Musalia Mudavadi’s name turns up in Anglo leasing case

ransport Chief Administra-
live Secretary Chris Obu-
re has dragged Amani Con-
gress (ANC) leader Musalia
Mudavadi into the Sh1.3 billion
Anglo-Leasing corruption scan-
At the opening of his defence
testimony yesterday, Dr Obure
told a Nairobi court that Mr Mu-
davadi was inwlved in one ofthe
Anglo-Leasing projects,which in-
volved procurement of equip-
ment for the Postal Corporation
of Kenya (PCK).
The CAS said Mr Mudavadi
wrote to him on May 9, 2002 seek-
ing direct proctuement of equip-
ment.
“Mudavadi informed me in
the letter that it was the govern-
ment’s intention to develop and
upgrade the Postal Corporation
of Kenya,” Dr Obure told Sen-
ior Principal Magistrate Anne
Mwangi.
Mr Mudavadi was at the time
the Vice-President as well as
Transport and Communication
minister, while Dr Obure was Fi-
nance minister under President
Daniel Moi.

The case relates to one of the
Anglo-Leasing projects, in which
18 high-value government se-
curity contracts were allegedly
awar€ed to fictitious CX)mpanies,
leading to loss of billions of shil-
lings of public funds.
The government of Kenya
signed , on a single-sourcing basis,
a contract with US-based compa-
ny Spacenet Corporation worth
(approximately
Equipment
The contractor was to sup-
ply equipment and services to
the PCK. The equipment were
named as VSat hardware, com-
puter servers, software licences
and other communication ser.
vices.
Dr Obure said Mr Mudavadi
sought his permission to direct-
ly pmcure the equipment from
the US company in order to inter-
link more than 900 post offices in
Kenya.
‘I’he letter reportedly informed

Dr Obure that upgrading of the
postal services would ease pay-
ment of teachers and other civil
servants at the grassroots
While denying that he abused
the powers of his office as Fi-
nance minister, Dr Obure said
he believed Mr Mudavadi when
he told him the government was
upgrading the postal services
through a broadband data net-
work that would interlink all the
post offices in the country.
Dr Obure further said Mr Mu-
davadi sought his assistance in
achieving the government’s in-
tention.
new technology once put
in place would ease transfer of
payments,” said Dr Obute.
The project would span 10
years, he added.
The court heard that Mr Muda-
vadi’s request regarding direct
procurement was necessitated
by the fact that the Finance min-
istry was the financier,
Upon receipt of the letter, Dr
Obure said he sought advice

from the Director of Procute-
ment in the Finance ministry
“The director in my former
ministry advised that Mudava-
di should forwarxi to them all the
contract documents in relation
to the project,” Dr Obure testified.
The documents were then for-
warded to the procurement
department for technical ad-
vice and action. He said he al-
so sought a legal opinion on

the project from the then Attor-
ney-General, who told him that
the contract was legal.
On getting the AG’s nod, Dr
Obure told the court that he
signed the contract documents
committing the government to
the pmject.
Co-accused
Dr Obure was accused along-
side former Transport and Com-
munication permanent secre-
tary Sammy Kyungu and former
Finance secretary Samwel Cham-
obo Bundotich. ‘Iheir co-accused.
former postmaster general Fran-
cis Chahonyo, died during the
course of the trial.
On his part,Mr Kyungu told the
court he was authorised by Mr
Mudavadi to sign the contract
documents on behalf of the min-
istry. He denied any w mngdoing,
in signing the contract.
The hearing continues

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