Lands Principal Secretary Nicholas Muraguri and 13 other government officials are under investigation for possible collusion in a fraudulent scheme to purchase mobile clinics that are lying in waste in Mombasa.
Muraguri, who was then Director of Medical Services, PS Khadija Kassachoom, and directors of Estama Investment Limited are among those who have been sued by the EACC to recover Sh800 million paid for the decrepit portable medical clinics.
Investigators have concluded that there was collusion between Njange Makanga, the director of the disgraced Estama, and several ministry officials including Muraguri and Kassachoom to circumvent procurement procedures.
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Although the EACC identifies offences committed and wants the money recovered, no criminal charges have been preferred against the suspected accomplices.
According to the court papers, on 30 June 2016, Khadiagala asked Muraguri, then Health PS to approve relocation of Sh200 million meant for Uhuru’s flagship project – free maternity —for the delivery of portable clinics.
The reallocation, EACC argues, was made without approval of the National Treasury contrary to the Public Funds Management Act, 2012.
The anti-graft agency accuses Kasachoom of allowing the procurement of the portable medical clinics to commence without ensuring that there were sufficient funds.
EACC avers that Makanga, in collusion with officers from the ministry, among them Muraguri and Kassachoon, planned to implement the fraudulent scheme.
The documents also show how senior ministry officials were allegedly bribed by directors of Estama to get the lucrative contract. A different firm owned by Makanga separately wired Sh1.4 million to members of the ministerial tender committee, ostensibly to procure the tender directly.
They include the Head of supply chain management (procurement) Ephantus Maina Thiga and another officer, Kariuki Ireri Njagi.
DIRECT
Maina pocketed one millions shillings while Ireri received Sh400,000 that EACC suspect were kickbacks for fraudulently awarding the lucrative tender through direct procurement
"On 29 July 2016, the 7th defendant, the head of supply chain management at the ministry received Sh1,000,000 from the 2nd defendant vide two cheques of Sh300,000 and Sh700,000 in his bank account no. 01400004160 held at the Family Bank, money reasonably believed to be corruptly received as a favour in the award of the tender," the court documents state.
"The second defendant is culpable of corruptly giving a benefit of Sh400,000 to the 14th defendant contrary to section 39-3(b) of the Anti-corruption and Economic Crimes Act, 2003. The said amount was paid to the 14th defendant as an inducement to show favour in the award of the tender to supply portable medical clinics," EACC claims.
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HUSHED
The second defendant is Business Capital Access Limited, a company that is also owned by Makanga.
The matter which came up in court last week has been hushed. It emerged just a day after President Uhuru Kenyatta, in an unprecedented move, sent all all heads of procurement and accounting units on compulsory leave pending vetting to ascertain their suitability to continue serving.
Also sued by EACC are the ministry’s Senior Deputy Secretary, Ibrahim Maalim; Senior Chief Finance Officer Benn Khadiagala; chief economist and head of policy Elkana Ong’uti; Director of Nursing Susan Otieno; and Deputy Director of Medical Services Izaq Okoth Odongo.
Others are Mamo Umuro, Peter Gachenge, Julius Nyamohanga Rioba, Stephen Matibu Njama, Abdulatif Ali and Kipkerich Chumo Koskei. They were all part of the ministerial tender committee.
INFLATED
In the case, EACC has laid blame squarely on Muraguri and Kassachoom for the tender that they claim was inflated, unbudgeted for, and fraudulently issued through direct procurement.
EACC claims that Muraguri, then Director of Medical Services and Kassachoom, as Health PS, breached their public trust and failed to act in the interest of the nation.
It claims both held the office of Principal Secretary, Ministry of Health, “a position of trust and owed the Kenyan public a fudiciary duty and trust to the general public.”
"Its the plaintiffs claim (EACC) that the defendants engaged in fraudulent scheme to defraud the ministry of health through over-valued award of a tender to the 1st defendant for the supply of 100 portable clinics to the Ministry of Health at a cost of Sh10 million per unit by unlawfully circumventing the statutory procurement procedure through stage managing competition of the tender process," EACC says.
Further, the said 200 million was expected to be utilised for the free maternity fund thus not available for reallocation as envisioned under section 43-2(a) of the Public Funds Management Act, 2012 and regulation 48-1(e) of the Public Finance Management Regulations, 2015.
ORDERS
EACC is seeking several orders, among them a declaration against the defendants jointly and severally that the subject tender award and contract were predicated on a crime.
The agency also wants an order for the payment of the sum of Sh800 million against the defendant jointly and severally.
In the alternative however, the anti-graft watchdog says that the court should enter a verdict that the tender was over-valued by Sh491million.
It seeks an order for payment of 491,140,000 as the difference between the tender amount paid and the total market value of the prefabricated portable medical clinics as against the defendants jointly and severally.
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