Economy

UK battles Kenyan authorities over use of ‘Chickengate’ funds

WAQO

Mr Halakhe Waqo, EACC chief executive. PHOTO | SALATON NJAU

The British government has sharply differed with Kenyan authorities over the planned repatriation and use of money recovered from the so-called Chickengate scandal.

UK authorities have rejected assertions that they ‘dictated’ how the £349,057.39 (Sh50.05 million at current exchange rates) would be used, putting Kenya’s Ethics and Anti-Corruption Authority (EACC) chief executive Halakhe Waqo , on the spot for possible breach of Chapter Six of the Constitution and perjury.

Mr Waqo last Wednesday told the National Assembly’s Justice and Legal Affairs Committee that the British government had directed that funds confiscated from the Chickengate firm be used to buy ambulances.

But London’s Department for International Development (DFID) said it had strongly recommended that the money be used to buy bed nets for pregnant mothers and young children in malaria-prone areas but added that discussions were still ongoing on the matter when Mr Waqo told Parliament of the attempt to dictate use of the cash.

“DFID is not in a position to dictate or give any orders. This is money belonging to the Kenyan people and should be used to directly benefit the Kenyan people,” said Tony Gardner, the Deputy Head of DFID Kenya, in an exclusive interview with the Business Daily.

“Our suggestion is to buy bed nets. Our choice is based on our knowledge of the health sector, including the fact that malaria has funding gaps, and we have a well-established supply route.”

READ: Kenya to get Sh51m seized from 'Chickengate' firm

Also read: Slow pace of 'Chickengate' probe puts EACC on the spot

The Chickengate cash is enough to buy about 140,000 bed nets, DFID said, noting that increased coverage of insecticide-treated bed nets is key in lowering child mortality and reducing the risk of malaria to pregnant women.

Mr Gardner said British authorities were in favour of investing the money in projects that secure maximum benefits to Kenyans and have pretty small operating costs and hence ensuring most of the funds go into the social venture rather than administrative costs.

DFID said it has never held talks with the EACC on the use of the Chickengate funds, adding it had only talked to the Treasury and the Presidency.

London’s Southwark Crown Court on January 8, 2016 seized the assets of Smith & Ouzman, the UK printer at the centre of the bribery scam, to pay a total of £2.39 million (Sh351 million) in fines and penalties for paying Kenyan electoral and examination officials bribes codenamed ‘chicken’.

The UK’s Serious Fraud Office then in February announced that Kenyan taxpayers — who bore the brunt of the inflated printing tenders — are entitled to receive reparations equivalent to the £349,057.39 that Smith & Ouzman paid in kickbacks to win lucrative tenders at IIEC and Knec.

DFID — Britain’s international development agency — is expected to invest the funds in a legacy project in areas such as education, water and health for the benefit of the Kenyan people.

A new fully equipped four-wheel drive ambulance costs about Sh8 million, meaning the seized funds can only buy six ambulances.

“The British dictated,” said Benson Kairichi Marimba, a spokesman at EACC, in response to our queries on what informed the decision to buy ambulances.

Accusing finger

Asked to defend the choice of ambulances, their running and maintenance costs and impact over other projects such as bursary schemes and boreholes, the EACC pointed an accusing finger at London accusing it of dictating what the funds should be used for.

Parliamentary committees have quasi-judicial powers and Mr Waqo can face perjury charges if it is established that he lied to the lawmakers on oath. Such conduct would be in breach of Chapter Six of the Constitution of which the EACC is the custodian.

Mr Waqo faces fresh vetting to determine his suitability or otherwise to continue heading the EACC, under a new law that President Uhuru Kenyatta signed last year.

DFID said it expects the Chickengate money to be in Kenya ‘very soon’ noting that it has taken time to work out the deal given that it is the first time a bribery case has involved repatriation of cash to the affected country.

“This is novel so we are trying to figure out how it works,” said Mr Gardner, adding that the framework to be established will be replicated in future cash repatriations.

The SFO is expected to liaise with the UK’s Treasury to wire the money recovered from Smith & Ouzman to a special account in Kenya, which will be drawn by a special agent to implement the agreed social impact project.

Kenya is also set to receive a significant portion of the Sh526 million (£3.28 million and $0.54 million) seized from an offshore Jersey account belonging to former Kenya Power boss Samuel Gichuru and ex-Energy minister Chris Okemo.

Windward Trading Ltd — the entity through which Mr Gichuru and Mr Okemo received kickbacks to award suppliers lucrative tenders at Kenya Power — in February pleaded guilty to four counts of handling illicit cash, leading to forfeiture of all its assets.

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