EACC carts away Devolution ministry files in fresh probe

A move by detectives from the Ethics and Anti-Corruption Commission (EACC) to cart away documents that could implicate senior officials at the Ministry of Devolution in the Sh800 million National Youth Service (NYS) scam has caused panic within government.

The Sunday Nation has learnt that the EACC is trying to establish the link between companies that benefited from lucrative contracts and the ministry’s leadership.

The investigations have sparked a chain of reactions from government officials, influence peddlers and PR agencies out to shape public perception and perhaps the course of investigations.

“This commission is investigating allegations of financial impropriety at NYS. To assist our investigations, kindly provide us with the procurement documents... Our officers Gideon Rukaria, Mohammed Hassan and Edwin Onyango will be available to collect the documents,” reads a letter from the EACC Director of Investigations to Devolution PS Peter Mangiti.

Among the documents collected on Wednesday are bank details of several companies including Brandspark Supplies Ltd, Fahaza Ltd, and Lizsol Chem Company Ltd. Others under the lens are Greenberg Holdings Ltd, Baltimore General Supplies Ltd, Lukenya Earth Movers East Africa Ltd and Out of the Box Solutions.

The investigators are also seeking company documents “relating to the subject procurements including correspondence between your procuring entity and suppliers”.

On Friday, NYS Director General Nelson Githinji appeared before EACC detectives amid the widening probe over financial irregularities at the outfit.

The initial probe report compiled by the Criminal Investigation Department (CID) and handed to Devolution Cabinet Secretary Anne Waiguru was dismissed by the Office of Director of Public Prosecutions as “hearsay”. Mr Tobiko went ahead to form an inter-agency team to start the investigations afresh.

The CID report, a copy of which was seen by the Sunday Nation, exonerated Ms Waiguru and implicated Mr Mangiti, Dr Githinji, his deputy Aden Harakhe, 18 NYS staff and directors of six companies.

But the companies whose documents were picked by EACC detectives on October 7 were not among those investigated by CID in its report to the CS.

Yesterday, minutes of one of the meetings at Harambee House on February 18, 2015 chaired by Ms Waiguru and attended by Mr Mangiti, Dr Githinji, Mr Harakhe plus more than 30 members of NYS staff show that the issue of inflation of project costs was discussed.

“It was noted with concern that some projects implemented in Kibera appear to have cost a lot more than would reasonably be expected,” extracts from the minutes indicate. “It was important to establish whether executing teams had adhered to the bills of quantities prepared at the commencement of the projects.”

The same meeting was also told that Dr Githinji was no longer the accounting officer of NYS. The minutes capture a directive by Ms Waiguru claiming that the change of guard would allow Dr Githinji to focus on “strategic leadership of NYS to deliver on its mandate”.

“It was noted that the DG was too overwhelmed with operational matters and as such many things were falling through the cracks. To address this, the Cabinet secretary directed that the AIE (Authority to Incur Expenditure) be withdrawn from the Director and issued to SDDG (Harakhe), who would effectively process requests promptly,” states the minutes. 

CONTRADICTING REPORTS

Mr Harakhe joined NYS in October 2014. It was said that he was transferred to the ministry from Provincial Administration to whittle down Dr Githinji’s powers after the director-general allegedly fell out with the CS.

Yesterday, there were contradicting reports as to whether Ms Waiguru had recorded a statement or not. Earlier, a source told Sunday Nation that EACC visited her office on Wednesday last week. But a top EACC official told us that she will be among the last officials to appear before the investigators.

The CID report leaked to the media and made public for the first time after Dr Githinji appeared before EACC on Friday could be aimed at influencing public perception and attempting to lead the EACC investigators down blind alleys.

Some sources say the latest frenzy of media leaks and briefings could be aimed at shielding some powerful individuals and deflecting the blame to others.

The CID report questions how Mr Mangiti allowed Sh133 million to be paid to suppliers while CID were conducting investigations.

It alleges that Mr Mangiti, who is the accounting officer of the ministry allegedly approved and signed the contracts despite active investigations.

It also questions why a Regina Nyambura, who allegedly transacted Sh 695 million had been redeployed by Mr Mangiti but still remained at NYS.

The report claims that the six companies which were identified as having been the beneficiaries of Sh695 million were jointly owned by Josephine Kabura Irungu, Caroline Njambi Kinuthia and Peter Omari Otuoma.

The report claims without offering proof that some of the companies – Sigi Holdings, Beatrom Investments and Ritsem Limited – were owned by alleged relatives of top NYS officials. According to the report, Dr Githinji approved Sh554 million with “a similar fraudulent manner of introducing zero on each transaction in the IFMIS”.

On receiving the CID report, DPP Keriako Tobiko questioned how the investigation was conducted by CID and Devolution ministry. 

He also directed that Ms Waiguru records a statement on the matter. “Several aspects of this fraud would properly fall under the Anti-Corruption and Crimes Act 2003, the Leadership and Integrity Act and the Public Officer Ethics Act,” said the DPP.

The Investigation by the CID is limited only to offences under the Penal Code. However, the evidence in the file discloses possible offences under Proceeds of Crime and Anti-Money Laundering Act and the Prevention of Organised Crimes Act. These offences have not been investigated,” he said.

Further, the DPP trashed the list of 22 officials from the ministry of Devolution and NYS who had been mentioned by the CS and suspended when she read the list on September 11. Only two officials according to the DPP had recorded statements with the DCI as suspects, the rest did so as potential witnesses.

Also sucked into the scandal is the Family Bank where all companies that received suspect payments were operating accounts at its KTDA branch.