Britain offers new leads on Anglo-Leasing projects fraud

Integrity Centre, the headquarters of the Ethics and Anti-Corruption Commission, whose latest reports say the team disrupted graft scandals worth Sh1.2 billion. File
Integrity Centre, the headquarters of the Ethics and Anti-Corruption Commission, whose latest reports say the team disrupted graft scandals worth Sh1.2 billion. File 

The anti-corruption watchdog has received new evidence from the UK on the dubious Sh60 billion Anglo Leasing projects as President Kibaki prepares to retire from public office having barely made headway in resolving the scandal.

In its latest annual report, which also spotlights frenzied corrupt activity at City Hall, the Ethics and Anti-Corruption Authority (EACC) indicates that Switzerland has also offered to help subject to resolution of unexplained legal issues.

“The new evidence is as a result of assistance the commission has sought from the Serious Fraud Office of the UK among other countries through Mutual Legal Assistance Framework,” it says.

Early last year, Attorney-General Githu Muigai restarted co-operation with Swiss authorities after years of inaction from the government.

The 18 “Anglo Leasing type” projects were mostly inherited by the Narc administration from the corrupt Kanu era or initiated after the Moi administration left power after the 2002 General Election.

Conceptualised between 1998 and 2004, the dubious projects included the recently delivered naval ship, the Postal Corporation of Kenya satellite service procurement, the failed second-generation passport scheme and a communication system for the Administration Police.

Only former Home Affairs PS Sylvester Mwaliko was ever convicted over the Sh3 billion passport scandal. Incidentally, the first down payment for the scheme provoked a public backlash that eventually shone the spotlight on the deals.

The scandal ended the career of then Finance minister David Mwiraria but the initiators of the scandals including three Cabinet ministers in the Moi administration and an influential businessman mentioned in official documents are yet to be prosecuted.

A former UBS bank employee, American national Bradley Birkenfeld, who was jailed for 40 months for helping clients hide cash, is reported to have been involved with the Anglo Leasing principals meaning that the US is among countries with knowledge of the suspect transactions.

Early this year, it was reported Switzerland had frozen some of the accounts linked to the scandal. According to the EACC report, the next single largest deal that came on its radar was Nairobi — in Vihiga. It was a claim by a firm called Capital Construction Ltd for Sh13 billion in pending bills for construction of

Vihiga district headquarters and district hospital. “Investigations have established that two contracts were duly settled by the government and the claims are fraudulent,” says the report.

EACC is investigating claims of over Sh173 billion (Sh170 billion in hard currency) for between December 2006 to April 2010 indicating the pending bills issue, which cropped up at the tail-end of the Kanu era, is yet to be resolved. Parliament has recommended the mandate of the Pending Bill Closure team be extended to next year.

EACC’s 2011/2012 report indicates heightened corruption activity — common ahead of general elections — although it says it disrupted corrupt deals worth Sh1.2 billion over the year while tracing Sh120 million in stolen assets.

Among the major losers in the “disruption” were City Council of Nairobi (CCN) officers, whose attempts at paying dubious suppliers were scuttled. These included planned payment of Sh321 million to an insurance firm, without following due process. The payment was stopped and investigations into the transaction started.

In another instance, the CCN tried to pay a garbage collector Sh155 million. But EACC intervened in October 2011 when some Sh70 million had already been paid to the firm. The council was at it again, attempting to irregularly pay Sh60 million for a land deal done a decade ago valued at Sh220 million.

It also attempted to pay Sh63 million for a ‘multimedia’ centre at City Hall which was thwarted. The last major act of attempted illegality was the leasing of the National Social Security Fund (NSSF) car park on Kenyatta Avenue, Nairobi. The deal is estimated to be worth Sh36 million a year.