NYS fishy payouts rise to Sh1.6 billion - VIDEO - Daily Nation

Over Sh1.6bn might have been lost in NYS scandal, probe team tells Uhuru

Thursday February 18 2016

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The amount of money lost in the National Youth Service scandal could be as much as Sh1.6 billion, according to a new report seen by the Nation.

The report reveals that further investigations into the NYS scandal had shown that hundreds of millions of shillings were paid to 15 additional companies beyond the Sh791 million already reported.

The report, the outcome of a meeting chaired by President Uhuru Kenyatta at State House in Nairobi on Monday, shows that the Ethics and Anti-Corruption Commission (EACC) was investigating payments amounting to Sh869 million to the additional companies.

This brings the total of the amounts suspected to have been paid out irregularly to Sh1.66 billion.

The report was compiled by a team comprising representatives from the Office of the President, the Office of the Director of Public Prosecutions, the Directorate of Criminal Investigations (DCI), the Kenya Revenue Authority and the Asset Recovery Agency.

The report also says that the Central Bank of Kenya had fined Family Bank Sh1 million for its role in handling the NYS money.


In the face of claims by one of the business people facing charges arising from the scandal that Mr Joseph Mugwanja, the head of the Banking Fraud Investigations Unit (BFIU) of the DCI,  had received Sh80 million to influence the investigations, the multi-agency team has placed all investigations under its technical team.

“To avoid duplication, all NYS investigations to be undertaken under MAT. In this respect, EACC and BFIU shall henceforth share information regarding the ongoing NYS investigations. Further investigations to be conducted jointly,” the reports recommends.

The team warned that parallel investigations by the BFIU could not yield the desired results.

“It was noted that parallel investigations are also being undertaken by the Banking Fraud Investigations Unit and this might negatively impact on the outcome. The BFIU shall henceforth be incorporated to the MAT technical team,” it said.

The EACC had cleared former CS Anne Waiguru of any wrongdoing in the NYS scandal in a letter sent to Chief of Staff and Head of Public Service Joseph Kinyua.


However, it has reopened investigations following a damning revelation by Ms Josephine Kabura Irungu— in an affidavit filed in court on Monday — that Ms Waiguru was aware of what was going on at the NYS and condoned irregular payments.

Ms Irungu is expected to appear before the EACC on Thursday at 10am for grilling.

She alleged that Ms Waiguru received a share of the money in question and that the former CS played a key role in devising devious schemes to divert public attention and mislead investigative agencies from getting to the bottom of the scandal.

Ms Waiguru has denied the allegations, saying she has never met Ms Irungu and that the claims were meant to derail her political ambitions. Ms Waiguru has indicated that she will vie for the Nairobi governor’s seat in next year’s elections.

Besides Ms Irungu, eight other business people are in court over the NYS scandal, while 11 are facing the prospect of losing their property in a move initiated by the Asset Recovery Agency.

In its report, the multi-agency team said it had also initiated investigations into four more cases involving the NYS, amounting to Sh321.5 million.

The cases involve Sh302 million paid for consultancy services for the youth, women and people with disabilities programme, Sh15 million meant for the construction of NYS camps, Sh4 million for the Naro Moru retreat and Sh500,000 to repair a vehicle by one of the directors.

At the same time, President Kenyatta has ordered that all NYS projects be stopped until investigations into the use of funds have been concluded and suspects prosecuted.

“The President has said that all NYS work will resume in March after the conclusions of investigations into the scandals,” said his spokesman, Mr Manoah Esipisu.

Meanwhile, the Independent Policing Oversight Authority yesterday said it had opened investigations against two police officers who were handling the NYS case.

The complaint was filed by Ms Charity Wambui, the mother of Mr Ben Gethi, one of the suspects.