Are the Goodyear bribes in Kenya, as disclosed in US Foreign Corrupt Practices Act case, disappearing into Kenya’s “black hole” of impunity?


tyres in Lamu

Tyres in Lamu


From Nairobi’s Business Daily of February 26, 2015, “Big names face scrutiny in Goodyear bribes scandal“:

Top Kenya government officials are on the spot once again for pocketing more than Sh138 million ($1.5 million) in bribes from a subsidiary of American tyre firm Goodyear Tire & Rubber Company, US regulators said.

The bribes were paid in exchange for the award of multi-million shilling tenders to supply tyres to some of Kenya’s largest state corporations, government agencies and public listed firms.

The US Securities & Exchange Commission (SEC) said Goodyear paid the bribes to Kenya Ports Authority (KPA), Armed Forces Canteen Organization (Afco), Nzoia Sugar, Kenyan Air Force, Ministry of Roads, Ministry of State for Defence, East African Portland Cement Company (EAPCC) and Telkom Kenya executives to win contracts.

US detectives also established that additional Sh1.3 million ($14,457) was dished out to lure Kenya Police and City Hall officials to award the Ohio-based tyre maker multi-million shilling deals.

The corrupt dealings, committed between 2007 and December 2011, were executed through Treadsetters Tyres Ltd, then a subsidiary of Goodyear.

Goodyear made the illicit payments to Kenyan officials in cash and recorded the spending in its financial books as advertising expenses, according to a forensic audit by the SEC.

“Treadsetters’ general manager and finance director were at the centre of the scheme,” the SEC said in its filings. “They approved payments for phony promotional products, and then directed the finance assistant to write-out the checks to cash.”

The well-orchestrated bribery ring involving Kenyan bureaucrats is captured in a ruling in which Goodyear has agreed to pay a Sh1.48 billion ($16.22 million) fine for engaging in corrupt practices abroad.

The allegations were disclosed by Goodyear in 2012 and hit the Kenyan press in a significant way when the SEC fine was announced almost eight months ago.  Many of the disclosed bribes were paid to Kenyan national security officials.  In the meantime, we see more successful terrorist attacks and insecurity, but no further news on anything being done to suggest that the Government of Kenya has any substantive intention of treating these bribes as unacceptable.

Where is Kenya’s Ethics and Anti-Corruption Commission? Where are Kenya’s journalists and media houses in following the stories they reported? (would be pleased to hear if I’m missing something . . .)

And where is my government?  I’m proud of my country for policing our own companies through the Foreign Corrupt Practices Act, but it has been sad to see our support for a “reform agenda” in our relations with Kenya seem to run off into a ditch.

“Faded Aid”

Nigeria example shows U.S. and other donors should act now on Kenya IEBC technology procurement corruption

For the 2013 election, I have a copy of one last minute USAID procurement through IFES for the Kenyan IEBC related to the failed electronic results transmission system; I would assume there were other USAID procurements involved for the IEBC.  Notably, the Supreme Court of Kenya found that the main cause of the failure of the electronic results transmission system and the electronic voter identification system appeared to be procurement “squabbles” among IEBC members. “It is, indeed, likely, that the acquisition process was marked by competing interests involving impropriety, or even criminality: and we recommend that this matter be entrusted to the relevant State agency, for further investigation and possible prosecution.”   “Thoughts on Kenya’s Supreme Court opinion” April 13, 2013.  See also, “Why would we trust the IEBC vote tally when they engaged on fraudulent procurement processes for key technology?”, March 24, 2013.

From “USAID Inspector General should take a hard look at Kenya’s election procurements supported by U.S. taxpayers“, February 17,2005.

Election technology can work, in Africa, just as elsewhere, when it is not sabotaged by corruption.  Nigeria, a much harder case than Kenya, proved that this weekend.

While technology is “not a panacea”, it would have mattered in Kenya in 2007 when it was purchased for Kenya’s ECK at the expense of American taxpayers as an important part of our USAID assistance program if it had not been simply “shelved” by the ECK at the last minute (in a meeting the records of which the ECK refused to turn over to the “Kreigler Commission” charged with investigating the failed election).  It was a central part of the planned assistance program for 2013 shaped on the basis of the Kreigler Commission’s recommendations for what was required based on what was done and not done in 2007.  It was also in 2013 a central and necessary part of election process under the new Kenyan law for the new IEBC, replacing the discredited and disbanded ECK.  It mattered that it did not work, and that it could not have worked because of the failure to procure what was needed when it was needed.

Aside from the basic issues regarding the technology procurements that we have all known about since the 2013 election (and before in some cases)–so thus for more than two years at a minimum–we now have in addition–the “Chickengate” matter where bribery of IEBC officials for ballot paper printing contracts by a British company and its officials, through a Kenyan agent formerly employed by the IEBC, was proven in a court of law to the standards required for criminal convictions.

Yet we see no indication of legal action by the Kenyan government to follow through even on those bribes already proven in the British Court, much less a serious fulfillment of the two-year old recommendation of the Supreme Court of Kenya for the Government to investigate and possibly prosecute the technology procurement cases.  We certainly see that corruption issues are admitted to be remain pervasive at all levels of the current Kenyan government–and perhaps there is a newfound intention to address some of them (time will tell) but apparently no new mention of the IEBC. See “Read the list of public officers implicated in corruption and what the EACC accuses them ofThe Star, March 31. And “Analysis: Kenyatta’s corrupted corruption probe” by Simon Allison in The Daily Maverick, March 30.

What are we waiting for?  Shouldn’t we (the United States) have enough self respect to at least suspend our underwriting of this nonsense and to at least make it clear that we will investigate how our own dollars were spent regardless of what the Government of Kenya elects to do or not do?  Likewise other donors who may have paid for part of this?

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US, UK, Swiss offer encouragement on Anglo Leasing corruption prosecution in face of Ethics and Anti-Corruption Commission crisis

Joint Statement by U.S. Ambassador Robert F. Godec, British High Commissioner Christian Turner, and Swiss Ambassador Jacques Pitteloud

IMG_7525March 13, 2015

The Governments of the United States, the United Kingdom and Switzerland welcome recent actions by the Kenyan Director of Public Prosecutions to combat corruption by ordering prosecutions in Kenya linked to the decade-old Anglo Leasing scandal. These orders and the subsequent arrests were important steps forward by the Government of Kenya in the critical fight against corruption. We encourage the government to build further on these actions, to include through independent and vigorous investigations of all allegations of corruption, and through fair trials and equal treatment under the law for all those charged.

The Governments of the United States, the United Kingdom and Switzerland will continue to work with the Government of Kenya as it seeks to tackle corruption and to build a democratic, secure, and prosperous future.

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For background: “Kenya’s New Anti-Graft Czar Comes with Baggage” by Brian Obara at Think Africa Press.

Integrity Centre