• Ethics watchdog CEO terms the deal outright fraud.
• Mbarak says close cooperation with DPP can go a long way to tame runaway graft.
Image: FAITH MUTEGI
The anti-graft agency is seeking to recover Sh300 million from an MP and his co-director in an intriguing corruption scandal that has exposed how cartels exploit the country’s food crisis to make a killing.
Sirisia MP John Waluke and Grace Wakhungu, the mother of former Environment CS Judy Wakhung, are to be sentenced on Thursday in a decision expected to shake the country’s political elite and graft barons.
Grace is a sister of former Vice President Moody Awori who was recently tapped by President Uhuru Kenyatta to serve as a member of the Sports, Art and Social Development Fund Board.
Her daughter, professor Wahkungu, is Kenya's Ambassador to France.
The graft trial that took less than two years may cost Waluke — an ardent supporter of Deputy President William Ruo — his parliamentary seat if he is sentenced to more than six months.
The two have been held at Kileleshwa police station since Monday after they were found guilty.
The Star has established the Ethics and Anti-Corruption Commission is now going for the assets of the two as the government moves to make corruption a painfully expensive affair.
EACC chief executive officer Twalib Mbarak said the two will pay dearly for stealing from the public as the Sh313 that they were paid fraudulently from the public coffers must be refunded.
“We will file for a recovery of the money from the assets they have accumulated. We will also freeze their accounts because they stole from the public,” Mbarak told the Star, terming their action outright fraud.
Wakhungu and Waluke are shareholders of Erad Supplies and General Contracts Ltd, which was paid Sh313 million by the NCPB after accusing the agency of breaching a contract in 2004.
Erad pressured the NCPB to make the illegal payments by threatening the auction of silos, buildings and vehicles.
The Anti-Corruption and Economic Crimes Act of 2003 stipulates that a person convicted of an offence under the Act shall be liable to a fine not exceeding S 1million, imprisonment for not more than 10 years, or both.
The person can suffer a mandatory fine if he or she received a quantifiable benefit (Sh313 million for Waluke and his co-convict). The mandatory fine shall be equivalent to twice the amount of the cash received or the loss caused by their corrupt action.
If the magistrate decides to apply the provision, the pair will have to pay Sh626 million.
They were still pushing NCPB to pay more than 264 million — the payment order was only being held pending the outcome of an appeal lodged by the NCPB in the Court of Appeal.
A third director of Erad was the businessman-turned-corruption fighter Jacob Juma, who was slain in May 2016.
However, on Monday, the courts agreed with the EACC that the claim for Sh577 million that was awarded in the arbitration process was based on forged invoices.
The documents were purported to emanate from a company called M/s Chelsea Freight based in South Africa.
However, directors of that company disowned the documents as fraudulent.
One of the directors actually testified in court and said his company never issued such a document and that it did not deal in the maize business.
“This case shows that international collaborations actually work,” Mbarak told the Star.
The trial has exposed how cartels have exploited the country’s food crisis and duty-free imports to make a killing.
In 2017, sugar cartels took advantage of a sugar crisis and duty-free import window opened by the government. They brought in poisonous sugar.
A tough-talking Mbarak pledged the supply of “air”, which is rampant in government, must come to an end.
He said the importation of maize, sugar, fertiliser and rice had become a huge graft avenue for "tenderpreneurs".
“Dummy supply in both county and national governments appear to be a norm but this must come to an end because the Commission is going to deal with those involved irrespective of who is involved,” the CEO promised.
For the first time, Mbarak - a former military intelligence officer- said the Commission has top-notch forensics and financial investigators.
The commission has been making high-profile arrests, with the latest on Monday when the top brass at the Kenya School of Law were apprehended in a Sh198 million corruption case.
“This case [Waluke and Wakhungu] also goes to demonstrate that close collaboration between the EACC and the DPP can achieve convictions. We have to also give credit to the DPP because they meticulously handled the case,” Mbarak said.
The grand food-crisis fraud began in July 2004 after the government declared acute famine a national disaster due to the shortage of maize, which was caused by severe drought.
The total maize shortfall was estimated at six million bags and National Cereals and Produce Board was tasked to import three million bags.
The private sector was tasked to import the other three million.
Maize dealers were invited by letters to submit bids and the Tender Committee awarded the tender to five firms, including Erad Suppliers and General Contracts Limited, which was awarded the import of 20,000 metric tonnes.
However, only two firms made the delivery of 69,755 metric tonnes of maize and there was still a shortfall.
Erad Suppliers and General Contracts Limited, however, failed to deliver the maize and a dispute on the contract arose.
The firm moved before an arbitrator and was awarded $3,106,00 (Sh330,579,128 today) plus interest at 12 per cent per annum from October 27, 2004. The award was confirmed by the High Court.
Through a Garnishee Order served upon the bank where NCPB held accounts, Erad Supplies and General Contracts Limited were paid Sh313 million.
They were still demanding Sh264,864,285. That payment order was only being held pending the outcome of an appeal lodged by the NCPB in the Court of Appeal.