CORRUPTION IN KENYA - JOHN GITHONGO PREPARES TO TELL

C O N F I D E N T I A L NAIROBI 005103

SIPDIS

SIPDIS



LONDON AND PARIS FOR AFRICA WATCHERS
STATE FOR AF/E, AF/EPS, EB/IFD
TREASURY FOR ANNE ALIKONIS

E.O. 12958: DECL: (###)
TAGS: ECON PGOV KCOR KPAO PINR KE
SUBJECT: CORRUPTION IN KENYA - JOHN GITHONGO PREPARES TO TELL
ALL

Ref: 11/28/2005 Hoover/Yamamoto and subsequent e-mails

Classified By: ECON COUNSELOR JOHN HOOVER. REASON 1.4(B) and
(D).


1. (C) Summary: Former Kenyan "anti-corruption czar" John
Githongo has organized all of the evidence of wrongdoing in
his possession and put it into a single seamless narrative
detailing the grand scale corruption committed by several of
the highest-ranking and most influential ministers and
advisors in the Kenyan administration of Mwai Kibaki between
2002 and 2004. All but one of the ministers exposed in
Githongo's soon-to-be-published report was reappointed by
Kibaki in his recent December 7 cabinet reshuffle. Githongo
intends to go public with his report in the coming days or
weeks - an event which will surely increase the pressure on
the embattled Kenyan president. However, it is doubtful the
report, no matter how compelling or how well supported with
material evidence, will lead to a sea change in the Kibaki
administration's willingness to take on entrenched corruption
within its upper ranks. End summary.


2. (C) Econ/C met December 10 with Mugo Githongo, brother of
John Githongo, former Kenyan Permanent Secretary for
Governance and Ethics. (Background note: John Githongo,
dubbed until then Kenya's "anti-corruption czar," resigned and
took up self-imposed exile in the UK in February. He is
currently in the United States on an International Visitor
program. End note). The purpose of the meeting was to allow
Econ/C to review (but not retain) a letter dated November 26
written by John Githongo to Kenyan President Mwai Kibaki, and
to also examine an attached 19-page dossier containing
information about "the most egregious" cases of high-level
corruption within the Kibaki administration, as investigated
by Githongo during his tenure in office. Mugo Githongo told
Econ/C that the dossier is a summary version of a 91-page
report completed by his brother in September based on all the
evidence on corruption in the Government of Kenya (GOK)
amassed during his time in office.

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Githongo Letter to Kibaki: Reaching Out One Last Time
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3. (C) As noted in referenced e-mails, Githongo's November 26
cover letter to Kibaki was written during the period after
Kibaki dismissed his cabinet on November 23, which in turn
followed his camp's resounding defeat in Kenya's
constitutional referendum two days earlier. The cover letter
represents an attempt by Githongo to discreetly reach out to
Kibaki, to remind him of "incontrovertible material evidence"
of corruption in his possession (as detailed in the dossier),
and to reiterate that this evidence links several of the
"senior-most officials" in Kibaki's administration to major
graft cases. The letter is not a self-serving offer to return
to government by Githongo. In fact, he closes it by merely
offering to hel in resolving the corruption cases he had
investigated and "to contribute to processes to ensure they
are not repeated in the future."

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Truth Better than Fiction: Chronology of Grand Scale Theft
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4. (C) The best reading, however, is in the 19-page summary
dossier, or "Statement of Events", a day-by-day account
beginning in early 2004 of Githongo's investigation of a
series of related scams involving illegal, shadowy, defense
and security-related procurement contracts, including not
least the now-infamous Anglo-Leasing scandals, in which the
government entered into two different contracts worth a
collective $89 million to a non-existent finance company
before any goods and services had ever been delivered.


5. (C) The dossier offers nothing strikingly new in the way
of evidence or conclusions about the high-level, grand scale
corruption that began to come to light beginning in the spring
of 2004. In fact, the information in the dossier is
consistent with much of what Embassy Nairobi received and
reported from Githongo and others at that time, and on up to
the present day. The value it adds is in stitching the many
pieces together into a coherent narrative. In so doing, it

offers a damning indictment of an administration that sold its
soul from the very outset by putting personal greed and power
politics ahead of good governance.

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A Who's Who of Corrupt Ministers and Advisors
--------------


6. (C) The Statement of Events directly links several former
and/or recently renamed ministers and advisors in Kibaki's
inner circle with the Anglo-Leasing and a series of other
similar security-related procurement scams. Some are direct
participants in the graft, others willing accomplices, and
others merely complicit. Among the highlights:

-- Chris Murungaru, National Security Minister (until February
2005) and Alfred Getonga, Office of the President: The
dossier is peppered with Murungaru's name. On several
occasions, Justice Minister Kiraitu Murungi admits to Githongo
with surprising openness that Murungaru and Getonga were the
ones behind Anglo-Leasing (see below),but that Murungaru is
too powerful politically to touch. Murungaru throughout is
shown to impede and block investigations, and to put pressure
on Githongo and the Kenya Anti-Corruption Commission (KACC) to
back off on their investigations because of the potential
"political costs" involved.

-- David Mwiraria, Finance Minister: The dossier starts out
with Mwiraria quizzing Githongo about an investigation into
shadowy bank transfers involving Anul Perera, a businessman
widely believed to be the private sector brains behind many
corrupt procurement scams both before and after the NARC came
to power. In the conversation, Mwiraria implores Githongo to
go easy on Perera, whom Mwiraria insists is an honorable,
upstanding businessman and friend of President Kibaki, having
once paid the latter's UK hospital bills. In June 2004,
Githongo catches Mwiraria in a bald lie when the latter
insists he had not budgeted for a KSh 222 million ($3 million)
payment to Anglo-Leasing, even after it was clear the company
was non-existent. The same month, Mwiraria in Githongo's
presence orders an aide to call Deepak Kamani, the private
sector conspirator behind Anglo-Leasing, to tell him to repay
the money he had received for the bogus contracts. This
startles Githongo, because Mwiraria had all along insisted he
did not know who was behind Anglo-Leasing. Once money does
begin to be mysteriously returned to the Kenyan Central Bank
due to Githongo's investigations, Mwiraria and others in the
administration repeatedly pressure Githong to "go easy" on the
investigations. Finance Permanent Secretary Joseph Kinyua,
with whom Githongo develops a good relationship, tells
Githongo in the second half of 2004 that he is under intense
pressure by Mwiraria to authorize payments for a suspicious
contract with a Spanish shipbuilder to build a frigate for the
Kenyan Navy.

-- Kiraitu Murungi, Justice Minister (reappointed Energy
Minister November 7): Murungi is perhaps the story's most
complex character, tortured by the knowledge of the graft
around him, but also ultimately an integral part of it. In a
June 29 meeting with Githongo, an emotional Murungi admits
that the Anglo-Leasing scandal "is us," i.e. Murungaru,
Getonga, and others. He appeals to Githongo's patriotism and
political loyalty to Kibaki, insisting the stolen money is
needed for "political fund raising". In a similar subsequent
discussion with Githongo, Murungi warns Githongo that exposure
of senior NARC leaders in "another Goldenburg" will bring down
the Kibaki administration. In yet another conversation with
Githongo in the fall of 2004, Murungi "lets his guard down"
and directly links Murungaru and Getonga with Anul Perera in
connection with the Navy frigate scam. He openly tells
Githongo that the contract needs to be paid to raise money for
political campaigns, and that Githongo's investigation is
thereby undermining the party's power.

-- Few Are Untouched: Githongo's dossier also implicates Vice
President Moody Awori, Simeon Nyachae (ex-Energy Minister,
reappointed Roads Minister November 7),Head of Civil Service
Francis Muthaura, and a panoply of lesser civil servants, only
some of whom were dismissed in June 2004 and are in the slow
process of being prosecuted. In the private sector, in
addition to masterminds Kamani and Perera, Amcit Charles
Kettering is placed at the center of a series of procurement

scams, including a deal to build a national communication
backbone for the military. KACC Director Aaron Ringera is
not implicated in any wrongdoing, but comes off as weak-willed
when he tells Githongo he is in the unenviable position of
knowing too much. He warns Githongo that "they" will kill
Githongo if he tries to leave Kenya. Ringera admits he
himself won't touch any cases that "reach the President."

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Kibaki Is At Least Complicit
--------------

7. (C) But what of President Kibaki himself? The dossier is
not definitive in this regard, but throughout the chronology,
Githongo is regularly briefing Kibaki on his findings.
Kibaki's lack of action in response to the evidence would
appear to indicate he either actively participated in the
corruption, or else felt the graft was a necessary political
expedient to raise cash for political campaigns. Kibaki's
true position emerges indirectly in the narrative when
Githongo realizes that Murungi's surprising candor about
Murungaru's involvement in the frigate scam, given in the
knowledge that Githongo had direct access to Kibaki, means
that the latter is at least complicit and that Githongo's
position is thus "untenable." Mugo Githongo later told
Econ/C that his brother remains "quite fond" of Kibaki, and
that the longer 91-page report paints Kibaki more as a
befuddled victim than an active conspirator.

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Corruption by the Numbers
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8. (C) The scale of grand scale corruption in the NARC
administration as reported by Githongo would have a direct,
negative macro-economic impact on a struggling economy of
around $20 billion in size in 2005. In the course of his
chronology, Githongo concludes in July 2004 that the NARC
administration had itself initiated $277 million worth of
bogus security-related contracts, and was also participating
in another $443 million of similar contracts signed by the
previous government in the period from 2001 until late in
2002, after which NARC came to power. Githongo later surmises
that including an even more shadowy set of deals involving the
Kenyan Department of Defense, the total of all such "Anglo-
Leasing-type" deals added up to over $1 billion.

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Next Steps: Githongo to Go Public with Evidence
-------------- --


9. (C) According to Mugo Githongo, a copy of the letter and
the summary dossier were conveyed to the KACC on December 13,
and his brother intends to go public in the coming days by way
of an op-ed he is now drafting which will be published in the
international media. How and when he will convey his longer,
more detailed 91 page report to Kenyan authorities and/or the
public remains to be seen, but Mugo Githongo said his brother
hopes to return to Kenya in January, and will make himself
available to the KACC and/or others to provide evidence and
testimony in the cases he was investigating. Mugo Githongo
intends to provide a hard copy of the 19-page dossier to us in
the coming days, at which time we will scan and e-mail to
concerned Washington offices. Another sidelight: John
Githongo passed a copy of his November 26 letter to Kibaki to
the Nation newspaper in Nairobi late in the week of December

5. As of December 13, the paper has sat on the letter and not
run a story.

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Comment
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10. (C) Once it is made public, the Githongo dossier is very
likely to put further pressure on the now-reconstituted Kibaki
administration, particularly since all of the ministerial-
level officials named and shamed in the dossier, except for
Chris Murungaru, have been invited back into Cabinet.
However, given that Kibaki has known about the wrongdoing
among his closest advisors for quite some time and done almost
nothing about it, we are under no illusion that he will use
the dossier, and the public outcry it will generate, to clean

house and truly make fighting corruption a priority. It is
very clear from the dossier that Kibaki's inner circle never
cared much about fighting corruption; indeed it quickly turned
to the same patterns of grand scale theft used by the previous
regime as a means to maintain its grip on power. Githongo, it
seems, was brought in as window dressing to fool the Kenyan
public and donors. It is lucky for Kenya, however, that
before he left, Githongo was able to amass evidence that will
soon expose the very lie perpetrated by the NARC power elite
when it came to power.

BELLAMY