One of the more alarming revelations arising from the frozen aid accounts crisis, is that it is not precedent setting in all respects.

This may be the first time that a creditor claiming an Anglo-Leasing-related debt has frozen Government aid accounts, but certainly not the first where failure to defend against a case has led to an award in favour of such firms.

Just three years ago Kenya lost a Sh3 billion Anglo-Leasing-type case without a fight in a Netherlands court. Now we have racked up another billion as owed without challenge. This cavalier approach to questionable debt is unacceptable.

The point of refusing to pay in early 2004 was to weed out fraudulent claims and lower overstated ones. At this rate, taxpayers may end up losing more than they would have to graft!

One other matter of concern is just how complex and secretive the lending process has become. Almost as much as the controversial repayment process, with irrevocable promissory notes waiting to be sprung on unsuspecting taxpayers. Despite the public announcements of pledges, actual disbursement is shrouded in so much secrecy, a court order is no cause to break "confidentiality".

Why is this a bad thing? Because, as explained by the Crown Agents Bank, which holds the 11 accounts that were frozen, not all accounts with terms like ‘Republic of Kenya’ in their name are set up by the Government.

Multilateral and bilateral donors (international and regional banks, foreign governments, aid agencies and others), as well as Government ministries or institutions have accounts at Crown Agents in Kenya’s name that are accorded privacy rights unknown for public accounts. This creates a fertile ground for donor-instigated corruption, a likely scenario given the emphasis most place on securing political, strategic or economic interests. Or, just as insidious, undue influence. Crown Agents will not even know this is going on thanks to the complexities of the disbursements.

As for the Government of Kenya, it is already vague enough as to what accounts it has. The two senior Finance ministry officials we interviewed for our exclusive story had no idea what accounts the Government has at the bank, let alone what it lost access to.

This, by the way, is the same Government that left funds allocated to fight HIV and Aids in an account it did not know existed until they were reclaimed as unused. Shouldn’t that fiasco with the Global Fund have taught us a lesson about needless secrecy?

The immediate problem of aid accounts being inaccessible and High Commission property "under threat of being auctioned off" is the result of more of this secrecy and complexity. The Government, specifically the Ministry of Finance and the Attorney-General’s office, are clearly to blame for this embarrassing mess.

The crisis has arisen because, despite agreeing in arbitration to pay ten million British pounds to ICS (Inspection and Control Services), it did not allocate money for this in this year’s Budget. Given that the Attorney-General’s office is negotiating a number of other settlements with regard to a few ‘Anglo-Leasing-type’ deals, we will find ourselves in this spot again.

We should not go into arbitration without a plan. This is a crisis Kenyans should not have in the first place. The Government should have foreseen what difficulties would be presented by its various creditors, whether fraudulent or genuine, and been prepared accordingly.

Cabinet, in its wisdom, authorised Mr Amos Wako to argue the case for revising amounts owed by Government downwards on a number of disputed deals. If and when this happens, and a commitment to pay is made, there is no sense in incurring penalties or sanctions by failing to do so.

In the same vein, not all those claiming payment from the Government have arguments to put before any arbitrator. Some have chosen to seek ‘justice’ in European commercial courts. It would be irresponsible of the Government’s legal advisor to ignore the suits in the hope claimants shall be talked into a settlement. Failing to put up a defence is a gross dereliction of duty.