Kenya makes first conviction in Anglo Leasing graft scam

NAIROBI (Reuters) - A Kenyan court found a former senior government official guilty of abuse of office and fined him 3 million shillings ($35,400) on Wednesday, the first conviction related to the multi-million dollar Anglo Leasing corruption scandal.

The scandal, which started before the 2002 election of President Mwai Kibaki, involved state contracts worth hundreds of millions of dollars being awarded to non-existent firms.

Kibaki came to power on a platform to stamp out endemic corruption but not one government minister has been convicted of graft since he took office, and financial malfeasance remains a serious drag on east Africa’s biggest economy.

Issuing Wednesday’s verdict, Judge Lucy Nyambura ordered former home affairs permanent secretary Sylvestor Mwaliko to either pay the fine or face three years of imprisonment.

The Anglo Leasing scandal involved government funds being paid to shadowy foreign companies for services ranging from forgery-proof passports to naval ships and forensic laboratories - which never materialized.

“The prosecution has proved its case beyond reasonable doubts that the accused signed the documents of the contract for the tender of new generation passports awarded to Anglo Leasing without the knowledge of the immigration department or verifying the status of the company before agreeing to enter into any contract,” Nyambura said in her ruling.

Mwaliko’s lawyer was not immediately available for comment.

Many Kenyans feel Mwaliko was not a major architect of the scandal and that those responsible continue to enjoy immunity from a political elite that protects its own interests.

No government ministers or senior officials are facing trial over the scandal, which came to light in April 2004 when questions were raised in parliament about why the government overpaid on the tender for the new generation passports.

In a new gesture to tackle graft, the attorney general asked several countries in July, including Switzerland, Japan, the United Kingdom and Jersey, to help it recover corrupt cash stashed in overseas accounts.

But political analysts perceive a general lack of political will to root out corruption.

Lawmakers on Tuesday struck down a report by a powerful parliamentary committee that had accused a cabinet minister and the central bank governor of entering a banknote printing contract that wasted millions of dollars in public funds.

The report had called on both officials to resign for committing the government to a joint venture with De La Rue PLC to print banknotes.

The committee chairman regretted the ruling, saying he had hoped parliament would endorse the report to send a “clear message to the international community” that Kenya’s political leaders were serious about tackling corruption.

A 2010 report by Transparency International-Kenya showed that 97 percent of Kenyans viewed corruption as a major vice in their economy and society.

Reporting by Humphrey Malalo; Writing by Yara Bayoumy; Editing by Richard Lough and Mark Heinrich