The Standard ran a page one story on the technical advisor on Anglo leasing, (a French company called Francois-Charles Oberthur Fiduciaire) angling to get the contract to print Kenya’s currency.
However in this case, the Sunday Standard is trying to keep up with its corruption-exposing theme by rehashing an old story they ran in May 2004. It’s shocking that Anglo-leasing Company is still alive, but the notion that it (or anybody) can snatch De La Rue’s contract to print Kenya’s currency is too unbelievable – they have done so since independence. De La Rue is unmatched in its currency printing operation and actually runs an operation in the EPZ Nairobi that prints currencies for several countries. The earlier story was much more revealing about who was behind the Anglo-leasing currency and carries an ominous warning – “When you start hearing French firms being given tenders, be sure corruption is back,” a Government official said.
(Since the Standard archives are offline today, here’s the article from last year)
Inteligence | New corruption haunts Narc
Big Issue | Financial Standard | Maddo | Pulse | Style | Society
Sunday, May 9, 2004
By Sunday Standard Team
Official corruption is back – and this time it is bigger, bolder and a lot more difficult to pin down. Errand boys and crooked businessmen of the Moi era have teamed up with cartels and officials of the Narc administration to continue with business as usual, exerting influence over tenders and supplies, as well as presenting themselves as brokers both locally and abroad.
Where the crooks of the Moi era asked for 10 per cent commissions on tenders and supplies, those of the Narc regime are asking for 30 per cent.
A twilight zone has emerged between the Office of the President, the Treasury and State House where – under the guise of state security – tenders are secretly negotiated on behalf of the Government by a clique of Asian businessmen and close associates of State House, Treasury and OP officials.
Sunday Standard investigations reveal that the security business is the worst hit because of the secrecy that surrounds even mundane things like printing of driving licences and passports.
For about a year now, the reputed firm, De La Rue’s security printing business with the Kenya Government has been hanging on a thread, awaiting cancellation because of intense lobbying to take away its business.
The cartels in the Kibaki administration, backed by a small clique of powerful government officials, have tracked down jack-of-all trades Asian businessmen, even those who fell out with the Kanu regime, and incorporated them into money-minting schemes where they hold sway over who gets lucrative tenders, at a fee. Sources told the Sunday Standard that an Asian businessman who made a killing in the Moi era by supplying substandard goods, or none at all, has been pushing for two foreign firms to take the business from De La Rue.
The businessman, teaming up with a former District Officer in the Eastlands area, a State House official, two permanent secretaries, a Cabinet Minister, a Democratic Party official and a nominated MP have been pushing for De La Rue’s business to be given to Banking Notes Ltd of Canada and Currency Australia of Australia.
A search on the firms yielded variations in names while a source said the companies might as well be non-existent.
“It could just be another money minting scheme by these crooks. Those firms may not exist. Even if they [the two firms] did get the [security printing] contract, De La Rue is local and is paid in local currency. The foreign firms will get 70 per cent of their pay in foreign currencies and only 30 per cent in local. That is capital flight,” a government official said.
The clique is also pursuing contracts for the supply of security equipment like guns, particularly AK-47s, which they have either supplied or plan to supply at a cost of $2,800 each where they would ordinarily go for $1,500. Because the European Union has stringent rules on kickbacks and bribery abroad by its firms, the crooks in government are looking elsewhere for companies that can give 30 per cent commissions.
“When you start hearing French firms being given tenders, be sure corruption is back,” a Government official said.
According to a chief executive of a US firm in Nairobi, the new influence-peddlers have added “a high-tech sophistication to the arsenal of old-fashioned corruption”. “They disguise their trade, they move with more discretion, they are better-educated, and they have more of an entrepreneurial vision of their corrupt businesses,” the government officer said.
“We are seeing a lot more of cronyism; where government officials offer favourable treatment to their old friends and ‘buddies’. We are seeing favouritism, confidentiality and preferential treatment based on long-standing friendships. I don’t know what it will evolve into,” he added.
In the wave of cronyism, abuse of office has emerged as a component of corruption where for being friends with the “right” people, individuals get favours they don’t deserve.
The nominated MP deep in the new cartel has her houses guarded by four administration police officers. Ordinarily, MPs are entitled to only one civilian body guard.
Meeting in Cyprus
Last December, an Asian businessman who fled the country after his business deals in the Moi era went sour and now lives in Cyprus held a meeting with a senior government official at an exclusive location in the Seychelles. He was accompanied by power brokers and
influence peddlers with State House connections. “This is not a man a clean Government official can meet. His duty is to pursue all sorts of contracts and ask for commissions. The fact that they are back says a lot about our war on corruption,” a government official said.
The official said the meeting in Cyprus was organised by a senior government official who left the country last December 12, and met the businessman in London to arrange the Seychelles meeting. The government official and his team was picked from Seychelles and flown to Mombasa on New Year’s Eve in a military helicopter dispatched from Nairobi.
According to a former MP who runs an international consultancy, the new corruption is run on a cash basis, not land or other property, as was the case in the Moi era.
“There seems to be a feeling that time is short and nobody wants to be bogged down in transactions like land transfers. They go for cash. The shady deals are all over. The ones we get to hear about are deals that go sour. Most of the shady deals are well executed and we don’t get to know about them. The parties shake hands and part happily while the government loses billions,” the former MP said.
Where the brokers cannot have firms to offer 30 per cent commissions, they form their own companies with foreign-sounding names to take the tenders and then subcontract other firms to supply the required goods.
A government official familiar with security and intelligence supplies and tenders was last week categorical that Anglo Leasing and Finance Ltd, the firm at the centre of the passports printing scandal, was a local firm owned by the same State House, OP and businessmen clique specifically for the passports deal. “Those companies are disbanded immediately they have got their cut and passed on the business to someone else.” The official said security is being used as an excuse to defraud the government.
“There are no security implications in printing of passports. What is required is that we get a reputable firm that will not leak information or one whose systems cannot be duplicated. If you are buying things like fighter jets or communications equipment, you don’t have to advertise. But you visit several suppliers, then you form a technical committee to evaluate the firms,” he said.
The feeling that old corruption is back cuts across party lines. Kiharu MP Kembi Gitura says the talk about corruption “cannot be for nothing and should form the basis for investigations.”
“When people talk like this, they are reacting to their frustrations. Even Goldenberg began as a clean business. I agree that security matters should be secret but good business sense requires that you vet what you are dealing with,” Gitura said.
“I want to believe that new passports were necessary. But we know of situations where contracts were created, not for the benefit of the country but to perpetuate corrupt practices. I hope that is not the case here,” he added.
Kanu MP Mutula Kilonzo blames the civil society, donors and the Government for the return of corruption. He sees a deliberate effort by the government to create confusion over which government agency does what.
“The shelving of the passports tender was announced by Dr Chris Murungaru. That was wrong. What happens when Murungaru is found to be a suspect? Will he announce that to the public? Only the anti-corruption commission should have announced that the tendering has been cancelled and investigations are on. But the government has ensured KACC has no director,” Kilonzo said.
“The country may have to grapple with a complex situation of a corrupt new regime investigating past corruption. If Moody Awori can defend a corrupt deal in government, who is left in Narc?” he added.
Mutula lamented the death of civil society whose members were co-opted into government and the feeling among donors that they want to channel all the money to the government and not civil society organisations.
Some 17 months ago, Kenyans cheered as President Kibaki took power with a warning that “the era of anything goes is gone forever and asked “all those members of my government and public officers accustomed to corrupt practice” to know there will be no sacred cows. Now, the optimism has faded, as allegations of corruption dog his presidency.