Raila: Here is why I will simply not comply with EACC summons

CORD Leader Raila Odinga adressing the press seeking the government to give them answers on how they spent the Eurobonds borrowed. With him Siaya senator James Orengo(R), Machakos senator Johnstone Muthama(L) among other officials at Serena hotel on 11/12/15 PHOTO: JENIPHER WACHIE

I have no answers for the Ethics and Anti-Corruption Commission (EACC). I will not appear before them. I have questions for the government. These were the words of CORD leader Raila Odinga yesterday when he explained why he snubbed summons to appear before the commission.

Raila said CORD has specific questions it wants the Jubilee government to answer regarding the expenditure of Sh250 billion (US$2.75 billion) Eurobond proceeds.

“We wish to state that we do not have answers to give to the EACC. We only have questions that we would want answered by the government,” said Raila yesterday in Nairobi at a press conference.

Raila spoke as Deputy President William Ruto who was in Kericho described his allegations on the Eurobond as economic sabotage and political propaganda.

Speaking during the second annual Baingor goat auction in Soin/Sigowet constituency, Ruto argued that the fight against corruption was not a political game and must not be tempered with outright lies.

“The fight against corruption can only be won when the truth is told. If you are just peddling falsehoods against the state of the country’s economy you are either malicious or trying to undermine the economy,” he said.

And businessman Tony Gachoka said Raila has every right to question how public funds are spend and should also demand and get answers without being threatened with arrest. “I know the President cannot make such misguided calls that Raila be arrested. There is someone who wants to cause public panic by making alarmist statements,” said Gachoka.

But speaking in Nairobi, Raila who was flanked by other CORD leaders said he respects the Constitution and authorities but will not comply with the EACC summons since the information the agency is seeking is already with the government. In the summons, the EACC threatened to prosecute the former Prime Minister should he fail to comply with the orders.

Addressing the press yesterday, Raila questioned the constitutionality of the commission, saying the agency was being run by “civil servants who can be manipulated by the Executive”. Currently, the EACC is operating without commissioners after they were forced out of office following fierce internal wrangling.

He compared the anti-graft agency to a headless chicken and accused it of inability to probe the Chicken gate scandal despite being provided with evidence.

“Siendi na sitaenda (Can’t go, won’t go),” stated Raila. The former Prime Minister said his lawyers had sent to EACC documents from the National Treasury and Central Bank of Kenya websites on questionable expenditure of the proceeds plus the specific questions the coalition wants answered by the government.

He said what the government was engaging in was meant to divert attention from the demand for public disclosure.

“We see no other reason other than to drag these questions into a criminal nature to divert attention from the demand for full disclosure in the first instance, and to bury the matter in court proceedings for as long as possible thereafter as happened with Goldenberg and Anglo-leasing frauds,” charged Raila.

Supporting data

He went on: “We have no information other than government documents and supporting data from and reports available on the Treasury and Central Bank websites.”

He cited the Quarterly Economic and Budget Review (QEBR) for the fourth quarter of 2014/15, dated August 2015, and the Budget Review and Outlook Paper (BROP) dated September 2015.

The above reports, he said, have three different accounts of how the Eurobond flowed into the budget.

“They are contradictory, inadequate and misleading,” he noted.

All the reports show that the Eurobond financed the budget deficit to a tune of Sh35 billion in the 2013/14 financial year but the figures presented by Cabinet Secretary Henry Rotich to Parliament and reproduced in the Government’s Press release dated December 3 show that the Government disbursed Sh25 billion,” continued the Opposition chief.

He said from the calculations, there was a difference of Sh10 billion that does not appear as carried forward to the following year. “The figure carried forward is Sh140.5 billion, which is the difference between the proceeds of the first issue (Sh174 billion) and Sh35 billion reflected as commercial borrowing in FY 2013/14,” he said.

The CORD leader stated that the first issue of the Eurobond amounting to Sh174 billion ($2billion) was received in June last year and is recorded by the Government.

This, he said, saw commercial debt increase from $684.9 billion in March last year to Sh2, 679.8 billion in June. “But as noted above, the Budget Outrun for the year, in all the three different accounts cited above reflect Sh35 billion,” he said.

“This raises the question as to why the entire amount, Sh174billion, is not reflected in the budget accounts for the year, yet it is recorded as a foreign borrowing?” he said.

Raila said the government was lying on how it spent the colossal amounts, citing contradicting information by government and Auditor General’s report. He said: “In the press release dated December 3, the government dated the transfer of Sh35 billion as June 30, 2014, yet a letter written by the Auditor General to Principal Secretary Treasury gives the date of this transaction as July 3.”

Net domestic borrowing as at June this year stood at Sh251.1 billion against a target borrowing of Sh172 billion.

The Opposition chief questioned why the government still resorted to borrowing locally after floating the foreign bond.

He said the local borrowing comprised Sh108 billion from commercial banks, Sh27.5 billion from non-bank financial institutions, Sh119 billion from the Central Bank and repayments of Sh3.5 billion to non-residents.

Comparatively, Raila continued, for the same period in 2013, the net domestic borrowing was Sh201.7 billion, comprising of net borrowings of Sh102.5 billion from the non-banking financial institutions, Sh6.4 billion from non-residents, Sh73.4 billion from commercial banks and Sh19.4 billion from Central Bank.

CORD has questioned PS Kamau Thugge’s report that Eurobond proceeds are reflected in the domestic financing account.

“We do not believe the PS is being truthful since movements in government deposits are clearly shown in the account as rising in the first half of the year and declining in the latter half...,” he said.

He went on: “We find no other reasonable understanding of these figures and the accompanying narrative other than the government’s domestic borrowing are as stated.”

CORD wants the government to clarify whether domestic borrowing in FY 2013/14 was Sh190 billion or Sh201 billion.