MPs in secret payment deal

By ALEX NDEGWA

Members of Parliament will stick their hands into the public pocket one last time as they prepare to leave the National Assembly.

As accusations of petty bribery arose over the just-passed Finance Bill, it has emerged that the law included a secret ¡®golden handshake¡¯ that may have helped persuade MPs to drop their fight for better terms for Kenyan borrowers. The deal was sealed after MPs were treated to two expensive luncheons in Nairobi. The MPs voted Wednesday to give themselves a tidy Sh3.7 million each as a gratuity at the end of the tenure of the Tenth Parliament. This is more than double the current severance pay.

Parliament in session. [PHOTO: FILE/STANDARD]

Following increases by the Eighth Parliament, MPs are also eligible for life-long pensions and other retirement benefits. The amount proposed as payment to outgoing MPs is a huge increment from the Sh1.5 million paid out to each member of the last Parliament. The Ninth Parliament outraged the public when they approved a severance allowance at the rate of Sh300,000 for every year in service, translating to Sh1.5 million.

The pay increment is likely to be challenged in court as MPs are seen to have illegally taken over the role of the Salaries and Remuneration Commission. It was passed as an amendment to the Financial Bill MPs had held up on the pretext they wanted to force through a cap on bank interest rates. Parliamentary officials advised against the amendment citing the conflict with the role of the commission but were ignored, The Standard On Saturday has learned.

With public protests likely, attention shifts to

President Kibaki who must sign the Bill into law for the new perks to take effect.

The hefty send-off package MPs handed themselves on Wednesday night covers all 222 members and will cost taxpayers Sh825 million. Millions more will be paid out in other allowances to various groups.

The lawmakers gave Deputy Speaker Farah Maalim Sh2.4 million per year in parliamentary responsibility allowance, to be backdated to 2008 when he assumed office. This means the taxpayer already owes him Sh9.6 million in arrears. The four members of the Speaker¡¯s panel ¨C MPs Gitobu Imanyara, Joyce Laboso, Ekwe Ethuro and Phillip Kaloki ¨C will also get Sh1.2 million each for every year served.

Parliamentary Service Commission members were handed Sh1.2 million each in parliamentary responsibility allowance for every year served. The commissioners had not been getting the allowance, which is paid out to the President, Prime Minister, Vice-President, House Speaker, Cabinet ministers and assistant ministers.

Backdated payments

All payments are backdated to the time various officers took over these roles. However, the new parliamentary responsibility allowances have been backdated to 2006. This is to compensate those who served in the PSC and Speaker¡¯s Panel previously and were made to pay back their allowances after a court ruled they had received them illegally before the necessary law had been passed.

The changes were part of a deal approved on Wednesday night when the House voted on the controversial Financial Bill. Finance Minister Njeru Githae used the payouts as a ¡®sweetener¡¯ to soften the MPs who had forced the Executive to withdraw the Finance Bill three times since June last year over a proposal to fix the interest rates that commercial banks can charge on consumer loans.

Githae moved the amendments to the National

Assembly Remuneration Act to legislate the new pay. The pay deal was kept secret and was not listed on the Order Paper that detailed amendments proposed to the Bill.

As the originator of the Bill, the Finance Minister is allowed to move amendments at any stage without prior notice, discretion the Treasury apparently exploited to keep the pay increase under wraps.

Only nominated MP Millie Odhiambo spoke out against the additional perks. She described the heftier pay as "sneaky" and "unfortunate", coming after the House had rejected the amendment to regulate interest rates.

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"I will not be party to unfairness to this country. MPs have refused to reduce interest rates for members of the public, but when it comes to our own things, we are very quick and sneaky," Millie said.

Earlier, Millie had claimed some MPs had been bribed with Sh50,000 each to defeat the bid to regulate interest rates. ODM MPs were reportedly lobbied at a luncheon at Gazebo, while their PNU counterparts were hosted at the Pan Afric hotel. The huge severance payout is now being viewed as the incentive that ended the standoff over an attempt to fix interest rates charged by banks at four per cent above the Central Bank base rate.

Severance allowance

Although the interest rate amendment was popular all along ¨C even a past meeting between President Kibaki and MPs had failed to secure a compromise ¨C it was curious that on Wednesday night the Executive appeared to have won over majority of MPs. The Government won the vote to oppose interest rate caps by 58-17. While those pressing for an intervention had marshalled more than 20 MPs, forcing a division.

In Parliament, Githae moved an amendment that "a severance allowance at the rate of 31 per centum of the salary specified in the second column of the First Schedule for every year in service," which had the effect of increasing the amount from Sh1.5 million per year to Sh3.7 million. The changes to the Finance Bill led to the insertion of a new clause immediately after Clause 44.

"The National Assembly Remuneration Act is amended in the Second Schedule by deleting the words "A severance at the rate of Sh300,000.00 for every year in service" appearing in column 2 of the Schedule against item 5 of the first column of the Schedule and substituting therefore the words "A severance allowance at the rate of thirty one per centum of the salary specified in the second column of the First Schedule for every year in service," the minister moved. The amendment to introduce a new clause immediately after clause 43 in the Bill introduced new beneficiaries for parliamentary responsibility allowance.

"That the National Assembly Remuneration Act is Amended in the first schedule by inserting in the third column thereof, under the title "Parliamentary Responsibilities Allowance" and corresponding to the entry " Deputy

Speaker", "Member of Chairmen¡¯s Panel", and "Parliamentary Service Commissioner" in the first column, the figures "2,400,000, and "1,200,000" and that it comes into effect on January 1, 2006," moved the minister. Reports also indicated there were changes that led to an increment of mileage allowances.