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September 24, 2018

State Is Running A Ponzi Scheme On Kenyans

Paul Wainaina join by his family Nancy Wanjiru (wife), Hellen Wanjiru daughter and John Nganga son after winning Sportspesa Shs 8 million. Photo Collins Kweyu
Paul Wainaina join by his family Nancy Wanjiru (wife), Hellen Wanjiru daughter and John Nganga son after winning Sportspesa Shs 8 million. Photo Collins Kweyu

The gullible people betting daily on sports and losing money while making overnight millionaires out of the Sportspesa owners, have no one to blame for the saying goes, “A fool and his money are soon parted.”

The people who saw their dreams of overnight millions fly away with the demise of the quail business, belong in the same boat.

Their greed and temporary flight of logic, blinded them to the downsides of the venture.

But there are instances where the common man has a legal case against duplicitous characters who fleece and defraud them of their money.

The American fraudster Bernie Madoff who ran the largest Ponzi scheme in the history of the US, fleecing investors of about US$18 billion, was jailed for 150 years which was the maximum sentence allowed.

Another similar case is that of Allen Stanford who also conned investors of US$7 billion. He was jailed for 110 years.

There is also a landmark case going on in court pitting one Rose Florence Wanjiru, a businesswoman who has sued Kenyan banks for allegedly imposing illegal fees on customers loans.

The case has become a class-action lawsuit with 187 more aggrieved parties, including businessman Da Gama Rose, enjoining the suit. The decision in this case could have serious ramifications and set a radical new precedent.

This brings me to Henry Rotich, the Cabinet secretary, Treasury, who is currently working on the budget for the coming financial year that will be tabled in parliament in June.

Newspaper reports say that Rotich is looking to revise income tax codes to raise more money from people’s earnings.

It is at this time that we invoke the cases of Bernie Madoff’s and others who were incarcerated for stealing from the common man.

This week, we have heard of explosive new revelations around the giant heist that took place at the National Youth Service.

Supposedly, the amount lost to tender bandits, is now thought to be more than Sh1.6billion and not the Sh791million we had been told.

Former CS, Devolution, Anne Waiguru was also mentioned adversely, by one of the suspects who handled the stolen funds.

The Inspector General of Police swiftly issued a statement that a senior officer in the police force who was mentioned in the same light as Waiguru, would be investigated.

The EACC, the body charged with fighting corruption, said it would investigate the matter afresh. No word as to whether the investigating officers who carried out the initial probe, would also be probed.

At the same time, a number of top officials at Kenya Ports Authority and the Kenya Revenue Authority in Mombasa, were sacked over corruption for allegedly colluding to help importers evade custom duty at the port.

This is as we await for a tribunal to be formed to probe Supreme Court Justice Phillip Tunoi who is facing sensational accusations of accepting a Sh200m bribe to sway a case brought against the election of Nairobi Governor Evans Kidero.

That matter has stalled apparently because the files from the Judicial Service Commission that are meant to be submitted to the president are missing.

Without going into all the other graft cases we have heard about, we must then ask CS Rotich, if he is out of his mind. Do we as citizens look like those gullible quail farmers or gamblers?

Are we earning money so that we can create billionaire Goliaths of graft? Does Treasury even have the moral authority to even speak of any more taxes to Kenyans when it is so patently clear that it can’t be trusted with custody of people’s money? One of the cardinal responsibilities of any government is to protect public money and ours has shown itself manifestly incapable of this.

It is very clear that the reason Rotich is running out of money is because individuals are raiding national coffers and diverting funds that should go to public use to their own pockets.

Rotich has no business coming to ask Kenyans for any more tax money until he can identify loopholes that money is bleeding through and put effort to recover it. In fact, when he stands to read the budget, he must inform the nation how much stolen money he and the government have recovered from these grabbers.

These are people who bank in in this country. It is upon him and Central Bank to crack down on the banks that are being used as conduits for this money and institute massive fines like those we see the JP Morgan’s and Bank of America paying in the US for flouting rules.

If millions have been channelled through a bank by these individuals, then fine the bank Sh1 billion for each instance until the banks become the foremost agents of the government in the fight against graft.

But until these proper measures are taken and individuals prosecuted and stripped of every asset they own, Rotich should not try to run a Madoff scheme on Kenyans.

In fact, Kenyans are fatigued. And it may reach a time when there will be a general strike on paying taxes involving the Federation of Kenya Employers, COTU, businessmen and so on until the tax regime is re-adjusted to fair levels instead of overtaxing us to bridge holes created by corruption lords who are robbing us blind.

Mbugua is a communications consultant and comments on topical issues.

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