Transport Minister James Macharia could be dragged in the Sh5.3 billion “Mafya” House scandal after it emerged his longtime aide influenced the award of lucrative tenders to her relatives.
The details came to light as the Senate Health Committee revealed that they would summon Macharia, the former Health boss, and his then Principal Secretary Khadijah Kassachoon in regard to the alleged heist.
Macharia’s Personal Assistant Irene Nanayu is a sister to Naomi Wanjiku Mirithu, a co-director of Medafrica Limited, one of the firms at the heart of the “Mafya House” storm. Wanjiku’s Medafrica co-director Njage Makaga also owns the controversial Estama Investment Limited that pocketed a staggering Sh800 million to supply 100 portable clinics.
The Kenyan Weekly has established that Njange is a close associate of the Minister’s PA and the rigging of the tendering process was meticulously executed.
In fact, it is believed Nanayu has considerable stakes in the firms and only used her sister to conceal her involvement.
Pressure has been mounting on Macharia and Health Principal Secretary Nicholas Muraguri to take political responsibility, although the dirty tricks of Nanayu have not been exposed.
“We wish to make it abundantly clear that the Cabinet Secretary who was in charge when the grand theft at the Health ministry took place is James Macharia,” Ugunja MP Opiyo Wandayi said last week, threatening mass protests.
Senate Health Committee chairman Wilfred Machage said many of the suspicious contracts were awarded when Macharia and Kassachoon were in office.
“Of course, we intend to call Macharia and the former PS at a later date depending on the preliminary findings,” Machage told journalists in Parliament.
Nanayu was Macharia’s Executive Assistant at NIC Bank before the latter was named Health CS by President Uhuru Kenyatta.
Described in Government circles as “ruthless”, Nanayu moved with Macharia to the Health ministry and has since shifted with the CS to the massive Ministry of Transport, Infrastructure, Housing and Urban Development.
“The lady is very ruthless. She should herself be summoned to Parliament to explain her relation with contractors,” frustrated Government insiders told The Kenyan Weekly.
The sleaze, also linked to Uhuru’s own relatives, has turned into a political hot potato for the First Family and is threatening the careers of the President’s trusted allies.
Macharia, the former NIC Bank General Manager, is a close Uhuru confidant and among the Cabinet Secretaries who survived the graft purge that consumed five CSs in March last year. According to the law, a State officer shall not award or influence the award of a contract to himself or herself, the State officer’s or public officer’s spouse or child, or even a business associate or agent.
“A State officer or public officer who has an interest in a matter under consideration in a public procurement or asset disposal shall disclose in writing, the nature of that interest and shall not participate in any procurement or asset disposal relating to that interest,” states The Public Procurement and Asset Disposal Act 2015.
The Ethics and Anti-Corruption Commission is investigating the scandal but the agency is largely considered moribund Medafrica was registered on August 12, 2013, four months after Macharia took over as Health boss.
However, according to records at the Registrar of Companies, Medafrica and Estama have not filed annual returns since their incorporation despite benefiting from some of the lucrative contracts. Nearly all disputed payouts relating to the Sh889 million free maternity funds were made before Macharia left the ministry last year.
In fact, the Sh1 billion contract with Estama Investment Limited to supply portable clinics was signed in July, 2015, although the payments were made this year.
Macharia served as Health CS until November last year when he was moved to Transport ministry and Kassachoon to the Ministry of Labour.
The current Cabinet Secretary Cleopa Mailu and PS Muraguri, have since been grilled by both the Senate and EACC with the two engaging in a nasty blame game.
However, Mailu insisted that at the time of procurement, Estama provided tax compliance certificate, contradicting a communique from the Attorney General Githu Muigai.
The CS also said the tender was above board and declared no money was lost in all the deals flagged by the internal auditor.
“We hereby also confirm that the company provided the requisite tax compliance certificate as well as its pin certificate as required during the procurement process,” Mailu said.
The scandal results from a leaked interim audit report for the 2015/2016 by the ministry‘s head of Internal Audit Bernard Muchere.
He raises queries on expenditure amounting to Sh5 billion, which the ministry was expected to explain before the report could be made public.
“The ongoing audit review on end of year procurements and payments has revealed pertinent issues which raise red flags on possible fraud scheme that require your attention,” Muchere wrote to Dr Mailu on August 29, this year.
He also points out at pending bills amounting to Sh2.5 billion from the 2014/2015 financial year despite the Ministry returning over Sh900 million to Treasury. “The pending bills should form the first charge in the subsequent financial year in line with Treasury circulars. Hence the ministry should not have 2014/2015 bills,” he said.
The scandal has roped in President Kenyatta’s own relatives.
Uhuru’s sister Nyokabi Kenyatta Muthama and cousin Kathleen Kihanya are directors of a company that pocketed Sh41 million in questionable payouts.
The controversial firm, Sundales International Limited, is listed on the Public Procurement Oversight Authority’s 2014 roll of “Disadvantaged Groups” that should receive preferential treatment when they bid for tenders.
Last Saturday, a local daily exclusively reported that Sundales, registered on September 12, 2013 – five months after Uhuru’s election – has been awarded Government contracts running into hundreds of millions of shillings.
Between September, 2014, and February this year, for instance, Sundales won at least five separate tenders from the Kenya Medical Supplies Authority — worth Sh270 million.
The Kenyan Weekly newspaper is a fresh general-news publication published on newsprint once a week.