FACTUAL CLARIFICATIONS ON MIGUNA BOOK BY OPM

FACTUAL CLARIFICATIONS ON ALLEGATIONS CONTAINED IN THE BOOK "PEELING BACK THE MASK" BY MIGUNA MIGUNA by Office of the Prime Minister of Kenya on Sunday, 22 July 2012 at 12:03

FACTUAL CLARIFICATION ON ALLEGATIONS MADE IN RECENT PUBLICATIONS REGARDING ‘CORRUPTION’IN THE OFFICE OF THE PRIME MINISTER

Introduction

The Office of the Prime Minister’s (OPM) attention has been drawn to malicious allegations against the Office and its Senior Officials in a book titled Peeling back the Mask by Miguna Miguna that has been serialized in a local newspaper. The book alleges that Senior Officials in the Office of the Prime Minister were involved in the maize, triton and KKV scandals.

For the avoidance of doubt, the following is a summary of the FACTS with regards to these allegations:

1. Involvement in the alleged “Maize Scandal”

The Subsidized Maize Scheme was undertaken by the National Cereals and Produce Board (NCPB) in 2008 to deal with chronic food shortages following the poor harvests in early 2008, post election violence, and escalating global food prices.

Following public concern regarding the administration, procurement and distribution of maize under the scheme, the Government commissioned Price Waterhouse Coopers (PWC) to undertake a forensic audit on what transpired at NCPB during implementation of the Subsidized Maize Scheme.

Subsequently, the PWC produced a report on its findings titled Independent Forensic Investigation into the alleged irregularities in the implementation of the Subsidised Maize Scheme at the NCPB” dated December, 2009. The report found evidence that more than 30 state officers including Ministers, Members of Parliament and Permanent Secretaries had been involved in irregular allocations of maize by the NCPB.

However, the report clearly stated that while two Senior Officers in the Office of the Prime Minister had been mentioned during the course of investigations there was no sufficient evidence to support any wrongdoing. The report therefore recommended further investigations by the Kenya Anti Corruption Commission to establish any culpability. The PWC report is in the public domain and available for scrutiny.

In keeping with Public Service regulations on integrity, four Permanent Secretaries and senior Public Officials mentioned in the PWC report stepped aside from their respective roles to allow investigations to be conducted.

Independent investigations into the matter were thereafter undertaken by the Kenya Anti Corruption Commission (KACC), Inspectorate of State Corporations (ISC) and the Efficiency Monitoring Unit (EMU).

On this matter it is important to note the following FACTS from the KACC report dated 30th June, 2010, on the ‘maize scandal’ which was published in the Kenya Gazette through Gazette Notice No. 8369 of 16th July, 2010:

i. On inquiry into allegations of abuse of office and conflict of interest against the Permanent Secretary, in the Office of the Prime Minister Dr. Mohamed Isahakia, KACC found “No evidence of culpable wrong doing was ascertained to warrant any action against the PS. A report was compiled and forwarded to the Attorney General on 28th June, 2010 recommending closure of the file.”


ii. On inquiry into allegations that the Chief of Staff in the Office of the Prime Minister, Mr. Caroli Omondi influenced the award of a contract to supply 75,000 tonnes of maize to a South African Company, KACC found “ No indication that the said officer influenced the award of the contract to supply maize. There was no evidence of culpability on the part of the said officer to necessitate either criminal or administrative action against him. A report was compiled and forwarded to the Attorney General on 28th June, 2010 recommending closure of the inquiry file.”


A joint investigative report by the Inspectorate of State Corporations and the Efficiency Monitoring Unit on all matters pertaining to the “trading activities of the NCPB, with a focus on the imported 1.7 million bags of maize for the Strategic Grain Reserve”, was completed and submitted in June 2010 which interalia found that there was no meaningful or sustainable evidence to support claims of impropriety or dereliction of duty, on the part of the Prime Minister, Permanent Secretary and Chief of Staff in the Office of the Prime Minister.

The two senior officials in the Office of the Prime Minister later resumed office after competent and independent authorities investigated the said allegations and the FACTS exonerated them from any culpability in the alleged ‘maize scandal’

Again, the KACC report is available to the public online at the following link: www.eacc.go.ke/docs/Quartely-Report-April-to-June-2010.pdf The joint report by ISC and EMU is a public record also available for Public Scrutiny.

2. On “Triton Scandal”

In the wake of fuel shortages witnessed in 2008 and following complaints by oil marketers and financiers, the management of Kenya Pipeline Company (KPC) ordered an audit of oil stocks in its systems. The audit revealed that stocks amounting to 126.4 milion litres were irregularly and illegally released to Triton Petroleum Limited between November 2007 and November 2008.

Subsequently, the Kenya Pipeline Company Limited (“KPC”) and the Ministry of Energy engaged the Price Water House Coopers (PWC) to conduct a full forensic investigation into the circumstances surrounding the release of oil products to Triton Petroleum Company without the authority of the respective financiers. Further investigations were carried out by the Inspectorate of State Corporations.

The findings by both PWC and the Inspectorate noted that the conduct of a number of staff members with responsibility for the administration of the Collective Financing Agreement at the Kenya Pipeline Company was questionable and had given rise to massive irregularities.

FACT: neither the Office of the Prime Minister nor any of its officers were mentioned in both PWC and ISC investigations and their subsequent reports.

The Kenya Anti-Corruption Commission was consequently invited to carry out investigations on allegations that officials of Kenya Pipeline Company colluded with Mr. Yagnesh Devani and other senior officials of Triton Petroleum to irregularly release petroleum products worth Kshs. 7.6 billion without authority from financiers.

The KACC completed investigations in June, 2009 and subsequently charged in court Mr. Yagnesh Devani together with 9 others including senior managers at both KPC and Triton with charges of fraud, corruption and other economic crimes.

FACT: neither the Office of the Prime Minister nor any of its officers were mentioned or implicated in KACC investigations.

The court case is still on-going and is a matter of public record

3. On ‘Kazi Kwa Vijana’ (‘KKV’, the Kenya Youth Empowerment programme)

The Kenya Youth Empowerment Project popularly known as ‘Kazi Kwa Vijana’ (KKV) was established in collaboration with the World Bank to support efforts by the Government to increase access to youth-targeted temporary employment programs and to improve youth employability.

The KYEP became effective on August 18, 2010. The first disbursement to the Government for Component 1, in the amount of US$9.3 million, took place on February 7, 2011. This was subsequently allocated to six implementing line ministries to undertake public works for youth: the Ministry of Water and Irrigation, the Ministry of Regional Development Authorities, the Ministry of Roads, Ministry of Forestry and Wildlife, the Ministry of Environment and Mineral Resources, and the Ministry of Local Government, as well as to the Office of the Prime Minister (OPM) to coordinate and monitor project activities

In June 2011, the World Bank initiated a standard Financial Management Review of the KYEP an exercise undertaken for all World Bank-financed projects during implementation.

On Sunday October 23, 2011, the Sunday Nation published a story entitled “Kazi Kwa Vijana: PM’s office on the spot” This story was based on a leaked Interim working draft of the World Bank that merely listed transactions that needed to be verified whether they were ‘eligible’ for financing by the World Bank or by the Government.

On 25th October, 2011, the World Bank sent a press release to the media to correct the gross distortion of facts presented by the Media and politicians on the KKV issue. Copy of the press statement is still online at the following link: bit.ly/s6WfB0

Eventually, the World Bank completed the Financial Management Review exercise and submitted its report.

The FACTS on the KKV are as follows:

i. The World Bank report findings indicated that out of the 14 payments that were raised for clarification, 9 had been cleared. The remaining 5 that were not eligible for payment by the World Bank funds had supporting documentation, were related to youth empowerment and should therefore be paid through GOK counterpart funds;

ii. The report never raised any integrity issues, did not allude to any wrongdoing or misappropriation by officials in the Office of the Prime Minister and made no finding that any funds in question were lost or stolen. The forwarding letter from the World Bank Country Director also clarified the meaning of the word “Ineligible” which the Media had misrepresented to mean misappropriation.

The World Bank Financial Management Review is a public record available for Public Scrutiny as are all the other FACTS outlined above.

Conclusion: The Office of the Prime Minister respects and upholds the rights of every Kenyan to the cherished Freedom of Expression. The Office recognises that all the blunt talk on so-called scandals is the product of hard won freedoms which the Office is keen to uphold and defend at all costs. But we must remind Kenyans that these freedoms must be exercised within the responsibility prescribed by our Constitution and all other laws of the land.

OFFICE OF THE PRIME MINISTER