WEDNESDAY, JUNE 4, 2014

I approved Anglo Leasing payments - Controller of Budget

The Controller of Budget Agnes Odhiambo Wednesday said she approved payment for two Anglo Leasing-type firms. PHOTO/FILE

The Controller of Budget Agnes Odhiambo Wednesday said she approved payment for two Anglo Leasing-type firms. PHOTO/FILE  NATION

In Summary

  • Her approval of the payment came a month after she declined and asked Treasury to get the approval of MPs first.
  • She said she declined to approve the payment the first time so that the matter could be handled by the National Assembly and generate public debate, which would have been in line with the law.
By JOHN NGIRACHU 
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The Controller of Budget Agnes Odhiambo Wednesday said she approved payment for two Anglo Leasing-type firms.

She told the National Assembly's Public Accounts Committee that the approval was based on her analysis of the benefits to the country and in line with the Constitution.

Ms Odhiambo said she considered the country's financial position at the time and an opinion from the Attorney General saying there were no options for appeal and the argument that Kenya needed to pay the Sh1.4 billion so that it could issue the Eurobond.

She revealed that because Kenya couldn't settle a $600 million (Sh52 billion) debt owed to local banks scheduled to be paid by May, the government will have to pay an additional Sh1.2 billion.

Ms Odhiambo said the local banks have already received Sh570 million as the cost of the extension of the repayment date and should pay Sh700 million by August 15 as interest on the money borrowed two years ago to shore up the budget.

PAYMENT LEGITIMATE

She argued that while the contracts to Universal Satspace and First Mercantile Securities Corporation were fraudulent, the payment was legitimate as it came from judgements against Kenya in court.

"Failing to pay the debts would have affected generations to come," said Mrs Odhiambo, citing the assertion by the Treasury that failing to issue the sovereign bond would cost Kenya Sh21 billion annually.

"This matter has caused untold pain and anguish to many Kenyans, myself included. I implore Parliament to leave no stone unturned to get to the bottom of this matter," she added.

She said everyone involved in the projects should be interrogated; those involved in designing and procuring the projects, negotiating and signing the contracts and ensuring their execution.

"The investigations should not take forever. Let us reach some finality and tell Kenyans what happened. Kenyans deserve to know the truth."

Mrs Odhiambo said the Constitution was adhered to because her approval was given on the condition that MPs should be asked to endorse the payment upon the resumption of the National Assembly as provided for.

Her approval of the payment came a month after she declined and asked Treasury to get the approval of MPs first.

She said she declined to approve the payment the first time so that the matter could be handled by the National Assembly and generate public debate, which would have been in line with the law.

PARLIAMENT AUTHORISED

The committee also discovered from the dossier Mrs Odhiambo presented that Parliament authorised the payment of about Sh1.7 billion to the two firms between 2003 and 2006.

Part of this was paid after the Government decided in August 2004 to terminate the contracts and stop payments, suggesting that Parliament might have endorsed an illegality all along.

The committee led by Ababu Namwamba (Budalang'i, ODM) differed with Mrs Odhiambo, arguing that the argument about the Eurobond was a diversionary and scare tactic and shouldn't be used to justify the payments.

MPs John Mbadi (Suba, ODM), Ibrahim Abass (Ijara, ODM) and Manson Nyamweya (South Mugirango, ODM) also argued that because she had declined to give the approval on April 15, her decision to give it a month later was irregular and unjustifiable.

"This is not an approval that has been given simply because of lack of time. You should have insisted that Parliament is either recalled to give its approval or wait until Parliament resumes," said Mr Mbadi.

He said Mrs Odhiambo's cost-benefit analysis was not based on a proper analysis of government expenditure.

Mr Abass said Mrs Odhiambo's reliance on a letter from the Ethics and Anti-Corruption Commission stating they are investigating the matter was wrong.

She was also prevented from relying on the report from the joint Finance, Trade and Planning Committees and the Budget and Appropriation committees was wrong because it was yet to be adopted by Parliament.

Mr Namwamba said the committee would consider her presentation as it investigates the matter.