The faceless untouchables who took away NYS billions

Nairobi, Kenya: They say avarice and power are joined in the hip; and so it is with the National Youth Service Scandal, as we found out.

Our investigation shows that close relatives of powerful politicians are among faceless individuals whose companies received billions of shillings in questionable payments from the besieged NYS.

In several cases, we have established that the wife of a vocal MP from Kiambu and close kin of two powerful Jubilee politicians in government were beneficiaries.

Other companies suspected to have had links to powerful politicians that did business with NYS include five firms (names in our possession) which received some of the biggest payments.

It is still unclear what the money was used for but we have established it was being paid on the command of senior individuals at the Youth Ministry.

And as this was happening, suppliers who had pending bills, including one who supplied containers for Beyond Zero clinics for the slums in 2014, were pushed to the periphery.

Everything was smooth until a senior official at the NYS was transferred early this year due to a contract expiry. Some powerful quarters in government, according to telephone recordings listened to by Saturday Standard, were vouching for the official -- who has since been moved to another ministry -- to take over from NYS Director Richard Ndubai, who has since stepped aside.

Clashing interests

Their interests, however, clashed with other quarters in government who wanted the official to leave as he was a stumbling block to some of their plans. It is this war of interests that broke the camel’s back, making one party to spill the beans.

By yesterday, the amount of money that may have been stolen at NYS was still unclear, as Principal Secretary Lilian Omollo struggled to convince MPs that the Sh9 billion in the media focus had not been lost.

“The amounts under investigation are best presented by the investigative agencies,” she said.

“We are in a country where the public can lynch you based on what they hear. It is unfortunate that that is how people in the country are,” she said.

We have established that so shameless were the beneficiaries that money to pay suppliers got depleted within 15 hours of being disbursed by the Treasury. The NYS receives at least Sh6 billion every quarter and it spent Sh21.6 billion this financial year. As at May, it had spent Sh19.5 billion.

The quarterly payment ritual, where preferred suppliers got paid at inflated prices, was characterised by well-connected individuals milling around their big cars at the NYS campus on Thika road. Insiders say that by the time the fuel guzzlers left, every cent had been paid out.

It is for this reason that the NYS, for example, paid Sh1.1 billion for beef in just one year. When broken down, it means the State agency was spending Sh3 million a day on meat, equivalent to 66kg of beef for each of the 45,000 recruits.

Another example of the shameless payments was the Sh1 million price tag for a car tyre, four times more than the Sh200,000 it costs to purchase a Boeing 747 tyre. The firm was also spending Sh27,000 per 25kgs of milk powder, a staggering 188 per cent more than the Sh14,000 market price.

NYS was also spending between Sh1.7 billion and Sh2 billion per year on fuel sourced from third parties, at more than 20 per cent the market rate, when it could have got the same cheaply from state owned National Oil. Likewise, it could have sourced the meat from government-owned Kenya Meat Commission (KMC) and milk powder from the Kenya Cooperative Creameries (KCC), but its cartels were only interested in profit margins.

But instead of following the money, investigative agencies appear to be going for small-time tenderpreneurs who received payments worth under Sh50 million, while the big fish walk free.

The Ethics and Anti-Corruption Commission (EACC), which we established has been sidelined from the NYS investigation altogether, has this week tried to save face by reactivating its past cases.

Likewise, the Kenya Revenue Authority (KRA) has written to all those mentioned in the scam, seeking tax arrears based on figures quoted in newspaper reports.

Meanwhile, Health Cabinet Secretary Sicily Kariuki, who was in charge of the Youth ministry when the looting happened, is still quiet over the matter. She told Saturday Standard from Geneva, Switzerland, where she is attending a health conference that unlike her colleagues, she is yet to be summoned by Parliament or the Directorate of Criminal Investigations (DCI).

“Let us not get into that space until I am served with a formal request on what to respond to. Geneva is not the right place to do that,” she said.

Hawked vouchers

Saturday Standard has established that detectives are also trying to ascertain whether some NYS employees are culpable. They are among the 40 people we have been informed recorded statements at the DCI.

The police are especially interested in those who work at the store and sign delivery notes, apparently because it has emerged that a number of companies were paid after presenting only delivery notes. Other firms got tenders they had not applied for but were awarded through phone calls from NYS officials.

“This is how it goes. An official calls you, based on the people you know, and asks if you can supply some goods, and that’s it. The deal is completed on phone,” one supplier who received hundreds of millions of shillings told Saturday Standard.

“The longer route is to pass through all the tendering stages, but then you will have to bribe everyone along the chain and still pay the 10 per cent from what you receive in the end. That is the rule,” claimed the supplier.

Although the tendering process in government was moved online a few years ago, the systems at NYS are still designed to have maximum human input. Here, a tender goes through seven stages before a payment is made. Those tendering first have to get a tender requisition, then get approval from a finance officer before the tender is evaluated by a procurement committee.

It is after the procurement committee approval that the goods or services are then delivered. Inspection is then done, before a voucher is handed to the supplier. The voucher is then validated before payment is done through the Central Bank of Kenya.

According to our sources, all the people in the chain demand that their palms be greased before the process can move to the next stage.

We learnt that the situation is so bad to an extent that at the NYS headquarters, some employees have resorted to hawking payment vouchers to the highest bidder whenever there are funds for the purpose.

But as has been the case with all big scandals, top government officials have promised that no one will be spared.

“Stiff penalties must be meted out to stop such acts. We cannot be losing money to corrupt individuals at the expense of development of the country,” Deputy President William Ruto said yesterday.

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