Political Corruption in Kenya

Political corruption in the post–colonial government of Kenya has had a history which spans the era of the Jomo Kenyatta and Daniel arap Moi’s KANU governments to the Mwai Kibaki’s NARC government. In the Corruption Perceptions Index 2005, Kenya was ranked 144th out of 159 countries for corruption (least corrupt countries are at the top of the list). The average urban Kenyan pays 16 bribes per month with the largest amounting to over 50,000 Kenyan shillings (€600, USD$700) or 41% of the total value.

The longest-running was the Goldenberg scandal, where the Kenyan government subsidized exports of gold, paying exporters in Kenyan Shillings (Sh.) 35% over their foreign currency earnings. In this case, the gold was smuggled from Congo. The Goldenberg scandal cost Kenya $600 million, the equivalent of more than 10% of the country’s annual GDP. Kenya’s gold deposits can never yield much revenue, so Goldenberg was pure theft.

A Sh360 million helicopter servicing contract in South Africa: Military officers had argued that the contract was too extravagant and servicing the helicopters could be done locally. However, the Kenya Air Force (KAF) went ahead to spend Sh108 million as a down payment for servicing the Puma helicopters, whose tail number is logged as 418 at Denel Aviation, a South African firm. Some politicians and other people gained illegally from this deal.

In 2003, the military was split over plans to buy new Czech fighter jets, with some officers protesting that the jets were low quality. The jet fighters would have cost taxpayers Sh. 12.3 billion. A Sh. 4.1 billion Navy ship deal: A Navy project was given to Euromarine, a company associated with Anura Pereira. The tender was awarded in a process that was criticised as irregular. The tender was worth Sh 4.1 billion. Military analysts say a similar vessel could have been built for Sh. 1.8 billion.  

Chamanlal Kamani was involved in a supply contract, through Kamsons Motors. Kamsons tendered for the supply of Mahindra Jeeps to the Police Department in the mid 1990s for close to Sh. 1 million (US$13,000) each, at a time when showrooms would have charged a sixth of the price. Moreover, the vehicles were being bought for a government department and were therefore to be imported duty free. A few of the more than 1,000 units that were imported over several years are in service today. The Kamanis were also involved in a deal to build a CID forensic laboratory. On June 7, 2004 an amount of $4.7 million was wired back to Kenya as claimed by then Finance minister Mwiraria. The payment was a refund against the money paid for the Criminal Investigations Department forensic laboratory. Another Euro 5.2 million was paid back in respect of the E-cop project, which involved computerisation of the police force and the installation of spy cameras in Nairobi by Infotalent Systems Private Limited.  

The Prisons department lost $3 million after contracting Hallmark International, a company associated with Mr. Deepak Kamani of Kamsons Motors, for the supply of 30 boilers. Only half of the boilers were delivered – from India and not the United States as had been agreed.

The construction of Nexus, a secret military communication centre in Karen, Nairobi: The Government spent Sh 2.6 billion (US$36.9 million) to construct the complex. Three years later, military personnel had not moved into the centre. A phantom company, Nedermar BV Technologies, which is said to have its headquarters in Holland, implemented the secret project situated along Karen South Road. Nedermar is linked to businessman Anura Pereira. However, Pereira denied this. Construction continued without any site visits by either the Department of Defence staff or the Ministry of Public Works officials. In 2005, there were plans to buy a sophisticated £20 million passport equipment system from France. The government wanted to replace its passport printing system. The transaction was originally quoted at 6 million Euros from François Charles Oberthur of Paris – the world’s leading supplier of Visa and MasterCards, but was awarded to a British firm, the Anglo-Leasing and Finance Company Limited at 30 million Euros, who would have sub-contracted the same French firm to do the work. Despite the lack of competitive tendering, Anglo Leasing was paid a “commitment fee” of more than £600,000. Anglo Leasing’s agent is a Liverpool-based firm, Saagar Associates, owned by a woman whose family had enjoyed close links with senior officials in the Moi regime. Company records show Saagar Associates is owned by Mrs. Sudha Ruparell, a 47-year-old Kenyan woman. Mrs. Ruparell is the daughter of Chamanlal Kamani, the 72-year-old multimillionaire patriarch of a business family which enjoyed close links with senior officials in the Moi regime. Anglo Leasing made a repayment of Euro 956,700 through a telegraphic transfer from Schroeder & Co Bank AG, Switzerland on May 17, 2004, when suspicions were raised. The local chapter of Transparency International and the Kenya National Commission on Human Rights (KNCHR), a government body released a report in February, 2006, stating that between January 2003 and September 2004, the National Rainbow Coalition government spent about $12-million on cars that were mostly for the personal use of senior government officials. The vehicles included 57 Mercedes-Benz, as well as Land Cruisers, Mitsubishi Pajeros, Range Rovers, Nissan Terranos and Nissan Patrols. The $12-million substantially exceeded what the government spent over the 2003/04 financial year on controlling malaria – “the leading cause of morbidity and mortality in Kenya”, said the report.

In late February 2006, a leading newspaper The Standard ran a story claiming that president Mwai Kibaki and a senior opposition figure Kalonzo Musyoka, had been holding secret meetings. On March 2 at 1:00 am local time (2200 UTC on the 1st), masked gunmen carrying AK-47s raided multiple editorial offices of The Standard, and of its television station KTN. They kicked and beat staff members, forcibly took computers and transmission equipment, burned all the copies of the March 2nd edition of the newspaper, and damaged the presses. At KTN, they shut down the power, putting the station off the air.  

Initially, the Kenyan information minister claimed no knowledge of the raid, but later revealed that the Kenyan police were responsible. The Minister of Internal Security then stated that the incident was to safeguard state security. “If you rattle a snake you must be prepared to be bitten by it,” John Michuki said. Three journalists at The Standard, arrested after the critical story was printed, were held without charges. The story also featured the bizarre case of two Armenian businessmen, mocked in the press for their taste for heavy gold chains, watches and rings, referred to as Mercenaries, who the opposition said led the raid and had shady dealings with Kibaki’s government.

In November 2006, the government was accused of failing to act on a banking fraud worth $1.5bn involving money laundering and tax evasion, reported by whistle-blowers as early as 2004. Investigators believe sums worth 10% of Kenya’s national income were involved. A recent auditor’s report says the scale of the operations “threatens the stability of the Kenyan economy”.  

In November 2006, the British Foreign Office minister Kim Howells warned that corruption in Kenya was increasing the UK’s exposure to drug trafficking and terrorism. “People can be bought, right from the person who works at the docks in Mombasa up to the government. This weakness has been recognised by drug-traffickers and probably by terrorists too.” Said Howells for the BBC.

Source: http://en.wikipedia.org/wiki/Corruption_in_Kenya#Corruption 

Edited by Jared Odero. Note: For more info, click on the bold active links.