Kenya’s Cabinet Secretary of National Treasury arrested of fraud, corruption charges

Reuters | Kenyan Cabinet Secretary of National Treasury (Finance Minister) Henry Rotich was arrested on Monday on suspicion of corruption related to the construction of two dams. It is unprecedented in Kenya for a sitting Cabinet Secretary to be arrested for corruption.

Charges against Rotich, announced on Monday, stem from a police investigation into the misuse of funds in a dam project overseen by the Italian construction company CMC Di Ravenna.

Rotich denied any wrongdoing in a large newspaper advertisement in March. The company has also denied any wrongdoing.

Rotich and his co-accused face 8 charges, ranging from conspiring to defraud and financial misconduct, Noordin Haji, the director of public prosecutions, said. The Cabinet Secretary and other officials will have to resign immediately, he said.

Rotich was arrested shortly after the charges were announced, George Kinoti, the head of the police Directorate of Criminal Investigations, told Reuters in a text message.

The Cabinet Secretary will be charged along with 27 other people, including Italian Paolo Porcelli, the director of CMC di Ravenna; and Rotich’s deputy at the ministry, Kamau Thugge, the principal secretary.

“They broke the law on public finance management under the guise of carrying out legitimate commercial transactions, colossal amounts were unjustifiably and illegally paid out through a well choreographed scheme by government officers in collusion with private individuals and institutions,” Haji told a news conference.

Both dams were budgeted to cost Ksh46 billion (US$446 million), he said, but the treasury borrowed far more.

“The national treasury negotiated a commercial facility increasing the amount to approximately Ksh63 billion (US$611 million) – which is Ksh17 billion (US$165 million) more than necessary or required, payable on a timely basis without regard to a performance or works,” he said.

Kenyan prosecutors have requested help from Italian authorities, Kinoti said, and more charges could result.

Political dimensions

Market reaction to the news was relatively muted, with little change in the shilling. Kenya’s dollar bonds maturing in 2028, 2032 and 2048 slipped around 0.5 cents in the dollar, according to data by Tradeweb.

However, Rotich’s indictment will send shockwaves through the political elite, who are accustomed to graft scandals resulting in little official action.

His arrest may also be seen as further evidence of a growing distance between President Uhuru Kenyatta and Deputy President William Ruto.

Rotich was appointed at Ruto’s request. Ruto has made clear that he expects to receive the ruling coalition’s nomination for the presidency in the 2022, despite objections from some in Kenyatta’s camp. Kenyatta will have served 2 terms and be ineligible to run again.

Ruto’s allies played down the charges.

“There is nothing to worry about. Relax,” Kipchumba Murkomen, the senate majority leader and a Ruto ally, told reporters.

Haji closed his press conference with a pointed warning against politicians using the case to score points.

“Corruption always fights back,” he said. “There may be elements who may seek to exploit these indictments to instigate social unrest.”

Rotich’s arrest was a “significant” step on a very long road, said Samuel Kimeu, the head of Kenya’s chapter of Transparency International. But he added:

“I would not be celebrating arrests. We need to see people in jail and we need to see what has been stolen recovered.”