Anglo Leasing probe gains fresh impetus

Kenya Anti-Corruption Commission director PLO Lumumba (right) gestures during a media briefing at Integrity Centre on July 26, 2010. Investigations into the Anglo-Leasing fraud, estimated to have cost the taxpayer nearly Sh200 billion, began in 2007. Photo/LIZ MUTHONI

By Mwaura Kimani

Efforts to recover the billions of shillings lost in security contracts commonly known as Anglo-Leasing got a new lease of life on Friday after the Court of Appeal gave the corruption watchdog the green light to involve foreign governments in investigations.

Judges RSC Omollo, Samuel Bosire and Phillip Waki cleared the way for the Kenya Anti-Corruption Commission (KACC) to seek help from the Swiss government in its pursuit of the suspects, nearly three years after the investigations began.

KACC had appealed against a High Court order barring it from getting the Swiss government’s help in the scandal estimated to have cost the tax payer more than Sh600 million.

But the Court of Appeal found that the lower court had erred in finding that the corruption watchdog cannot investigate First Mercantile Limited, a Swiss firm that got a government tender to help the Postal Corporation of Kenya (PCK) buy telecoms equipment at a cost of Sh1 billion.

Treasury had paid First Mercantile Sh600 million for the deal signed in 2002 but stopped in 2005, forcing the Swiss firm to seek redress in a Geneva court.

Three years ago, First Mercantile obtained a court order blocking KACC from seeking mutual legal assistance from Switzerland’s Federal Office of Justice and Police to investigate the case.

The Swiss firm had argued that such assistance would amount to opening parallel investigations into a matter that was already before the court in Geneva, a position that the Kenyan High Court affirmed in a 2007 judgement.

KACC responded to the judgement with an appeal that ended last week with the verdict that it can, in fact, seek the assistance of the Swiss authorities to pursue the suspects.

On Monday, KACC termed the latest decision a big step in the fight against corruption that clears the way for it to involve foreign authorities in its investigation of bank accounts, inquiries and interviews.

It also allows the corruption watchdog to seek similar help in the execution of warrants authorising seizure of documents and equipment and freezing of assets.

“It clears the way for KACC to pursue the Anglo-Leasing type cases and conclusively bring the perpetrators to book,” said KACC advisory board chairman Okong’o O’Mogeni. “KACC is holding a lot of information on the deals but the court order had meant that it cannot use them for investigations and possible prosecutions,” said Mr O’Mogeni.

Investigations into the Anglo-Leasing fraud, estimated to have cost the taxpayer nearly Sh200 billion, began in 2007 but no stolen funds have been recovered.

The involvement of foreign governments in the pursuit of suspects in similar cases has yielded more striking results in other African countries.

Information-sharing between the British and Nigerian agencies, for instance, saw more than £35 million worth of assets frozen in the UK, and more than £5 million repatriated to Nigeria.

Legal challenges at home and abroad have however prevented Kenyan authorities from seeking similar assistance making the Court of Appeal’s decision critical.

Lawyers said the judgement opens a fresh window for quick investigation and determination of pending corruption cases.

“Some of these cases commenced more than six years ago — a statement of how slow our criminal justice system is,” said Philip Murgor, a senior partner at Murgor & Murgor Advocates.

Business leaders and anti-corruption crusaders said Kenya’s fight against graft has suffered near paralysis due to a faltering political commitment and misuse of court process to frustrate justice.

“We still have a long way to go to eliminate corruption,” said Mr Patrick Obath, the chairman of the Kenya Private Sector Alliance (Kepsa). “Until we systematically fight corruption by successfully prosecuting offenders, we won’t achieve much,” he said.

The Anglo Leasing series of contracts were mostly signed in 2002 when the Kenyan government decided to replace its passport printing system.

The tender was originally quoted at Sh588 million but was awarded to a non-existent British firm, Anglo Leasing Finance, at a price of Sh2.9 billion.

Investigations into the scandal, which resulted in the resignation of the then Finance minister David Mwiraria and dismissal of three top civil servants, uncovered 17 other security contracts in which the government had either paid out billions of shillings to bogus overseas contractors, had been grossly overcharged or had signed contracts that left the taxpayer at a disadvantage.

Public outcry forced the government to cancel the contracts but some of the contractors sued the government or the Kenyan authorities for breach of contract.

Kenya remains one of the most corrupt countries in Africa, according Transparency International, which ranked the country the third most corrupt nation in the five- member East Africa Community, citing high level of corruption in the public sector.

Many Kenyans believe success of Kenya’s anti-corruption machinery is bound to be judged on the basis of the return on investment to the taxpayers in terms of recovery of stolen public assets, the number of high profile convictions and the deterrence force of the institution in fighting corruption.

“The ruling by the Appeal Judges is testimony to the fact that something is happening on Anglo Leasing cases,” said Patrick Lumumba, the new director at KACC.

The ruling also gives KACC powers to seek MLA without reference to the AG.

Previously, KACC had to seek the AG’s support in seeking assistance with any foreign government or bodies, under the Anti-Corruption and Economic Crimes Act, 2003.

“The AG must push for the passing of the Mutual Legal Assistance Bill so that he too can be on the same or better position than that of KACC,” said the ruling by the three Judges issued on July 16, 2010.

The Mutual Legal Assistance Bill which was introduced in Parliament in May last year is still awaiting debate in the House.

Mutual Legal Assistance (MLA) is the formal way in which countries request and provides assistance in obtaining evidence located in one country.

Source: Business Daily