Waiguru roped into Sh791 million NYS saga by former procurement boss

Kirinyaga Governor Ann Waiguru has been drawn into the Sh791 million corruption saga by former National Youth Service (NYS) procurement boss Henrick Pilisi, who is serving a seven-year prison sentence for fraud.

Pilisi was implicated in a National Assembly Public Accounts Committee (PAC) audit report over a Sh1.4 billion procurement fraud and was later convicted over the loss of Sh791.385 million meant for the development of roads in Kibera and Mukuru.

In his petition before Justice Lawrence Mugambi challenging the PAC's audit report, Pilisi said Waiguru, who was then Cabinet Secretary for Devolution and Planning, confronted him and instructed him to approve procurement contracts despite his having flagged irregularities.

Pilisi claimed that Waiguru deployed advisers to various departments to oversee and micro-manage procurement operations, resulting in frequent changes of senior procurement officers and creating an environment susceptible to procurement malpractice.

He told the court that on November 18, 2014, Waiguru confronted him and later issued him with a show-cause letter dated February 20, 2015, accusing him of delaying the procurement process.

“I was instructed by the CS to utilise existing supply branch contracts and that only a limited number of contractors under those contracts could supply the required construction materials,” said Pilisi.

Pilisi said that after observing procurement irregularities, he personally contacted the Ethics and Anti-Corruption Commission (EACC), seeking its intervention and advice regarding the happenings at the NYS.

He said some procurement processes were initiated and concluded before being transferred to the NYS by the ministry itself.

According to Pilisi, many of the suppliers questioned during subsequent investigations had been pre-qualified by the Ministry of Public Works and supplied common-user items at competitive prices.

The former NYS procurement boss said confusion began after the 11th Parliament resolved to have Cabinet secretaries assume supervisory and approval powers over procurement matters that had previously been exercised by principal secretaries as accounting officers.

He further said the Public Service Commission (PSC) delegated additional human resource functions to Cabinet secretaries, leading to extensive restructuring within the NYS.

Pilisi said he was never involved in the procurement of consultancy services awarded to Consulting House Ltd and that the consultancy originated from a proposal by Mutahi Ngunyi that was approved by the ministerial tender committee.

“The committee failed to consider material evidence that demonstrated the impugned procurements were undertaken at the headquarters of the Ministry of Devolution and not me personally,” said Pilisi.

He said that, as the head of procurement with more than 23 years' experience in the field, he discharged his duties diligently until changes in the government's procurement structure fundamentally altered the procurement process within the ministry.

Pilisi said he served as the principal supply chain management officer at the NYS after joining the government as a supplies officer in 1994, rising through the ranks without any scandal.

However, Pilisi lost his bid to have the court review and set aside the PAC findings that led to his arrest and conviction.

In his petition, Pilisi had sought compensation for lost employment, retirement benefits and future job prospects.

He told Justice Mugambi that despite raising concerns over irregularities, the Speaker of the National Assembly disregarded his evidence, which he said had never been controverted.

“As a result of the actions of the speaker and the clerk of the National Assembly, I lost my employment due to the false accusations which tarnished my name and reputation, making it extremely difficult to secure employment thereafter,” said Pilisi.

However, in their defence, the National Assembly Speaker and the Clerk said the PAC had requested the Auditor-General to undertake a special audit of the NYS books of account following widespread media reports concerning an alleged financial misappropriation scandal.

Clerk of the National Assembly Samuel Njoroge said the Auditor-General's special audit report uncovered massive fraudulent activities involving losses amounting to Sh791.385 million and Sh609.253 million, as well as an attempted fraudulent payment of Sh695.4 million, among other procurement irregularities.

Njoroge said the committee found that procurement  procedures at the NYS had been blatantly breached, with tenders awarded to firms lacking the requisite experience and supporting documentation.

The clerk said the committee found that Pilisi approved procurement transactions in IFMIS using fake Supplies Branch contracts amounting to Sh609.253 million.

He accused Pilisi of approving a forged Supplies Branch contract without verifying its authenticity for the procurement of goods and services valued at Sh791.385 million and Sh609.253 million.

Njoroge said Pilisi also approved a fraudulent double payment of Sh12.5 million to M/s Consulting House through IFMIS and approved a fraudulent procurement of goods and services amounting to Sh695.4 million, which was subsequently detected and reversed.

On its part, the Office of the Director of Public Prosecutions (ODPP) said the decision to charge Pilisi was not influenced by the PAC report, but by evidence gathered during investigations that led to the charging of 26 people.

Prosecution counsel Laura Spira said institutional changes within the ministry, or the alleged reassignment of procurement functions, did not exempt Pilisi from complying with the law, particularly because there was no evidence that he had raised objections to those changes with the relevant authorities at the time.

Spira said that under Section 20 of the Penal Code, criminal liability extends to all persons who participate in the commission of an offence. She therefore argued that Pilisi's assertion that he played only a nominal role could not absolve him of criminal responsibility.

In dismissing the petition, Justice Mugambi said Pilisi had been accorded a meaningful opportunity by the PAC to respond to the issues he wanted the court to review.

“In any event, I find it highly improbable that that a committee that had sanctioned a special audit which unearthed many procurement-related irregularities would summon the head of procurement on two distinct occasions to discuss only one issue as the petitioner (Pilisi) would want this court to believe,” said Justice Mugambi.