Kenya's Anglo-Leasing Scandal: Uganda-Born U.K. National Could Shed Some Light

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Anglo-Leasing: Kenyan attorney general Githu Muigai could learn something from Jesse Mashate

[Black Star Editorial]

Kenya's Attorney General Githu Muigai and other officials involved in untangling an epic multi-million dollars corruption scheme -- called "Anglo-Leasing" -- of inflated invoices from foreign companies seeking payments could learn a thing or two from a Ugandan-born British national named Jesse Mashate. 

Mashate has been involved in a legal tangle with Edwin Coe LLP, a law firm involved in representing Kenya in Anglo-Leasing  related lawsuits  -- in Uganda and the U.K. the firm is being investigated for submitting millions of dollars in inflated invoices to the Ugandan government which it's representing in legal action filed by Mashate.

The Anglo-Leasing scandal in Kenya dates back to 1997. Briefly: the Kenyan government working through local business executives as middlemen signed contracts with European firms to provide equipment or services. Some of the equipment included machines to print forgery-proof passports; some services were related to security work. Reportedly in some cases no services or products were provided.

The contract for passport printing equipment was estimated a 6 million euros. Yet the contract was inflated to 30 million euros by the time it was awarded to a U.K. company, which in turn was to sub-contract the work to the French company which had provided the 6 million euros. Through the years the value of the contracts awarded the various firms -- 18 in total-- ballooned as interest and late payment fees were tacked on. In many cases the actual owners of the shell companies were not known.

Kenya eventually cancelled the contracts contending that they had been awarded and secured fraudulently through corruption. Some of the vendors, including Universal Satspace (USS) and First Mercantile Securities (FMS), sued for payment in the U.K. and Switzerland, respectively. Both companies secured judgments against Kenya and FMS also asked a U.K. court to enforce the decision.

Kenya's current Solicitor-General Njee Muturi, who works closely with Attorney General Muigai, appeared before a U.K. court to defend the country. The country's position was simple: how could Kenya be made to pay on fraudulent contracts?

According to media reports, even though Muturi presented Kenya's side of the case, he may as well have stayed in Nairobi. Muturi is not licensed to practice law before a British court. Whatever evidence he presented on behalf of Kenya was disregarded. The ruling was in favor of the European companies. President Uhuru Kenyatta, saying he feared adverse impact on Kenya's debt rating and risk to its overseas assets, ordered the Treasury to make a payment of $8 million to each of the companies for a  total of $16 million. The Kenyan public was enraged. 

Kenya denies that more companies will receive payments and is hoping the Swiss can help them in a criminal investigation.

Meanwhile, a Kenyan lawyer named John Wambugu, who also "represented" Kenya in its defense against the vendors seeking payment has sued the government for payment of his legal fees according to media reports. He's seeking 100 million Kenyan shillings which translates to about $ 1 million.

Since Wambugu too is not qualified to practice before the U.K. courts, and therefore could not have appeared on behalf of Kenya in proceedings he outsourced this work to a U.K. firm named Edwin Coe LLP.

Jesse Mashate, the Uganda-born U.K. native, knows that company all too well -- with its alleged reputation for inflated invoices with its Ugandan partners.

Edwin Coe represents Uganda's President Yoweri K. Museveni in a U.K. lawsuit filed by Mr. Mashate in 2006 seeking compensation for his newspaper, The Weekly Digest, which was confiscated when Museveni seized power in 1986.

In 2013 Uganda's Parliament and U.K. law enforcement investigated allegations that Edwin Coe, working with Ugandan lawyers as partners, submitted inflated billings of about $30 million in purported fees. In fact, according to documents connected with the case, the total cost of a timely defense of the law suit should not have exceeded $160,000 over a five year period.

What's more, Edwin Coe allegedly worked with several Ugandan lawyers it knew were not qualified to practice before a U.K. court. Nevertheless, some of the Ugandan lawyers were allegedly allowed to appear before the court.

Also, a Ugandan firm, Kampala Advocates Associates (KAA), reportedly billed $2 million for purportedly representing Gen. Museveni in the same Mashate case. The contract was cancelled following an investigation by Uganda's Inspector General of Government (IGG), according to media reports. KAA objected to the cancellation and claimed it was brought to the case by President Museveni and that even Edwin Coe confirmed that it's played a critical role in the defense.

Uganda's Attorney General Peter Nyombi was accused of corruption for authorizing the payments to Edwin Coe.

Similarly, in Kenya, Attorney General Muigai has endured a barrage of criticism amidst accusations of mishandling the government's defense in the U.K.

Eric Mutua, Chairman of the Kenya Law Society (LSK) wants Muigai removed. The LSK accused Muigai of “unconstitutional, illegal and unprofessional”  conduct in handling the cases. LSK want UK authorities to investigate Edwin Coe LLP's suspected role in undermining Kenya's case and to investigate the presiding U.K. Justice Teare's actions. Justice Teare was either “incompetent or compromised in the matter” the LSK says.

Kenya must study Mashate's case for insight.

Mashate won a default judgment of about $31 million against President Museveni on December 11, 2006. The judgment was vacated in 2007 when the Ugandan ruler's representatives argued that he wasn't properly served. The Black Star News reported that Museveni's aides used a forged document to secure the reversal.

There were other alleged shenanigans. Forest Solicitors, Mashate's counsel, switched sides and started representing President Museveni.

The parties have tussled back in forth for the last eight years. The firms are happy, billing tens of millions of dollars. There is speculation it's a money-laundering scheme with portions of being recycled back to Ugandan officials.

Coupled with interests and fees since the original $31 million, Mashate's representatives believe he's owed about $150 million.

The next scheduled court appearance in London for Mashate and President Museveni's representatives is November 4 and 5.

Mashate's representatives have also moved for the case to be heard at the European Court of Human Rights on grounds of the numerous breaches of the ECHR's Convention Articles and its Protocols. This would likely expose President Museveni and the Ugandan government to additional millions of dollars in damages.

Attempts to secure comments from Mashate were not successful but Kenya's AG Githu Muigai can try reaching him through



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