Public Accounts Committee exposes IEBC dirty fights in Sh4 billion poll kits saga

IEBC commissioner Muthoni Wangari (left), IEBC CEO Ezra Chiloba (center) and IEBC chairman Issack Hassan addressing the press during the launch of voter registration at pumwani hall on 15/2/16 [Photo:BEVERLYNE MUSILI/Standard]

Fresh details have emerged of schemes within the electoral commission to defraud the taxpayer of over Sh4 billion in the 2013 elections.

A report of the Public Accounts Committee gives a chronology of events that led to the damning report against top commission bosses.

Adversely named in the report on the botched procurement of kits for the last elections, is Independent Electoral and Boundaries Commission Chairman Issack Hassan, eight commissioners, former Chief Executive Officer James Oswago and senior officials in the then Grand Coalition government.

In one instance, during the evaluation of the biometric voter registration (BVR) tenders, Mr Issack attempted to influence the process through a series of short text messages (sms) to the then director of finance and procurement Edward Karisa, asking him to ensure Lithotech was among the short-listed firms.

“Issack even tried to discredit Face Technologies Pty of South Africa who had also bid. After Lithotech was disqualified, he switched position to back Face Technologies. It was further claimed that Mr Oswago favoured 4G Identity Solutions. This is what led to the stalemate during procurement, culminating in him terminating the tender,” PAC said.

When he appeared before the committee, Issack claimed senior personalities of bidding firms frequented Oswago’s office.

According to the report tabled in the National Assembly yesterday, plans to procure poll equipment, including BVRs, electronic voter identification devices (EVIDs) and electronic result transmission system (ERTS) and optical mark readers (OMR) and universal polling kits were hatched unilaterally, with no procurement plans in place for a successful process.

Wheeler-dealers in and out of the commission pushed for certain interests, opening a window for corruption, and gave lobbyists a free rein in the corridors of Anniversary Towers, the commission’s offices.

The committee suggested that the process was designed to fail from the very beginning, given the accusations and counter-accusations of bribery by competing companies.

“The committee finds that the commission’s procurement was not guided by a procurement plan, or that the plan was inadequate, or both. The timing of procurement of devices was so tight that it indicated that this process was deliberately designed to fail despite Treasury allocating Sh12 billion,” PAC said in the report.

 STUNNING FAILURE

The country lost Sh4.1 billion in the procurement of the 15,000 BVRs alone, but the kits malfunctioned on election day.

The tender was controversially awarded to Face Technologies, a Canadian firm, in what the committee has now revealed was a process mired in tensions and suspicion between the commission and its secretariat.

The two departments were ‘at war,’ and it would have been foolhardy to expect any other outcome other than stunning failure, according to the committee.

“The failure by IEBC to procure BVRs was a result of vested financial interests pitting the commission against the secretariat,” it said.

“Accusations and counter-accusations compounded by contempt among opposing camps paint a clear picture of an organisation at war with itself. Expecting a better outcome in the procurement process would be overly optimistic,” the committee added.

In one case between January and February 2012, Treasury advised the commission to review the budgets for the project but Oswago, (then IEBC’s chief executive officer) allegedly responded by telling Karisa and the director of voter registration and election operations Immaculate Njenge-Kassait to choose between working for Treasury or IEBC.

After an initial attempt to procure the equipment failed, a second tender committee led by Ms Kasait subsequently awarded the tender to Face Technologies, which was favoured by Issack.

The firm was awarded the tender despite quoting Sh825 million above the IEBC budget. The PAC report indicates no individual evaluation of the bidders was conducted.

After dangerous games between the commission and its secretariat led to the stalling of the initial process, the Government took over, setting in motion another round of intrigues between the two opposing camps.

Unscrupulous Treasury officials were then roped into the scam, seeing the procurement “as an avenue to legitimise a process that was marred by irregularities”.

The government-to-government procurement model then adopted saw Kenyans lose more money, including Sh295 million as brokerage fees.

The kits were single-sourced from France in a process brokered by the Commercial Canadian Corporation. The Kenyan government did not bother to explore alternative sources of funding for the project, instead choosing to accept a loan from Standard Chartered Bank.

The loan accumulated interest of Sh1.5 billion, there were further charges including loan insurance premium to Export Development Corporation of Sh988 million, arrangement fee, facility agent fees and lenders’ legal counsel, all totalling Sh2.5 billion.

A further Sh500 million was then lost after the supplying company changed the terms of contract midway. In a shocking twist, the company supplied specifications that had not been tendered for, and without any reference increased the number of kits from 30,000 to 34,000.

It is this variation of terms, sanctioned by the commissioners without asking questions, that led to the massive failure of the kits on voting day, the committee said.

“The laptops had no power solution that was relevant to the local polling station scenario. All devices collapsed massively. This was further compounded by lack of adequate time for training of key electoral personnel,” it said.

Despite the kits’ failure, the firm went further to claim Sh258 million, which was promptly paid by the current IEBC Chief Executive Officer Ezra Chiloba. The committee now wants him barred from holding public office.

Shockingly, the company was paid Sh1.5 billion despite supplying universal polling kits well after the general election had been concluded.

“This is another pointer to the haphazard procurement at IEBC,” PAC said.

As a result of sins of omission and commission, the committee noted that IEBC placed the country on the precipice, raising the possibility of it descending into post-election violence.

“The commission either took for granted the desire by Kenyans to avoid a repeat of the 2007 chaos or underestimated the possibility of Kenyans going back that road. Subsequent failure by these devices on election day had the potential to reignite simmering tensions,” said the report.

Other equipment tendered for were voter transmission system, which crashed, “rendering the expenditure on BVRs and EVIDs useless”.

After the controversial procurement of the equipment, they were deployed without any certification. This means that the commission did not take any precautions to ensure that the kits would not fail on election day.

“The equipment was not inspected by the Inspection and Acceptance Committee as was required under Regulations 17 (3) of the Procurement Regulations. The commission therefore deployed uncertified equipment for the election,” the committee said.

Last month, The Ethics and Anti-Corruption Commission (EACC) requested for files related to the “Chicken scandal” from UK’s Serious Fraud Office (SFO). EACC vice-chairman Irene Keino said they also wrote to the British government for mutual legal assistance in investigating the scandal.