Kenyan finance minister arrested on graft charges

Kenyan Finance Minister Henry Rotich was arrested on Monday on suspicion of financial misconduct related to the construction of two dams, unprecedented detention of a sitting minister for corruption in a country notorious for graft.

The charges against Rotich stem from a police investigation into the misuse of funds in a dam project overseen by Italian construction company CMC Di Ravenna.

Rotich denied any wrongdoing in a large newspaper advertisement in March. CMC denied wrongdoing Reuters said.

Rotich and 27 co-accused face eight charges, ranging from conspiring to defraud and financial misconduct, said Noordin Haji, the director of public prosecutions. The minister and other officials will have to resign immediately, he said.

Among the others charged are Paolo Porcelli, the Italian director of CMC di Ravenna; and Rotich’s number two at the ministry, Kamau Thugge, the principal secretary.

“They broke the law on public finance management under the guise of carrying out legitimate commercial transactions. Colossal amounts were unjustifiably and illegally paid out through a well-choreographed scheme by government officers in collusion with private individuals and institutions,” Haji told a news conference.

The two dams were budgeted to cost 46 billion shillings ($446 million), he said, but the treasury borrowed 63 billion instead, needlessly ratcheting up Kenya’s ballooning public debt, which stands at around 55 percent of GDP.

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“This kind of crime and irresponsibility enslaves us with unnecessary debt and mortgages our future generations,” Haji said.

Kenyan prosecutors have requested help from British and Italian authorities, Haji said, and more charges could result.

CMC di Ravenna told Reuters in March that it had received slightly more than $75 million in advance payments for the two dams, planned in western Kenya.

CMC said on Monday it had received no official communication from Kenya on the charges. “CMC is certain of the correctness of the work of the company and its representatives, both in Italy and abroad,” said a CMC statement emailed to Reuters.