Financial ‘engineering’: The new norm in Uganda

Former Uganda Revenue Authority commissioner general Allen Kagina (centre) and her successor Doris Akol (right) at Parliament after Ms Kagina was recognised for her contribution to the tax body. Ms Kagina and Ms Akol are some of the officials who benefited from the Shs6b ‘presidential handshake’ recently. MONITOR PHOTO

What you need to know:

New custom. Engaging in graft is now perceived as the norm, a normal and acceptable state of affairs, other than an exception. Therefore, anyone who deviates from this ‘new norm’ has done something so exceptional that they deserve to be ‘highly recognised’ and/or ‘heavily appreciated’, Arthur Bwadene Baraka writes.

The phrase ‘financial engineering’ was popularised in Uganda by Gen Caleb Akandwanaho, aka Salim Saleh. This happened around 1997 on Capital Radio’s Capital Gang talk show. The general was being put to task over his role in the ‘junk choppers’ scandal.

Around April 1997, government signed an agreement with a company called CSC belonging to businessman Emma Kato for the supply of four Mi-24 attack helicopters from Belarus. Each chopper was supposed to cost about $1.5m. However, when the choppers arrived, they turned out to be junk.

It later emerged that Gen Saleh, who was minister of Defence at the time, had pocketed a cool $800,000 to help CSC clinch the deal. The good general confessed to the same and the commander-in-chief forgave him after it was reportedly agreed that the money was to be put to some official use.
When Gen Saleh was put to task by the panellists on the said show, his response was a curt “that is called financial engineering, if you don’t know!”

Since then, there have been many other financial engineering scams. Key among them include the ‘ghost’ soldiers scam of early 2000s in which, in some cases, we had whole ‘ghost’ battalions (around 800 to 1,000 soldiers) fighting Kony and the Global Fund scandal of 2005 in which billions of shillings meant to fight HV/Aids and other diseases were lost, mostly through ghost organisations.
Others include the GAVI Funds scandal of 2007 in which about Shs1.89b meant for immunising children against killer diseases was lost through flawed procurement; the Chogm scandal of 2007 in which about Shs200b was lost through questionable procurement processes; the Temangalo land scandal of 2008 in which NSSF bought land for building housing estates at highly inflated rates; about $1.7m paid out to some Indian firm(s) around 2010 supposedly for the delivery of bicycles for Local Council officials but the bicycles were never seen; a compensation claim for cancellation of contract to manage markets due to Hassan Basajjabalaba’s Haba Group that ‘miraculously’ multiplied from about $3m (as per original demand note) to about $58m (at time of payment), sometime around 2010; about $20m of donor funds meant for development projects swindled from Prime Minister’s Office (2010); and, the very recent Shs4 trillion meant for roads that was reportedly swindled from UNRA.
Whereas it may be common knowledge that financial engineering or corruption has over the last few decades pervaded Ugandan society to unprecedented levels, and whereas it may also be generally recognised that we live in a society where the corrupt are exulted while the honest are denigrated, the case of the ‘Oil cash bonanza’ goes a long way in highlighting just how far we as a country and a people have degenerated, how low we have sunk.
Engaging in financial engineering is now perceived as the norm, a normal and acceptable state of affairs, other than an exception. Therefore, anyone who deviates from this ‘new norm’ has done something so exceptional that they deserve to be ‘highly recognised’ and/or ‘heavily appreciated’.

This was the rationale advanced by Ms Doris Akol, the Uganda Revenue Authority commissioner general, to justify why her and her ‘partners in crime’ deserve a ‘presidential handshake’, running into millions of shillings each, for coordinating the oil cases that saw the country’s coffers swell by about $700m. She argued that the amounts involved were too big but they successfully managed to restrain themselves or resist all temptations.
Never mind that, herself plus some of her colleagues, the obvious ones being her predecessor, Allen Kagina (now UNRA executive director) and Jennifer Musisi (now executive director of KCCA) who played a leading role in these cases, are well known to be Born-again Christians who ought to be exemplary at practically everything.
Furthermore, what the ‘three musketeers’ earn from the public coffers in one single month, in both salary and allowances, may take an average public servant up to 15 years to realise.

Interestingly, whereas Akol and co. requested to be heavily rewarded for this great and rare accomplishment, they did not do the work themselves. The ‘feat’ or ‘feats’ was/were actually pulled off at great cost through different law firms, one local and the other British. It has been reported that whereas the local firm pocketed a cool Shs2.5b, the foreign firm went off with a whopping $10m.

Furthermore, even Akol’s argument that they were able to resist temptation may be found hollow in the face of a forensic audit of the processes involved. For one, we have been told that a daughter of one of the top officials involved works with the local law firm that was involved in one of the cases. This, without doubt, raises the issue of conflict of interest.

We may then also ask ourselves whether the processes through which the legal firms were contracted followed procurement guidelines. And, whether they were indeed free, fair and transparent!

I, personally, wouldn’t also be surprised if it so happened that while we spent that whopping $10m on a foreign firm to represent us in the UK, we also at the same time spent huge sums of money on air tickets and subsistence allowance for several of these officials purporting to be going to the UK to pursue the case.
Another interesting absurdity in this saga is the argument by Akol and co. that the ‘handshake’ is ‘standard international best practice’. Whereas the fact that recognising and rewarding employees for outstanding performance is standard best practice is not contestable, the issue that comes up here is when and how should it be done?
For starters: Was it ‘standard international best practice’ for the beneficiaries themselves to sneak to the President’s private home at Rwakitura and convince him, perhaps with partial information, as to how they had done an exceptionally commendable job deserving such a ‘handshake’?

Is it ‘standard international best practice’ for recognition and reward to be carried out in secrecy? Who selected the beneficiaries and how? Did the ‘handshake’ have to stretch to a mind-boggling Shs6b, considering the state of the economy and the country? There are many more questions that could be asked.

What this highlights, however, is the state of our society. It shows just how far we have degenerated. The abnormal has come to be perceived in the minds of many as normal. People who otherwise look very intelligent, decent and responsible will go out of their way to defend the indefensible.
In this light, we should, perhaps, not be surprised at all by the story which appeared in the Daily Monitor of Monday, January 9, on Page 3 entitled, ‘Officer buried with Shs200m for handshake with the creator’.
Apparently, the late Charles Ebong, 52, who has been a senior personnel officer with the Ministry of Public Service, had directed in his will that he be buried with Shs200m which he would use to ‘bribe’ God in order to find his way to Heaven.

Surprisingly, his wife, a whole principal immigration officer, together with two siblings of the deceased, had complied and honoured the deceased’s wish. Money, in both local and foreign currency, had been reportedly packed in the Shs20m coffin. Unfortunately, or fortunately, the locals got wind of the ‘madness’ and had the coffin opened to extract the cash.

On first impression, I thought this was one of those jokes being made of the now infamous ‘presidential handshake’; more so, since the amount Ebong was gifting God, was more or less the same as what our ‘three musketeers’ and their ‘accomplices’ gifted themselves with to appease their spirits!
But then, the story was posted on the news page; and, this was no April Fool’s Day! That is our country as it is now. Lord, have mercy on us.

The author is a social scientist
and freelance writer