State House dragged into escrow scandal

Opposition Chief Whip Tundu Lissu debates PAC’s report on the Tegeta escrow account scandal in Parliament yesterday. PHOTO | EMMANUEL HERMAN 

By The Citizen Reporters

Posted  Friday, November 28  2014 at  08:30

In Summary

• Leader of the Official Opposition in Parliament Freeman Mbowe and Chief Whip Tundu Lissu reveal the role played by an Ikulu official to reinforce the claim that highly placed State officials had a hand in the release of tens of billions of shillings from the escrow account

Dodoma. Parliament was told yesterday that a State House official, Mr Prosper Mbena, wrote a letter to reinforce the decision to withdraw the Sh306 billion escrow funds from the Bank of Tanzania.

Mr Mbena who works as secretary to the President reportedly wrote the letter last year directing the ministry of Finance to release the funds as advised by the Attorney General.

The involvement of the State House official surfaced as MPs begun debating the Public Accounts Committee (PAC) report on the scandal that has gripped the country in the last couple of months.

The Leader of the Official Opposition in Parliament, Mr Freeman Mbowe, and the camp’s Chief Whip, Mr Tundu Lissu, revealed the role by the Ikulu official to reinforce the claim that high placed State officials had a hand in the release of the Tegeta escrow billions.

The PAC report concluded that the escrow money was taxpayer’s property that was fraudulently withdrawn and shared among influential figures.

It recommended that Prime Minister Mizengo Pinda and Energy minister Prof Sospeter Muhongo take political responsibility and resign over the scandal.

The Zitto-led committee also recommended that energy PS Eliakim Maswi and the Attorney General Judge Frederick Werema and all the other public officials named to be sacked and taken to court.

PAC further said the key architects of the IPTL and PAP, Kenyan Harbinger Singh Sethi and Mr James Rugemalira be made to account by arresting the former and freezing all their accounts to recover the money, including the Sh73 billion shared among influential personalities, among them current and former ministers.

Yesterday, as the debate picked up, it became distinctly clear that the MPs would not stand as one to defend the PAC report, with some of them tearing apart the committee’s report and fervently openly defending Mr Pinda and Prof Muhongo.

All the CCM legislators who contributed appeared to read from the same book – that of defending the government and its top officials, in an apparent script arrived at in a party caucus on Wednesday night.

Their attack on the PAC and on the person of Mr Kabwe (Livingstone Lusinde-Mtera-CCM) tabled documents claiming Kabwe took millions from Mr Sethi) attracted points of information, including from Dr Hamis Kigwangala (Nzega-CCM) who said the team had done the job on behalf of the House and not the Opposition. Dr Kigwangala was one of the MPs co-opted into the team to draft the report.

Mr Mbowe said it was sad that MPs were ready to defend actions by the government that could see Tanzania become a “failed state.”

He said Tanesco stood to pay over $225 million to Standard Chartered Bank of Hong Kong should the matter not be handled carefully.

“We are now supposed to pay $110 million on political decisions we made in the Richmond scandal and today we are handling this escrow matter in a less serious manner,” said Mr Mbowe.

He said the State House letter and that of the AG led to a loss of Sh21 billion in Value Added Tax (VAT), on the escrow withdrawals.

Earlier, Mr Lissu ran into trouble when he linked the IPTL history and current scandal to different periods of President Kikwete leadership of the ministry of energy and finance before he became president.  

“The release of the money had blessings from the AG and the State House through Mr Mbena; if this money belonged to an individual or a private company, there could be no involvement of such top government officials ” said Mr Lissu.

Mr Lissu said the Parliament must make sure the adversely mentioned leaders are taken to task.

Mr Lissu added that the heads of Tanzania Intelligence Service (TIS), Financial Intelligence Unit (TIU) under the Ministry for Finance as well as PCCB should also be punished for their failure to detect the dirty game.       

Mr Tundu Lissu (Singida East - Chadema) dismissed Prof Muhongo’s earlier defence as a “sham.” “Minister Muhongo has presented two documents as evidence, but both of them do not relate with the matter on the table,” said Mr Lissu.

Muleba North MP, Mr Charles Mwijage  (CCM) said IPTL had been a problem since 1994 and it had become like a monster that is now eating everybody in the country.

“There is a debate on who owns the Tegeta escrow account. If there is indemnity, we need to get a clear picture including all people who have been mentioned in the PAC report’” he said.

Mr Athuman Mfutakamba (Igalula-CCM),  Mr Richard Ndassa (Sumve-CCM), Mr Livingstone Lusinde—Mtera-CCM were among those who argued against the PAC report. They, however, said pertinent issues around tax evasion and the ownership of IPTL and its continued operation couldn’t be addressed by the government.

Mr Lusinde sensationally claimed the escrow debate was being used to settle political scores ahead of the 2015 elections.

But Mr David Kafulila (Kigoma South-NCCR-Mageuzi) said the scandal could cost the country another $700 million in MCC funding from the US, a claim immediately dismissed by Prof Muhongo and his Finance counterpart Ms Samia Saluhu

“Let us not use lies to clean up wrong doers...it has reached a time when we call a spade a spade,” said Kafulila.