CROOKS BEHIND CHARTERHOUSE COME TO LIFE "WIKILEAK"

[reporter911]

C O N F I D E N T I A L NAIROBI 003217

SIPDIS

SIPDIS

TREASURY PASS TO FINCEN

E.O. 12958: DECL: 07/25/2026
TAGS: KCOR KCRM PREF ECON EFIN KE TZ UG
SUBJECT: CHARTERHOUSE WHISTLEBLOWER DETAILS MONEY
LAUNDERING AND TAX EVASION AND REQUESTS REFUGE IN U.S.

REF: A. A. NAIROBI 2870

¶B. B. NAIROBI 2482
¶C. C. NAIROBI 1688
¶D. D. NAIROBI 1614

Classified By: Charge John F. Hoover for reasons 1.4 (B) and (D)

¶1. (C) Summary: Kenyan auditor Peter Odhiambo exposed
billions of shillings of tax evasion and money laundering at
his former employer, Charterhouse Bank, by a group of major
companies partly owned by notorious businessman John Mwau and
MP William Kabogo. On July 20, Odhiambo briefed Emboffs on
the details of the scam, and explained he had experienced
death threats and a frightening attempt by some policemen to
serve him with a bogus warrant. Because the people
implicated in the scandal are dangerous and appear to have
bought influence and protection from the GOK, Odhiambo
requested refuge in the U.S. Refugee Officer is prepared to
write an Embassy referral for Odhiambo to DHS for processing
his application for refugee status, and DHS is willing to
interview him. End summary.

Money Laundering and Tax Evasion at Charterhouse Bank
--------------------------------------------- --------

¶2. (C) Peter Odhiambo met with PolOff and EconOff on July
20 to describe his role in exposing massive money laundering
and tax evasion by the Nakumatt Group of companies. (See
reftels for more details.) Odhiambo moved from Barclays Bank
to Charterhouse in May 2003 as the internal auditor. Within
two months, he noticed suspicious transactions in accounts
lacking the customer identification information required by
the Central Bank of Kenya,s (CBK) &Know Your Customer8
regulations. Some accounts also appeared to violate CBK
prudential limits on loans and liquidity. Charterhouse
concealed the violations by manipulating the figures just
before the end of the month submissions were compiled, or
before visits from external or CBK auditors, and then
reverted the figures immediately afterwards. The General
Manager told Odhiambo not to write down anything about the
suspicious accounts in any report the CBK auditors might see.

¶3. (C) Odhiambo examined the suspicious accounts and found
many personal savings accounts with (annual?) turnovers in
excess of Ksh2 billion ($27 million). The transactions
records showed funds were being diverted from Nakumatt
Supermarket and related firms into various personal savings
accounts, presumably to avoid taxes by under-declaring
revenues to the Kenya Revenue Authority (KRA). In May 2004,
Odhiambo collected the information on 85 accounts with annual
turnover of about Ksh20 billion ($270 million) and presented
it to the KRA, which promised strict confidentiality to
protect him. KRA however, took no action, and did not give
Odhiambo the 1% reward its newspaper ads promised to
informants who revealed tax fraud.

¶4. (C) Odhiambo identified the companies involved in tax
evasion and money laundering as the five companies in
Nakumatt Holdings: XXXXXXXXXXXX.
(A CBK report also implicated the John Harun Group, Triton
Petroleum, law firm Kariuki Muigua & Co., Pepe Ltd, XXXXXXXXXXXX,
and businessmen William Gitau). Odhiambo stated that,

although six South Asian Kenyans were listed as the owners of Nakumatt Holdings, some of them were proxy holders of shares actually
owned by John Haroun Mwau and MP William Kabogo,
both of whom have been linked to smuggling XXXXXXXXXXXX.
Odhiambo noticed a deposit of Ksh10 million/day into Nakumatt,s
or Tusker Mattresses, accounts, and he suspected the funds were
smuggling proceeds from Harun Mwau,s container depot
company, Pepe. Odhiambo believes the perpetrators evaded
about Ksh43 billion ($573 million) in taxes, but that KRA has
been purposefully understating the figure.

Whistleblowing is Hazardous in Kenya
------------------------------------

¶5. (C) When KRA made no effort to pursue the fraud and money
laundering at Charterhouse, Odhiambo presented the
information in August to CBK Governor Mullei. Mullei formed
a task force with KRA and the Kenya Anti-Corruption
Commission (KACC) to investigate Odhiambo,s information.
Odhiambo left Charterhouse in August 2004. In November 2004,
colleagues still at Charterhouse warned him the bank was
aware of his disclosure of information. He began receiving

disquieting calls, but claims he was not offered any bribe
for silence. Odhiambo suspected someone at KACC revealed his
whistleblowing role to Charterhouse. In February 2005,
Mullei offered him a position at CBK advising the task force,
and his situation &quieted down.8 Odhiambo said the task
force confirmed Odhiambo,s information. (Note: Press
reports claimed the Charterhouse Bank Archives were destroyed
in a fire, so it is not clear whether the task force was able
to view the files Odhiambo copied. End note.) Press reports
said CBK fined Charterhouse for violations of the Banking Act
and on March 20, 2006 recommended to the Minister of Finance
that he cancel the bank,s license (ref A). A few days
later, Governor Mullei was charged in court with four counts
of abuse of office, apparently in retaliation for his effort
to indict Charterhouse.

¶6. (C) In an effort to defend himself, Mullei leaked
information on Charterhouse to the press, and Finance
Minister Kimunya was forced to close the bank temporarily to
prevent a run. On July 6, shadow Finance Minister Kerrow
tabled a bootlegged CBK report claiming the Nakumatt Group of
companies had evaded Ksh18 billion of taxes.

On July 7, two
men who identified themselves as police officers from the
Central Station confronted Odhiambo at the CBK and ordered
him to accompany them to his house for a search.
Fortunately, the acting CBK Governor demanded to see the
warrant, and rejected it because it was dated July 2005 and
the applicant was no longer the General Manager of
Charterhouse.

¶7. (C) Fearing further police harassment, Odhiambo called
the Daily Nation, which published his story on July 8, and
the Kenya National Human Rights Commission (KNHCR). The head
of the Commission arranged a meeting for Odhiambo on July 11
with Justice Minister Martha Karua, who was concerned by his
story and regretted how &criminals had taken over so much of
the Kenyan Government.8 She advised Odhiambo to write a
letter to Police Commissioner Ali asking him to guarantee his
safety. He sent copies of the letter to Minister Karua,
Finance Minister Kimunya, Internal Security Minister Michuki,
the Attorney General and the CBK Acting Governor to ensure
they were all aware of the effort to use the police to
intimidate or threaten him. Odhiambo never received any
acknowledgment of the letters, nor any protection. Nor have
the CBK, KRA, KACC, or the Ministry of Finance taken any
further action against Charterhouse Bank or the account
holders. The Ministry has not officially released any of the
CBK,s reports on the Charterhouse investigation. A scathing
July 8 press article called into question Finance Minister
Kimunya's credibility in getting to the bottom of the matter,
pointing out a number of critical omissions and deceptions in
the Minister's June 27 statement to Parliament, when he
announced the temporary closure of the bank.

¶8. (C) After the July 8 newspaper stories, Odhiambo said he
began receiving threatening phone calls warning him to leave
Kenya, suspicious people were seen lurking around his house,
and his cell phone may have been bugged. He claimed one of
the Task Force members connected with him has also received
threatening calls. Odhiambo sent his family to the U.S.,
changed his cell phone, and changed his residence twice. He
suspects Mwau and the other businessmen bought protection
from all GOK enforcement agencies by funneling large sums of
money to senior officials to pay for the NARCs constitutional
referendum campaign in November 2005. For example, one
acquaintance at KRA told Odhiambo the KRA Commissioner
receives Ksh5 million/month from Mwau,s group. Odhiambo
fears Mwau, Kabogo and others involved will kill him or
&make him disappear8 both to retaliate and to deter other
potential whistleblowers. He does not believe any GOK agency
will protect him effectively.


Whistleblower Requests Refuge in the U.S.
-----------------------------------------

¶9. (C) Odhiambo therefore requested refuge in the U.S.,
where he would like to study and work in the banking field.
He believes protecting him would demonstrate the USG cares
about corruption in Kenya, protect people in jeopardy, and
shame the GOK into a better recognition of the need to
seriously address corruption. Odhiambo said it would be
dangerous, but he would be willing to return temporarily to
Kenya as a witness, if his testimony in court was needed to
convict the criminals. He said he was considering fleeing
Kenya shortly, with or without arrangements for onward travel
to the U.S. He believed he could travel to a neighboring
country and be safe for a time. Refugee Officer discussed

the possible options and procedures available for refugee
processing. He said he would discuss the issue with the DHS
officer responsible and get back to Odhiambo ASAP.

¶10. (C) Credible contacts familiar with the case, including
XXXXXXXXXXXX and the journalist investigating
the Charterhouse scandal, are unequivocal in lending credibility
to Odhiambo's fears. The believe that Odhiambo, as a low-profile
"small fish", makes a perfect victim through which Mwau and his
accomplices can vent their anger and send a message to other
whistleblowers to lay off. They urge the USG to do whatever it can
do now to assist Odhiambo, both for his own physical safety, and to
send a signal that the U.S. supports whistleblowers on corruption.

¶11. (C) Refugee Coordinator discussed this case with DHS rep
and others within the Mission. The consensus view among
those consulted, as well as Refugee Coordinator's own view,
is that the rarely used in-country DHS interview approach
would not be suitable in this case. However, Refugee
Coordinator is prepared to write an Embassy referral for
Odhiambo should he go to another country, and DHS is willing
to interview him for refugee processing. While Emboffs do
not advise anyone to become a refugee, we will let Odhiambo
know when he contacts us again that should he depart Kenya,
we will arrange an interview for him. Odhiambo has been out
of contact since July 20, and Emboffs are concerned about his
safety.


Comment
---------

¶12. (C) Odhiambo,s story is credible. It fits well with
information from other sources about Harun Mwau, Nakumatt,
and the others implicated in the Charterhouse scandal (see
reftels). We believe he has a well-founded fear of being
injured or killed. The perpetrators would most likely be
thugs working for John Harun Mwau and his accomplices, but we
can't rule out that corrupt police or security officers would
do the job. In any event, Odhiambo cannot expect GOK
protection given the strong ties we believe Mwau enjoys at
all levels of the Kenyan government. MP William Kabogo, if
he is involved as now alleged, also has a reputation for
being a ruthless businessman. Like Mwau, he got rich by
means of a large-scale smuggling operation in Mombasa. He is
believed by many to be behind the New Years Eve murder of a
CID officer investigating smuggling there. Given the stakes
involved (penalties that could reach roughly $1.3 billion,
plus potential criminal charges and prison) they have both
the incentive and the track record to make an example out of
Odhiambo through violent means.

¶13. (C) Although the GOK recently passed a Whistleblower
Protection Act, the recent death from pneumonia and in
poverty of Goldenberg whistleblower David Munyakei
demonstrates the neglect and lack of protection the GOK
provides. Odhiambo,s story and concerns sound realistic. A
DHS visit to a neighboring country could be arranged
relatively quickly, allowing DHS to make a refugee status
determination in short order, if Odhiambo chooses that route.
HOOVER wikileaks.l0cal.com/cable/2006/07/06NAIROBI3217.html

KENYA PNU BRANCH OF GOVERNMENT CONTROLLED BY THUGS LIKE MWAU & KABOGO SOME ARE PAID $$$$$$ TO LOOK THE OTHER WAY

[phil]

reporter911

Whereas its not my wish to absolve Mwau and Kabogo from money laundering allegations, I must tell you, PETER ODHIAMBO is not a clean man either.

This former rugby player is a man who was previously employed by Barclays Bank in Kenya, until he masterminded fraud against Barclays in which the bank lost millions of shillings. During those days Odhiambo was a well known spendthrift in Nairobi's entertainment joints. There are actually some congolese bands that composed songs in his honour as he was extremely generous with them. Yet he was a mere bank clerk whose lifestyle was a huge contrast to his actual and known income. Odhiambo used to change sports cars like you and I would change shirts.

Odhiambo was summarily dismissed by Barclays in the 90s, arrested, tried in court and eventually convicted for a lengthy jail term. He served time in Kamiti only to be released through presidential clemency for 'good behavior'. Odhiambo actually bribed his way to get his name recommended for early release.

Upon release, he joined Chartethouse as a 'consultant' while its a fact that when he was dismissed by Barclays, he was by then a mere clerk. His joinig Charterhouse was motivated by the need to make quick money. It was not to be, and what you see in this wikileak report, was information which he used unsuccessfully to extort money from the wahindi owners of Charterhouse (same guys who own Kingsway tyres).

You can see how the sly Odhiambo has used the same unveryfied infomation to win himself and his family US citizenship.

That embassy officials opted to take Odhiambo's whistleblowing as gospel truth, it begs the question if they bothered to do a background check on 'Makuti Park - life member' Odhiambo, or at least undertake a due delligence on charterhouse themselves directly.

I urge you and jukwaa not to be taken for a ride by the likes of Odhiambo. Wikileaks is a big sham!

[reporter911]

Charterhouse Saga, was Governor Mullei also a crook? lying on evasion of tax by these crooks? do bank deposits and bank withdrawals lie? follow the bank statements deposits and withdrawals I don't believe electronic deposits or withdrawal, including wire transfers lie!!

Odhiambo might have wanted a deal with those crooks and he was denied hence turning into a whistle-blower but the fact remains there was plenty happening at chaterhouse bank, evasion of tax, money laundering e.t.c.. bank documents revels $$$$$$$$$ moving in and out!
THOSE CROOKS CAN'T GET AWAY WITH CORRUPT DEALS!!

[phil]

Feb 28, 2011 20:53:02 GMT 3 phil said:

reporter911

Whereas its not my wish to absolve Mwau and Kabogo from money laundering allegations, I must tell you, PETER ODHIAMBO is not a clean man either.

This former rugby player is a man who was previously employed by Barclays Bank in Kenya, until he masterminded fraud against Barclays in which the bank lost millions of shillings. During those days Odhiambo was a well known spendthrift in Nairobi's entertainment joints. There are actually some congolese bands that composed songs in his honour as he was extremely generous with them. Yet he was a mere bank clerk whose lifestyle was a huge contrast to his actual and known income. Odhiambo used to change sports cars like you and I would change shirts.

Odhiambo was summarily dismissed by Barclays in the 90s, arrested, tried in court and eventually convicted for a lengthy jail term. He served time in Kamiti only to be released through presidential clemency for 'good behavior'. Odhiambo actually bribed his way to get his name recommended for early release.

Upon release, he joined Chartethouse as a 'consultant' while its a fact that when he was dismissed by Barclays, he was by then a mere clerk. His joinig Charterhouse was motivated by the need to make quick money. It was not to be, and what you see in this wikileak report, was information which he used unsuccessfully to extort money from the wahindi owners of Charterhouse (same guys who own Kingsway tyres).

You can see how the sly Odhiambo has used the same unveryfied infomation to win himself and his family US citizenship.

That embassy officials opted to take Odhiambo's whistleblowing as gospel truth, it begs the question if they bothered to do a background check on 'Makuti Park - life member' Odhiambo, or at least undertake a due delligence on charterhouse themselves directly.

I urge you and jukwaa not to be taken for a ride by the likes of Odhiambo. Wikileaks is a big sham!

www.nation.co.ke/News/Man+seeks+Sh2bn+for+exposing+bank+scam/-/1056/1390074/-/trxcrv/-/index.html

Kumbe there was motivation.........I said it!

[jonah]

Phil

Fascinating information about Peter Odhiambo.

Tell us more.

[merlin]

Sorry just a private note

Charterhouse bank is not cleared. As far as I know it is still under statutory management.

In order to protect the interests of Charterhouse Bank Limited, its depositors and other creditors, the Central Bank of Kenya has today appointed Miss Rose Detho as Statutory Manager for Charterhouse Bank Limited pursuant to Section 34(1)(d) of the Banking Act with effect from 23rd June, 2006. ... JACINTA W. MWATELA ACTING GOVERNOR

I have blind trust in the banking system and been so unlucky to bank with Charterhouse bank which still must have my 120,000 shillings in their accounts. I should not be worried as Miss Rose Detho is looking after my interest as depositor but I find six years a pretty long waiting time. I know my landlord is not so patient.

[job]

Feb 28, 2011 20:53:02 GMT 3 phil said:

reporter911

Whereas its not my wish to absolve Mwau and Kabogo from money laundering allegations, I must tell you, PETER ODHIAMBO is not a clean man either.

This former rugby player is a man who was previously employed by Barclays Bank in Kenya, until he masterminded fraud against Barclays in which the bank lost millions of shillings. During those days Odhiambo was a well known spendthrift in Nairobi's entertainment joints. There are actually some congolese bands that composed songs in his honour as he was extremely generous with them. Yet he was a mere bank clerk whose lifestyle was a huge contrast to his actual and known income. Odhiambo used to change sports cars like you and I would change shirts.

Odhiambo was summarily dismissed by Barclays in the 90s, arrested, tried in court and eventually convicted for a lengthy jail term. He served time in Kamiti only to be released through presidential clemency for 'good behavior'. Odhiambo actually bribed his way to get his name recommended for early release.

Upon release, he joined Chartethouse as a 'consultant' while its a fact that when he was dismissed by Barclays, he was by then a mere clerk. His joinig Charterhouse was motivated by the need to make quick money. It was not to be, and what you see in this wikileak report, was information which he used unsuccessfully to extort money from the wahindi owners of Charterhouse (same guys who own Kingsway tyres).

You can see how the sly Odhiambo has used the same unveryfied infomation to win himself and his family US citizenship.

That embassy officials opted to take Odhiambo's whistleblowing as gospel truth, it begs the question if they bothered to do a background check on 'Makuti Park - life member' Odhiambo, or at least undertake a due delligence on charterhouse themselves directly.

I urge you and jukwaa not to be taken for a ride by the likes of Odhiambo. Wikileaks is a big sham!

Phil,


Even previously convicted felons can still whistle-blow. If there's a reward for the same, and their whistle-blowing turns out positive, they're entitled to every penny promised. You're thus deviating from the substantive matter into the world of ad hominems.



You have a point regarding the general extortion culture prevailing in Kenya. But you must pin-point the extortion artists accurately. In this particular case, it is certainly not Peter Odhiambo. Odhiambo is merely demanding his rightful dues.



Here was an auditor (Odhiambo) employed at Charter House Bank, who discovered that his employer (Charter House Bank owners - Harun Mwau et al) were essentially laundering money (to evade taxes) on behalf of companies like Nakumatt, Kingsway and others - some of which were incidentally also owned by the same Harun Mwau and the Shah family. It is now apparent that these unscrupulous businessmen figured out that setting up a bank (Charter House Bank) was the easiest way to hide and launder incoming cash and evade taxes.



When Nakumatt collected their billions of shillings in sales, they deposited the cash into secret accounts within Charter House Bank - proceeds that were not reported as sales income - thus not surcharged taxes. These are the secretive accounts Peter Odhiambo's watchful eye caught - and started surreptitiously documenting. We (public) were essentially being denied lots of billions of shillings in unpaid taxes.



Odhiambo took his dossier to KRA - handing it to the Commissioner General Michael Waweru himself; Treasury (to Finance Minister David Mwiraria himself); and CBK (to CBK Governor Andrew Mulei himself) - on advise from lawyers who followed up from the background.


Instead of getting his advertised rewards for whistle-blowing, he was met by death threats to himself and his family. His lawyers then advised him to seek protection from diplomats and the UNCHR; which he did. Of course, Odhiambo exchanged the high-value dossier with them; since many esp, the U.S. Embassy, were keenly interested in tracking down money laundering activities - avenues through which terrorist activities could be similarly funded unnoticed. We all know what the diplomats did with their information - some of which ended up in wikileaks...and where Odhiambo himself (& family) eventually landed.



Who were the real extortionists in this case? All you need to do is simply follow-up what the government (specifically KRA Commissioner General, Finance Minister, & CBK Governor) did with Odhiambo's dossier to know who the first batch of extortionists are.


Apart from the then CBK Governor Andrew Mulei - the rest, from David Mwiraria (Treasury) and Michael Waweru (KRA) both decided to use the dossier as a milking (extortion) machine. Mulei did the right thing - launching a task force to investigate Charter House Bank. He was unceremoniously fired for that. On the contrary, Mwiraria and Waweru gleefully jumped into the scam. To hit the nail on the head, Mwiraria (Treasury) and Waweru (KRA) approached Charter House Bank and its clients like Nakumatt, Kingsway et al., with the dossier - to specifically extort from the respective owners. These companies owed us (the public) hundreds of billions of shillings in unpaid taxes; which they were not ready to submit but willing to bribe Mwiraria, Waweru etc to write them off.


Mwiraria, Waweru (and very likely a proceed for their overall boss), each must have demanded a 'cut' of the unpaid taxes which were to be informally written off. To add insult to injury, the tax-evasion was to continue under 'agreed' terms. Thus, under a new equilibrium, the extortion and tax-evasion status quo prevails to date under fresh terms.


In other words, since Odhiambo's dossier, the "eating" from this tax-evasion scam was essentially transfered from the mid-level clerks and officers of government, to the top bosses - who were now eating directly. These top bosses of KRA, Treasury, and CBK (currently) are the first batch of extortionists.


Every Finance Minister, KRA Commissioner, and CBK Governor since Mwiraria must have been involved in this on-going conspiracy. The tax evasion hasn't stopped for sure. So count more beneficiaries of the scam to include Amos Kimunya, Uhuru Kenyatta, Njeru Githae, Njuguna Ndung'u, and John Njiriaini.



Then comes the next batch of extortionists, masquearading as peoples' watch-dog - in the formal name of the Chris Okemo-led Parliamentary Committee on Finance and Budgeting. After a "parliamentary inquiry" they found "no evidence" of money laundering, tax-evasion, or such vices and quickly wrote a report recommending the re-opening of Charter House Bank. That's the face of extortion and evidence of bribery right there. Kenyans must stop being gullible and start understanding how they are being defrauded from all ends.



That's how Kenyans will also realize that another group of extortionists on daily high alert are media. Extortionist and super-bribed mainstream media has indeed skewed stories towards the direction of their palm-greasers. I bet many have read stories and editorials literally: demanding for the reopening of Charter House Bank; painting rosy pictures of the roles of KRA, Treasury and CBK on this matter; amplifying bogus parliamentary reports; or vilifying the likes of patriotic Kenyans like Andrew Mulei and Peter Odhiambo. Please don't fall into the baits of these palm-greased salesmen of snake oil. Most of these writers are themselves extorting from the same tax-evaders.



In short, rather than recover money for us (public), and reward Odhiambo for his whistle-blowing, all his cerebral effort ended up being the golden egg for the Mwirairas, Wawerus, Njiriainis, Ndungus, Kimunyas, Uhurus, Githaes, Okemos and other MPs of this world. In fact, his dossier ended up being the basis for the new partnership between the tax-evadors (Mwau and the Shah family) on one side; and the tax collectors & receivers (KRA, Treasury, CBK) on the other.


What if Odhiambo decided to be an extortionist rather than a whistleblower? What if he just walked straight to Mwau and the Shahs directly, and demanded his 'cut'? I guess he was smart enough to know he would have been dead by now, like the Goldenberg whistle-blower from Kajiado.


I think Odhiambo still has some pretty good amount of functional cerebral matter above his shoulders. Does anyone see the significance of filing this case in the U.S. - just at a time when Uncle Sam has sanctioned Mwau's businesses under the Drug Kingpin Act? Probably Mwau and others might this time want to negotiate with Odhiambo. Who knows?

[phil]

Man who exposed bank scam a con man, claims Githae

The man who allegedly exposed a tax evasion scandal at the closed Charterhouse Bank was rewarded for his work.

Finance minister Njeru Githae said the Kenya Revenue Authority (KRA) rewarded Peter Odhiambo, now living in the United States, for whistleblowing.

But Githae described Odhiambo as a con man who fled to the US on flimsy claims. The minister had earlier defended KRA’s move arguing the law allows the Commissioner General to reward those who give information on people evading tax.

“The Commissioner General is authorised to reward those who provide critical information. That is why we have been able to increase taxes from Sh300 billion in 2002 to Sh1.3 trillion this year,” he stated.

He, however, said the Government will hire the best lawyers in a suit filed against it by Odhiambo.

Odhiambo is suing the Government for Sh2 billion.

He sought refuge in the United States in 2006 citing threats on his life after he allegedly uncovered a multi-billion tax evasion scam.

Odhiambo allegedly exposed a multi-billion shillings tax evasion and money laundering at Charterhouse Bank and shared the information with several government agencies including KRA, the then Kenya Anti-Corruption Commission (KACC) and the Central Bank of Kenya (CBK).

Disclosed depositors

However, KRA and KACC have absolved the bank from any wrongdoing, stating that Charterhouse Bank had never evaded paying taxes neither had it been used for money laundering activities. “We are going to get the best lawyers to fight the suit. The Government is not going to pay Sh2 billion,” he added.

The minister was responding to a question in Parliament by Kilome MP Harun Mwau.

The MP wanted the minister to confirm if Peter Odhiambo, a former auditor at Charterhouse Bank Limited disclosed depositors’ accounts information without their consent to KRA for a reward.

Dujis MP Adan Duale wondered why KRA was paying people money to receive secret information.

– Stories by Allan Kisia and Moses Njagih

[reporter911]

Sept 11, 2012 22:20:47 GMT 3 phil said:

Man who exposed bank scam a con man, claims Githae

The man who allegedly exposed a tax evasion scandal at the closed Charterhouse Bank was rewarded for his work.

Finance minister Njeru Githae said the Kenya Revenue Authority (KRA) rewarded Peter Odhiambo, now living in the United States, for whistleblowing.

But Githae described Odhiambo as a con man who fled to the US on flimsy claims. The minister had earlier defended KRA’s move arguing the law allows the Commissioner General to reward those who give information on people evading tax.

“The Commissioner General is authorised to reward those who provide critical information. That is why we have been able to increase taxes from Sh300 billion in 2002 to Sh1.3 trillion this year,” he stated.

He, however, said the Government will hire the best lawyers in a suit filed against it by Odhiambo.

Odhiambo is suing the Government for Sh2 billion.

He sought refuge in the United States in 2006 citing threats on his life after he allegedly uncovered a multi-billion tax evasion scam.

Odhiambo allegedly exposed a multi-billion shillings tax evasion and money laundering at Charterhouse Bank and shared the information with several government agencies including KRA, the then Kenya Anti-Corruption Commission (KACC) and the Central Bank of Kenya (CBK).

Disclosed depositors

However, KRA and KACC have absolved the bank from any wrongdoing, stating that Charterhouse Bank had never evaded paying taxes neither had it been used for money laundering activities. “We are going to get the best lawyers to fight the suit. The Government is not going to pay Sh2 billion,” he added.

The minister was responding to a question in Parliament by Kilome MP Harun Mwau.

The MP wanted the minister to confirm if Peter Odhiambo, a former auditor at Charterhouse Bank Limited disclosed depositors’ accounts information without their consent to KRA for a reward.

Dujis MP Adan Duale wondered why KRA was paying people money to receive secret information.

– Stories by Allan Kisia and Moses Njagih

Is this man Githae for real? How the hell did he get the Job of FINANCE MINISTER? he should be sacked with immediate effect for trying to protect charterhouse bank crooks!! "THIEVES" is it why he was given the ministry of finance position.. I'M GLAD THAT THE 2013 ELECTIONS ARE AROUND THE CORNERS.. some of these guys like GITHAE should face the law ... he must answer to the claim to why he thinks a whistle- blower is a con man when even charterhouse corrupt dealings were leaked through other independent channels like WIKILEAKS..
THIS GITHAE GUY IS NOT QUALIFIED TO HANDLE THE MINISTRY OF FINANCE ..BURE KABISA.... Githae must go!! Githae must go or else face the law.. for protecting thieves!! instead of whistle-blowers !!

Lets not forget why Harun Mwau asked the Question??
becuase he was in the think of money laundering through the charterhouse bank

Wikileaks

(C) Odhiambo identified the companies involved in tax
evasion and money laundering as the five companies in
Nakumatt Holdings: XXXXXXXXXXXX.
(A CBK report also implicated the John Harun Group, Triton
Petroleum, law firm Kariuki Muigua & Co., Pepe Ltd, XXXXXXXXXXXX,
and businessmen William Gitau). Odhiambo stated that,

although six South Asian Kenyans were listed as the owners of Nakumatt Holdings, some of them were proxy holders of shares actually
owned by John Haroun Mwau and MP William Kabogo,
both of whom have been linked to smuggling XXXXXXXXXXXX.
Odhiambo noticed a deposit of Ksh10 million/day into Nakumatt,s
or Tusker Mattresses, accounts, and he suspected the funds were
smuggling proceeds from Harun Mwau,s container depot
company, Pepe. Odhiambo believes the perpetrators evaded
about Ksh43 billion ($573 million) in taxes, but that KRA has
been purposefully understating the figure

Odhiambo is lucky to have escaped from Kenya alive.. seeing the group of thieves profile.. enuff said

[jakaswanga]

Sept 11, 2012 22:20:47 GMT 3 phil said:

Man who exposed bank scam a con man, claims Githae

The man who allegedly exposed a tax evasion scandal at the closed Charterhouse Bank was rewarded for his work.

Finance minister Njeru Githae said the Kenya Revenue Authority (KRA) rewarded Peter Odhiambo, now living in the United States, for whistleblowing.

But Githae described Odhiambo as a con man who fled to the US on flimsy claims. The minister had earlier defended KRA’s move arguing the law allows the Commissioner General to reward those who give information on people evading tax.

“The Commissioner General is authorised to reward those who provide critical information. That is why we have been able to increase taxes from Sh300 billion in 2002 to Sh1.3 trillion this year,” he stated.

He, however, said the Government will hire the best lawyers in a suit filed against it by Odhiambo.

Odhiambo is suing the Government for Sh2 billion.

He sought refuge in the United States in 2006 citing threats on his life after he allegedly uncovered a multi-billion tax evasion scam.

Odhiambo allegedly exposed a multi-billion shillings tax evasion and money laundering at Charterhouse Bank and shared the information with several government agencies including KRA, the then Kenya Anti-Corruption Commission (KACC) and the Central Bank of Kenya (CBK).

Disclosed depositors

However, KRA and KACC have absolved the bank from any wrongdoing, stating that Charterhouse Bank had never evaded paying taxes neither had it been used for money laundering activities. “We are going to get the best lawyers to fight the suit. The Government is not going to pay Sh2 billion,” he added.

The minister was responding to a question in Parliament by Kilome MP Harun Mwau.

The MP wanted the minister to confirm if Peter Odhiambo, a former auditor at Charterhouse Bank Limited disclosed depositors’ accounts information without their consent to KRA for a reward.

Dujis MP Adan Duale wondered why KRA was paying people money to receive secret information.

– Stories by Allan Kisia and Moses Njagih

Always good to take a look at what happens elsewhere. UBS is not a bank one hears of in Africa, but it is where all the loot african heads of state and their cronies stole in the past half a century, ended up. Here are part of her tribulations with the american internal revenue service, after an employee blew the whistle.

Whistleblower Brad Birkenfeld Rewarded Record $104M for Exposing How UBS Helped Rich Evade Taxes
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The IRS has announced a record $104 million reward to a whistleblower who exposed the largest tax evasion scheme in U.S. history. Former UBS AG banker Brad Birkenfeld first reported in 2007 that he and his colleagues had encouraged rich Americans to store more than $20 billion in offshore Swiss bank accounts and cheat the IRS. But after coming forward, Birkenfeld was prosecuted and convicted of conspiracy and sentenced to prison. Following Birkenfeld’s release last month, on Tuesday the IRS vindicated his actions with the largest amount ever awarded under its whistleblower program. We’re joined by Stephen Kohn, an attorney for Birkenfeld and executive director of the National Whistleblowers Center. [Transcript to come. Check back soon.]
FILED UNDER Tax Havens, Stephen Kohn
GUEST:
Stephen Kohn, co-counsel for UBS whistleblower Brad Birkenfeld, and executive director of the National Whistleblowers Center. He’s also the author of "The Whistleblower’s Handbook: A Step-by-Step Guide to Doing What’s Right and
www.democracynow.org/2012/9/12/whistleblower_brad_birkenfeld_rewarded_record_104m

=========================

From Snitch to Rich? The Case of UBS's Brad Birkenfeld
This is a discussion on From Snitch to Rich? The Case of UBS's Brad Birkenfeld within the Law News forum, part of the FORUM

INFORMATION category; For the next several years, life for Bradley Birkenfeld will be pretty lousy. Then, pretty much overnight, life could get ...

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Nov 27th, 2009, 11:40 AM #1
WSJ Law Blog
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From Snitch to Rich? The Case of UBS's Brad Birkenfeld


For the next several years, life for Bradley Birkenfeld will be pretty lousy. Then, pretty much overnight, life could get very, very fun. Private-jet, island-owning, buy-a-sports-team kind of fun.

LBers might remember Birkenfeld’s name, seen right heading down the steps of the federal courthouse in Fort Lauderdale. He was the initial whistle-blower in the huge UBS tax-fraud. He pleaded guilty to helping rich Americans evade taxes, a plea for which he received a 40-month sentence.

But Birkenfeld’s whistleblowing, federal authorities admit, ultimately led to over 14,000 UBS clients stepping forward and copping to tax-evasion. “Without Mr. Birkenfeld walking into the door of the Department of Justice in summer of 2007, I doubt this massive fraud scheme would have been discovered by the United States government,” Kevin M. Downing, the Justice Department prosecutor who handled the UBS investigation, wrote in court papers filed in Birkenfeld’s case. Clickhere for the NYT story on the Birkenfeld situation.

According to the NYT story, for his assistance in cracking the case, Birkenfeld is seeking serious money, pursuant to a 2006 federal whistleblower statute meant to entice people to shine light on tax fraud.

Birkenfeld, who is to begin his prison term as soon as January, will seek “at least several billion dollars,” says his lawyer, Stephen M. Kohn.

It might sound like a pretty penny for a convicted felon, but some experts believe Birkenfeld, 44, has a good chance to cash in.

“I do think he has a serious claim,” said Erika A. Kelton, a partner at Phillips & Cohen, a law firm that specializes in large whistle-blower claims. “It was very credible, very useful information from inside UBS that he provided. The law is pretty clean on this.”

Under a 2006 whistle-blower law, explains the NYT’s Lynnley Browning, informants now stand to collect 15 to 30% of the taxes, fines, penalties and interest ultimately collected by the I.R.S. In the case of UBS, the tally could run into the billions.

Informants who are convicted of “planning” and “initiating” the schemes are not entitled to bounties. But Birkenfeld, is not seeking rewards for money collected from his own clients. Instead, his lawyers are arguing that he is entitled to a reward stemming from the thousands of others who have come forward in recent months about hidden, offshore bank accounts.

The I.R.S. declined to comment on Birkenfeld’s case. But the agency, which did not grant Birkenfeld immunity from prosecution when he came forward, considers Birkenfeld more of a tipster or an informant than a formal whistle-blower, in part because while he described the bank’s dealings, he provided few details on actual clients, according to a senior Justice Department official.

Photo: Getty Images --WSJ-law blog.
=====

[jakaswanga]

Njeru Githae understands his brief yes, as a hand-picked maiden of Uhuru Kenyatta, to chaperon the nobility finance-capital in Kenya. To protect conservative ill-gotten loot, real-estate, and their related financial scams.

Conservative capital, as I use this term in Kenya, is scared of competition, is scared of investments which means risks --which is the true doctrine of a capitalism that expands the productive process and creates national wealth. Conservative capital is then more prone to control the state, this to ensure favour, easy deals, so that it can thrive by proximity to the state, rather than offering services which compete and of own strength... to sell for profit. Conservative capital needs the state to maintain, multiply and perpetuate itself. The state is its means of production so to speak. This is why it is called PARASITIC. It creates no wealth of its own outside control, ownership of the state.

Her business, this conservative and impotent capital, is corruption. This is why Kenya looses [conservative estimate] 30% of her GDP per year to corruption. Estimated GDP being $33bn.

If a ruling class is siphoning off half of that 30% by theft, what is their chief activity then? THEFT of course. and cover up.

It is Njeru Githae's historical role to protect this kind of capital in this kind of business --THEFT. By hook and crook.

This sets the stage for his demise, because a new entrepreneurial class can only rise up by competent competition in this global era. Chinese money, the biggest FDI source, will not be behaving like NGO western money, meant specifically to facilitate corruption amongst the elite to buy political favour.

It is the prevalence of none risk taking, corrupt, lazy capital protected by the states, that has made it easy for China to make a killing in every sector of the African economy. There is practically no competition from the local entrepreneurial class, because there are no risk-takers. Everybody is feeding off the state. No parasite is competitive. The host dies, or it is removed from the host, it demises.

Njeru Githae, is thus, in my opinion, a thing of the past. A lively worm on a rotting body as it is buried.
----------------
Here is an idea of how the contradictions of whistle-blowers are handled in a mature land. The Solomonic safety valve. part of the earlier post on UBS and the whistle-blower.

www.nytimes.com/2012/09/12/business/whistle-blower-awarded-104-million-by-irs.html

[OtishOtish]

Sept 12, 2012 19:31:41 GMT 3 jakaswanga said:

This sets the stage for his demise, because a new entrepreneurial class can only rise up by competent competition in this global era. Chinese money, the biggest FDI source, will not be behaving like NGO western money, meant specifically to facilitate corruption amongst the elite to buy political favour.

India and South Korea are also pumping in relatively huge amounts of FDI but this is not common knowledge because there are no Koreans going around enjoying the fruits of the land.

The Chinese operate differently. They lend us money to build a "super-highway" or whatever. The money is then spent on Chinese materials and labour---for both the road and other things. And of the labour, I was astonished by the extent to which they have "sown seeds" along the way to Thika. Long live China-Africa friendship!

As to your hypothesis, it fails because Western money is still the major source of "eating". Looking at the amounts: (a) it appears that the amount of Western aid that gets salted away exceeds the incoming Chinese FDI; (b) there was a single year in which the amount of Western aid that got eaten exceeded all the Chinese FDI+loans that we have had in the last 5 years. (Sweden was particularly upset about that.)

So, once our boys have done their sums and determined who's putting the most butter on their bread, it is likely that there will be no "demising".

[podp]

Sept 12, 2012 19:31:41 GMT 3 jakaswanga said:

Njeru Githae understands his brief yes, as a hand-picked maiden of Uhuru Kenyatta, to chaperon the nobility finance-capital in Kenya. To protect conservative ill-gotten loot, real-estate, and their related financial scams.

Conservative capital, as I use this term in Kenya, is scared of competition, is scared of investments which means risks --which is the true doctrine of a capitalism that expands the productive process and creates national wealth. Conservative capital is then more prone to control the state, this to ensure favour, easy deals, so that it can thrive by proximity to the state, rather than offering services which compete and of own strength... to sell for profit. Conservative capital needs the state to maintain, multiply and perpetuate itself. The state is its means of production so to speak. This is why it is called PARASITIC. It creates no wealth of its own outside control, ownership of the state.
Her business, this conservative and impotent capital, is corruption. This is why Kenya looses [conservative estimate] 30% of her GDP per year to corruption. Estimated GDP being $33bn.

If a ruling class is siphoning off half of that 30% by theft, what is their chief activity then? THEFT of course. and cover up.

It is Njeru Githae's historical role to protect this kind of capital in this kind of business --THEFT. By hook and crook.

This sets the stage for his demise, because a new entrepreneurial class can only rise up by competent competition in this global era. Chinese money, the biggest FDI source, will not be behaving like NGO western money, meant specifically to facilitate corruption amongst the elite to buy political favour.

It is the prevalence of none risk taking, corrupt, lazy capital protected by the states, that has made it easy for China to make a killing in every sector of the African economy. There is practically no competition from the local entrepreneurial class, because there are no risk-takers. Everybody is feeding off the state. No parasite is competitive. The host dies, or it is removed from the host, it demises.

Njeru Githae, is thus, in my opinion, a thing of the past. A lively worm on a rotting body as it is buried.
----------------
Here is an idea of how the contradictions of whistle-blowers are handled in a mature land. The Solomonic safety valve. part of the earlier post on UBS and the whistle-blower.

www.nytimes.com/2012/09/12/business/whistle-blower-awarded-104-million-by-irs.html

the red high lights

you are spot on explaining our Comprador class who have a mobid contempt of property rights. that undoubtedly scares off potential investors who nurse the fear that they may be the next victims in the hands of a predatory regime hence flooding of Chinese substandard goods, European and western rejects (2nd hand goods) and architects of Goldenberg, Angloleasing, Maize, KKV etc.

the role of Compradors is to take over and subvert key state institutions (civil service, judiciary, pariament, media, etc) we need to interrogate whose beck and interests do they serve?

Why do we have poor governance given that good governance entails not only cognitive wherewithal but also the ability to compromise and bargain successfully with a plethora of competing groups. why do we have terrible at economic management? what should we do about the demise of domestic industries as cheap imports flood us?

remember NARK government of 2002 and now the nusu mkate one? too often, opposition parties that set out to liberate their countries from tyranny win up selling out, fighting among themselves, and sowing seeds of discord. to defeat a tyrant in an election, a coalition of opposition parties must field only one presidential candidate. What happens when the candidate becomes a dictator as current PORK turned out after 2002 election hiding behind all and sundry including Nyeri business woman cum activist?

beware of any dictator, weather brazen like mo1 or sleeping as current PORK.

"The only good dictator is a dead one" wrote one George A in his latest classic Defeating Dictators: Fighting Tyranny in Africa and Around the World. the mess that the "Hippo" generation following decolonization made, and how it ruined the continent. his prescriptions, which amount to `Africans must solve their own problems in their own way. the "vampire states" and "coconut republics" whose undemocratic and illegitimate rulers have done more harm to their own people than any external agents

examining what strategies worked in the struggle to establish democracy through revolution one lesson is never trust a guy or men who tell you they are reformers and keep retrogressive company.

any political system that concentrates power in the hands of one person, George A argues, will inevitably degenerate into a dictatorship. the culprit is the system that abuses state power, electoral gerrymandering, merchants of impunity and rape of democracy--not ideology or culture. why did MM fall out with RAO? earlier Githongo with Kibaki? unyielding grip on power is the hallmark of every dictato. the only voice a dictator listens to is his own voice

see return of UK? Mo1 sons and very soon Kibaki’s and RAO’s blood kinsmen. it is because dictators grow senile, and then they start to groom their sons, wives, and half-brothers to succeed them. African despots are notorious for these treasonous acts of insanity. and the great hangers on though highly educated with PhDs, (AG, ministers of Medical Services, Foreign Service, Higher Education, CBK Governor) a multitude of them have sold off their consciences, integrity and principles as they kowtow to the diktats of barbarous dictators.

so who will bell the cat? dictator

[jakaswanga]

Sept 12, 2012 20:41:14 GMT 3 OtishOtish said:

As to your hypothesis, it fails because Western money is still the major source of "eating". Looking at the amounts: (a) it appears that the amount of Western aid that gets salted away exceeds the incoming Chinese FDI; (b) there was a single year in which the amount of Western aid that got eaten exceeded all the Chinese FDI+loans that we have had in the last 5 years. (Sweden was particularly upset about that.)

So, once our boys have done their sums and determined who's putting the most butter on their bread, it is likely that there will be no "demising".

Otishotish

Do you remember the days of official exchange rates of the ksh to foreign currency? The finance minister would be reading his budget with the official figure, a pretense, while every businessman and others interested in the real figure, would be watching the black-market and working their figures accordingly. Until the 'official act' could no longer be maintained anymore in reality. And the rate was floated --denying the treasury and CBK to set this key determinant of trade. That kind of forced re-adjustment to reality of a certain system, involves a 'demise'.

This [demising] is a historical rather than a physical thing. Eg. The demise of Britain in Kenya is represented by the fact that Kibaki could not even be bothered to stop taking tea to answer a telephone call from Gordon Brown, then premier. ---Tell him am taking tea. Later. May be!

In this picture there is no difference between Njeru Githae, or James Mbadi, Gumo or Keter, or whichever worm ODM would have replace Njeru if they win, to busily burrow in the carcass.

PS: On the actual figures of FDI, 2011 Asia-Pacific figure was $4.5bn. Europe was $1.87 bn. Western Aid was less than diaspora remittance.

China, apart from FDI king, is also all loan types King to AFRICA. And with the agreed new $20bn pledged in FOCAC 2012, an unbeatable monster. [Unless her economy collapses, dragging the world along with it ;D in apocalypse then]

I will hunt for figures on how this lump sums break down to Kenya.

[OtishOtish]

Sept 12, 2012 22:29:17 GMT 3 jakaswanga said:

Sept 12, 2012 20:41:14 GMT 3 OtishOtish said:

As to your hypothesis, it fails because Western money is still the major source of "eating". Looking at the amounts: (a) it appears that the amount of Western aid that gets salted away exceeds the incoming Chinese FDI; (b) there was a single year in which the amount of Western aid that got eaten exceeded all the Chinese FDI+loans that we have had in the last 5 years. (Sweden was particularly upset about that.)

So, once our boys have done their sums and determined who's putting the most butter on their bread, it is likely that there will be no "demising".

Otishotish

Do you remember the days of official exchange rates of the ksh to foreign currency? The finance minister would be reading his budget with the official figure, a pretense, while every businessman and others interested in the real figure, would be watching the black-market and working their figures accordingly. Until the 'official act' could no longer be maintained anymore in reality. And the rate was floated --denying the treasury and CBK to set this key determinant of trade. That kind of forced re-adjustment to reality of a certain system, involves a 'demise'.

This [demising] is a historical rather than a physical thing. Eg. The demise of Britain in Kenya is represented by the fact that Kibaki could not even be bothered to stop taking tea to answer a telephone call from Gordon Brown, then premier. ---Tell him am taking tea. Later. May be!

In this picture there is no difference between Njeru Githae, or James Mbadi, Gumo or Keter, or whichever worm ODM would have replace Njeru if they win, to busily burrow in the carcass.

PS: On the actual figures of FDI, 2011 Asia-Pacific figure was $4.5bn. Europe was $1.87 bn. Western Aid was less than diaspora remittance.

China, apart from FDI king, is also all loan types King to AFRICA. And with the agreed new $20bn pledged in FOCAC 2012, an unbeatable monster. [Unless her economy collapses, dragging the world along with it ;D in apocalypse then]

I will hunt for figures on how this lump sums break down to Kenya.

Jakaswanga:

What I had in mind was "aid", not FDI. FDI from Europe has generally been decreasing--e.g. in Kenya, from the UK. "Aid" on the other hand still counts for a great deal, e.g. the $0.5 billion per year that the USA gives Kenya for health. For Kenya, I estimate that the difference between what China lends us and what it gives us as "aid" (read grants) is a factor of about 15-20 in favour of loans.

And the "$20bn pledged in FOCAC 2012" is all for loans, which we will use to import Chinese products and labour. The real question has to be what we get out of Chinese loans that we would not get from loans from elsewhere. A lot of little men working 18-hr days for peanuts while their brethren take over everything, incuding making mandazis and hawking 2nd-hand clothes? What's more most Chinese money is actually going to just a handful of countries, excluding Kenya---last time I checked almost 50% was going to just 4 countries. Guess which ones? Yep, the ones with the most natural resources to be exploited.

So, the Chinese have agreed to lend all of Africa $20 billion over a certain period. How much will all of Africa be borrowing from elsewhere during that period?

Even if we were to assume that the $20 billion is all FDI, which it isn't, to my mind it is not an "unbeatable monster". In 2011, FDI transfers around the world totalled about $1.5 trillion. Take a look at where it went. In Africa only 3 or 4 countries got figures worth talking about. On the other hand, African countries spent quite a lot elsewhere (e.g. on Chinese junk), and don't forget the stuff from the ground. Africa seems to be the place where you put in as little as possible but reap rewards out of proportion. By normal accounting, it should be a good place to invest, but I imagine it doesn't help when the natives indulge in mayhem over elections, over grazing land, etc. Even as a Kenyan who loves Kenya, I do not think it is a particularly good place to invest money in---all that corruption and stealing, from government officials to even one's own relatives!

It is also interesting that you should mention the diaspora remittances. For Kenya, we are now approaching $1 billion per year. And almost all of that is from Kenyans in the West. Perhaps we should be exporting Kenyans instead of borrowing from China and importing Chinese.

I once took a quick look at all the figures involved---aid, loans, diaspora remittances, whatever---and concluded that the Great Saviours from China may not quite be that. Of course, I have no problem if our new friends eventually push down the price of chickens, sukuma-wiki, and hookers.

As you can tell, I am not particularly enamoured of your new Chinese friends. We bent over while the West stuck it to us. Now we are bending over for East---actually just China, since the USSR already had its go---to do it to us. (The Chinese, though are more rapacious, and there's a bloody huge number of them.) After that, I guess it will be South America's turn. When do Africans wake up and start to seriously take care of Africa and Africans?

A lot is said and written about what China is supposedly putting into Africa. How about we stop for a bit and consider what they are getting out of Africa.

I understood what you meant by "demise". My point is that those guys and the system they operate in won't be "demising" any time soon as long as the money to be eaten comes from the usual sources.