By Kenya Confidential Corruption Awareness Editor, Nairobi – May 8, 2020
Simply put, the Supreme Court said theft of public funds does not warrant wasting more public resources listening to thieves on matters clearly prohibited by the Constitution involving Public officers
Kenya’s judiciary has finally joined the War on Corruption spelling doom to overnight millionaires and billionaires who cannot account for their wealth.
Henceforth, the corrupt who cannot explain the source of their wealth will no longer hide behind the right to property or hide in courts, the Supreme Court declared this week.
By slaming the door shut on the ugly face of Stanley Amuti, a man who could not explain his wealth, the Supreme Court set the bar high and made it clear in future, it won’t entertain cases already determined by the Court of Appeal – a major blow to those with riches acquired through dubious means.
The Supreme Court verdict is a big victory to the war against corruption and the self-effaced millionaires with various cases in court can see darkness at noon. In what is emerging as Kenya’s jurisprudence on insatiable greed, the Court of Appeal had previously described unexplained assets as “tainted property” and that such property can only be categorised as “unlawfully acquired” – previously one of the biggest victories in the war against graft.
The other two bastions of corruption now remaining aloof are the legal profession and the banking industry who play a pivotal role in concealing the proceeds of graft and transship it to off-shore accounts in billions. Penalties introduced by the Central Bank of Kenya on errant banks are not deterrent enough.
Now that the Supreme Court has pronounced itself on the matter, it places the High Court and Court of Appeal handling corruption cases under public scrutiny on decisions they make on crooks who have to explain their source of wealth or they lose it.
While ruling on a case involving little-known billionaire Amuti, a former finance manager at the National Water Conservation and Pipeline Corporation, the Supreme Court ruled that the matter was not of public interest and does not raise constitutional issues; and as such the highest court had no jurisdiction to hear it.
Simply put, the Supreme Court said theft of public funds does not warrant wasting more public resources listening to thieves on matters clearly prohibited by the Constitution involving Public officers.
The Supreme Court now says that it will not listen to such cases “as a matter of right” under Article 163 (4) (a) and that those who cannot explain the source of their wealth cannot rush to be heard at that level.
Where the case to be appealed against has nothing or little to do with the interpretation or application of the Constitution, it cannot support a further appeal to the Supreme Court under the provisions of Article 163 (4)(a), the Supreme Court ruled.
Amuti built a multi-million estate within a few years, but when he was taken to court by the Ethics and Anti-Corruption Commission (EACC), he could not explain where he got the money. The anti-graft agency had objected to Amuti’s appeal at the Supreme Court Appeal 21 of 2019.
With that door closed, the ruling now means that cases involving forfeiture of property will be terminating at the Court of Appeal and may take less time. It also means that the constitutional right to property and land grabbers cannot be invoked in such cases and that leaves those with similar cases in a limbo with no constitutional haven to hide in.
Amuti, who had built a huge empire, had been ordered to surrender only Ksh 41 million to the government after failing to explain its source. The case, before the Court of Appeal had placed the burden of explaining the source of wealth on the accused. “The theme in evidentiary burden in relation to unexplained assets is prove it or lose it,” the judges had said.
“In other words, an individual has the evidentiary burden to offer satisfactory explanation for legitimate acquisition of the asset or forfeit such asset. The cornerstone for forfeiture proceedings of unexplained assets is having assets disproportionate to known legitimate sources of income.”
This principle was recently applied in the case involving former Youth and Gender Principal Secretary Lilian Omollo who was ordered to forfeit about Ksh 33 million in her bank accounts to the State.
Justice Mumbi Ngugi ruled that the former PS, a suspect in the National Youth Service (NYS) fraud cases, was unable to explain how she made her money and that the only conclusion was that the funds were proceeds of crime and corruption, which she described as “that insidious scourge that has reduced our society to penury”.
The Supreme Court has now added that presumption of innocence as a legal right does not arise when somebody is asked to explain their wealth and does not violate the right to fair hearing.
“The requirement to explain assets is not a requirement for one to explain his innocence. The presumption of innocence is a fundamental right that cannot be displaced through a notice to explain how assets have been acquired”.
This was in support of a Court of Appeal observation: “The right (to property) protects the sweat of the brow – it does not protect property acquired through larceny, money laundering or proceeds of crime or any illegal enterprise.
When an individual is alleged to have assets disproportionate to his known lawful source of income, is asking such a person to explain and account for the unexplained disproportionate assets a violation of the constitutional protection of the right to property? The answer is in the negative. There is no violation of the right to property if an individual is requested to explain the source of his assets that is disproportionate to his legitimate source of income.”
It now means that courts will no longer be able to protect property acquired through corruption and that for such property to be seized, one does not have to go through time-wasting criminal process. The Court of Appeal had held that civil recovery will take place if an individual is unable to explain the source of assets and that “those who acquire property unlawfully cannot claim protection provided by the legal system.”
It means that the criminal process and the civil process will be different.
The landmark Court of Appeal ruling recently which held that all unexplained funds and assets belong to the State is among the latest wins in the war on corruption as agencies intensify a crackdown on suspects with rags-to-riches and overnight billionaire stories.
Anti-corruption agencies believe the May 10, 2020, ruling by three appellate judges — Phillip Waki, Gatembu Kairu and Otieno Odek, will open the floodgates for the seizure of assets whose owners will be unable to effectively explain how they acquired them.
Overjoyed Ethics and Anti-Corruption Commission (EACC) said that the ruling will boost their efforts to seize unexplained wealth of various officers who are facing corruption allegations in court.
The list of targeted “secret millionaires and billionaires” include junior and senior Gounty government officers, members of County Assemblies and other County senior public officials who have amassed unexplainable wealth since 2013. The list also include police officers whose rags to riches stories despite earning meagre salaries have drawn the interest of anti-corruption detective,
The latest investigations at County level involve former Kiambu Governor Ferdinand Waititu, his relatives and some company directors. EACC Chief Executive Officer Twalib Mbarak said the investigation of suspicious transactions involving Ksh 588 million was complex and included unmasking several persons of interest. Focus will be on bank accounts and property linked to the governor’s family and associates.
Most of those on the radar are County government officials, Kenya Revenue Authority (KRA) staff, police officers and ministry officials. Others are Governors paying directors of companies that are paid millions of shillings for supplying nothing.
In February, EACC records indicated that there were 78 cases of illegally acquired assets in court with other investigations ongoing. The Directorate of Criminal Invesigations (DCI) and the Assets Recovery Agency are also involved in the process.
Twalib recently said; “We don’t just want to take people to court and jail them. We also want to recover the properties that they have acquired through the proceeds of corruption. We have identified some of the suspects through lifestyle audit reports which pointed out to individuals living beyond their means,” he added.
The EACC and DCI detectives have calso compiled a list of property and account details of junior KRA officials who were late last year charged in court after a surprise raid targeting more than 70 junior staff.
Some of the high-profile targets in court are officials who have multi-million-shillings empires that do not match their salaries. They include former Nairobi Governor Evans Kidero who in a short span of five years at the helm of the capital city build residential estates in several parts of Nairobi, Nakuru and Kisumu worth billions of shillings when the Country Government he headed did not build a single estate or primary school.
Former Nairobi County chief finance officer Jimmy Mutuku Kiamba’s house locate in Runda, Nairobi, that is being targeted for recovery by EACC. PHOTO | EACC
In one of his houses located in the exclusive Runda Grove, former Nairobi County Chief Officer Jimmy Kiamba maintains the opulence and elegance that is associated with the neighbourhood, which is an exclusive favourite for the rich and famous.
The property is in close proximity to the UN offices, Two Rivers Mall, Ridgeways Mall, Village Market, Brookhouse School and Potterhouse School.
Nonetheless, if a vicious on-going process of asset-recovery for property suspected to have been illegally acquired by public officials is finalised, the splendid piece of architecture will be forfeited to the Nairobi County government.
Investigations and perusing through court documents, established that Kiamba, who is battling several corruption-related charges, will not just lose the Runda residence but assets worth Ksh 1.3 billion illegally acquired between August 2009 and February 2015.
In that short period of about six years, investigators discovered that he made bank deposits totalling Ksh1, 383,468,402 against a total net salary of Ksh 5,821,309 at Ksh 90,833 per month.
Also in trouble is former Migori County Assembly clerk Bob Kephas Otieno who amassed a fortune from County coffers and used the proceeds to build a mansion in his village. In August last year, Kephas and ten Migori County Assembly officials were charged with flouting procurement rules in awarding tenders.According to investigators, the clerk paid his wife Ksh 26 million for “supplying nothing.”
EACC documents tabled in court alleged that Otieno used his influence to transfer Ksh 26, 272,460 on different dates to Nyangume Enterprise, which is owned by his wife Everline Awino Agutu.
The money, which was later withdrawn and part of it transferred to Otieno’s account, was disguised as payment for goods and services ‘tendered’ but which were never rendered. The detectives also discovered that Nyangume Company was neither pre-qualified nor appeared in the tender quotation register.
Despite facing charges of corruption, Kephas continued being in office until in February when MCAs impeached him over misuse of Ksh 34.4 million.
Efforts to recover the properties of former KRA official Joseph Chege are in progress. By the time of his arrest, Chege who used to earn a monthly salary of Ksh 119,000 and owned properties estimated to be more than Ksh 615 million.
Chege had declared that he held assets estimated at only Ksh 61 million but investigators unearthed an empire that included cash deposits in various banks totalling Ksh 399 million and immovable property spread across Nairobi, Mombasa, Kilifi and Kwale counties valued at Ksh 355 million.
After detaining some staff and searching their houses, the Kenya Revenue Authority (KRA) on late last year fired 75 employees and handed them over to police for allegedly facilitating tax evasion. Sixty two of the workers were arrested at the KRA’s Times Towers headquarters in the in a fresh corruption purge meant to plug leakages that cost the country billions of shillings in tax evasion revenues.
KRA, which is last year was targeting a 40 percent growth in tax returns, has consistently missed its targets.
The reasons for this include tax-related misconduct such as theft, cheating in the declaration of return, corruption, collusion and soliciting bribes from tax cheats. The authority, which recently established an Intelligence and Strategic Operations Department to combat tax evasion, cracked the whip on after four months of investigations.
The criminal practices in question include facilitation of fraudulent clearance of cargo, fraudulent amendment of tax returns so as to help taxpayers evade taxes and the irregular issuance of Tax Compliance Certificates. The bulk of the cases touched on staff based in Nairobi. Sixty one of those arrested were from the domestic taxes department and 14 from customs and border control.
In 2018, KRA fired 85 officers and instituted 15 cases of lifestyle audits for its staff on suspicion of aiding tax evasion. The criminal scheme has occasioned a reduction in tax collections by KRA. The number of implicated employees were in senior and middle level management .
“By their criminal conduct, they have betrayed public trust and KRA,” a statement said.
The anti-graft purge has also turned the spotlight on the National Police Service where the Internal Affairs Unit (IAU) has been asked to act on a number of complaints touching on multi-billion-shilling corruption syndicates.
Among the complaints include junior and medium, generally Traffic police officers who own multi-million-shillings properties which they cannot account for given their low salaries. Some of the junior officers under investigation own several apartments, luxurious mansions, drive high end vehicles and lead flashy lifestyles.
Other officers are said to have served or are serving under elite units like the Motor Vehicle Theft Unit, Flying Squad and the Land Fraud Unit. It is suspected their tools of work have been extortion, kidnapping and murder.
Inspector General of Police Hilary Mutyambai (above) recently announced that the police service will revamp the IAU to make it more effective in dealing with corruption. He said although the unit had received 7,909 complaints against police officers since 2013, there were many more cases that had gone unreported.
One high-profile case in court involves Constable Jamal Bare Mohamed who, by the time of his arrest had Ksh 33 million in his bank accounts and assets worth Ksh 47 million in a short span of three years -January 2013 and August 2016.
Some of global corrupt criminals have been fighting protracted court battles for years but changes in the law and creation of a multi-agency team have piled pressure. Two notorious fugitives are former Finance Minister Chris Okemo and former Kenya Power managing director Samuel Gichuru wanted by a Jersey Court to answer over 20 charges of Corruption.
In the President’s Office Thomas Gitau Njongu, a senior assistant accountant attached to the Ministry of Interior and National Coordination is alleged to have deposited Ksh 1 million daily in his bank accounts.Njongu deposited the monies in his bank accounts and in those of wife, Teresia Njeri, and in the bank accounts of four firms that they jointly own.
He also had vast properties including apartments and flats in Nairobi’s Lavington, Kileleshwa, Runda and Riara as well as land in Kitengela, Kisumu municipality, Muhoroni and his rural home in Nyando, Kisumu County.