Aspirants for the 2017 elections have devised ways of bypassing stringent campaign financing rules as well as anti-money laundering laws which restrict the handling of bulk cash.
The tricks which include installing of safes at home to keep the money and colluding with unscrupulous bank staff to circumvent the controls illustrate the extent they are willing to go about their political activities which includes treating voters unimpeded.
A number of political contenders, especially those at the level of governor, senator and presidency-positions — which are capital intensive — admitted in confidence to having procured safe-deposit boxes for storage of cash. These are mostly hidden out of sight, considering the possibility of a surprise raid by the Ethics and Anti-Corruption Commission officials.
They are also encouraging their benefactors to give them cash donations and not cheque or in other electronic forms to avoid interacting with banking institutions.
Being tamper and fire-proof, such vaults are usually found in banks but they now appear to have found new use in homes and offices.
Nyamira Senator Kennedy Mong’are says the rules are incapable of obedience.
“Who’s going to enforce this? The law is in itself too ambitious. Looters of public coffers in this country do not keep the money in the bank,” he says.
It all begun with a circular by the Central Bank Governor Patrick Njoroge back in January informing banks that from then on, they would be required to keep closer tabs on customer withdrawals and deposits to rein in on money laundering.
“The CBK asks institutions to obtain the following additional information while handling large cash transactions: Why the large cash deposit or withdrawal is necessary? Why it cannot be done through electronic means? The full identity of the intended beneficiaries,” it read.
The Nation is aware that CBK is under concerted pressure from MPs to relax the requirements ahead of the polls with some threatening to censure Governor Njoroge if he does not budge.
But the Kenya Bankers Association (KBA) chief executive Habil Olaka says they are complying with international requirements and will not change the rules of engagement because of politicians.
“The regulations are not unique to Kenya. It is part of the global effort to tame money laundering and financing terrorism. We can choose to soften our stance but this will be at the greater risk of being blacklisted. This would adversely affect the economy,” he said.
CBK defines a large transaction as one exceeding $10,000 (Sh1 million) or its equivalent in any currency.
Former Youth for Kanu ’92 National Treasurer Sam Nyamweya says the new rules will make it more difficult for politicians to campaign because politics needs money “and big money for that matter”.
“But it will be very hard for banks to refuse to give you money because it is your money anyway. If you went to the bank and told the manager you need Sh10 million to pay your workers, will he refuse to pay you? He cannot. Kenyans are streetwise, they will devise methods of beating banks at their own game,” he said echoing what is already going on.
For those who with their monies in the bank, they opt to do many transactions that are barely shy of Sh1 million to avoid being subjected to the scrutiny. It is not rare to see many with drawing Sh999,999.
There are those who collude with bank officials to get “false loans”. It is an intricate yet sure way of cleaning their monies; The unscrupulous staff cheats the system by claiming that a given amount of loan has been awarded to a given customer when in actual sense this is not the case.
Armed with “loan papers” the customer is then able to approach a different bank and deposits the borrowed cash. They are then able to withdraw it in convenient amounts at a later date.
While the rules were largely informed by wanton theft at the National Youth Service where banks received so much flak for aiding the theft of billions of shillings from the public coffers, politicians have been caught in between since the law is cross-cutting.
The Elections Campaign Finance Act decrees that those seeking elective offices next year should open bank accounts and name the people who will manage them.
The Independent Electoral and Boundaries Commission (IEBC) says no one can spend campaign money without opening an authorised bank account and appointing people to run it. Names of such appointees must then be submitted to IEBC eight months to the election.
As they pursue the extra legal means to beat the law ahead of an election projected to gobble up more billions of shillings than past elections, the politicians are also seeking to amend sections of the law to grant them some reprieve.
National Assembly Speaker Justin Muturi has called a special sitting of the House on Tuesday to consider proposed amendments to the law on campaign financing.
The IEBC limits parties spending at a maximum of Sh15 billion for nationwide campaigns. Aspirants for various seats have different caps as well.
A presidential contender must restrict his expenditure to not more than Sh5.2 billion, Sh432 million for woman reps, governors and senators depending on counties in which they are running. Members of the County and National Assembly’s budget range between Sh10 million to Sh33 million, again depending on their size and location of the voting unit.
A group or entity is also not allowed to contribute more than Sh3 billion to a political party.