UGANDA: $740m FIGHTER JETS SCAM SNEAKS UNDER THE RADAR
By William Lacourneuve, Analyste Militaire
Source: The EastAfrican
In a deal reminiscent of previous purchases of military hardware in which the army bypassed civilian oversight, the Ministry of Defence and Bank of Uganda are in the news again following revelations that on the express instructions of President Yoweri Museveni, the ministry withdrew money from the central bank without due parliamentary approval, to buy six fighter jets and other military equipment from Russia worth $740 million.
It also emerged that this money is from the supplementary budget and that part of it — over $400 million — has already been spent. Hence government only wants parliament to rubberstamp the acquisition.
The deal marks a return to the late 1990s, when under the cover of classified expenditure, the country lost $6 million after shadowy middlemen sold the Uganda People’s Defence Forces attack helicopters that could not fly.
In a belated attempt to regularise the deal, Defence officials sought parliamentary approval last week and ruling party MPs have been asked to support the purchase of the jet fighters.
“Let’s say the president is trying to cover his tracks. Agreed, this is under classified expenditure, but why do it behind parliament’s back? If we find out tomorrow that we spent $740 million on jets that can’t fly or that the money was used to bribe voters, Museveni has parliament’s resolution to fall back on,” said a member of the Defence and Internal Affairs Committee of Parliament who asked not to be named.
Although the central bank has breached no procurement procedures this time, its unquestioning execution of Museveni’s orders to release the cash has raised eyebrows.
Consequently, the Public Accounts Committee of parliament has written to BoU Governor Emmanuel Tumusiime Mutebile to explain why he sanctioned this irregular withdrawal.
“This money was withdrawn from the central bank without parliament’s approval. We have now asked BoU to explain. I am sure [the BoU] governor knows the rules under which such money can be withdrawn,” PAC chairman Nathan Nandala Mafabi told The EastAfrican.
This came in the wake of the PAC’s failed attempts to get answers from the Defence Ministry.
Last week, the committee summoned Defence Permanent Secretary Rosette Byengoma, who offered no explanation of the purchase, but made the telling statement that she had been “ordered not to talk about this particular procurement.”
As usual, the president is once again on hand to let Defence off the hook.
On the night of March 24, Museveni met the National Resistance Movement parliamentary caucus at State House Entebbe and told the legislators to support the $740 million supplementary expenditure.
Although he did not mention the country the jets were bought from, the Daily Monitor reported last week that Russian defence websites claimed that Uganda and Algeria had gone shopping in the Russian capital.
It further revealed that the two countries paid a joint price of $1.2 billion for 22 jets — Uganda’s being only six.
Hence each of Uganda’s jets should have cost $54.5 million, translating into a total of $327 million.
Why Uganda should end up paying an extra $413 million remains a mystery.
Although opposition legislators have claimed that they will block the House from giving this deal the all clear, it is a fait accompli given the ruling party’s numbers.
As has happened in past Defence and army procurements, there are no guarantees that the taxpayer will get value for money.
“There is nothing wrong with the purchase of fighter jets. Everyone knows that Defence spending is classified, but all we are saying is, follow the rules. This deal did not, and Ugandans want to know what value they are getting out of it,” said Mr Mafabi.
Under the Public Procurement and Disposal of Public Assets Authority (PPDA) Act, security and Defence procurement operates under what is referred to as the “dual list.”
There are two lists, one of which is the classified items, while the other is subject to normal procurement procedure.
Although both lists are submitted to the PPDA, overall responsibility for executing purchases and ensuring value for money rests with the accounting officer of the Defence Ministry, who is the permanent secretary.
PPDA spokeswoman Dorah Egunyu told The EastAfrican this procurement did not go through the government’s watchdog because PPDA only receives the ministry list of items to be procured but cannot regulate what is classified or even discuss whether the jet fighters were part of the list.
“I cannot discuss contents of the dual list,” she said. According to Defence and army spokesman Lt Col. Felix Kulayigye, there are justifiable grounds for this purchase because the jet fighters are part of the required equipment “for strategic management of Uganda’s security.”
Museveni’s instructions to BoU have a precedent.
In 2002, he directed Governor Mutebile to bail out businessman Hassan Basajjabalaba to the tune of over $20 million to clear a loan he owed to Standard Chartered Bank.
In 1998, the army, procured four MI-24 helicopters, their spares and ammunition at a cost of $12 million.
The helicopters were faulty and came to be known as the “junk choppers.” No official has been prosecuted or convicted over this scam.
There have been a myriad other military equipment purchases that have cost the taxpayer millions of dollars, including a consignment of malfunctioning guns from South Korea and an order of undersize army uniforms.
The army also bought some 90 tanks from Bulgaria, only 10 of which proved operational.
The purchase earlier of another set of MiG jet fighters also followed a similar pattern: They arrived with one wing, had no spare parts nor bomb loading capacity.
Public policy analysts argue that these dubious procurements are not just bad luck hounding Uganda’s military.
Rather, they say, defence spending is the conduit through which public finances are channelled to fund politics.
Significantly, the timing of this $740 million procurement comes right after the February 18 election in which the ruling party bought its way back to power.
It might well have done so with the taxpayer’s money.
By JULIUS BARIGABA
Uganda: Govt Buys Fighters Jets From Unknown Source
30 March 2011
Ministry of Defence officials are under instruction not to talk about transactions related to the purchase of military fighter jets, MPs heard yesterday.
Appearing before the Parliamentary Accounts Committee, the Permanent Secretary, Ms Rosette Byengoma, said she “had been ordered” not to reveal or discuss anything to do with the transaction.
She was appearing before the committee with some of her staff and army officers to answer audit queries. “I am under instructions not to talk about that particular procurement,” Ms Byengoma said, when asked by committee chair Nandala Mafabi, to shed light.
Making no headway, Mr Mafabi, said: “Okay we leave it at that.” The government has taken $740 million (about Shs1.7 trillion) from Bank of Uganda (BoU) to buy fighter jets and other military hardware from an unknown country.
The transaction was revealed by President Museveni over the weekend when he held a meeting in Entebbe, with NRM MPs, and asked them to support the supplementary request when it comes before the House. It is not clear whether government has already made the payments although MPs yesterday said Mr Museveni announced that deposits amounting to above Shs1 trillion had already been made.
The MPs also revealed that the President made mention of the money being drawn from the Ministry of Defence budget.
The BoU communication director, Mr Eriot Mweya, said he is yet to cross-check the details of the transaction and whether the central bank knew about the deal.
Payment minus contract
Meanwhile, MPs yesterday began investigations into a payment of Shs253m by the Ministry of Defence to a Cyprus firm, M/s Oracle Systems Ltd, without a contract. The deal, part of a wider Shs12b project to computerise the payroll system in order to erase ghost soldiers, was questioned by the Auditor General.
The AG wondered why the money was paid to the firm that reportedly supplied spare parts yet no contract was signed between the parties. “Before commissioning the project, the Ministry of Defence paid an additional amount of Shs253m to the company to cater for spare parts needed for commissioning of the system,” the report reads in part. It adds: “The payment was irregular because there was no contract and it is not certain whether the firm will eventually win the contract.”
Ms Byengoma, however, told the MPs to pardon her for the payment although the contract was still before the Solicitor General. The MPs, who wondered how she would recover the money in case the SG did not endorse the deal, gave her up to Friday 1 to explain her payments and attach all the documentation so that the AG does a specific audit into the transaction.
“Since they were the installers of the project, we didn’t want to bring in a third party into our systems because we have classified information,” Ms Byengoma said. “We paid them for spare parts because we knew at some point the system would break down and I didn’t have to wait until it shuts down.”
Ms Byengoma yesterday told the MPs that the system, though dogged with such queries, had been successful because there are no more ghost soldiers on the payroll.
WHY MUSEVENI IS BUYING NEW FIGHTER JETS
By Chris Obore
It's now public knowledge that President Museveni is buying fighter jets at a whooping Shs1.7trillion, an amount of money that would sort out Uganda's health problems for more than 3 years.
But typical of NRM approach, patients at Mulago national referral hospital have to stage strikes protesting failure to receive treatment for six months. Those in village hospital simply visit the health centers to die "honorably."
But why is the President investing in fighter jets.
Here is why. Soon after elections, Col. Moses Rwakitarate visited Russia. Rwakitarate works in the Ugandan air force. A source in Russia told me that Rwakitarate, who is Museveni's blue-eyed boy, was shocked by the discussion of the Russian military chiefs about troubled Libyan dictator Col. Muamar Gaddafi's military weakness. He heard that the Russians knew that Gaddafi had a weak air force with rusty war planes and soldiers. That Gaddafi had only concentrated on the welfare of his elite presidential guard army at the expense of the general army. Besides, Gaddafi's army had not had any refresher training, so they were ill prepared to fight when the insurrection started.
He had to reorganise his own army before attacking that rebels that iswhy the rebels fisrt moved faster than Gaddafi.
So, for Museveni, this was a lesson learnt. He had to quickly get money to buy fighter jets in case anything happens in Uganda.
And that anything could be possible. Again, here is why. For sometime, the intelligence has supplied Museveni with information that the Opposition elements especially Col. Kizza Besigye were organizing a rebellion. The intelligence claim thatBesigye has the support of DR Congo and Rwanda. They further allege that rebels of arrested dissident Laurent Nkunda, was supposed to have been integrated into the DR Congo army after Nkunda was nabbed. That some of the rebels agreed to be integrated while others opposed. Even those integrated did not find the working conditions suitable, so they asked to join their fellow rebels. Most of these were Rwandan interahamwe. Apparently, Ugandan intelligence believes that Paul Kagame and Joseph Kabila, felt the rebels would pose a serious headache to them. That to appease the rebels, the two leaders agreed to locate them somewhere between Rwanda and Congo. They are reportedly being paid monthly stipend and have been promised that they would soon be engaged.
That engagement, according to Ugandan intelligence, was to fight the Kampala regime.
After getting this information, the Ugandan coordinator of intelligence services Gen. David Tinyenfuza evicted Balaalo in the oil rich district of Buliisa. This, eviction, according to sources, was to try to avoid infiltration from the alleged rebels since most of them have Rwandan links.
However, the Kampala regime is notorious for cooking up rebel allegations in order to unleash violence to genuine Opposition figures in the country.
It's now difficult to know which information to believe: whether this is creation of the intelligence or a real threat to the Kampala regime. There is however, growing tension in intelligence that any time, a new rebel force would be at work. This belief by the intelligence has already created suspicion against some high ranking soldiers. Sources say several soldiers are now under surveillance because they are accused of being sympathetic to the Opposition endeavors.
Because of fear that some elements in the army could defect to Opposition if chaos erupt, the private Security Company--Saracen--which is owned by Gen. Salim Saleh, is reportedly briefed to supply fighters to protect Museveni. Although Saracen provides private guarding services, sources say its top managers are all seasoned military officers close to the President. Their deployment in Saracen is to ensure that when called upon, they should be able to provide extra fighting force to defend the regime. Critics say in effect, Saracen is a standby force for the President.
During the presidential campaigns, there was tension in the army. This tension explains why we saw several roadblocks on highways across the country. And after the elections, roadblocks are still on highway but Ugandans have not understood why. Some roadblocks were set up to screen travelers to the city after it emerged that the Opposition led by UPC's Olara Otunnu, had mobilised 1million people for a demonstration in Kampala. Apparently, during the campaigns, Otunnu was not looking for the votes since he knew that Museveni had rigged the elections. Instead, the UN diplomat used the campaigns to silently mobilise rioters to action after elections.
However, the plan leaked. Museveni security set up the roadblocks. And unknown to Ugandans, the intelligence is scrutinising travelers. Any public vehicle carrying more than six male passengers, is highly monitored to ascertain where the men are going. In the roadblocks, the security pretends to be searching the taxis yet in actual sense they are counting the number of men in the car. That is how the mini bus carrying young from Busia was recently arrested. The men were being mobilised to travel to Kampala for a demonstration but the intelligence got wind of wind that is the men said they were going to work in a farm in Mityana. It was not their destination. Kampala was the ultimate destination. To kill off any demonstration, Mambas have been placed on all main roads leading to the city center to scare away potential protesters.
CIVIL SOCIETY ORGANIZATIONS DEMAND ACCOUNTABILITY FOR OUTRAGEOUS GOVERNMENT SPENDING
Kampala, Uganda. Civil Society health experts condemn the outrageous passage by Parliament on Wednesday April 27 2011 of a Uganda Shs1.5 trillion supplementary budget. This money was allocated as a retroactive authorization for payments already made for fighter jets and unspecified military equipment, without permission of Parliament, as well as the President’s May 12 swearing-in ceremony.
The Speaker of Parliament refused to allow a motion by the opposition that would have reduced the expenditure for the swearing in ceremony, and halted the expenditure for military equipment. To add insult to injury the government has cut Shs2billion off the health budget to refund the billions of the stolen GAVI funds (Daily monitor 18th April, 2011). A source from Ministry of Finance, Planning and Economic Development (MFPED) has confirmed that these funds have already been disbursed to GAVI
In 2004, the Global Alliance for Vaccines and Immunization (GAVI) allocated over $4.3 million to be used as a Vaccine stabilization fund to immunize children in Uganda. The former State health ministers Jim Muhwezi, Mike Mukula and Alex Kamugisha and State House aide Alice Kaboyo were implicated for mismanaging the GAVI funds. GAVI Alliance suspended the Immunization Systems Strengthening (ISS) cash transfers in Mid-2006 following the alleged mismanagement of the funds by the selfish officials of Ministry of Health. The GAVI Alliance and Fund Boards insisted that the Government of Uganda reimburse GAVI of the missing funds. The Board requested the Government of Uganda to establish measures to avoid similar cases in future, before they could approve any possible resumption of cash transfers to Uganda. This has not happened instead the Ministry of Health took money from the health budget to reimburse the stolen funds.
“Our families and communities have no security—they are suffering and dying without the medicine they need. Cutting the health budget and purchasing fighter Jets will not protect them when they are dying without access to HIV treatment or dying in childbirth, because of hemorrhage. This Administration and Parliament have decided that we must spend almost twice the annual allocation for entire health budget on useless military equipment. There is no doubt—this decision will result in more death and sickness of ordinary Ugandans,” said Dr.Sandra Kiapi, the Executive Director of Action Group for Health, Human Rights and HIV/AIDS (AGHA).
Additional reports indicate that recent sales of oil fields between the companies Tullow, Total and China National Offshore Oil Corporation (CNOOC) have generated more than $400 million in tax revenue, which could have been used to expand investments in medicines and health workers. “The Government claims resources are too scarce to invest in poor, sick, and dying people. This decision by Parliament reveals that this claim is a lie. The resources are available, it is the Government that refuses to keep its promises and invest in the people.”
Parliament’s passage of the supplementary budget comes at the same time the fiscal year 2011-2012 Budget Framework Paper from the Ministry of Finance, Planning and Economic Development (MoFPED) proposes flat-funding for the Ministry of health including in critical areas where, without increased investments, unnecessary deaths of Ugandans will increase. These priority areas that will receive no increase include: deployment and remuneration of health workers and for equipping lower level health facilities with commodities and personnel needed to perform essential functions. Early reports of the supplemental budget indicated that the President had already spent the money without requesting authorization from Parliament, making the expenditure illegal.
CSOs Health Experts calls for the following immediate remedial actions:
· Government of Uganda must immediately support a Shs150 billion increase in funding for urgent priorities in the 2011/12 health budget, in particular procurement of essential medicines, deployment and remuneration of health workers, and equipping low level health facilities with commodities and health workers
· Immediate investigation by the Auditor General of the unauthorized expenditure by the Executive and immediate action to recover the stolen GAVI funds for the benefit of health service delivery in this country.
· Donors to immediately freeze non essential aid pending outcomes of the Auditor General’s investigation
· Ugandans must demand for accountability for the funds that have been put to waste by the government on unproductive social activities
CSO PRESS STATEMENT 4th May 2011