Army pays Shs2b to ‘ghost’ pilot

Kampala- More than Shs2.4 billion is feared to have been lost by the Ministry of Defence through maintenance of a suspected “ghost” Russian pilot on its payroll over a period of 11 years.

Information obtained by Sunday Monitor reveals that the ministry had over that period paid out at least $618,000 (approximately Shs2.07billion) in monthly salaries and another $120,000 (approximately Shs402 million) in gratuity to the ghost pilot-cum-instructor of the Mi17 and Mi24 helicopter gunships.

The loss came to light in June after a team appointed by the Chief of Defence Forces (CDF), Gen Katumba Wamala, in February to investigate the matter, released its report.

The report cites several military officers and civilian employees attached to the ministry for connivance and negligence.

A June 18 memo that Gen Wamala sent to the permanent secretary in the Ministry of Defence reveals that the investigation was precipitated by “consistent reports pertaining to gross mismanagement of resources in airforce”.

The investigators
The investigation team was led by Maj Martin Nsengiyunva from the Chieftaincy of Military Intelligence (CMI), Ms Rose Nabakoza and Ms Grace Apio from the police’s Crime Intelligence and Investigation Directorate (CIID) and Capt Apollo Ahimbise from the Special Investigations Bureau (SIB) of the Uganda People’s Defence Airforce (UPDAF).

The team was asked to verify validity of contracts, examining circumstances under which the contracts were made, identifying the architects and beneficiaries of the said contracts and to make recommendations for action.

The report reveals that the Defence ministry, at the prompting of the airforce, entered into a two-year renewable contract with the said “ghost” Russian Air force pilot Valerie Ketrisk, on October 4, 2005. He was to work as a pilot and pilots’ instructor for a monthly pay of $4,306 (approximately Shs14,425,100).

Payments were in the period between October 2005 and June 2008 made to account number 0710006739 in Nile Bank, Luwum Street Branch.
Though the contract was still running as of July 2008, details about how payments were effected in the period between July and December 2008, which constitutes a part of the second contract, are unclear.

The pay was revised upwards to $5,350 (approximately Shs17.922,500) per month when the contract was renewed for the second time, an amount which was retained through the 2011 and the 2013 contract durations and until the middle of 2015 when the monthly pay was reduced to $5,150 (approximately Shs17,252,500).

The pay is said to have been retained at that rate until February this year when payments were stopped on the orders of Gen Katumba.

During the period between 2009 and February this year, payments were made by electronic transfer from Bank of Uganda to Barclays Bank Account Number 5800134562, Prime IMPEX Plaza Branch.

Investigators established that withdrawals from the said two accounts were always made either through auto teller machine (ATM) or by cheque, but that all withdrawals had been effected almost immediately after monies had been disbursed to the said accounts.

Investigators were, however, shocked to find inconsistencies in the names of the contract holder and those of the owner of the two accounts through which the ministry made the payments.

“While the contract is in the names of Valerie Ketrisk, a Russian national and male pilot Instructor, salaries and gratuities are paid to Keti Valerie SK,” the investigators wrote in their report, a copy of which Sunday Monitor has seen.

The investigators concluded that the whole scheme was set up to swindle government money.

“The contract was a sham deliberately made to defraud government. The employee never existed at all. The account holder was stage-managed for conduit purposes. The person who opened the account in Nile Bank used a forged identity card claiming to be an accountant in the Ministry of Finance,” reads the report in parts.

The investigators raised issues with the Ministry of Defence’s system of entering, verifying and filing of contracts, saying the institution often enters contracts in the absence of employees and that it has not been effective in filing of key contracts, especially those pertaining to its expatriate staff. This, they argue, left room for manipulation.

In their recommendations, the investigators called for a verification exercise or head count of contract employees in the Ministry of Defence and a review of the ministry’s policy on contracts.

When contacted for a comment on this story, the Airforce spokesperson, Maj Tabaro Kiconco, referred Sunday Monitor to Army and Defense spokesperson, Lt Col Paddy Ankunda, saying he was not the best placed person to comment on the matter.

“I have been away on a course. Besides, this report comes from one of those strategic offices so I am not the best placed person to comment,” he told Sunday Monitor on phone on Friday afternoon.

Col Ankunda confirmed that the report was the product of an internal investigation by the army.

“This is our investigation, implying that we are equally concerned (that the fraud could go on undetected for over 10 years),” he told Sunday Monitor on Friday afternoon.
The contract of the ghost pilot was in the 11 years, renewed four times, in 2007, 2009, 2011 and 2013. The contract was being processed for renewal in September 2015 when the red flag was raised.