Hassan Basajjabalaba
The Public Accounts Committee yesterday tabled its report on the abuse of more than Shs150 billion in compensation claims to City businessmen Hassan Basajjabalaba and Col (rtd) John Mugyenyi setting the stage for open debate on the floor next week.
The report recommends the sacking of two senior ministers and the bank of Uganda Governor over the controversial payments.
The recommendation is the highlight of a 65 page report tabled on the floor yesterday by PAC Chairman MP Kassiano Wadri compiled after months of inquest into the curious deals.
Lawmakers concluded that ministers Prof Khiddu Makubuya (General Duties) and Syda Bbumba (Gender) be relieved of duty for their roles in the curious payments and passed down the same judgment for Governor Tumusiime Mutebile.
The MPs also concluded that the government officials be investigated further for criminal conduct by the Inspectorate of Government and the Criminal Investigations directorate.
In indicting the two ministers, the MPs cite President Museveni’s questioning of the motive behind “the hurried manner” in which they acted in implementing his directive to pay out.
The MPs noted that the duo had apparently failed to implement a presidential directive to compensate a one Mzee Aramtori of Katikekile, Amudat District who lost 298 heads of cattle to the UPDF.
The President is further quoted as saying that even if he had directed that that businessman be paid, the ministers had an obligation to decline to implement his directive.
The Committee also faulted former Solicitor General Justice Billy Kayinamura and recommended that he takes full responsibility for any losses in the payments. Although the report absolved Mr Museveni of any wrong doing, the committee recommended that the president takes note of the violations of laid down guidelines by his subordinates and moves to rectify them.
The MPs also concluded that the Attorney General’s chambers should be restructured, and urged the President to institute a performance management contract system for ministers and public officials.
During the inquiry, Mr Basajjabalaba told PAC that his claims were genuine because he had lost business for 11 years. The committee, however, disagreed in its report and concluded that his company, Haba Group, payback government all monies including taxes, in excess of what was determined by the Auditor General.
The report indicts Prof. Makubuya for failure to respond to the President’s letters and inflating payments from Shs131.7 billion to Shs142.6 billion to Haba Group despite testimony by the former Attorney General stating he was only acting on the orders of the President.
Mr Basajjabalaba is a high ranking member of the ruling NRM party and a key party financier.
He also told PAC during the inquiry that his compensations had been approved and directed by the President.
Speaker Rebecca Kadaga said debate on the report would commence next week to allow members comprehend its details. However, if the recommendations of the report are adopted by the House, the government will be compelled to prosecute the implicated individuals.
The implicated ministers who attended yesterday’s sitting are expected to defend themselves when debate opens next week.
Background
Mr Basajjabalaba claims he lost business for 11 years after the government, on the instructions of the President, cancelled his tenders to run Nakasero, Shauriyako and St. Balikuddembe (Owino) markets and the Constitution Square. He was subsequently paid Shs 142.6b.
Col John Mugyenyi’s Rhino Investments Ltd was paid Shs 14.9bn.
The Committee recommends that Prof Makubuya be liable for causing financial loss by unilaterally approving additional compensation of (Shs8.1billion) to the retired army officer.
How they were nailed
Mr Mutebile issued letters of comfort to commercial banks without seeking clarifications from the Finance Minister. MPs said the Governor seemed to be all out to assist Haba Group. Some of the letters of comfort that the Governor wrote contained information which was inaccurate, they said. “It’s therefore strange to note that the Governor did not revert or advise the President upon the receipt of H.E the President’s January 8 2011 letter advising the Governor to assist Basajjabalaba access funding without suffering exorbitant interest rates.”
Before the verification exercise by the Auditor General was concluded, Bank of Uganda, upon a request from Ms Bbumba, issued guarantees to various banks. The guarantees enabled Mr Basajjabalaba access $65.35 million (about Shs160 billion) in anticipation of government settlement of the claims by Haba Group.
Bank of Uganda had on June 15, 2010, upon request by Ms Bbumba, written to four banks asking them to offer credit facilities to Haba Group of Companies. Consequently, on November 22, 2010, Prof. Makubuya in an internal memo to the Solicitor General approved the payment of Shs142.6b to Mr Basajjabalaba.
On July 30, 2008, President Museveni wrote to Prof Makubuya directing him to examine the legality of the claims and advise him as soon as possible but the then Attorney General did not respond to the directive. The President directed him to chair the Inter-Ministerial Committee to handle Basajjabalaba’s claims but this was not done. PAC accuses Makubuya of inflating the payments to City businessmen.
By Yasiin Mugerwa, Daily Monitor
