Treasury Cabinet Secretay Henry Rotich, his PS Kamau Thugge and 14 others have on Tuesday been arraigned in a Nairobi court over the multibillion-shilling Kimwarer and Arror dams scandal.
The Treasury mandarins spent Monday night in police cells after the Director of Public Prosecutions ordered their prosecution, alongside 26 other individuals, for orchestrating theft of public funds.
The other officials seized over the public funds heist are from the National Treasury, Ministry of East Africa Community, National Environment Management Authority, Kerio Valley Development Authority and Inspectorate of State Corporations.
The 16 were ordered arrested on Monday by the DPP Noordin Haji after they were found to have a case to answer over the dams scandal.
In a case of strange irony, CS Rotich was watching a press conference by Mr Haji announcing his arrest when detectives stormed his office and detained him over the dams scandal.
Like many Kenyans, Mr Rotich was curious to know the latest information on investigations involving the controversial multi-billion projects in Elgeyo Marakwet County when detectives from the Directorate of Criminal Investigations (DCI) stormed into his office.
The officers found him glued to the TV, with a remote control in hand, probably to adjust the volume.
Officers from the Special Crime Prevention Unit moved in as the DPP started reading names of the people to be arrested over the scandal.
All the minister asked the detectives was, “Ni kesi gani mnasema? hakuna shida, twendeni” (Which case are you talking about? All the same, there is no problem, let’s go), he said, as he reached for his coat.
Before the officers accessed his 14th floor office at around 10.45am, the minister’s bodyguards had tried to block them, but Rotich, who was taking a cup of tea at the time, reportedly instructed them to allow the sleuths in.
The minister was courteous, even offering the arresting officers a cup of tea, which they politely declined.
The CS, who was arrested at the same time as his Principal Secretary Kamau Thugge, was whisked to the basement where the officers had parked their vehicles. The two were driven to the DCI headquarters in two separate cars as their bodyguards followed in different vehicles.
Rotich was arrested moments after the DPP directed the Director of Criminal Investigations George Kinoti to arrest and arraign Rotich and 27 others over the scandal about the whereabouts of Sh20 billion said to have been lost.
Other than Rotich and Thugge, others arrested from Treasury are Kennedy Nyakundi Nyachiro, the Chief Economist and Head of Europe II Division, and the Director, Resource Mobilisation Department, Jackson Njau Kinyanjui.
Also arrested are the PS East Africa Community Susan Jemtai Koech, the Inspector General State Corporations Titus Murithii, National Environment Management Authority (Nema) chief executive Geoffrey Mwangi Wahungu, and David Walunya Ongare and Boniface Mamboleo Lengisho, both of Nema.
The Kerio Valley Development Authority (KVDA) immediate former boss David Kipchumba Kimosop has also been arrested together with the authority’s head of Supply Management William Kemboi Maina and the manager for Engineering Services Paul Kipkoech Serem.
Also targeted are Italian nationals Paolo Porcelli, director CMC di Ravenna, CMC di Ravenna-Itinera JV Italy, and CMC di Ravenna –Itinera JV Kenya. It is was not immediately clear how the probe team plans to effect the arrest of the Italians.
The DPP also listed the tender committee members as the suspects in the fraud. They are Francis Chepkonga Kipkech, David Juma Onyango, Patrick Kiptoo, Elizabeth Kebenei, and Esther Jepchirchir Kiror.
Seven of the 28 suspects, the DPP revealed, were members of the ad hoc technical and financial evaluation committee Team 2. They are Moses Kipchumba, Nelson Korir, Isaac Kiiru, Patrick Kipsang, Fredrick Towett, Jotham Rutto, and Charity Muui.
Abuse of office
Haji said the suspects would face charges of conspiracy to defraud, willful failure to comply with applicable procedures and guidelines relating to procurement, engaging in a project without prior planning and abuse of office.
They will also face charges of financial misconduct, fraudulent acquisition of public property and knowingly giving a misleading document.
“The decision to charge is based on the evidence that is available to the DPP at the time the decision is made,” he said.
It is expected that the CS and the other officials will step down once they are charged.
The DPP revealed that the National Treasury officials deliberately flouted procurement rules and circumvented the law to ensure that CMC di Ravenna was awarded the dams’ construction tender.
Haji said Treasury negotiated a commercial facility, increasing the amount to approximately Sh63 billion, which he said was Sh17 billion more than was required.
According to the alleged commercial contract, the Kimwarer Dam was to cost of Sh20.4 billion while Arror Dam was to cost Sh25.2 billion, totalling to Sh45.6 billion.
KVDA, the implementing agency, chose the Public Procurement and Disposal Act, 2005, for the concession agreements despite the fact that the law in 2013 prescribed Public-Private Partnerships.
“Colossal amounts were unjustifiably and illegally paid out through a well-orchestrated scheme by government officers in collusion with private individuals and institutions,” Haji said.
Officials who should have pointed this out, Haji said, went ahead to award the contracts to CMC di Ravenna to run concurrently while aware that the firm was, at the time of award, financially strained and getting into voluntary liquidation in Italy.
“The money so far paid, was without regard to performance or works. The law for such projects was ignored and the law was circumvented to ensure that CMC di Ravenna got the contract,” he said.
“We also note that the same firm had been awarded three other mega dam projects that are either incomplete or are yet to commence,” he added.
The country also lost money through exchange rates after the Treasury entered into a facility contract in Euros while the commercial contracts were in dollars.
Out of Sh63 billion in respect of the projects, as at January 2019, the Kenya government had paid advance payment, commitment fee, insurance and other costs, totalling Sh19.7 billion.
Out of this, Sh11 billion for insurance was paid upfront.
“In contrast, if the borrowing was justified, a government guarantee would have sufficed at no cost to the Government of Kenya and mwananchi,” Haji said.
Investigations had revealed that a further Euros 40,031,927 (Sh4.6 billion) was borrowed in addition to the principal amount to pay interest in advance during the construction period which to date has not started.
“As a country, we continue to pay interest on the loan,” Haji said. The DPP noted that though another Sh643 million was released by Treasury for resettlement of people to be affected by the two projects as compensation for land, there is no evidence that land had been acquired, four years later.