Obure drags Musalia into Sh1.3bn Anglo Leasing graft scandal


ANC Party leader Musalia Mudavadi. PHOTO | JOHN NJOROGE | NMG

Transport Chief Administrative Secretary (CAS) Chris Obure has dragged the Amani National Congress (ANC) party leader Musalia Mudavadi into the Sh1.3 billion Anglo-Leasing graft scandal.

At the start of his defence against the alleged economic crimes yesterday, Mr Obure testified that Mr Mudavadi was involved in one of the Anglo leasing projects linked to the procurement of equipment for the Postal Corporation of Kenya (PCK).

He said that Mr Mudavadi wrote to him on May 9, 2002, seeking direct procurement of equipment for upgrading postal services in the country.

“Mudavadi informed me in the letter that it was the government's intention to develop and upgrade the Postal Corporation of Kenya (PCK)," Mr Obure told senior principal magistrate Anne Mwangi.

At the time, Mr Mudavadi, a 2022 elections presidential hopeful, was the vice president and Minister of Transport and Communication while Mr Obure was finance minister under President Daniel Moi.

The case relates to one of the Anglo Leasing scandals in which 18 high-value government security contracts were allegedly awarded to fictitious companies leading to the loss of billions of shillings of public funds.

Businessman Deepak Kamani and several former senior government officials are facing trial over the scandal, which came to light in April 2004.

The Government of Kenya on a single-sourcing basis signed a contract agreement with a US-based company, Spacenet Corporation, worth $11,787,000 (about Sh1,301,284,800).

The contract was for the supply of equipment and services to be acquired by the PCK.

The equipment was named VSAT hardware, computer servers, software licenses and other communication services.

Mr Obure said Mr Mudavadi sought his permission to use direct procumbent of the equipment from the US company to supply the equipment required to connect more than 900 post offices in Kenya.

The letter informed Mr Obure that the upgrading of the postal services would ease payment of teachers, postal staff and other civil servants at the grassroots.

While denying that he abused the powers of his then office as Cabinet Minister for Finance, Mr Obure said he believed Mr Mudavadi when he told him the government had embarked on a program to upgrade postal services in the country.

Mr Obure told the trial magistrate that the former vice president told him the postal services would be improved through a broadband network data network connecting every post office in the county to each other.

Mudavadi asked him to offer him assistant in achieving the government's intention.

“The new technology once put in place would ease the transfer of payment for teachers and other government entities," said Mr Obure. The project was to last for 10 years.

He added that Mr Mudavadi’s request to have him approve the direct procurement in the single-sourced service was necessitated by the fact that the ministry of finance was the financier.