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Wanted: Will Auditor General Edward Ouko survive latest hit?


Edward Ouko is a marked man. The decorated accountant has been a nightmare for the Jubilee administration with his hard hitting reports that have indicted various ministries and government departments. He is now in the biggest fight to save his six-year career as the Government’s top auditor.

Several fires lit from different fronts, now threaten to consume him. From battling efforts to trim him to size by cutting his budget, he has waged wars to keep his independence as well as protect his staff from being threatened after stepping on many toes.

But these pale in comparison to his current fight. The latest fire came last month when Mr Emmanuel Mwagambo Mwagonah, a lawyer, filed a petition in Parliament seeking his removal from office. The petition gave Parliament a necessary window to join a fight previously waged silently by the executive. The fire could see him exit his office at Anniversary Towers way before the end of his term.

In a major departure for a man who had chosen to fight his battles privately since he took office in 2010, the top auditor has come out in the open, choosing to lay bare his troubles in public. Ouko says he was alarmed by the manner in which the petition was being handled, which had left him without doubt he was a hunted man.

Who wants me out?

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The more disturbing issue, he said was not that he is being targeted, but that up to now, even as the matter is being “fast-tracked” by the National Assembly, he does not know who his real accuser(s).

“When he appeared before the Finance Committee that is handling the petition, Mwagonah said he was only the lawyer of the petitioner, but could not tell us who is behind the move. Just who is my accuser?” Ouko posed. Mr Mwagonah has accused Ouko of ‘serious violation of the constitution and several other laws of the republic.’

According to the petitioner, Ouko violated the Constitution by failing to submit reports to the President and to Parliament. He cited at least 30 grounds on which Mr Ouko should be pushed out of office. He accused Ouko of being in breach of the law requiring public officials to be prudent and responsible in the use of public funds by allegedly failing to prevent wastage. One of his sharpest attack came on Ouko’s foreign travels.

“The auditor general frequently travels out of the country sometimes for reasons that are more private than official, but the expenses are met through public funds,” Mwagonah says in his ten page petition. “This can be demonstrated by a review of his passport. As a result he is forced to remotely manage the office, increasing the telephone and internet costs,” Mwagonah adds.

In one trip abroad in 2014, Mwagonah alleges that the telephone charges of Ouko’s iPad line was in excess of Sh1 million. “The amount was not captured as telephone expenditure in the accounting records,” the petition adds. In a classic case of the hunter becoming the hunted, Mwagonah also claims that Ouko has five vehicles attached to his office which are used by his close family members.

“One vehicle is allocated to the wife and another to daughter. These vehicles include two Mercedes Benz, one Toyota Land cruiser VX, one Volkswagen Passat and one Nissan Patrol. All the above vehicles have private plates and therefore easily abused,” he alleges.

Another allegation is that the office of the Auditor General procured regional offices in Mombasa for a period of over one year which were never occupied. The office attracted rent of Sh10 million. But it is the allegation that he benefited from the award of a Sh100 million contract for audit software that is likely to keep more tongues wagging.

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According to the petition, about Sh36 million from this contract was subsequently paid to a firm associated with the Auditor General. Another Sh13 million was allegedly paid to a company whose directors were the sons of the deputy Auditor General. He says Ouko approved the single sourcing of this audit software.

This is not the first time he has fought this software scandal. Ouko was able to get off investigators after it emerged that he approved the Sh100 million audit vault tender on condition that all due diligence was undertaken.

When his deputy Stephen Kinuthia requested Ouko’s authority to issue a formal Local Purchase Order (LPO) to process payment for the contract on August 26, 2013, Ouko responded: “I approve on confirmation all due diligence undertaken. Ensure procurement regulation 62(3) complied with…”

The Director of Public Prosecution (DPP) Keriako Tobiko, who dropped the investigations against Ouko on the software bids, said it was clear that it had actually been awarded. “The tender committee at its meeting of June 24, 2013 not only approved the use of direct procurement method but also did make and must have been understood by all to have made an award to OSI Kenya Ltd,” Tobiko said.

Audit Vault

On EACC’s second charge of engaging in a project without prior planning, the DPP said there was enough evidence in the EACC file negating the same charge. The final charge against Ouko — willful failure to comply with the law relating to procurement — was equally found defective on the basis of lack of specifics and also for being illogical.

“From the evidence, Ouko was deceived by Kinuthia, Annette Mwangi and Justus Ongera regarding the issue of OSI being the exclusive supplier of Audit Vault and regarding the issue that all processes and procedures had been followed, including due diligence by the tender committee,” DPP said. The other allegation is that Ouko ignored merit and the approved scheme of service in the recruitment and promotion of employees in his office.

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But Ouko, who said he was ready to respond to all allegations levelled against him, said it was telling that the petition was filed in the House, considered by a legal committee, forwarded to the Clerk’s­­­ office and finally to the Speaker, who in turn communicated to the House and committed the same to the Finance committee, on the same day.

“The petitioner further asserts that the Auditor General has severally acted contrary to the Public Procurement and Asset Disposal Act with regard to procurement activities in the office, the Public Audit Act with regard to the appointment of members to and operations of the audit advisory board and the Leadership and Integrity Act with regard to alleged conflict of interest and the recruitment of some employee in 2015,” Mr Justin Muturi, the speaker of the national assembly told Parliament when he notified them of the petition.

Ouko’s is one of the latest high profile petitions filed against a holder of an independent office in the current Parliament. Other prominent petitions include one for removal of National Lands Commission Chairperson Muhammad Swazuri, which has been stopped by the High Court and the one filed in 2013 against Ms Sarah Serem, the chairperson of the Salaries and Remuneration Commission (SRC).

Since it is only the Parliament that can initiate Auditor General’s removal from office, Ouko has now rushed to the courts to stop his ouster. In the court process, Ouko has sued President Uhuru Kenyatta, the National Assembly, its Speaker Justin Muturi and Clerk Justin Bundi as well as Attorney-General Githu Muigai.

Ouko wants Mr Muturi barred from forwarding any recommendations made by the House to the President, who is expected to constitute a tribunal to investigate him.

In the ensuing battle, activist Okiya Omtatah filed a case at the High Court against the National Assembly, its Speaker, the Attorney-General and Mr Emmanuel Mwagambo Mwagonah over an imminent intent to remove Mr Ouko from office.

High Court Judge Chacha Mwita issued orders stopping Parliament form proceeding with the petition, which outraged Mr Muturi.

His removal comes at a time when his office is at the tail end of compiling the controversial Eurobond report which is expected to clear the air on the Sh250 billion loan. “Due to the malicious nature, the unprecedented fast tracking and the unfair manner that the process was undertaken, the applicant is apprehensive that the process will irreparably violate his fundamental rights and freedoms guaranteed under the Constitution,” Ouko says in his court papers.

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Federal Reserve Bank

These fights, insiders say, have now slowed down the man and distracted him from his main audit job as the country heads into an election.

His fellow members of staff at Anniversary Towers say the man is no longer the firebrand that he was when he took over office. “He loves his glass of whiskey in the evenings especially he is under pressure like the last six months have been,” a source said. Mr Ouko became a marked man from October last year after president Uhuru Kenyatta publicly displayed his dissent for Mr Ouko’s continuing to pursue the Eurobond saga.

In the State House attack Kenyatta laughed at Ouko saying: “Na huyu amesema anataka kuenda kuinterrogate (And this man here says he wants to interrogate) Federal Reserve Bank of New York. Ngai! (My God!) Anyway, you know, you sit back and you ask yourself, are we being serious in what we are doing?”

Expenditure of the proceeds of the borrowing created a huge public debate after the National Treasury was unable to name projects in which the billions were sunk into. This caused Ouko to start a probe on the case. As part of the probe, Ouko sent his men to New York to interview Federal Reserve Bank officials, following claims that they could have taken part in falsifying Kenya’s records on Eurobond. He had been skeptic from the start and had refused to clear the Government on the Eurobond.

In his latest report, he wrote: “Investigations into the receipts, accounting and use of funds related to the Sovereign/Euro Bond are still ongoing and the accuracy of the net proceeds of Sh215.5 billion is yet to be ascertained.” Mr Ouko singled out the Ministry of Water and Irrigation, which was said to have received Sh11.2 billion. He said the officials failed to show any documentation of receipt and expenditure.

Ouko’s term ends in 2019. He can only, however, be removed from office through a tribunal.

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