Biggest graft probe ever starts as Tobiko moves in

An investigation into what could turn out to be the biggest corruption scandal in the country's history is underway, targeting the custodians of the nation's purse in President Uhuru's administration.

Yesterday, the Director of Public Prosecutions (DPP) Keriako Tobiko gave investigators 10 days to file evidence, if any, of graft following claims by the Opposition that about Sh140 billion cannot be accounted for in the Eurobond saga. The optimism that swept the country last year after Kenya's success in raising capital from European and American investors has since degenerated into pessimism following graft claims on the spending of the Sh250 billion raised through the bond.

Tobiko's directive to the Ethics and Anti-Corruption Commission and the Directorate of Criminal Investigations makes it the biggest graft probe. In fact, both the Goldenberg and Anglo Leasing scandals that rocked the previous regimes are just but a fraction of the amount of money involved in the Eurobond. The Anglo Leasing affair, which involved contracts being awarded to phantom firms, shocked Kenyans when it was revealed in 2004. In 2006, the Auditor General told Parliament that the total value of the scam was Sh56 billion.

The other shocking scandal was Goldenberg, that involved Sh5.8 billion in which the architect of the scam, Kamlesh Patni, irregularly claimed money for the re-export of gold and diamonds that had come into Kenya from third countries. Kenya itself produces little gold and no diamonds.

The Government - backed by assurances from the Auditor General and Controller of Budget that the funds had been accounted for- has insisted the books are clean. Treasury Cabinet Secretaty Henry Rotich has even invited Opposition leader Raila Odinga, who has raised the graft claims, to his office tomorrow to receive documents on the transaction.

But the fact that investigative agencies have been asked to question officials and pore through documents to ascertain whether the math adds up, dampens a transaction the President last year described as a vote of confidence in Kenya after the bond attracted bids four times the initial target. The DPP directed that all the parties concerned be interrogated and record statements before the file is sent to his office for appropriate direction.

"I am informed that your respective agencies have commenced and are undertaking investigations into the matter. This is therefore to direct you to interrogate, record statements and obtain evidence from all parties concerned and forward the completed file to my office within ten days for perusal and appropriate directions," said Tobiko.

And determined to prove there was nothing to hide, Mr Rotich yesterday said organisations that handled the Eurobond, which Raila has has sought more information on, will send representatives to the meeting planned for tomorrow.

"Following your request for information relating to the Eurobond, I have the pleasure to invite you to the Treasury building on Friday, December 4, to enable us supply you with the relevant documents, answer any further questions you may have and provide the clarification you may need. It is also important to inform you that I have requested the representatives of the organisations you sought information from to be present at the function," reads a letter by Rotich to Raila.

Raila had written to the CS and Principal Secretary Kamau Thugge, who issued the sovereign bond on behalf of the country, and given them 14 days to explain how the money was used.

He also wrote to Barclays Bank PLC, J P Morgan Securities PLC, both of London, QNB Capital LLC of Doha, Qatar, and Standard Bank PLC of London as joint lead managers and bookrunners of the National Treasury.

But Raila yesterday declined the invitation, saying he had not sought the information for his private consumption and that the Government should instead publish it. Through his lawyer Paul Mwangi, Raila wrote to Rotich: "Our client is happy to note that the information is available but regrets that it has been unnecessarily withheld not only from the public but also the National Assembly's Public Accounts Committee."

"Article 35 of the Constitution states that every citizen has a right to information held by the State and the State should publish any important information affecting the nation. The only way to discharge your constitutional obligation in this matter is to publish the answers to the questions that were laid out to you," said Raila.

contradicting figures

And Raila has said he doubted that the DPP's investigation would yield much, noting the Government has maintained that all is well with the EuroBond and that the information would come from the same Government.

"Raila Odinga finds the orders for investigation into the Eurobond by the DPP deeply suspect and views them as part of the deliberate attempt to mislead the public and eventually cover up. Mr Odinga expects the DPP to obtain the information he is supposed to be investigating directly from the Government. His actions will therefore not deter the Opposition from demanding that the Government makes public all information on the Eurobond," the former premier said in a statement.

The Government has explained the money was used to pay off a syndicated loan and the balance disbursed to ministries for infrastructure projects. The two agencies had apparently started probes following complaints and adverse reports that the proceeds of the money were misused.

The Opposition has claimed the Government was unable to account for at least Sh140 billion from the proceeds because official statutory reports gave contradicting figures. They asked the Treasury to publish details of the Eurobond transactions within two weeks.