Global Policy Forum

State Changes Tune on Looted Billions Abroad


By Philip Mwakio

East African Standard
May 19, 2005

The Government is considering entering into negotiations with people who stole and stashed billions of taxpayers' money abroad during the Kanu regime. Justice and Constitutional Affairs minister Kiraitu Murungi spoke of this possibility yesterday as he announced that a delegation would soon be dispatched to London for a meeting with an international consultancy firm contracted to trace the money.

Despite assurances by Kiraitu since 2003 that the firm had identified the looted cash, nothing has been forthcoming. Yesterday, as Kiraitu denied that the Government had fallen out with the firm, signs that parts of, if not the entire recovery, may have broken down, emerged when the minister said the delegation to London would discuss with Kroll "better mechanisms of tracing the billions".

The minister, responding to a question by The Standard's journalist, would not give the exact date when the delegation would be leaving for the meeting, only saying "it will be very soon". The recovery, he said, would focus on two ways: Using the courts to get the money back or entering into negotiations with culprits to return it. "This process of recovering money abroad is a bit more complicated, so we'll resort to going to court or entering into negotiations with the culprits," he said.

Kiraitu was speaking in Kilifi after the opening of the second joint review forum of the Government, Justice, Law and Order Sector (GJLOS) Short Term Priorities Programme. Asked if it was true that the working relationship with Kroll had broken down because of Government has not honoured its side of the bargain by paying the consultancy firm Kiraitu replied: "That is a lie."

Last month, the Government Spokesman, Dr Alfred Mutua, said after consulting with Kiraitu that Kroll was not owed any money and that the firm was expected to present its report to the Government. "It's them (Kroll) who owe us the report, which we are still awaiting," Mutua told The Standard in a telephone interview. Yesterday, Kiraitu did not refer to a report, but instead spoke of "new modalities".

The Government hired Kroll in 2003 to locate funds siphoned out of the country by elite members of the previous regime. Nearly a year ago, Government officials enthusiastically announced that they were closing in on Sh80 billion, with the help of Kroll investigators, and were taking the first steps towards recovery. But in June, according to reports published in the Financial Times of London, the Government failed to pay Kroll its second installment, only settling the account six months later and endangering the investigations at a critical stage.

There was concern that delay could allow assets to be moved. But speaking at the time, Kiraitu was quoted by FT as saying: "Obviously Kroll is a professional body so they were waiting for the payment." He added, "I wouldn't say [the investigations] were suspended but they kept on reminding us about the payment." Then, he said the probe was continuing and that the "individuals, the bank accounts, the amounts" were known and that the freezing of assets was ongoing.

The Justice minister attributed the failure to pay Kroll at the time to a "bureaucratic delay", but to some, according to the report, the failure by Government to pay on time was an illustration of the administration's flaws and lack of political will. In March, Kiraitu said on returning from an overseas trip that Sh70 billion already traced by Kroll was safe in a bank "somewhere". The minister said the report by Kroll was expected to mark the second phase of the tracking down of the stolen billions.

But yesterday, the minister would not say at what stage the investigations had reached, how much money Kroll had tracked down, and in whose accounts it had been found. It was also not possible to ascertain how much the Government is paying the forensic experts to accomplish the task. Kiraitu would only put the total assets and money said to be stashed abroad at over Sh70 billion, adding that a good number of the assets and money had been frozen.

The minister curtly told the Press that no contractual agreements were breached as far as working with the firm was concerned. "The Narc Government undertook to deal with the past and with it came the asset recovery programme," Kiraitu, who was accompanied by the Solicitor-General Wanjuki Muchemi said.

He added that apart from arresting all those suspected to have fraudulently obtained money and assets, the Government was also prosecuting and punishing the culprits. The minister said that the whole exercise was being conducted locally and abroad. But he would not be dragged into the intricate details of the recovery saying it was not the appropriate time to speak since the process was still midstream.

Kiraitu said part of the recovery process was the implementation of the Ndung'u report on land. "We are already repossessing land that was acquired through the back door," he said. The Government was also awaiting the final Goldenberg report and would act on its recommendations by October this year. On corruption, Kiraitu said the media was being used to exaggerate "alleged government inability" to fight the vice.

"The activities of some of our development partners, who have taken sides in the local political rivalries and used anti -corruption rhetoric as a pretext for advancing their commercial, political and strategic interests, are well known to us," participants of the forum. Kiraitu said reactions to the resignation in February of Ethics Permanent Secretary John Githongo pointed to deep-rooted suspicions of the Government's commitment to fighting corruption. "These suspicions are largely based on perceptions and misunderstanding rather than facts or reality," he said. The GJLOS is a Government-led reform programme launched in November 2003.

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