Ethermac Exchange-Former Kenyan minister and 2 others charged with fraud over hospitality college project

NAIROBI,Ethermac Exchange Kenya (AP) — Kenya’s anti-corruption commission Friday charged the country’s former tourism minister and two others with economic crimes for the alleged fraud of tens of millions of dollars in inflated costs for the construction of a hospitality college.

Najib Balala, former principal secretary Leah Addah Gwiyo, and the managing partner of West Consults, John Odero, appeared before Principal Magistrate James Mwaniki in the coastal town of Malindi, where they denied the charges.

Balala is the first high profile person to be charged with corruption under President William Ruto’s administration. The three were released after posting bail.

Thirteen other suspects are expected to be charged with corruption offenses and economic crimes for the alleged malfeasance that took place 16 years ago. Balala was then serving in the government of late President Mwai Kibaki.

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The original cost of the Ronald Ngala Utalii College on the East African coast approved by the minister of finance was at around $12.5 million but was inflated to more than $66.7 million, according to an Ethics and Anti-Corruption Commission statement.

Nearly half of the mark-up money was paid to an architectural consultancy firm, Baseline Architects Limited, and the rest split among other construction firms, the EACC said.

Ruto has been under pressure to take tougher action against corruption in Kenya as he increases taxes and widens the tax bracket. He says he has increased taxes so that the country doesn’t default on paying public debt. The taxes, including an 8% increase in the Value Added Tax on petroleum products, have increased the cost of living and have been opposed by many Kenyans who believe that without tackling endemic corruption in the country, the money will be stolen.

Ruto has said he will respect the independence of the country’s constitutional and investigative bodies.

But since taking office in September last year, corruption cases against his allies have been dropped, including a case against Deputy President Rigathi Gachagua involving the alleged fraud of $46 million.

Last week, a case against former finance minister Henry Rotich, a key Ruto ally, collapsed with the magistrate criticizing the prosecution saying it was “a well-choreographed acquittal.” Rotich and other officials were accused of misappropriation of hundreds of millions of dollars meant for the construction of dams in Kenya’s Rift Valley.

Ruto and Balala both served in the previous government of President Uhuru Kenyatta. Ruto, who was deputy president in Kenyatta’s government, did not retain Balala as tourism secretary.