Tale of bungled probe, wrong suspects in the NYS graft case

It is Friday, March 9. Kennedy Bidali, Chief Magistrate of the anti-corruption court in Nairobi, walks into a packed courtroom in Milimani to deliver his 18 page ruling.

Before him lies the fate of 24 people facing eight counts in relation to the National Youth Service (NYS) scandal that gripped the country in 2016.

The 2014 NYS scam saw taxpayers lose Sh791 million and a plot to loot another Sh695 million was underway when the suspicious transactions were flagged by the Central Bank’s financial reporting centre, and later exposed.

The government, through the office of the Director of Public Prosecutions (DPP), had lined up 16 witnesses among them NYS employees, procurement experts and detectives from the Ethics and Anti-Corruption Commission (EACC).

Mr Bidali, acquitted 23 of the 24 accused persons of all counts, and lifted the veil on a shoddy investigation process that has dogged the NYS scam.

The case had just collapsed even before it began.

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The Chief Magistrate handed the suspect stiff cash bail and ruled that the prosecutor failed to establish a prima facie case against the accused and threw out the case.

A prima facie case is the presentation of sufficient evidence to support claims made in court. The prosecutor only had sufficient evidence to allow the magistrate send one person to trial.

The ruling has revealed shocking details of poor investigations and a shoddy prosecution team that ignored key evidence and instead decided on who it would charge and who it would spare irrespective of the findings of the investigations, killing its own case even before it began.

Bidali found that some accused persons did not attend the ministerial tender committee meetings at the relevant times when decisions they were being accused of, were made.

In an ironic twist, some prosecution witnesses ended up exonerating the accused persons in their evidence, essentially defeating their case. This raised many questions on why they were brought to the stand in the first place.

Not been appointed

One of the accused persons, had not even been appointed as an Authority to Incur Expenditure (AIE) holder at critical times in the procurement process. AIE holders are government officials who have authority to incur expenditure. They are mostly appointed by the Principal Secretary, who is the accounting officer of the ministry.

The Chief Magistrate also noted undisputed evidence that some members of the ministerial committee did not know the agenda of the deliberations in advance and that none of the prosecution witnesses who served in the secretariat of the Devolution Ministry’s tender committee was influenced.

But it is the roles that each of the officials in the procurement process played that weakened the case most.

Most importantly, despite then NYS Director General Nelson Githinji initiating the procurement process under investigation in writing and sent the memo for action, the Chief Magistrate noted that in the prosecution’s view, he was not part of the conspiracy.

“The request for use of restricted tendering method plus the ten firms, who the investigating officer stated were mysteriously selected to participate in the tender, were all proposed by the director general, National Youth Service,” he ruled.

Through the ruling, we can now recreate the procurement mess at the NYS.

Trouble started on November 19, 2014 when Dr Githinji walked into his corner office at the NYS.

He had just inherited the office from Japther Kiplimo Rugut, who later described his ouster at the youth service as worse than how house helps were sent away from homes.

Few weeks before he was kicked out, Mr Rugut and the then Devolution Permanent Secretary Peter Mangiti, had learnt that the NYS had now been allowed to install the government procurement system, IFMIS, at its premises, which allowed it to do most of its procurement processes without the help of the parent ministry.

When Eng Mangiti asked for clarification on this from his counterpart at the Treasury, Kamau Thugge, he was assured that there was nothing to worry about.

But it was clear that the ministry had lost control of the procurement processes at the agency, and would now just approve the process once it is at the tail end.

Another critical thing was happening at the time. NYS was being prepared for an abrupt increase in budget allocation, that would make it one of the most liquid departments in government. It had already received an extra Sh2 billion through a supplementary budget.

Githinji, who had previously worked as a middle level manager at soft drinks manufacturer Coca Cola also and State House comptroller in President Kibaki’s administration, walked into his office and wrote a memo to Mangiti.

It is this memo that would later come to form an important piece of evidence in the NYS scandal, which would make and break the cases when they later found their way to court.

Githinji listed 14 machines that were urgently required for use in the automotive engineering faculty.

“The items are urgently required for training purposes following the massive recruitment of trainees and the recently held pass out,” the memo reads in part. He requested his parent ministry to use restricted tendering in the procurement process and recommended ten firms to be used.

These were Nyamci Enterprices, Brandspark Supplies, Bluestar Enterprises, Sakoji Ltd, Jogat Ltd, Off Limit Enterprices, Lerock Ltd, Queste International, and Asteriks Engineering.

When the PS received this memo, he forwarded it to the ministerial tender committee for action. This decision would later help exonerate him.

From here, everything went as planned. Or so they thought. The ten firms were invited to tender, but only eight picked bid documents.

But when the tender was opened, it was found that Dama Services, a company which had not been authorised for the restricted tendering, had participated in the tender. This would be another puzzle in court.

Financial Reporting Centre

Six of the firms were awarded various components of the tender. They supplied the goods. Some were imported.

But it was when the time for payments came that the tender attracted the attention of the Financial Reporting Center when Bluestar enterprises received a sudden deposit of Sh45 million in its account held at Paramount Bank.

The amount was flagged because the firm had had a balance of less than Sh5,000 for some time and it needed to explain where the money was coming from. The bank freezed the account, but the firm contested the move in court. The judge lifted the order.

The firm’s proprietor was named as Ms Betty Njoki Muriithi. But when the attention on this account persisted, the bank asked Mangiti to inform it that indeed the money was for genuine business with the department.

That is when the PS wrote to the EACC to start investigations, a decision that worsened his relationship with top ministry officials.

The financial reporting center released its report on September 30, 2015. This triggered the Directorate of Criminal Investigation (DCI), to start investigations. Mark Ndiema, who was the 16th prosecution witness was the investigating officer on the matter.

Mr Ndiema wrote to the Devolution Ministry requesting for the relevant documentation. On the same day, he also wrote to the NYS requesting for relevant procurement documents in the case.

The detective says the investigating team looked at the procurement plan for the year 2014/2015 to see if the training materials had been factored in the plan. He then interviewed the user department at the NYS, which was the engineering, which confirmed that the item was not captured in the approved procurement plan.

“There were three broad categories and the subject tender was not among those advertised,” the ruling says.

The detective made further inquiries on how the procurement process was commenced.

Despite not attending the meeting, a Ms Florence Bett signed the attendance register. The detective said NYS did not provide proper justification for use of restricted tendering and the ministerial tender committee which granted the request did not bother to ask for the reasons why the agency was in a hurry.

Further, NYS did not give the reasons how the ten firms invited for the restricted tender were selected.

The detective also noted that the user department had not requisitioned for the equipment and that the tender process was rushed for ulterior motives.

The tender in question was presented on December 16, 2014 and the notification was issued on February, 2, 2015, within 45 days. In his view, the items were over priced by all the bidders.

When a senior deputy director of the NYS, James Tambul Kipseile, was called on the stand as the 12th prosecution witness, he said he informed the EACC when he was called to record a statement that the subject items of this case were not listed in the procurement plan produced as an exhibit in court.

It is after most of the witnesses helped tear down the cases that the judge decided to throw it out.

“The upshot of my findings is that the prosecution has failed to establish a prima facie case against the accused persons in respect of the charges in count 1,2,3,4,5,6 and 7 and on those counts I shall acquit the accused persons under section 210 of the criminal procedure code,” Bidali’s ruling reads in part. “In respect of count 8, I find that the prima facie case has been established sufficiently to warrant the 24th accused person to be placed on his defense,” he added.

With this ruling, cases against 23 suspects, among them Mangiti collapsed, as investigating authorities continue to charge wrong suspects or conduct shoddy investigations at the taxpayers’ expense.

This has handed the suspects the opportunity to sue the state over wrongful prosecution and to seek compensation for loss of employment, torture and damage to reputation.

Mangiti has already taken this window and is now suing the government seeking compensation that could run into millions of shillings.

After the collapse of this case attention has now shifted to the second case that is still ongoing.