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August 2003

Which way Goldenberg Commission?

The judicial commission of inquiry appointed to investigate Kenya's biggest cash scandal is faced with a dilemma following the latest developments. Notably, former president Daniel arap Moi's role in the scam has been the commission's nightmare following persistent adverse mentions by key witnesses.
Zachary Ochieng

Moi and his immediate family members, namely his sons Gideon and Philip Moi and his daughter June have been mentioned a number of times for having authorized or received payments pertaining to Goldenberg.

Goldenberg International, a firm owned by businessman Kamlesh Pattni and former director of security intelligence James Kanyotu was registered in 1991 ostensibly to provide and alternative source of forex earnings from gold and diamond jewellery exports.

Faced by a severe forex crunch following the suspension of donor aid, the then government, which was also in dire need of campaign money for the 1992 general election gave Pattni exclusive rights to export gold and diamonds. On his part, Pattni guaranteed the Central Bank of Kenya (CBK) US$ 50 million a year if paid export compensation at the rate of 35 per cent.

But the commission, set up in February seems to be in a dilemma over what to do with Moi, following a declaration by Justice and Constitutional affairs minister Kiraitu Murungi that Moi will not be taken to court over any ills he might have committed while in office.

Evidence adduced to the commission so far indicates that Moi intimidated the Treasury Permanent Secretary Joseph Magari into making illegal payments. The same allegations also came from a former commissioner of customs Joseph Mulili, among other key witnesses.

Taking cognizance of the fact that the commission's findings will be referred to court and that the key player - Moi is unlikely to appear in court, a section of the ruling party MPs now want the commission disbanded to save the government from "unnecessary expenses".

Others argue that the main culprits - namely Moi, Pattni and businessman Ketan Somaia are already known and should be taken to court anon. But their arguments cannot be dismissed off hand. The inquiry into the US$ 1 billion scam is projected to cost a staggering US$34.6million over a three-year period.

The Office of the President currently pays US$ 14000 per month as rent for the commission's secretariat at Kencom House, Nairobi and another US$ 40000 for the commission's sittings at the Kenyatta International Conference Centre (KICC). But a greater chunk of the budget goes to paying emoluments for the commissioners, assisting counsel and subordinate staff numbering about 40. In total, they consume US$ 184000 a month.

Security provision for the commissioners and assisting counsel takes US$ 60000 while another US$ 20000 goes to recording facilities. Other overheads such as transport, food and fuel take unto US$ 76000 a month. In a month, the commission consumes a total of US$ 540000.

Besides the above costs being incurred by the government, those mentioned adversely at the commission have to contend with astronomical legal fees charged by lawyers representing them.

There are about 50 lawyers representing various parties. The highest paid lawyer pockets about US$ 400 an hour while the lowest paid earns half that amount. In total, the lawyers will net US$ 16 million in three years. The total public and private spending will hit 34.6 million in three years.

But with the recent expansion of the commission's mandate, the commission may sit for more than three years, with increased costs to the taxpayer. Initially mandated to find out if gold and diamonds were actually exported from Kenya and how the 35 per cent export compensation was arrived at, the commission is now charged with investigating whether Goldenberg money was used to fund political party campaigns and identify beneficiaries.

It has also been mandated to trace monies and property acquired using Goldenberg money, besides probing bank accounts held by people linked to Goldenberg. Those who have been involved in any form of cover up are also to be investigated. The widened mandate, no doubt, calls for more time and resources.

It is for this reason that a number of MPs ask for the disbandment of the commission. However, the government maintains that Goldenberg must be pursued to its conclusive end and the culprits brought to book.

Analysts, however, argue that the Goldenberg issue may never be resolved following revelations that some key players, especially top figures in the former regime are offloading wealth acquired with the Goldenberg money.

It has also been revealed at the inquiry that huge sums of money from the Goldenberg account were used to finance the 1992 general election and therefore may not be recovered. Vital records on Goldenberg transactions were also reportedly destroyed when the former ruling party sensed defeat on the eve of the 2002 transition general election.

However, the commission's litmus test will be how to deal with organizations, which received millions of shillings from Goldenberg accounts. Already, prominent law firms are up in arms over the publication of their names as some of the beneficiaries of the Goldenberg loot.

City lawyer Mutula Kilonzo, whose firm received millions of shillings says lawyers cannot question their clients about their source of funds when they come for services and argues it would be wrong to penalize lawyers simply because they dealt with Goldenberg.

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