Now Chenge`s lawyers start pointing fingers

[BAK]

Nani hawa? Wanaanza kutajana taratibu.

Now Chenge`s lawyers start pointing fingers

THISDAY REPORTER
Dar es Salaam

AMERICAN and British lawyers representing the Minister for Infrastructure Development, Andrew Chenge, are apportioning blame for the 2002 radar scandal on the Ministry of Defence and National Service and the former Ministry of Communications and Transport, it has been learnt.

Insiders say the minister's team of foreign lawyers � J. Lewis Madorsky from Cleveland, Ohio, in the United States and Goodman Derrick LLP from the United Kingdom - have fingered the two ministries as being the actual powerhouses of the whole radar transaction.

At the time the 28 million pounds sterling (approx. 70bn/-) deal took place, Chenge was serving as Attorney General in the third phase government of ex-president Benjamin Mkapa.

According to government sources, the troubled minister - himself a Harvard-educated lawyer - hired the team of legal counsels in the US, UK and right here in Tanzania to defend him against graft allegations soon after the queries being made into the radar deal by British investigators and journalists became more pointed towards himself.

''Chenge's lawyers in the US and UK have been telling people asking questions about his role in the radar deal, that it was actually the Ministry of Defence and National Service and the Ministry of Communications and Transport that were responsible for promoting the sale of the radar system to the government,'' one informed source told THISDAY.

The source said these lawyers are arguing that the minister � despite his position as AG at the time - was ''not involved in the radar negotiations.''

While the purchase itself was concluded in 2002, it is understood that the negotiations started as early as 1999. Records show that during this three-year period, both the Ministry of Defence and National Service and Communications and Transport portfolios were held by at least two ministers each.

Moreover, it is further understood that the minister's lawyers have also been insisting that the radar deal was approved by the full ministerial cabinet, and finally authorized by ex-president Mkapa himself.

It has been reported that Chenge's local legal representative in the matter is Dar es Salaam lawyer Joseph Mbuna, who incidentally is also the father-in-law of Nicholas Mkapa (the son of ex-president Mkapa) and chairman of the board of directors of Kiwira Coal and Power Company Limited.

The formerly state-owned coal mine was sold in 2005 under dubious circumstances to Tanpower Resources Limited, a private company jointly owned by the Mkapa family, former energy and minerals minister Daniel Yona, Mbuna himself, and other closely-connected shareholders.

At the same time, there are reports that Nicholas Mkapa is currently in the employ of the Director of Public Prosecutions (DPP) office - a fact that again raises fears that he may interfere in a potentially-pending prosecution of high-profile individuals linked to the dubious privatization of the lucrative Kiwira mine.

Investigations by THISDAY have established that although Chenge may have not been directly involved in the negotiations with Britain's arms manufacturer BAE Systems for purchase of the radar, he did give crucial legal advice to the Tanzanian government in favour of the deal.

This advice was in relation to the jurisdiction clause of the Supply and Financing Agreement and Performance Bond. It is understood that the then AG�s advice on jurisdiction was a key factor in the deal.

It has also been established that it was Chenge who gave key advice on whether the financing of the radar deal by a commercial loan was compatible with Tanzania's then-pending application for debt relief from the West.

At the time Tanzania was buying the proven overpriced radar, the Mkapa government had successfully applied for substantial debt relief under the Highly Indebted Poor Countries (HIPC) initiative.

The government eventually financed the purchase of the radar through a loan from Barclays Bank.

Detectives from Britain's Serious Fraud Office (SFO) and the Prevention and Combating of Corruption Bureau (PCCB) are investigating a trail that suggests the payment of all or part of over $1m (over 1.2bn/-) into Chenge's offshore bank accounts in Jersey may have coincided with the time he gave the legal advice to the government on the radar deal.

Although the minister has denied that the money in his offshore accounts came from BAE Systems, he has not disputed the existence of the money in those accounts.

The SFO investigation has uncovered that around $12m (approx. 15bn/-) of the radar deal's contract price was diverted via Switzerland and secretly transferred into a bank account controlled by the deal's middleman, fugitive businessman Shailesh Vithlani.

Investigators are now checking whether Vithlani arranged to pass any of these funds in turn to Chenge and/or other local politicians and public officials, to approve the radar deal.

 

[BAK]

Friday, 21 December, 2001, 15:19 GMT
BBC News Online
Mixed signals for Tanzania's radar

Tanzania's main airport may benefit from the deal

By Christine Otieno in Dar es Salaam
With the UK's decision to go ahead with the sale of a $40m air traffic control system to Tanzania, the government here announced its "delight and happiness" at the news.

The move to sell the British-made system to one the world's poorest countries has sparked cabinet rows in the UK.

When two jumbo jets crash over Tanzania, will people accept the need for us to have a radar system?

For the most part, Tanzanians are unaware of the row raging in the UK and the news has only just started to seep into the local media.

Those who know about the deal have mixed feelings on whether or not Tanzania should be buying the equipment.

One young student in Dar es Salaam was livid.

"It is a shame we need the foreign press to tell us what is happening in our country. Can't the money be used on education or health? Look at the state of our roads. Personally I am outraged."

Crash

The opposition is also upset.

Professor Ibrahim Lipumba, Chairman of the opposition Civic United Front says the deal has been shrouded in secrecy.

Tanzania is a sovereign country and surely should be able to decide what to do with its loans

Rebecca Muna
Debt campaigner

But the Minister for Foreign Affairs and International Relations, Jakaya Kikwete, rejects such arguments.

"People say we do not need this system, what are they waiting for? When two jumbo jets crash over Tanzania, will people accept the need for us to have a radar system? This problem is real not fiction," he says.

As a country that has been classified, by the World Bank and the IMF, as being a Highly Indebted Poor Country (HIPC) Tanzania qualified for a $3bn debt relief fund only last month.

'Sovereign'

Critics within the World Bank have questioned the government's decision to spend such a large amount of money given their HIPC status.

But Rebecca Muna, a local campaigner for debt relief, believes Tanzania should be left to make its own decisions.


"For a long time the World Bank has been thinking they are prefects who can tell countries what to do and what not to do. Tanzania is a sovereign country and surely should be able to decide what to do with its loans."

The foreign minister emphasised not just the government's delight at the new system but also the need for new revenue.

The new system will enable Tanzania to track foreign craft flying over its airspace and consequently collect tax from them, he says.

"We are looking at an increased revenue of $2-5m a year. People are only talking of the $40m that we will spend purchasing the system but what about the revenue it generate?" says Mr Kikwete.