Parliament has decried the failure by key investigative agencies to get to the bottom of the scandals at the National Youth Service.
The Public Accounts Committee (PAC), the House's key watchdog team, strongly criticised the Ethics and Anti-Corruption Commission, the Directorate of Criminal Investigations and the Director of Public Prosecutions for shoddy investigations that they said failed to unravel the real magnitude of the theft at the National Youth Service, especially because it is likely more than Sh1.8 billion had been lost.
The committee’s criticism came out in the open on Tuesday as it revealed that it had obtained more information from the Devolution and Planning ministry showing several billions were paid out from National Youth Service to date.
The fresh information showed that 17 other banks, in addition to the 11 the PAC has already interviewed, handled the money on behalf of hundreds of businesses that transacted with the youth service.
“We realised that the work this committee did ought to have been done by the investigative institutions of this country, that is the Ethics and Anti-Corruption Commission and the Director of the criminal investigations,” said committee chairman Nicholas Gumbo.
Instead of exposing the intricate web of looting, the investigating agencies appeared to have concentrated on the information that was already in the public domain, therefore limiting inquiries into the banks and the businesses involved.
Mr Gumbo said the committee would write to anti-graft agency and the head of the criminal investigations to ask them if they had probed the roles of the banks and businesses in perpetrating the scandal. Although the fresh information has not been analysed, it is suspected there is more to it than meets the eye.
The accounts committee has in the past questioned a decision by prosecutor Keriako Tobiko to list former youth service deputy director-general Adan Gedow Harakhe as a prosecution witness rather than a suspect.
Director of Criminal Investigations boss Ndegwa Muhoro pointed out the apparent anomaly when he testified before the committee. Last week, Mr Tobiko told the committee he was cautious about testifying before MPs as he is at the same time prosecuting the cases against 35 suspects.
It was later reported, but he is yet to make it official, that Mr Harakhe and Hassan Noor Hassan, who was the chairman of the Ministerial Tender Committee at the Devolution and Planning ministry would be prosecuted for abuse of office. “We have asked him to submit a report. After looking at the report we’ll decide whether to invite him,” said Mr Gumbo.
The anti-corruption agency and criminal investigators would also be asked if they had investigated the Central Bank of Kenya and any of its officers as the money that went to the banks was from the Devolution and Planning ministry and youth service accounts at the Central Bank.
The bank fired off the first warning shot about the scandal after it wrote a letter to the Devolution ministry expressing concerns about the huge payments to private companies through the National Youth Service.
When a related letter from then Principal Secretary Peter Mangiti to then youth service director-general Nelson Githinji was leaked, then Devolution and Planning Cabinet Secretary Anne Waiguru said Sh791 million had been paid out fraudulently.
Mr Harakhe later claimed that his password to the Integrated Financial Management Information System (Ifmis) had been stolen and his account used to pay out Sh695 million.
In off-the-record conversations, PAC members have said they are dissatisfied with the manner in which the auditor-general conducted the youth service audit.
One glaring mistake by the auditors was failing to get information from the Central Bank yet it was the source of all the money paid out, fraudulently or otherwise.
TRANSACTIONS DONE AT NIGHT
According to the MPs, talking to the Central Bank would have revealed the role of other banks and individuals in handling the youth service money.
In the report, only National Bank and Family Bank feature. National Bank handled the money paid out to cohorts recruited to work in Kibera and other places, while key suspects had accounts at Family Bank where some transactions were allegedly done in the dead of the night, some as late as 2 am.
Central Bank governor Patrick Njoroge has endorsed the prosecution of some Family Bank employees for failing to report the suspicious transactions to the financial reporting centre.
“We levied a maximum penalty to Family Bank. We fined them Sh1 million. We also required re-vetting of nine employees who were responsible since there was culpability on their part,” he said when he met Public Accounts Committee in August.
Information on the banks is considered important because it can show who was paid from the youth service, giving the committee leeway to question what the money was being paid for.
In two instances reported to the committee, Ben Gethi and John Kago, the suspected beneficiaries of the loot, transferred funds to a lawyer supposedly to handle purchases for them, and later asked him to transfer the money to other bank accounts.
The committee investigated and found out about the involvement of Elgeyo-Marakwet Senator Kipchumba Murkomen and Farouk Kibet, an aide to Deputy President William Ruto.
Mr Murkomen’s firm — Sing’oei, Murkomen and Sigei Advocates Ltd — was reported to have been paid Sh5 million by Out of the Box Solutions Limited, the company that was paid Sh90 million from a questionable contract worth Sh302 million before the scandal was detected and payments stopped.
Senator Murkomen and Mr Kibet have for now been spared public questioning and have been asked to make written submissions, which will be scrutinised.