Foreign Affairs Permanent Secretary Thuita Mwangi and Minister Moses Wetangula deserve praise for cost saving measures.

Smarting from being ranked as the worst performing Ministry in the Government of Kenya ( a ranking that the Ministry rejects on plausible methodological grounds) the ministry of Foreign Affairs, has done a very rare thing. So rare, that it is unheard of in Government. An East African Standard exclusive tells us that the Ministry of Foreign Affairs is recalling staff to cut costs and save millions of shillings. This effort to save tax payers’ money is the first effort by a Government Ministry to save very scarce resources and must be applauded.

In this year’s budget allocation the Ministry of Foreign Affairs has the sixth largest provision for ‘Utilities Supplies & Services’ at Ksh 159.5 million . Permanent Secretary, Mwangi Thuita, is doing the right thing by addressing this expenditure in his cost cutting measures. Another area targeted for reductions is rents and housing expenditure; of which incidentally the Ministry of Foreign Affairs has the largest budget allocation in the entire Government at Ksh 1,025 billion per year. According to the Permanent Secretary, the ministry will reduce its expenditure by at least Ksh 150 million per year in its cost saving measures.

The ministry has gone further to recall more than 100 employees in all 50 missions abroad. Minister Wetangula is to be congratulated for this – the Ministry has always been “bottom-heavy” - according to GOK records there were 742 employees for the financial year 2008/2009, of which only 264 were actually involved in diplomatic representation. The rest were classified as working in General Administration and Planning.

Ideally, Kenyans would like to see more reductions, but in a country, where poverty and corruption seem to be the greatest threats to national security and stability the move by the Ministry of Foreign Affairs is an immediate step towards addressing these problems.

Rare praise from us, but well done Sirs! Although, remember there is loads more waste that you can address.

Tags: cost cutting, Government of Kenya, Ministry of Foreign Affairs, Mwangi Thuia, Wetangula

“More than 30 years ago, MWAI KIBAKI was Minister for Finance, he committed the Government, and the people of Kenya to the construction of a Ken Ren Chemical and Fertiliser Company in the Coast Province. Why is the Kibaki Government committing Kenyans to pay Kenya shillings 4.3 Billion from the consolidated fund for a project that never was?” RAILA ODINGA, November 5th 2007

Resolving the 30-year old Ken Ren Fertiliser Factory Scandal is a political hot potato.

When Raila Odinga called a press conference on November 5^th 2007 to accuse his then opponent Mwai Kibaki of corruptly authorizing payments for the non-existent fertilizer could he have imagined that the two would once again sit in the same government? At that time it would have been a stretch of imagination to predict that as Prime Minister Raila Odinga would be collectively responsible in a government that would continue to make payments for the phantom factory. And yet, that is the very situation he now finds himself in.

The handling of Ken Ren is a study in political compromise and irony. Kenyan politics is such that within less than a year Mr. Odinga has found himself at the heart of a government that continues to commit ever more badly needed funds to a project he loudly condemned as fictitious and corrupt.

The National Budget for this year includes payments to the tune of hundreds of millions of shillings to Austrian and Belgian banks for the Ken Ren fertilizer factory that was never built; even as Kenyan farmers have to be bailed out with subsidized fertilizer by the Government to the tune of billions of shillings.

The transcripts of the Raila Odinga’s November 2007 press conference and the furious responses it elicited from the government demonstrate that Ken Ren is a hot political potato. Most of the claims made by several Government ministers can easily be described as misleading – for example it is clear that the Finance Ministry was less than candid in claiming that there was no provision for Ken Ren Fertiliser Factory payments in the budget for 2007.

The challenge to Mr. Odinga’s anti-corruption credentials that Ken Ren poses is obvious. Some may surmise that in struggling to keep the fractious Grand Coalition together he is sacrificing principle at the altar of political expediency. But in doing so, he exposes himself to charges that a year ago might not have been brought against him, such as condonation of what he condemned.

The facts about the infamous Ken Ren Fertiliser factory are well known in Kenya. Three decades ago the country was scammed by a foreign investor, and three decades later Kenyans are still paying the price of inaction against grand corruption and abuse of office. There is no fertilizer factory and Treasury should not be making annual payments to European banks, especially at this time of economic hardship. If ever there was a prime candidate for a declaration of odious debt, it is the Ken Ren Fertiliser Factory.

We are uploading the transcripts of Raila Odinga’s November press conference on the Ken Ren Fertiliser Factory to remind the Government, and the Prime Minister in particular, of their obligation to give Kenyans a straight answer about this project and the dubious payments annually made to two European banks – BAWAG of Austria and Ducroire of Belgium. This is the least expected of Raila Odinga.

5^th NOVEMBER 2007

1. Citizen Television (CTV) 5^th November 2007 - 21.00 News

CTV ANCHOR: ODM Presidential candidate Raila Odinga has made fresh allegations of corruption within the Government. The Langata Member of Parliament is claiming that the Government has authorized payment of 4.3 Billion shillings towards the Ken Ren Fertiliser Company project that failed to take off 30 years ago. But Finance Minister Amos Kimunya dismissed the claims as mere politicking and challenged Raila to give evidence.

CTV REPORTER: Raila made the claims shortly after meeting with ODM Parliamentary aspirants from across the country at the Bomas of Kenya in Nairobi. Raila who was accompanied by ODM Pentagon members claimed that the Government has authorized part of payment of 4.3 Billion shillings for the project whose principal worth was 268 Million shillings in the mid 1970’s

RAILA ODINGA: Why is the Kibaki Government committing Kenyans to pay Kenya shillings 4.3 Billion from the consolidated fund for a project that never was? Two, is this not another way of Stealing Public money to bank roll the Kibaki re –election bid?

CTV REPORTER: The former Langata MP claims that the payment was one of the schemes by Treasury to pay for non existent projects

RAILA ODINGA: It is emerging that this Ken Ren Scandal is part of an elaborate scheme to siphon huge amounts of money from the Consolidated Fund through the Central Bank and the National Security Intelligence Service on instructions from State House. It is clear that the Ken Ren Scandal is one of many questionable schemes hatched by Treasury to pay for non existent projects

CTV REPORTER: But, the Government moved fast to dismiss the allegations

AMOS KIMUNYA: And its very unfortunate that a Presidential candidate should be going around the country eh..eh spreading rumours either on ECK or the stock exchange and when they exhausted that, they now start talking about non existent payments being made. So I think I would be happy to hear from him or to seek from him what evidence he has that me as Minister for Finance, I don’t have.

CTV REPORTER: The Minister challenged Raila to table his evidence regarding the payment.

AMOS KIMUNYA: If it is contained in the Financial Statement then, he should be showing the specific line where it is contained. You know its him who is alleging, let the one who alleging prove not try and force things that were not there. And in any case he was in Parliament when the matter was discussed and I don’t remember him either introducing it because we have not introduced it or questioning where it was.

PETER KENNETH: It is important for the public to note that the Government proposes its Estimates of expenditure to Parliament, and further that Parliament is the institution that has full Authority and approves the Estimates through the Appropriations Act.

2. Kenya Television Network (KTN) 5^th November 2007 - 21.00 News

KTN ANCHOR: As earlier mentioned ODM Presidential candidate Raila Odinga has accused President Mwai Kibaki of presiding over graft by ordering the payment of 4.3 Billion shillings from the Consolidated Fund to a non existent project commissioned over 30 years ago and one that never took off.

KTN ANCHOR: But the Government called a News Conference this evening AND dismissed the allegations as a bunch of lies. Raila has in the meantime promised Public Service jobs to losers of ODM nominations. He told the parliamentary Aspirants that the nominations will be free and fair.

KTN REPORTER: When Raila walked into Bomas of Kenya today, it was for a meeting with aspirants, but he called a press conference at which he accused the President of engaging in graft to fund his re election campaign. He said the Government was paying 4.3 Billion shillings from the Consolidate fund to a project that was non existent.

RAILA ODINGA: More than 30 years ago, Mwai Kibaki was Minister for Finance, he committed the Government, and the people of Kenya to the construction of a Ken Ren Chemical and Fertiliser Company in the Coast Province. Why is the Kibaki Government committing Kenyans to pay Kenya shillings 4.3 Billion from the consolidated fund for a project that never was?

KTN REPORTER: However, the Government was swift to counter the allegations. Finance Assistant Minister, Peter Kenneth accompanied by Permanent Secretary Joseph Kinyua and Investment Secretary Esther Koimett, quickly disputing the allegations

PETER KENNETH: We have no provisions whatsoever for Ken Ren, we have no provision of that amount for any other item whatsoever. And we are saying the Printed estimates are there anybody can look at them.

3. Nation Television (NTV) 5^th November 2007 - 21.00 News

NTV ANCHOR: ODM Presidential Candidate Raila Odinga is putting President Kibaki and his Government on the spot over a 30 years old scandal that he says continues to the cost tax payer. Raila claims the Government is still paying out billions of shillings to a phantom company for a project that failed in the late 70s. The Government has however denied using any money from the Ken Ren project of the 1970s. NTV’s Robert Nagila brings us that story

NTV REPORTER: it was just a matter of time before the gloves came off. And, this morning a remark from an unlikely source brought to the fore the beginning of the dirty campaigns. This morning, Noah Wekesa the minister for Science and technology, triggered off a ripple effect that would be having far reaching consequences by days’ end.

NOAH WEKESA:(translated from Kiswahili) we can see he is a man with a lot of money and the way we know honourable Raila, he is not someone who runs big businesses or has donor outside who are supplying him with money and vehicles of which some of them we cannot afford, while he has vehicles and choppers.

NTV REPORTER: The personal attack of the ODM presidential candidate did not go down well triggering an immediate response over a scandal that had largely been forgotten.

RAILA ODINGA: President Kibaki has authorised payment of Kenya shillings 4.3 Billion from the consolidated fund for a project whose principle worth was only Kenya Shillings 268 million.

NTV REPORTER: That statement set alarm bells ringing and by early evening Treasury called for a press conference slated for 7pm. Flanked by all the top Officials, Peter Kenneth, the assistant minister for Finance answered Raila’s allegations.

PETER KENNETH: treasury would like to categorically state that Hon. Odinga’s statement is not factually correct. The correct position is as follows:-

1. Government has no plans to establish or revive the Ken Ren project.

NTV REPORTER: But Raila claims that he has the evidence, he refers to these two provisions made in this years budget to pay two companies apparently in relation to the Ken Ren Chemicals factory saga but the finance ministry has denied it.

RAILA ODINGA: the part payment of the 4.3 billion shillings is contained in the printed estimates of the financial year 2007/2008.

PETER KENNETH: We have no provisions whatsoever for Ken Ren, we have no provision of that amount for any other item whatsoever. And we are saying the Printed estimates are there anybody can look at them.

NTV REPORTER: Tonight, Treasury are saying they are willing and ready to table the estimates to prove no such payment was factored into the Government budget. The public will be keenly watching this developing story to find out just who is telling the truth. Robert Nagila NTV tonight

4. Kenya Broadcasting Corporation (KBC) 5^th November 2007 - 21.00 News

KBC ANCHOR: The Government has dismissed as false allegations by ODM Presidential aspirant Raila Odinga purporting that it has authorised payment of 4.3 billion shillings from the consolidated fund of this financial year for a project where its principle was worth 268 million shillings. Assistant finance minister Peter Kenneth says the Government has no plans to establish or receive or revive the Ken Ren project.

RAILA ODINGA: the Government has authorised the payment of 4.3 billion Kenya Shillings from the Consolidated Fund for a project whose principal worth was only Kenya Shillings 268 million at its conception in the late 1970s. the part payment of the 4.3 billion shillings is contained in the printed estimates of the financial year 2007/2008.

PETER KENNETH: it is important for the public to know that the government proposes its estimates of expenditure to parliament and further that the parliament is an institution that has full authority and approves the estimates through their appropriation act. It is therefore insincere and unfortunate for honourable Odinga who is aspiring to the highest office in the land to make unsubstantiated statements and purport them to be the truth.

6^th NOVEMBER 2007

1. Nation Television (NTV) 6^th November 2007 - 21.00 News

NTV ANCHOR: Bawag Austria a company associated with the Ken Ren scandal is featured in the list of Government debtors despite denial by the treasury, the revelation further complicates the mystery surrounding the chemical’s factory that collapsed thirty years ago. ODM’s Raila Odinga maintains that the Government intends to pay up to 4.3 billion Kenya Shillings for the deal. NTV’s Richard Chacha reports.

NTV REPORTER: The Ken Ren scam dates back to 1970 when Kenya Government entered into a joint venture with an American company to set up a fertilizer-processing plant in Mombasa. Ken Ren chemical and Fertilizer Company was born, the Government of Kenya was both a shareholder and a guarantor in the factory. The deal collapsed and the factory was not built after all ,then it was embroiled in litigation in Europe. When the matter was referred for arbitration Bawag an Austrian company was awarded against the Kenya Government. The issue was brought into public domain by ODM pentagon member Joseph Nyagah, and now reintroduced by party presidential candidate Raila Odinga.

RAILA ODINGA: President Kibaki has authorised payment of Kenya Shillings 4.3 billion from the Consolidated fund for a project whose principal worth was only Kenya shillings 268 million at its conception in the mid 1970’s.

NTV REPORTER: But the government says that no such deal was ever factored in the printed estimates.

PETER KENNETH: The Government has no plans to establish or revive the Ken Ren Project.

MUKHISA KITUYI: I am the minister under whose portfolio Ken Ren falls, we have commissioned studies on the viability of reviving Ken Ren. We have decided it is not viable, we have abandoned it and there is absolutely no attempt to revive Ken Ren.

NTV REPORTER: But NTV has now established that Ken Ren related companies were included in a long list of debts Kenya signed between 1963 to date, as tabled in Parliament by finance assistant minister Peter Kenneth. In the printed estimates for the current financial year, part payment of 192 million shillings is listed for Bawag Austria and another 75 million Shillings under Austria. The issue has fast turned political as the Government critics strive to highlight the fact that the deal was signed when President Kibaki was the finance minister. The scandal may be older than the vast majority of us but its effects continue and will continue being felt as Kenyans now grapple to understand on who is fooling who. Richard Chacha NTV tonight

2. Kenya Television Network (KTN) 6^th November 2007 - 21.00 News

KTN ANCHOR: To political matters now, where the Party of National Unity has rubbished claims by ODM presidential candidate Raila Odinga that President Kibaki had ordered the irregular payment of 4.3 billion shillings from the Consolidated Fund.

A statement from the party’s headquarters said “the only payments made with respect to Ken Ren were approved by the cabinet when Raila was in cabinet” however, Mwalimu Mati from MARS GROUP an Anti Corruption Watch Dog weighed in on the debate by asking the Government to clarify why the loans were listed in the debt Register if the Government did not intend to repay them. Muraya Kariuki has the details

KTN REPORTER: “when Raila Odinga spoke of Ken Ren yesterday, it was to accuse the President on ordering the payment of 4.3 billion shillings to a project initiated 30 years ago and which never took off.

RAILA ODINGA: “President Kibaki has authorized payment of Kenya shillings 4.3 billion from the Consolidated Fund for a project whose principal worth was only Kenya shillings 268 million at its conception in the mid 1970s.”

KTN REPORTER: Raila alleged that the funds were meant to fund the President’s campaigns, but that got a swift reply from finance assistance minister Peter Kenneth was flanked by finance PS Joseph Kinyua and investment secretary Esther Koimet.

PETER KENNETH: “an allegation has been made to the fact that the treasury intends to pay or has paid 4.3 billion on account of Ken Ren and am saying there is no such a thing”.

KTN REPORTER: according to documents attributed to the ministry of finance, in 2004 the government signed off 2.8 billion shillings for the repayment of loans, the repayment was based on agreements to honor old debts and was then included in the debt register.

Mwalimu Mati of the MARS GROUP says the problem lays in the intended payments or payments made for a contract that was never actualized.

MWALIMU MATI: “Why should tax payers be asked to contribute to repayments for something that does not exist and that even the Kombo select committee report said does not exist’.

KTN REPORTER: Mukyisa Kituyi on the other hand says Ken Ren was judged to be beyond redemption and there is no plan to revive it.

MUKHISA KITUYI: “I am the minister under which portfolio Ken Ren falls, we have commissioned studies on the viability of reviving Ken Ren we have decided its not viable we have abandoned it and there is absolutely no attempt to revive Ken Ren’.

KTN REPORTER: printed estimates for the year 2006/2007 show that the government intended to pay 14.2 million in 2006 and 192.9 million shillings in 2007 to a company known as Bawag of Austria listed as a creditor for 2.8 billion shillings in relation to Ken Ren, the question then begs, just who is telling the truth on this one, and what exactly is the nature of Government dealings as regards Ken Ren. Muraya Kariuki KTN Prime

Print Media

http://multimedia.marsgroupkenya.org/?StoryID=201810

http://multimedia.marsgroupkenya.org/?StoryID=201807

http://multimedia.marsgroupkenya.org/?StoryID=201812

http://multimedia.marsgroupkenya.org/?StoryID=201766

The facts on Ken Ren Chemical and Fertilizer Company.

Peter Kenneth (Assistant Minister for Finance) tabled a list of all loans signed by the Government of Kenya between January 1963 and December 31st 2006. On this list there are two Ken Ren related loans. Unpaid loans. Collectively, they are worth just over Ksh. 4.3 billion. Click here to see list of loans tabled in Parliament

Ken Ren debts are listed in Our External Debt Register of the Government of Kenya as monies we owe an Austrian Bank called Austria BAWAG and a Belgian Bank called Belgium Ducroire. Click here to see Kenya’s external debt register from 2002 to 2006

Ken Ren Chemical and Fertilizer Company a fertiliser processing plant at Tudor, Mombasa, on the Kenyan Coast was never built and does not exist.

The budget estimates 2007/2008 provided for a payment of at least Ksh.268m on principal and interest payments for Ken Ren, which by all accounts ended in failure 30 years ago. The payment was made from the Consolidated Fund. . Click here to see the Ken Ren provisions in 2007/2008 estimates of the Budget of Kenya

This financial year budget estimates 2008/2009 provides for a payment of at least Kshs 334,436 558 million on principal and interest payments for Ken Ren a 30 year old dud project, The payment will be made from the Consolidated Fund. Click here to see the Ken Ren provisions in the current 2008/2009 estimates of the Budget of Kenya

The mystery of Ken Ren Chemical and fertilizer company. Click here to read our Publication on Ken Ren

Kenya’s Finance Minister’s Budget speech June 12^th 2008

Kenya faces a massive fertilizer importation bill even as the Minister of Finance makes payment of hundreds of millions of shillings to foreign banks for a fertilizer factory that does not exist.

Government Initiative on Fertiliser

http://www.communication.go.ke/media.asp?id=537&media_type=2

Equity Bank Fertiliser Loans

http://africanagriculture.blogspot.com/2008/04/kenyan-bank-offers-grain-farmers.html

Huge fertilizer import bill to cost farmers dearly

http://www.bdafrica.com/index.php?option=com_content&task=view&id=7807&Itemid=5813

KTDA suspends fertiliser imports as costs rise

http://www.bdafrica.com/index.php?option=com_content&task=view&id=7651&Itemid=5811

State turns down cries for subsidies

http://www.bdafrica.com/index.php?option=com_content&task=view&id=8019&Itemid=5813

Tags: 2007/2008, Bawag, budget, Budget Estimates, debt, Finance Minister, KenRen, Mwai Kibaki, Peter Keneth, Raila Odinga

Mars Group Kenya opens a new sub-domain for public use

http://crisis.marsgroupkenya.org

The post-election crisis was the gravest threat to the survival of Kenya since
Independence in 1963. To contribute to current efforts to address the root causes
of the crisis, and to facilitate ending the impunity of perpetrators, Mars Group
Kenya is opening its databases to free public access via a special website supported
by the Open Society Institute East Africa Initiative.

Since May 1st 2008, Mars Group Kenya has been implementing a monitoring and documentation
project for the purposes of providing regular web-based research updates on the
implementation of the peace accord in Kenya. The Crisis sub-domain developed under
this grant is now open to public access.

Sub-domain description:

1. Multimedia Content & Resources:

A special crisis website has been created at the URL address http://crisis.marsgroupkenya.org
The crisis website contains 1,905 selected multi-media news clips from Kenyan
and international media on the events in Kenya relevant to the implementation
of the National Accord of February 28th 2008. The multi-media clips cover all
major events starting December 27th 2007 through the end of June 2008 including:

• Election Day, Counting, Tallying and the violent aftermath of the Announcement
• of Kibaki’s re-election.
• Mediation and Negotiation Efforts
• Civil Society and other responses including international community
• ilitia and State sponsored violence
• The National Accord and formation of the Grand Coalition
• Media and civil liberties suppression

All clips have been converted into Flash format and are searchable by subject
title, date, name of individuals or organisations. Play lists can be created and
copies downloaded by users. The site uses XML and has been optimised for Google’s
search engine.

Multimedia Requests: Mars Group supplies access to its multimedia databases on
request. For crisis information, Mars Group has been approached by inter alia
the Commissions created under the National Accord. The challenge Mars Group faces
as regards enabling unrestricted public access to all the clips is bandwidth and
server costs. The next phase will involve acquiring more server space to enable
faster, free public access.

2. Monthly interactive web reports: crisis documentation

January 2008: 30 documents including the media tally of the Presidential election
result, the officially announced Electoral Commission of Kenya tally, specialist
analyses of the role played by security forces in the Tally Announcement; statements
by Kenyan civil society including the Kenyans for Peace with Truth and Justice’s
verdict on the Presidential election process and media analyses; statements by
the EU Observer Mission; the European Parliament; Human Rights Watch; Parliamentary
debates; the Kenya Medical Association; the Law Society of Kenya and the World
Bank.

February 2008: 49 Documents including rare documentation of the position of the
African Union, the United States, the World Bank, the European Union during the
months of January and February 2008. Also includes reports and statements by Kenyan
NGOs (including the KHRC and IMLU) on violence and testimony before international
forums (including foreign legislatures).

March 2008: 15 Documents including the Constitution of Kenya Amendment Bill, the
signed agreements between the principals to the National Accord (Kibaki and Odinga),
specialist commentaries on the agreements, research reports and memoranda from
inter alia Human Rights Watch, Kenyans for Peace with Truth and Justice and the
United Nations.

April 2008: 11 Documents including specialist commentaries on article 16 of the
Constitution of Kenya given that the Grand Coalition government was sworn in on
14/04/08.

Kenya National Dialogue and Reconciliation process 2008: 28 Documents including
the full text of all agreements reached, and statements issued, during the negotiation
and mediation process which resulted in the National Accord between the PNU/ Government
and the ODM on 28/02/08.

Information Requests: The crisis website constitutes the most comprehensive record
of the political crisis in Kenya – no other organisation was able to document
the crisis using technology available to Mars Group Kenya exclusively. As a result
there is some demand for the information in the Mars Group databases, even prior
to the uploading of the website itself. Requests for information and multimedia
resources have been received from public and civil society entities including
the Kenyans for Peace with Truth and Justice; the [Kriegler] Commission on Post
Election Violence; the [Waki] Commission on the Election Process; local and international
media and Political Parties including the PNU and ODM.

3. Screenshot of the Crisis Website – http://crisis.marsgroupkenya.org

The crisis website incorporates the following features:

• A crisis calendar interface which allows the user to browse by date for multimedia
• clips – linked to 17 other sub domains
• A search engine allowing users to browse by subject matter
• Flash player for faster viewing
• Quick downlinks (multiple servers)
• Written using XML allowing user updates e.g. RSS feed
• Linked directly to Mars Group Kenya’s Website and all sub domains
• Optimized for Google
• Registration for updates

For more information contact:

info@marsgroupkenya.org

Mwalimu Mati, CEO, Mars Group Kenya

Tags: annan, Bloated Cabinet, by election, Cabinet, Chaos, church, constitution, crisis, CTV, ECK, Elections, government, Grand Coalition, human rights, IDPS, kalonzo, KBC, kenya, Kibaki, KICC, Kivuitu, kriegler, KTN, Mars Group Kenya, Media, Mediation talks, militia, multimedia, Mungiki, Mwalimu Mati, National Accord, NTV, odm, odm kenya, Parliamentary polls, peace, pnu, Police, post election, Presidential polls, raila, rigging, truth and reconciliation, violence

The following is an excerpt from the Hansard of Parliament of 24^th June 2008. Hon. Mwakulegwa is a new member of Parliament for Voi Constituency. We upload his contribution to the budget debate and applaud his effort to discuss real issues in the budget as presented by the Minister for Finance.

Mr. Mwakulegwa: “Madam Temporary Deputy Speaker, I rise to support the

. Minister’s Budget. Despite the hardships in Kenya, it was a well thought-out Budget.

Kama vile wenzangu wanapendekeza tutozwe kodi, nakubaliana nao. Tukitozwa kodi,

wananchi wengi watafurahi sana. Wabunge 222 wakitozwa kodi, hiyani Kshs800 milioni.

Ningependa Waziri wa Fedha aangalie mahali ambapo tungeweza kupunguza matumizi

yetu, ili wananchi wa Kenya wapate nafuu kifedha. Mambo hayo ni mengi sana.

Nitaanza na Recurrent Expenditure. In last year’s expenditure, under hospitality, the

Government used Kshs 2.16 billion which is about Kshs 5.7 million per day. Now, if the

Government could reduce that expenditure, there could be a lot of saving.

The Temporary Deputy Speaker (Ms. Noor): Order! Please, you are required to

use one language; either English or Kiswahili. Do not mix!

Mr. Mwakulegwa: Thank you, Madam Temporary Deputy speaker: I will restrict

myself to English. As I was saying; I am going to focus on areas where we could save

money as a country. As I said, I am looking at Recurrent Expenditure. Last year, the

Government spent Kshs2.16 billion on hospitality. That translates to about Kshs 5.7 million

per day. If we could reduce that amount of money, we would have huge savings. Even if

Members of Parliament are not taxed; we could save a lot of money from that.

For example, the Minister for Finance said that he was going to increase his hospitality

budget from Kshs 500,000 to Kshs 728,000 per day. This expenditure is uncalled for.

If you look at the other recurrent expenditure utilities, we spent Kshs 2 billion to pay for water,

electricity and other things. If you look at the expenditure by State House, you will realise

that it spends more than the 30 Ministries in terms of paying for these utilities. It is

important for the Government to make sure that though it is not under a microscope, these

expenses could be huge savings for this Government and Kenyans.

When it comes to paying rent, you will be surprised that we spend Kshs3.9 billion, while the Government only collected Kshs239 million out of which, Kshs210 million was collected from the

KlCC. Therefore, if we could utilize the Government buildings like Nyayo House and

others, the Government could save a lot of money from that.

‘With regard’ to printing, the Government Printer is supposed to be the only printing press used by the Government. However, the Ministries go out to out-source printing services. For example, last year, we spend Kshs2.2 billion on out-sourced printing services for the Government, whereas we have a fully-fledged Government Printing Press. Had we used it much more efficiently, we could have saved this money. Secondly, there is a lot of trash and paper all over in the Government buildings. Maybe it will be a good idea if we set up a paper recycling plant for the Government so

that they can utilize these, paper and reprint using the same.

Madam Temporary Deputy Speaker, another area where we spend a lot of money is foreign trips. Even during the crisis, we saw Government delegations touring overseas. Last year we spent Kshs 2 billion. This amounts to about Kshs 6.7 million per day. If we could cut down on these foreign trips of huge delegations which are not necessary, we could also save a lot of money.

There is also an Item where State House is getting new cars worth Kshs 73 million.

Now, last year’s Budget had a similar amount of money which was used to buy new cars

for State House. It is important to note that currently, State House has 149 cars. If every

year we have the same allocation for buying new cars, what will happen to the old cars?

Does it mean that these cars are obsolete? So, it is an area we could look at and save a lot.

Madam Temporary Deputy Speaker, I know that we are not supposed to discuss

internal security matters, however, it is surprising that Kshs 47 billion is proposed to be used

by the National Security Intelligence Service (NSIS), Armed Forces and the Kenya Anti-

Corruption Commission (KACC). Though we are not supposed to discuss about national

security issues, when it comes to KACC, I thought this is a transparent body whereby we

should have been told how much- will be spend and how much money is allocated to this

body. That way, it would be very transparent when it Comes, to handling their own budget.

Another area of concern is that there was Kshs4 billion which was to be paid to

KENREN Fertilizer Company. This company does not exist. The fertilizer plant ought to

have been approved by Parliament in 1970 and it was to be located somewhere in

Mombasa, but it was never built. This Item is, however, in the Budget. It is important for

the Minister to really tell this House where that money will be going to.

Tags: Amos Kimunya, budget, crisis, government, kacc, Ken Ren Fertiliser, KenRen, Kenyan Tax payer, Minister for Finance, Ms. Noor, Mwakulegwa, Nyayo House, parliament, Printing Press, Tax Money

By GITAU GIKONYO

Honesty is such a vital quality that it can hardly be surpassed by anything else. As a nation, we will not achieve much if we fail to embrace or inculcate it in ourselves.

British essayist Thomas Carlyle (1795-1881) once said of honesty: “Make yourself an honest man and then you may be sure there is one rascal less in the world.”

In this spirit of honesty, three musketeers must rise up and honestly explain away allegations that are being made or have been made against them.

The first one is attorney-general Amos Wako. This man, in his characteristic fashion of denial, claims not to have been involved or informed of any immunity from pursuit given to Kamlesh Pattni and his accomplices or in the subsequent sale of the Grand Regency Hotel.

Quit the office

His claims notwithstanding, there is a very disturbing contention which has been doing rounds in the press and which Wako must clarify as he prepares to quit office.

This is in relation to section 56B of the Anti-Corruption and Economic Crimes Act. The “handover” of the Grand Regency and its subsequent hurried sale trace their origins to the settlement agreement registered in court on April 9, 2008.

This settlement was pursuant to section 56B of the Act. However, it is emerging that this specific section may after all be illegal.

The Hansard of September 13, 2007, says that during a debate on amendments to the Act, the question on whether to approve Section 56B was put to the vote and Parliament voted to have the section deleted.

Also, the President declined to assent to the Act citing among other things its proposed blanket amnesty and agreed with Parliament that Section 56B remains deleted.

Secret insertion

According to the Hansard the President‘s recommendations were debated in Parliament on October 4, 2007, and section 56A reinstated while section 56B remained deleted.

It is also on record that Justice Aaron Ringera called a news conference that day and complained about the deletion of Section 56B and other proposed amendments.

How strange then that when AG Wako published the Act and commenced it on October 15, 2007, section 56B was part of our laws?

The net effect is that any perceived amnesty or transaction pursuant to section 56B of the Act is null and void ab initio. For the secret insertion of otherwise deleted amendments into a law for the President’s assent is fraudulent, unconstitutional and criminal in nature.

What Kenyans must demand to be told is, if section 56B was deleted by Parliament on September 13, 2007, who “sneaked” it back into the Act and why?

Any attempt to wish it away thus “I was not informed or consulted” will not work. The buck must stop with Mr Wako.The other two musketeers have everything to do with the new buzz word for ministers under siege — “discretion.”

Former Finance minister Amos Kimunya must be wishing it had come up before he stepped aside since it being a cushion, he most certainly would have taken cover behind it too.

But for the moment it is providing cover for Deputy Prime Minister Uhuru Kenyatta, who has been sucked into controversy, and Immigration and Registration of Persons minister Otieno Kajwang’ who is not yet out of the woods.

It is alleged that while serving as Local Government minister, Mr Kenyatta substituted a list of political parties’ civic nominees forwarded to him by the ECK with one of his own, which accusations he has denied.

Mr Kajwang’ on the other hand, has been accused of impropriety in that he issued work permits to foreigners whose professions are available locally, totally against the advice of his permanent secretary and director of Immigration Services.

Likewise he has denied any wrongdoing. Mr Kenyatta has, however, not  used the word “discretion” but Kajwang’ was quick to invoke it.

The fundamental objective of allowing ministers and senior public servants discretionary powers is purely to support wider public interest.For Parliament which confers that discretion, can never be taken to have intended to give a power to act in bad faith or to abuse power. If an act is to be done according to the discretion of a minister, it should follow the rules of reason and justice, not private opinion.

For Mr Kajwang’ to have met the applicants in person reeks with a decision informed by private opinion.In his own words, he is “like an appellate judge with discretion to supreme ministerial decisions”. The discretion of a judge has been discredited as the law of tyrants; especially appellate judges whose decisions settle a matter for good.

Public bodies

But some discretion is necessary, because law cannot anticipate every eventuality or how to decide which law may apply to a given situation. However, all public bodies are under an obligation to show fairness and reasonableness.

“Unreasonableness” may mean that even though the authority has acted according to the law in the sense that it has not acted on irrelevant grounds or exercised power for an improper purpose, yet it has given more weight to some factors than they deserved as compared with other factors.

Mr Kajwang’ can, therefore, not be heard to say that he has a soft spot for “people who pray” otherwise woes betide this nation when he develops a soft spot for terrorists.

Mr Kenyatta, Mr Kajwang’ and Mr Wako must be investigated.

Tags: Kajwang, Section 56B, Uhuru, Wako

Remember Goldenberg! Cost Kenya 10% Of GDP “Our final opinion on the evidence reviewed is that although the above were criminal actions of an economic nature, they could only have succeeded with the necessary political backing they were provided with by officers of state who flagrantly violated the basic rules by which they were bound in virtue of their positions. In sum, it was because of the culture of impunity. If that culture is to be brought to an end in Kenya, then there is a need for firm action to be taken against all those who have been implicated in this grand scheme of criminal malfeasance. If it has taken fifteen years for the whole truth to emerge, there can be no excuse for inaction now.”

Hon. Justice Samuel William Wako Wambuzi

Chief Justice Emeritus of the Republic of Uganda

Prof. Chris Maina Peter

Professor of Law, University of Dar es Salaam

Prof. J. Oloka-Onyango

Professor of Law, Makerere University

www.kituochakatiba.co.ug

The economic, financial and political events that developed in the Republic of Kenya in the 1990s and came to be known as the Goldenberg Affair were the brainchild of a Kenyan citizen named Kamlesh Mansukhlal Dhamji Pattni. In his late 20s and without substantial schooling, Kamlesh Pattni conceived a financial scheme which was to facilitate the stealing from the national coffers in Kenya of substantial amounts of money—running into millions of dollars.

This scheme involved people high up the political ladder in Kenya who in one way or another stood to gain from it and thus provided the much needed protection and cover for the scheme to take place and eventually succeed. How this scheme was conceived, who was involved, and its general effects on economic and political governance in Kenya were the subject of a judicial inquiry.

The Commission of Inquiry into the Goldenberg Affair referred to as the Bosire Commission was set up by notice in the Kenya Gazette of February 24, 2003 by the President of Kenya, H.E. Mwai Kibaki, and placed under the Chairmanship of Hon. Mr. Justice Samuel Elkanah Onderi Bosire of the Court of Appeal of Kenya. The Bosire Commission held public hearings for a period of almost two years.

It began work on 14th March, 2003 and conducted its final public session on 10th February, 2005. Over that period, about 102 witnesses were called to testify; 188 exhibits were tendered; and oral and documentary evidence was adduced. The Hansard of the sittings of the Commission ran to over 18,000 pages. Over 55 advocates appeared before the Commission. While the majority of them represented various people who had been adversely mentioned—some of who appeared and others who chose not to—yet others were invited as amicus curie to assist the Commission in its deliberations. The Goldenberg Inquiry was one of the longest single inquiries in the history of Kenya.

Moreover, it has not been cheap to the taxpayer. According to one source, the inquiry cost an average of KShs. 15 million per month. The Grand Regency Hotel sale scandal refocuses attention on Goldenberg. The law on which the sale was based is illegal.

Section 56B of the Anti Corruption and Economic Crimes Act which allows the Kenya Anti Corruption Commission to enter into out of court Settlements with corruption suspects for both civil and criminal Proceedings as it did with Kamlesh Pattni is illegal because it was deleted by Parliament on 13th September 2007 at page 3929 of the Hansard of Parliament.

We are of the view that Goldenberg must not be allowed to go unpunished. Goldenberg cost Kenya 10% of its GDP and most of the culprits identified by the Bosire Commission are still alive and over 158 Billion traced is recoverable. All that is needed is political will. We upload the following extracts from Kituo Cha Katiba’s sterling investigations of Goldenberg to enable a very simple understanding of the Goldenberg Scam.

1. What were the origins of Goldenberg?
2. Did Goldenberg International Limited follow the law?
3. Does Kenya have Diamonds and/or Gold?
4. Did Goldenberg International Limited actually deal in or export diamonds and gold?
5. If diamonds and gold were exported as alleged, what was the quantity and to whom was it exported?
6. Where did Goldenberg International Limited get the diamonds/gold it allegedly exported?
7. How did Goldenberg International Limited acquire a license to export diamond and gold?
8. How did Goldenberg International Ltd secure the monopoly to export gold?
9. How much money was paid by the Ministry of Finance and Central Bank Of Kenya to Goldenberg International Ltd?
10. What are the circumstances surrounding the payment of KShs. 5.8 billion to Goldenberg International Ltd ?
11. What were the circumstances surrounding the payment of US $ 210 million to Exchange Bank Limited (EBL) in respect of fictitious foreign exchange claims?
12. What was the fraudulent scheme of cheque-kiting by Goldenberg International Ltd and associated banks?
13. Were the moneys illegally obtained from Central Bank of Kenya, the Customs Department and the Treasury , used to fund the campaigns of any political parties?
14. What effect did the Goldenberg related civil and criminal litigation have on the administration of justice in Kenya?
15. The Broad Issues Emerging From The Goldenberg Affair
16. Specific And General Recommendations on the Goldenberg Affair

www.marsgroupkenya.org

Watching Out for You

Tags: , Bosire, CentralBank, Corruption, Diamonds, export, Finance, Gold, Goldenberg, Grandregency, impunity, kenya, KituochaKatiba, MarsgroupKenya, Pattni

THE PEOPLE’S OPINION ON THE “GOLDENBERG AFFAIR”

SPECIFIC AND GENERAL RECOMMENDATIONS

From our general observations and conclusions we humbly make the following

recommendations of specific and general nature:

1. Criminal charges should be instituted against those found to have engaged themselves in activities that led to the loss of money belonging to the Government of Kenya during the Goldenberg Affair. This should include those who were aware that such transactions were illegal and went ahead to execute them and those who by virtue of their positions conspired to defraud the Treasury.

1. Those individuals who, by virtue of their positions, failed to stop the Affair and thereby caused financial loss to the government of Kenya, if still in office, should be relieved of their duties. They should also be barred from occupying any public office in future.

1. Individuals and companies found to have benefited from this affair should be made to refund to the State what they received illegally. The moneys recouped in this fashion should be directed to the alleviation of the adverse social and economic conditions in which the people of Kenya are currently enmeshed. In this regard civil society actors in Kenya and in the wider Eastern Africa region have an obligation to increase their vigilance of the processes that follow publication of the Bosire Commission’s report, and also to monitor compliance of government officials with the report’s recommendations, plus ensuring that even where government fails to take action, alternative civic, non-state actions are pursued instead.

1. A thorough investigation should be carried out into the wealth of public officials linked to the Goldenberg Affair with a view to confiscating their ill-gotten wealth. This should not only cover those who directly seem to have benefited from the Goldenberg Affair. Those who fail to account or who acquired their wealth through dubious, unscrupulous or unaccountable means should be made to surrender it to the State. Such action should also extend to bank accounts and estates within the country and abroad. Indeed, we gather that mechanisms are now in place for all public officials to report and account for their wealth in periodic fashion. Those who fail to account or who acquired their wealth through dubious, unscrupulous or unaccountable means should be made to surrender it to the State. Such action should be open to public scrutiny and should also extend to bank accounts and estates within the country and abroad.

1. Commercial Banks found to have facilitated the Goldenberg Affair should have their licenses withdrawn (if any remain that are still in operation) taking into account the interests of customers beforehand. This should be to stop them from participating in affairs of this nature in future, punish them for professional misconduct and economic sabotage and deter those that might have plans of doing the same from venturing in a similar direction. The same should be applied to business companies. Indeed, both the regulatory and monitoring capacities of those organs of the State that have the responsibility to oversee the operation of these bodies need to be greatly strengthened.

1. The independence and autonomy of the Central Bank of Kenya needs to be guaranteed in law and in practice, and strengthened in order to enable it perform its statutory functions optimally and without any interference. In particular, the management of the CBK should comprise of people of the highest moral integrity, competence and transparency.

1. Parliament should be strengthened so as to effectively carry out its watchdog function, and particularly to impose political and technocratic accountability. Thus, Parliament should be strong enough to exercise its powers of impeachment, whether of the President and/or members of his/her Cabinet, and at a minimum to secure some degree of accountability.

1. Members of Parliament, members of the Cabinet and other public leaders who participated and benefited from the Goldenberg Affair should be brought to account. They should be forced to vacate public office and barred from ever taking any public office in future both in Kenya or abroad with support of the Government of Kenya.

1. There is a need of establishing and/or strengthening the institutions that fight corruption in order to enable them perform their statutory functions optimally and without any interference.

1. Legislation on privatisation, investment, import and exports should be tightened and loopholes eliminated in order to protect the wider interest of the country and their application should be uniform to all. There should be no preferential treatment given to any entity, individual, company or institution.

1. Conflict of Interest Laws need to be reviewed, strengthened and operationalised in order to ensure that the bar on public officials engaging in private business while still in service and particularly where that engagement may clash with their public role, is effectively imposed. The essential objective of such laws should be to stop them from engaging in business that compromises their positions of public trust and which may also result in divided loyalties between serving public and serving self.

1. Employment to any public office should be based purely on the basis of merit rather than on political loyalty or blood relations. This should go hand in hand with improved remuneration and conditions of service so as to minimise the temptations to abuse office due to economic hardship and reasons of survival.

1. The justice system should be improved and streamlined in order to ensure speedy trial of those accused of any wrong doing.

1. Companies and individuals found to have evaded taxes and other dues to the State should be made to pay that amount with appropriate fines. The Kenya Revenue Authority should be further empowered to enforce the collection of revenue from any eligible taxpayer and should be availed necessary information where needed.

1. There were patriotic Kenyans—particularly technocrats—who saw a fraudulent scheme being hatched to loot their country and spoke out against it. As a result, they suffered in various ways including stagnation in career, unwarranted transfers affecting them and their families or being sacked from their jobs for not being cooperative”. These should be carefully identified and compensated for gallantly standing on the side of justice for their country at its hour of need.

1. It is especially important in our view that the government of the Republic of Kenya take the findings and recommendations of the Judicial Commission of Inquiry with the necessary weight and seriousness that final resolution of the Goldenberg Affair deserves.

Hon. Justice Samuel William Wako Wambuzi

Chief Justice Emeritus of the Republic of Uganda

Kampala, Uganda

Prof. Chris Maina Peter

Professor of Law, University of Dar es Salaam

Dar es Salaam, Tanzania

Prof. J. Oloka-Onyango

Professor of Law, Makerere University

Kampala, Uganda

Source:

THE PEOPLE’S OPINION ON THE “GOLDENBERG AFFAIR”

KITUO CHA KATIBA

EXTRACTS FROM THE REPORT BY MARS GROUP KENYA

Tags: Bosire, Corruption, Goldenberg, grand regency, kenya, Mars Group Kenya, Pattni, Saitoti

THE PEOPLE’S OPINION ON THE “GOLDENBERG AFFAIR”

BROAD ISSUES EMERGING FROM THE GOLDENBERG AFFAIR

Having provided our main opinions and observations on the evidence submitted to the Commission of Inquiry, we believe that there is need to examine several broad issues that emerge out of the Goldenberg Affair. This will help to provide a better understanding of the impact and wider implications of this affair to the people of Kenya and the failure of their Government to protect their wealth and resources at a time of critical need and when accosted by economic saboteurs of the worst kind. It will also assist the people of the other countries of the Eastern Africa region to draw lessons about the failure of mechanisms of good governance and transparency and to improve their instruments of governmental operation and accountability.

In the first instance, the Goldenberg Affair was a process not an event. It was not like the forgery of a single cheque, which is essentially a solitary episode, however large the monies involved. Indeed, it was not even like a bank heist which although taking place at a single shot, is nevertheless the result of some degree of pre-planning and a little bit of external assistance. Goldenberg was delicately and deliberately contemplated and executed; it unfurled over a considerable length of time and in different mutations, and it involved a bewildering array of individuals and institutions, many of whom occupied positions of not only tremendous influence, but also of considerable public trust.

Secondly, the Affair had the backing—clearly demonstrated by the evidence we reviewed—of persons who held significant positions of power and influence in the government of the Republic of Kenya. Those individuals either demonstrated a callous disregard for the oaths that they swore upon taking office, or stood to gain much more than either their offices or their reputations could give them, or, quite simply, they were intimidated. The third general point that needs to be made is that it will be impossible to discern the full scale of the devastation caused by the Goldenberg Affair, regardless of the number of inquiries and investigations that will be conducted.

Unlike a war, where the casualties are strewn around the battlefield allowing for a body count, the effects of these events extend into every facet of Kenyan public life. Even if one thinks of just the interest that could have accrued from the monies defrauded and what this could have meant in terms of medicine and health care; basic education; potable water and improved standards of living, the scale of the devastation eclipses many disasters—natural and human-generated. Indeed, in certain respects to describe the saga as a ‘scam’ is to somewhat minimize both the degree of its devastation and the scale of its deception. It is much more appropriate to describe it as the ‘Goldenberg Conflagration.’

The following are the broad issues that emerge from the totality of events that took place:

1. POLITICAL ACCOUNTABILITY

There is no doubt that the scandal in the first instance reflected a massive failure in political accountability. An analysis of such accountability must commence by focusing on key policymaking bodies, mainly the Executive and Parliament. This kind of accountability arises with respect to the method by which the Export Compensation Policy was made; the mechanisms of policy formulation and communication utilized, and the need for their formalization. While there were obvious problems in the manner in which policy was formulated (the lack of supporting documentation, the dismissal of technical expertise, the failure to critically review the implications of proposed new policy formulation) it is clear that the most serious deficiencies were embedded in the processes of implementation.

1.1 Collapse of the System of Checks and Balances

The checks and balances in place—which should have extended from the Treasury to the other government departments involved such as the Department of Mines and Geology as well as the Department of Customs and Excise—simply did not operate effectively. Given the scale of the collapse of those systems, plus the implication of policy makers at the highest possible level.

The whole affair appears to have been technically hatched and prepared in the Office of the Minister for Finance, who was also Vice-President, Prof. George Saitoti. It is in this office that most government officials were introduced to Kamlesh Pattni and asked to work with him. Also, it was in this office that most senior officers of the government were introduced to the Affair and informed of their role and the importance of co-operating in carrying out this “Government Policy.” Nobody could question the plan and “policies” explained by the Vice President—who was the Assistant to the President. Even in the face of resistance by Government technocrats who could see through the many holes in the proposal, it was the Minister for Finance, Prof. Saitoti, who ensured that the deal promised to Kamlesh Pattni, Kanyotu and those “above” them went through. A good example is the decision by the Ministry to pay the 15% export compensation, ex-gratia. It is obvious to all that the Minister for Finance could not have had the courage to take this course of action which not only violated the law but also undermined the authority of Parliament and meant a loss of billions of shillings to Kenya without a nod from the top.

1.2 Hiding from Justice: Former-President Moi and Others

It is unfortunate for the people of Kenya that the then President, Daniel Toroitich arap Moi, decided not to appear and testify before the Commission. Under a close examination and cross-examination by the lawyers assisting the Commission, there is no doubt in our minds that the truth would have eventually emerged. At the same time, it would have been an opportunity for him to clear his name, indeed, an opportunity the ex-President should have welcomed. On record, three Permanent Secretaries have named him as the person giving orders and expecting compliance. One of them, Dr. Wilfred Koinange testified that he even travelled to Mombasa to inform the then President that the first of the payments he was interested in had been effected. He was also named by Prof. Philip Mbithi, the Head of the Civil Service/Secretary to the Cabinet. Can we say with certainty that all these senior civil servants had an axe to grind against the former President? No reasonable person can believe such an assertion. That is all the more reason why—if he was a person of truth and veracity—he should have seized the opportunity offered by the Commission to clear his name and clear the political air around the role of his office in the Goldenberg Affair. Irrespective of whether or not the ex-President was actually directly involved in the Affair, he had an obligation, stemming from the position of public trust that he previously occupied, to give a more direct account of his role in events surrounding the Affair, whether by omission or commission.

We would like to point out that the appearance of a President or former President before a Judicial Commission of Inquiry is not an entirely novel phenomenon. The world has witnessed both sitting and retired heads of State being summoned before similar investigations and they have modestly responded to the call as a public duty. Former US President Bill Clinton appeared before a judicial commission headed by the then US Chief Justice the late William Rehnquist—a Commission impeaching him over the affair with the intern Monica Lewinsky. Retired South African President Nelson Mandela appeared before the Rugby Union Commission and made an important and lasting contribution to its work.That is not to mention the scores of important personalities—both White and Black—who on their own free will appeared before the South African Truth and Reconciliation Commission chaired by the respected Archbishop Desmond Tutu. Closer to home, the then Prime Minister, the late Apollo Milton Obote, of neighbouring Uganda, testified to a mid-1960s commission inquiring into allegations of the smuggling of gold and ivory from the then Congo. He did so even though several witnesses directly implicated him in the alleged smuggling.