NYS investigation puts former top official at centre of scam

Former NYS Deputy Director-General Adan Harakhe, who was arrested on November 28, 2016. PHOTO | FILE | NATION MEDIA GROUP

What you need to know:

  • Director of Directorate of Criminal Investigations Ndegwa Muhoro, appearing before Public Accounts Committee, rejects claim by former NYS Director-General Adan Harakhe that his password had been stolen and used in fraudulent transactions.
  • Mr Muhoro says entries were made into integrated financial management information system using Mr Harakhe’s password and username.

Investigations into the Sh791 million National Youth Service (NYS) scandal placed a former top official at the centre of the scam for allegedly authorising questionable payments, MPs were told on Wednesday.

Director of Directorate of Criminal Investigations Ndegwa Muhoro, who appeared before the Public Accounts Committee (PAC), rejected a claim by former NYS Director-General Adan Harakhe, whom investigations appeared to have centred on, that his password was stolen and used in the fraudulent transactions, saying there was no evidence that it was hacked.

Mr Muhoro said entries were made into the Integrated Financial Management Information System (IFMIS) using Mr Harakhe’s password and username, in which zeroes were added to figures, converting them into hundreds of millions of shillings.

For instance, an audit of the cost of a road in the Kibera slums in Nairobi, by the Ministry of Public Works, indicated that it cost Sh78 million, but three companies owned by one of the key suspects, Ms Josephine Kabura, were paid Sh791 million, with investigations by the Directorate of Criminal Investigations (DCI) indicating zeroes were added to inflate the figures.

The DCI boss told the PAC, chaired by  the deputy chairman, Kipkelion West MP Jackson Rop, that investigations also indicated that 21 other companies were involved in fraudulent NYS transactions and were reportedly paid Sh999 million, bringing the total amount stolen from the agency to over Sh1.8 billion.

The Ethics and Anti-Corruption Commission (EACC) has also warned of an evolving scandal, saying billions may have been stolen and top government officials sucked into the corruption as fraudsters dipped their fingers into the lucrative Sh25 billion NYS coffers, in one of the biggest scandals to hit the country in recent times.

BEN GETHI

Investigations by the Banking Fraud Investigation Unit also revealed drama and intrigues, with some of the huge cash withdrawals by Ms Kabura taking place at 3 in the morning at Family Bank, KTDA Branch in Nairobi, with most of the payments being made to Mr Ben Gethi, who had on Tuesday denied links with Ms Kabura.

The Director of Public Prosecutions (DPP), Mr Keriako Tobiko, was also thrown into the mix after it emerged that he overturned a decision of the DCI to have Mr Harakhe prosecuted for his alleged role in the scandal, and directed that he be treated as a witness.

“Our recommendation, which were based on material facts is that Mr Harakhe should face prosecution. He (DPP), however, advised that he remain a witness. Our stand has, however, not changed,” he said.

A perception that the former NYS boss had protection in “high places” also loomed large among the MPs during Wednesday’s proceedings, with questions being raised about the meteoric rise in the career of Mr Harakhe from a primary schoolteacher to a senior government official.

Kieni MP Kanini Kega said evidence adduced before the committee indicated that Mr Harakhe had been suspended three times for criminal conduct but after serving a month’s suspension, he each time returned to earn a promotion.

“The ‘clearance’ by the DPP lends credence to perception that he was protected, in addition to the fact that he was earning a full salary and privileges even though he had been interdicted.”