Industry News

[September 24, 2006]

KACC Ready to Sue On Five Graft Cases

(The Nation (Kenya) Via Thomson Dialog NewsEdge) Anti-corruption investigators have drafted criminal charges in five of the 18 questionable contracts on minister Martha Karua's controversial List of Shame, it emerged yesterday.

At least 28 high-profile figures could face corruption charges if graft Czar Aaron Ringera acts on proposals from Kenya Anti-Corruption Commission lawyers on suspect security contracts, which were signed in ministries headed by four politicians now in the Opposition and two former members of President Kibaki's Cabinet.

But the cases ready for hand-over to the Attorney-General exclude contracts linked to two sitting ministers - Vice President Moody Awori and Mr Simon Nyachae - even though they featured in the list unveiled by Ms Karua on Thursday.

The Nation has established that KACC teams have wrapped up cases against officials of the Moi and Kibaki governments, who were involved in five of the controversial contracts and suggested criminal charges to Mr Ringera.

One of the cases on which lawyers have recommended criminal charges relates to a contract signed when Mr Musalia Mudavadi was the minister for Transport and Communication.

It involves a contract signed by the Government on July 11, 2002 on single sourcing with Spacenet Inc of 1750 Olod Meadow Road, McLean Virginia 22102 USA to supply VSAT equipment to Postal Corporation of Kenya.

The contract required the company to supply all the equipment and services to the corporation.

Some of the names which came up in relation to the contract include a former Finance minister Chris Obure, former postmaster general Francis Chahonyo, former permanent secretary Sammy Kyungu, a former Communication Commission of Kenya official James Kulubi and a Mr Michael Allan. The suggested charges are abuse of office against five officials and obtaining money by false pretences for the others.

Another contract on which commission lawyers have proposed charges was signed during the tenure of Imenti North MP David Mwiraria as Finance minister.

Two other former permanent secretaries of the time were Mr Joseph Magari who was at Treasury and Mr Dave Mwangi, Internal Security.

Businesspeople who have been reported as having dealt with the Office of the President at the time include a Mr V. Kamani, Mr Rashmi Kamani and Mr Deepak Kamani.

The project on which lawyers have made recommendations to Mr ringera involved an alleged irregular contract by the Office of the President estimated at Sh5.6 billion.

The deal involved a suppliers and finance agreement with Infotalent Ltd., of Switzerland for computerisation and improvement of security, law and order systems and procedures project for Kenya police code named E-cops.

Charges of failure to observe statutory duty and failure to adhere to provisions of External Loans Agreement Act are proposed against three of the officials and conspiracy to defraud the government against eight others.

Sources said the cases which could reach Mr Wako for a prosecution decision include two security contracts for the Kenya Police and three others for Administration Police, Postal Corporation of Kenya and the Meteorological Department.

But whether or not the files are released by KACC depends on executive director Ringera while the final decision on which case goes to court will come from Mr Wako.

Yesterday the anti-corruption commission spokesman Nicholas Simani declined to confirm reports about the five files, only saying investigations into the 18 contracts were progressing smoothly.

"Let Kenyans be patient. Investigations are on course," he said.

In the document made public by Ms Karua on Thursday, Mr Awori and Mr Nyachae top the list of prominent people recommended for investigations over Anglo Leasing type of contracts.

Her list included Orange Democratic Movement presidential hopefuls William Ruto and Musalia Mudavadi as well their Opposition colleagues, Mr Chris Okemo and Mr William ole Ntimama.

The contracts, some of which began during retired President Moi's era and continued under President Kibaki's rule, have dogged the Narc regime since it came to power four years ago.

Some have led to the resignation of key Kibaki allies including former Finance minister David Mwiraria, who was listed by Ms Karua as having been in office when some of the contracts were signed, and former Justice minister Kiraitu Murungi.

Former Internal Security minister Chris Murungaru, who was also in Ms Karua's list, was left out of the Cabinet when President Kibaki reconstituted it after sacking all ministers following the government's defeat in the last November's referendum for a new Constitution. The minister's name had adversely mentioned in the Anglo Leasing-type deals.

According to Ms Karua's list, Dr Murungaru and Mr Mwiraria were in charge of Treasury and the Office of the President respectively when the Narc Government signed six of the suspect contracts.

Those fully investigated by KACC and were signed during the tenure of the two ministers are the Telecommunication Network for Administration police (May 29, 2003), the Kenya Police E-Cops project (November 19, 2003), and Modernisation of Police Security Equipment and Accessories (December 17, 2003).

Also in the list are former PSs in the Office of the President Sammy Kyungu (until July 2003) and Dave Mwangi who took over from Mr Kyungu.

Finance PS at the time was Mr Joseph Magari who has since been relieved of his duties and is facing a court case over the passports deal.

Former Treasury official, Mr David Onyonka, was questioned by KACC officials over the Modernisation of Police Security Equipment and Accessories project.

Another civil servant, Mr John Agili, who used to work at the Office of the President when the Telecommunication Network for Administration police project was signed, has recorded a statement at Integrity Centre.

The project was for Euros 49,650,000 (about Sh5 Billion).

Another contract fully investigated by Mr Ringera's officers is for National Early Warning and Security System and it was signed on June, 7, 2002 when Mr Mudavadi was the Transport minister and Mr Chris Obure was the minister for Finance. Mr Kyungu was then the PS.

Mr Mudavadi was also the Transport minister and Mr Obure was in Treasury when the Government signed a contract with Spacenet Inc. of the USA to set up data and Internet services for Postal Corporation of Kenya.

Mr Francis Chahonyo was the PCK boss and Mr Kyungu was the Transport PS and Dr James Kulubi was the acting director of the Communications Commission of Kenya.

Mr Michael Alan represented the US firm.

The project had taken off and more than Sh3 billion had been paid out by the Government since November 2002.

But the company has since switched off the Vsat service for PCK demanding that Kenya pays a balance of US$12.366 million (Sh903 million) and $532,884 (Sh40 million) as interest due as at July 17, 2006. It warns that the money accrues interest at $3,520 (Sh264,000) a day.

The Kenya Police E-Cops project, which would have cost Kenyan taxpayers Euro 59,688,250 (Sh5,5billion), was awarded to Infotalent Ltd of Switzerland for the Computerization and improvement of security, law and order systems.

Distributed by AllAfrica Global Media. (

Copyright 2006 The Nation (Kenya). Distributed by Allafrica Global Media.

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