Senior Kenya officials arrested in $100m corruption probe

Kenyan authorities have arrested more than 20 people, including senior officials, in a probe into the alleged theft of almost $100 million from a government agency, as business chiefs warned that widescale corruption threatened President Uhuru Kenyatta’s economic agenda.

The east African nation’s chief prosecutor said 54 people and 10 businesses will be charged in connection with the case this week.

Anti-graft activists welcomed the arrests, but cautioned that until senior politicians were punished for corruption, the reputation of east Africa’s dominant economy as a hotbed of impunity would continue.

There have been numerous corruption scandals since Mr Kenyatta took office in 2013, but no prominent convictions.

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The latest allegations centre on the National Youth Service, which trains tens of thousands of people each year in skills from construction to agriculture and public security. It is alleged that almost 10 billion Kenyan shillings (€85 million) has been siphoned off from the agency through manipulation of procurement contracts and the issuing of fictitious invoices.

Richard Ndubai, the NYS director-general, and more than a dozen others were arrested on Sunday and Monday in connection with the case.

Lilian Omollo, the principal secretary in the ministry of public service, youth and gender affairs – which oversees the agency – surrendered herself to police on Monday for questioning in connection with the scandal.

Ms Omollo told a parliamentary committee last week that the majority of the suspicious payments were pending bills from previous financial years. Both she and Mr Ndubai have denied wrongdoing.

The Kenyan Private Sector Alliance, a prominent business group, said in a statement before the arrests that recent reports of alleged graft "prove that corruption could become a major stumbling block in the implementation of\Mr Kenyatta's] ambitious plan [to stimulate the economy]".

“The public expects to see government officials in positions of power, influence, and most importantly accountability, convicted and made to pay for the plunder,” it added.

National security

In the latest corruption perception index published in February by Transparency International, a non-governmental organisation, Kenya scored 28 of a possible 100, with zero being deemed completely corrupt. The mean ratings for the world and Africa were 43 and 32 respectively.

In recent weeks Mr Kenyatta has warned that corruption endangers national security and has intensified his calls for officials to stamp it out and arrest those responsible. “We are not going to tolerate unethical people,” he said on Monday. “People with responsibility must be ready to serve and not to be served.”

But John Githongo, an anti-corruption tsar under Mr Kenyatta's predecessor Mwai Kibaki, said the "level of cynicism" about the president's commitment to fighting graft was so great that he needed "to pay some sort of political price" to change perceptions.

“People don’t have faith the judiciary will be able to handle these cases, so we need the president to fire a whole bunch of people who are implicated in a raft of public sector scandals,” he said.

One example of Kenya's culture of impunity cited by activistsis the so-called Chickengate scandal. Two executives of Smith and Ouzman, a British company, were convicted in London in December 2014 of paying bribes, known as "chicken" in their correspondence, to secure contracts in Kenya. No one in Kenya has been convicted for receiving the money.

Joanna Turner, the Nairobi partner for Control Risks, a consultancy, said investors saw Kenya's public sector corruption as an obstacle for doing business but that it "doesn't seem to put [them] off".

“It’s a particular issue for mid-sized companies who have to work through local partnerships, with family businesses and for any companies looking to work with government,” she said. – Copyright The Financial Times Limited 2018