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TI-Kenya and local NGOs denounce government’s handling of procurement scandal

PUBLIC STATEMENT ON THE C.I.D. FORENSIC SCIENCE LABORATORY PROJECT

WE THE undersigned issue this statement in the public interest, and specifically respond to the Government statement on the C.I.D. Forensic Science Laboratory Project issued on 22nd June 2004, by Ambassador Francis K. Muthaura, MBS, Permanent Secretary, Secretary to the Cabinet and Head of the Public Service, for the three following main reasons:

  • The statement is a study in vagueness, dissemblance and a complete absence of detail. In purporting to exonerate unnamed Ministers and Permanent Secretaries, Ambassador Muthaura pre-empts the findings of the Kenya Anti-Corruption Commission (KACC) and the inquiry of the Parliamentary Accounts Committee, in a manner that is contemptuous to both efforts to establish the truth about the dealings between the government and a company said to be Anglo Leasing Finance Limited (ALFL).
  • The statement in effect insults the intelligence of Kenyans and displays an unaccountable stance by the government in the light of what has entered the public domain. The inadequate understanding of accountability displayed in the statement is cause for serious concern. It attacks the media despite the sterling job they have done in trying to prevent the loss of billions of shillings that belong to the people of Kenya.
  • Finally, the statement proposes an ad hoc solution to complex procurement issues, particularly as regards projects classified in the interests of national security. The solution presented is to establish yet another inter-ministerial committee, belying the fact that it is the Executive that is responsible for the mess we almost got ourselves in with Anglo-Leasing Finance Limited. External accountability, preferably to Parliament is the most urgent order of business today. We believe that decisions that cannot stand public scrutiny should not be taken in the first place.

The Statement Should Be Rejected For:

1. Raising up Sacred Cows: despite quoting the President, the statement reverses itself by absolving unnamed Ministers and Permanent Secretaries. In one breath the Head of Public Service tells Kenyans that investigations are continuing and that the facts have yet to be established; while in the next breath he purports to exonerate unnamed members of government. Presumably, Kenyans are being asked to believe that "the government's investigations have not established anything irregular done by the Ministers or Permanent Secretaries" and that what the Head of the Public Service says is true, simply because he says it. This is unacceptable.

2. Papering over the truth about the controversial contracts: The statement says that the purported Forensic Science Laboratories were to comprise 40 million US Dollars worth of buildings, equipment and training purportedly to be built, supplied and delivered by Anglo Leasing Finance Limited and Forensic Laboratories of Scotland. The project was valued at 40 million US Dollars via a "lease purchase finance arrangement for 11 (eleven) years to be paid in six monthly instalments of US$2.3 million on average at the interest of 6%." A condition of the August 2001 contract was purportedly that the government would avail land for the laboratories within 100 days of the signing of the agreement. ALFL reportedly claims elsewhere that this never happened hence construction never started. Yet we read in this statement published by Ambassador Muthaura that "during this period, and as further discussions on implementation were going on, the Government honoured the payment of the two instalments, which fell due as per the terms of the agreement." The author of the statement appears completely unconcerned, beyond telling us of refunds, that almost 1 million US Dollars was paid as a commitment fee way back in 2001, to a company apparently without an identifiable representative; that the current 2004/5 budget contained a provision to make instalment payments amounting to over 450 million shillings; and that over 4.6 million US Dollars has been paid in "instalments" on a non-performing contract. Assigning the entire blame for this bizarre situation to the past government will not wash.

3. Misleading the Public: The statement's attempts to divert attention from the Passport Immigration Security and Documents saga misstates the nub of public outrage by suggesting that only the "Forensic Science Laboratory project under the Office of the President has been the subject of extensive media coverage and of public interest." The author of this statement has ignored the fact that Kenyans have been concerned to find the truth of another saga too, namely the Passport Immigration Security and Documents issue. It is ironic that the statement admits that the Forensic Science Laboratory Contract investigation "was triggered by the Government investigation on the Passport Immigration Security and Documents contract where Anglo-Leasing and Financing Company Limited was reported to be having another contract with the Government", while not commenting on the prior issue.

4. Disregard for the Kenya Anti-Corruption Commission: The statement indicates a disregard for the Kenya Anti-Corruption Commission that beggars belief. While the author properly states the government policy towards "setting up a strong independent and autonomous anti-corruption Commission to ensure a fair, objective and professional investigation of corruption," his purported announcement of the findings of a KACC investigation endangers the prospects of the KACC being seen as independent of the Executive. Furthermore, Kenyans should be made aware that, though KACC has been in existence since May 2003, it remains an under-resourced and under-capacity organization incapable of fulfilling its gigantic statutory obligations. While elite corruption is in resurgence, KACC had its funds cut in the 2004 budget by close to 100 million Kenya Shillings.

5. Pulling the Wool over our Eyes: The statement glibly tells Kenyans that "corruption investigations are complex and may take longer than anticipated for the simple reason that acts of corruption are always concealed." The authors of all crimes seek to conceal them, but that is not our point. Not ALL corruption cases are complex and not ALL of them require lengthy investigations. We do not, and Kenyans should not, accept that the cases involving ALFL are in this category for, if they were, then how would the Head of the Civil Service have so swiftly concluded his investigations and exonerated unnamed Ministers and Permanent Secretaries? The statement dissembles by trying to convince Kenyans that despite information, available in the public domain and appearing to inculpate public officers for, at the very least, ethical breaches, no irregularities have occurred.

6. Dissemblance: The statement displays no evidence of any serious intent to communicate any real information about the investigations to the public. Consider this excerpt from the statement: "The first correspondence by NARC Government on this project was in March, 2003 when a Communication to trigger the implementation of the project was addressed to the Ministry of Public Works & Housing as per the terms of agreement. The communication that followed related to the design of the buildings, formation of the Technical Implementation Committee and availability of adequate land. Correspondence was between the Office of the President, the Ministry of Roads, Public Works and Housing, and the Ministry of Environment and Natural Resources." In the tradition of 'Yes Minister' the author tells us nothing whilst using public money. The civil society and Kenyans would like to know, for example, which public officers were involved and what constitutes a communication?

7. Misstating the Government's Legal Obligations: According to the statement, the "Government is legally bound to honour a contract and agreements entered into by the previous Government. Therefore budgetary provisions are made as a matter of routine to finance such contracts as per the agreed repayment schedules." We say the government is under a greater duty to scrutinize contracts for legality. For example, the Government has laudably reviewed pending bills for public works and refused to pay most of them for lack of genuineness. What's different here?

8. Withholding Evidence: We are told "the Government has stopped the implementation of the project, and both the commitment fee and the two instalments have been fully refunded by Anglo-Leasing and Financing Company Limited to the Government." The presentation of documentary evidence would strengthen the claim that, over the past week or two, in what would appear to be record time, a shadowy entity called ALFL has repaid us, the people of Kenya, close to 5 million US Dollars.

9. Providing Ad hoc Solutions to Complex Problems: The creation of an inter-ministerial procurement committee and a public-private-partnership unit in the Ministry of Finance are ad hoc, bureaucratic responses that demonstrate a lack of understanding of the complexity of the problem being faced. Put simply the problem is that the Executive is not externally accountable for how it has been addressing security related projects. The solution being proposed by Ambassador Muthaura may well not work, and is certainly inadequate. May we suggest the following to Kenyans?

  • Security classification should only be very restrictively applied to public procurement projects. All security procurement should be tendered except for a compelling reason.
  • All security procurement decisions should be scrutinized by a Parliamentary Committee (whose members are sworn to secrecy). All bid evaluation criteria should be scrutinized.
  • Companies involved in bidding for and delivering security projects must subscribe to anti-bribery and Integrity Pacts as proposed by Transparency International. Any commissions or facilitation payments must be declared and published.
  • Whistleblower protection legislation is a priority legislative agenda for Parliament. The Parliament should urgently review the Official Secrets Act and enact a Freedom of Information Act.

10. Shooting the Messenger and Missing the Point: On the coverage of the issues surrounding the governments handling of security procurement and ALFL we find no fault with the media, rather we congratulate them for doggedly pursuing the truth about the identity of key players and exposing Kenyans to the resurgence of impunity before it is too late.

SIGNED BY:

Gladwell Otieno, Executive Director, Transparency International -Kenya

Francis Angila, Chief Executive Officer, National Council of NGOs

Albert Mwenda, Ag. Executive Director, Institute for Economic Affairs

Philip Kichana, Executive Director, International Commission of Jurists (Kenya Section)


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