NAIROBI, Kenya, May 21 – The government says it has already paid out the Sh1.4 billion owed to two Anglo Leasing firms, following a directive from President Uhuru Kenyatta.
National Treasury Principal Secretary Kamau Thugge told the Public Accounts Committee that the money was paid out through a UK law firm on May 19, 2014.
Thugge found himself in murky waters after he was challenged to produce a copy of President Kenyatta’s authorisation on which he effected the payment.
This is after the committee rejected his attempt to use an email sent to him by State House Spokesman Manoah Esipisu, while claiming it was a statement the President read during a televised news conference where he explained why Kenya Government was compelled to pay the two companies.
Article 134 (2) (f) which touches on the President’s authority to confer honours in the name of the people and the Republic states: “A decision of the President in the performance of any function of the President under this Constitution shall be in writing and shall bear the seal and signature of the President.”
Committee members observed that the Treasury was still operating on old orders, “where (businessman Kamlesh) Pattni would show up at Treasury and say that President Moi said you pay Goldenberg only for President Moi to later deny ever issuing such orders.”
“Mr PS if you don’t produce the President’s authorisation, you will be in for it because you will have to prove how you verified the pay order,” said Suna East MP Junet Mohammed
More significantly, the Public Accounts Committee queried whether the PS followed the Public Finance Management Act before making the payment, which includes seeking the approval of the Controller of Budget before making withdrawals from the Contingency Fund.
Thugge was to encounter more questions as to why he rushed into making the payment before he received the written confirmation from the President.
The attempt by the Treasury technocrat to explain why the Executive overlooked Parliament before making the payment infuriated the MPs, leading to Namwamba suggesting that he was trying to be ‘smart’ with the committee.
Thugge had explained that the national government is allowed to spend money and then get parliamentary approval within two months.
Article 223 of the Constitution states: (1) Subject to clauses (2) to (4), the national government may spend money that has not been appropriated if –
(a) the amount appropriated for any purpose under the Appropriation Act is insufficient or a need has arisen for expenditure for a purpose for which no amount has been appropriated by that Act; or
(b) money has been withdrawn from the Contingencies Fund.
(2) The approval of Parliament for any spending under this Article shall be sought within two months after the first withdrawal of the money, subject to clause (3).
(3) If Parliament is not sitting during the time contemplated in clause (2), or is sitting but adjourns before the approval has been sought, the approval shall be sought within two weeks after it next sits.
PAC members Namwamba, Suba MP John Mbadi and South Mugirango’s Manson Nyamweya took exception to this, saying that the Constitution allows the House to be recalled from its month-long break.
Thugge said it was necessary to rush the payment to the two firms because Kenya plans to sell its inaugural Eurobond by mid-August, when its $600 million syndicated loan is scheduled to mature after it agreed to a three-month extension with lenders.
“We have Sh140 billion in our budget but it was being blocked by this Sh1.4 billion. Mr Chairman, we were faced with two options, we either pay or government operations grind to a halt” the Treasury PS said even as MPs accused him of engaging in ‘fear-mongering’ tactics.