The K145 million Malawi scandal: what needs to be done

I beg to move that President Peter Mutharika must step aside and clear his name in a trial by the courts of the Republic of Malawi, and if the courts find him innocent, he can resume his presidency. My proposal is in fact good for his political career, otherwise he will enter into the next electoral cycle widely regarded as a thief. The trial could be expedited – two months max. If guilty, of course he goes to jail, like all thieves do. If innocent, he comes back with a greater halo and wins back the confidence of the general public.

Background

President Peter Mutharika has been named as a corruption beneficiary in a secret investigation report leaked from the country’s Anti-Corruption Bureau (ACB).

Mutharika is suspected to have pocketed K145 million in a procurement scandal masterminded by senior officers in the Malawi Police.

The report has recommended that Innocent G. Bottoman, a director of finance in the Malawi Police Service, and businessman Zameer Karim, owner of Pioneer Investments, be prosecuted for defrauding the Malawi government of K466,000,000.

The report also recommends that I.G. Bottoman and Karim be prosecuted for acquiring proceeds of crime totaling K1.4 billion. The two are also to be charged for forging and uttering false documents, contrary to section 356 as read with section 360 of the penal code.

According to the report, Mutharika cannot be prosecuted due to his immunity as a sitting head of state.

This follows months of questions raised about the contract, including a probe by the Malawi Parliament in December 2017, and refusal by the then auditor general, Stephen Kamphasa, to let Karim steal a further K0.6 billion. Karim will be separately charged for this attempt.

Dated 4 May 2018, the report says that Pioneer Investments won a tender to supply 500,000 ration packs to the Malawi police for a total contract sum of K2,327,087,500 ($3.2 million). The contract was signed on 4 August 2015.

Exactly six days after signing the contract, Karim wrote G.I. Bottoman requesting an upward adjustment of 20 per cent. Karim claimed that the depreciation of the Malawi Kwacha against the United States dollar was the reason for the price adjustment.

Meanwhile, ACB established that between 4 to 6 August 2015, the kwacha had only depreciated by almost two per cent, not the 20 per cent Karim claimed.

The report goes on to say that on 12 August 2015, Bottoman, on his own and without approval by an internal procurement committee, approved the 20 per cent adjustment.

The contract amount was raised by K466 million.

According to Malawi’s laws, price adjustment can only be effected if there is a just cause. In addition, it must be approved by an internal procurement committee and the Office of the Director of Public Procurement.

Six months before awarding the contract to Pioneer Investments, Bottoman wrote CDH, a local bank. In the letter, the Malawi Police undertook to remit almost MK1 billion to Pioneer Investments for the purpose of procuring ration packs. Based on that undertaking, Pioneer Investments borrowed almost K1 billion from CDH to finance the supply of ration packs.

ACB established that the signature of a co-signatory on Bottoman’s letter to CDH, Bottoman’s deputy Tadius Samveka, was forged.

Again, on 16 July 2015, Bottoman and Karim made an additional undertaking to CDH that the Malawi Police Service would remit over MK2.1 billion to the bank, as a guarantee for Karim to borrow a similar amount from the bank.

Bottoman made both guarantees to Karim before the contract was awarded on 4 August 2015, contrary to Malawi’s procurement laws. Only Malawi’s minister of finance has powers to make such undertakings. Even so, making such undertakings before the contract was awarded means the whole tender process was fraudulent.

ACB estimates that Bottoman and Karim made K1.4 billion out of the deal.

In a twist to the story, on 12 April 2016, Zameer Karim deposited cheque No. 127572 worth K2,793,087,500 to his account at National Bank. The account number is 1000687029.

The balance of the account on the day was K-30,425.66.

The following day, on 13 April 2016, Karim issued a cheque of K145 million in favour of a bank account called “Democratic Progressive Party.” Malawi’s president, Peter Mutharika, is the sole signatory of the account. The account number is 014003192200.

Mutharika opened the account at Standard Bank in 2015. From January to October 2016, Mutharika withdrew K65 million ($88,000) from this account.

Meanwhile, Zameer Karim is yet to pay back the K3.4 billion he borrowed from CDH Bank, the loans he took backed by Malawi Police guarantees.

Doubts about the Pioneer Investment contract were first raised by the media in December last year.

Response after Today’s Revelations

State House did not know how to handle the bombshell. When a friend from one leading media house contacted Mgeme Kalirani earlier in the day, the following was his initial response:

“We know that there is a coordinated and sponsored character assassination campaign against President Professor Arthur Peter and the DPP from disgruntled politicians.

“This so-called leakage document on corruption is part of that scheme.

“As regard to the transaction in question, there was nothing sinister about it and we will provide a detailed explanation in due course.”

As you can see, Mutharika has admitted that the K145 million of the corruption proceeds was indeed deposited to his account. I suspect that given the law about the declaration of assets, Mutharika decided to disguise his dubiously acquired money by making it look as though the account belonged to the party. This is money-laundering. As far as I know, Mutharika is not treasurer-general of the party, and the fact that he is the only signatory confirms that the account is personal, meant to be used as a conduit for harvesting corruption proceeds. I demand that bank statements of the account be published in widely circulated newspapers from the day it was opened to this day.

Perhaps after further reflection, Mutharika’s spokesperson came back with a longer response:

“We know that there is a coordinated and sponsored character assassination campaign against President Professor Arthur Peter and the DPP from a disgruntled politician.

“This so-called leaked document is part of that scheme. Take a close look at it and u will notice that the document is not signed. It is a fabrication and the said politician is behind this scheme.

“As regard to the transaction in the DPP account, there was nothing sinister about it and we will provide a detailed explanation about it due course.”

Look at Mutharika’s attempts to turn himself into a victim, when, as a matter of fact, real victims are the poor Malawians who suffer because of poverty.

In this response, there is also an attempt to make the leak look like the work of an unnamed political rival. Had the contents of the report been untrue, such a smear campaign should have been a concern for us all. But the undeniable fact is that the president received K145 million which Zameer Karim obtained in a fraudulent contract.

At this juncture, we got wind of the fact that attempts were being made to compel the ACB to disown its own document. Sure, we soon saw a communiqué from the agency:

“The Anti-Corruption Bureau would like to inform members of the public that it has noted with great concern the circulation of a report which is purported to have come from the Bureau. The Bureau would like to advise that the document being circulated has not been released by the Director General’s office or its spokesperson.

“The Bureau does not release its investigation reports to the public as this is against the Bureau Standing Orders and the Corrupt Practices Act. The Bureau will, therefore, investigate this to establish whether the report came from the Bureau or not. If it is established that the document was illegally released from the Bureau, appropriate disciplinary measures will be taken on the officer(s) involved as that does not only jeopardize investigations but also puts the Bureau into disrepute.

“The Bureau would like to assure members of the public that it will continue discharging its duties professionally and in accordance with the Corrupt Practices [sic].”

You do not need to have a degree in philosophy to discern that the Bureau is, in fact, owning the document. If the document was fake, they would have wasted no time to be this longwinded. They would have simply written: “The document is fake. The Bureau hereby kindly requests the public to disregard it.” Simple. But when the Bureau says “If it is established that the document was illegally released from the Bureau, appropriate disciplinary measures will be taken on the officer(s) involved” it means it admits that the document is indeed from ACB.

What is disturbing is that now the ACB will waste taxpayers’ time and money to investigate the leakage instead of putting on trial the thieves who have stolen from Malawians.

Conclusion

Once again, I beg to move that President Peter Mutharika must step aside and clear his name in a trial by the courts of the Republic of Malawi, and if the courts find him innocent, he can resume his presidency.

*Views expressed in this article are those of the author and not necessarily of Malawi24. You can read the full report by clicking here.