Kenya: Officials, Banks in $1bn Corruption Probe

Publisher Name: 
Financial Times

At least $1bn of illegal gains made by former and
serving politicians and civil servants in Kenya has
been uncovered in a secret international investigation
over the past six months, according to Kenyan
anti-corruption officials.

The assets identified include shares in two London
hotels and funds generated partly through foreign
exchange transactions at leading international banks.

John Githongo, Kenya's permanent secretary for
governance and ethics, who has co-ordinated the
investigation, told the Financial Times his department
was in a position to initiate procedures towards
freezing some of the assets.

One series of transfers under investigation involves
$13m moved to accounts at Citibank and Union Bancaire
Prive in Switzerland and Equatorial Bank in London,
according to investigators. Citibank and Union
Bancaire Prive have been named in investigations into
the laundering of public money by General Sani Abacha,
the former Nigerian dictator. Neither bank could
provide immediate comment on Monday night.

The transfers, dating back to October 27 1992, have
been linked by forensic accountants to Goldenberg
International, a Kenyan company at the centre of a
public inquiry.

The commission of inquiry was appointed earlier this
year by President Mwai Kibaki to probe allegations
that top officials in the former government of Daniel
arap Moi used the companies to generate hundreds of
millions of dollars in state subsidies and financing
for fictitious gold and diamond exports.

According to documents presented at the inquiry, New
York branches of Citibank and the now defunct
Equatorial Bank were used in a series of multi-million
dollar foreign exchange transactions connected to
Goldenberg.

Investigators are also seeking information from ABN
Amro, Barclays, the former ANZ Grindlays,
Indosuez-Sogem Aval, Middle East Bank, Standard
Chartered and many Kenyan banks.

In contrast to actions by other African countries
against alleged corrupt activity under past
governments, Kenya's efforts to recover state funds
appear to target members of the former president's
entourage as much as Mr Moi himself. Mr Moi governed
the country for 24 years before peacefully
relinquishing power last year.

Kenyan anti-corruption officials have employed Kroll,
the business investigation consultants, to help trace
money obtained illegally through Goldenberg and other
schemes

.

A senior Kroll source said the total of illegal funds
could be between $3bn and $4bn, equivalent to about a
third of Kenya's annual economic output.

AMP Section Name:Money & Politics