EACC: No Government official found culpable in Eurobond probe

The country‘s anti-graft agency has cleared the National Treasury‘s chiefs and asked the Director of Public Prosecution to order a thorough forensic audit on how the billions in the Eurobond saga were used.

DPP Keriako Tobiko confirmed that the Ethics and Anti-Corruption Commission had asked that Auditor-General Edward Ouko audits all projects in the ministries to find out how the money was used, and if the country got value for money.

EACC, according to investigators from the commission and also from the Directorate of Criminal Investigations, had followed the money from the Consolidated Fund to the ministries, but there were doubts on how it was spent — that is why they want the Auditor-General to step in.

“I wish to confirm that I have just received from the EACC the investigation file into the Eurobond allegations. In the file, EACC has found no evidence of criminal culpability on the part of any government official and therefore recommended that the file be closed,” said Mr Tobiko yesterday.

“EACC further recommended that the matter be referred to the office of the Auditor-General as it was the independent body with the mandate to audit accounts under Article 229 of the Constitution to carry out a special audit on development projects that were implemented by ministries, departments and agencies in the financial years 2013/14 and 2014/15 in order to ascertain the utilisation of the funds and whether there was value for money,” he added.

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This comes after the parliamentary Public Accounts Committee (PAC) said it would ask the Auditor-General to re-look at the expenditure of the Eurobond funds.

The Opposition has maintained that at least Sh140 billion was missing. It wants to know how the money was used, which projects were funded, and if the projects were of economic value.

The worry for the government is that the Eurobond probe may claim top officials of the National Treasury if it is established that the government used the money on the recurrent budget. The law requires borrowed money to be used on development projects.

Yesterday, Tobiko said he would review the work of the commission and decide what to do.

“The file shall be independently reviewed by my office and a decision thereon made shortly based on the facts, evidence and the law.”

Treasury Cabinet Secretary Henry Rotich had pledged to provide a breakdown of the projects funded by the Eurobond proceeds after getting details from the ministries concerned but he had not done so by the time the probe was completed.

The team did not also visit the said ministries to seek clarification on the issue. Furthermore, the team did not visit the financial institutions based in other countries that were involved in the transactions.

The probe into the matter began on December 1 when the DPP ordered the two agencies to conduct a probe within 10 days and submit the  file to his office.

PAC has said it will begin investigations into the Eurobond matter this month. The committee has asked the Auditor-General to prepare special reports on the issue and that of the Sh791 million National Youth Service scandal with a view of using the dossiers as a basis for further investigations.

The committee, chaired by Rarieda MP Nicholas Gumbo, has given Mr Ouko up to the end of January to table the two reports, after which it will schedule hearing sittings with witnesses. The probe began following complaints from various quarters that proceeds from the Eurobond cannot be accounted for.

Opposition leaders have been making the claims and have since written to various agencies for explanations.

Led by CORD leaders Raila Odinga, Kalonzo Musyoka and Moses Wetang’ula, they have been demanding for accountability of the funds and have sought to establish the projects that were funded.

The concerns are based on two Treasury documents which include the Quarterly Economic Budget Review for the fourth quarter of 2014/2015 and Budget Review Outlook Paper dated September 2015.

EACC CEO Halakhe Waqo said the investigators had so far recorded statements from people who had crucial information.

Those questioned include Treasury CS, his PS Kamau Thugge, Controller of Budget Agnes Odhiambo, the Accountant General, Manager Financial Markets, departments in charge of External Payments and Reserve Management, Deputy Accountant General and financial experts. 

Others are Investment Secretary, Economic Secretary and Director General Public Debt Management. Some of the officials appeared before the investigators more than twice.

In his letter to the EACC, Raila said official statutory reports were gave  contradictory figures.

The former premier had also written to Mr Rotich and Mr Thugge who issued the sovereign bond on behalf of the Republic of Kenya and gave them 14 days to explain how the money was used.

He also wrote to Barclays Bank PLC, J P Morgan Securities PLC, both of London, and QNB Capital LLC of Doha, Qatar, and Standard Bank PLC of London as joint lead managers and joint book runners of the National Treasury.

Raila demanded information on which banks Eurobond managers credited the proceeds, the account numbers and the signatories to the offshore accounts that the National Treasury operated.

CORD also wants the National Treasury to make public the signatories of offshore accounts operated by the ministry.

The Opposition wants the Government to clarify the number of transactions carried out through each of the offshore accounts from the date of opening to the date of answering to the inquiry.

They are seeking details of the expenditure of the proceeds of the Eurobond that were credited to the Consolidated Fund.