Defiant Mwatela faces the sack

Mrs Mwatela. Photo/FILE

President Mwai Kibaki is likely to sack abrasive Central Bank Deputy Governor Jacinta Mwatela over alleged insubordination, according to a Harambee House official.

The official said the President is “furious” and is regarding Mrs Mwatela’s refusal to move to the ministry of Northern Kenya Development and Arid Areas as insubordination.

The transfer has become murky with Mrs Mwatela, who has a reputation for being honest but headstrong, claiming that she was being moved because she had refused to sanction a corrupt currency printing deal.

On Saturday, the government was also furiously briefing the media against her, accusing her of bringing the operations of the Central Bank to a near-halt by being obstructionist.

The official, who did not want to be named discussing State House matters, said the President was also disappointed that Mrs Mwatela had taken her grievances to the Press.

The official said the President will likely revoke the appointment she never took and the one she now holds. But lawyers, among them Cabinet minister Mutula Kilonzo, said that the government was breaking the law with impunity in moving Mrs Mwatela to the new job as permanent secretary.

On Saturday, the government issued a statement through spokesman Alfred Mutua saying that the deputy governor of the Central Bank does not enjoy security of tenure.

“The government wishes to clarify that contrary to some media reports, the position of deputy governor of the Central Bank of Kenya does not enjoy security of tenure,” Dr Mutua said in a statement posted on public communications website.

Public service

Dr Mutua said people employed in the public service can be removed or deployed to various offices in the public sector, an indication that the government was keen on transferring Mrs Mwatela.

Mr Kilonzo said as deputy governor, Mrs Mwatela was protected in that position by the law.

“She enjoys protection of the law; if she left that office she’d be violating the provisions of the Central Bank Act,” said Mr Kilonzo. “She’s dead right.”

The government source said under public service regulations and code of conduct, every civil servant declares readiness to serve anywhere and any part of the country to deliver services to Kenyans.

State House is said to be unhappy with Mrs Mwatela’s move to engage Head of Civil Service Francis Muthaura who notified her of her appointment as PS in the media.

“Once employed as a civil servant you should be ready to serve in any capacity, anywhere in the country. You are not supposed to enter politics or hold press conferences,” the source said.

Mr Kilonzo, however, said the deputy governor’s position is created by law and that Mrs Mwatela had not willingly volunteered to leave nor procedure to remove her followed. Mr Kilonzo likened Mrs Mwatela’s situation to the removal of former CBK governor Andrew Mullei.

“Central Bank is a very important institution. The position of deputy governor is more important than that of a PS because CBK takes care of the fiscal and monetary well-being of the country,” he told the Sunday Nation on the phone.

Security of tenure

Safina party leader Paul Muite said Parliament gave the deputy governor’s office security of tenure in recognition that there will be conflict between government and CBK “in as far as fiscal and monetary matters are concerned.”

“The law requires that the interpreter looks at the wording and the objective of the law,” Mr Muite said.

The CBK Act states about the position of deputy governor thus: “There shall be a deputy governor who shall be appointed by the President on the recommendation of the minister and who shall hold office for a term of four years, but shall be eligible for reappointment for one further term.”

It adds that the board shall consist of a governor, (who shall be the chairman), a deputy governor (deputy chairman), Finance PS and five other non-executive directors.

The law says the governor, deputy governor and the directors shall be appointed by the President and hold office for four years each but shall be eligible for re-appointment. No governor, deputy governor or director is to hold office for more than two terms.

The President has powers to terminate appointment of a governor, deputy governor or a director who is adjudged bankrupt or enters into a composition or scheme of arrangement with his creditors; is convicted of an offence involving dishonesty or fraud or moral turpitude (extreme immorality) or is adjudged or otherwise declared to be of unsound mind.

The officials could also be dismissed if absent, without the leave of the Board, from three consecutive meetings of the Board or becomes incapable or incompetent of properly performing the functions of his office.

Whereas the President must appoint a tribunal before removing the governor, the Act is quiet on the deputy. On Friday, Mrs Mwatela linked her removal to her refusal to authorise an “illegal” tender for the printing of new currency.

As the chairman of the CBK tender committee, Mrs Mwatela said she rejected instructions to order printing of new currency notes from De La Rue, arguing it was against procurement laws. The tender could have cost the country an extra Sh2 billion, she said.

She said CBK had signed another contract with De La Rue back in 2005 to print new generation currency notes and made a down-payment of $25 million for no reason.

The 2005 contract was cancelled due to alleged lack of storage space but the $25 million was not returned. Mrs Mwatela, the wife of Education assistant minister Calist Mwatela, has worked at the CBK since 1977.

Additional reporting by David Okwembah