To What extent are Malawian Banks enablers of Corruption and Fraud in Malawi? – a Survey

IFMIS : What did UDF, DPP and PP know?

IFMIS

Reports can be fantastic pieces of literature. Absolutely wonderful things…informative, revealing, ridiculing, attesting – marvelous!  More so if they happen to be government-funded.

Whenever political leaders are busy paying lip service, telling lies, denying allegations and generally being unpleasant to their electors (and those who didn’t elect them), a little bit of research can quickly reveal who amongst the herd is Pinocchio.

The report above which is a summary can be downloaded here: Summary of key findings and recommendations of GOM IFMIS Review-2. It is dated 18th November 2009, and is a summary of a Report commissioned to asses how the IFMIS was functioning. It is titled QUICK ASSESSMENT OF THE INTEGRATED FINANCIAL MANAGEMENT INFORMATION SYSTEM.

The original report (which I imagine can be obtained from the Public Financial and Economic Management section of the Ministry of Finance) is over 200 pages long (and don’t ask how I got my hands on it), but this summary is only 34 pages long. According to this summary:

As part of the continuous PFM reform processes in a bid to further enhance public expenditure management, the Malawi Government through the PSRMU of the OPC engaged the author through UltiNetS2 to undertake a quick impact assessment of the EPICOR* based IFMIS implementation with a core objective to identify any system operational or functionality challenges and make appropriate recommendations for improvements.

*EPICOR is the company that makes such software

In other words the report was commissioned to highlight the benefits and challenges of the IFMIS and ask questions such as:

(1) What is the IFMIS?

(2) Why was it chosen by the Ministry of Finance (MOF)?

(3) Is it working as intended / achieving its purpose?

(4) How well is it performing ?

(5) What are the problems / operational issues ?

(6) Where are these problems / operational challenges?

(7) What can be done to improve its performance/ resolve these problems?

… and so on.

At the time of commissioning, Bingu Wa Mutharika had been in power for some 5 years and 6 months.

Before we look closely at this summary, a notable point is somewhat appropriate: the version of IFMIS Malawi installed on its systems / computers is based on a version Tanzania installed. We all know that not too long ago, Tanzania’s president sacked his cabinet ministers due to corruption. Was this related to IFMIS?? I think someone needs to find out?

Earlier in 2006, the OECD Journal on Budgeting carried an article by Jack Diamond and Pokar Khemani titled Introducing Financial Management Information Systems in Developing Countries that explored the merits of the IFMIS system and looked at case studies in developing countries including those across Africa.

According to the OECD article, attributes of a well-designed FMIS include:

attributes-ifmis

Yet if you take a look at the summary of the IFMIS in Malawi, it’s indisputable how hollow and a shambles the whole rollout was. Everything was dysfunctional, from the contracting phase to the implementation phase and support, everything was a disaster!

According to the UltiNetS Summary, the positives include:

– The successful implementation of the EPICOR based IFMIS significantly contributed to the debt cancellation for Malawi as a country under the HIPC initiative

The implementation of EPICOR based IFMIS has to some extent assisted the Government in restoring some fiscal discipline through public expenditure management particularly on transactions that are primarily processed through the system.

The introduction of EPICOR based IFMIS has significantly checked the proliferation of Government bank accounts by the MDAs* thereby giving the AGD* a better control.

The introduction of the EPICOR based CPS* has significantly restored the credibility of Government cheque payments to its creditors.

*[AGD: Accounts General Department; CPS: Central Payment System; MDA’s: Ministerial Departments and Agencies]

Yet in spite of all this, we are then informed that:

– The conditions of contract were more in favour of the contractor (Soft-Tech Consultants) than the client (Malawi Government) which clearly shows that the client did not have much input into the document before engagement.

There was no valid justification for the training to be conducted for almost the whole year and at every site of implementation, hence proved too expensive for the Government considering similar implementations.

– The IFMIS contractual costs are too high than anticipated (almost USD $1.7million) more particularly on the user licences, consultancy, training services and travel which account for almost 91% of the total cost.

– There was non strategic procurement of bout 240 system concurrent user licences for all 32 sites for all the modules when only a few of these licences are currently used.

–  The EPICOR based IFMIS architecture, design and operational framework is incomplete to constitute an ideal Government IFMIS system design and operational architecture as it still falls short of
other key elements and full functionality of the sy stem.

In other words, the Malawian government has been using an incomplete and system that is not fit for purpose. The observations continue:

There is a great deal of system underutilization considering the number of procured modules and other key features within the existing functional modules that are currently not functional.

The system does not have any alert system to detect any fraudulent activities or any deviations to normal operations within the system such as overriding system controls without appropriate approval
process and any system performance issues let alone a functional audit trail to track system usage

If post-Cashgate you wanted to know why junior accounts assistants (see most recent revelations here) were found with millions of dollars, this is precisely why.

The current Chart of Accounts is not yet fully GFS compliant as per the IMF requirement and does not fully respond to the performance measurement indicators of the current MGDS.

From a budget execution perspective, the EPICOR based IFMIS system is working perfectly as a budget expenditure control system since no funding or expenditure can take place where there is no budget unless overridden, however the system does not block budgets that have already been expended to the equivalent of expenditures 

In other words, a user can Overspend. In principle, this means that a user can generate a cheque and get the Reserve Bank of Malawi to honour it, even when on his budget, that money doesn’t actually exist.

The IFMIS infrastructure does not have any intrusion prevention and detective system or mechanism to easily gain visibility and monitor any potential security threats considering that the access in mainly by user ID and password which can easily be accessed

So who can say whether foreign criminals haven’t laid their hands on some of this money??

Some of key control features particularly in the payment management approval process within the IFMIS are not yet activated and functional to improve the entire system internal control framework.

The current payments management system is weak and prone to exploitation or abuse by colluders as access into the system and Accounts Payable module in particular is not physically authenticated beyond normal user ID and passwords due to lack of appropriate tools.

Again, like above, misappropriation withing IFMIS is easy, so long as you have a username and password. And people could collude to steal money, so the Cashgate scandal should not be a surprise at all.

The current core accounting system and financials suite of the EPICOR based IFMIS has an Electronic Funds Transfer (EFT) module which is more secure mode of payments which if implemented could help reduce some instances of cheque frauds and frequent delays in processing and dispatching cheques. In addition, it could eliminate risks associated with the MALSWITCH link used for cheque list transmission.

So they knew that there was cheque fraud happening? Or is this just a hypothetical situation?

The current structure of the CPS within the EPICOR based IFMIS lack appropriate tools and effective controls for checking, verifying and authenticating or validating payment transactions within key units before issuing cheques or effecting transfers to third parties, hence difficult to detect any fraudulent payments from within the financial system. For instance the Receiving unit of the AGD’s CPO does not have any means for verifying the authenticity of signatures on the payment vouchers and electronic voucher list from the MDAs, hence difficult to establish any instances of forgery.

There was no capacity to check if signatures are fake, meaning forgeries could have occurred, or did occur?

– The NAO [National Audit Office] does not have adequate capacity to audit the EPICOR based IFMIS functionality apart from auditing the financial statements (‘ Appropriation accounts’) as it does not have automated audit management tools to enable carry out that function

The NAO does not have adequate capacity in terms of man power and funding to effectively carry various types of audits covering automated systems.

All this advice was given to the Office of the President under DPP’s watch, when Mutharika was at the helm. Further the 2006 OECD report at page 19 / 115(last paragraph), states that:

In general, the implementation phase has not progressed well, primarily because of clearly limited involvement and some neglect of the system by the main players, including the Ministry of Finance, the Accountant General and pilot ministries. There are several significant issues to be addressed before the system can be made fully functional and rolled out.

Neglect?? That’s a strong word. When they received this advice, why didn’t DPP act?  And if they claim to have acted, what did they do to solve the above problems? More importantly, when PP came into power, did they know of this report and its findings, given the fact that the Ministry of Finance is a crucial ministry in any country?

I think the Malawian people deserve some answers. Malawians need responsible leaders who will help develop the country, not a hopeless and clueless bunch who are only interested in self-enrichment…

Reviewing this summary, it is absolutely clear that the Ministry of Finance knew the dangers of the IFMIS and the fraud that was happening ? They must have known. There are no two ways about this. But they ignored the problems/ fraud, or took advantage of them. In my view, the silence / inaction suggests some people was benefitting from the mess. Clearly, Lipenga and his juniors were hopelessly incompetent, and Joyce Banda must take responsibility for bringing in such a useless man into such a respectable office.

It all simply begs the question, how can such massive amounts of money be embezzled when the inherent problems were known? Those responsible for the plunder must pay back what they stole…Every single penny! And face the arm of the law.

The fact that successive governments knew there was a problem, but didn’t act strongly suggest there was a conspiracy to defraud the Malawian people, such that our syndicate theory may in fact be broader and far-reaching than us ordinary folk think?

Why do Malawians elect incompetent officials who can’t even do the basics?

Similare Articles

Satan’s Neonazi conmen: The Institutional Discrimination and Racism hidden within Immigration (part 1)

racism

“Institutions can behave in ways that are overtly racist (i.e., specifically excluding people-of-color from services) or inherently racist (i.e., adopting policies that while not specifically directed at excluding people-of-color, nevertheless result in their exclusion). Therefore, institutions can respond to people-of-color and whites differently. Institutional behavior can injure people-of-color; and, when it does, it is nonetheless racist in outcome if not in intent.”  via http://racism.org/

“Every miserable fool who has nothing at all of which he can be proud, adopts as a last resource pride in the nation to which he belongs; he is ready and happy to defend all its faults and follies tooth and nail, thus reimbursing himself for his own inferiority.” Arthur Schopenhauer, Essays and Aphorisms

“I have a dream that one day little black boys and girls will be holding hands with little white boys and girls.”  ― Martin Luther King Jr., I Have A Dream

“You can easily judge the character of a man by how he treats those who can do nothing for him.” —Malcolm S. Forbes.

“Hating people because of their color is wrong. And it doesn’t matter which color does the hating. It’s just plain wrong.”   Muhammad Ali

“You never really understand a person until you consider things from his point of view . . . until you climb into his skin and walk around in it” – Atticus Finch, To Kill a Mockingbird (Harper Lee)

I was going to subtitle title this post as ‘Stupid & Repressive laws from Stupid & Repressive institutions’, but that subtitle was too long, sounded angry and would have messed up the layout of this article.

A more moderate subtitle would definitely be more effective in getting the important message across. Then I thought of calling it ‘A radical experiment on Immigration’ in a similar fashion to Sam Richard’s brilliant video ‘A radical experiment in empathy’, but that subtitle didn’t explicitly specify the Racism and Discrimination aspects…

A few months ago, I read an article on the Guardian website, in which the writer wrote that “Unless universities realise that merely paying lip service to equality will not eliminate society’s prejudices from their campuses, racism will continue to flourish” [posted on Guardian blogging Students website by one Conrad Landin].

As a migrant who is proud to have come out of two British Universities with two good degrees, I couldn’t agree more. I was racially abused in University (not once or twice), my first encounter with the practice on British soil, but even then I recognised that it was a part of a much bigger and wider problem. A problem that in other forms extended to double gold medallist Mo Farah being stopped and questioned by US customs, over his Somali origins.

Up to the time I began writing this article, I had been asked to write something on immigration and racism by three of my closest friends, and up until recently I gently resisted their requests. Not that I didn’t want to write about the subject or that I didn’t care so much about their requests, nor that it hasn’t affected my own family, no, not because of all that. Instead, it’s quite a painful subject to write about when one’s experiences have been hellish in this regard, and when the institutions involved have caused one’s family members (especially my mother) a lot of grief and hardship. Extremely painful, in more ways than words can describe, so to an extent I was shunning the topic because of the inevitable pain writing about it would cause…..

To put it into perspective, the UK Border Agency (UKBA) has been described as Cruel (Roseline’s journey: a kidney transplant patient meets UK Border Agency contractors , Child refugees harmed by ‘cruel’ detention systemState-sponsored cruelty  , Medical Justice : “‘State Sponsored Cruelty’: Children in immigration detention” and here: Child detention is ‘state sponsored cruelty’- report finds); they have been accused of Harrassment; described as Oppressive (The UK Border Agency’s long, punitive campaign against children (helped by G4S and Serco), Not fit for PurposeRacist (Indians to pay £3,000 cash bond deposit for U.K. visa ) , (Why Is the UK Border Agency Racially Profiling People On the Tube?), (Exclusive: Doreen Lawrence pledges to condemn ‘racial profiling’ spot checks in the House of Lords) and (CABIN CRUELTY: MORE TROUBLE AT THE UK BORDERS AGENCY – via Liberty ) which contains the paragraph:

Predictably the UKBA refused to disclose its policy in full. But even what we were shown set alarm bells ringing. There was no provision whatsoever for training staff for aircraft removals – all scenarios related solely to prisons. The approach towards medical care was inconsistent at best, and little or no attention had been paid to de-escalation techniques. It’s not hard to work out that dealing with a distressed deportee on a long flight, confined inside a claustrophobic cabin, might pose particular challenges and health risks. But there was absolutely nothing to suggest the UKBA appreciated this

IncompetentDamning report says practically all UK LGBT asylum claims are being refused; Border Agency “cruel and discriminatory” ) , a law unto itself – a link that contains the paragraph:

“The hearings at the Home Affairs Select Committee enquiring into the running of the UK Border Agency were hard to credit. Keith Vaz, the Chairman of the committee, asked the Head of The UK Border Authority for information about their operations, and the Head of the UKBA replied that he was unwilling to provide said information. It was entirely obvious that the UKBA has become a law unto itself. “

and even Murderous (Jackie Nanyonjo, Jimmy Mubenga and Joy Gardner: all killed by Britain’s racist deportation regime)

The issue has become politicised with people separated from their families ( My battle with Britain’s mean, ineffective immigration system:  ‘Controlling immigration’ means being rude to foreigners — as I found out ); genuine weddings have been wrecked:-

“We travelled down to the venue from Nottingham, only to find that the Bride had been arrested by the Police upon arrival at the Church. It was stated it was due to an Immigration matter. They detained her over night and released her on Sunday without charge. They claimed she had indicated in her application that she was married in the USA and that it was a sham wedding. The girls father had travelled all the way from Malawi, they had friends and guests from all over the country and everything was ruined. The Bride is Malawian who has a USA Green card and lives in America. The groom is a Malawian student who has finished his studies and is waiting for his passport which is with UKBA so that he can leave.They had done all the necessary paperwork to enable them to get married here, gone to the registrar etc and all was in order.”

Even those who served in the armed forces are being harassed.

Another source told me:

“My own sister and niece, who obviously are black – and now American citizens have been denied a visitor visa once, even when they are fully settled in the US, and have no intention of moving to the UK, they have a good life there…much better than what I have here, and at the time of making the application, they supplied all the material that was required for the application…and paid a lot of money, only to have a visa denied, after all that money!”

And all this is just scratching the surface. Indeed the sad stories (that includes staff at UKBA slamming the phone down on nervous applicants) are many and heart wrenching and we don’t have time or room to list them all here.

But how can this kind of treatment of other countries’ nationals be fair game? And why hasn’t the coalition government done something decisive to end the harassment? Do they approve of such heavy-handedness? How many people must die before the UKBA is finally brought to book, and its officers prosecuted? In case you didn’t know, the guardian reported here that detainees at Yarl’s Wood immigration centre were ‘facing sexual abuse’, with guards preying on isolated women at the institution (which is run by Serco), and orchestrating a cover-up. How bad can it get?

Nelson Mandela once said that “To deny people their human rights is to challenge their very humanity. To impose on them a wretched life of hunger and deprivation is to dehumanise them.”  In other words, such treatment simply means the victims are being stripped of their humanity; deeply ingrained in the persecutor’s head is the notion that the persecuted are not humans (or are lesser humans). Precisely the very same type of racist ideology that was partially responsible for apartheid, slavery and the holocaust.

Just because it’s happening to a non-white non-British national, does it mean that abuse, cruelty, force, harassment, mental torture, murder and other evils are justified?

Would the British authorities (let alone the officers responsible for these crimes) be happy or content if in quid pro quo fashion, British nationals abroad (there are 5 million of them living outside the UK) were treated inhumanely in the same manner that the UKBA (and its associate agencies) treats migrants here in the UK?

I think not. I think if you showed the majority of British subjects living abroad how migrants are treated by the UKBA, and asked them what they think of the practices, and whether it would be fair game for the authorities in the country in which they are living in to treat them in a similar or identical manner, most would be appalled by the UKBA’s conduct and would not be happy to be treated anything like it.

Someone needs to inject some common sense into this madness…

To some christians in pentecostal and other churches, the UK Border Agency is the very embodiment of Satan, his machinery, the officers – employees of organisations such as Serco and G4S (which have been implicated in numerous heinous scandals [see here, here, here and here]), possessed by his demons.

To aggrieved intellectuals, the UKBA are Neo Nazis, similar in manner to the Gestapo; they are the 21st century’s version of the Ku klux Klan. If their behaviour is anything to go by, there is certainly a case that they have crossed the line, especially with reports (After Serco, what rights do asylum seekers have in detention?) that a manual that authorised guards to use force to incapacitate detainees (including to kick, punch and target pressure points on detainees)  was as recently as last year still in use.

Some say the UKBA is just a money-making scheme (see here , here and here[UK Border agency accused of charging excessive fees for visas – made £225 million PROFIT in 2012]); a profiteering scam with government blessings designed to suck money from already impoverished foreigners (and from wealthy ones); an institutional conduit of funds and a modern-day servitude for the deprivation of foreign nationals. As someone who has had to dish out over £10,000 (a sum that at the time would have completely wiped away all my family’s debts) for one visa or another (including exorbitant solicitors fees), I agree with this allegation to a great extent, and to be honest I’m a little bitter about having had to pay so much. Especially since a lot of that money was paid by my mother, a single parent who at over 60 years of age still had to work (while I was unemployed).

But if you are prepared to use force and even go as far as kill innocent people, to enforce your oppressive laws, what’s a mere low-level scam that causes untold financial hardship?

And this ‘scam’ didn’t start just yesterday. As far back as 2006, some rational people were already questioning the UKBA visa fees policy, with one account in the Financial Times here, stating:

“Students who need visas will already be paying much higher tuition fees than British and other European Union students. If it is argued that if you can afford the tuition fees you can afford the visa fees, a thoroughly incorrect attitude is revealed.

Are we trying to drive away students in need of visas? The visa service is said to be largely self-financing, a typically short-sighted arrangement that ignores the external benefits of accessible visa fees.”

And somehow, despite the complaints against the UKBA, there is nothing wrong with all this, apparently….??

Further, you rarely hear any of their ill-treatment of innocent people in the mainstream media, especially on Tv, which to me is highly suspicious. With the exception of a few bold publications (see Guardian report here) and specialist publications such as New Statesman, which has a story (published March 2013) titled “The UK Border Agency: after four years, a car crash in slow motion finally comes to a stop“, that includes the paragraphs:

“..But incompetence is one thing – cruelty quite another. The fact the new body was kept at arm’s length lead Theresa May to conclude it had created a “closed, secretive and defensive” culture. Staff from sub-contractor Reliance were transporting Roseline Akhalu when she ended up pissing all over herself because she wasn’t allowed to use a toilet. Staff from Tascor – which superceded Reliance – allegedly beat Marius Betondi and broke his nose during a failed deportation attempt. That was one of thousands of distressing cases, the product of a system in chaos.

The failure to prosecute G4S staff over the death of Jimmy Mubenga has been described as “perverse” by the former Chief Inspector of Prisons. Just as it failed to protect victims of torture, so the system failed to protect victims of slavery. The right-wing Centre for Social Justice (CSJ) found a litany of flaws in UKBA’s procedures and concluded that “too often the CSJ has been told that UKBA involvement in the . . .  process acts as a major barrier to victims [of slavery] to make a referral.”…

When a reckless banker misuses the funds of his bank, leading to loss of millions of pounds, it is reported as news, often with glee. When a sea creature is washed up on a beach, the story is reported, even the polar bear cub Knut (who sadly died 2 years ago) received so much publicity!

Is the media saying that such ill-treatment of innocent people (who are HUMANS) as reported in the articles above is not newsworthy?? Or is something more sinister going on?

The way I see it, the silence of large media houses suggests either an indifference (in the same way as Hitler was initially tolerated before everybody realised [rather late] he was pure filth and evil) by the media to atrocious treatment of migrant by UKBA (i.e. we don’t think it’s news) – a massive miscalculation and a failure of judgement; or the silence suggests complicity (i.e. let them get on with it, somebody has got to do it).

In addition, you rarely hear of anyone white, especially from non-EU countries such as Australia, New Zealand, the US or even countries such as Israel being mistreated or harassed?? In the 11 years that I have been living in Britain, and following these issues, I’ve never read a single report of people from these countries being a victim. Instead by far the majority of those who are victimized by what is by all appearances a Neo Nazi fascist organisation are Black Africans, Afro-Caribbeans, Arabs or Asians, which is appalling and quite shameful in a post-apartheid post-slavery 21st century.

It doesn’t speak well at all of Britain’s race relations, or indeed its Human Rights record.

So, given the material I possessed, part of the reason I hesitated in writing this article is because I was still trying to resolve my thoughts and feelings regarding what my true position on the topic was.

And since its pretty clear that there was nothing positive about the Nazi’s, I’m struggling to find anything positive about the UK Border Agency.

Also, the fact that the topic was too broad and requiring formal research didn’t make it easy. Add to that the many facets deserving consideration, the history, multiple implications for the lives of tens of people I know and thousands I don’t know, and the picture couldn’t be fuzzier. That was until a couple of months ago, when a friend told me of his ordeal, which although not as heart wrenching as some of the above cases, demonstrates that the problem is not only in the UK, and even when you have legal status, if you are an ethnic minority, discrimination is everywhere.

Good friend A lives in England with his family (a wife and 3 young kids – the oldest is 6), and has a good job. ‘Good job’ meaning he’s in a managerial position with 8 people below him and earns a good salary. He lives in a 4 bedroom house, and has some savings. Good friend A regularly supports at least 5 relatives back in Africa from his salary (almost every month). I know all this because he told me. He holds a Malawian passport and has travelled extensively over the last 10 years or so, to Germany, France, Switzerland, Austria and other European countries. Recently he wanted to attend a 2 day music festival in a European country with his family. Having made his visa application, showing the festival tickets which costed him around €200 in total, the officials at this country’s embassy in London told him to book his hotel, which he did, spending an additional €200 even when he didn’t know when they would issue the visa, and therefore when he would travel. Then, just before the weekend of the event (and too late for him to cancel his hotel) they requested that he submit additional documents, even when he had supplied everything that was stipulated on both their website and their application forms. Then he went for the interview at the embassy, to find staff who were so haughty, condescending and disparaging, he came out feeling disgusted.  Suffice to say, he missed his festival, and €500 (including the cost of the visa and trip to the embassy) went down the drain.

I’d love to say that there is no racial discrimination in the immigration system, but I’m afraid as all the above demonstrates I can’t. There are too many stories like those above – whose victims are ethnic minorities – which suggests otherwise.

If you look across Europe, just as its undeniable that there has been an increase in ‘hostilities’ against muslims (another type of largely baseless discrimination), there’s an ‘anti-immigrant wave’ blowing across the continent, in France, Sweden, and other countries, and a large part of that wave is directed towards non-white, non-european migrants from outside the EU.

But I’m not saying that there are no other aspects of immigration worth considering. It is perfectly clear that not everybody can live in Europe, or America, or Canada or Australia, for all sorts of reasons (and I’m going to outline them in my next post), but to exclude and discriminate against people robotically on the basis of their race and nationality is in my view simply wrong. To use force to wreck lives without a basis is inexcusable, to harass people who have a genuine case is atrocious, to kill innocent people or separate families is a criminal act.

In addition, I’m concerned that very few people are prepared to ask, why are all these people wanting to live here, and not in their own countries, what is happening in their own countries that’s causing them to want to live here?

And predictably with such pressure and harassment some people get desperate, and in an attempt to stay in the country from which they are being threatened with removal utilise every means possible, from fake passports to shady lawyers. The effect, it diminishes the credibility in the genuine cases of other migrants such that everyone is viewed with suspicion.

And because usually with such stories, people have had some extremely bad and painful experiences, emotions run high, and some can be dismissive. One friend recently declared:- “the west pillaged resources from other continents, and then created a ‘apartheid’ immigration system, a walled fortress to keep out everyone from the wealth that was built on the proceeds of the plunder. You see it in Canada, in Australia, in the US, in Britain and most western economies.” 

And in countries which have non-white ‘native populations’ such as Australia and the US, the parodies are never in short supply:

grg

Many years ago, I used to wonder, why some people fail to forgive. Why some people get hardened. What exactly is happening in their hearts? Why can’t they just let things go? For example why is retaliation the song of the day between Israel and Palestine? Why can’t one of them say,

Look we’ve caused each other too much pain already, enough lives have been lost, enough is enough, this has got to stop. This ends now.”

I couldn’t understand it. Then recently, while doing research for this article, that led me to places where I heard views from many people who have been affected by the Immigration system in the UK, I began to see it, I began to realise that sometimes, undue persecution, institutional harassment and violation can run so deep, and the unhealed wounds can continue to be painful after so many years, and be so many of them, such that forgiveness is impossible. It appears like one can literally lose the capacity to forgive. In such out of control circumstances, I can imagine why an eye truly and only calls for another eye.

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Whodunnit : Kalambula bwalo

money-case-163495_640

“By making the government a combination of elected officials and citizen-backed initiatives and referenda, there can truly be a government of the people, by the people, and for the people.” Victoria Stoklasa, Sign It Into Law: How to Put Your Petition on the Ballot

Desperate times call for desperate measures, so the saying goes. Also, it takes a thief to catch a thief, so the idiom goes.

A scandal of rampant corruption on a colossal scale, dodgy deals that swindled millions of dollars from Malawi government state coffers, a mush of top-level fraud, pseudo-mafia syndicates, cover-ups, propaganda, damage limitation and possibly character assassination has been running amok on social media circles lately. The plot, which includes illegal cashing of cheques using ghost companies or companies that did not supply any goods or services to  the government, makes some astounding (but not entirely surprising) allegations and sounds like something out of a Nollywood movie. Or from a wild wild west film. You don’t believe me? Well, for a start take a look at these titles:

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And that’s before we even get to the issue of inflated invoices most recently decried here.

But, but before I continue (and before somebody erroneously labels me a cantankerous and belligerent git beguiled by rumour, speculation or social media chit-chat), I must categorically state that my interest in the story you are about to read is either as a messenger-cum-advocate (writing to advance and improve Malawi’s economic situation by dissemination of progressive ideas, views and inspiration – which probably includes exposing corruption that stands in the way of progress), or as a shocked Malawian national horrified by the scale and proliferation of impunity in government. At least that’s what I think.

I have absolutely no interest in petty fights or trifles, no interest in causing problems for anybody, neither interest nor intention in tarnishing individual reputations, I take absolutely no pleasure in defaming upright politicians or honest members of the public, and will take no responsibility whatsoever over the accuracy of what is handed over to me. I’m only reflecting what I’ve received and have been asked to publish, and should it be false, or not entirely true, I will do nothing other than publish one apology to those aggrieved by the allegations – here, on the same page as the allegation and, if they like, in BIG LETTERS and on a massive RED background, in a number of languages, for full effect:-

sorry

Obviously, anyone sensible never publishes serious allegations without doing some serious research and taking reasonable steps to invite comment or alternative storylines from those that stand accused of the allegations (as far as one is able to). And this I have done, although I must say after waiting for at least 9 days (during which I received no response or even acknowledgement) for the accused to comment, with what others term ‘righteous anger’ building in my loins, I had little choice but to proceed and publish this material.

Also, there is the element of common sense: which thief / conman who hasn’t yet been apprehended by the authorities or the law, and who has their liberty, will voluntarily confess of their thieving in public? That is why in legal circles evidence comes into play, because even if you deny doing it, if there is compelling evidence against you, beyond reasonable doubt, then you my friend are the one whodunnit.

But what if the evidence is fuzzy, or virtually non-existent (except for secret murmurs from fear-struck individuals who want to do what is right, but are afraid of the consequences)? And what if the conman happens to be cunning enough to cover up most (thankfully not all) of their tracks? Further, what if some of those accused are cagey about what happened (akin in opacity perhaps to the responses of US bank chiefs, when asked what they did with the bailout billions in re Troubled Assets Relief Program)? Also, consider the scenario whereby the ‘conmen’ are infact a sophisticated syndicate that includes powerful individuals within the Malawian government? Does the Malawian public still deserve to know of the allegations made against the public officials? I’ll let you think about that for a moment…

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So, after much soul-searching and indeterminate hours of painful research, telephone calls and discussions with legal types, hitting several dead ends and encountering various versions of the same story (an exercise that brought to mind the irreconcilable contradictions within the Biblical gospels), I have decided that the material I hold on the Mphwiyo shooting is plausible, of journalistic significance and squarely within the public right to know. After all, much of it is already on Facebook, and this will give those without a Facebook account a piece of the action.

Further (and please feel free to excuse any appearance of narcissism here), because well-known portals for aggrieved citizens to report the wrongdoings of their governments – such as Wikileaks – are often under siege/ attack (by, surprise surprise, government agencies) and burdened by other more spurious global matters (Edward Snowden affair, Julian Assange embassy hideout et al), it may not be too bad an idea to carry their mantle (in this regard that mantle is probably only a small scarf/handkerchief) a short distance, shedding light onto corruption that has been happening in recent months in more lowly places such as in the country of Malawi.

Thankfully, there are other warriors in this battle: The Chief Mourner is one, so is Billy Mayaya, Henry Kachaje and many other honourable and brave souls. I say Kudos to them all, no doubt, they have their own reasons and motivations, possibly agendas, definitely intentions for doing what they do, and you can ask them this, but I will not pretend that I know for sure what those intentions are, except to say that they wish the best for Malawi.

* * * * * * * * * * * * * * * * * * * The Background  * * * * * * * * * * * * * * * * * * *

While there has been both a positive (http://world.time.com/2013/09/15/malawi-official-who-fought-graft-shot-wounded/ ) and negative (http://www.nyasatimes.com/2013/09/18/smokes-and-mirrors-unpacking-the-paul-mphwiyo-saga/  ) picture painted of the budget director Paul Mphwiyo, who was recently shot outside his home, and according to news reports because he was close to exposing corruption in top government circles, a credible source reveals there is more meat to the story.

* * * * * * * * The Story – the allegations  – translated into English and with minor edits-  reference date: 17th of September 2013 * * * * * * * * *

Recently Paul Mphwiyo instructed his Budget Section to fund the Pensions Section with K450million (£ 842,239.46). Because Pensions is called Below-the-line account or in other words a Statutory Account (like miscellaneous deposit or the Presidency account) which means Auditors cannot question the Funds flow in these accounts since they are statutory, Mphwiyo took advantage of this loophole.

In a bid to either please or deceive the presidency, he was informing the Secretary to the Treasury that somehow the money will find itself in the hands of Peoples Party (PP) for their election Campaign. Mphwiyo shared the money with another gentleman; one Mr. Madzi (who apparently is the Chief Accountant in Accountant General’s office). This man was given K200million (£374,164.30) and he is the one who is keeping the ‘fund’ and distributing it amongst accomplice officers at the Accountant General’s office, while Paul Mphwiyo is keeping K250million (£ 467,688.20) to distribute with accomplices including officers at the Treasury. So this idea that Mphwiyo was fighting corruption is entirely false. It appears to be a carefully crafted lie designed to either cover up or distort the real truth.

Actually, for this issue to be uncovered there was a spat within the ‘corruption syndicate’ at the Accountant General’s office, as those involved began arguing as to how the funds will be divided amongst them, until Mr. Madzi suddenly took a holiday (‘bed leave’) the whole of last week. Predictably, some of the disgruntled officers began ‘talking’ threatening that they will out the accountant, including names of ghost pensioners they collectively used to make payments to, to embezzle the money out of government coffers.

My source tells me this is the third time that K450 million has been transferred from government accounts.  And interesting this is the third month that Government Ministries and Departments in Malawi have had only half of their budget funded. The excuse that was provided for the August transfer of K450 million was that there was the SADC Conference that needed to be funded.

And remember the K120 million which Patrick Sithole was arrested for several days ago? (http://www.nyasatimes.com/2013/09/11/malawi-public-servant-arrested-over-k120-million-cash/ ) Well, that’s related to this scandal because Patrick Sithole worked at Accountant General’s office in the reconciliation section. Here, he was responsible for accounting reconciliation on the books from all the government Ministries. He had access rights within the government accounting system known as IFMIS, which is used in all the Ministries. Because of having such access, temptation and excitement got the better of him and he began doing unauthorised deals and transactions. In order to get money out, he needed to find companies that were willing to receive money in seemingly ‘normal looking’ transactions, but from which he would be paid a cut, dividing the funds with the owner of the company. Unfortunately, he began to ask too many people to be accomplices in his fraudulent activities, and this exposed him as word travelled around as to what he was actually doing. With such rumours circulating, a man by the name of Pika Manondo (a man with connections to Ralph Kasambara – which Kasambara denies) approached Sithole, and gave him company names, so that they could be doing the fraudulent deals together. My source informs me that they have been embezzling governments funds for quite a while now and Pika Manondo (who was in fact fired from his role at Parliament because of fraud) has become incredibly wealthy such that he has K350million   (£ 654,982.14) in his bank account and owns a 15 vehicle car hire company. This wealth appears to have been accumulated from since the time Ralph Kasambara was appointed into government. So these deals extended to Ralph Kasambara and Wapona Kita (not least because some people knew that one day they will need legal protection).

These deals also involve companies belonging to Maxwell Namata (who was fired from Ministry of Housing due to fraud) [see different story implicating Namata’s company here: http://www.nyasatimes.com/2013/09/19/acb-arrests-2-public-servants-on-fraud-over-k70m/ ] and Mr Hophmally Makande’s protégés??

The Problem then arose about how they will be getting funds to fund Government Ministries which then can be used to process cheques to the Companies. That’s when Ralph Kasambara approached Paul Mphwiyo as Budget Director (because it is the budget section in the Ministry of Finance that does the funding in the IFMIS system) to help with the deals. Paul Mphwiyo is not at all a clean man, and it’s only a matter of time that these investigations reveal this very fact.

In actual fact, the Toyota Fortuner which was found at Patrick Sithole area 47 residence when he got arrested, and in which they found K80 million (£149,692.71), belongs to Paul Mphwiyo.

So, for a while these deals have been going on ‘smoothly’ but of recent, Pika Manondo, Ralph Kasambara, Hophmally Makande and Maxwell Namata (as owners of companies) were not happy with how the division of funds was going. And what happened was that A WEEK BEFORE Sithole was caught, armed thugs with guns raided Sithole’s house and stole K62million (£ 119,753.14). Some insiders say it was Max, Pika and Ralph who sent these thugs to Sithole’s house. The theft can be verified with LINGADZI POLICE STATION because Sithole is said to have reported the theft to police. This also explains why Wapona Kita rushed to defend Sithole. Which is why Ralph Kasambara was so concerned that he decided to go to Paul Mphwiyo and the Reserve Bank, as Government cheques are effectively cleared through Reserve Bank of Malawi using Commercial Banks as agents.

When Paul Mphwiyo heard this, there was an argument and he began threatening Pika, Maxwell Namata, Ralph and Hophmally that he would out them unless the thugs should return the money to Sithole. Mphwiyo said he didn’t care of the consequences because after all he was not the one who personally was affecting the fund in the IFMIS system; instead it was his junior officer.

This is where things went horribly wrong, there was anger against Mphwiyo, and one night the following days, Wapona Kita and Ralph Kasambara went to the house of Paul Mphwiyo to warn him that he could be killed because Maxwell Namata, Pika Manondo and the likes of Makande were not happy. This is what led to Mphwiyos shooting and people at the Ministry of Finance know this. In fact quite a good number would be willing to verify this information in confidence, if it wouldn’t threaten their jobs and lives.

As of 18th September 2013 Pika Manondo is in South Africa and Maxwell Namata was also in South Africa, but on a trip connected to China. However, some people believe a South African assassin has been hired to kill Mphwiyo, and his life is currently in danger.

*********************************The Response********************************

Ralph Kasambara and Wapona Kita have denied the allegations, and called them defamatory and malicious. They say these allegations come from people who wish them ill. In particular on Sithole’s K120 million case, Kita said while he is involved, it is not true that the instructions for him to represent Sithole in the case came from Kasambara as alleged. Further, Kasambara dismissed the allegations, saying  he has never been to the Budget Director’s office or his house, and Mphwiyo’s CCTV [which we can assume wasn’t tampered with] can prove this.

But it remains to be seen how true some of these allegations are, more so since Pika Manondo has now been put on Interpol’s wanted list. If the above story was entirely false, how has Manondo ended up on an Interpol wanted list?? :

manondo

[**** UPDATE -30 SEPTEMBER 2013MAXWELL NAMATA ARRESTED **** like above, if this story was entirely false, how has Namata been arrested in connection with these allegations?]

Some people are concerned that this may just be damage limitation and that Manondo the scapegoat may take the lashes which others duly deserve. However since police investigations are ongoing, this remains to be seen.

A different version of the story (with some similar allegations and naming similar characters)  appears here, on Maravi Post, titled “Marapost enquiry on malawi budget director shooting that triggered donor’s response-friday”. [Update 5th October 2013 – Theres another branch (one of many branches that show the workings of the syndicate) to the saga (now aptly named ‘Cashgate’) here. the K4.2 billion mentioned on this link is equivalent to £7,114,875.55 (Seven Million Pounds) – a hefty sum by any measure]

Whichever of the two versions is the most accurate or closer to the truth, donors are already calling for a swift probe into the matter, and have even offered help. In the interest of transparency and ‘clean hands’, president Joyce Banda would have been wise to take this opportunity to give donors unfettered access to all aspects of this case. Such an action would to an extent help restore public faith in the presidency

These are worrying developments that potentially risk Malawi’s stability, rule of law and reputation,” reads a statement signed by the British High Commissioner Michael Nevin, USA’s ambassador Jeanine Jackson, the head of the EU Delegation Alexander Baum, Germany Ambassador Peter Woeste, Iceland’s Maria Erla Marelsdottir, Ireland’s Liz HigginsJapanese Envoy Fujio Samukawa and Norwegian Mission Head Asbjorn Eidhammer.

As the drama was unfolding, president Joyce Banda (whose People’s Party (PP) is implicated by the allegations in that some of the money was allegedly meant for financing PP’s 2014 election campaign) was on another trip, this time in the US, in Austin, Texas where she even managed to find time to stop by a church, en route to giving an address at the 68th session UN General Assembly. The allegation against PP has a bit of a flavor of the troubles facing Afghan president Hamid Karzai, whose brother (more allegations here), is said to have embezzled US$1 billion from Kabul Bank (in which the brother is a minority shareholder). Part of the funds were said to be for financing Karzai’s re-election. Further, it is said Afghanistan loses 25% of its GDP to corruption, a curious percentage when we’ve just been informed by Malawi’s Anti-Corruption Bureau (ACB)’s director Justice Rezine Mzikamanda recently that Malawi loses 30% of budget money to corruption.

The question remains where exactly is that money going? And why are those responsible for the embezzlement not brought to book sooner than later?

Despite her assurances that her government is committed to combatting fraud, I wonder how this scandal will play out if indeed there were some people in her party who were in complicity with the swindlers, as the allegations seem to suggest. Will Joyce Banda sack them? How so, when the likes of Ken Kandodo or Khumbo Kachali, who themselves have also had some serious allegations made against them, got to keep their jobs? And if those officials get to keep their jobs, what will have become of one of the world’s most powerful black women, as she is fondly described in some quarters [see Forbes link here]? Word in the grapevine suggests that a cabinet reshuffle is imminent.

But since it’s doubtful whether any thief can voluntarily repent, and since in ages past people in positions of authority have been known to use their influence and power to cover-up wrongdoing (see the experiences in Kenya here and here), if what really happened in this scandal is not unfurled by independent parties unconnected with the wrongdoing, only time will tell whether these allegations hold water, or are in fact false. A complete fabrication. After all, it was only many years after Dr Kamuzu Banda lost power that the scale of misappropriation of public funds that occurred under his watch was revealed. Same story for aChair, same story with Bingu.

Madame President, some of us may have liked the way you began your presidency, but what’s happening now stinks! It stinks a lot. And believe me you, if you do not do what is right to clean up your government, your day of reckoning may be a lot more damaging than that which hit aChair, or what Bingu’s estate is currently going through.

God bless you all, God bless the Republic of Malawi.

***Update 30 September: Maxwell Namata Arrested ****

****** Update 2 October 2013 – Civil Society Organisations threatens to urge Malawians against tax payment: Gives JB 30 days ultimatum  ******

*** Anti Corruption Bureau Arrests man that got paid K1bn ($2.5 million) without having a contract ***

***Update 8th November : Pika Manondo Arrested ****

*****Update 9th November – Former Justice Minister Ralph Kasambara Arrested  via Voice of America *******

*****Update December 30 – Kandoje outsted as Malawi Accountant general over cashgate – redeployed *******

****Update 24th January 2014 – STRIPPING PRESIDENT **** NAKED, SEE HOW SHE STOLE YOUR MONEY MALAWIANS *****

****Update: 27th January 2014 – Former Malawi Justice Minister Ralph Kasambara re-arrested *******

***** Update 30th January 2014 – Pika Manondo Spits Fire, Says president Joyce Banda is shielding Big Fish in Cashgate *****

Battling Corruption & Fraud

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via Nation online : K5bn fraud scam swells to K15bn

When I read the above piece, which concerns an investigation that reveals the extent of fraud and theft in certain government departments, my first thoughts were where did all this money come from? Are there no safeguards or anti-fraud measures to restrict who handles the money? How could there be such widespread theft of public funds in top government departments? And to such a scale???

On the first question, had these funds really been from tax revenues, or had they been donated to Malawi from external sources? If they had been donated, how can Malawi attract international investment when we have thieves operating within the country’s top government departments and arms of the state including the police (according to the article, the fraud occurred within the “..Accountant General, Malawi Police Service (MPS)…State House, Malawi Defence Force (MDF) and other government offices”)? I’m also wondering, since some of these anomalies date back to 2011, what has the current Malawian government done to ensure that those who committed this fraud face the full force of the law, to ensure that such theft is not currently taking place elsewhere, and also that this situation does not occur again?

While the taxpayer has all the reasons to be angry, and demand an explanation over this fraud, including that the people who are responsible for this corrupt act should feel the force of the law (possibly a number of long imprisonments -> SO THAT THE MESSAGE IS CLEAR THAT YOU WILL BE PUNISHED IF YOU STEAL FROM THE STATE), this kind of thing is in my view the main problem why we struggle to attract investment.  Because how can investors trust their money with a country where the police and State House are stealing from the government coffers???

Also, how was the system of anti-fraud bypassed???  Shouldn’t there be several levels of checks? Think about it, its 50 years since independence, why are monies up to this value (K15 billion) going missing over low-level fraud? This is not Somalia!! What are the financial processes, and how is it possible for individuals to bypass them? How did those individuals get ‘personal’ access that did not involve verification from a number of other parties? Or is it a criminal group within these organisations operating together? Further, could it be that there were some accomplices within some of the banks involved (e.g. Reserve Bank of Malawi)? And finally, why was one of those accused transferred, instead of being dismissed and put behind bars?? I think there are far too many questions that must be answered, an opportunity for the present government to show that it means business.

Recommend

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