Unnerving details about Sh1.2bn Tokyo embassy land deal few want told

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Mr Thuita Mwangi, former Foreign Affairs Permanent Secretary was an architect of various scams including others involving Anne Waiguru. Because Anne Waiguru was dating President Uhuru, he was never thrilled by him.  
By WACHIRA MAINA

A central part of the Ethics and Anti-Corruption (EACC) case against Mr Thuita Mwangi, former Foreign Affairs Permanent Secretary, and Mr Allan Mburu, a former First Counsellor at the Kenyan Embassy in Japan, was that they took advantage of Ambassador Dennis Awori’s absence from Tokyo to pull off the scam.

This claim is easily shown to be false by minutes of the Inspection Team’s meetings and group photos, which show Mr Awori leading the team on site visits and record his attendance in meetings that made the decision to make the purchase.

The Team was in Tokyo from January 13 to 17, 2009. Mr Awori left Tokyo for the United States on January 19, 2009, two days after the team had already returned to Nairobi. It beggars belief that Mr Awori, a principal decision-maker in this alleged fraudulent scheme, was never charged.

The fourth claim is that the accused exposed the government to financial risk by not using a lawyer in the transaction. This claim arose from the gripes of Shioji Yanagawa, a lawyer the Kenya government had hired to do the search and validate the title. He told the Judicial Police in Japan that he had heard from a contact named Salim on March 27, 2009, that the Kenyan embassy would pay him 2.8 per cent of the transaction value, if he would make a 2 per cent payment as kick-back to them. Neither the committee nor the EACC asked whether, in fact, Mr Yanagawa was a witness of truth.

He had already been paid Sh3 million for doing the due diligence on the land. Now he wanted Sh45.7 million to execute the transaction. Mr Mwangi thought this exorbitant and asked the Embassy to find a cheaper alternative.

PAID FOR IN CASH

On enquiry, the Ministry of Foreign Affairs in Japan told the Embassy that transactions such as this one could be done by a judicial scrivener, the Japanese equivalent of a solicitor. Based on this assurance, the Ministerial Tender Committee approved the use of the Judicial Scrivener on June 12, 2009.

Finally, the EACC, the Special Audit Report and the Report of the Parliamentary Committee on Defence, Security and Foreign Affairs claimed that the Tokyo property was paid for in cash, a highly irregular mode of payment for a transaction this size.

The implication was that this unusual mode of payment was adopted to facilitate bribes. But the accountant at the Embassy in Tokyo hotly disputes this and gives a completely different account of what happened, which no one actually questioned.

According to him, the money to pay for this acquisition was to come from the Supplementary Budget approved by Parliament in May 2009. But the deadline for closing the financial year — June 30, 2009 — was a short month away.

Given the urgency involved, the Ministry of Foreign Affairs pleaded with the Treasury in a letter of May 28, 2009 to make “an immediate Exchequer release of Sh1.2 billion” so as “to ensure that funds are remitted to Tokyo before the June 30 deadline.”

Inevitably, the delay happened: Sh900 million was only released on June 25, 2009 and the shortfall of Sh357 million on June 26, 2009. But the receiving bank only notified the financial attaché at the Embassy that the funds had arrived on deadline day, June 30, but the money would not be reflected in the mission’s account until July 1, 2009.

On that day, the Head of Mission and the Financial Attaché went to the bank to make the transfer to the vendor’s account.

They filled in a bank transfer application and then made out a cheque of the same amount to attach to the form because the form itself did not have room for the signatories. A total of Sh1,477,634,381.00 was transferred against the form and the cheque and an equivalent amount was received on the same day in the vendor’s bank, which was a 30-minute drive from the mission’s banker.

The accountant noted that quite apart “from the urgency to meet the deadline” this mode of payment was popular in Japan because it ensures “immediate cash transfer” and is allowed by “normal banking practice.”

Neither the Auditor General nor the EACC — not even the Parliamentary Committee — seem to have interviewed the bank to confirm this story.

Finally, there was the claim that Mr Mwangi and Mr Mburu deceitfully signed two sale agreements. According to the EACC, the deception begun when Mr Mburu irregularly gave himself “a power of attorney” by holding himself out as “a representative of the Government of Kenya”.

Later, the real agreement “was signed by the accounting officer and deceitfully back-dated”. On scrutiny, this claim rests on a really mundane point.

Mr Mburu became the Charge d’Affaires when Ambassador Awori left and he thought that in that capacity he had authority to sign on behalf of the government. However, it seems that later he and Mr Mwangi had some concern that this might raise queries from external auditors.

To pre-empt such queries, a second agreement on the same property was drawn up and signed between the Permanent Secretary, on behalf of the Government of Kenya and the vendor, Mr Nobuo Kuriyama.

PRECAUTIONARY REASONS

When the Special Audit was finally done at the end of 2010, the auditor expressed the very concerns that Mr Mwangi and Mr Mburu had feared he might. The ministry’s perfectly reasonable explanation was that they signed the second agreement for purely precautionary reasons. But since the second agreement did not entail a second payment to the vendor, it is pressed to the fraud claims.

Not only do all indictment claims fail, even haphazard attempts to nail Mr Mburu by looking into his finances proved futile. On October 14, 2011, the Organised Crime Investigation Centre of Japan interviewed Mr Mburu’s financial advisor, Mr Ricky Mathews, in Tokyo.

Mr Mathews told them that Mr Mburu had a five-year savings plan from Zurich International Life Ltd into which he made a monthly payment of $2,000 (Sh200,000 at current rates) through a Kenyan Embassy credit card. Though he had handled Mr Mburu’s finances for some time, the client had never made a lump-sum payment into the plan.

Lacking a clear money trail, the EACC then tried to link Mr Mburu to a Mr Ryoji Manabe, an alleged business associate. According to the EACC, their case would prove that Mr Mburu had not only made capital contributions to Mr Ryoji’s business activities in Kenya but that Mr Ryoji’s bank accounts would prove this. In fact, no accounts that proved this were ever produced.

Moreover, in his statements to the Japanese police, Mr Ryoji confirmed that he was not Mr Mburu’s business associate; that in fact all that Mr Mburu and Mr Awori had done — as embassies do in such cases — was to introduce him to a lawyer in Kenya, one Mr Maina; that Mr Mburu had never invested any money in his business or personally given him any money; that he was not involved in any way in the purchase of land for the Kenyan Embassy in Tokyo; that he only bought 30 acres of land in Amboseli and that he had all the records of his financial transactions and that the directors of his company were his brother, Mr Jouji Manabe, and his sister, Ms Mami Koyama.

Combining through the files, the only direct allegation of corruption — other than the suppositions of the EACC and the Parliamentary Committee — is the one made by Mr Yanagawa, the Japanese lawyer whose contract was cancelled by Mr Mwangi for charging exorbitant legal fees.

That claim rested on the call the lawyer allegedly received from the mysterious Salim about a two per cent kickback to be made to unnamed Kenyan embassy officials once the property transaction went through.

It is surprising, even culpably incompetent, that neither the EACC nor the Parliamentary Committee asked to interview Salim — who was then said to be living in Thailand. Without that, how was the Director of Public Prosecution to know who exactly in the Kenyan Embassy in Tokyo had demanded the kickback? And even if true that someone at the embassy wanted a kickback, the fact that Mr Mwangi cancelled the lawyer’s contract destroyed the opportunity for the kickback, a fact that further undermines the theory of a conspiracy between them.

Ultimately, this was a prosecution without legs, pursued for reasons both fuzzy and suspect. It proves, if proof were needed, that the EACC and the DPP have neither the interest nor the capacity to fight corruption. What we have here are sham shows fuelled by political drama, media theatrics and official complicity, complete with regular nods and winks at the truly corrupt.

In the meantime, those who get in the way of the powerful risk ruined careers and sullied reputations. This is not a system that can fight corruption: it is not merely broken, it is a vertically integrated cover-up network for the real criminals.

Wachira Maina, a constitutional lawyer, reviewed evidence files for the defence in this case.

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From left, former charge d’affaires at the Kenyan embassy in Tokyo Allan Mburu, former Kenya ambassador to Libya Anthony Mwaniki Muchiri and former Foreign Affairs PS Thuita Mwangi in a Nairobi court in March 2016. PHOTO | PAUL WAWERU | 
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