400 public officers with secret offshore accounts
As the nation awaits President Uhuru Kenyatta’s comprehensive statement on his family’s wealth held in offshore accounts, it has emerged that at least 400 state and public officers have opened such accounts over the last decade.
While the Constitution declares that a state or public officer shall not maintain a bank account outside Kenya, the 12th Parliament diluted the principle when it enacted the Leadership and Integrity Act with exemptions.
The law allows state officers to operate such accounts under conditions stipulated in the Act— including seeking clearance from the Ethics and Anti -Corruption Commission (EACC).
The Act says a state officer who has “reasonable grounds for opening or operating a bank account outside Kenya to apply to the Ethics and Integrity Commission for approval”.
Consequently, EACC says it granted permission to at least 453 officers to own and operate secret accounts since 2012, according to its 2017-2018 annual report.
During the same period, the commission received applications and processed eight notifications for bank account closures, four of which were executed in the 2017/18 financial year.
The revelations come amid calls for repatriation of foreign-held wealth to help grow the struggling Kenyan economy after it emerged that Mr Kenyatta’s family has billions of shillings worth of properties and liquid assets stashed abroad.
The first family, in a global exposé christened the Pandora Papers, was listed among powerful global figures holding multi-million dollar properties in foreign countries as well as Sh3.3 billion worth of stocks and bonds, which critics say should be liquidated and sent back to jumpstart the ailing economy.
Most of the accounts held by the Kenyattas were opened before the 2010 Constitution and the Integrity Act was passed two years later.
The exposé contained in 12 million files leaked to the International Consortium of Investigative Journalists (ICIJ) did not accuse the first family of involvement in any illegalities.
According to EACC, it received and approved 15 applications from state and public officers to open or continue to operate bank accounts outside Kenya in the 2017-18 financial year.
Once a public officer secures the commission's green light to operate the overseas account, they are required to submit annual bank statements to the commission not later than January 31 of each succeeding year.
But not all state officers complied with these rules, with EACC saying it is investigating 191 public officers working in foreign missions illegally operating secret bank accounts abroad.
An audit by the agency of bank accounts held by public officers outside Kenya uncovered the unauthorised overseas accounts run by the 191 officers in the Ministry of Foreign Affairs.
According to CEO Twalib Mbarak, the commission has further identified 58 officers who, despite approval for their bank accounts held abroad, have failed to furnish the commission with their annual bank statements.
And MPs are now blaming the weak 2012 law for this mess.
Rarieda MP Otiende Amolo said yesterday that the Leadership and Integrity Act lowered the standards that had been contemplated by the drafters and given the state officers the leeway to operate overseas bank accounts.
“The drafters were categorical that no state officer should maintain a foreign bank account outside Kenya. The requirement that a state officer should seek the authority of the Commission weakens that intention. It lowers the standard,” he said, saying all one can cite authorisation from the commission to justify their position.
Ugunja MP Opiyo Wandayi maintained his opposition to such a law, arguing that it could compromise Kenya as a player in the global economy.
“Such a law is not proper in the globalised economy and it puts restrictions on Kenyans who want to invest in international markets. We can’t afford to be island in the international economy,” he said.
Former Mandera MP Abdikadir Mohamed, who chaired the Constitution Oversight and Implementation Committee (CIOC) in the 10 Parliament, said there are enough laws governing state officers and their finances and stated that the challenge is in the implementation of such laws.
“Implementation is always the problem,” he said, citing the Leadership Integrity Act, which he midwifed when he chaired the committee.
The law obligates all state and public officers to declare their wealth at the end of every year, a medium the former MP argues is sufficient for all state officers to make their revelations on such matters.
“At the end of every year, state officers must sign their wealth declaration forms and if there is an issue they are under an obligation to make it public. Anything else is criminal.”