FRANKLY SPEAKING... 1) Why do you think that President Banda is implicated in the cash-gate scandal? The Cash-gate scandal is a looting of state coffers perpetrated by an organized syndicate made up of government officials, people in the ruling party, and individuals and companies in the private sector. In my investigations into this matter, I was provided with information from individuals from inside the syndicate. It was these whistleblowers that named president Banda and confirmed to me the structure that I present in the report “Licence to Loot”, and it was this that confirms also my own theory of the setup of the syndicate. Furthermore, please note the following: a) The Malawi Financial Management System (IFMIS) is set up with internal checks and controls that can only really be bypassed with orders from above. Given the scale and the amounts involved, this supports the information given to me by whistleblowers within the syndicate. b) Almost all those arrested in the scandal, and especially Oswald Lutepo, are individuals with strong links to the President and her ruling party. c) The wealth of the President, particularly that which she has acquired since becoming president, is unknown. Estimates based on her so-called personally funded projects demonstrate great wealth, which, because of her continual refusal to declare her assets, remains unexplained. President Joyce Banda is set to distribute 2 million cows by May 2014 from the so-called her own personal funds, launch a parallel fertilizer subsidy worth over MK20 billion, and from media reports, she has been distributing blankets and maize on each of the rallies she conducts every one to two days apart. She is estimated to be worth in excess of MK50 billion when she was unable to do any charity projects at all due to lack of funds before becoming president. d) Finally, I submit that even if the evidence implicating the President directly was not conclusive, the President is implicated indirectly, and could be considered guilty of gross negligence and failure to execute the responsibilities of her office. It is just beyond comprehension that this amount of syndicated looting could happen right under her nose (investigations have firmly implicated the Office of the President) without her knowledge. 2) Do you think that the level of corruption (and looting of state funds) was similar under the previous President? I have not been able to establish systemic corruption of this nature as happening under the previous regime. In my investigations, I am aware that a report analyzing IFMIS recommended to the president then that it was vulnerable to sabotage and leakage. However, my investigations reveal that much of the corruption that happened under Bingu wa Mutharika involved kickbacks, patronage and bribes. Much of this happened in the second term. There were tight fiscal controls in the first term and the opposition was strong enough to exercise effective oversight. Corruption during this period also comprised of monopoly of business by few business empires connected to the President and to the president’s Lomwe tribe. The current PP government claims that MK90bn was looted directly through Treasury during the Mutharika period, but this is unverified. I have been unable to establish the existence of a presidentially sanctioned syndicate as that which exists under the current administration. Under the previous regime, services were being delivered, but contracts were limited to very few people with connections to the President and to the DPP. Under the current regime, people and companies are being paid billions without delivering any service at all. My investigation on the level of corruption in the previous regime is still ongoing. To unearth the full extent of corruption and quantify the totality of funds lost in the past ten years, and to assess the effects of this on the Malawian economy I need insider intelligence and other financial and human resources. However, on the basis of the available evidence, I submit that the level of corruption under the previous president did not reach the levels of the current one. 3) How much money do you think that has been looted over the last 18 months? And in the previous 10 years (if any)? The Malawi Financial Intelligence Unit (FIU) has been in existence for less than ten years and thus does not have full information for the past ten years. Their audited figures reveal that more than MK20 billion has been looted from the IFMIS alone in the past 4 months. By straight line extrapolation, over MK81bn could have been looted over 18months. Unaudited figures for the Mutharika period as claimed by the PP are that up to MK91 billion could have been looted by the previous administrations. This is unconfirmed. My own conservative estimates, based on these unaudited figures, verified media reports and undeclared assets of politicians suggest that over MK120 billion may have been looted in the past 10 years. Of that figure, over MK80 billion could be in the last 18 months. There are so many avenues through which the Malawi government loses billions: allowances by corrupt civil servants, theft of fuel and small-scale corruption by numerous government officials in collusion with suppliers to steal from government. If the figures above are combined with corruption in the Civil Service, the wastage runs in the hundreds of billions. If you take an average of 300 Billion directed to the annual budget and the resultant lack of progress in development, I would safely say that 40% of the budget goes down the drain. Hence my estimate that 120 billion may have been lost cumulatively over 10 years; When we combine MK120 billion with other forms of official corruption at the very top level, the sums are astronomical and the grossest violation of human rights. 5) Why do you think that donor countries have decided to say enough is enough now? It is impossible for me to speculate on this one. I believe the donors have very good reason for doing so which they may be willing to share. 6) What do you think would be the impact of the cash-gate scandal in the 2014 elections? It is difficult to predict the impact that the cash-gate scandal may have in the 2014 elections in Malawi. On the one hand, if the millions that have been looted will in fact be used to finance the PP campaign, then one would think that the ruling party would have an unfair advantage. Indeed it has been suggested that it is these looted millions that have been used to buy maize and cows, which have been distributed widely by President Joyce Banda in order to build her popularity at the grassroots. This is already an unfair advantage because opposition parties do not have such financial power. On the other hand, the effect of the cash-gate scandal could be to reduce President Banda’s popularity, giving the opposition parties the right debate upon which to engage her and upon which they are assured of popular sympathy and support. In this regard, the looted millions not withstanding, president Banda might find that the strategy has backfired because of its being exposed. There are many unknown factors, such as the reaction and position that will continue to be taken by the international community- especially the donors and what they will do to public opinion in Malawi. The role of CSO’s, which already are calling for the president to resign and are organising campaigns to march to state house and refuse to leave until the president resigns, is also a factor that will need to be observed closely. In the final analysis, however, much of the impact of the cash-gate scandal will depend on what President Joyce Banda will do to address the issue. There is a real need for her to ensure there is a truly independent investigation and that prosecutions are carried out on all those concerned, whether they are her trusted confidants, supporters or even her own children. Convictions will be crucial, as will recovery of assets to show that these individuals did not benefit from cash-gate. Her own position in regard will also matter immensely. How willing will she be to show transparency and a commitment to solve the cash-gate scandal beginning in her own office? These are all factors connected to cash-gate that will have an impact in 2014 elections.
Posted on: Mon, 25 Nov 2013 15:13:27 +0000
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