Anglo-Leasing scandal
Encyclopedia
The Anglo Leasing Scandal, also known as Anglo-fleecing, is the popular name for a corruption scandal in Kenya
Kenya
Kenya , officially known as the Republic of Kenya, is a country in East Africa that lies on the equator, with the Indian Ocean to its south-east...

.

Origins

The scandal is alleged to have started when the Kenya
Kenya
Kenya , officially known as the Republic of Kenya, is a country in East Africa that lies on the equator, with the Indian Ocean to its south-east...

n government wanted to replace its passport
Passport
A passport is a document, issued by a national government, which certifies, for the purpose of international travel, the identity and nationality of its holder. The elements of identity are name, date of birth, sex, and place of birth....

 printing system, in the year 1997, but came to light after revelation by a government officer, in 2002.

It was among the many corrupt deals that were inherited from KANU Government, that had ruled Kenya for 24 years. Even though the new NARK Government came to power with a promise to fight corruption, which some effort was put but completely watered-down by the magnitude of the Anglo-Leasing Scandal. Some corrupt civil servants and cabinet ministers happily inherited graft projects and nurtured them to super pet-projects. Former Internal Security Minister Christopher Ndarathi Murungaru and former vice president Moody Awori
Moody Awori
Arthur Moody Awori , known as "Uncle Moody", was the 9th Vice President of Kenya from 25 September 2003 to 9 January 2008.-Politics:Awori was born in Butere. He went to Mangu High School in 1935, and later Kakamega High School...

 were said to have been the biggest beneficiaries of this particular scandal.

Sophisticated passport equipment system was sourced from France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...

 and forensic science laboratories for the police were sourced from Britain
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...

. The transaction was originally quoted at 6 million euros from a French firm, but was awarded to a British firm, Anglo Leasing Finance, at 30 million euros, who would have sub-contracted the same French firm to do the work. The tender was not publicly advertised, and its details were leaked to the media by a junior civil servant. The Anglo-Leasing sales agent was Sudha Ruparell
Sudha Ruparell
Sudha Ruparell is a Kenyan currently living in Dubai, UAE. She is the daughter of Chamanlal Kamani and was married to the late Ashwin Ruparell....

, a 48 year old woman who is the daughter of Chamanlal Kamani
Chamanlal Kamani
Chamanlal Vrajlal Kamani is a business magnate and the patriarch of the Kamani family of Kenya, with interests in hotels, flower farms, infrastructure, telecommunications, project financing, real estate, cotton, as well as Diani Reef Beach Resort in Mombasa and Radisson Whitesands Resort in Goa,...

 and sister of Rashmikant Chamanlal Kamani & Deepak Kamani
Deepak Kamani
Deepak Kamani is the son of Chamanlal Kamani and brother of Rashmi Chamanlal Kamani and Sudha Ruparell. Deepak Kamani is involved in the Kamani family businesses of Kenya, including the flagship company Kamsons....

. The Kamani family has been involved in various security supplies scandals in the past. In January 2006, the Anglo Leasing Scandal was given fresh impetus through the publication of John Githongo's report. The new revelations indicate that Anglo Leasing Finance was just one of a plethora of phantom entities, including some UK companies, used to perpetrate fraud on the Kenyan taxpayer through non-delivery of goods and services and massive overpricing.

Impact

The then-British envoy to Kenya, Sir Edward Clay
Edward Clay
Sir Edward Clay KCMG is a retired British diplomat, formerly a High Commissioner and ambassador.During his time as British High Commissioner in Kenya, Sir Edward earned a reputation for his willingness to speak out against corruption at high levels of the Kenyan government...

, publicly raised the issue of Anglo-Leasing at a dinner in Nairobi
Nairobi
Nairobi is the capital and largest city of Kenya. The city and its surrounding area also forms the Nairobi County. The name "Nairobi" comes from the Maasai phrase Enkare Nyirobi, which translates to "the place of cool waters". However, it is popularly known as the "Green City in the Sun" and is...

 (see the Guardian Newspaper article). He subsequently came under pressure from Kenyan politicians to make public his evidence, and was reported to have provided the President, Mwai Kibaki
Mwai Kibaki
Mwai Kibaki is the current and third President of the republic of Kenya.Kibaki was previously Vice President of Kenya for ten years from 1978–1988 and also held cabinet ministerial positions, including a widely acclaimed stint as Minister for Finance , Minister for Home Affairs and Minister for...

, with a dossier containing details of corruption in the government. However, no one was punished and the case slipped from the public eye.

Kenyan government has a well oiled law machine The system
The System
The System can refer to:* Any system* Any system of government, law, or bureaucracy: political system. The phrase in this usage can carry negative connotations.* Systema, a Russian martial art...

, which has a tendency to derail major corruption cases, in many ways protecting the culprits, who happen to be senior civil servants and politicians, the so called Big Fish
Big Fish
Big Fish is a 2003 American fantasy adventure film based on the 1998 novel of the same name by Daniel Wallace. The film was directed by Tim Burton and stars Albert Finney, Ewan McGregor, Billy Crudup, Jessica Lange and Marion Cotillard. Finney plays Edward Bloom, a former traveling salesman from...

. When put under media scrutiny, the government sites on-going investigations. The On-going investigation, is a commonly used term in Kenya, especially by the authority, it has literally replaced Moi's commission of enquiry.

For this reason corruption
Political corruption
Political corruption is the use of legislated powers by government officials for illegitimate private gain. Misuse of government power for other purposes, such as repression of political opponents and general police brutality, is not considered political corruption. Neither are illegal acts by...

, Kibaki's government came to near topple in the last general election. Even though He had done well in lifting the Kenyan economy, introducing free primary education and developing new infrastructure, Kenyans still faced corrupt officers daily. The very thing they though will be past tense, was there to stay, the fact that corruption affects them in their daily life, it was always a constant reminder of NO Change. And the opposition knew best, they rode on that issue, ""corruption"".

Kenya's minister in charge of the project, Chris Murungaru
Chris Murungaru
Dr Christopher Ndarathi "Chris" Murungaru is a Kenyan politician, a former Member of Parliament for Kieni Constituency in Nyeri District and a former Minister of Transport....

, was later on banned by the UK government from travelling to Britain, on the grounds that it would not be in the public good. It was widely reported that the ban was due to corruption by Mr Murungaru involving, among others, the Anglo-Leasing scam.

On January 22, 2006, John Githongo
John Githongo
John Githongo is a former Kenyan journalist who investigated bribery and fraud in his home country and later, under the presidency of Mwai Kibaki, took on an official governmental position to fight corruption. In 2005 he left that position, later accusing top ministers of large-scale fraud...

 named Vice-President Moody Awori
Moody Awori
Arthur Moody Awori , known as "Uncle Moody", was the 9th Vice President of Kenya from 25 September 2003 to 9 January 2008.-Politics:Awori was born in Butere. He went to Mangu High School in 1935, and later Kakamega High School...

 as one of four top politicians (with Kiraitu Murungi
Kiraitu Murungi
-Education:Kiraitu Murungi was born on 1 January 1952 in Kionyo village, Abogeta division of Meru District in Central Kenya. He attended Chuka High School before proceeding to Alliance High School. Murungi graduated with a Bachelor of Laws in Nairobi University in 1977 and attained a Master of Law...

, former justice minister and later energy minister; finance minister David Mwiraria
David Mwiraria
David Mwiraria was the Minister for Environment and Natural Resources previously Finance Minister of Kenya until December 2007 when Kenya held its General Elections...

 and former transport minister Chris Murungaru
Chris Murungaru
Dr Christopher Ndarathi "Chris" Murungaru is a Kenyan politician, a former Member of Parliament for Kieni Constituency in Nyeri District and a former Minister of Transport....

) as being involved. Public sympathy for Githongo reached its peak when he released audio recordings of an incriminating conversation with David Mwiraria on the internet. He also claimed that President Mwai Kibaki
Mwai Kibaki
Mwai Kibaki is the current and third President of the republic of Kenya.Kibaki was previously Vice President of Kenya for ten years from 1978–1988 and also held cabinet ministerial positions, including a widely acclaimed stint as Minister for Finance , Minister for Home Affairs and Minister for...

 was complicit in the affair. Githongo claimed that the money raised would have funded the then government's forthcoming 2005 Constitutional Referendum and 2007 Election campaign. Githongo's report can be read here. These allegations were denied by Awori and Murunguru and an investigation was promised.

In February, in an interview with the BBC
BBC
The British Broadcasting Corporation is a British public service broadcaster. Its headquarters is at Broadcasting House in the City of Westminster, London. It is the largest broadcaster in the world, with about 23,000 staff...

, Githongo told of his meeting with Kiraitu, during which the then Justice minister tried to blackmail him over a loan his (Githongo's) father is said to owe businessman Anura Pereira
Anura Pereira
Anura Pereira is a Sri Lankan with Cypriot origins, frequently mentioned in association with Corruption in Kenya-History:He came to Kenya in the 1980s and was a defence contractor during the KANU regime.-Controversy:...

. "The minister of Justice was telling me that if I eased off my inquiries, then my father's loan matter would be made to go away," Githongo said. He had an audiotape, which was played on the BBC.

Githongo's Exile

In an interview with Fergal Keane
Fergal Keane
Fergal Patrick Keane , is an Irish writer and broadcaster. For many years, Keane was the BBC's correspondent in Southern Africa. He is the nephew of Irish author John B. Keane....

 for the BBC
BBC
The British Broadcasting Corporation is a British public service broadcaster. Its headquarters is at Broadcasting House in the City of Westminster, London. It is the largest broadcaster in the world, with about 23,000 staff...

's Newsnight
Newsnight
Newsnight is a BBC Television current affairs programme noted for its in-depth analysis and often robust cross-examination of senior politicians. Jeremy Paxman has been its main presenter for over two decades....

 programme on 8 February 2006, Githongo revealed what he claims is taped evidence proving that Kiraitu Murungi
Kiraitu Murungi
-Education:Kiraitu Murungi was born on 1 January 1952 in Kionyo village, Abogeta division of Meru District in Central Kenya. He attended Chuka High School before proceeding to Alliance High School. Murungi graduated with a Bachelor of Laws in Nairobi University in 1977 and attained a Master of Law...

 attempted to impede his inquiries. Murungi suggested that a 30M Shilling loan to his father by a lawyer A.H. Malik had been bought by Anura Pereira
Anura Pereira
Anura Pereira is a Sri Lankan with Cypriot origins, frequently mentioned in association with Corruption in Kenya-History:He came to Kenya in the 1980s and was a defence contractor during the KANU regime.-Controversy:...

, and might be forgiven in exchange for 'going slow' on the Anglo Leasing investigation. He reveals that at the end of his investigations, he came to the inescapeable conclusion that the Anglo Leasing scandal went all the way to the top, and as a consequence his life was in danger. Anglo Leasing, and many other similar deals, were, in part, back-door financing to pay for NARC
National Rainbow Coalition
The National Rainbow Coalition was a coalition of Kenyan political parties in power from 2002 and 2005 when it fell apart in a controversy between its wings about a constitutional referendum.-Formation:...

's election bid in 2007.

Dismissals and Resignations

  • On November 23, 2005, President Mwai Kibaki
    Mwai Kibaki
    Mwai Kibaki is the current and third President of the republic of Kenya.Kibaki was previously Vice President of Kenya for ten years from 1978–1988 and also held cabinet ministerial positions, including a widely acclaimed stint as Minister for Finance , Minister for Home Affairs and Minister for...

     dissolved his cabinet following a humiliating defeat on a referendum on the proposed constitution of Kenya. In the resulting re-shuffle, Chris Murungaru
    Chris Murungaru
    Dr Christopher Ndarathi "Chris" Murungaru is a Kenyan politician, a former Member of Parliament for Kieni Constituency in Nyeri District and a former Minister of Transport....

     was not re-appointed.
  • On February 1 David Mwiraria
    David Mwiraria
    David Mwiraria was the Minister for Environment and Natural Resources previously Finance Minister of Kenya until December 2007 when Kenya held its General Elections...

     became the first of those implicated in the report to resign, doing so live on television. He maintained his innocence and claimed that he was resigning in order to clear his name.
  • A day later, Moody Awori
    Moody Awori
    Arthur Moody Awori , known as "Uncle Moody", was the 9th Vice President of Kenya from 25 September 2003 to 9 January 2008.-Politics:Awori was born in Butere. He went to Mangu High School in 1935, and later Kakamega High School...

     refused to resign, saying he saw no reason to. A day later a group of 80 MPs called for the sacking of Awori, threatening street protests if their requests were not met.
  • On 13 February, President Mwai Kibaki
    Mwai Kibaki
    Mwai Kibaki is the current and third President of the republic of Kenya.Kibaki was previously Vice President of Kenya for ten years from 1978–1988 and also held cabinet ministerial positions, including a widely acclaimed stint as Minister for Finance , Minister for Home Affairs and Minister for...

     announced that Kiraitu Murungi
    Kiraitu Murungi
    -Education:Kiraitu Murungi was born on 1 January 1952 in Kionyo village, Abogeta division of Meru District in Central Kenya. He attended Chuka High School before proceeding to Alliance High School. Murungi graduated with a Bachelor of Laws in Nairobi University in 1977 and attained a Master of Law...

     had resigned to allow full investigation into the allegations. Murungi's resignation was announced in a television address by President Kibaki, though he too denies any wrongdoing.


Travel bans have been imposed on key players, and Kenyan authorities will start freezing the assets of individuals suspected of being involved in corruption in a bid to recover looted state funds

Response from Kenyans

The response of Kenyans has been critical of the Government, both from those who initially voted for it and those who did not. The president has been accused of adding to the problems he promised to solve and making Kenya an embarrassment in the eyes of the world. Most responses have also praised the role played by John Githongo in bringing the scandal to light though a minority opinion has criticised him for holding a 'neo-colonial' attitude and not remaining in Kenya.

On 17 February anti-corruption protestors marched through Nairobi
Nairobi
Nairobi is the capital and largest city of Kenya. The city and its surrounding area also forms the Nairobi County. The name "Nairobi" comes from the Maasai phrase Enkare Nyirobi, which translates to "the place of cool waters". However, it is popularly known as the "Green City in the Sun" and is...

 despite their demonstration being officially banned. The participants carried banners calling for a conclusion to the Anglo-Leasing scandal and chanted for the resignation of Vice-president Moody Awori.

British enquiry

United Kingdom's Serious Fraud Office
Serious Fraud Office
The Serious Fraud Office may refer to:*Serious Fraud Office *Serious Fraud Office...

 began its probe on July 2007, and was investigating offshore accounts in the British tax havens of Jersey and Guernsey, which were used to transfer more than $30m to a company called Apex Finance between April 2002 and February 2004. The SFO said it decided to halt its probe after the Kenyan government failed to produce evidence that would enable the prosecution of suspects.

Finance

Anglo Leasing Finance is an entity associated to Deepak Kamani
Deepak Kamani
Deepak Kamani is the son of Chamanlal Kamani and brother of Rashmi Chamanlal Kamani and Sudha Ruparell. Deepak Kamani is involved in the Kamani family businesses of Kenya, including the flagship company Kamsons....

. The Controller & Auditor General of Kenya has published a report on single sourced security contracts where widespread fraud through non-delivery and overpricing are suspected. The entities used to carry out this fraud are linked:
Payee Purpose Amount (millions) Signatories Date signed
Anglo Leasing Forensic LAB - CID USD
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....

 54.56
PS-Treasury
PS-Internal Security OP
16 August 2001
Silverson Establishment Security Vehicles USD 90 PS-Treasury
PS-Internal Security OP
16 August 2001
Apex Finance Police Security USD 30 PS-Treasury
PS-Internal Security OP
9 February 2002
LBA Systems Security-MET USD 35 PS-Treasury 7 June 2002
Apex Finance Police Security USD 31.8 PS-Treasury
PS-Internal Security OP
14 June 2002
Universal Satspace Satellite Services USD 28.11 PS-Treasury
PS-Transport
11 July 2002
First Mechantile Police Security USD 11.8 PS-Treasury
PS-Transport
11 July 2002
Apex Finance Corp Police Security USD 12.8 PS-Treasury
PS-Internal Security OP
12 July 2002
LBA Systems Prison security USD 29.7 PS-Treasury 19 November 2002
Nedemar Security USD 36.9 PS-Treasury
PS-Transport
19 November 2002
Midland Bank Police security USD 49.65 PS-Treasury 29 May 2003
Naviga Capital Oceanographic vessel EUR 26.6 PS-Treasury 15 July 2003
Empressa Oceanographic vessel EUR 15 PS-Treasury 15 July 2003
Euromarine Oceanographic vessel EUR 10.4 PS-Treasury 15 July 2003
Infotalent Police security EUR 59.7 PS-Treasury
PS-Internal Security OP
19 November 2003
Apex Finance Corp Police security EUR 40 PS-Treasury
PS-Internal Security OP
17 December 2003
Ciaria Systems Inc Design, maintain satellite NSIS USD 44.56 PS Treasury
Director NSIS
20 January 2004

See also

  • Corruption in Kenya
    Corruption in Kenya
    Political corruption in the post-colonial government of Kenya has had a history which spans the era of the Jomo Kenyatta and Daniel arap Moi's KANU governments to the Mwai Kibaki's NARC government. In the Corruption Perceptions Index 2005 Kenya is ranked 144th out of 159 countries for corruption...

  • Goldenberg scandal
    Goldenberg scandal
    The Goldenberg scandal was a political scandal where the Kenyan government was found to have subsidised exports of gold far beyond standard arrangements during the 1990s, by paying the company Goldenberg International 35% more than their foreign currency earnings...

  • John Githongo
    John Githongo
    John Githongo is a former Kenyan journalist who investigated bribery and fraud in his home country and later, under the presidency of Mwai Kibaki, took on an official governmental position to fight corruption. In 2005 he left that position, later accusing top ministers of large-scale fraud...

  • Chris Murungaru
    Chris Murungaru
    Dr Christopher Ndarathi "Chris" Murungaru is a Kenyan politician, a former Member of Parliament for Kieni Constituency in Nyeri District and a former Minister of Transport....

  • Moody Awori
    Moody Awori
    Arthur Moody Awori , known as "Uncle Moody", was the 9th Vice President of Kenya from 25 September 2003 to 9 January 2008.-Politics:Awori was born in Butere. He went to Mangu High School in 1935, and later Kakamega High School...

  • David Mwiraria
    David Mwiraria
    David Mwiraria was the Minister for Environment and Natural Resources previously Finance Minister of Kenya until December 2007 when Kenya held its General Elections...

  • Chamanlal Kamani
    Chamanlal Kamani
    Chamanlal Vrajlal Kamani is a business magnate and the patriarch of the Kamani family of Kenya, with interests in hotels, flower farms, infrastructure, telecommunications, project financing, real estate, cotton, as well as Diani Reef Beach Resort in Mombasa and Radisson Whitesands Resort in Goa,...

  • Rashmikant Chamanlal Kamani

External links

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