Shs10b land scam: Was it negligence or syndicated graft?

Uganda Land Commission chairperson Beatrice Nyakaisiki Byenkya (left) and Inspector General of Government, who is the former Lands Minister, Ms Beti Kamya, appear before the Committee on Commissions, State Authorities, and State Enterprises at Parliament on May 25, 2022. PHOTO | DAVID LUBOWA

What you need to know:

  • What started as an audit query in the Auditor General’s report for the FY2020/2021 regarding payment of Shs10.6 billion to fictitious claimants by the Uganda Land Commission (ULC), the statutory body that holds in trust and manages any land owned by government, culminated into a parliamentary probe, which has lifted the lid on syndicated corruption, sloppiness and incompetence seeping across the cloistered halls of ministries, departments and agencies. This continues to deplete the national coffers and costs taxpayers billions of shillings annually, writes Frederic Musisi.

In May 2017, the former Energy minister, Ms Syda Bbumba, shocked the country when she admitted before the parliamentary Committee on Commissions, Statutory Authorities, and State Enterprise (Cosase) that she approved a $157m tax waiver to an Anglo-Irish oil company, Tullow Oil, without perusing the agreement.

Ms Bbumba who served as the Energy minister between 2006 and 2008 told the committee investigating the Shs6b cash bonus given to 42 public servants for their role in the Heritage Oil tax arbitration, on May 7, 2017 that she didn’t have expert knowledge on the Production Sharing Agreements and by the time she endorsed the tax waiver, she assumed that her technical staff in the ministry had tied all the loose ends.

Exactly four years later, this conduct has returned to haunt government.

Senior government officials, one after another, while appearing before the same committee have been admitting to the slackness, bordering on ineptitude, in the initiation, authorisation, and payment of Shs10.62b from the Treasury to a group of six, including fictitious claimants for land compensation.

As sleuths continue to probe, it may come to light that this cavalier attitude by some senior government officials could have been deliberate to cheat taxpayers.

While appearing before the committee chaired by the Nakawa West MP, Mr Joel Ssenyonyi, on May 31, Finance minister Matia Kasaija acknowledged that the money as supplementary budget was erroneously approved from the Treasury. Mr Kasaija said he also thought his technical staff had scrutinised this vote.

Former Lands minister Beti Kamya who initiated the payment told the committee earlier on May 25 that she conferred with her technical staff regarding the details of the claimants. It is upon this basis that she wrote a letter, the premise for the controversial payment to Mr Kasaija on November 30, 2020 requesting for the provision of funds.

It emerged last Thursday that some of the claimants are fictitious.

One of the claimants in Ms Kamya’s letter is 79-year-old Natalia Namuli, who ‘urgently’ needed her money—about Shs1.6b— for medical treatment. Eventually Shs2 billion was paid in her name.

But the committee heard last Thursday that she had never received any funds. The committee heard that two lawyers Kyle Lubega and Richard Buzibira of L&B Company Advocates forged powers of attorney over the late Antwane Kalete’s estate in which Ms Namuli was falsely named as a beneficiary. 

The lawyers, according to documents tendered to the committee, forged the signature of retired High Court judge Ralph Ocan on the letter granting Ms Namuli powers of attorney from the Antwane Kaleete estate. Justice Ocan ostensibly signed the letter on March 18, 2015.

Justice Ocan, however, wrote to the committee on June 21 indicating that his signature was forged.

“In the year 2015, I was serving as the chairperson of the Public Service Commission having been appointed to that office on Ma7 7, 2014,” the letter reads in part.

Ms Kamya and Ms Byenkya appeared before the committee and their fractious relationship played out.

“When you are a minister, you ask technical people to do the work for you,” Ms Kamya argued. “The list [of claimants] was sent to me by ULC and if there was a mistake it should have been corrected at that level and if the ad hoc committee of parliament found some issues [with the claimants] they should have asked ULC.”

Asked why Ms Byenkya, as head of ULC, was disowning the list, Ms Kamya, now the Inspector General of Government, said she held a number of meetings with the interdicted ULC accounting officer, Ms Barbara Imaryo, whose whereabouts are unknown.

Both Ms Imaryo and Byenkya were suspended by President Museveni on March 16 to pave way for investigations into allegations corruption and dubious payments causing financial loss to government. Ms Imaryo has snubbed summons to appear before the committee.

On June 8, Mr Ssenyonyi wrote to the UPDF Chief of Defence Forces seeking for information about Ms Imaryo’s whereabouts. 

“The committee has also been reliably informed that she had been under guard by Military Police unit until she left the country when the investigations commenced. This was confirmed by the records in the Department of Immigration,” the letter reads in part. It is unclear if the CDF responded.

In an interview last Thursday, Mr Ssenyonyi told Daily Monitor that what is becoming clear is that there is a syndicate that has been using ULC to defraud taxpayer fund.

“One of the claimants is Namuli who received Shs2.3b but it turns out she has never heard of the money. There is a group of lawyers who said she was their claimant and they received the money.  “What we hear about this cartel is that it is very organised.”

The government annually loses billions of shillings through dubious compensation schemes involving crafty lawyers and sly government officials especially in the Finance ministry.

How it works is simple; debtors owed money by government, working with government officials, lawyers and a few judicial officers, secure court orders attaching a bank account of a select institution until they are paid. 

In most cases, genuine claimants are frustrated and subjected to inordinate delays until they acquiesce to forego part of their entitlement.

In the Shs10.6b compensation scam, the committee insists that procedure was not followed, the Lands, Finance and ULC officials handled the matter sloppily.

The MPs questioned the criteria of identifying the claimants.

The claimants are the family of Mzee Kasiya Rwabukurukuru-Shs6.4b, Stephen Peter Nagenda-Shs1b, Julius Busulwa-Shs1.4b, Nataliya Namuli-Shs1.6b, and Yasika Lwakana-Shs125m.

Ms Kamya denies any wrong-doing in ensuring that the claimants were paid. She told the committee, and in a separate interview with this newspaper said that payment of the Rwabukurukuru family was a presidential directive while Peter Nagenda had secured a court order and was threatening to garnishee ULC’s bank accounts.

Asked whether any government official benefited from the transaction she said: “I don’t know. But of course, the claimants benefited.”

Sloppiness, ineptitude 

She added: “Money is released after the accounting officer requests for it so if ULC wasn’t ready for it why didn’t they send it back to the Consolidated Fund as they do sometimes. Institutions return money all the time and to my understanding this was towards the end of the FY [2020/2021].”

On November 30, 2020, Ms Kamya wrote to Mr Kasaija that: “I have been directed by H.E. the President to expeditiously settle compensation for some land acquired by government to ease tension between land owners and squatters. Other claims for compensation arise out of court orders while others are very sick, long time claimants who need to meet their medical expenses to acquire land elsewhere.”

The money in question was approved by technocrats at the Finance ministry and tabled in February 2021 as part of the supplementary vote of Shs292b sought by the Executive.

According to Section 25 of the Public Finance Management Act, the Finance minister considers a request for supplementary budget upon request by the accounting officer of any ministry, agency, and department.

There is no documented request by the ULC accounting officer. Ms Kamya says her role was to draw attention to the Finance minister about the compensation.

On February 9, 2021 when the Shs292b supplementary was supposed to be approved during the plenary, a disagreement ensued on the floor of Parliament after a section of MPs rejected the supplementary vote to ULC, which by then stood to Shs12.1b, but was revised to Shs10b to settle outstanding compensation to the six claimants.

The former Mukono South MP, Mr Johnson Muyanja Ssenyonga, red flagged ULC’s request citing a letter by Ms Byenkya. In the letter addressed to then Speaker of Parliament Rebecca Kadaga and which was read out on the floor, Ms Byenkya disowned the list of claimants.

This compelled Ms Kadaga to direct the Budget Committee to further probe the claimants’ list.  During the committee’s hearings, Ms Byenkya, and Ms Kamya accompanied by her then deputy Persis Namuganza clashed over the request. Byenkya revealed that the request was crafty and was not generated by the Land Commission.

“Much as the Commission needs the money, we never requested for this supplementary budget. I want it to be on record. So, when I hear this, I just think the minister is trying to access the money using our institution. That is irregular. How can this be?” Ms Byenkya told MPs.

She added: “There are more than 500 households that are yet to be paid, why these six claimants only? Yes, we need this money but it should be untagged so that we decide whom to compensate, although we will also consider them. Why do you pick only these six who we have actually been paying?” 

Ms Namuganza, in turn, accused Ms Byenkya of failing to understand her position in the ministry. She and Ms Kamya defended the supplementary vote.

The Kachumbala County MP, Mr Patrick Isiagi, the then vice chairperson of the committee, after failing to secure a consensus during a February 10, 2021 meeting, dismissed both parties and indicated that they would come up with recommendations.

Shoot first, aim later

Consequently, the Shs292b supplementary budget was passed on February 12, 2021. Mr Isiagi told colleagues that the divergent opinion between ULC and its parent ministry of Lands had been harmonised.

Fifteen months later, the Finance ministry officials told the Mr Ssenyonyi-led Cosase that the supplementary request to ULC was erroneous.

Mr Keith Muhakanzi, the former Finance ministry Permanent Secretary, told the Committee on June 14 that he was away on sick leave and his deputy, Mr Patrick Ocailap handled the matter.

“Parliament set up a committee that investigated and cleared the expenditure. If Parliament had not approved the supplementary, then it would have ceased to be supplementary expenditure and no resources would have been expended,” Mr Muhakanizi said.

Mr Muhakanizi further noted that monies cannot be paid without a requisition from the responsible accounting officer, where in this case, the accounting officer at ULC should have formally requested for the money.

Mr Ocailap apologised for the error, but revealed that he acted on an authorising letter from Mr Kasaija.

“I concede that I did not follow up on the letter of the Presidential directive. I made an error in judgment to act on the minister’s communication,” he noted.

Ms Kamya asked to avail copy of the letter in which President Museveni directed for payment to be sanctioned to the Rwabukurukuru family said the communication was verbal from the President’s Principal Private Secretary (PPS).

But Ms Kamya said during the interview that, “it is true I did write a letter to the minister of Finance, but that letter is not binding on the part of the Finance minister.”

“Ministers write to fellow ministers. In fact, anyone can write to the Minister of Finance,” she argued. “When they find merit in a communication, they will act on it but in this case the minister did not act on his own volition. The request went to Parliament which appropriates funds. I don’t know why Finance is fidgeting; when the request to Parliament, a committee looked into the matter and arising out of their findings they approved the request to ULC.” 

She added: “There are all these check points in the entire system of government so payment cannot be made on a strength of a mere letter I wrote which is why I have failed to understand why this is a big issue, except to say COSASE is making a mountain out of molehill; wasting tax payers’ money on sitting allowances.”

But Mr Ssenyonyi told this newspaper that the payment ought to have been rejected. 

“They didn’t ask for a presidential directive on which she [Kamya] says she acted upon. Then parliament put up an ad hoc committee to look into the matter; I don’t know what challenges they faced, but in a short time we have been able to establish that procedure was bypassed and people are admitting and apologising and some of the claimants are fake.”

Ssenyonyi opined: “Ultimately, Ms Kamya is not the only one answerable here, but she is number one on the list. This syndicate cannot be one person. If she says her letter wasn’t binding but money was released on basis of her letter what does that mean? Procedure was flouted because they knew the people going to receive money were not real.”

Museveni declines to grant more tax waivers

In 2019, President Museveni told off petroleum multinationals pushing for tax waivers as a pre-condition for further development of the country’s oil fields, deepening a standoff that had put on ice the building of a critical export pipeline. Mr Museveni, according to highly placed diplomatic sources then lashed out at the petroleum companies accusing them of failing to appreciate the many concessions and infrastructural investments that the government has already made to facilitate development of the Hoima oil fields estimated to have 1.7 billion barrels of crude. He reportedly listed about 17 promises that the government had delivered on, including a road network known as the Oil Roads and an international airport that is still under construction.

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