Money laundering claims against manufacturing equipment dealer Blue Nile East Africa may have led the Directorate of Criminal Investigations (DCI) to go after Deputy Chief Justice Philomena Mwilu, fresh court filings have revealed.
Blue Nile is one of the firms that the Deputy Chief Justice dealt with in transactions that attracted interest from the DCI.
Imperial Bank advanced a Sh60 million loan to Justice Mwilu in June 2015, for the purchase of a piece of land in Nairobi.
But after receiving the funds, Justice Mwilu sent Sh36 million to ex-Nairobi County speaker Alex Ole Magelo’s wife, Lucy, and channelled another Sh10 million to Blue Nile East Africa.
Documents Justice Mwilu has filed in a petition seeking to block her prosecution have now revealed that the DCI relied on a court order that allowed them to probe Blue Nile to gather evidence against the judge.
On June 22, DCI inspector Arthur Onyango obtained a search warrant from the Chief Magistrate’s Court allowing him and other officers to scrutinise a KCB bank account operated by Blue Nile. The investigator had told the court that he was looking into money laundering allegations levelled against Blue Nile.
Two weeks later, DCI detectives visited Imperial Bank receiver manager Mr Mohamud Mohamud’s office armed with the same court order. Mr Mohamud was away in Mombasa but returned a day later when he was given the court document.
The DCI wanted copies of documents relating to two loan accounts Justice Mwilu had at Imperial Bank among other files that detailed her dealings with the now collapsed lender. Mr Mohamud complied and made copies for the detectives.
It was also during the visit by the DCI when Mr Mohamud noticed that Justice Mwilu’s lawyer Stanley Kiima had not delivered title deeds that were to be used as substitute security for a Sh60 million loan.
After Imperial Bank collapsed, Justice Mwilu reached a deal with the receiver manager which was to see her given back the security used for the Sh60 million loan after which she was to offer another piece of land as a substitute.
Mr Mohamud says in his statement to DCI that after being served with a court order, he looked into Justice Mwilu’s loan files and realised that she had not produced a substitute security.
“I also sought clarification from the legal officer (Imperial Bank Limited In Receivership) Mr Wamicwe on the securities held in respect of all the sample files sought by the DCI. It is from this that I established that in respect of the outstanding long term loan advanced to Justice Mwilu, the replacement charge over LR 3734/1129 and the original title held had not been surrendered to the bank by Mutunga & Company Advocates as earlier agreed as per his undertaking,” Mr Mohamud said in his statement.
After combing through the documents, DCI detectives gathered what they intend to use as evidence in Justice Mwilu’s planned prosecution.
The judge is facing 13 counts of abuse of office, tax evasion and fraudulent recovery of loan securities and was to be charged alongside her lawyer Stanley Kiima.
She however obtained court orders barring her prosecution before she could be charged. Yesterday, Justice Enoch Chacha Mwita extended the orders to Monday when he will make a ruling on whether to forward the case to Chief Justice David Maraga, for constitution of a three-judge bench to hear the issues she raised in her application not to take plea.
In his application to scrutinise Blue Nile’s KCB account, Mr Onyango cited transactions carried out between January 1, 2013 and June 22, 2018 as being of interest.
The firm on its website says it deals in steel and wire products.
Justice Mwilu contends that the DCI abused its authority by using the search warrant issued to scrutinise Blue Nile accounts at Imperial Bank. She says her planned prosecution relates to commercial transactions which the DCI and the Director of Public Prosecutions should not be allowed to criminalise.
“The above demonstrates malice and abuse of power by the DCI and DPP in their institution of investigations and recommendations for my prosecution on count one and two,” the judge argues.
DPP Noording Haji wants Justice Mwilu’s petition determined by a bench of at least three judges, arguing that the suit raises questions that will require interpretation of sections of the Constitution.
In legal practice, cases that require interpretation of unclear sections of the Constitution can be referred to the Chief Justice to set a panel of at least three judges for determination.
Mr Haji argues that the suit could determine whether judges are immune from criminal prosecution and whether criminal proceedings against the court officers amount to removal from office.
He adds that it may also determine whether prosecution of judges undermines independence of the Judiciary, and the role of the DCI, DPP, Ethics and Anti-Corruption Commission, Ombudsman and Kenya National Human Rights Commission play when such officials are caught up in criminal matters.
Attorney General Paul Kihara has thrown his weight behind Mr Haji.
“The matter before you my lord raises questions that have never been determined by our courts before. As respondents we may have answers to these questions but these are not answers we share with the petitioner and the court. These are issues that are contested and are of great public interest,” Solicitor General Ken Ogetto argued on behalf of the Attorney General.
But Justice Mwilu insists that her petition has not raised any issue that requires interpretation of the Constitution, saying her suit is simply about whether the DCI and DPP have abused their authority by investigating and prosecuting her respectively.
“The court can only look at the pleadings in arriving at a determination on whether or not to set up a three judge court.”
“There must be a foundation laid in the pleadings and a question emanating from the pleadings. If you look at paragraph 39 of our pleadings, the first point we have raised is that the DPP is trying to criminalise commercial matters. At paragraph 57 we're saying that in abuse of power and court process, the DPP is trying to use the prosecution to achieve ulterior motives,” Justice Mwilu’s lawyer Okong’o Omogeni argued.
An earlier version of this story misidentified Mr Kotni Rao, Mr Botu Rao and Mr Raghu Chandra as directors of Blue Nile East Africa, a company linked to Deputy Chief Justice Philomena in court filings. It has since been clarified that Mr Botu and Mr Chandra are directors of Blue Nile Rolling Mills which is not related to Blue Nile East Africa. We apologise to Mr Botu and Mr Chandra for any embarrassment that the error may have caused.