Governors ,MPs, MCAs looting

Shocking Revelation Of How governors, MPs siphon public funds through kickbacks As Common Mwananchi Languish in Poverty

New Ethics and Anti-Corruption Commission documents show how governors, MPs and MCAs are using county government and CDF funds to enrich themselves.

Documents seen by the Star state that governors, MPs and MCAs commonly receive 10 per cent kickbacks on CDF and county government projects meant to improve transport, education and health — devolved functions.

They further show that the leaders mandated to protect taxpayers’ funds work closely with county and CDF employees to award 27.9 per cent of the projects to friends and cronies.

The most affected counties are Nairobi, Kakamega, Kisii, Isiolo, Kisumu, Kilifi, Kitui, Murang’a, Kakamega and Mombasa.

“The integrity issues revolve around bribes to public officials and the companies owned by public officials directly or through a proxy, supplying substandard goods and giving public tenders to one supplier over and over again,” one document reads.

Between 2013 and 2017, the EACC received 984 CDF reports of suspected corruption and another 4,281 from counties.  They also claimed to detail how money was being siphoned off. 

The Nairobi county government accounted for 10 per cent (408 cases) of the reports — all pointing to misappropriation of funds.

Public property worth Sh.780 million recovered by EACC IN Nakuru and BometNews1 week ago

“We were not successful in securing interviews with county employees of Nairobi and Murang’a counties,” the EACC says.

The main corruption offences are outright CDF embezzlement, public procurement irregularities, abuse of office, bribery, unethical conduct, fraudulent acquisition and disposal of public property and tax evasion. Others are fraud, conflict of interest, unexplained wealth and bid-rigging.

According to  EACC documents, embezzlement of public funds constituted the largest proportion of these reports, the CDF having 57 per cent and 32 per cent for the case of counties.

The EACC further revealed that the integrity of 40 per cent of the contractors was questionable in the face of rampant bribery by public officers.

The EACC established that specific companies control 42.1 per cent of government projects, while 31.6 per cent is controlled by external actors.  

Others are unqualified bidders (11.5 per cent), contractors from a specific area (8.2 per cent) and a powerful team (6.6 per cent) that never followed procurement rules.

The integrity issues revolve around bribes to public officials and the companies owned by public officials directly or through a proxy, supplying substandard goods and giving public tenders to one supplier over and over again

Cases of governors, MPs, MCAs, CDF staff and county employees sabotaging devolved projects were also reported. Cartels controlled only 3.3 per cent of the projects.

EACC officials who spoke to directors and CEOs of 388 company suppliers said that whoever overprices projects has an added advantage of winning tenders.

“A company that quoted market prices while submitting their bids but factored in big profit margins was more likely to win the tender compared to a company that only quoted the prevailing market prices,” the ethics agency said.

“A company that knew the estimated price of a project before submitting its bids had a higher chance of winning the tender compared to one that never got to know the estimated price,” documents indicated.

The EACC said most companies doing business with counties and the CDF are owned by the employees or their proxies.

Competent bidders, according to EACC, are normally locked out of tenders following rampant bribery, non-adherence to procurement procedures, non-payment of contractors, bid rigging, conflict of interest, favouritism in tender awards and lack of public awareness.

The EACC also established that tenders were dictated by bribes, the extent to which a company knows the public institution’s estimated cost of a project, if a company has been involved in developing specifications for a project and how a company establishes the project cost to use while tendering.

Others used media, accessibility of procurement records and delay in processing of payments to craft and push for tenders.

“Companies that benchmark their price with other suppliers bidding for the same tender had a higher chance of winning tenders compared to those who use the prevailing market prices,” the commission said.

Overpricing a project was an added advantage to win tenders, showing collusion between contractors and companies bidding for tenders where projects are overpriced — and then the company wins the tender and probably the extra money shared.

Companies that developed specifications for a project were more likely to win public tenders compared to those that did not

On sources of information for bidding opportunities, those companies getting information on bidding opportunities from friends, procurement officers, county,  CDF officers, and other suppliers led to high chances of winning public tenders.

The EACC wants increased funding, disqualifying politicians from any involvement in public tenders, proper monitoring and evaluating of project implementation, evaluation of tenders be done by an external person and efficient mechanisms of reporting tender outcomes.

The ethics watchdog says it is much easier to win tenders in Kisii, Nakuru, Kajiado, Kakamega, and Tharaka Nithi and Murang’a than elsewhere.

Kitui county was the hardest place to win public tenders. It was followed by Trans Nzoia, Kilifi, Nairobi, Mombasa, West Pokot, Isiolo, Kisumu, and Kirinyaga, respectively.

“The difference in price is then shared out among the corrupt individuals who include public officials and the company representatives,” a document read

“Kakamega county contributed the largest percentage (26 per cent) of contractors who learn the reserve price before they submit the bids, followed by Kilifi and Kitui, both with 12.5 per cent, and Kisumu with 11 per cent,” a document read.

A document read, “In addition, Kakamega constituted 31 per cent of cases reported by contractors as having received an estimated cost of projects from the management of public institutions.”

Author: Alexxie

Alex is a Kenyan blogger writing on technology, fraud, social media and politics.

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