New agency signals deeper forfeitures of dirty public cash

The fight against corruption has intensified in the past two years with State agencies arraigning suspects linked to the vice and in the process, recovering billions of shillings suspected to be proceeds of crime.

Ethics and Anti-Corruption Commission (EACC) alone is reported to have recovered assets worth more than Sh7.9 billion and filed approximately 400 cases in court seeking recovery, seizure and confiscation of unexplained assets valued more than Sh10 billion.

The Assets Recovery Agency (ARA) has made progress after successfully seeking forfeiture of monies suspected to be proceeds of crime from individuals and companies.

The agency has made life difficult for State officials said to have corruptly acquired public assets, especially those linked to the theft of billions of funds from National Youth Service (NYS).

Last year, the Director of Public Prosecutions (DPP) Noordin Haji told Parliament that the government is targeting to recover at least Sh72.5 billion from senior government officials who are suspected to have acquired wealth through corrupt means.

Among those whose millions have been forfeited to the State include former Gender Principal Secretary (PS) Lillian Omollo who lost Sh33 million after she failed to explain how she made the money and Mr Thomas Gitau Njogu, a civil servant working with the Ministry of Interior and his wife Teresia Njeri, who lost more than Sh112 million.

Mr Sostenah Ogero Taracha lost Sh18 million. EACC was investigating his wife- Dr Salome Munubi, who worked with National Land Commission (NLC) when it stumbled on the cash and he failed to satisfactorily explain how he made the money.

Others are Ms Pamela Aboo who lost Sh19.6 million and Mr Jimmy Kiamba, former Nairobi County Chief Financial Officer, whose Sh317 million was confiscated by the government, after his explanation as to how he made the money was rejected. Mr Kiamba served during Governor Evans Kidero’s administration.

In 2019, the High Court ordered the forfeiture of Sh42 million belonging to Mr Stanley Amuti, a former employee of the National Water Pipeline Corporation(NWPC). His attempts to reverse the decision were thwarted by the Court of Appeal and a second appeal to the Supreme Court, was also rejected.

Another couple, Joseph Wanjohi and Jane Wambui, lost properties whose value is estimated at Sh1 billion, among them houses and high-end vehicles after the High Court ruled that they are proceeds of crime. The two were accused of drug trafficking and trading in wildlife trophies.

And yesterday the government managed to recover Sh95 million properties from the Ngirita family that was linked to NYS scam after the High Court ruled that they were proceeds of crime.

Justice Mumbi Ngugi said the parcels of land in Nakuru, Naivasha and Trans Nzoia and a Toyota station wagon, should be forfeited to the government.

She ruled that the family, which received in excess of Sh400 million from the agency, failed to explain how they acquired the properties.

But as the agencies make the recoveries, there has been no fund to manage the billions thus far confiscated.

Recently, Mr Haji and EACC boss Twalib Mbarak presented a Sh2 billion cheque to Treasury Cabinet Secretary Ukur Yatani from a fund the DPP created from the proceeds of crimes. He said during the presentation that the agencies managed to net Sh2.9 billion last year.

The amount could have been higher save for cases that have been appealed as suspects still believe they can reverse the seizure. “There are some cases ongoing. We can’t use the money because of pending appeals. But we are confident we will recover this money,” he said.

Other than seizures from individuals, the DPP also entered into a plea bargain with five banks, implicated in the NYS scandal, after the lenders opted to pay a total Sh385 million to save their executives from criminal prosecutions.

The lenders included Standard Chartered Kenya, Equity, Diamond Trust, Co-operative Bank, and KCB Group.

The five top commercial banks were to face criminal prosecution for facilitating the NYS scam after they received about Sh3.5 billion believed to have been stolen from the State agency.

According to Central Bank of Kenya (CBK) the lenders failed to report large transactions or to undertake proper due diligence on customers. It also accused them of approving large transactions without proper documents.

But the financial institutions opted for plea agreements with the DPP for the breaches they committed in handling the large sums of money.

The office of DPP (ODPP) invoked Articles 157 (11) and 159 of the Constitution that provide for alternative dispute resolution in entering the agreement. The agreement was also in line with the plea agreement and diversion guidelines launched by the ODPP to hasten cases and recover loots.

But now the Treasury is almost making the establishment of Fund to manage such proceeds of crime a reality. This is after the public was invited to submit comments or memoranda on the Proceeds of Crime and Anti-Money Laundering (Criminal Assets Recovery Fund) (Administration) Regulations, 2020.

The Fund will receive all money confiscated or forfeited to the government under the Proceed of Crime and Anti-Money Laundering Act.

The regulations also establish a committee to be known as the Criminal Assets Recovery Fund Committee, which will comprise the Attorney-General, who will be the chairperson, PS Treasury, Director General of the National Intelligence Service (NIS), CBK Governor, Director General of the Financial Reporting Centre and EACC chief executive officer.

It will also include Kenya Revenue Authority boss, the DPP, Director of Criminal Investigations (DCI) and an Administrator of the Fund, who will be the secretary of the Committee.

The Fund will receive, manage and transfer all property derived from confiscation and forfeiture or any funds repatriated from abroad through mutual legal assistance. The regulations also propose to use the fund to build capacities for law enforcement and criminal justice in the country.

The regulations state that the disbursements from the Fund shall be approved and minuted by the Committee in respect of confiscated assets.

Third party claims will be required to provide a court order to be compensated after approval by the committee.

“Where in the opinion of the Committee it is appropriate to do so, the Committee may direct such sums from the Fund as it determines, be invested in government securities,” the proposed regulations stated.

The operations of the Fund shall be reviewed every 10 years.

It is hoped that the judicial process and the adjudication of cases, which is still slow- and has been worsened by the Covid-19 pandemic- will hasten and more recoveries will be made and boost the fund.