Dismal funds allocation likely to hamper corruption fight

What you need to know:

  • Offices like that of the First Lady and spouse of the Deputy President enjoy more budget allocations compared to offices like Finance Reporting Centre and Assets Recovery Agency.

  • This week the Finance Reporting Centre was allocated Sh287, million down from Sh300m it was allocated the previous financial year.

  • Asset Recovery Agency which is housed under the Attorney-General’s office was allocated sh184 million this financial year.

The government’s resolve to fight corruption is likely to be hampered by dismal budget allocations and understaffing of key agencies enabled by the law to carry out the mandate.

A careful look at budget allocations released by the Treasury shows that offices like that of the First Lady and spouse of the Deputy President enjoy more budget allocations compared to offices like Finance Reporting Centre and Assets Recovery Agency.

There also seems to be a mismatch in allocations to Ethics and Anti-Corruption Commission (EACC) and Directorate of Criminal Investigations (DCI), in the sense that despite EACC operating only under one law and therefore a limited scope, it has been allocated a bigger budget than DCI which deals with not only fighting corruption but also other serious crimes and is managed by several laws.

MULTI-AGENCY TEAM

“A key enabler for achieving the Big Four is eradication of corruption. Without vigorously addressing corruption we will not achieve our aspiration of becoming a middle income country. It is critical, therefore, that each arm of government – Legislature, Judiciary and Executive – plays its role firmly and without fear or favour. We have strengthened the multi-agency team enabling them to investigate, prosecute and recover corruptly acquired assets,” noted Finance Cabinet Secretary Henry Rotich when he presented the budget on Thursday.

But it even as the government waxes lyrical on the fight against corruption, the Finance Reporting Centre and Assets Recovery Agency, two bodies established under Proceeds of Crime and Anti Money Laundering Act, 2008, are grossly underfunded and understaffed.

When he visited Kenya in 2015 the then US President Barack Obama entered into a deal with President Uhuru Kenyatta that would see Kenya vigorously implement the Proceeds of Crime and Anti-Money Laundering law with the help of the US government.

LAUNDERING DEALS

This week the Finance Reporting Centre was allocated Sh287, million down from Sh300 m it was allocated the previous financial year.

The strategic agency, which is mandated to monitor all banking transactions and flag any money laundering deals, is understaffed with sources indicating that it has only one forensic auditor. This is despite the law directing all banks to report any suspicious bank accounts to FRC for investigation. This means that every day banks report hundreds of transactions which, in their view, need special attention but are not followed up owing to the understaffing at FRC.

Another agency under the POCAMLA law is Asset Recovery Agency which is housed under the Attorney-General’s office.

The agency was allocated sh184 million this financial year.

Sources indicated that it is also grossly understaffed as it has only four detectives drawn from the Directorate of Criminal Investigations.

FREEZE ACCOUNTS

Assets Recovery Agency is mandated by law to freeze accounts of suspected or convicted people or seize their assets if they are suspected to have been involved in crimes related to money laundering.

It is this agency that routinely works closely with EACC and DCI in freezing bank accounts of those who are charged in court with corruption and money laundering crimes. FRC and ARA cannot now recruit more staff owing to the modest budget allocated to them.

But despite these modest budgetary allocations to those key institutions, the office of the First Lady was allocated Sh437, 016,634 while that of the office of the spouse of the Deputy President got Sh305,671,531. The two offices, which are not established by law, are also well staffed.

Meanwhile, the Directorate of Criminal Investigations, which has now emerged as the public face in the fight against corruption, was allocated Sh2,846,994,248 in the 2018/2019 financial year, a drop from 2,968,976,377 in 2017/18 financial, year.

SERIOUS CRIMES

In the fight against corruption DCI is guided by at least six Acts of parliament which include Anti-Corruption and Economic Crimes Act, 2003, Proceeds of Crime and Anti-Money Laundering Act, 2009, Prevention of and Organised Crimes Act, 2010. Penal Code, Public Procurement and Asset Disposal Act. No. 33 of 2015 and Public Finance Management Act, 2012.

This is in addition to dealing with other serious crimes like murder, human trafficking, fight against drugs among others.

On the other hand EACC which is only guided by Anti-Corruption and Economic Crimes Act, 2003 received a staggering 2,751,540,000.