Kenya Among Countries Mentioned in Panama Papers Leak

Eleven million documents held by the Panama-based law firm Mossack Fonseca passed to German newspaper Sueddeutsche Zeitung, and then shared with the International Consortium of Investigative Journalists reveal how the rich and powerful use tax havens to hide their wealth.

Out of sixteen Africa Countries, Kenya has not been spared within the revelation.

Kalpana Rawal, the deputy chief justice of Kenya who was sworn in June 2013 after taking over after Ms. Nancy Barasa who resigned instead of facing the Supreme Court to hear of her appeal. Barasa was accused of threatening a security guard with a gun.  

Rawal on the other hand, has been fighting an attempt by the Judicial Services Commission to force her to retire from Kenya’s Supreme Court on her 70th birthday in January 2016.

Rawal with over 40 years’ experience in the legal profession, and described by the Kenya Law as, “A loving wife, caring mother of two and proud grandmother of three”, looks like the tip of an iceberg.

The Mossack Fonseca data reveals that Rawal,  “Rawal and her husband were directors of two companies based in the British Virgin Islands, prior to her joining the nation’s Supreme Court. The family used other offshore companies to buy and sell real estate in London and nearby Surrey.”

• Montague Real Estate SA was used in 2004 to buy a London flat for $1.12 million, which they sold in 2006.
• Innovate Global Limited was used to buy a house in Surrey for $2.74 million and a London apartment which they bought for $967,000 in 2004 and sold for $1.62 million in 2013.
• Through Arklyn International Limited, they bought another two London apartments, one bought for $1.66 million in 2005 and sold for $2.23 million in 2011, and the other bought for $1.57 million in 2005 and sold for $2.15 million in 2012.

However, she says without her knowledge, she was listed as director on two of them by her husband when he was told two directors were required.

“My family members include my two adult sons residing in London, both of whom are British subjects and run the business as per the laws applicable in U.K.” She said has never had “any involvement direct or indirect and have no interest or control” in the other companies.

Offshore accounts aren’t illegal

The International Consortium of Investigative Journalists (ICIJ) according to Panama papers, sifted through thousands of emails, documents and images to find names that were in the public interest. The year-long investigation unveiled connections to companies in many different tax havens, their uses and their real owners, whose identities were sometimes hidden behind layers of secrecy.

It further clarifies that, “There are legitimate uses for offshore companies, and we do not intend to suggest or imply that any individuals or entities included in the interactive were in violation of the law.”

Which countries have officials implicated in #PanamaPapers? Just a few: pic.twitter.com/Gy4m8VLu5b

— ian bremmer (@ianbremmer) April 4, 2016

On the contrary, if persons mentioned ever violated the law, then it raises many questions that Kenya and the rest of the continent is trying to tackle.

The Transparency International 2015 Corruption Perceptions Index ranks Kenya 139 out 168 countries.

Chantal Uwimana, TI Director for Sub-Saharan Africa notes that, “Forty out of the region’s 46 countries show a serious corruption problem and there’s no improvement for continent powerhouses Nigeria and South Africa.”

TI states that the human cost of corruption is huge, yet all too often leaders with notoriously corrupt records continue to enjoy lives of luxury at the expense of people living in grinding poverty.

For instance, Kenya President Uhuru Kenyatta during the state of the nation address at Parliament buildings, Nairobi on 31st march 2016 said there are more than 360 corruption cases before the courts, most of them involving senior public officials.

Sadly enough, none is behind bars for alleged corruption cases.

On the other hand, it seems the British government is doing more than the Kenyan government in tracing and recovering assets looted. For instance, the British has been able to seize and repatriate assets from the ‘chicken gate scandal, the confiscation of former Kenya power boss Samuel Gichuru off shore account funds’ and they are in the process of identifying a KSh 145 billion looted from the taxpayers according to the Kroll Report.

Other persons who have been convicted by the UK include, businessman Ketan Somaia was fined KSh5.6 billion by a UK court or be jailed for an additional 16 years. Somaia, is serving an eight-year sentence at the Belmarsh Prison for fraud.

However, the Kenyan citizen will never know the suspects who played a role within the Chickengate scandal as all alleged suspects have denied being involved. No one will ever know who was involved in the unlawful acquisition of the Sh1.5 billion Tokyo Embassy after the Anti-Corruption Court freed the former Foreign Affairs Permanent Secreatary Thuita Mwangi, Allan Mburu and former deputy director of administration in the ministry, Anthony Muchiri, after the court ruled there was no evidence to warrant putting them on their defence.

Existing measures of corruption are predominantly perception-based

At a continental level, it will be interesting to know the details that the Panama papers have on Uganda, Botswana, DRC, Sierra Leone, Guinea,Nigeria,South Africa and Kenya.

This is because, in fighting illicit financial flows, Africa loses over $100 billion annually through illicit financial outflows, profit repatriation and bad treaties signed between governments and multinationals.

The Economic Commission for Africa’s fourth Africa Governance Report (AGR IV) titled, “Measuring Corruption in Africa: the international dimension matters argues that existing measures of corruption are predominantly perception-based, and that they ignore the international dimension of corruption.

The Report questions the credibility and reliability of corruption indices that focus on country ranking or naming and shaming, but offer minimal policy insights and practical recommendations to inform policy reforms. Thus, it lays importance of measuring corruption and of understating its international dimensions.

“Policymakers must understand the importance and implications of viewing corruption as a broader phenomenon where private agents share significant responsibility, and where many unethical acts, which can be regarded as corrupt, may not necessarily be illegal or located within the public sector,” says Carlos Lopes, United Nations Under-Secretary-General and Executive Secretary of the Economic Commission for Africa.

ECA’s director for macroeconomics policy, Adam Elhiraika, stated that the problem of corruption in Africa cannot be solved solely by Africans. “To combat corruption, Africa needs good governance institutions and policies that are not exclusively domestic-oriented, since corruption in the continent is not exclusively the making of Africans.”