When he was Kenya Power and Lighting managing director, Samuel Gichuru was Mr Moneybags.
How he and Mr Chris Okemo, then Finance minister, bilked money from the energy docket is contained in court filings – and which form the basis for the Island of Jersey’s demand for their extradition.
Both Mr Gichuru and Mr Okemo ran an intricate web where foreign companies would win tenders and contracts at Kenya Power and in return would pay “consultancy fee” to Mr Gichuru’s Windward Trading Company, which had an offshore account in Jersey.
He would later pay to an account ran by Mr Okemo.
A Jersey Court has already seized more than Sh520 million from Mr Gichuru’s firm after Jersey’s Windward Trading directors pleaded guilty in court to money laundering.
Mr Gichuru, in a complete lack of imagination, had told a Jersey Court in a separate case that he was the beneficial owner of the company – and not the directors.
Mr Gichuru’s Jersey accounts and the millions of dollars stashed there first came to the limelight during his 2001 divorce trial – which the media shied from reporting given his then immense political power – and was confirmed when he filed a suit against police in Jersey.
In Kenya, the lid on his Sh20 billion empire was lifted in court filing by his ex-wife, Salome Njeri (now deceased), who had sought an equal share of the matrimonial property.
Njeri told a Family court in Nairobi on November 14, 2006 that Mr Gichuru controlled a multimillion-dollar estate, including accounts in Jersey, and that he was worth more than what was stated publicly.
By then, Mr Gichuru was quietly pursuing his billions in Jersey after a Deloitte in-house trust company, Walbrook Trustees (Jersey) Limited, filed Suspicious Transaction Report on May 2002.
The company was then providing Mr Gichuru with directors as he remained in the shadows.
On May 2007, Deloitte sold Walbrook Trustees to Barclays Wealth, which was later taken over by Zedra Trust Company (Jersey) Limited – an indicator of how it is hard to keep tabs on the management of offshore companies and their beneficiaries.
When Gichuru’s Windward Trading was taken to the Jersey court, the judge ruled that Mr Gichuru “accepted bribes from foreign businesses that contracted (Kenya Power) during his term of office and hid them in Jersey.
“(Windward) knowingly enabled Mr Gichuru to obtain substantial bribes paid to him while he held public office in Kenya.
“The company played a vital role without which corruption on a grand scale is impossible: money laundering.”
Mr Gichuru’s and Mr Okemo’s troubles appear to have started in 2001 when the British House of Commons started questioning what happened to a Sh8.2 billion loan taken to carry out a study on the still non-existent Ewaso Nyiro hydro power plant.
Part of this loan was diverted to Mr Gichuru’s Jersey account as a bribe, according to court papers.
While three dams were to be built by 2007 at a cost of $350 million (Sh35 billion), the initial feasibility study, awarded to British firm, Knight Piesold, cost “five times what such services would normally cost”, according to a World Bank study team report published in 1992.
The Ewaso Nyiro power dam scandal prompted the British government to start investigating the duo who signed the deal.
In order to facilitate the bribes to Gichuru’s Jersey-registered Windward Trading Company company, Knight Piesold was first paid $15.3 million (Sh1.5 billion) upfront by Kenya Power even though the dam was not to be started in 10 years.
Finally, it was never built, leaving Kenyan taxpayers paying a loan for a non-existent project.
It is now known that Knight Piesold published 14 reports between 1991 and 1993 with each report costing an average of $2.7 million (Sh270 million).
That means that the feasibility study alone cost Kenyans Sh3.8 billion of which they paid Mr Gichuru’s firm consultancy fee, according to court papers.
The Kenya Power and Lighting project was supported by the British government through its Export Credits Guarantee Department (ECGD), which backs UK companies to seek and win tenders abroad.
The ECGD, once christened “the department of dodgy deals”, has over the years been accused by Transparency International and other lobby groups of turning a blind eye to bribe-paying companies and providing a cover to their operations in developing countries.
HOUSE OF COMMONS
On June 21, 1990, ECGD supported a £68.1 million loan (Sh8.2 billion) between ANZ Grindlays Bank and the Moi government, which was to assist in financing the contract between KPLC and Knight Piesold.
Part of this money would later be diverted to Jersey Islands where Gichuru had opened some secret accounts in 1986 with the help of Deloitte & Touche, a Jersey accounting firm.
It was when they came under pressure from the House of Commons that Knight Piesold officials turned against Mr Gichuru, revealing the elaborate fraud that took place at Kenya Power.
“It was impossible to do work in Kenya without paying commission to important political figures. It was like a tax.
“Knight Piesold paid such a commissions to various people. Without doing so, we would never have been able to work there. One person we paid was Samuel Gichuru,” Peter Garrat, an official with Knight Piesold, said in the Gichuru extradition papers.
By working in Kenya Power and Lighting for many years, Gichuru had found a way to fund his dream projects.
He would approach a UK bank which would then ask the ECGD to provide a guarantee to the bank that the loan will be paid.
The Minister for Energy and Minister for Finance in Kenya would then sign the relevant government guarantees and the bank would then use the loan to pay the contracted UK company.
According to court records, Mr Gichuru, as the Kenya Power and Lighting MD, disguised himself as a broker and consultant and they show that on different dates between 1986 and 2002 Windward received payments of $5.4 million (Sh540 million), £5.3 million, £4.4 million, $3.3 million, and 6.8 million Danish Kroners from various companies contracted by Kenya Power.
Court records say that Mr Gichuru used part of the Sh2.1 billion for his “personal expenditure” while Mr Okemo kept the money in his Jersey accounts before investing it with “recognized financial institutions”.