Finally, the verdict on escrow scandal is here

 

Public Accounts Committee chairman Zitto Kabwe presents the team’s report on the Tegeta escrow account scandal in Parliament yesterday. PHOTO | EMMANUEL HERMAN 

By The Citizen Reporter

The Public Accounts Committee (PAC) yesterday recommended that Mr Pinda and other top government officials take political responsibility and resign over the scandal involving funds that were fraudulently withdrawn from the Central Bank and shared out.

Mr Pinda is now staring at the possibility of following in the footsteps of his predecessor, Mr Edward Lowassa, who resigned in 2008 in almost similar circumstances involving Parliament and another power scandal--Richmond.

The government will react today to the damning findings and far reaching recommendations that could lead to a reshuffle in the government. If Mr Pinda resigns, he would the second leader to do so during Mr Kikwete’s reign.

Tabling the eagerly-awaited report in Parliament yesterday, PAC Chairman Zitto Kabwe and his deputy, Mr Deo Filikunjombe, took time to present the shocking findings on how a Kenyan businessman, in collaboration with high-ranking state officials, hatched a plot to grab the money from the Bank of Tanzania.

Other top government officials implicated in the saga are Attorney General Frederick Werema, Permanent Secretary in the Ministry of Energy and Minerals Eliakim Maswi, Energy and Minerals Minister Sospeter Muhongo and his deputy, Stephen Masele.

The PAC recommended that the bureaucrats resign and face court charges. The committee wants the political heads removed from office.

The 111-page report recommended that Mr Pinda take political responsibility for “misleading” statements he made in the National Assembly and for failing to discharge his constitutional responsibilities effectively. The Prime Minister had critical information on the money that was stolen from the Escrow Account, according to evidence submitted to the office of the Controller and Auditor General (CAG)’s office.

According to Mr Filikunjombe, the prime minister was in the know about the transactions but failed to take action, leading to the loss of the escrow money. The premier was quoted in a local daily saying IPTL was a clean deal.

The PAC reports that Judge Werema, who is the chief state legal adviser, did not discharge his duties properly when he advised the Bank of Tanzania (BoT) on the withdrawal of the Tegeta escrow cash.

“Judge Werema misused his discretionary powers when he advised the BOT governor on the interpretation of the High Court ruling that was delivered by Judge John Utamwa,” he said. The AG ordered that Sh21 billion that was supposed to be paid as tax to the government should not be released.

The committee proposed that the CAG’s appointment be revoked. It also wants him arraigned to court immediately for abuse of office over the loss of the billions of shillings.

Also implicated in the PAC report are Energy and Minerals Minister Sospeter Muhongo who, according to Mr Kabwe, was a key agent in initiating the meeting between Mr Harbinder Singh Sethi and Mr James Rugemalila, knowing full well that Mr Sethi had no powers to operate in the name of IPTL.

According to PAC, Prof Muhongo repeatedly misled Parliament that the escrow money did not belong to the government but to individuals. The committee wants him sacked--along with Energy and Minerals Deputy Minister Stephen Masele--for misleading the House on the Tegeta escrow saga. He is also accused of sparking off a diplomatic row between Tanzania and Britain when he engaged in a war of words with the British High Commissioner.

Also on the list of those implicated in the scam is the Permanent Secretary in the ministry of Energy and Minerals, Mr Eliakim Maswi. According to PAC’s analysis, Mr Maswi failed to perform due diligence to satisfy himself before Piperlink bought out Mechmar company and later PAP, prompting payment of the escrow money to the wrong company.

The other key recommendations involve the immediate arrest and prosecution of Mr Harbinger Singh Sethi and freezing of all accounts related to the transactions to do with the escrow account. The committee also wants all the funds from BoT returned to state coffers.

Those who benefited from the escrow billions will have their properties attached to recover the money and top government officials implicated will not only be sacked but also taken to court.

The entire Tanesco board will be dissolved and the officials charged for their role in the scandal. Banks that were used to move the escrow money--Stanbic and Mkombozi--can also expect sanctions over money laundering.

The PAC called for an independent Grand Corruption Agency fashioned on the lines of the South African model to deal with crime in high places to deter looting of public resources.

It also proposed a review of all contracts entered into by Tanesco.