DISMANTLE MOF CARTEL
…protect country’s resources or we’re going to regret – TI-Z
By Ernest Chanda
TRANSPARENCY International-Zambia (TI-Z) has expressed worry that there is more theft at the Ministry of Finance which should have moved leaders in government to act.
On January 7, 2022, The Mast published a story in which new information emerged which revealed that about K533 million was looted from the Ministry of Finance and not K100 million as earlier reported by the same newspaper in August 2022.
On August 24, 2022, The Mast published a story where a Transparency International – Zambia investigation revealed that a cartel at Ministry of Finance (MoF) siphoned money amounting to K100 million between 2019 and 2021 using fictitious events to draw allowances.
Corroborated evidence and information from whistleblowers within the ministry showed various names of officers in the Ministry of Finance.
At the time, names were withheld of people who had seemingly engaged in an intricate network of fictitious and organised activities.
According to the evidence, this loot seemed to be spreading tentacles to strategic ministries, commissions, and agencies.
And according to sources close to the investigation, MoF senior staff that included then secretary to the treasury Fredson Yamba, Accountant General Kennedy Musonda, controller of internal audit Chibwe Mulonda and assistant director internal audit David Kajokoto seemingly engaged in money laundering.
The sources explained that once funds were obtained from MoF’s Treasury Single Account (TSA) loans and investments – a special account that is dedicated to the Government of the Republic of Zambia (GRZ’s) repayment of loans including the Eurobond and financing of investments, the funds were transferred to the respective individuals’ bank accounts through Real Time Gross Settlement (RTGS) system.
Once this money was pulled into these peoples’ accounts it was then laundered into Bank of Zambia treasury bills through deposit accounts in order to conceal its nature and origin.
“The matrix was that apart from receiving monies directly, Yamba, Musonda, Mulonda and Kajokota would receive monies which on IFMIS showed junior officers’ names, but information technology was manipulated to pull funds into Yamba’s, Mulonda’s, Musonda’s and Kajokoto’s bank accounts,” the sources narrated. “When the junior officers were interviewed by investigative wings, they were like, ‘I’m not aware, I had monies raised in my name’.”
Commenting on the revelation, TI-Z executive director Maurice Nyambe urged the new dawn administration to “take this matter by the horn”.
“I think for us the first thing to say is that the follow-up investigation that you (The Mast) did justifies the concerns that we raised in our own investigation. But I think for us it’s also just a feeling of being overwhelmed because it’s clear that the extent of the rot we’re talking about in terms of the amounts that were involved is actually a lot worse than what our investigation revealed,” he said yesterday. “So I think that there’s an argument for the UPND administration to take this matter by the horns and really get to the bottom of holding whoever is found culpable accountable.”
Nyambe also expressed concern that the Anti-Corruption Commission (ACC) has not arrested culprits despite investigating the matter.
“I think that the fact that this story was reported even to the Anti-Corruption Commission and it seems we are not seeing any movement in terms of them taking it up, it raises a lot of questions and suspicions as to why there seems to be this inertia to get to the bottom of this. So, it justifies what we raised in our investigation, but it also shows that the problem is actually a lot worse than we discovered ourselves,” Nyambe said. “So we can only call on law enforcement agencies to really take keen interest in this matter and see to it that they go in with their own investigations and bring whoever is found responsible to book.”
He gave a brief history of when this theft started, further urging the UPND government to stop it before more national resources are plundered.
“This has been happening for a very long time as our investigation showed. This started back in the days of the MMD. It continued through the days of the PF, and it is continuing even now under the UPND. So if we do not take action now to dismantle this cartel and protect the country’s resources, then we’re going to regret it in a sense,” warned Nyambe. “And what that will entail is that the slippage that is happening in terms of our resources is going to continue, and this will be to the detriment of social service delivery and to the detriment on our economic development even as a country. So it’s important for law enforcement agencies to take keen interest in this.”
And sources in the civil service told The Mast that this vice started a long time ago.
The sources explained that there are some people at the ministry who have refused to be transferred to other ministries.
“Theft started as way back as 2006. Ministry of Finance is the only ministry where PSs and directors are still intact. There are people there who have worked there for more than 15 years. They can’t be transferred,” one source explained. “And they can’t be transferred for the purpose of continuing to loot. They are the masterminds. The system (Integrated Financial Management System – IFMIS) has crashed twice. In 2018 it crashed, and in 2022; cleansing mudala! The only way you can catch them is to check their bank accounts. Some people have literally resisted to be moved from that ministry because they have found a sweet well to drink from.”
Another source said current Minister of Finance Situmbeko Musokotwane should know some members of the cartel because he worked with them during the MMD administration.
“He definitely knows them because some of them worked under him when he was secretary to the treasury and later as finance minister. So if there is a politician who can help in dismantling this cartel it has to be Dr Musokotwane himself because he has worked with them,” the source said.
Another source explained how transactions are done, in addition to what has already been published.
The source said there are certain illegal allowances that officers pay themselves.
“Firstly, they pay themselves abnormal allowances for jobs not executed. There are allowances like parliamentary allowance which does not exist in government circulars. They pay themselves hefty allowances to the tune of not less than K87,000 per week or more,” the source said. “Secondly, there is a kind of payment they call DHL, this is where they connive with some ministries. Payment is made from Ministry of Finance to the organised ministry but the beneficiaries are the same members of the syndicate. Last year alone they collected more than K1 million each in form of illegal allowances. It seems people have mastered the weakness of IFMIS, and are capable of deleting some transactions like they have so far done it twice when the system crashed.”
The source explained that data was deleted from IFMIS a few years ago, all in the quest to destroy information.
“The first time they deleted financial data in the system was in 2018 and the second was last year in 2022. At both instances they have crashed the IFMIS system so that some payments could be removed. The only way to spot the payment is to investigate their personal bank account statements,” explained the source. “The President has made changes to all ministries, however, the only ministry that has not been touched is Ministry of Finance. All permanent secretaries and directors are still in office even after a change of government. Upon taking office, President Hakainde Hichilema told the nation that there is a clique of thieves at the Ministry of Finance. Is he saying the same, has he removed them? The answer is no. So, you expect theft to continue at the Ministry of Finance because the President has not dismantled this cartel. Some of the people have even found their way into the President’s inner circle, and they are the ones cleansing their fellow members of the cartel.”