Wednesday, December 2, 2015

What Would Magufuli Do about Serious Fraud?

What would Magufuli do about the Serious Fraud Office's (SFO) 'Statement of Facts'?

By Chambi Chachage

News about the swift actions of Tanzania's new President, Dr. John Pombe Magufuli, have gone viral. From Australia to Zimbabwe, he is hailed as a role model on how a leader can enforce accountability and tackle corruption. Tanzanians are now 'walking tall' in Africa.

At a time when 'Magufuli Euphoria (Maguphoria)' is at its peak, the UK's Serious Fraud Office (SFO) has, ironically, presented us with yet another challenge reminiscence of the one it posed during the BAE's Air Traffic Control System (Radar) scandal. In 2008 SFO came up with, among others, the names of the then Minister of Infrastructure and former Attorney General, Andrew John Chenge, and the former Director of the Tanzania Electric Supply Company Limited (TANESCO) and former governor of the Bank of Tanzania (BOT), Dr. Idris Rashid, as having benefitted, financially, from the controversial selling of radar to Tanzania. Chenge had to resign after infamously - and indeed arrogantly - claiming that the over $1.5 million that SFO alleged he had received through an offshore Barclays Bank account in Jersey is merely peanuts ("vijisenti").

This time around, the State House in Tanzania is in a seemingly celebratory mood after SFO struck a "plea deal" with the Standard Bank through a British court that would also enable "a $6 million fine plus interest of over $1 million to be paid to the government of Tanzania." But not all is rosy as the statement made by the Chief Permanet Secretary, Ombeni Sefue, indicates. There is more to be done in terms of investigating and, ultimately, prosecuting  through the promised and anticipated special court for grand corruption (ufisadi), those who benefitted directly and indirectly from bribery.

What is so puzzling, however, is the fact that our main 'source of facts' about what happened seems to be the British media. This is particularly troubling given that SFO's Statement of Facts has been  made publicly available online for the past four days or so. It seems some pertinent facts from their 'dossier' have either escaped top investigative journalists, rigorous public officials let alone critical scholars, activists and fiery politicians or were simply bypassed.

Even though in some cases people are not mentioned by names, the document does not mince words about those involved. Carefully crafted, the code its uses to mention some of the people have keys therein to decode them. One does not need to be Shylock Holmes, James Bond or even Johnny English to know those it is referring to. 

For instance, after narrating how "the alleged commission by Standard Bank plc [SB], now called ICBC Standard Bank plc, of an offence of failing to prevent bribery by its former sister company Stanbic BankTanzania Limited [ST] by the actions of ST's then Chief Executive Officer (Bashir Awale) [BA]and/or Head of Corporate and Investment Banking (Shose Sinare) [SS] contrary to section 7 of the Bribery Act 2010",  on page 11 SFO states: "A few weeks after the May meeting Minister B sent his son ST Employee Z to ST with a letter of introduction. BA said he would interview him personally, met him in July and then approved his recruitment as a graduate trainee within SS's (Shose Sinare) team. In due course, ST Employee Z played a minor part in this deal."  

But the clue to the identity of this minister is already provided on page 4: "The transaction was announced to the market in February 2013. A few days after this announcement, Mr Kitiliya in his capacity as Head of the Tanzanian Tax Authority was part of the GOT team (together with the Minister of Finance known herein as "Minister B" and other government officials) participating in investor calls about this intended sovereign note placement."

His son's identity and role is also evident on page 6: "The ST deal team also included "ST Employee Z", a graduate trainee and son of Minister B who ultimately signed off on this transaction."

Google is also handy in triangulating this information. The  Curriculum Vitae (CV) of one of a Member of Parliament (MPs) who fits with SFO's description contains this entry on employment history: Stanbic Bank (TZ) as the company name; Investment Banker as his position; and 2012 to 2014 as the duration. MPs champions conspiracy theories must now be feeling vindicated given that he vehemently opposed their attempt to initiate an inquiry into the death of his father so as to know if it had any connection to the diehard Tegeta Escrow Account scandal. 

SFO does not end there, it also ruffles the feathers of key public servants in the ministry that is so dear to the president and his plans of financing development for the poor majority. It is important to recall that after he was sworn in, Magufuli made an impromptu visit to the Ministry of Finance (MOF) and stressed its centrality in regard to the collection and management of revenues. One could almost sense the level of trust he had on some public officials there.

In this regard the accusations against "Public Official E" who was the then "Deputy to Public Official X" in MOF on page 8 of SFO's document is a big blow. It introduces him as the "Recipient of the draft Letter of Proposal and mandate documentation from ST and described by SS [Soshe Sinare] in July 2012 as "the key person on this transaction." Elsewhere, on page 3, it thus connects him to the person who withdraw the "almost all of the EGMA US $6 million was withdrawn in cash between 18th and 27th March 2013":

"EGMA's Managing Director, Dr. Fratern Mboya had been Chief Executive Officer of theTanzanian Capital Markets and Securities Authority (a government agency established topromote and regulate securities business in the country) [CSMA] between 1995-2011. One ofDr Mboya's curriculum vitae referees was the then Deputy to the most senior Civil Servant (Treasury), MOF and one of the GOT officials involved in this transaction herein referred to as"Public Official E""

Now one can connect the dots and easily tell who this official is. To be fair, page 10 of SOF's document almost exonerates him when it describes how he 'prudently' dealt with the 'situation' when the Minister whom the late Minister B replaced was still in charge:

"He [Public Official E] apparently raised with SS [Shose Sinare] some objections raised by the technical MOF staff which SS  agreed to address in writing. SS [Shose Sinare] reported that Minister A was keen to see a draft Mandate Letter and close the deal quickly. During the same month SS [Shose Sinare] also "cleared the air" with Minister A, Public Official E and others about some issues which had arisen on the 2011 transaction."

If there is one lesson that we can learn from these "statements of fact" from SFO, then it is this: What we have seen is just a tip of an iceberg. While it is so easy to zero in on the apparent link between EGMA, Bashir Awale, Harry Kitilya (former Commissioner General of Tanzania Revenue Authority(TRA)) and the 'said owner' of the plot that its website says it is located at, i.e. 'Alfa House Plot 25', in simply doing so, that is, at the expense of other facts we may lose sight of the bigger picture. When we conclude what we know on the basis of the British media we easily miss the point, nay, iceberg beneath the weight of evidence that SFO has shared. 

By focusing on one 'Blacklist', we may easily find ourselves with a 'Blindspot' for the 'full list'. If what was referred to as the 'Network' (Mtandao) operated as a 'Cabal', then Magufuli's work of  bursting what he refers to as boils in our 'body politic' is only beginning.

What would Magufuli do? Scratch the surface? Or get to the root?


Unknown December 2, 2015 at 11:46 PM  

Good points as always. How deep should the president go in cleaning the house and what are implications of such a foray. My concern however are somewhat different. They reflect what many other scholars have previously said such as Zeleza, McGovern and Mamdani: positive change is about institutional culture and not one man show. For example, those government workers that show up at work early and do their jobs efficiently they do so because its their duty or out of fear of the paramount chief. The chief has a club and a spear. Sustainable and deep changes cannot come from just strong leaders--some have called such a mode of governance neo-patrimony--but from an institutional culture that is widespread. One is tempted to ask what happens when Magufuli leaves? Is ten years enough to create deep and meaningful institutional changes? What has Mwalimu Julius Nyerere's political legacy taught us? I am vacillating between hope and despair that what we are seeing is great but may have a short shelf life.

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