The Tsunami of Graft: Top officials entangled in a string of theft cases

The year 2015 goes down with the dubious distinction of being the moment Kenya got soaked in a ‘corruption storm’ that saw a number of high-ranking public officials and business leaders get entangled in multi-billion shilling theft cases. 

The Tsunami of corruption reflected recent findings by accounting firm KPMG that the Kenyan economy loses up to Sh500 billion every year in bribery, creative accounting, wasteful spending, tendering fraud, pillaging of public resources, and other illicit practices.

The growing number of graft cases and the evolving nature of the actors helped cement Nairobi’s dubious standing as a hotbed of corruption.

Business leaders and the government responded to the crisis with a draft Anti-Bribery Bill that, among other things, seeks to bar companies involved in corruption from doing business with the government.

The ominous dark clouds of corruption began pouring its contents when President Uhuru Kenyatta tabled a ‘list of shame’ in Parliament during his annual State of the Nation address. The list had names of 175 high-ranking public officials accused of involvement in graft.

In recent months, senior Kenyan government officials have been named in international reports as having taken bribes from foreign companies in exchange for tenders or influence peddling.

The directors of British firm Smith & Ouzman were in February sentenced to jail for bribing Kenyan electoral and examination officials to win lucrative printing tenders.

American tyre firm Goodyear Tire & Rubber Co. admitted it spent Sh153 million ($1.5 million) in bribes to top executives at the Kenya Ports Authority (KPA), the Kenya Air Force, the Ministry of Roads, the Ministry of Defence, and East African Portland Cement Company (EAPCC) to win supply tenders.

British American Tobacco (BAT) has most recently found itself at the centre of serious bribery claims. The cigarette-maker is accused of operating a bribery scheme that paid kickbacks to Kenyan officials to stifle anti-smoking laws and harass its rival Mastermind Tobacco.

The private sector did not disappoint: two lenders —Dubai Bank and Imperial Bank — collapsed under a cloud of accounting fraud and theft of customer deposits, sending shockwaves across the banking industry.

Cooking books spread through audit firms to top executives at Haco Tiger, Uchumi, and Mumias Sugar Company.

It was also the year when Kenya exported corruption to Tanzania and the UN. Kenyan executives were named in the $6 million bribes paid out by Standard Bank Plc in March 2013 to win a fundraising deal from the Tanzanian government.

There was also the $183 million Tegeta Escrow Account scandal in Dar and a $1.3 million bribery case involving a former president of the UN General Assembly, John Ashe.

Charity Ngilu, Michael Kamau, Davis Chirchir, Felix Koskei and Kazungu Kambi

President Uhuru Kenyatta last month finally sacked the five Cabinet secretaries he had named in a list of shame tabled in Parliament during his annual address in March.

The quintet had already stepped aside from their offices and were battling court cases to clear their names.

Ms Ngilu (Land) was in July charged with obstructing investigations into the Karen land saga by directing ministry officials not to release documents to investigators or even record any statements regarding the matter.

Mr Kamau had already been charged with abuse of office and failure to follow procurement rules in a road project.

Director of Public Prosecutions Keriako Tobiko cleared Mr Kambi (Labour) and Mr Koskei (Agriculture) of the graft charges but ordered more investigations into Mr Chirchir’s (Energy) alleged involvement in the loss of Sh90 million from the Kenya Pipeline Company.

Anne Waiguru

The former Devolution secretary fell on her own sword after five months of vehement denial that money was lost at the National Youth Service (NYS).

But investigations by the Directorate of Criminal Investigations soon revealed that at least Sh791 million had been stolen in fraudulent deals.

While throwing in the towel after nearly three months of fighting, Ms Waiguru defended her record but admitted that mistakes were made on her watch and that officers in some departments and agencies had abused their discretion and misappropriated public funds.

Gladys Boss Shollei

The former Judiciary chief registrar is facing a fresh graft charge for allegedly paying Sh46 million to a contractor for works not done.

Ms Shollei is already in court facing charges of abuse of office and corruption over alleged irregular procurement of a Sh310 million residence for Chief Justice Willy Mutunga in Runda, Nairobi. Earlier, Ms Shollei was named among former and current electoral officials who pocketed bribes codenamed ‘chicken’ from a British printing firm Smith & Ouzman to award tenders during her tenure as deputy CEO at the defunct Interim Independent Electoral Commission.

BAT bribery scandal

Julie Adell-Owino, Moses Wetang’ula, Martha Karua, Mary M’Mukindia, and Raila Odinga 

Five prominent Kenyan personalities have so far been entangled in reports of BAT’s elaborate bribery scheme across Africa where the cigarette maker reportedly paid kickbacks to tax officials, legislators, and rival company insiders — in exchange for confidential tax information about rivals, and stifling anti-tobacco laws.

Whistleblower Paul Hopkins first hit the road with a detailed account of how Julie Adell-Owino, a former BAT Kenya lobbyist, organised payment of bribes to senior government officials, including former Trade minister Moses Wetang’ula, for reasons that were not explained.

Jimmy Mutuku Kiamba

The former chief finance officer at City Hall had his accounts frozen in June to pave the way for investigations into his vast business empire, despite earning a salary of Sh85,000 per month.

Mr Kiamba’s two bank accounts at CfC Stanbic were used to transact more than Sh400 million between January and November 2014, the Ethics and Anti-Corruption Commission says in court papers.

His wealthy estate includes two maisonnettes in South C, a plush townhouse in upmarket Kileleshwa, four apartments in the posh Kilimani estate, and eight plots of land in Muthaiga, Mavoko and Machakos. He also owns a fleet of six cars.

The EACC said it believes Mr Kiamba acquired the property through fraudulent deals using his position as City Hall CFO.

Chris Okemo, Samuel Gichuru

High Court judge Isaac Lenaola last week ruled that the hearing at a magistrate’s court as to whether the duo should be sent to Jersey Island to stand trial for money laundering must continue.

Mr Okemo, a former Energy minister, and Mr Gichuru, an ex-CEO of Kenya Power, are wanted in the channel island for allegedly defrauding the electricity retailer of millions of shillings and laundering it before keeping the cash in the foreign country.

The two face 53 counts linked to “commissions” paid by companies to win Kenya Power tenders between 1999 and 2002 in foreign currencies: £4.45 million; $3.2 million and kr790,000; totalling Sh1.01 billion at current exchange rates.