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Rumours, truths and lies on Dominion Farm

Some time in 2011, a Nigerian Minister for Agriculture – on the request on former President Olusegun Obasanjo – flew to Kenya and went to Yala swamp to see what American investor Calvin Burgess was doing there. Obasanjo had been to Yala before on the invitation of Raila Odinga, who is a family friend. Soon after, the minister invited Mr Burgess to Lagos in a trip that he would later describe as a “great fanfare of private planes, helicopters, and fancy hotels”.

“We were promised the world, if only we would come to Nigeria to build another Dominion Farm,” he would later say of the 30,000 hectares of land that was on offer.
Mr Obasanjo had wanted to woo Mr Burgess to start massive rice cultivation in Taraba State and in Nigerian newspapers, he described him as a “friend of Nigeria.”

It is a story that can help us unravel the mystery of the Canadian-born Oklahoma man behind the expansive Dominion farms straddling Bondo and Siaya – and how well connected he is (or was). We will come to that in a short while; but first, the allegations.

Burgess was in the news this month after he claimed that opposition leader Raila Odinga, his family members and political associates had been trying to extort money from him – and have been frustrating his business after he refused to give in to demands that he bankroll’s Odinga’s Orange Democratic Movement (ODM) party.

Interestingly, Raila has refused to be drawn to that debate and has left his political handlers to deny the allegations and threaten Burgess with a libel suit.

Burgess also claimed that Odinga’s sister, Kisumu deputy governor Ruth Odinga, had taken rice from the factory and refused to pay for it and that this has now caused bad blood between the Dominion Farm administration and the locals.

It is not clear where the fallout with the Odinga family came from since when the project was starting, Raila’s eldest brother, Oburu Odinga, took it upon himself to lobby the government to approve the controversial project.

But who is this man?

Burgess arrived in Kenya in September 2002 at the height of the Moi succession campaigns that had seen the emergence of Uhuru Kenyatta as the Kanu candidate and the formation of the Rainbow Alliance that was opposed to Moi’s candidate. By his side was a local clergyman, Rev Ken Nyagudi, who was vying for the Kisumu Town West seat (which he won) – and is currently the ODM director of E-fundraising and resource mobilisation.

Rev Nyagudi introduced Burgess to local churches, politicos and elders. He organised church crusades where Burgess was the preacher and he would even attend local funerals and hold development seminars with the elders.

POSITION OF KINGMAKER

By then, Raila was the key player in the Rainbow Alliance, composed of Kanu stalwarts who included George Saitoti, JJ Kamotho, Moody Awori and Kalonzo Musyoka. The group later merged with Mwai Kibaki’s National Alliance of Kenya (NAK) to form National Rainbow Coalition (Narc) that trounced Uhuru Kenyatta at the ballot box, thus elevating Raila to the lofty position of a kingmaker.

It was during this period, September 20, 2002, that Burgess visited the Lake Basin Development Authority (LBDA) which was in charge of the Yala swamp, and took a quick look at the trust land then under the Siaya and Bondo county councils.

He was seeking an opportunity to invest there – by building Africa’s largest rice farm and perhaps fulfil the reclamation opportunities that had been identified here in 1954 when Sir Alexander Gibb and Partners made the first proposal on profitable utilisation of Yala swamp.

Mr Peter Owino, a worker at the Dominion farm in Siaya feeds fingerlings at a fish pond within the extensive farm. The farm rears fish for sale. PHOTO/HEZRON NJOROGE

Mr Peter Owino, a worker at the Dominion farm in Siaya feeds fingerlings at a fish pond within the extensive farm. The farm rears fish for sale. PHOTO/HEZRON NJOROGE

Yala was a desolate tsetse fly-infested place – a showcase of how not to run an irrigation project. Of the 17,000 hectares, the struggling LBDA had only managed to reclaim 2,300 hectares and constructed some dykes and canals. After years of wastage and wanton theft, LBDA had sunk hundreds of millions of shillings into that swamp and there was nothing to show for it.

For many years, Yala was like a condemned yard of abandoned government houses, collapsed dykes and rusty machinery. The only visible development was a dyke that had been built between 1965 and 1970 and that had led to the successful channelling of the Yala River and its separation from Lake Kanyaboli.

Even though various studies – first by a Dutch firm Illaco and later by the Japanese – had been carried out on Yala swamp’s potential, no international investor was willing to put his faith and money in that swamp.

PROCESSING PADDY RICE

That is the place that Mr Burgess walked into, as the first foreign investor. Following a second meeting, held at the offices of Kaplan and Stratton advocates, it had been agreed that LBDA would be a shareholder of the Dominion project by contributing land, heavy equipment and rice mills for processing paddy rice.

Mr Burgess was not an ordinary soul. He was a Canadian-born American millionaire; the founder of Oklahoma-based Dominion Group of Companies whose core business was to build private prisons and lease them to the government.

Back home, he owned several prison properties and federal buildings in the states of Texas, New Mexico, Kansas and Oklahoma. Besides construction and leasing, he also ventured into large-scale farming, and aircraft maintenance and leasing, minting millions of dollars every year in profit.

A man who presents himself as religious and owns a church, Mr Burgess always says that he came to Kenya following a touching testimony about the poverty in Yala made in his Oklahoma church by a woman who had lived there for many years.

“God has plans for people’s lives,” Burgess was once quoted as saying about his decision to come to Kenya, “and I thought that maybe this was part of His plan for me.”
But he didn’t know that he was walking into a dreary environmental trap pit – where politics, corruption and activism thrive as cosy bedfellows.

Burgess knew how to survive in African politics. As a rich Christian, he could easily mingle with the locals thanks to Rev Nyagudi’s friendship and support – and dine with the mighty too.

Located at the end of Yala River in the south and the Hwiro and Nzoia rivers in the north, Mr Burgess’s Dominion project was initially to run for 25 years before it was handed back to the parastatal. In between, and nobody seems to know how, this lease was extended to 45 years, plus some additional hectares.

PAY SH15 MILLION

An MoU was also signed between the Siaya and Bondo councils – but not Busia, where the farms extend to. Burgess was to pay Sh15 million to a council account – which he claims in a published interview that he did – before it was emptied and closed after the payments. As compensation, the MoU had asked Dominion to rehabilitate 150 acres as community land but he was forced to give more than that.

Starting this project was an investment nightmare since environmentalists regard this swamp as home to the endangered Sitatunga antelope. They made a lot of noise – on that account alone – but Burgess was unmoved.

While he was patient to see his Yala project thrive, he was impatient with the government bureaucracy and that is how Oburu Odinga sought to push for the approval of the project by taking on the government on the floor of the House. And he did this with the support of other Nyanza MPs.

This was at a time when the Ministry of Water Resources – under Martha Karua – and Natural Resources – under Newton Kulundu and Prof Wangari Maathai – had stopped the project and asked Dominion to hand back all the government equipment and houses.

The stoppage of the Dominion project sparked protests in Kisumu, Bondo and Siaya and the demonstrators accused the Mwai Kibaki government of attempting to sideline the Luo by frustrating foreign investors. It was the ministry of Planning and National Development, then under Prof Anyang’ Nyong’o, that gave Dominion the go-ahead.

Because of the bad blood between various arms of government, due to the collapsed Narc MoU, Dominion managed to survive and take off minus lots of scrutiny.

Its problems started when local activists emerged demanding that Dominion should compensate 150 locals who owned the land before it was taken over by LBDA. Again, local MPs shielded Dominion from paying: “It was not the responsibility of the investor to pay those people but, rather that of the government,” said Nyakach MP Peter Odoyo during the 2006 discussion about the Yala Swamp and place of Dominion.

At that time Dominion had started to encroach on people’s property and international activists saw Calvin Burgess as a good example of land grabs in Africa. But Burgess had the local political backing and always denied that allegation. “This was not land, it wasn’t gazetted, it didn’t exist, this was a swamp,” he once told NTV. In another interview with environmental author Fred Pearce, he said: “Whatever the locals say, they didn’t use the swamp. They couldn’t get in. Now they want to go there of course because we are drying it out. But they didn’t before.”

Another issue that was never addressed – thanks to local politics – was that Dominion Farms had, after signing the MoU, taken over Yala swamp with minimal consultation with the LBDA management. It had also failed to provide a project proposal and had not paid for land rates among other issues, according to then assistant minister for Regional Development, Danson Mungatana.

As the draining of the Yala swamp started, Burgess flew from his Oklahoma base to supervise the works. In between, lobby groups and environmental activists raised concerns about the environmental destruction of Yala swamp. Letters started flying to both the Kenyan authorities and UNEP – but Mr Burgess had the backing of the most powerful family – the Odingas.

IRRIGATE RICE FIELDS

Before long, Dominion Farms occupied some 40 per cent of the Yala Swamp, but the dam that the company built to irrigate its rice fields had flooded a much larger area and made it practically impossible for the local communities to raise livestock.

They also claimed that Burgess’ project was destroying their access to water, and that the regular aerial spraying of fertilisers and agrochemicals made them and their animals sick.

In 2006, Peter Oloo Aringo went to Parliament and lobbied for the establishment of a technical committee on Yala Swamp whose objective was to recommend the expansion of the Dominion project towards Busia. Parliament was told that Burgess had invested Sh2.3 billion and had brought equipment worth Sh400 million. But there was one problem – this equipment had been detained at the Mombasa port by the taxman.

It was during this period that Burgess found his way to State House, Nairobi, where he met with President Kibaki and that is how Dominion got another lease of life. Kibaki would follow up and inaugurate the Dominion rice mills a year later.

To his credit, Mr Burgess rehabilitated the Yala swamp into a formidable showcase. It stands out as one of the best run irrigation schemes in Eastern Africa employing hundreds of people. What he forgot was that powerplay, politics and business are sisters.

It was the success of this venture that saw Nigeria’s Obasanjo invite him to Nigeria which was looking for a rice investor to feed its growing population.

Like in Kenya, Burgess went and met the local community, the State government and the Upper Benue River Authority. He also visited churches and mosques to sell his vision before meeting the Minister for Agriculture, the Minister for Water, the ports and customs offices and the US Embassy officials

On February 17, 2012 at the Abuja Hilton Hotel, Burgess signed an MoU with the State of Taraba and the Government of Nigeria and they agreed to fly 50 Nigerians to Yala for six months of training.

PROMISED FINANCING

Then he found hiccups: “The promised financing from both the State of Taraba and the Government of Nigeria was all talk but no money. Help from the President came in the form of a waiver for all duty on agricultural equipment for everyone … not just us. Treasury and Customs quickly hid the waiver in their “Secret Files”.

We fought for a year to get the promised exemptions and only after tape recording the direct demands for bribes from high officials in the Treasury did we even find out about the “Secret Files”. The Treasury attempted direct extortion from our manager and he recorded it and gave the copy to the highest law enforcement agency in the land but the culprits scoffed at us with impunity …”

In between, he was accused of attempting to grab land and displace thousands of locals. As his equipment arrived at the Nigeria ports, Burgess refused to pay bribes.

“The clearing agents added “extras” to our billings and when we demanded to know what these were, there was no response,” he later said. “We would not be part of their corruption … I have been extorted, arrested, detained, lied to …

Finally, he threw in the towel in West Africa. Whether he survives at the Yala Swamp where it all began remains to be seen. But the story of Dominion Farm has hardly been told. The story of Burgess is only beginning to unfold.

[email protected] @johnkamau1

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