Anglo-leasing Details

KAMANI, JAMES WANJIGI Ref: A. 2-28-06 Hoover-Pratt e-mail, with attached "Githongo dossier", B. 05 Nairobi 3446 Classified by Econ Counselor John Hoover for reasons 1.4 (B) and (D). 1. (S) SUMMARY AND ACTION REQUEST: Embassy Nairobi hereby seeks security advisory opinions under section 212(F) of the Immigration and Nationality Act, Proclamation 7750, suspending entry into the United States of the following individuals: -- Alfred Getonga, -- Anura Perera, -- Deepak Kamani, -- Joseph "Jimmy" Wanjigi. Ref B is Embassy Nairobi's request for the suspension of entry into the U.S. (subsequently approved by the Department) of former Minister Christopher Murungaru for his central role in a number of grand-scale corruption cases under the administration of Kenyan President Mwai Kibaki. This cable should be read in conjunction with ref B, as it expands the case used against Murungaru to include chief co-conspirators Getonga, Perera, Kamani, and Wanjigi. All were central figures in a network of corrupt government officials and private sector dealmakers that has systematically stolen, or attempted to steal, a cumulative sum as high as $700 million over the past three years by exploiting a secretive system of government security- related procurement contracts in Kenya. These activities have had a serious adverse effect on U.S. national interests in Kenya, which include strengthening democratic institutions and the rule of law and fostering economic development. This cable also draws heavily on, and should be read in conjunction with, ref A. Ref A is the first- hand account detailing high-level graft and cover-up in the Kibaki administration made available to the public in January 2006 by John Githongo, the President's anti- corruption advisor who went into self-imposed exile in February 2005. The so-called Githongo dossier is a credible and detailed account documenting graft and cover- up on the part of the aforementioned individuals. Embassy reporting and significant flows of sensitive intelligence corroborate Githongo's revelations. With indictments looming, the Government of Kenya has ordered in recent days that all four men surrender their passports and any personal firearms they may possess. Further, the Kenya Anti-Corruption Authority strongly supports visa revocation against the four individuals in light of the Commission's own evidence of wrongdoing. 2. (S) Getonga has a valid B1/B2 visa expiring July 21, 2006; Kamani has a valid B1/B2 visa expiring May 14, 2006; Wanjigi has previously held visas, the latest being an A2 which expired in 2003. Getonga, Kamani, and Wanjigi are Kenyan nationals; Perera's nationality is unknown at this time. Post recommends Getonga, Perera, Kamani, and Wanjigi be found ineligible under Presidential Proclamation 7750. Please advise ASAP. END SUMMARY AND ACTION REQUEST. ANATOMY OF A CORRUPTION NETWORK ------------------------------- 3. (C) In April 2004, information emerged publicly that a shadowy firm, Anglo Leasing and Finance Limited (Anglo Leasing), had secured two bogus contracts with the Government of Kenya (GOK). The first was for the supply of new secure passport issuing equipment, and the second for the construction of a police forensics lab. Together, the two contracts were worth a combined $90 million. Anglo- Leasing, it turned out, was no more than a "PO Box company" with fictitious offices in the UK and Switzerland and no identifiable officers or management. The Anglo-Leasing scandal was aggressively investigated at the time by the then-Permanent Secretary for Ethics and Governance, John Githongo. Githongo's investigations revealed Anglo-Leasing to be only the tip of an iceberg of grand-scale theft. They forced the Ministry of Finance to suspend payments and order forensic audits on 18 secretive security-related procurement contracts that followed a very similar pattern to that found in the Anglo-Leasing cases. 4. (C) This pattern involved a small clique of private- sector dealmakers working together with an equally small cadre of senior government conspirators. Together, they would generate proposals for large-scale government procurement contracts. Because these contracts involved national security equipment of one kind or another, they fell well outside the normal (and already weak) systems of scrutiny and oversight found in other parts of the GOK and Parliament. The proposals frequently requested goods not needed or desired by the line ministry targeted to pay for them, and involved large upfront payments or commissions financed by loans arranged by the businessmen. The goods or services were either vastly overpriced or not supplied at all. This kind of scam generated enormous illicit profits, much of which were recycled by the businessmen who received the payments to the concerned GOK officials and other middlemen for personal gain or to finance future political campaigns 5. (C) Githongo resigned from his position following several death threats in February 2005, and has been living in self-imposed exile in the United Kingdom ever since. During his time in exile, however, Githongo consolidated all of the evidence at his disposal and began on January 22, 2006, to release portions of it to the Kenyan public through the nation's largest daily newspaper. His now- public 19-page summary dossier of evidence paints a convincing, coherent, and credible picture of the activities of the corruption network described above. Moreover, both in its details and overarching narrative, his account is strongly corroborated time and again by the Embassy's own reporting, as well as sensitive reporting in other channels dating to mid-2004. 6. (S) Githongo's summary dossier directly implicates Murungaru, Getonga, Perera, Kamani, and Wanjigi, as well as others, as the core drivers of the corruption network that generated the Anglo-Leasing and similar scandals. Getonga used his position as Personal Assistant to the President to connect Perera and Kamani, the two private sector dealmakers (who had operated for years doing similar deals under the previous administration), to Murungaru and other complicit senior-level officials in the Kibaki administration. In turn, Wanjigi, the son of a former Minister and nephew of a Permanent Secretary already arrested for his involvement in Anglo Leasing, was the local middleman, channeling contracts and payments in both directions as the bogus procurement scams were consummated. ALFRED GETONGA -------------- 7. (S) As Personal Assistant to the President, Alfred Getonga used his position in the Office of the President (OP) to push forward fraudulent contracts in the OP and in other ministries, and then divert a large portion of these government resources for political campaign fundraising, and for personal gain. In Githongo's account, former Justice Minister Kiraitu Murungi (who has also been implicated in covering up the Anglo-Leasing scandal) tells Githongo that nearly all of the suspect contracts Githongo was investigating were engineered by Alfred Getonga and others, and that the contracts were designed to raise funds for the NARC political party under the direction of Getonga and Murungaru. Githongo's evidence implicating Getonga is so substantial that he informed President Kibaki of Getonga's direct involvement in Anglo-Leasing in at least two separate briefings for the president. Our own reporting strongly corroborates Githongo's accounts, and the Embassy acted on it in a similar way. On at least two occasions in 2005, when solicited by President Kibaki for advice and information in one-on-one meetings, the Ambassador specifically named Getonga as a significant source of corruption in Kibaki's administration. 8. (SBU) Since the Githongo report has been published, the OP has announced publicly that Getonga is no longer employed there. On February 14, 2006, the Presidential Press Service announced that Getonga's contract had expired and would not be renewed. 9. (S) A reliable Embassy source in the telecom sector recently reported that Getonga was also at the center of the 11th hour cancellation of the tender for a second national landline phone operator in Kenya in July 2004. Thanks to his position, Getonga was aware ahead of time of the winner. Invoking the President's name, he approached the company slated to win and successfully solicited the gratis contribution of 5% of the shares under the pretense that such a gesture was needed to guarantee winning the tender. When Kibaki learned of this intrigue through his son (who was supporting a rival consortium), he angrily ordered the entire tender cancelled, setting back telecom reform and service delivery in Kenya by several years. ANURA PERERA ------------ 10. (S) Reliable private sector contacts who have done business in Kenya for many years regularly cite Anura Perera as a long-standing corrupt dealmaker whose activities far pre-date the Anglo Leasing cases. He is nonetheless very difficult to trace, and has proven a formidable adversary for law enforcement personnel by operating indirectly through a network of dummy corporations in Switzerland, the UK, and elsewhere which act as conduits for the proceeds of the inflated or outright bogus procurement contracts he has engineered over the years. The Githongo dossier, together with sensitive reporting, nonetheless provides compelling circumstantial evidence against Perera for his role in a series of security and military-related procurement scams. In large part as a result, Perera was ordered by the Kenyan police to surrender his passport and firearm on February 21, 2006. (Note: It is unlikely Perera is in Kenya at this time; nor is it clear what kind of passport he carries or under what nationality he travels. End note).11. (S) In the Githongo dossier, an associate of Kamani and Perera, working from an office building owned by Perera in Nairobi, is reported to have set up bogus companies, including Anglo-Leasing, in 1997 for purposes of engaging in fraudulent government procurement deals. As he was unraveling the Anglo-Leasing secure passport scam, Githongo was indirectly threatened by Perera through then-Justice Minister Murungi. Meeting with Githongo, Murungi cited a file compiled by a local lawyer whom Murungi stated was acting on Perera's behalf. He told Githongo that an unpaid debt owed by his father was really owed to Perera himself. Githongo explained the connection: Murungi "warned me to 'go easy' on 'our friends' Murungaru and Alfie (Getonga)... The message Hon. Kiraitu (Murungi) was communicating very directly to me was that Mr. Perera wanted me to to 'turn off the heat'" so that his father's debt could be "settled amicably." 12. (S) Githongo's report goes on to reference "an assortment of reliable sources, including within the Kenyan military" who told Githongo that "Perera was involved in a range of questionable projects in the defense and security sector and had developed a reputation for paying sizable kickbacks." Perera, for example, is widely believed to be at the center of the Nexus project, a military communications complex on the southern outskirts of Nairobi. Three years after the $36.9 million project was completed, the Kenyan military has yet to occupy the complex. The Kenyan Department of Defense (KDOD) tender committee, which should have overseen implementation of such a large contract, has publicly denied ever being aware of it. KDOD sources told Embassy DAO in mid-2005 that the project was likely without any specific military purpose or plan in mind, but rather for personal gain on the part of top military brass. Perera's connection is through another phantom European company, Nedermar BV Technologies, for which there is no information on the internet. It won the secretive contract to build the communications center on a SIPDIS turn-key basis, but its origins and officers remain a mystery. Kenya Anti-Corruption Commission (KACC) Director Aaron Ringera told the Embassy in mid-2005 that he had used evidence gathered by KACC on the Nexus project to persuade Kibaki to take action against former Chief of Staff Joseph Kibwana. (Note: Kibaki went half-way, asking Kibwana to retire early in August 2005. End note). Judge Ringera told Econ/C and other diplomats in February 2006 that Perera was the private sector mastermind behind the Nexus deal. 13. (S) Perera is also believed to be the mastermind behind the procurement of a naval frigate for the Kenyan Navy beginning in 2003. Through a fictitious firm named Euromarine, Perera arranged $57 million in financing for a ship constructed in a Spanish shipyard at a cost estimated to be 3-4 times more than its actual value. The frigate deal was one of the 18 contracts investigated and audited after the Anglo-Leasing scandals were revealed and the GOK has stopped payments on the vessel. Compelling sensitive reporting places Perera at the very center of the frigate deal, and in multiple conversations with Embassy officers, Kenya's Permanent Secretary of Finance has repeatedly confirmed the facts of the scandal as outlined here. DEEPAK KAMANI ------------- 14. (S) Deepak Kamani joins Anura Perera as the other long-standing private sector mastermind of fraudulent security-related procurement contracts in Kenya over the years. Kamani family businesses first broke into the business of exploiting security contracts in the mid-1990s after forming close ties with the then-Permanent Secretary of Internal Security in the Office of the President. The current Permanent Secretary of Finance, who held the same position at the end of the Moi administration, recently told the Embassy that Kamani had unnaturally open access to Treasury officials in the late 1990s, to the point that he mistakenly believed at one time that Kamani was an employee of the ministry. When he assumed his current position for a second time as PS Finance in 2004, this same official warned counterparts in the Office of the President to cease doing business with Kamani, but to no avail. 15. (S) Kamani cut his teeth in a multi-million dollar contract to supply boilers to the Prisons Department in the early 1990s. The deal continues to be investigated by Kenya's Auditor General because the boilers supplied were second hand or unserviceable. Kamani's companies have also been directly linked to a $25 million contract in 1997 to supply a digital telecommunications network to the Prisons Department through LBA Systems, a shell company registered in Scotland. More than five years after the network was supposedly installed and commissioned, it remains inoperable. In a similar case, another shadowy Kamani- owned company, Infotalent Systems, signed a $36 million deal to supply telecommunications equipment to the Office of the President. The deal is believed to be among the 18 suspect contracts frozen by the Minister of Finance in 2004 for forensic audit and investigation. 16. (C) Kamani is directly implicated in the two Anglo- Leasing scams. He enjoyed close ties and had regular access to Zakayo Cheruiyot, the Permanent Secretary of Internal Security who was indicted in February 2005 and is now on trial for the two Anglo-Leasing cases. Kamani's sister is named as the director of a company in the UK that occupies the address given as that of Anglo-Leasing in the secure passport deal, and his son is listed as director of a company occupying the address listed as that of Anglo- Leasing's in the police forensic lab scam. Finally, the Githongo dossier directly links Kamani to the two Anglo- Leasing scandals. In his account, Githongo details his conversation with then-Finance Minister David Mwiraria about the mysterious return of some of the money paid on the Anglo-Leasing forensics lab project. Mwiraria, despite previously claiming not to know who stood behind Anglo- Leasing, made a "startling admission" which directly implicated both Kamani and himself when he told Githongo that the money was only returned after Mwiraria had ordered an associate to contact Kamani by phone to do so. JIMMY WANJIGI ------------- 17. (S) Like Getonga, Jimmy Wanjigi's role in the Anglo- Leasing and similar scandals has been to facilitate and channel contracts, communication, and money between the private businessmen like Perera and Kamani on the one hand, and GOK agencies and officials responsible for procurement on the other. Like Getonga, he is also a relative newcomer to high-level graft, having come on the scene following the 2002 electoral victory of Kibaki's coalition. Early in the Kibaki administration, he traded on his contacts with members of Kibaki's family (probably without Kibaki's knowledge) to break into Kamani and Perera's networks, and to insist on getting a cut from the security-related procurement scams the latter had become experts in engineering. One of his first such deals was an extension of a Kamani-origin contract begun under the previous administration to supply vehicles to the Office of the President. The overpriced contract reportedly netted Wanjigi and Murungaru $5.6 million. 18. (S) Wanjigi also turns up later as a participant in Perera's massively overpriced naval frigate deal, working behind the scenes with Perera, Getonga and others to work out a way to move the deal forward, despite the risk of public exposure. After the February 2005 resignation of John Githongo, he is also widely believed to have worked closely with Getonga to put out a number of false rumors to discredit Githongo by, for example, circulating rumors and planting stories in the media alleging that Githongo was a British spy and a child molester. Githongo himself believes Wanjigi and Getonga were behind the death threats that forced him to resign and go into self-imposed exile. According to Githongo's written account, the very day Githongo succeeded in having President Kibaki sack some officials since indicted for their involvement in Anglo- Leasing, Finance Minister Mwiraria came to Githongo's office "and warned that Mr. Jimmy Wanjigi had sworn to kill me." ADVERSE EFFECT ON U.S. NATIONAL INTERESTS ----------------------------------------- 19. (C) The corruption network that perpetrated the Anglo Leasing and similar corruption scandals has had serious adverse effects on three areas of U.S. interests specified in the proclamation, which are also three of the Embassy's top Mission Performance Plan (MPP) priorities: promoting democracy and good governance (starting with the stability of the government); encouraging sustainable economic development; and, combating terrorism and transnational crime. 20. (C) Before coming to power in December 2002, the National Rainbow Coalition (NARC) adopted a "zero- tolerance" anti-corruption posture. Public expectations were high that the new government would break with the corrupt excesses of the Moi administration, and international donors made plans to help bolster Kenya's nascent anti-corruption effort. However, by December 2003, barely a year into NARC's tenure in office, high-level officials were engaging in precisely the corrupt practices they had vowed to stop, helped in great part by the seamless transition into the new administration provided by Getonga, of the corruption network led on the private sector side by Kamani, Perera and Wanjigi. 21. (C) The Kenyan Government's ability to successfully battle corruption touches directly on the legitimacy and thus the stability of the Government itself. Proper enforcement of the rule of law is thus central to Kenya's political and economic development.source a