Identifier
Created
Classification
Origin
06NAIROBI2482
2006-06-06 13:34:00
CONFIDENTIAL
Embassy Nairobi
Cable title:  

CORRUPTION IN KENYA: HOW FULL - OR EMPTY - IS THE

Tags:  ECON PGOV EAID EFIN KCOR PREL PINR KE 
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PP RUEHLMC
DE RUEHNR #2482/01 1571334
ZNY CCCCC ZZH
P 061334Z JUN 06
FM AMEMBASSY NAIROBI
TO RUEHC/SECSTATE WASHDC PRIORITY 2255
RUEHLMC/MILLENNIUM CHALLENGE CORP PRIORITY
INFO RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUEHXR/RWANDA COLLECTIVE
C O N F I D E N T I A L SECTION 01 OF 03 NAIROBI 002482 

SIPDIS

SIPDIS

DEPT FOR AF/E, AF/EPS, EB/IFD/OMA
USAID FOR AFR/DP WADE WARREN, AFR/EA JEFF BORNS AND
JULIA ESCALONA
MCC FOR MALIK CHAKA
TREASURY FOR LUKAS KOHLER
LONDON AND PARIS FOR AFRICA WATCHERS

E.O. 12958: DECL: 5/31/2031
TAGS: ECON PGOV EAID EFIN KCOR PREL PINR KE
SUBJECT: CORRUPTION IN KENYA: HOW FULL - OR EMPTY - IS THE
GLASS?

Ref: Nairobi 1720

Classified by Econ Counselor John Hoover for reasons 1.4
(B) and (D).

C O N F I D E N T I A L SECTION 01 OF 03 NAIROBI 002482

SIPDIS

SIPDIS

DEPT FOR AF/E, AF/EPS, EB/IFD/OMA
USAID FOR AFR/DP WADE WARREN, AFR/EA JEFF BORNS AND
JULIA ESCALONA
MCC FOR MALIK CHAKA
TREASURY FOR LUKAS KOHLER
LONDON AND PARIS FOR AFRICA WATCHERS

E.O. 12958: DECL: 5/31/2031
TAGS: ECON PGOV EAID EFIN KCOR PREL PINR KE
SUBJECT: CORRUPTION IN KENYA: HOW FULL - OR EMPTY - IS THE
GLASS?

Ref: Nairobi 1720

Classified by Econ Counselor John Hoover for reasons 1.4
(B) and (D).


1. (C) Summary: The bad news in the war against corruption
in Kenya is that there continues to be no genuine political
will at the leadership level to aggressively investigate
and prosecute major graft cases. The desperation of the
NARC administration as it positions itself for next year's
election only reinforces this. However, neither Kenyans
nor donors are fooled by the hollow rhetoric the leadership
continues to put up as an empty substitute for real action.
The good news is that a number of important institutional
reforms are progressing quietly below the leadership level,
and these deserve our attention and support. Not least of
these are reforms aimed at ultimately reducing the still-
immense opportunities for corruption in government
procurement. Kenya will be seeking additional U.S.
assistance in this regard when it submits a business plan
requesting Millennium Challenge Corporation Threshold
funding later this year. End summary.


2. (SBU) Kenya is now well past the half-point in the
administration of the National Rainbow Coalition (NARC),
which came to power on a surge of popular support, in large
part due to its pledge to clean up government and eliminate
corruption. On this issue, an important question arises:
are things getting better, or are they getting worse? The
NARC administration continues to trumpet its successes,
while also acknowledging the challenges ahead. The public,
on the other hand, appears utterly disillusioned, and there
is a widespread belief, shared by many donors, that there
will be little tangible progress in the fight against

corruption in the run-up to elections at the end of 2007.
We tend towards this latter view, while also recognizing
some good trends and initiatives that deserve our attention
and support in the meantime.

--------------
Starting at the Top: Still No Political Will
--------------


3. (C) In our analysis, the principle bad news is that
there remains virtually no genuine political will or
commitment at the leadership level in Kenya to fighting
corruption, or at least not the most egregious cases of
graft involving anyone in Cabinet or at State House.
Completion of investigations being carried out by the Kenya
Anti-Corruption Commission (KACC) of the Anglo-Leasing-
style cases (which number 18, totaling $800 million; see
reftel),are delayed. KACC Director Aaron Ringera and his
deputies have complained publicly that they have been
unable to question key suspects because they have fled the
country. That seems fair enough, but there are also strong
suspicions that Ringera is using these challenges as an
easy pretext to either drag out the investigations
endlessly or kill them outright.


4. (C) The conventional wisdom holds that Ringera is
personally clean and his KACC capable. However, his strong
historic and tribal ties to Kibaki and his inner circle
make it unpalatable for Ringera to aggressively take the
Anglo-Leasing investigations to their ultimate conclusion
because doing so would eventually reveal the culpability or
at least complicity of President Kibaki himself.

--------------
Prosecutions: From Bad to Worse
--------------


5. (C) The record is worse on the prosecutorial front.
Except for the conviction of senior HIV/AIDS official
Margaret Gachara in 2004 (she was pardoned a year later by
Kibaki),the NARC administration cannot claim a single "big
fish" corruption conviction to date. Because of this
failure and the perception that Kenya's legal system
appears rigged to prevent prosecution of anyone with money
and influence, both the World Bank and the IMF have made
"prosecutorial capacity" a major theme in recent months.
Behind closed doors, but with surprising assertiveness, the
World Bank has advocated the replacement of Attorney
General Amos Wako, a politically pliant survivor who

NAIROBI 00002482 002 OF 003


appears unwilling to take on any high-profile prosecutions
handed him by the KACC involving sitting or recently
sitting senior-level GOK officials.

--------------
DPP: Powerless and Poor
--------------


6. (C) The GOK has taken the hint given by the World Bank
and the IMF and is advertising contracts for private
attorneys to step in and prosecute cases investigated by
the KACC, but for which the Department of Public
Prosecutions (DPP) lacks the capacity to successfully
prosecute. While this sounds like a neat short-term fix,
special prosecutors of this sort have been used before, at
exorbitant cost and without notable success.


7. (C) Worse, bringing in hired guns from the outside will
only hasten the downward spiral at the DPP, where
prosecutors are paid 5 percent vs. either their KACC
counterparts or what special prosecutors from the private
sector will receive. In this environment, the DPP has
found it impossible to attract and retain legal talent, and
morale is virtually nil. USAID Kenya's Democracy and
Governance Office has reduced its planned assistance to the
DPP because the GOK has refused to act on any of the
prerequisite reform commitments made earlier to strengthen
the DPP by, for example, equalizing pay for DPP attorneys.

--------------
GOK Turns Again to Empty Rhetoric
--------------


8. (C) The decision to hire special prosecutors is
symptomatic of a general tendency on the part of the GOK
leadership when dealing with corruption. Rather than make
the difficult political decisions necessary to restore its
credibility, it chooses instead to engage in rhetoric and
empty gestures to create the perception of real action.
Nowhere was this tendency better illustrated than in the
May 30 National Anti-Corruption Plan (NACP) Forum, whose
slogan was "Kenyans Arise! Fight Corruption Now." The
event was kicked off by prayers and an anti-corruption
ballad sung by a musical troupe to the tune of "My Darling
Clementine." All in attendance were encouraged to sing
along for "synergy of purpose."


9. (C) The forum was staged by the KACC's Aaron Ringera to
confer legitimacy on a draft 100-page national anti-graft
strategy that is six years old, and which will lead to the
creation of yet another institution, the NACP Secretariat,
to oversee its implementation. The highlight of the show
was some tough rhetoric from Justice Minister Martha Karua,
who acknowledged that Kenya is "under siege...by a
monster." But otherwise, donor reps in attendance shrugged
the event off as yet another example of window dressing to
cover up the lack of real action in fighting corruption.
The plan itself is of little value - a lawyerly compendium
of past, present and future trends, actions, and actors,
none of which are new or very specific.

--------------
TI Index Shows the Public Not Fooled
--------------


10. (SBU) The Kenyan public is not fooled. The just-
released Kenya Bribery Index from Transparency
International Kenya found that corruption experienced by
the public in 2005 increased. Close to half of survey
respondents reported encounters with bribery, up from a
third in 2004, and the number of bribes paid doubled from
over one for every two people in 2004 to 1.2 bribes paid
per person in 2005. The only good news is that the cost of
bribes on average continued a downward trend.

--------------
Now for the Good News - And There is Some
--------------


11. (SBU) It would be wrong and unfair, however, to
completely write off Kenyan efforts to improve governance
and fight corruption. Despite the insincerity and
defensiveness at the leadership level, there are a number

NAIROBI 00002482 003 OF 003


of important longer-term initiatives being led by officials
at the sub-leadership level that deserve recognition and
support. Not least are procurement reforms being led by
the 50-person strong Public Procurement Directorate (PPD)
in the Ministry of Finance. The PPD, now led by a world-
class procurement expert on leave of absence from the World
Bank, is working to complete new procurement regulations
and establish a Procurement Oversight Authority. USAID is
already supporting this effort, and the GOK will be
requesting an additional $12 million in Millennium
Challenge Corporation Threshold assistance for procurement
reform when it completes its MCC Threshold business plan,
perhaps as early as July.


12. (SBU) Procurement reform itself is a subset of a wider
set of ongoing public financial management reforms aimed at
improving budget planning, and then strengthening the links
between budgeting, expenditure, procurement, accounting,
and actual results in terms of service delivery by line
ministries. In a related set of reforms, the GOK has begun
to use performance-based management as the cornerstone of
civil service reform. This has thus far principally taken
the form of performance contracts for senior civil
servants. In theory, these contracts will eventually be
linked to the budget planning process for each line
ministry. It is an effort so ambitious that it risks
collapse. But if it is even partially successful, it will
change the way Kenya is governed in the years ahead, with
enormous cost savings.

--------------
Economy is Doing OK Too
--------------


13. (C) Finally, though again the picture is mixed, the
GOK is moving ahead with key structural reforms. Under
aggressive leadership at the relevant ministry, the GOK is
at last preparing to privatize the state-owned monopoly
phone company. This follows the recent partial
privatization of the country's monopoly power generating
firm, and plans are on track to turn the dilapidated
national railway over to a private concessionaire later
this year. Lastly, the GOK announced last week that GDP
growth in 2005 has been revised upward to 5.8 percent.
While this is still far below the country's potential, the
GOK does deserve credit for creating and maintaining a
stable macro-environment conducive for further growth.

--------------
Comment
--------------


14. (C) We should not expect any dramatic breakthroughs,
such as successful high-level prosecutions, between now and
election time in late-2007. The Kibaki administration,
which was probably never really committed to tackling grand
scale corruption in the first place, will be even less
inclined to be so now, grand rhetoric from the likes of
Martha Karua aside. Kibaki's meeting in late May with ex-
President Moi points out that in the current campaign
atmosphere, Kibaki can ill-afford to offend anyone--not
even his ostensible rivals. As a result, KACC's
investigations are likely to go nowhere, no one important
will be prosecuted, and the culture of impunity will live
on, to the dismay of the average Kenyan. But we must also
keep an eye on and nurture the genuine attempts to bring
about the institutional changes that will someday, one
hopes, reduce or eliminate the loopholes on which
corruption thrives. In this light, we should look
positively at supporting procurement reform through the
MCC's Threshold program.
Bellamy