It's Our Turn to Eat Page 19

  Worryingly for the presidential coterie, John’s eccentricities were all of the sort to close down possible avenues for applying leverage. For most Africans, the weight of the extended family serves as ballast, tethering their ambitions firmly to the ground. When confronting our destinies, we each tot up what we stand to lose and what we can bear to surrender. John had no direct dependants. Should he choose to commit career suicide, no child’s education would be at risk, no ambitious wife’s laments echo around the family home, no in-laws make impassioned appeals to his common sense. Gloriously self-sufficient, John Githongo was free to take whatever decisions he chose.

  Even if the Mount Kenya Mafia’s members were not given to probing motives and analysing underlying social shifts, an episode in John’s past really should have caused them some concern.

  In 1998, before John moved to TI, he had briefly agreed to launch a regional political magazine on behalf of a Kenyan NGO called SAREAT (Series for Alternative Research in East Africa Trust). Headed by political scientist Mutahi Ngunyi, SAREAT won generous funding from the Nairobi office of the US-based Ford Foundation. But the project, John came to believe, was being used to front a scam. He suspected Ford’s local programme officer, a Zimbabwean called Jonathan Moyo who would go on to serve as Robert Mugabe’s information minister, of plotting with Ngunyi to misappropriate tens of thousands of dollars of Ford funding. Carefully documenting what had happened, John walked away from the project. Initially, recalls former work colleague Milena Hileman, he had no plans to report the issue to Ford’s senior management. ‘He was very upset, but he simply didn’t trust the wazungus to do anything about it. I kept nagging him, saying, “Not all wazungus are the same. These are good people and they need to know.”’ In the end, the two flew to New York to brief Ford’s vice president, and the foundation sued both Ngunyi and Moyo.

  A practice run, in many ways, for Anglo Leasing, the SAREAT episode was not exactly an encouraging sign for anyone hoping the new permanent secretary would show leniency towards those caught with their hand in the till.

  10

  Everything Depends on the Boss

  DAVID FROST: So what in a sense you’re saying is that there are certain situations…where the president can decide that it’s in the best interests of the nation or something, and do something illegal?

  RICHARD NIXON: Well, when the president does it, that means that it is not illegal.

  Excerpt from interview, aired 19 May 1977

  As the long rains spluttered to an end in June 2004, Kenya’s anti-corruption chief was aware of a range of possible scams being hatched across various government departments. Yet he decided to train his focus exclusively on Anglo Leasing, for unashamedly political reasons. There were only so many projects his office could handle. Had he channelled his energies into cleaning up a Kamba-led ministry or Luhya-headed department, it would have looked like ethnic targeting of the most blatant kind. ‘I had to make choices. I knew of at least one other minister who was a complete crook, but I was a Kikuyu, in a Kikuyu government, and people around me were saying, “It’s our turn to eat.” You have to start at home.’ Although he knew few fellow kinsmen would see it as such, his approach was a form of protective ethnic loyalty–his interpretation of what it meant to be a ‘good Kikuyu’. In the tribe’s long-term interests, a fundamental principle needed to be established. Ever since Kibaki’s inauguration, cynics had been predicting a return to the abuses of the Kenyatta era, when the Kikuyu had enriched themselves without compunction. The new government had to prove such predictions false, show that such practices had become obsolete in the new Kenya, if history was not to repeat itself. ‘Moi’s term in office wouldn’t have been possible without widespread resentment towards the Kikuyu. Moi was a Kikuyu blunder. The richest and biggest tribe has to be the most magnanimous.’

  John’s suspicions of key colleagues did not necessarily mean his entire venture was holed below the waterline, he told himself, reciting the Chinese proverb ‘A fish rots from the head down.’ As long as the president was still committed to the fight against sleaze–and that was certainly what John told any diplomat, journalist or NGO director willing to listen–his ministers could be tackled and thwarted. The simple matter of John’s geographical location inside the white-colonnaded edifice of State House held the key, he had come to realise, for it guaranteed access to this least ideologically steadfast and most indolent of presidents. ‘On several occasions, John told me, “The battle will be where my office is,”’ remembers Richard Leakey. ‘John said, “If I can walk down the corridor into the president’s office, then I can continue. If I have to move downtown, it’s over.”’

  As family friends and prominent politicians virtually queued up to urge him to stop digging, John was also coming under pressure from the opposite direction. Alarmed senior officials were nagging him to now turn his attention to the second suspect Anglo Leasing deal, which involved the building of a forensic laboratory. His more lowly informants were not letting up, either. The flood of leaked information threatened to drown him. At times he felt as if his overenthusiastic agents were running him, rather than the other way round. ‘I became overwhelmed. I felt I could not satisfy these individuals.’

  The pressure had an effect. On 4 June, after only ten days of playing the ‘softly-softly’ game, John violated his self-imposed cease-fire. He wrote to Andrew Mullei, governor of the Central Bank, asking him to stop all further payments to Anglo Leasing and requesting details of money transfers to the firm to date. The letter was a measure of his distrust of the permanent secretaries, as he had already written–in vain–to Joseph Magari at the finance ministry making the same request. As John was bracing himself for a response to this salvo, he was leaked a letter that put his efforts into chilling perspective. What he had glimpsed so far, the document made clear, was the merest tip of the iceberg. The Anglo Leasing affair was far more than a couple of dodgy contracts with a shadowy Liverpudlian company. It was a modus operandi taking place beyond parliamentary scrutiny, across two administrations, enthusiastically replicated by its inventors in confident expectation of huge profits.

  The letter, drafted by the Central Bank governor, was addressed to the finance ministry and asked for confirmation that Mwiraria had authorised payment on a long list of contracts. The list embraced the two projects John already knew about, but included sixteen other contracts–eighteen in all–which had variously been signed off by the finance, transport and internal security ministries. Kenya’s auditor general would later draw up a similar, even more detailed inventory. All the contracts could be described as ‘sensitive’. Military-or security-related in nature, they included a digital multi-channel communications network for the prison service, new helicopters, a secure communications system for the police, that state-of-the-art frigate for the navy, a data network and internet service satellite link for the Kenya Post Office, a top-secret military surveillance system dubbed ‘Project Nexus’, an early-warning radar system for the meteorological department, and so on. Twelve of the contracts had originally been signed under the previous Moi regime and carried over under NARC. The other six had been signed by the new government. The list gave dates and values. Added together, the auditor general would calculate, the eighteen contracts were worth a gulp-inducing 56.3 billion shillings ($751 million).

  One of the problems that would confront those trying to whip up public ire over Anglo Leasing–the same hurdle faced by those trying to stop Goldenberg in the 1990s–was that for a Kenyan public accustomed to calculating daily expenses in hundreds and thousands of shillings, the billions involved had an abstract, intangible quality. Ironically, the bigger the figures, the less relevance they seemed to have to ordinary lives, making it difficult for civil society activists and opposition MPs to persuade voters that Anglo Leasing deserved their attention, taking a vast bite, as it did, out of their taxes and hiking their daily costs. Like a tourist attempting to capture the vast cathedral of St Paul’s in his viewfinder, th
e ordinary Kenyan struggled to focus on the gigantic object looming unexpectedly before him.

  In fact, the value of the eighteen contracts amounted to 5 per cent of Kenya’s gross domestic product, and over 16 per cent of the government’s gross expenditure in 2003–04, the period in which the six NARC-era contracts were signed. It easily outstripped the country’s total aid that year ($521 million), and represented three quarters of the amount the hard-pressed Kenyan diaspora annually sent back home. The campaigning anti-graft organisation Mars Kenya would later calculate that the funds involved were the equivalent of 68 per cent of what the finance ministry allocated to infrastructure in 2006, and thirty-seven times more than it allocated to water projects in Kenya’s arid lands. The American ambassador came up with an even more depressing figure: the money would have been enough to supply every HIV-positive Kenyan with anti-retrovirals for the next ten years.

  While not on Goldenberg’s gargantuan scale, Anglo Leasing was still big enough for its knock-on effects to impact on every Kenyan, no matter their social status. The scale of the thing made the nervousness John had encountered from suspected key players suddenly comprehensible. There was plenty to be uneasy about.

  When I was stationed in Kenya as a foreign correspondent, I worked out of the international press centre in Chester House. The building is located in Nairobi’s business district, next to one of the city’s least salubrious nightclubs, on a scruffy street that is lined at night with prostitutes in tight white miniskirts. The press centre was often a very quiet place, because the Western reporters spent half their lives on the road, relying on Kenyan staff to pay their bills, update their files and order stationery during long absences in Rwanda and Burundi, Ethiopia and Somalia. As the years passed, many of us began to suspect that our office managers, routinely trusted with huge volumes of cash, were getting a little sloppy. Going through my receipts, I’d be taken aback to see the price we’d paid for a few reams of photocopying paper, a plastic binder, or some ink. I’d pause, stare at the receipt, dark suspicions stirring. But there was always something more pressing that needed doing. If I couldn’t rely on my office manager to do his job, my entire operation became unsustainable. Then, one day, I decided to check a suspicious receipt against the high street price. We’d paid three times as much. Furious, I confronted my office manager, planning to storm to the shop in question to have it out with the owner.

  ‘Where the hell did we buy this? Whoever sold it is a complete crook.’

  My plan for a showdown immediately stalled. Looking uncharacteristically flustered, my office manager explained that, like his colleagues in the building, he routinely bought stationery from a supplier who went door to door in Chester House, rather than venturing into Nairobi’s business district.

  ‘But you’ve been paying him three times the going rate!’

  ‘I didn’t realise. I thought he was giving us special prices.’

  ‘They were special all right.’

  ‘I’m sorry. This will never happen again.’

  For a moment, I almost fell for it. Who was this nameless, faceless, nebulous salesman who had been conning Chester House staff? I tried to remember if, during my stints in Nairobi, any office supplier had ever come knocking on my door. I could remember the Sudanese rebel spokesman with his acronym-spattered declarations, the charming amputee who begged for alms, the student hungry for freelance work. But no shadowy stationery supplier. I quizzed colleagues down the hall. None of them remembered him, either.

  Of course, there was no such man. He was a ghost, conjured into existence in the mind of my canny office manager, whom I eventually sacked when the fiddling became too obvious to ignore. Capitalising on my inattention, he had got together with a small army of obliging high street shop staff to fabricate inflated receipts. The shop owner, likely to be a Kenyan Asian, would get the official price. The difference between that and what I actually paid would be split between my office manager and the shop assistant, probably a kinsman–two sons of the soil ganging up satisfyingly to con the mzungu and the mhindi in one fell swoop. There was nothing original or complicated about the scam: it was the oldest trick in the book. It was, as it happened, almost exactly the technique used in Anglo Leasing.

  While Goldenberg involved financial stratagems so complex even economists had difficulty grasping them all, Anglo Leasing was so simple a child could master the technique. It was a classic procurement scam, needing only two parties, although for it to work one of those parties had to be at the top of government, powerful enough to silence doubting minions and ignore institutional checks and balances. Another vital component was the military and security nature of the contracts. In every other sector, contracts had to be put to open tender, forcing even the greediest of suppliers to stay within the realms of the reasonable. Advertisements were placed in newspapers and trade journals, competitive bids collected, technical competence established, and the companies who came forward knew they might be subjected to due diligence before the relevant ministry made its decision. Any irregularities risked being picked up by opposition-dominated parliamentary committees and scoop-hungry journalists. The only area escaping such scrutiny was the security and intelligence sector, where single-sourcing, opaque negotiations and loosely worded contracts could all be justified on the grounds of ‘national security’. Could the government really be expected to tout for a counter-terrorism centre on the open market? Or to publish specifications for a new prison communications network in the press? Of course not. It would put Kenya itself at risk.

  Security concerns served as the perfect cover for some extraordinary sharp practice. Before legitimate suppliers even knew the Kenya government was looking for a particular service, news would break that the deal had been signed. To experts in the field, the contract awarded might seem suspiciously expensive–sure sign of a ‘commission’ being paid–but since the government’s contract specifications were not available, it was impossible to tell how much was being creamed off. ‘In the absence of competitive bidding, it was not possible to ascertain how the contract sums were determined and accepted by Government as fair,’ Kenya’s auditor general, Evan Mwai, would note in a damning April 2006 report into Anglo Leasing.27 One small example, however, gave a hint of the level of greed involved: Kenya was paying $US9 million each for MI 17 helicopters; a quick internet trawl revealed them to be simultaneously selling in Asia for just $3.9 million.

  No due diligence had been carried out, the auditor general discovered, no implementation schedules agreed. In some cases, the companies concerned might actually have planned to supply the Kenyan government with promised equipment, albeit at ridiculously inflated prices, but once again, noted the auditor general, ‘the non-availability in most cases of detailed contract specifications, invoices and delivery notes’ made it difficult to verify what was delivered, and the failure to keep an up-to-date register of assets left their whereabouts unclear. In others, the Kenyan government clearly never stood to receive anything at all, given the nature of the companies it was doing business with. ‘At least seven of the supplier/credit providers do not exist in the countries in which they are purportedly registered and may therefore not be bona fide registered business firms,’ Mwai found. ‘Additional firms among the list of the suppliers/credit providers may also prove to be non-existent.’

  Confusion over the firms’ identities was an important ingredient in the scam. As John probed the eighteen contracts the Kenyan media and public would come to refer to collectively as ‘Anglo Leasing’, he would be confronted by the surreal situation of a government which appeared to have no clear idea with whom it was signing its multi-million-dollar deals. Just as my office manager prevented me from identifying his fellow conspirators by inventing a shadowy door-to-door salesman, the anonymity of the contractors helped conceal both the mechanism and eventual benefactors of this laziest of scams. It was always obvious that the identities of the entrepreneurs involved in Anglo Leasing could not be the great mystery claimed
by the ministers and civil servants involved. How could they not know their suppliers, given the supposed sensitivity of the projects? How could they later go on to cash cheques from these nameless individuals, refunding monies paid? The very questions were absurd, yet no one in power was in any rush to ink in a deliberately created void. No wonder newspaper cartoonists drew Anglo Leasing as a featureless ghost, a figure with the sizeable belly, business suit, bulging briefcase and bloated potato shape of one of Kenya’s wabenzi, but without nose, eyes or mouth.

  There was another fishy thing about Anglo Leasing: the payment methods. These were all ‘turnkey’ deals, in which suppliers offered not only equipment, but the funding arrangements a cash-pressed African government needed to pay for all this state-of-the-art hardware. The government signed a ‘credit supplier contract’, under which it was loaned the money, undertaking to repay the credit via irrevocable promissory notes.

  In the Moi era, when the IMF and the World Bank grew wary of funding Kenya, such special credit arrangements had a certain logic. But by the first year of the NARC regime, Kenya was receiving over half a billion dollars in aid from its foreign partners, much of it at interest of less than 1 per cent. The interest charged on the eighteen Anglo Leasing contracts, Mwai would later establish, ranged between 4 and 6 per cent. Despite its ready access to cheap money, the government preferred to borrow at a hefty premium. As for the use of irrevocable promissory notes, the practice simply stank.28 Backed by a legal opinion from attorney general Amos Wako, these notes were eternally binding. As good as cash, they could be bought and sold on international financial markets. If a Kenyan government subsequently tried disavowing them, it would do so at the price of its credit-worthiness and its reputation.