Unending flow of Cashgate in Malawi: 7 rotten ministers, prominent names shielded

More and more prominent names are coming into prosecutors’ sights but their political masters are applying the brakes. The conviction on 21 July of former Justice Minister Ralph Kasambara for conspiracy to murder is not just a victory for Malawian justice but a major morale boost for those prosecuting the Cashgate defendants.

Prosecutors and Anti-Corruption Bureau (ACB) staff have been feeling no love from the government of President Peter Mutharika and they bemoan the slowdown in ACB prosecutions since the President appointed Lucas Kondowe as Director General in October 2014.

Kasambara and two others, business associate Pika Manondo and former soldier Macdonald Kumwembe, were convicted of conspiracy to murder National Budget Director Paul Mphwiyo on 13 September 2013, and the last two of attempted murder .

Mphwiyo – later himself arrested for fraud – was shot and left for dead but survived to testify against his assailants.

Kasambara had targeted Mphwiyo for assassination because he wasn’t sharing enough of the proceeds of the Cashgate frauds.

The ruling elite is showing diminishing zeal for fraud prosecutions, which have severely dented the country’s reputation and cost it hundreds of millions of dollars in budget support funds. Yet the revelations keep on coming.

A leak of the latest audit names serving cabinet ministers for participating in contract inflation and procurement fraud during the late President Bingu wa Mutharika’s time in office.

However, the opposition is not baying for blood as enthusiastically as it was because the audits are revealing as many villains in the former People’s Party (PP) government as that in the now governing Democratic Progressive Party (DPP).

Only 13 of the 67 publicly named suspects in the 24 billion kwacha Cashgate plunder of the national coffers have been convicted and only eleven are serving gaol sentences.

One case ended only on 27 June although the defendant had been convicted nine months ago. The case of Leonard Kalonga is highly illustrative.

One of the key operators of the fraud, this former Administration Director of the Tourism Ministry pleaded guilty to stealing K3.7 bn. (US$5 million) on 17 August, 2015, and yet has still not been sentenced.

He pleaded mitigation and asked the ACB to provide a detailed list of beneficiaries of Cashgate frauds which he says it seized from his home.

The ACB says there is no such list but Kalonga and his friends insist it details individuals very close to President Mutharika and is the reason he is still out of prison. Most of those convicted were tried and sentenced last year before a prosecution hiatus that ended only on 31 May, when Angella Katengeza received five years for stealing K105 million, while Caroline Savala was sentenced to ten years’ detention for theft and moneylaundering on 27 June.

Of the leaders of the fraud, only Oswald Lutepo, the PP’s one-time director of procurement and logistics, is behind bars, with an eleven-year term for stealing K4.2 bn. Over 40 suspects named in audits as probable fraudsters remain free.

So many cases remain unresolved that the first person convicted, Treza Namathanga Senzani, is due to leave prison soon after serving her threeyear sentence.

While in opposition, the DPP professed great keenness to get to the bottom of Cashgate and blamed Joyce Banda.  Now, that the investigations are uncovering different frauds from Bingu’s government, the zeal is waning.

While she was in office, Banda was named as a beneficiary of Cashgate by Lutepo, Kalonga, Namathanga and Savala, among others. She continues to plead innocence while claiming, to widespread disbelief, that to return from her self-imposed exile in South Africa would risk murder at the hands of the DPP.

She is still on the international speakers’ circuit and was last seen in Ghana delivering a commemorative lecture on the fourth anniversary of the death of President John Evans Atta Mills.

Two frauds

Major frauds started under Bingu were of a different nature to the Cashgate type that was instituted during President Joyce Banda’s reign. Under Bingu they were of the more typical over-invoicing and over-pricing variety.

Preliminary audits of government finances between 2009 and 2014, carried out by PricewaterhouseCoopers (PwC) and financed by the German government, indicate that at least K577 bn. ($807 mn.) could not be accounted for.

Later, the estimated loss was reduced to K236 bn. ($330 mn.), still a gigantic figure for such a small country, about one third of the government’s annual budget.

PP legislators, led by Mzimba West MP Harry Mkandawire and Kamlepo Kalua from Rumphi East, led calls  for the names of all suspects to be made public. Much like the DPP, they have now fallen quiet as the extent of looting during Banda’s 2012-14 government has become clear.

Recent reports have spoken of seven serving Ministers being implicated in the latest audit, but we (Africa Confidential) understand that only current Agriculture Minister George Chaponda and Labour Minister Henry Mussa have been named in it, according to National Audit Office officials.

The other departments mentioned in connection with the frauds under Bingu are Energy, Information, Local Government, and Gender.

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