Graft watchdog summons Rotich in Eurobond probe

The Ethics and Anti-Corruption Commission has summoned National Treasury Cabinet Secretary Henry Rotich for questioning over questionable expenditure of Sh250 billion in the Eurobond saga.

EACC chief executive Halakhe Waqo Friday invited members of the public to volunteer any information about the borrowing and subsequent expenditure.

“Towards this end the Commission has summoned State and Public officials in the relevant Public Institutions to provide information within their knowledge and possession that is relevant to the floating of the Euro bond,” Mr Waqo said in statement.

The probe would begin immediately, to enable the investigators complete their work by next week as directed by the Keriako Tobiko, the Director of Public Prosecutions.

The moves came as the Rotich explained why he could not give a list of projects funded with cash raised through the Eurobond. Addressing the media Friday, Rotich said Treasury could only provide a probability of the projects. In the past week, Kenyans across the political divide have been demanding the list of projects undertaken using the Eurobond cash. Opposition chief Raila Odinga has been vocal in making the demands.

The difficulty, Rotich explained, lies in separating which projects were funded from what source. This, he said, is because cash from the Eurobond was deposited in the government’s bank accounts at the Central Bank together with revenues from other sources, including taxes. It is from the government’s bank accounts that all expenditure is incurred by the different ministries, departments and agencies — which have now been asked to present the development projects executed in the last two financial years.

“That would be possible if we had issued the Eurobond with specific projects beforehand,” Rotich said, saying the purpose of the borrowing was broadly identified as “budgetary support for infrastructure projects”.

The Sh197 billion realised from the Eurobond — after settling an earlier syndicated loan — was lumped with other funds before being disbursed to the various ministries and agencies.

Rotich paraded top officials of the National Treasury Friday as he desperately sought to clarify how he spent the billions he borrowed on behalf of the country.

Rotich and his PS Kamau Thugge are already under a probe by various agencies in what could turn out to be the biggest financial scandal, if it is established that the funds were misappropriated.

The PS said the Eurobond money was not coloured any differently from cash raised through taxes collected by the Kenya Revenue Authority to enable differentiation of the two in appropriation. “We understand where the ministries are having problems in separating which among their development expenses were funded from the Eurobond,” Thugge said. He was optimistic that his ministry could tick off from the provided list, to get as close as possible to the list. The final list would in effect be a result of the ministry’s interpretation.

In the last financial year for instance, the government’s development budget was Sh270 billion which included Sh172 billion from the Eurobond, Sh62 billion from taxes and Sh36 billion worth of donor-funded projects.

Sh25 billion of the Eurobond was spent in the previous financial year where the ministry of Transport and Infrastructure got the lion’s share of Sh15 billion.

All ministries, departments and agencies have now been asked to provide a list of all their development projects. Raila had on Wednesday demanded of the government to name the beneficiaries of Eurobond proceeds, identities of signatories who authorised transfer of funds and amounts involved in each transaction after National Treasury authored three different versions of the same accounts.

He demanded full disclosure on transactions, entire paper trail detailing the movement of funds, individuals and institutions that were involved in the raising and use of the Sh250 billion raised in June 2014.

“We demand to know from the Treasury into which bank did every respective manager of the Eurobond credit the proceeds thereof. What are the account numbers and descriptions, including names under which these credits were made?” Raila asked. The Opposition leader also sought the list of the specific projects funded with proceeds from the Eurobond citing that the Thika Super Highway was built at a cost of Sh30 billion, implying that a much bigger scale of development would have been completed through the Eurobond funding.

The demands would turn out to be the fiercest push to unravel the Eurobond mystery, prompting the formation of a high-level investigation spearheaded by the Ethics and Anti-Corruption Commission and the police.