Youth Fund director says Waiguru ordered Sh44m pay for cancelled event

Former Devolution Cabinet Secretary Anne Waiguru ordered that an events company be paid Sh44 million for organising a function that did not take place, MPs investigating corruption at the Youth Fund heard Thursday.

A director at the Youth Enterprise Development Fund, Mr Clement Ayungo, told the Public Investments Committee that the board chairman, Mr Bruce Odhiambo, told him that Ms Waiguru had instructed him to ensure payments were made to Saverin Holdings Ltd, although a rebranding event it was supposed to organise had been cancelled.

“He (Odhiambo) told me he had received a call from Anne or State House, I can’t recall who but it was one of them, and told me to pay for the event which the minister had herself cancelled,” he said.

The committee also heard that Ms Waiguru ignored the advice of the Ethics and Anti-Corruption Commission that the suspended Youth Fund chief executive Ms Catherine Namuye was unfit to hold a public office since she had “serious integrity issues.”

Ms Namuye and Mr Odhiambo have been adversely mentioned in connection with the loss of the fund’s Sh180 million.

Ms Waiguru denied knowledge of the anti-corruption commission's advice. She also denied any relationship with a director of the fund, Mr Michael Wamai, whose firm Lukenya Earth Movers won a Sh137 million contract with the National Youth Service (NYS), which is subject to investigations in connection with the Sh791 million NYS scandal.

MYSTERIOUS DEATH

MPs also questioned Mr Ayungo on the death of Mr Simon Mwangi, who was a driver at the Youth Fund, who died in mysterious circumstances, while the two attended a “pool party” at the South Coast.

PIC chairman Adan Keynan said Mwangi’s death had something to do with the loss of the Sh180 million, but Mr Ayungo protested, saying his death was an accident, which happened as they swam in the wee hours of the night at the Kivuli Cottage.

Ms Waiguru appeared to heap the blame on the suspicious transactions on former Principal Secretary Peter Mangiti, who she accused of failing to inform her about the fraudulent activities.

“He may have told me verbally which was informal. All formal communications should be in writing and I don’t remember seeing any,” she said.

Her statement was in contrast to Mr Mangiti’s own testimony in which he accused his former boss of trying to interfere with investigations by insisting that investigations into the Sh180 million loss be handled internally, although three investigative agencies were already looking into it.

The former CS said she only ordered for an administrative report in addition to the ongoing investigations by the EACC, the anti-banking fraud unit and the Directorate of Criminal Investigations (DCI) and that she did not at any point demand that the internal process take precedence.

Mr Keynan asked Ms Waiguru to explain what action she took upon learning of the alleged fraud through a copy of a letter by Mr Odhiambo suspending Ms Namuye.

The former CS, who resigned under public pressure following corruption allegations at her ministry,  said she became aware of the suspected fraud three weeks before she quit the Cabinet, and by which time she couldn’t have done anything.

“The EACC was already investigating the matter. What was a minister supposed to do? If I had done anything maybe you would now be telling me I was interfering with investigations,” she said.

The former powerful CS told the MPs that she would have been reluctant to be a whistleblower on the suspected fraud, since those who sounded the alarm on corruption ended up being treated like the culprits.