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Kenyan finance minister arrested on graft charges

Newsdeck

Newsdeck

Kenyan finance minister arrested on graft charges

(FILE) - Kenyan Finance Minister Henry Rotich attends the opening of the Second German-African Business Summit (GABS) 2017 in Nairobi, Kenya, 09 February 2017 (reissued 22 July 2019). Media reports state on 22 July 2019 that Kenyan Finance Minister Henry Rotich has handed himself in to the police after the country's chief prosecutor ordered his arrest over corruption allegations. EPA-EFE/DANIEL IRUNGU
By Reuters
22 Jul 2019 0

NAIROBI, July 22 (Reuters) - Kenyan Finance Minister Henry Rotich was arrested on Monday on suspicion of corruption related to the construction of two dams. Despite Kenya's notorious graft, it is unprecedented for a sitting minister to be arrested for corruption.

By Duncan Miriri

Charges against Rotich, announced on Monday, stem from a police investigation into the misuse of funds in a dam project overseen by the Italian construction company CMC Di Ravenna.

Rotich denied any wrongdoing in a large newspaper advertisement in March. The company has also denied any wrongdoing.

Rotich and his co-accused face eight charges, ranging from conspiring to defraud and financial misconduct, Noordin Haji, the director of public prosecutions, said. The minister and other officials will have to resign immediately, he said.

Rotich was arrested shortly after the charges were announced, George Kinoti, the head of the police Directorate of Criminal Investigations, told Reuters in a text message.

The minister will be charged along with 27 other people, including Italian Paolo Porcelli, the director of CMC di Ravenna; and Rotich’s number two at the ministry, Kamau Thugge, the principal secretary.

“They broke the law on public finance management under the guise of carrying out legitimate commercial transactions, colossal amounts were unjustifiably and illegally paid out through a well choreographed scheme by government officers in collusion with private individuals and institutions,” Haji told a news conference.

The two dams were budgeted to cost 46 billion shillings ($446 million), he said, but the treasury borrowed far more.

“The national treasury negotiated a commercial facility increasing the amount to approximately 63 billion shillings – which is 17 billion more than necessary or required, payable on a timely basis without regard to a performance or works,” he said.

Kenyan prosecutors have requested help from British and Italian authorities, Kinoti said, and more charges could result.

POLITICAL DIMENSIONS

Market reaction to the news was relatively muted, with little change in the shilling. Kenya’s dollar bonds maturing in 2028, 2032 and 2048 slipped around 0.5 cents in the dollar, according to data by Tradeweb.

However, Rotich’s indictment will send shockwaves through the political elite, who are accustomed to graft scandals resulting in little official action.

His arrest may also be seen as further evidence of a growing distance between President Uhuru Kenyatta and Deputy President William Ruto.

Rotich was appointed at Ruto’s request. Ruto has made clear that he expects to receive the ruling coalition’s nomination for the presidency in the 2022, despite objections from some in Kenyatta’s camp. Kenyatta will have served two terms and be ineligible to run again.

Earlier this year, Rotich’s questioning by police provoked an angry reaction among politicians from Ruto and Rotich’s powerful Kalenjin ethnic group. Their home area saw some of the worst violence after the disputed 2007 elections, in which 1,200 people died.

Ruto’s allies played down the charges.

“There is nothing to worry about. Relax,” Kipchumba Murkomen, the senate majority leader and a Ruto ally, told reporters.

Ruto’s supporters have repeatedly accused police and prosecutors of trying to derail his presidential ambitions, said Ngunjiri Wambugu, who is opposed to Ruto’s candidacy.

“There was a lot of claims especially from the Ruto wing of (the ruling coalition) Jubilee that corruption was being weaponised against them. And there was a lot of vicious attacks,” he told Reuters.

Haji closed his press conference with a pointed warning against politicians using the case to score points.

“Corruption always fights back,” he said. “There may be elements who may seek to exploit these indictments to instigate social unrest.”

MANY CHARGED, FEW CONVICTED

Critics accused Kenyatta of failing to deal with corruption during his first term, despite his promises to do so when he was first elected in 2013. Now more people are being charged, but successful prosecutions are rare.

Hundreds of senior government officials and business people are already facing various charges related to corruption, including the chairman of the National Land Commission, the managing director of the Kenya Railways Corporation, the deputy chief justice, the CEO of Kenya Power and the head of Kenya Pipeline Company.

None of the cases has resulted in a successful prosecution.

Auditor general Edward Ouko has said his detailed reports on corruption are often ignored. Corrupt judges interfere with cases and the government’s own anti-corruption watchdog built cases that were too weak to prosecute, Haji said last year.

Rotich’s arrest was a “significant” step on a very long road, said Samuel Kimeu, the head of Kenya’s chapter of Transparency International. But he added:

“I would not be celebrating arrests. We need to see people in jail and we need to see what has been stolen recovered.”

($1 = 103.2000 Kenyan shillings) (Additional reporting by Katharine Houreld, Humphrey Malalo and George Obulutsa in Nairobi and Karin Strohecker in London Writing by Katharine Houreld Editing by Frances Kerry)

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