Kenya

Musalia Mudavadi dragged into Sh1.3bn Anglo-Leasing graft case

Musalia Mudavadi dragged into Sh1.3bn Anglo-Leasing graft case

Transport Chief Administrative Secretary Chris Obure has dragged Amani Congress (ANC) leader Musalia Mudavadi into the Sh1.3 billion Anglo-Leasing corruption scandal.

At the opening of his defence testimony yesterday, Dr Obure told a Nairobi court that Mr Mudavadi was involved in one of the Anglo-Leasing projects, which involved procurement of equipment for the Postal Corporation of Kenya (PCK).

The CAS said Mr Mudavadi wrote to him on May 9, 2002 seeking direct procurement of equipment for upgrading postal services in the country.

“Mudavadi informed me in the letter that it was the government's intention to develop and upgrade the PCK," Dr Obure told Senior Principal Magistrate Anne Mwangi.

Mr Mudavadi was at the time the Vice-President as well as Transport and Communication minister, while Dr Obure was Finance minister under President Daniel Moi.

The case relates to one of the Anglo-Leasing scandal projects, in which 18 high-value government security contracts were allegedly awarded to fictitious companies, leading to loss of billions of shillings of public funds.

The government of Kenya signed, on a single-sourcing basis, a contract with a US-based company, Spacenet Corporation, worth US dollars 11,787,000 (approximately Sh1,301,284,800).

The contractor was to supply equipment and services to the PCK.

Direct procurement

The equipment were named as VSat hardware, computer servers, software licences and other communication services.

Dr Obure said Mr Mudavadi sought his permission to directly procure the equipment from the US company in order to interlink more than 900 post offices in Kenya.

The letter reportedly informed Dr Obure that upgrading of the postal services would ease payment of teachers, postal staff and other civil servants at the grassroots.

While denying that he abused the powers of his office as Finance minister, Dr Obure said he believed Mr Mudavadi when he told him the government was upgrading postal services across the country.

Dr Obure told the trial magistrate that the former Vice President told him that postal services would be improved through a broadband data network that would interlink all the post offices in the country.

Dr Obure further said Mr Mudavadi sought his assistance in achieving the government's intention.

“The new technology once put in place would ease transfer of payment for teachers and and other government entities," said Dr Obure.

The project would span 10 years, he added.

The court heard that Mr Mudavadi’s request regarding direct procurement was necessitated by the fact that the Finance ministry was the financier.

Contract documents

Upon receipt of the letter, Dr Obure said he sought advice from the Director of Procurement in the Finance ministry.

"The director in my former ministry advised that Mudavadi should forward to them all the contract documents in relation to the project,” Dr Obure testified.

The court heard that the documents were then forwarded to the procurement department for technical advice and action.

He said he also sought a legal opinion on the project from the then Attorney-General, who told him that the contract was legally viable.

On getting the AG's nod, Dr Obure told the court that he signed the contract documents committing the government to the project.

Mr Obure was accused alongside former Transport and Communication Permanent Secretary Sammy Kyungu and former Finance Secretary in the Ministry of Finance, Mr Samwel Chamobo Bundotich.

Their co-accused, former Postmaster General Francis Mellops Chahonyo, died during pendency of the trial.

For his part, Mr Kyungu told the court he was authorised by Mr Mudavadi to sign the contract documents on behalf of the ministry.

He denied any wrongdoing, saying he never abused the authority of his office in signing the contract for upgrading the postal services. The defence hearing continues.