Republished : 2015-06-24
DEMOCRATIC PROGRESSIVE PARTY’s RESPONSE TO THE STATEMENT ON THE CAPITAL HILL PUBLIC FINANCE CRISIS DELIVERED BY THE VICE PRESIDENT RIGHT HONOURABLE KHUMBO KACHALI BY DR. GEORGE T. CHAPONDA. LEADER OF DPP IN PARLIAMENT.
“TIME FOR PP-LED GOVERNMENT TO ACCEPT RESPONSIBILITY”
Mr. Speaker Sir, first of all let me thank you for granting me the platform to respond to the statement delivered by the Right Honorable the Vice President on the update regarding the plunder and looting which is happening at Capital Hill and in numerous government departments. Let me also thank the State President for creating space for dialogue on this important matter. Let me reiterate that with due respect to the Vice President, it would have earned this nation more integrity if the State President had delivered The “cash-gate” crisis statement herself. As a matter of fact, the Vice President has demonstrated rare and strange courage to be the one delivering a statement on the Capital Hill “cash-gate” crisis which we still insist implicated him in ways to be explained soon.
Before proceeding, let me remind this venerable house of an ancient saying: “A fish rots from the head down”. The meaning is clear: When an organization or state fails, it is the leadership that is the root cause.
Mr. Speaker, the steps, suggestions and action plan presented in the Statement by the Right Honorable Vice President are commendable. This includes the instituting of audits and forensic investigations. We are delighted to hear statements that no-one will be spared and we hope that the government means that even the offices of the President and that of the Vice President will also be investigated and prosecuted.
Mr. Speaker Sir, we take the government by its word that the investigations into the squandering of public resources will not spare anyone. However, so far that rhetoric has not been matched with action on the ground. We hear of reports of Accounts Assistants being arrested for preparing a payment to a payee with whom Government had no contract and who did not supply anything.
Mr. Speaker Sir, where are the senior officers who normally authorize and approve these payments? Mr. Speaker Sir, IFMIS is an Integrated Financial Management System which provides for budget management, budget execution, accounting and control and other relevant financial matters. It has been hailed for its ability to control over expenditure as no payment can be issued outside the budget and without the available funds.
Malawians expect the investigations to also go into who provided these billions for consolidated funds to these ministries and departments for channeling into these fraudulent accounts. We also expect the concept of “follow the money” and the doctrine of tracing to be fully utilized in the investigations. This tax payers’ money must be followed whether it was turned into houses or a fleet of cars.
Mr. Speaker Sir, we trust the law enforcement agencies will ignore the President’s assertions that the investigations should track down only the ones who stole and not those who benefitted from the crime. We find such a statement to be suspicious; it contradicts the age-old principles of criminal responsibility as contained in the Penal Code, Criminal Procedure and Evidence Code and the Money Laundering Proceeds of Serious Crime and Terrorists Financing Act. Mr. Speaker Sir, a fish rots from the head down.
Mr. Speaker Sir, The Democratic Progressive Party maintains its zero tolerance stance on corruption. We strongly believe no efforts should be spared to eliminate this scourge. To this end Mr. Speaker Sir to ensure that investigations cover the entire period that IFMIS has been in use, that is from 2005. We will not shield anyone who will have been found to have illegally obtained a single Tambala from the tax payers’ money.
The President indicated that for the past twenty years corruption has been happening. She attributed to the
Director of Public Prosecution (DPP) during the UDF regime and an assertion that 30% of the National Budget was being lost to corruption. She further alleged that during the DPP’s era, a Junior Officer in government was found with over MK400 Milllion in 2011 and that investigation in this case was stopped by some top brass who were involved. The President purportedly ordered the resumption of such investigations.
We challenge the President to clarify a numbers of issues on this point;
(a) Who in 2011 ordered the investigations to be stopped?
(b) To whom was that order given?
(c) Who is this top brass and if they were involved as alleged, why hasn’t this government moved to ensure that they face the full extent of the law.
(d) If it was the Anti-Corruption Bureau (ACB), is the ACB not an independent body that reports only to Parliament?
Mr. Speaker Sir, such allegations seek to deflect public attention from the current looting that has happened under the PP administration. Why was this allowed to happen and why is it taking so long to bring the ringleaders to book? As I said at the outset: A fish rots from the head down.
Mr. Speaker sir, over K20 billion has gone down the drain under this administration. Bogus companies have been registered as conduits to siphon tax payers’ money. Over 50 bogus companies is what we are talking about here. Over 33 bank accounts are involved in these mother- of-all scams. It is also a common knowledge that all contracts in the Ministry of Agriculture for transportation of FISP have already been given to PP officials or companies connected with the current PP administration. It is therefore time for the current administration and the PP to accept responsibility and stop blaming others for its own failures.
Now, Mr. Speaker Sir, here is the whole story. What I am about to tell you is exactly why this country is in mourning. Malawians are crying over the massive looting of their hard earned tax money. The people are angry over the deception which this administration is championing, the state-sponsored theft and government-sanctioned plunder. I am about to tell you why people have lost confidence in this government, why poor people are currently feeling betrayed, used and abused by the state machinery. Mr. Speaker Sir, this pilot has crashed the plane. This driver has plunged us into a ditch. This captain has run our ship aground. And the social contract between the people and their leaders in government has been broken. The PP has not only failed this country, the PP has betrayed the people.
Mr. Speaker, the cash-gate scandal is a man-made crisis engineered by the PP that is busy siphoning money to finance its 2014 election campaign. The cash-gate is a network of civil servants and top politicians in PP who are working under instructions to raise over K20 billion through theft. Top PP leadership has identified and even created companies and firms which are being used as conduits for siphoning the funds for work that will never be done. Some of the companies have the PP leaders as signatories or part owners.
The instructions go further to the extent that founders of such companies or firms are promised some commission for handling the loot. The owners then are remitting the larger loot to a team of PP politicians who are designated the responsibility to collect the stolen cash. Mr. Speaker, I am willing to substantiate my revelations because I believe that ordinary Malawians, poor people, and the entire world must know how this corruption is actually a master plan of the current administration.
For example, International Procurement Services and O & G Construction which is owned by Oswald Lutepo a top Official in the ruling PP Government which defrauded OPC over K2 billion and has donated 22 vehicles to the PP. Furthermore, a senior lady cabinet minister is strongly connected to this loot. Should I mention her name?
Mr. Speaker Sir, another fraudulent company which is on the list of conduits being used to steal tax payers’ money to finance the PP election campaign is called Crossmarketing. Millions of Kwachas have also gone down the drain using this bogus entity. We wish to ask the VP to come out clear if he himself is not connected to this company. Crossmarketing has siphoned MK68.5 Million (cheque number 028531) and MK28.4 Million (cheque number 028532).
Mr. Speaker Sir, this network of fraudsters needs to be busted and mark my word, we will soon hear big names being mentioned, and we hope that the President will not shield them even if her own relatives will be revealed during the investigations. A fish rots from the head down.
Let me reveal other companies Mr Speaker. Over K730 million was siphoned under one company alone called O&G Construction Ltd. Zozama Civil Engineering amassed over K90 million. Ziuya Contractors took away K85 million. Over K100 million has been looted by Clive Engineering while Hury Building Contractors went away with K88 million. Mr. Speaker Sir, government should explain how the National Construction Industry Council had over 1 billion uprooted under its name. The names are so many, we can spend the whole day listing them, and we have the cheque numbers and disbursement codes as well as names of officers who deleted the transaction from the IFMIS. This is the saddest moment in the fiscal history of the Malawi nation.
Mr. Speaker, while the temporary suspension of IFMIS is a welcome move, Malawians are angry and are interested to know the names and faces behind the computers which man the IFMIS. Mr. Speaker, the IFMIS is simply put, a computerized system for managing public finances, and it is designed to ensure transparency and accountability in public expenditures. However, behind every computer, there is a human being operating the machine. Somebody fed the IFMIS with information which responded accordingly by disbursing cheques for encashment of the billions that we are querying here.
The IFMIS could not misdirect on its own. That is why we strongly suggest and entirely agree to independent international forensic teams that must hunt down all human elements behind the IFMIS. These must include accounts officers, IT officers, and also senior civil servants who are responsible for authorizing all cheques and payments. The forensic audits must start now, with independent external forensic teams reporting directly to parliament.
Mr. Speaker Sir, each budget vote has a controlling officer and also a budget ceiling. Therefore, there is no way millions and billions worth of cheques could be cashed without the authorization and sanctioning by the Controlling Officers. These senior officers manage budget ceilings and cash flows in their respective ministries and there is no way such huge payments could have been made without the knowledge of the Controlling Officers. In fact, Controlling Officers were either grossly negligent, complicit to the scams, or were operating under instructions from the PP political leadership.
This is where much effort should be spent during the forensic audit. We wish to challenge the PP leadership to prove that they are not involved. We still remember, and our minds are fresh on what the State President said during her recent Press Conference that “you don’t prosecute the beneficiary to the loot”. This statement seem to imply that the PP is the beneficiary, and that other agents were deployed to do the stealing on behalf of the PP, to finance the election campaign as I said before. We wish to congratulate the new Minister of Justice for cautioning the public to stay away from the looted cash. Mr. Speaker Sir, is this in one way a suggestion that the Minister is responding to the negative statements made by the State President that the beneficiaries should be spared from scrutiny? Mr Speaker, a fish rots from the head down.
Mr. Speaker Sir, public funds are managed under Account Number 1 which is at the Reserve Bank of Malawi (RBM). Now, we wonder why little or no mention is made of the role of the banks in this filthy act. We also wish to question how it is that the Reserve Bank Governor could have had absolutely no knowledge of all this. Is it possible that the RBM Governor too has been caught up in the cobweb of political instructions to safeguard and promote this deplorable theft? Allow me Mr. Speaker to strongly recommend that the RBM should also be investigated. We are talking about a network, which may include some financial intermediaries that should be identified and subjected to intensive investigations. The cheques used in this scan are normally deposited or cashed in commercial banks.
The RBM and the commercial banks which might have handled the suspect transactions should make public statements on how these transactions were processed. Mr. Speaker Sir, we are all aware of the rigorous process that banks subject their customers to when they are cashing cheques. Here, Mr. Speaker Sir, we are talking about cheques as small as K40, 000.00 What more with cheques worth millions and billions that have passed through the banks under this fraudulent scheme. Why the lack of scrutiny this time?
Mr. Speaker, the Finance Intelligence Unit (FIU) has just confirmed the existence of the fraudulent companies and bank accounts which have been the epicenter of this corruption and fraud. The ACB too has corroborated this information. We do hope that appropriate measures under the Money Laundering Act and the Corrupt Practices Act will be taken without delay, without fear or favour, and without political interference. The Companies Act, under which most of the fraudulent companies are registered should also be invoked and deregister all entities that are in illegal malpractices.
Mr. Speaker Sir, we have provided facts and figures to back up our claim that the PP administration has a role in the current fraud. Contrary to this, the PP were alleging without supporting documents about the so called MK61 Billion allegedly amassed by the Late President Ngwazi Prof. Bingu wa Mutharika and that the current DPP President holds dual citizenship. Both have been proved to be wrong. Not of least importance is the current selective prosecution on treason charges.
Mr. Speaker Sir, allow me now to turn to the lack of proactiveness on the part of government. All the arrests that we have witnessed have only happened in the past few weeks immediately after the shooting of the Budget Director. The pain that our brother and son is going through has triggered all these revelations. The Democratic Progressive Party (DPP) wishes Mr. Paul Mphwiyo and his family complete recovery and continued safe custody.
The question that we ask though is; was the PP Government waiting until this shooting incident to happen for government to start hunting down the looters of the funds? Does this mean that if the shooting did not take place, then the looting of the funds would have continued unnoticed until the PP satisfied its desire to fund its campaign using stolen cash. Should we as a nation wait until somebody suffers pain for our government to start doing its job? Mr. Speaker, this leaves me very worried, and Malawians must be very afraid at the scheming and plotting under this government. Under the PP, even whistleblowers will start fearing for their lives. For instance, currently Galaxy journalists are in hiding as they have been threatened with arrests following their revelation of those implicated in the cash-gate scandal.
Actually, if no tangible answers come from Government, we will hold the government and the PP responsible for the shooting of our budget director. The same government through the State President told the nation that she knows who shot Mr. Mphwiyo, and it is the same President who is busy refuting and denying knowledge of the gun-toting criminals. We are not convinced Mr Speaker. This administration has a lot to account for. The nation is not in safe hands. Malawians are being led astray. A fish rots from the head down.
Mr. Speaker Sir, the manner in which the cabinet was dissolved and later reconstituted leaves a lot to be desired. We can only applaud the appointment of the new Minister of Finance and Minister of Justice as worthy of the tax payers’ money. As for the rest, it is like putting new wine in old bottles. Apart from two or three new faces, the rest will have to similarly account for what has happened under their watch.
The rest of the cabinet must demonstrate in no uncertain terms that they played no role in the cash gate crisis. Listen to public opinion on radios and other media, it is clear that Malawians are not satisfied with this so called new cabinet. The entire cabinet should have not have returned after the dissolution. Due to collective responsibility, everyone should have have resigned voluntarily. Malawians do not have confidence in this government anymore.
In fact, the act of dissolving the cabinet only to bring back the same old faces is an insult to the integrity of tax payers. We wonder why the State President continues to shield, protect and favor the looters in her midst. Any further protection of the looters leaves the public with the impression that the rot starts from the top. Heads must roll starting this month, not next month or next year.
Lastly, Mr. Speaker, while putting in place measures to curb future embezzlement of funds is most welcome, allow me to state that money has already been stolen here and part of it may never be recovered. This is how bad the cash-gate crisis has become. The fraud means that Malawians will go to bed hungry as food shortage worsens.
More households will go without fertilizer coupons as is already the case at the moment, and now we know where money for the fertilizer subsidy was diverted to. The rampant theft of tax payers’ money under the PP government means that more health workers will be on the street striking due to delayed salaries. It means that money has been stolen which should have otherwise been used to refurbished our roads which are in a bad shape.
The cash-gate crisis means pupils will have less teaching and learning materials, teachers will be on sit-ins due to low pay, and there will be continued shortage of medicines and drugs in hospitals. The stealing of government money is the same as stealing from Malawians who will suffer months of security breakdown as the Police will have little funds for enforcement.
This is only the tip of the iceberg in terms of how bad the theft of the public funds will hit the poor. In short, this administration, the PP led government has worsened the poverty of Malawians. It is time to bring this cycle of poverty to a halt and the verdict will be passed by the angry Malawians themselves.
As for this government, it is time for you to accept responsibility, stop blaming the DPP for all your failings. This is the time for PP to accept responsibility; clean the mess in good time before the landlord, the DPP party from whom you have rented this house, reclaims the residence in May 2014.
Mr Speaker, sir. A fish rots from the head down. When an organization or state fails, it is the leadership that is the root cause.
I thank you, Mr. Speaker.