Former MP gives up pension to save his house

Kamukunji MP Simon Mbugua. (Photo:File/Standard)

By Alphonce Shiundu

Nairobi, Kenya: A former MP has surrendered more than half of his pension to save his house, which he bought through the parliamentary mortgage scheme.

The MP owes Sh1.3 million in unpaid loan and interest.

Two other former lawmakers — one who is still serving as a senator — also had to save their houses from being auctioned to recover the house loans.

At one point the trio owed the Parliamentary Service Commission (PSC) Sh17. 2 million, and they were not servicing the loans, to an extent that the Auditor General had to ask the commission why the MPs were not repaying the loans.

All the three stopped making payments when they lost their seats in the august House.

In a report of the PSC to a key watchdog committee, former Kamukunji MP Simon Mbugua has written to the Pensions Department at the National Treasury saying his retirement dues have to be sent to the PSC to pay the debt.

Pension package

According to the report signed by PSC Secretary Jeremiah Nyegenye, Mbugua owes the commission Sh1,303,206 in loans plus interest, and has a pension package of Sh2.4 million.

“We are following up with the Treasury for the pension dues to be forwarded and used to offset loans outstanding,” reads the PSC report before the Public Accounts Committee (PAC).

The report shows that the MP has been playing cat and mouse games with the debt collectors — every time the commission threatened to sell the house, the MP showed up and paid off part of the debt.

The commission noted in the report to the PAC that it had twice put up notices to sell the MP’s house in Nairobi.

“He has been making part payments each time an attempted sale of the property is undertaken. He has offered to use his pension entitlements to pay off the balance outstanding,” notes the report.

Mbugua had acquired a loan of Sh15 million in January 8, 2010.

MPs get loans to buy houses but they have to clear the amounts within their terms.

Lost seat

But the payments stopped in February 2011 when he lost his seat.

In December 2011, the MP paid Sh1.9 million to save the house.

Two other former MPs managed to pay off Sh15 million each in loans, after a gruelling negotiation with the PSC.

Wajir Senator Abdirahman Hassan, a former MP for Wajir South, got his loan on February 16, 2009.

He paid religiously at a rate of between Sh245,000 and Sh367,000 a month, and after he had paid Sh5 million, the payments stopped — that was in August 2010 when he lost an election petition.

The MP spent nine months looking for money to pay, and on May 27, 2011, he paid Sh2 million and two days later, he paid Sh3.5 million.

Fresh entitlement

He kept paying until he cleared all his debts to keep the house. He was elected to the Senate on March 4, 2013, and thus earned a fresh entitlement for a mortgage. The records do not show if he took another mortgage.

Similarly, former MP James Omingo Magara also got his Sh15 million loan on August 15, 2008.

He paid at an average rate of between Sh230,000 and Sh241,000, but the last regular payment was made in December 2009.

For the whole of 2010 and for five months in 2011, the MP never made any payment.

Then on May 30, 2011, he paid Sh4.5 million and kept on paying regularly, until he overpaid by Sh419,719, which the PSC had to refund.