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LOOKING BACK AT 2007: Govt vs Graft:Who won?
THISDAY REPORTER
Dar es Salaam
THE spectre of corruption cast a long shadow over Tanzania in 2007, prompting a good number of prominent politicians and senior government officials to come out of their shells in a bid to clear their names amidst regular newspaper headlines of bribery, graft and fraud.
It was a year in which the government's resolve to fight corruption was seriously put to the test, as the political opposition camp came up with the now-infamous 'List of Shame' which directly fingered several high-ranking public officials for alleged involvement in corruption dealings.
During the year under review, questions were raised both here at home and abroad about the effectiveness of the state-run Prevention and Combating of Corruption Bureau (PCCB) in tackling high-level graft in the country.
With the exception of the launch of prosecution proceedings against Tanzania's former ambassador to Italy, Prof. Costa Ricky Mahalu, and others over a 2 million euro (approx. 3bn/-) corruption case, there was precious little to write home about.
The following are the pick of top investigative reports into corruption allegations published by THISDAY over the past year:
Corruption at BoT
The biggest reported scandals of all invariably revolved around the Bank of Tanzania (BoT) and its embattled governor, Dr Daudi Ballali, over alleged massive misuse of public funds.
The well-documented misappropriation of funds in the BoT's external payment arrears (EPA) account dominated many of the year's headlines, with estimations showing that up to $200m was swindled through this particular channel.
Auditors, for instance, are understood to have uncovered that the central bank dished out a staggering $30.8m (approx. 40bn/-) to one 'shell' company going by the name of Kagoda Agriculture Limited, in very dubious circumstances believed to have also involved massive fraud and collusion amongst senior officials at the bank.
The evidently-inflated costs of the BoT's controversial Twin Towers headquarters project in Dar es Salaam, as well as construction of new branch offices in Zanzibar, were also widely reported last year; according to various experts, the Twin Towers were overpriced to at least four times the value of similar buildings in some of the world's most expensive cities such as London, New York and Tokyo.
Other allegations of corruption at the BoT involved the gold auditing contract between the central bank and Alex Stewart Assayers, who were paid more than $70m over a period of just three years; highly-suspect, multi-million dollar payments to Mwananchi Gold Company Limited, Deep Green company, Tangold, Meremeta gold mine and others; payments of dubiously-excessive legal fees; and a controversial, multi-billion shilling contract for the printing of new bank notes.
But no action has so far been taken against Ballali or any other BoT official over these allegations, and members of the public are now anxiously awaiting the release of a special audit report on the central bank ordered at the behest of donor community interests including the International Monetary Fund (IMF).
And although reports of Ballali's voluntary resignation surfaced in mid-December, the government had neither confirmed nor denied the reports by the end of the year.
An 'unholy' alliance
During the year under review, some major allegations of corruption and abuse of public office were directed against former president Benjamin Mkapa and senior cabinet minister Daniel Yona, over the privatization of the previously state-run Kiwira Coal Mine Limited in Mbeya Region.
Investigations by THISDAY revealed that Mkapa, in his capacity as president, and Yona (then energy and minerals minister in Mkapa's cabinet) used their powerful positions in public office to fast-track the privatization of the potentially-lucrative Kiwira coal mine and its subsequent acquisition by Tanpower Resources Ltd, a private company they ( Mkapa and Yona) had jointly formed.
Tanpower Resources, whose shareholders comprises almost exclusively close relatives of both Mkapa and Yona, currently holds 85 per cent shares in the renamed Kiwira Coal and Power Limited, which is now in line to benefit from a controversial, $271.8m (approx. 340bn/-) contract with the state-run Tanzania Electric Supply Company (TANESCO) for the supply of 200 megawatts of electricity to the national power grid.
The remaining 15 per cent shares in the Kiwira company are still formally held by the government of the day.
Our investigations further revealed that Mkapa and first lady Anna Mkapa jointly formed their own private company - ANBEM Limited - in 1999 (while they were still at State House), and went on to actively engage in private business dealings through this company again while still at Ikulu.
The registered office of ANBEM Limited was located within the official State House premises, and the company acquired loans of up to 750m/- from the National Bank of Commerce and CRDB Bank.
A lively national debate on the ethical considerations of these actions by the then State House couple emerged during the course of the year, with contributors including Mzee Joseph Butiku - former close aide to the late Mwalimu Nyerere - who publicly challenged Mkapa to come out and defend himself against allegations of corruption and abuse of office.
But with both Mkapa and Yona so far opting to remain extremely tight-lipped over the allegations, the PCCB director general Edward Hosea has already declared that the government's anti-corruption watchdog will not investigate the ex-president - purportedly because doing so would be going against the directives of incumbent President Jakaya Kikwete.
Richmond power generation deal
In October, THISDAY began publishing a series of exclusive reports on the 172.9bn/- Richmond power generation scandal following the release of a scathing new report on the deal by the government's procurement watchdog the Public Procurement Regulatory Authority (PPRA).
The reports highlighted key findings of the PPRA report, suggesting that there was interference by higher authorities in government in the deal and underlining the fact that the contract was signed ''at night under strange circumstances.''
Following the THISDAY reports serialization, the National Assembly appointed a parliamentary committee to conduct a fresh probe into the Richmond affair � even though the PCCB had already declared the deal to be 'clean' after conducting its own investigation.
The chairman of the parliamentary probe team, Dr Harrison Mwakyembe, confirmed as the year was winding down that the committee's report has already been formally submitted to the National Assembly Speaker's office in Dar es Salaam, ready for discussion at the next Bunge session.
Defence sector contracts
The 28 million pounds sterling (approx. 70bn/-) military radar scandal continued to develop during the year under review, with revelations that local businessmen Shailesh Pragji Vithlani and Tanil Somaiya were both questioned under oath in connection with their involvement in the deal as alleged 'kickback agents.'
But surprisingly, the PCCB has not filed corruption allegations against any suspect so far. While Somaiya has avoided criminal charges altogether, Vithlani was charged with perjury and lying to an investigating officer over the radar affair. Despite an arrest warrant issued against him, Vithlani remains at large.
The Ministry of Defence and National Service has also been in the spotlight over other corruption allegations involving the purchase of new military trucks and helicopters from European sources with Vithlani in particular again in the spotlight as the facilitating 'agent' .
Buzwagi gold deal
The Minister for Energy and Minerals, Nazir Karamagi, found himself at the centre of allegations of corruption following the signing of the Buzwagi mineral development agreement. Opposition members of parliament claimed that the contract was signed under dubious circumstances and demanded an official investigation.
President Kikwete later appointed a mining sector review committee chaired by Judge Mark Bomani, that was mandated to review all major mining contracts in the country, including the Buzwagi deal. The committee is still at work.
Hunting, forestry sector scandals
The tourist hunting and forestry sectors continued to attract their fair share of corruption allegations during the year under review. A study by the international conservation group TRAFFIC discovered that the government loses up to $58m (approx. 75bn/-) each year through poor governance and rampant corruption resulting in illegal logging and exports of forest products.
More than half of the 28 logging companies studied in the TRAFFIC report had close links to senior government officials, some dealing directly with forestry issues and some not so directly. Similar wanton corruption was reported in the hunting sector.
The government responded to the allegations by overhauling the Ministry of Natural Resources and Tourism and replacing key department heads, including the powerful director of the wildlife division, Emannuel Severre.
Miscellaneous
Allegations of corruption in the purchase of real estate property at vastly-inflated prices by the National Social Security Fund (NSSF) and the Public Service Pensions Fund (PSPF) from one particular company - Quality Group Limited - remain at large. The PCCB says it has been investigating these transactions, but is yet to make any formal announcement on the latest developments in its probes.
Another suspect deal involving a government decision to sell an expensive property in the Dar es Salaam city centre at a ridiculously cheap price, and without following procedure, also received extensive coverage.
The piece of land valued at 1.85bn/- was sold to El-Hillal Minerals (Tanzania) Limited for just 440m/-. Following publication of a series of reports about the deal by THISDAY, the government finally told the private buyer to pay an extra 1.41bn/- for the plot.
THISDAY REPORTER
Dar es Salaam
THE spectre of corruption cast a long shadow over Tanzania in 2007, prompting a good number of prominent politicians and senior government officials to come out of their shells in a bid to clear their names amidst regular newspaper headlines of bribery, graft and fraud.
It was a year in which the government's resolve to fight corruption was seriously put to the test, as the political opposition camp came up with the now-infamous 'List of Shame' which directly fingered several high-ranking public officials for alleged involvement in corruption dealings.
During the year under review, questions were raised both here at home and abroad about the effectiveness of the state-run Prevention and Combating of Corruption Bureau (PCCB) in tackling high-level graft in the country.
With the exception of the launch of prosecution proceedings against Tanzania's former ambassador to Italy, Prof. Costa Ricky Mahalu, and others over a 2 million euro (approx. 3bn/-) corruption case, there was precious little to write home about.
The following are the pick of top investigative reports into corruption allegations published by THISDAY over the past year:
Corruption at BoT
The biggest reported scandals of all invariably revolved around the Bank of Tanzania (BoT) and its embattled governor, Dr Daudi Ballali, over alleged massive misuse of public funds.
The well-documented misappropriation of funds in the BoT's external payment arrears (EPA) account dominated many of the year's headlines, with estimations showing that up to $200m was swindled through this particular channel.
Auditors, for instance, are understood to have uncovered that the central bank dished out a staggering $30.8m (approx. 40bn/-) to one 'shell' company going by the name of Kagoda Agriculture Limited, in very dubious circumstances believed to have also involved massive fraud and collusion amongst senior officials at the bank.
The evidently-inflated costs of the BoT's controversial Twin Towers headquarters project in Dar es Salaam, as well as construction of new branch offices in Zanzibar, were also widely reported last year; according to various experts, the Twin Towers were overpriced to at least four times the value of similar buildings in some of the world's most expensive cities such as London, New York and Tokyo.
Other allegations of corruption at the BoT involved the gold auditing contract between the central bank and Alex Stewart Assayers, who were paid more than $70m over a period of just three years; highly-suspect, multi-million dollar payments to Mwananchi Gold Company Limited, Deep Green company, Tangold, Meremeta gold mine and others; payments of dubiously-excessive legal fees; and a controversial, multi-billion shilling contract for the printing of new bank notes.
But no action has so far been taken against Ballali or any other BoT official over these allegations, and members of the public are now anxiously awaiting the release of a special audit report on the central bank ordered at the behest of donor community interests including the International Monetary Fund (IMF).
And although reports of Ballali's voluntary resignation surfaced in mid-December, the government had neither confirmed nor denied the reports by the end of the year.
An 'unholy' alliance
During the year under review, some major allegations of corruption and abuse of public office were directed against former president Benjamin Mkapa and senior cabinet minister Daniel Yona, over the privatization of the previously state-run Kiwira Coal Mine Limited in Mbeya Region.
Investigations by THISDAY revealed that Mkapa, in his capacity as president, and Yona (then energy and minerals minister in Mkapa's cabinet) used their powerful positions in public office to fast-track the privatization of the potentially-lucrative Kiwira coal mine and its subsequent acquisition by Tanpower Resources Ltd, a private company they ( Mkapa and Yona) had jointly formed.
Tanpower Resources, whose shareholders comprises almost exclusively close relatives of both Mkapa and Yona, currently holds 85 per cent shares in the renamed Kiwira Coal and Power Limited, which is now in line to benefit from a controversial, $271.8m (approx. 340bn/-) contract with the state-run Tanzania Electric Supply Company (TANESCO) for the supply of 200 megawatts of electricity to the national power grid.
The remaining 15 per cent shares in the Kiwira company are still formally held by the government of the day.
Our investigations further revealed that Mkapa and first lady Anna Mkapa jointly formed their own private company - ANBEM Limited - in 1999 (while they were still at State House), and went on to actively engage in private business dealings through this company again while still at Ikulu.
The registered office of ANBEM Limited was located within the official State House premises, and the company acquired loans of up to 750m/- from the National Bank of Commerce and CRDB Bank.
A lively national debate on the ethical considerations of these actions by the then State House couple emerged during the course of the year, with contributors including Mzee Joseph Butiku - former close aide to the late Mwalimu Nyerere - who publicly challenged Mkapa to come out and defend himself against allegations of corruption and abuse of office.
But with both Mkapa and Yona so far opting to remain extremely tight-lipped over the allegations, the PCCB director general Edward Hosea has already declared that the government's anti-corruption watchdog will not investigate the ex-president - purportedly because doing so would be going against the directives of incumbent President Jakaya Kikwete.
Richmond power generation deal
In October, THISDAY began publishing a series of exclusive reports on the 172.9bn/- Richmond power generation scandal following the release of a scathing new report on the deal by the government's procurement watchdog the Public Procurement Regulatory Authority (PPRA).
The reports highlighted key findings of the PPRA report, suggesting that there was interference by higher authorities in government in the deal and underlining the fact that the contract was signed ''at night under strange circumstances.''
Following the THISDAY reports serialization, the National Assembly appointed a parliamentary committee to conduct a fresh probe into the Richmond affair � even though the PCCB had already declared the deal to be 'clean' after conducting its own investigation.
The chairman of the parliamentary probe team, Dr Harrison Mwakyembe, confirmed as the year was winding down that the committee's report has already been formally submitted to the National Assembly Speaker's office in Dar es Salaam, ready for discussion at the next Bunge session.
Defence sector contracts
The 28 million pounds sterling (approx. 70bn/-) military radar scandal continued to develop during the year under review, with revelations that local businessmen Shailesh Pragji Vithlani and Tanil Somaiya were both questioned under oath in connection with their involvement in the deal as alleged 'kickback agents.'
But surprisingly, the PCCB has not filed corruption allegations against any suspect so far. While Somaiya has avoided criminal charges altogether, Vithlani was charged with perjury and lying to an investigating officer over the radar affair. Despite an arrest warrant issued against him, Vithlani remains at large.
The Ministry of Defence and National Service has also been in the spotlight over other corruption allegations involving the purchase of new military trucks and helicopters from European sources with Vithlani in particular again in the spotlight as the facilitating 'agent' .
Buzwagi gold deal
The Minister for Energy and Minerals, Nazir Karamagi, found himself at the centre of allegations of corruption following the signing of the Buzwagi mineral development agreement. Opposition members of parliament claimed that the contract was signed under dubious circumstances and demanded an official investigation.
President Kikwete later appointed a mining sector review committee chaired by Judge Mark Bomani, that was mandated to review all major mining contracts in the country, including the Buzwagi deal. The committee is still at work.
Hunting, forestry sector scandals
The tourist hunting and forestry sectors continued to attract their fair share of corruption allegations during the year under review. A study by the international conservation group TRAFFIC discovered that the government loses up to $58m (approx. 75bn/-) each year through poor governance and rampant corruption resulting in illegal logging and exports of forest products.
More than half of the 28 logging companies studied in the TRAFFIC report had close links to senior government officials, some dealing directly with forestry issues and some not so directly. Similar wanton corruption was reported in the hunting sector.
The government responded to the allegations by overhauling the Ministry of Natural Resources and Tourism and replacing key department heads, including the powerful director of the wildlife division, Emannuel Severre.
Miscellaneous
Allegations of corruption in the purchase of real estate property at vastly-inflated prices by the National Social Security Fund (NSSF) and the Public Service Pensions Fund (PSPF) from one particular company - Quality Group Limited - remain at large. The PCCB says it has been investigating these transactions, but is yet to make any formal announcement on the latest developments in its probes.
Another suspect deal involving a government decision to sell an expensive property in the Dar es Salaam city centre at a ridiculously cheap price, and without following procedure, also received extensive coverage.
The piece of land valued at 1.85bn/- was sold to El-Hillal Minerals (Tanzania) Limited for just 440m/-. Following publication of a series of reports about the deal by THISDAY, the government finally told the private buyer to pay an extra 1.41bn/- for the plot.
