Auditor silenced: What did Ouko find on the Eurobond investigations that shut him up?

Edward Ouko cuts the image of a fearless auditor who would not spare even State House when it came to matters of public expenditure.

He never shies away from turning heavy stones to unearth financial scandals in Government that seem to permeate almost all agencies including the Presidency, Directorate of Criminal Investigations (DCI) and even the National Treasury, who are expected to lead by example.

Mr Ouko was still on this path when he found that the National Treasury could not satisfy him that the proceeds of the first Eurobond were brought into the country in full.

In his usual daredevil approach that has characterised his reign at Anniversary Towers, he sparked a national storm when he declared on Note 409 of his reservations in the audit report covering the 2014/2015 financial year.

The Auditor General said while following the trail of the proceeds of the billions Kenya had borrowed, he chose to sample a few ministries to establish if what officers from the National Treasury were saying was indeed true.

Guinea pig

He picked the State Department of Water as one of his guinea pigs. Here, he came face to face with his suspicions. The ministry had received Sh11.1 billion from the sovereign bond that year.

However, the management could not provide even just one project that was funded by the Eurobond proceeds.

“In the circumstance, it has not been possible to confirm how the Eurobond funds were utilised,” noted Ouko.

This was the start of his problems and perhaps one of the wires he should never have touched.

He would ignore indirect warnings sent to his office and his men and continue with his investigations. The following year, he stuck to his guns and continued his crusade against the pilferage.

“I wish to draw your attention to Note 5.7 in the statement of receipts into and issues from the National Exchequer Account for the year ended June 30, 2016 which reflects an Exchequer balance of Sh203,491,419 brought forward from 2014/2015 financial year,” wrote Ouko.

“As indicated in the Auditor’s Report for 2014/2015, the receipt of net proceeds from commercial financing (Sovereign/Euro Bond) of Sh215,469,626,036 accounted for in 2014/2015 financial year could not be ascertained as investigation into the receipts, issues, accounting and utilisation of the funds related to the Sovereign/Euro Bond was still on-going as at 30 June 2016.”

Doorstep

To keep the matter active, the Auditor General maintained his position on the matter, despite the pressure that was now mounting on his doorstep. He refused to clear the Eurobond query.

“Under the circumstances, the accuracy of the Exchequer balance of Sh203,491,419 brought forward from 2014/2015 may be affected by the outcome of the on-going special audit on Euro Bond,” he concluded.

That is not all. He decided that if the fovernment would not give him answers, then he would go seek them out himself.

He took another decisive step to send a team to New York and London to get assurance from all the banks that were involved in the transactions, including JP Morgan and the Federal Reserve Bank of New York.

This step was the last straw that broke the camel’s back.

President Uhuru Kenyatta would swear in his mother tongue that Ouko was wasting his time with the investigation and he would not allow him to keep poking his nose in places he should not.

It was clear the President wanted Ouko out of the scene, he had become a nuisance. An unnecessary thorn in the flesh. It was a big irony for a president elected on an anti-corruption platform to want to silence the only man who appeared to be working at the time. Uhuru would repeat the warning in State House - and this was the switch that Parliament was awaiting to jump into action.

A House heavily controlled by the Jubilee side was, like a fawning lapdog, charged with the duty of bringing Ouko down in a most shameless scheme.

A private petitioner was roped in with a claim that the Auditor General accumulated a Sh1million bill on his iPad while overseas, besides allocating official cars to members of his family. Ouko in his usual steely manner refused to take the beating lying down and sued both the President and Parliament. He submitted through his lawyer Otiende Amolo that Uhuru should not be allowed to sign a recommendation by the National Assembly to have a tribunal investigate him, a move that would have seen him step aside.

He termed the process rushed, malicious and intended to irreparably violate his fundamental rights and freedoms guaranteed under the Constitution. But by the time he was coming out of this storm, he was limping and brutally harassed. He retreated and went dead silent on the matter only promising that his report would be out first before the General Election, then after the polls - then nothing.

He also appears to have decided to break away from the tradition of passing on audit queries year in year out until they are resolved.

Instead, he dropped the query and never gave it a clean bill of health or otherwise, a neutral position adopted by auditors when they want to protect their jobs but at the same time not to clear books that do not add up.

Just what did Ouko find out that shut him up?

Ouko has survived all the tumult to unearth myriad financial scandals that have left the very president who wanted him sacked appearing helpless in the face of unprecedented theft by his appointees as borne out by his latest admission that stealing of public funds has become the vogue in Kenya, hence his decision to appoint 91-year-old Moody Awori to be in charge of the Sports Fund.

Prior to his appointment as Kenya’s Auditor General in 2011, Ouko worked with the African Development Bank where he directed and supervised audits, anti-corruption and fraud investigation for over 12 years.