The Treasury is facing an unprecedented crisis after the Director of Public Prosecutions (DPP) Noordin Haji recommended charges against Treasury Secretary Henry Rotich and Principal Secretary Kamau Thugge
The two are accused in connection with the Sh21 billion paid to an insolvent Italian company, CMC di Ravena, for construction of the Kimwarer and Arror dam projects in Elgeyo Marakwet County.
The DPP on Monday said investigations by the Directorate of Criminal Investigations (DCI) had determined that the top Treasury officials alongside two dozen other State officials did not follow proper procedures, aiding the loss of funds allocated for the dams project.
“The Director of Public Prosecutions is cognisant of the principle of innocent until proven guilty the determination of which can only be made by a court of law,” said Mr Haji said.
He added: “The decision to charge is based on the evidence that is available to the DPP at the time the decision is made.”
Mr Rotich on Monday afternoon presented himself at the DCI, according to the police. Several officials linked to the probe had been arrested by the DCI as at Monday 12:45pm.
The charges to be preferred against Mr Rotich, the DPP said include: “conspiracy to defraud”, “abuse of office”, “financial misconduct”, “engaging in a project without proper planning” and “willful failure to comply with procurement laws.”
The other officials who faced arrest are Susan Jemtai Koech, Principal Secretary in the Ministry of East Africa Community, David Kipchumba Kimosop, the Kerio Valley Development Authority (KVDA) managing director and Kennedy Nyakundi Nyachiro, the chief economist and head of Europe II Division at the National Treasury.
Others are Jackson Njau Kinyanjui, Director Resource Mobilisation Department at the National Treasury, Titus Muriithi, Inspector General of State Corporations, Paolo Porcelli, director CMC di Ravenna, William Kipkemboi Maina, head of supply chain management (KVDA) and Paul Kipkoech Serem, manager, engineering services (KVDA).
The DCI had been investigating circumstances in which Sh21 billion was paid to an insolvent Italian company, CMC di Ravena, for construction of the Kimwarer and Arror dam projects in Elgeyo Marakwet County.
The Treasury released the cash as advance payments for the dam projects that are yet to start.
The fees were largely paid out as part of the conditions that were to be met before commencement of construction.
Other officials to be charged include those who sat at the tender committee for the dams project.
These are Francis Chepkonga Kipkech, Samuel Kimutai Koskei, David Juma Onyango, Patrick Kiptoo, Elizabeth Kebenei, Esther Jepchirchir Kiror and Moses Kipchumba.
Others are Nelson Korir, Isaac Kiiru, Patrick Kipsang, Fredrick Towett, Jotham Rutto, Charity Muui.
National Environment Management Authority (Nema) chief executive Geoffrey Wahungu and two officials David Walunya Ongare and Boniface Mamboleo Lengisho will also be charged.
The money is said to have been wired to Italy before being transferred to England and back to Kenya where it was withdrawn and distributed to local individuals and companies.
Detectives investigating the dam payments had already quizzed four Cabinet Secretaries, including Mr Rotich.
Others who had been questioned are Mwangi Kiunjuri (Agriculture), Eugene Wamalwa (Devolution) and Peter Munya (Trade, Industry and East Africa).
Mr Rotich, David Kimosop, the KVDA managing director and several board members of the State corporation that contracted Italian companies CMC di Ravenna and Itinera were questioned four times by the DCI on the controversial dam payments.
The Kimwarer and Arror probe also sucked in Deputy President William Ruto who claimed that only Sh7 billion had been paid out.
Mr Rotich said earlier that up to Sh19.8 billion had been paid to different firms in the two projects on various dates by the end of last year.
The two projects are yet to kick off since 2017 when the money was paid.
The charges come at an awkward time for Treasury, which is expected to help Kenya raise money locally through taxes and the international debt markets in coming months and wants to woo international investors to shore up President Uhuru Kenyatta’s Sh3.1 trillion Budget between July 2019 and June 2020.
Pressure is now bound to build on President Kenyatta to ensure stability at Treasury, which is critical to build policy certainty and stability in the financial markets.
Mr Rotich, who turns 50 year this year, was thrust into national limelight when President Kenyatta picked him to manage the country’s purse strings six years ago.
Before joining the Treasury as head of macroeconomics, Mr Rotich, a Harvard University-trained bureaucrat, served as an economist at the International Monetary Fund (IMF) office in Nairobi between 2001 and 2004.
He took over as Treasury Cabinet Secretary in May 2013.
In this plum position in President Kenyatta’s administration, he is charged with managing the country’s finances, including “spearheading an efficient and sustainable public financial management”.
Under his chequered reign, the country’s public debt has ballooned significantly on the back of new mega projects, raising eyebrows among financial experts.
The debt crossed the Sh5 trillion mark for the first time mid last year, shining the light on Mr Rotich. The credit binge has left experts worried.
Mr Rotich has always defended the country’s borrowing plans as necessary for its planned development and growth.
“Kenya has no surplus budget like the oil-rich economies and we have to shoulder the burden of building new airports and roads and the railway now if we are to grow in future,” he said earlier.
Before joining the Finance ministry, the CS had worked in the research department of the Central Bank of Kenya from 1994.
He holds a master’s degree in Public Administration from the Harvard Kennedy School in the USA.
“Kenya has no surplus budget like the oil-rich economies and we have to shoulder the burden of building new airports and roads and the railway now if we are to grow in future,” Mr Rotich said earlier.
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