Two ex-ministers, PSs under probe over Anglo Leasing

The Solicitor General Mr Njee Muturi says the government is still gathering evidence against five officials who entered into corrupt Anglo Leasing contracts.

Mr Muturi said the five individuals, a former minister for Finance, a former minister for Information, two former Permanent Secretaries and an ex-Post Master General were walking free, as the government has been unable to prove criminal culpability with regards to corruption over unfair procurement and inflated prices.

The government has lost two cases in London and Switzerland respectively and is required to pay over Sh1.4 billion following two cases pitting First Mercantile Securities Corporation (FMSC) against the Republic of Kenya and Universal Satspace (USS) versus Kenya.

The cases arose from two contracts signed by the Ministry of Information on July 11, 2002 for the purchase and supply of satellite telecommunication equipment and communication network for Postal Corporation of Kenya (PCK) at a contract price of $11,787,000 (Sh1 billion at current exchange rates).

“There were political repercussions with some of the individuals resigning but to prove criminal liability is much harder because a nexus between the alleged corruption and the reward to the individuals involved has to be proved,” Mr Muturi said.

The government had tried to introduce evidence of corruption in litigation in the two cases, but the evidence did not meet the threshold required to stand in court, he said.

The evidence currently available with the government were tapes of recordings provided by government whistle blower Mr John Githongo, and evidence that two daughters of a former PS had their studies paid for by a director of one of the shadowy companies.

Appearing on a morning talk show on Citizen TV, Mr Muturi said the government had negotiated a lower settlement from $20 million to $7.6 million.

He said failure to pay the debts owed to the companies would lead to downgrading of the country’s credit rating and affect the country’s issuance of sovereign bond at reduced interest rates to Kenyans.

The Solicitor General said one of the companies supplied Satellite communication equipment and bandwidth, but the costs were inflated, compelling the government to negotiate lower amounts of settlements.

The former Attorney General Amos Wako had also failed to conduct due diligence in advising the government before the questionable contracts were entered into, however no explanation was given why the former AG who is now Senator for Busia had not been made questioned.

Mr Muturi said one of the companies had refunded Sh1 billion to the government in commitment fees, saying the State had much more to gain paying the Sh1.4 billion debt compared to the repercussions of a default.

Despite opposition from Jubilee MPs and the Law Society of Kenya (LSK) who have gone to court to block the payment of the corrupt deals, Mr Muturi said the government was keen to make the payments.