Wednesday, December 7, 2011


It is not clear whether what is being revealing as having gone on in Uganda and the President’s name being mentioned does not tantamount to abuse of the Presidency by President Museveni. When you cite the case of Burundi getting money by Museveni’s authority, one wonders whether Museveni imagines that tax payer money is for his to use as he wants. A deal involving shs 38bn for Luweero war support.
One at times has to sympathize with civil servants who more often than not have to take Museveni’s instructions without question by virtue of their employment, yet some of the actions bind them to the extent that they can be prosecuted.
William Kituuka Kiwanuka


Acting Secretary to the Treasury Keith Muhakanizi appears before PAC. Photo by Geoffrey Sseruyange.

Posted Wednesday, December 7 2011 at 00:00

President Museveni ordered senior officials in the Ministry of Finance to pay more than $14.2 million (about Shs35.5 billion) to Burundi, MPs heard yesterday. The claims are now a subject of investigation by Parliament’s Public Accounts Committee (PAC).
The acting Secretary to the Treasury, Mr Keith Muhakanizi, told PAC that Burundi supplied material to President Museveni’s National Resistance Army rebels during the bush war (1981-1986) and after the liberation war; the support was converted into a national debt.
However, PAC Chairman Kassiano Wadri said: “Money given to Museveni’s rebels fighting in bush was a private matter and they did not have any legal mandate to commit the country. If these NRA rebels had been captured by the government in power then, they were going to be charged with treason.”
It has also emerged that while under a debt relief agreement signed between the two countries, Burundi had cancelled interest of $5,504,302 (about Shs13.7 billion), President Museveni through unclear circumstances ordered Ministry of Finance to pay the interest on account that Burundi was a poor country.

The directive
In one of his letters on the matter, the President on March 2, 2009, told then Attorney General Khiddu Makubuya and Finance Minister Syda Bbumba to assist Burundi, saying: “Burundi is a poor country which is recovering from war and therefore, cannot be considered to be like rich nations to which we owe debts. I am therefore, of the opinion that where we can, we should support them. The agreement notwithstanding, can we pay this amount of $5.5m as an ex-gratia to the people of Burundi?”
Mr Muhakanizi told PAC that President Museveni and his Burundian counterpart met in Addis Ababa, Ethiopia, where the two leaders agreed that $5.5 million that had been waived be reinstated and donated to the people of Burundi as ex-gratia.
“I am a born-again Christian I don’t tell lies I have always been truthful,” Mr Muhakanizi said. “The President asked us not to treat Burundi as a rich country. We had refused to pay because the interest had been cancelled. But the President sought for legal advice from the Attorney General who cleared the payment. There is no way I would have paid if the Attorney General had not cleared this payment.”
Communication from the Finance Minister of the Republic of Burundi tabled in PAC indicates that the money was allegedly paid to Burundi through a local company, Ms Picfare Ltd whose ownership is being sought by the committee. The money was paid on a dollar account number 02501007274 with Bank of Baroda in return for the equivalent of scholastic materials supplied.

Forgery cited
But Mr Wadri said his investigation with URA has revealed that out of Shs35.5 billion only Shs1.2 billion left the country. “This money is in Uganda,” Mr Wadri said. “Some of the documents from Picfare Industries appear forged and the company did not have power of attorney to receive money on behalf of Burundi government. This is another case of abuse of public funds and we are going to summon all the ministers who were involved and we shall meet the President who authorised this illegal expenditure.”
Mr Muhakanizi and Account General Gustavio Bwoch also tabled letters from Ministers Syda Bbumba (Gender) Sam Kutesa (Foreign Affairs), Fred Omach (Finance General Duties) and former Attorney General Khiddu Makubuya who offered a legal opinion clearing the deal.
Mr Kutesa, who has since stepped aside over a Chogm case, wrote to the then Finance Minister Ezra Suruma reminding him to pay Burundi since they had assisted NRM at a critical time in 1985. In his legal opinion dated February 24 2010, Prof Makubuya said: “I have considered the matter carefully and concluded those…Principles of Pan Africanism and the sense of African solidarity may be called into play to treat Burundi as a special case. There is no legal bar to this consideration. Therefore it’s my considered opinion that Uganda may lawfully pay $5.5 million as ex-gratia payments to the government of Burundi.” PAC asked CID to investigate allegations of forgery in the deal.
The committee heard that Shs35.5 billion was paid without parliamentary approval and the mandatory Auditor General’s warrant. Mr Muhakanizi, Mr Bwoch and other officials from Ministry of Finance return to PAC today with all the original documents relating to the deal.


on Tuesday, November 29 2011 at 00:00

A German firm has only produced 400 national identity cards a year after it was hurriedly recruited outside official procurement methods and given billions of taxpayer money.
Mühlbauer Technology Group was contracted in March 2010 without competitive bidding on the orders of President Museveni after reported lobbying by the then German ambassador to Kampala, Reinhard Butchnolz, who met the President a week before the contract was signed to make the case for the firm.
The company was expected to deliver 3.5 million ID cards by December 2010 and at least 21 million cards by the end of the project in June next year.
At a hushed ceremony yesterday, almost a year after the first deadline, officials from the National Citizenship and Immigration Board from the Internal Affairs Ministry handed over only the 400th card issued under the scheme – to Prime Minister Amama Mbabazi.
“There have been financial constraints really,” Board Chairman Ambassador Wanume Kibedi said, explaining the delay. “That has been the drawback.” Officials from the company were not available for comment yesterday and could not confirm how much money it has received from government, although press reports at the signing indicated that the firm expected to receive at least 20 per cent of the Shs185 billion. If this money was paid, it would mean that the company has spent a year and Shs37 billion to produce only 400 cards.
Originally expected to roll out ahead of the February 2011 general election, phase one of the project was marked with the registration of new voters by the Electoral Commission.
That phase, which saw the collection of bio-data of up to 5.5 million new voters is understood to have cost the Ugandan taxpayer as much as Shs122 billion.
This newspaper now understands that an extra Shs196 billion is being sought for the final implementation of the project, whose timeframe remains unknown, a matter that has got lawmakers raising the red flag.
Parliament’s Information and Communications Technology (ICT) Committee is due to meet officials from the Ministry of ICT this morning over the matter.
“We are extremely concerned about this project,” said committee chairman Nathan Nabeta, who admitted that government had not allocated any funding for the project under the ICT Ministry’s Shs12 billion budget this financial year, “besides the Shs600 million in this budget to the Ministry of Internal Affairs.”

President’s directive
Originally under the Internal Affairs Ministry, President Museveni earlier this year directed that overall supervision of the project be placed under the ICT Ministry.
Uganda is the only country in the East African region where its citizens do not possess official identification cards, a vital tool that can be used for tracking criminals and illegal immigrants.
Mr Museveni received the first card and officially launched the project at his fourth term inauguration ceremony in May. “A lot has been happening. We gave the first card to the President and the second card to the First Lady and in between we have issued 400 cards including to Members of Parliament,” Amb. Kibedi said.
Asked why “no ordinary citizen” had yet been issued the cards, Amb. Kibedi argued that priority had dictated that officials of influence receive the IDs first, and added that Ugandans should expect to have their IDs “within the next two years.”

Basajjabalaba: The man with a tough hide, golden skin


By Monitor Reporters

Posted Wednesday, December 7 2011 at 00:00

In Summary

Connivance. In the last of a three-part series on Hassan Basajjabalaba’s controversial Shs142 billion compensation claims, we reveal the hands that signed off the money and peep into the secretive business world of the well-connected businessman, NRM financier and kingmaker.
Hassan Basajjabalaba is not the only businessman to receive compensation from government under suspicious circumstances – Parliament is also investigating compensation paid to soldier-turned-businessman Col. John Mugyenyi for a cancelled sub-lease on Kisekka Market, and at least one other firm for a contested mine concession in western Uganda.
Yet Mr Basajjabalaba has cut out a niche as the master of the compensation claims, receiving billions in taxpayers’ money over the last 10 years in often-dodgy circumstances. In the first two parts of this series, we showed how an audit report by the accounting firm KPMG commissioned by the Auditor General and tabled before Parliament, found Mr Basajjabalaba’s claims for Shs142 billion after losing control of three city markets and the Constitution Square, to be without legal or financial merit.
The audit was concluded in July by which time the businessman had been paid several billions in cash and loan guarantees out of the Central Bank. However, far from a case of coming after the fact, investigations by this newspaper show that politicians, including President Museveni, then Attorney General Khiddu Makubuya and then Finance Minister Syda Bbumba pushed to have the businessman paid despite resistance from technocrats.

Paper trail
Mr Museveni’s role in the matter is both decisive and confusing. In one of his earlier letters on the matter, dated July 30, 2008, the President directed Mr Makubuya to examine the legality of the compensation claims but it is not clear how, if such an effort was made, the Attorney General was unable to discover that many of the claims were built on illegalities.
Documents seen by Daily Monitor show that President Museveni, on November 29, 2009, directed the AG to use the same formula used while calculating compensation for other markets, ostensibly Col. Mugyenyi’s Kisekka Market. This was one of at least six letters seen from the President over the matter, including one dated November 13, 2010 directing the Finance Minister and Central Bank Governor to settle all outstanding claims by Basajjabalaba.
It is not clear why the President, then in the middle of a gruelling campaign for re-election, was very keen to have the matter settled.
Technocrats in the Finance Ministry had watched the political pressure to pay the claims for almost two years but had been reluctant to endorse the payments without covering their backs.

Compensation claims
The ministers have all said they acted under directives of the President. Mr Museveni, whom MPs expect to interview on the matter before the end of the month, says he gave general directions for compensation without specifying the amounts.
However, documents seen by Daily Monitor show that after a ministerial committee decided to pay Haba Group Shs68 billion, Mr Basajjabalaba petitioned President Museveni claiming the amount was too low. Mr Makubuya then wrote to the acting Solicitor General saying the President had directed him “to revisit the matter” and apply the same computation done for Col. Mugyenyi.
“I obliged and advised you on additional compensation,” Mr Makubuya wrote, proposing an additional Shs46b, increasing the total compensation to Shs142b. On November 29, 2010 the Solicitor General wrote to Finance asking for the claim to be paid. On December 2, Keith Muhakanizi, the deputy Secretary to the Treasury asked the Auditor General to conduct a value-for-money audit before payment could be implemented.
Although the letter was copied to her, the next day, Finance Minister Bbumba wrote to the Governor BoU asking for “immediate” assistance to Haba Group to access money. Although letters from Ms Bbumba indicate that she acted in response to Mr Museveni’s letter of November 13, 2010, documents seen by this newspaper show that as early as October 28, 2010 BoU had guaranteed Haba Group a $24.35 million loan from Orient Bank.
On November 25, the Central Bank then guaranteed a $10 million loan from Tropical Bank and a $1 million loan from Baroda, a week later. Another $10 million from United Bank of Africa was guaranteed on January 15, 2011 before two separate loans of $10m were guaranteed on the same day in April from Orient and United Bank of Africa.
It is not clear how much the President knew about the amount paid to Haba Group before the fact and why he sounded upset and shocked when he wrote to Bbumba on May 8, 2011 citing corruption through the claims.
What is clear is that it was not the first time Mr Museveni was bailing out Mr Basajjabalaba, a senior member of the ruling party and a key financier.
On February 10, 2004, President Museveni directed BoU Governor, Tumusiime Mutebile, to pay $11,575,500m to Standard Chartered Bank on behalf of the businessman’s Basajjabalaba Hides and Skins Ltd, which was in financial peril.

Although the businessman deposited land titles with BoU as security for the loan, the properties in question were later transferred irregularly on the basis on a consent judgement that BoU lawyers argued was forged.
In fact, Basajjabalaba, who burst onto the local scene a little over a decade ago as head of the Bushenyi-based, family-held hides and skins business, has been followed around by scandal.
He was accused of irregular conduct in the management of properties under his care as chairman of the Uganda Muslim Supreme Council, slapping a photographer at a public function, and selling back to the open market tax-free cement supplied under government aegis to his teaching university hospital in Bushenyi.
Throughout it all, Mr Basajjabalaba, who denies all allegations, remains untouchable and, apparently, too close to power to be troubled. A widely acknowledged ruling party financier (sources close to the businessman say he bankrolled the campaigns of at least two dozen MPs, if not more), there was a rare glimpse of Mr Basajjabalaba’s influence at a victory party for the NRM in Bushenyi after the election where the businessman openly asked President Museveni not to re-appoint local rival Richard Nduhuura to Cabinet. Although Nduhuura lost his seat to a Basajjabalaba-sponsored rival, Mr Museveni reappointed him in part, sources say, not to appear to be under the businessman’s influence.
An MP on the Public Accounts Committee handling the matter has publicly spoken out about attempts to influence the investigation, and has warned that some lawmakers were too closely associated to Mr Basajjabalaba to be impartial.
The President’s appearance before the committee should offer some insights about the nature of his relationship with the businessman.

No comments:

Post a Comment