Sunday, July 6, 2008



Published on July 6, 2008
By Sunday Standard Team

Three battles President Kibaki and his team fought between 2003 and last year could hold the answer to the strings of graft claims that have dogged him to the final term.

Elected on the platform of change and anti-corruption in 2002, nearly six years later and his administration having ‘inherited’ Kanu’s master of ‘white collar’ crime Mr Kamlesh Pattni, eyes are today firmly on Kibaki.

Mr Kamlesh Pattni at the handing over of the Grand Regency Hotel, Nairobi, to the Government on April 9.


The questions begging for answers revolve around what he possibly knew about the Anglo Leasing and the Grand Regency scandals, and if at all they were linked to his tussle with Prime Minister Raila Odinga.

Sources familiar with the President’s circle and the Grand Regency saga say it might have been conceived during a trip Kibaki’s nephew the late Alex Muriithi made to Libya in 2003.

That trip is said to have marked the beginning of a clash between official and private functions, which dovetailed into scandals like what has put Finance Minister Amos Kimunya in a spot.

Discreet interviews within his circle, those familiar with his troubles with Raila on being elected President in December 2002, reveal the dalliance with suspect deals by some of his key backers could have a direct bearing with a scheme to slow down the Lang’ata MP.

The second reason for which some of his key advisers walked right into the jaws of the corruption monster, many of whom have been edged out to save the President further embarrassment, is a decision Kibaki and his team reached in 2003 – a second term in office.

Sources familiar with the decision reveal in Kibaki’s circle it was not a question of ‘if we win’ but ‘when we win’.

The strongest indicator of how resolute the decision was came from Mr John Githongo, Kibaki’s first and last official adviser on the graft war, who fled to exile saying he was a hunted man, being asked to slow down on anti-graft war. He blew the lid on the resolve to ‘organise’ resources for the 2007 General Election "the Kanu way".

Thirdly, and for which the constant factor was the unrelenting desire to contain Raila after purging Kanu and retired President Moi with his help, the thirst for victory in the November 2005 referendum on the proposed constitution, which Kibaki lost badly.

The three ‘political programmes’, whose common denominator was retention of State House’s tenancy, is reported to have triggered the thirst for ‘slush fund’ to oil the ‘victory’ machine. "If Moi had 24 years in office, we surely must fight for 10," is reported to have been the line spurn inside his circles in as far as the election last year was concerned.

The question that will persist right into the post-Kibaki era, is his place in the weighty schemes that shook his Cabinet and for which he kept silent until his lieutenants started falling.

Today the nation waits either embattled Finance Minister Amos Kimunya’s resignation, to pave way for investigation into the controversial sale of the Grand Regency Hotel, or the sight of Kibaki’s hand pushing him to the sideline. But Kimunya, who had first said the deal not only had Kibaki’s seal of approval, but also the Head of State negotiated it with President Muammar Gaddaffi on a visit to Libya.

Already the President’s inner circle, through Deputy Prime Minister, Kanu chairman Uhuru Kenyatta, and Internal Security Minister Prof George Saitoti, have fought the graft claims so much on the composition of the Cabinet sub-committee Raila appointed to look at the sale, than on the fact that there was no competitive tendering at all.

Uhuru and Saitoti watched silently as Kimunya was humiliated during the successful Motion of no confidence against him in Parliament on Wednesday.

For Kibaki first was the Sh7 billion twin Anglo Leasing scandals – that brought to ruin the political career of Dr Chris Murungaru and his friend and Permanent Secretary from the Makerere days, Mr Joseph Magari.

It also gave pushed to the precipice two Cabinet members and friends from the Democratic Party days – Mr David Mwiraria and Mr Kiraitu Murungi and his second Vice-President Moody Awori.

Today, apart from Kimunya, the axe is on the necks of four senior public servants who enjoy security of tenure. They include Attorney General Amos Wako, who Kimunya claimed was briefed on the sale, but denied knowledge of it.

There is also Kenya Anti-Corruption Commission’s director Justice Aaron Ringera, considered close to some of the President’s men, and who traded amnesty for Pattni for the hotel built on unpaid Central Bank loan.

There is also CBK Governor Njuguna Ndung’u whose institution was the vendor in the Grand Regency deal, and who conceded before the committee it was triggered by external influence.

President’s Libya visit

Finally, there is the Director-General of National Intelligence Security Service Maj-Gen Michael Gichangi, who Njuguna is reported to have told the Cabinet sub-committee, linked CBK to Pattni on possible sale.

Given the sensitivity of their roles in government and frequent interaction with the President, to the personal level, questions abound whether they could have pushed such a big ‘government programme’ without telling the President.

Behind the veneer of an independent and apolitical Public Service, several senior civil servants, including Gichangi, who gave the President intelligence briefs all through, are claimed to have made their institutions extension of the Party of National Unity’s campaign tool. That is why on the sidewalk the Grand Regency sale is being whimsically dismissed as campaign fundraiser for Kibaki. The claim, however, remains unsubstantiated.

The pursuit of the three ‘programmes’ of containing Raila, winning the referendum, and securing Kibaki a second term ‘at all costs’, saw the President’s associates hit the road, and one of the destinations was Libya. Tripoli, Kibaki’s associates reasoned, would ‘support’ Raila because of his shared revolutionary streak with Gaddaffi. The first overture therefore came from the Kibaki circle (through Muriithi) and the bait is reported to be Gaddaffi’s secret desire to own hotels, albeit discreetly in African capitals.

After Anglo Leasing, which was conceived by Kanu (after Goldenberg), but nurtured and milked by some well-connected individuals in Kibaki administration, the Libyan connection further yanked open doors for impunity in the Kibaki administration.

Those familiar with the Grand Regency saga claim it began way back in 2003, but was sealed last September when the President visited Libya.

The escapade and search for funds are coming together, in Kibaki’s second and final term. How he handles them will determine the President’s legacy.

His first term created sharp national divisions; with claims his administration sanctioned tribalism and nepotism. But he was sustained by a contested notion the economy was growing and life was getting better.

President Kibaki’s second term began with streams of blood and thousands of lives lost as his re-election was being contested. The economic growth was slowed down by post-election violence.

Should the scandal take political dimension as it is beginning to, the President will be in for another turbulent five years which may only worsen when succession battles take off in earnest.

Indications are that like in his first term, Kibaki’s Cabinet is getting split between those seen to be fighting corruption and those abetting it.

It emerged in 2003 that Muriithi visited several countries, approaching governments to solicit investment and business opportunities for Kenya outside established channels.

Another man, a Mr Joe Kamau, whose name was listed alongside the late Muriithi’s in the 2003 trip to Libya, has resurfaced in the Grand Regency saga, but the bearer of the name remains unknown.

Muriithi, who invariably introduced himself as Alex Kibaki, styled himself as an official emissary of the Kenya Government, although relevant ministries remained in the dark about his quasi-official activities.

In mid-2003, Muriithi traveled to Libya, armed with an official letter from State House, introducing him to Gaddaffi, which authorised him to "make serious contacts" with Libyan investors.

The letter to President Gaddaffi said Kenya had appointed Mr Joe Kamau and Mr Alex Muriithi — who was also referred to as a nephew of the President and head of the then Narc secretariat – "to spearhead efforts aimed at attracting Libyan investments".

Rwanda connection

The two businessmen were also said to have visited Rwanda and Uganda. Muriithi and Kamau were in Rwanda in October 2003 where they announced an unspecified group of local investors were planning to sink USD$60 million (Sh4.6 billion) in Rwanda in 2004.

The first and probably the only attempt to unravel what was going on in the Grand Regency saga came in April, when the PM wrote to the KACC, seeking answers.

In the letter dated April 25, just a week after being sworn-in, the PM, saying he was concerned over media reports that Pattni and his company, Uhuru Highway Development Ltd, had surrendered the hotel. The PM wanted to know the status of the receivership accounts relating to the hotel, status of pending civil suits against Pattni, surrender and transfer documents, among others.

Former MP Paul Muite, a lawyer, yesterday said that in asking for the status of receivership accounts, the PM, in ordinary language, wanted to know what the receivers had been doing at the hotel.

He also wanted to know what they had been paid, how much they had collected and how much they submitted to CBK. "Today, no one is explaining what has happened to the money the receivers have been collecting from the hotel. There is even no evidence the Sh2.9 billion the Finance Minister is quoting to have been the price has been submitted to the Government accounts," Muite said.

In asking for terms of settlement, Muite said, the PM was seeking to know "what precisely Pattni, CBK and KACC had agreed on"." KACC’s response to the PM’s letter came more than a month later and was scarce on details.

On June 6 Mrs Fatuma Sichale, KACC deputy director, wrote to the PM saying KACC was, "initially minded not to respond" to his letter, because "the same was copied or availed to the media".

The letter only confirmed that Grand Regency was "recovered" from Uhuru Highway Development Ltd, and handed over to the CBK. She also enclosed a copy of the settlement.

In the KACC letter, there was no mention of how much the receiver- managers had collected, where it went and that the hotel was being sold.