Kenya suspends ministers over graft allegations

NAIROBI (Reuters) - Kenya's prime minister suspended two ministers over corruption allegations on Sunday after the president took the same action against eight officials in moves that will please donors but underline coalition divisions.

Prime Minister Raila Odinga said former ally Agriculture Minister William Ruto and Education Minister Sam Ongeri should step aside for three months to allow further investigations into scandals in subsidized maize and education programs.

"I am taking this action because two recent investigations ... have laid credible foundations for the two ministers to be investigated," the prime minister said in a statement.

Donors and Kenyans have long called for leaders in the unity government to take a tougher line with influential individuals blamed for a raft of major graft cases that have tainted several important sectors of east Africa's biggest economy.

Late on Saturday, President Mwai Kibaki suspended eight officials, also for three months, after they were "mentioned adversely" in reports on the work of the subsidized maize scheme and Kenya's free primary education program.

Donors will welcome the action against senior figures, who include officials from the National Cereals and Produce Board and the permanent secretaries in the ministries of agriculture, education, special programs and prime minister's office.

But many Kenyans said the moves had highlighted rifts between the president and Odinga, the opposition leader who became prime minister after talks to end post-election violence at the start of 2008 that killed at least 1,300 people.

UNHAPPY COALITION

Demonstrating the uneasy relationship between the pair, Kibaki's office said later on Sunday that the president had not been consulted on the suspension of the two ministers -- and that Odinga did not have the authority to take such a step.

Ruto said he was going nowhere.

"I have read very carefully my letter of appointment ... and the appointing authority is very clear," Ruto told local KTN Television. "I have not received any communication from the appointing authority as minister of agriculture and therefore I will continue to discharge my responsibilities."

Tensions have risen since Kibaki allies were implicated in the education scandal, then senior Odinga allies were implicated in the bigger maize procurement case.

The issue of how to deal with high level corruption has soured coalition relations. Among the officials suspended by Kibaki were Mohammed Isahakia, permanent secretary in Odinga's office, and the prime minister's chief of staff, Karol Omondi.

The United States and Britain have both banned a number of Kenyans from traveling to their countries because of graft. Last month, the U.S. ambassador warned that Kenya risked another eruption of violence even before its next presidential poll in 2012 unless reforms were put in place soon.

In an editorial, Kenya's Sunday Nation newspaper said the developments posed a grave danger to the fate of much-needed reforms, and were particularly regrettable because Kibaki and Odinga had been working well together at the start of the year.

"The newfound unity in the coalition saw the country make major strides in a relatively short period of time," it said. "This rosy outlook has been disrupted by the infighting within the cabinet in the last few weeks. Kenyan politicians seem never to miss an opportunity to shoot themselves in the foot."

(Additional reporting by George Obulutsa; Editing by David Clarke and Andrew Roche)