Another season of scandal as Kenya elections near

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Photo|FILE Clinix Healthcare Ltd Chief Executive officer Toddy Madahana (left) and chairman Jayesh Saini before the Parliamentary Committee investigating the NHIF scandal on May 15, 2012. 

By MUGUMO MUNENE mmunene@ke.nationmedia.com
Posted  Saturday, June 9  2012 at  22:30

Anti-corruption campaigners have expressed fears that theft of public money may escalate as the country gears up for elections.

The raging corruption scandals in parastatals such as the National Social Security Fund (NSSF) and National Hospital Insurance Fund (NHIF) have rekindled fears that politicians in power may start looting public coffers ahead of the General Election.

Researchers say politicians spent over Sh4.8 billion in the 2007 campaigns, a quarter of which is believed to have come from government coffers.

The Centre for Democracy and Governance estimates that over Sh1 billion was raised through pyramid schemes. CDG researchers say they found evidence that some of the money found its way to campaign kitties.

“For those incumbent in public office, additional income came from unpaid use of the provincial administration machinery, coercion to extort money from private businesses, use of state media and state corporation advertisements to propagate partisan information, use of government premises for party meetings, involving senior public officers in presidential campaign planning, use of government resources to produce material for campaigns and fuelling private vehicles using funds from government.

“These latter activities are estimated to have amounted to Sh500 million,” the researchers said of the 2007 elections.

According to an expenditure monitoring and income tracking survey conducted by the NGO, about Sh1 billion may have been spent in the use of state resources such as state media, vehicles and the Government Printer.

To unduly pressure

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Former Cabinent minister Mukhisa Kituyi says he sees ominous signs of theft of public money. Dr Kituyi says he was once approached by a certain individual when he was in Cabinet in 2007 and asked to unduly pressure French cement maker Lafarge out of East African Portland Cement. (READ: State must come clean on its pressure on Lafarge)

Lafarge holds a large stake in Portland, a state corporation, and the threat was supposed to “make them talk” – couched language for issuing a bribe in order to be left alone.

Dr Kituyi is now warning that the same forces are on the loose with the same intentions and, again, in an election year.

“I feel a sense of déjà vu. The latest posturing comes at a time when questionable deals at NHIF, bulk petroleum importation, the possible sale of New KCC are raising the spectre of raiding public coffers for campaign funds,” Dr Kituyi says. “All prefects and whistle blowers should now get on heightened alert.”

Anti-corruption crusader Mwalimu Mati says there is a connection between scandals and an election year. “There is no doubt. All those incidents are related because of politics based on vote buying.

“The incumbent want to buy their way back into power. During election years, we have discovered that accounts of government go into shambles. There’s definitely a connection,” Mr Mati said.

“If Kenyans were to vote with their heads and not their stomachs, it would be different. If you sell your vote, you sell your government. If we had the moral fibre, it would be different.

“The major spending has got to be recouped somehow. Political party financing may make a difference. It’s not an all-hope-gone situation but we are trying to change a political culture that has gained root over the last 50 years,” Mr Mati told the Sunday Nation.

Parliament is trying to find out what happened at NHIF as the public health insurer rolled out a multi-billion-shilling scheme covering civil servants but which is embroiled in controversy.

The claims of fraud at NHIF came hot on the heels of a scandal at the NSSF where the state pension fund is paying for Kanu-era contracts.

Political scientist Karuti Kanyinga says that scandals have arisen in election years executed by those who see corruption as a way of building a base for political power.

“Corruption finances politics and elections. It is interwoven with politics at both local and national levels. Indeed, in Kenya, major corruption scams have been taking place around election time or when the opposition is potentially threatening to remove from office the governing elite,” said the University of Nairobi lecturer.

Former Ethics and Governance permanent secretary John Githongo is also raising the red flag. He warns that corruption has devolved because the economy has grown and this year could mark the biggest diversion of public funds to election campaigns.
“There are huge uncertainties. It’s a transition election where the President is retiring and there is also the ICC. There are so many balls in the air. We could be looking at the biggest election scandal since Goldenberg,” Mr Githongo told the Sunday Nation.

Campaign financing

CDG conducted a study after the 2007 General Election on campaign financing in which they found that political parties often spend far in excess of the documented income, raising questions about the source of the extra funds.

“The balance may have been settled using shady deals yet to be known to the public. Besides, most income for the parties was raised through fundraising activities” said the report.

“As for personalities from the private sector holding government contracts, the question is whether or not their presence and contribution was motivated by the need to secure future government contracts. Was there an element of extortion by which government coerced these private sector personalities?” asked the researchers.

The study also found that high value bank robberies increase around election years. Although the researchers did not establish a direct link between bank robbers and politicians, the pattern suggested that the money could have ended up in campaign coffers.

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Every election year since the reintroduction of multi-party politics in the early 1990s has witnessed the eruption of mega scandals. In 1991, the government authorised what famously came to be known as the Goldenberg scandal in which the public lost up to Sh100 billion.

Receive payments

Goldenberg International would receive payments from the government for the export of gold and diamonds – which Kenya does not mine – ostensibly because they were helping to shore up foreign exchange reserves.

It turned out that the company exported very little gold and diamond jewellery but would, with the connivance of government officials and power barons, present fake documentation and receive payment.

Some of the money -- as admitted by the scheme’s chief architect Kamlesh Pattni in a public inquiry -- was used to bankroll Kanu’s 1992 campaigns. The theft of public money through Goldenberg, said former Economic Secretary Terrence Ryan, would take the country three generations to repair.

In the 1997 election campaign period, the major scandal revolved around the issuance of public land to reward political loyalty. “For the 2002 elections, corruption networks invaded through pending bills in the Ministry of Public Works; through over-invoicing,” he said.

The 2002 election marked the exit of Kanu from power and with it the entry of Narc, which promised voters zero tolerance on corruption. But the wheeler-dealers went to work.

“Grand corruption re-emerged in procurements of security services through Anglo Leasing and Finance Company. This emerged against a background of politically threatening disagreements within Narc over the share of political power and the constitutional reform process,” said Prof Kanyinga.

He was referring to the fallout in Narc between NAK and LDP parties, which had joined hands and supported President Kibaki’s candidature. Also the hotly contested 2007 General Election did not come without its share of scandal.