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Jirongo’s Sh500 notes that shook the country

Sunday June 5 2016

Former Lugari MP Cyrus Jirongo speaks during the requiem of Jacob Juma at All Saints Cathedral on May 12, 2016. Jirongo has denied allegations that the Youth for Kanu ‘92 used to print money. PHOTO | JEFF ANGOTE | NATION MEDIA GROUP

Former Lugari MP Cyrus Jirongo speaks during the requiem of Jacob Juma at All Saints Cathedral on May 12, 2016. Jirongo has denied allegations that the Youth for Kanu ‘92 used to print money. PHOTO | JEFF ANGOTE | NATION MEDIA GROUP 

KIPCHUMBA SOME
By KIPCHUMBA SOME
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Some time in late March 1992, Cabinet minister Shariff Nassir requested his personal assistant, Abdirahman Bafadhil, to link him up with Cyrus Jirongo, the chairman of the Youth for Kanu ‘92 lobby group.

Bafadhil was one of the two keynote speakers when the group was officially launched at Nyayo Stadium in Nairobi on March 7, 1992 by Vice-President George Saitoti.

Since the event, Bafadhil had talked glowingly about the group, and Mr Jirongo and Nassir developed a desire to meet this young man who was causing political waves in Kanu.

Nassir, Mvita MP and Moi’s political point man at the Coast had heard that the 33 year old Jirongo was fabulously wealthy and more importantly, was quite generous.

Now he was about to experience the depths of this generosity.

After their meeting at Jirongo’s office at Anniversary Towers, Jirongo escorted Nassir and Bafadhil down to the basement where the Cabinet minister’s old Mercedes Benz was parked.

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Jirongo was not pleased with what he saw. He told Nassir, “Bwana waziri gari hii haikufai tena wewe kama waziri” (Mr Minister, this car does not suit you anymore),” Bafadhil said.

Jirongo then went back to his office and returned a few minutes later with a bag and a note which he gave to Nassir.

“The note instructed DT Dobie to give Waziri a brand new Mercedes Benz!” Bafadhil said. The bag contained some good amount of money which he declined to reveal.

“Mzee was utterly taken by surprise by the gesture. We knew Jirongo was quite generous but we did not expect him to give him that much money,” Bafadhil said.

Bafadhil said Jirongo allocated him a house belonging to the National Housing Corporation in Lang'ata just before the operations of YK’92 were suspended by President Moi in April 1993.

“I delayed in registering the house in my name and when Moi suspended our operations somebody in NHC said the allocation was irregular and took back the house,” he said. 

They were not the only beneficiaries of Jirongo’s generosity.

FINANCING CAMPAIGNS

Prof Eric Aseka, the group’s first spokesman, said that Jirongo gave him Sh500,000 to set up YK’92 secretariats throughout the country.

“I travelled across the country using my Ford Cortina 760, KVX 760 until its engine knocked. When the exercise was finished, my car was a total wreck. I had Sh40,000 remaining and I took it to Jirongo. He gave me a cheque for Sh750, 000 to buy a new car. I took the cheque to Marshalls and picked my car,” he said.

YK’92 is remembered for many things, most of them not endearing, but top among them is the huge sums of money that they dished out liberally in their campaigns. 

For years since then, the source of this money has become the subject of all manner of speculation and theories.

The theory that has endured long after YK’92 exited the scene was that the government allowed its members to print money on large scale to finance Kanu’s campaigns.

The group was awash with cash, which mostly came in the form of newly-minted, crispy Sh500 notes. Until then, the largest denomination in the country was the Sh200 note.

Although President Moi’s face appeared in all the currencies, Sh500 note was much associated with YK’92’s activities and its flamboyant chairman so much so that the note was nicknamed “Jirongo.”

All members of the group whom we interviewed for this article denied that they engaged in money printing.

“This is just part of the false legend that has been used to destroy the reputation of YK,” Jirongo said. “If the government printed money that is a different thing, but not us. Printing is the work of Central Bank. It would be impossible to do that kind of thing and keep it a secret for all these years. Tell me, have you ever heard one single person saying this was where YK used to print money?” he said. 

On the Sh500 note being nicknamed after him, he said that it was so because the activities of YK’92 peaked at the time when the new note was being released. 

He pointed out that in the past, currency in Kenya had been nicknamed after prominent individuals of the time.

He pointed to the fact that the Sh40 coin released during President Mwai Kibaki’s first term was nicknamed “KaLucy,” after the President’s late wife Lucy.

He said that the group got its finances from donations from members and other private supporters of the lobby group. 

He said the first funding of Sh3 million, about Sh30 million today adjusted to inflation, came from him and five other friends.

These are Gerald Bomett, Kirono Kitony, Jimmy Choge, Sam Nyamweya and Mohammed Ahmed Ali, a director with Fly 540 airline. 

The first three in the list above are sons of prominent people close to President Moi and they were successful businessmen, and so was Makelele.

YK'92 FUNDRAISERS

By the time he was being picked as the chairman of YK’92, Jirongo had cut the image of a shrewd businessman whose main interests were in real estate.

He is associated with Saika estate near Komarock/Kayole, Hazina Estate in South B and Kemri estate on Mbagathi Road. 

“I was a billionaire by the age of 30. YK never made me, it destroyed me financially,” Jirongo said. 

Mr Nyamweya, the group’s treasurer and a close business associate of President Moi’s son Jonathan, said he was a successful businessman by the time he joined YK’92. 

“I bought this land in 1991 before YK came into the picture,” he told the Sunday Nation on Saturday at his 10-acre farm in upscale Karen area.

He said that the group raised around Sh300 million for their campaigns. Adjusted for inflation, this would be equivalent to Sh1.2 billion today.

However, he maintains that the group never got any money from state coffers, but from YK members, Kanu officials and businessmen friendly to Kanu.

“In any campaign, there will be people with certain interests who are willing to support certain candidates for different reasons. It happens everywhere in the world. This was the case with those campaigns too,” Nyamweya said.

The presence of industrialist Manu Chandaria during the group’s first meeting with President Moi at Kabarnet Gardens in late January 1992 indicates that powerful businessmen could have contributed to the group’s campaigns. 

“I don’t remember going to that meeting and I can’t remember if I ever contributed to it,” said the billionaire businessman, now aged 87. 

Kanu operatives close to Moi donated to the group. For example, former Nominated MP Mark Too is recorded in the Nation of April 1992 contributing Sh100,000 to a YK’92 fundraiser in Nandi district.

In late February 1992, Vice-President George Saitoti led a fundraiser for the group at the Inter-Continental Hotel, which realised Sh12 million, according to Nyamweya. This is about Sh50 million today.

However, the total amount of these contributions is just but a drop in the ocean compared to the colossal amounts that YK’92 and Kanu used in their campaigns.

Perhaps, the source of these monies could lie somewhere else, most probably in a devious project that was conceived in October 1991 by another young man.

PATTNI'S ENTRANCE

In July 1990, Kamlesh Mansukhlal Pattni, aged 25, registered Goldenberg International Limited and, through it, robbed the country to bankruptcy from fictitious sale of gold and diamonds.

His business partner was James Kanyotu, the long-serving, powerful director of intelligence, who passed away in February 2008. 

The resulting scam, commonly known as the Goldenberg Scandal, is estimated to have cost the country in excess of Sh80 billion and its effects are still felt today.

However, members of YK’92 point to the fact that they were never mentioned in the 2005 inquiry into the Goldenberg affair as proof that they raised their money legitimately.

“Not even a single member of YK‘92 was mentioned in that report,” Jirongo said.

Mr Pattni told the Justice (rtd) Samuel Bosire-led commission that he financed Kanu’s 1992 elections to the tune of Sh4 billion. 

He said he distributed the money through powerful politicians close to President Moi, especially his personal assistant Joshua Kulei.

Part of the report reads: “In his testimony before us, he stated that these monies were paid during the 1992 General Election. He alleged that he was closely connected to President Moi, his personal assistant Joshua Kulei, former Vice-President Professor George Saitoti and many other Kanu Cabinet ministers, Members of Parliament and party officials spread all over the country.

According to Mr Pattni, it was agreed between himself and the former President that Mr Pattni would directly and through his companies finance Kanu in the 1992 General Election. A conduit system was then set up whereby Mr Kulei would write chits at State House.

These would be addressed to Mr Pattni who would then pay money to the person stated on the chits. At times he would be required to give to the person a vehicle and he would comply. 

On some occasions, Mr Kulei would allegedly simply telephone Mr Pattni giving him relevant instructions and Mr Pattni would comply.”

A man “given to melodrama, gross exaggeration and sometimes outright perjury,” according to the report, the Commission did not entirely believe Pattni’s narrative and questioned the figure of Sh4 billion. However, it did not discount the fact that he contributed finances to Kanu’s campaigns.

“Indeed, owing to his admitted proximity to President Moi, Prof George Saitoti and many Kanu politicians, he probably gave Kanu financial support. Mr Evans Ondieki and several other Kanu politicians have signed payment chits acknowledging receipt of money on behalf of Kanu from Mr Pattni.”

Mr Ondieki was the head of 'Operation Moi Wins', a rival group to YK’92. He was the Nairobi County minister for Environment until he was sacked in February.

“I never received a single coin from Pattni,” Mr Nyamweya said. “I did not even know who he was until much later on when the Goldenberg thing exploded.”

RISE OF INFLATION

But it is inconceivable to imagine that YK’92 never received any money, even indirectly, from Mr Pattni given the fact that the group was President Moi’s main campaign machine. 

The Goldenberg Report, which was never adopted by Parliament, also addressed the issue of money printing which YK’92 is accused of engaging in.

Prof Terry Ryan, a professor of macro-economics and who has worked for the government in various capacities since 1962, explained what “printing” of money is in the fiscal world.

Prof Ryan said that Goldenberg’s fraudulent activities caused a huge financial deficit and as a result the government “resorted to increased domestic borrowing from Central Bank beyond set ratio. This was described to us as printing money.”

Prof Ryan said the payments to Goldenberg and increased domestic borrowing came from the Paymaster General account at Central Bank.

“This led to some increase in money supply. Increased money supply triggered inflation ... Overdrafts improperly granted to weak banks also contributed enormously to existing pressure leading to greater increases in money supply, the onset of rapid inflation and the fall of the shilling,” Prof Ryan told the commission.

Lawyer Moses Kurgat, who was the group’s secretary-general briefly before a road accident saw him bedridden for months, said he suspects that State parastatals were looted to finance YK’s campaigns.

One of the fat parastatals that has been milked over and again by successive regimes for campaign finances is the National Social Security Fund, NSSF.

At the height of YK’92 activities, the Sunday Nation of September 22, 1992 reported that Jirongo and Davy Koech, the director of Kenya Medical Research Institute, had sold, through their company Sololo Outlets, two plots in the city to NSSF.