News

Story by DAVID OKWEMBAH

The Government has hired an international audit firm for Sh96 million to carry out a fresh investigation into the nearly 20 Anglo Leasing-type contracts worth Sh54 billion.

The company’s brief in the renewed effort to tackle the scandal, which has marred the Kibaki administration’s image, is to determine whether to renegotiate or cancel the contract.

The UK firm has also been asked to determine whether any criminal activity took place in the contracting or contractors’ performance. The British audit firm, PricewaterhouseCoopers, was retained on January 17 to carry out valuation and forensic investigations into the 18 Anglo Leasing type contracts.

And for this, the Government is expected to pay the auditors Sh96 million for an eight-week contract. The contract, sources told the Nation, will enable the Treasury to investigate the principal players either remotely or directly linked to the Anglo-Leasing scandal, by among other means, obtaining information on their bank accounts.

On Tuesday, Kieni MP and former influential Cabinet minister Chris Murungaru alluded to the new investigation, when he accused the Kenya Anti-Corruption Commission of trying to illegally obtain information on his bank transactions. KACC spokesman Nicholas Simani confirmed that the Treasury had contracted the audit firm but declined to reveal any details, arguing that it would jeopardise the investigations.

The scandal led to the resignation of Finance minister David Mwiraria, the dismissal of Permanent secretaries Joseph Magari (Finance) and Sylvester Mwaliko of Immigration. The audit contract was signed by the financial secretary, Mr Mutua Kilaka, on behalf of the Government and Mr Alphan Njeru for the UK firm.

It is not known whether the final report has been handed to the Ministry of Finance. The audit firm has, however, reportedly told the Government that the signing of irrevocable Promissory Notes by the Treasury in for the 18 contracts tilts the issue against the Government.

Besides getting necessary support from the Government, the audit firm was expected to work closely with the Kenya Anti-Corruption Commission (KACC). The Government was also expected to provide office space to accommodate 23 people and five broadband Internet access points at the offices. The contracts include the tamper-proof passports valued at Sh2.7 billion and the Criminal Investigations Department (CID) forensic laboratories project put at Sh4.3 billion.

Also included are contracts signed during the Kanu and Narc era from 2001 to 2004. In some of the contracts, the addresses given by the companies which entered into deals with the Government were later found to be non-existent while in other cases, the directors were not known.

Several attempts have been made by the Government to unearth the key players behind the contracts, to no avail. Some of the initiatives include an investigation by Parliament’s Public Accounts Committee (PAC), which was chaired by the Leader of the Official Opposition, Mr Uhuru Kenyatta. The audit firm has broken the 18 contracts into two groups. In 10 cases, it is expected to identify any corrupt or criminal activity. In eight other cases, the Government only wants the firm to carry out forensic investigations.

The contracts which PricewaterhouseCoopers is expected to carry out forensic investigations to identify any corrupt or criminal activities include; The Kenya Police Air Wing Support Project II ($12.8m), Prisons Security & Telecommunications Project II (euros 29.7m), Telecommunications Network for Administration Police (euros 49.7m), Broadband Network for Postal Corporation of Kenya ($11.8m) and Broadband Spectrum Network Operations & Control Project ($31.8m) The Kenya Police: Supply of Security Equipment-Addendum 3 ($31.8m), Project Flagstaff-National Counter Terrorism Control Centre ($41.8m), NEXUS-Defence Centre (Euro36.9m), Naval Ship (Euro52m) and National Early Warning and Security System ($35m).

The eight where the government wants forensic investigations carried out are; The Kenya Police Addendum 2 ($30m) Kenya Police Airwing-1 ($36m) Kenya Prisons-Communications Network ($24.6m) Immigration security and Document control system ($31.9m) Forensic Science Laboratories, CID ($54.6m) Security vehicles-purchase of 994 vehicles and spares ($90m) Police Equipment and accessories ($40m), and E-Cops-supply of computer system for Kenya Police ($59.7m)

A team of 11 consultants comprising seven forensic accountants, three lawyers and one forensic technology specialist is examining the 18 contracts. The individual consultants are led by the Kenyan director of PricewaterhouseCoopers, Mr Njeru and are from Britain, France and South Africa.

The experts include Mr Melvyn FC James (helicopter), Dr MK Wilkinson (security systems), Mr Gordon Muir (ballistic and weapons), Mr A. J. Overy (communications and defence), Mr Mark Ralphson (military IT with radar capability), Mr Gerard Seminel (microwave link telecoms) and Mr Patrice Raffo (Vsat and satellite telecoms).

Others are Mr Godfrey Braganza (structural engineer), Mr Stephen Kimori (electrical engineer), Mr David Grantham (quantity surveyor), Mr Magotsi Sudi (architect), Mr Barry Kingwill (marine engineer/naval architect) and Mr Sawyer (aviation systems engineer).

Under the contract, the Government was to provide investigation reports by the Kenya Anti-Corruption Commission (KACC), the auditor-general, former Permanent Secretary for Ethics and Governance, Mr John Githongo. The audit firm was also expected to review the tendering process for all the 18 contracts if any, interview individuals involved in the procurement on the government side, suppliers and financiers. Pricewaterhousecoopers is also to assist KACC to obtain legal disclosure of information held by parties in other jurisdictions using mutual legal assistance or by requesting disclosure through civil proceedings.

When the scandal erupted three years ago, the Kibaki Government, which was elected on the platform of anti-corruption moved with speed to cancel all the 18 Anglo Leasing-type contracts and set up a ministerial committee to carry out evaluation. So far, the scandal has claimed the scalp of five permanent secretaries implicated in some of the contracts, while another Mr Githongo quit in protest, claiming his life was in danger for leading investigations.

The PSs who were sacked include Joseph Magari, Dave Mwangi and Sylvester Mwaliko. Also not spared were two ministers Dr Murungaru (Transport) and Mr Mwiraria (Finance). While Mr Mwiraria quit last year for being linked to the scam, Dr Murungaru was left out by President Kibaki in a Cabinet reshuffle following the November 21, 2005 referendum vote. Yesterday, Dr Murungaru was quoted in a section of the Press as claiming that the KACC had hacked into his bank’s accounts and carted away all the data.

The former minister claimed the contract which the Government had entered into with Pricewaterhousecoopers was illegal. Dr Murungaru also claimed the anti-graft body was “desperately trying to obtain court orders” to investigate his business accounts.