Poll officials inflated prices by up to 30pc to cater for bribes

This is a continuation of court transcripts of a case in which a British company is accused of bribing election officials in Kenya. The first part was published Thursday.

COUNT 1 IN DETAIL– KENYA - (Independent Interim Electoral Commission “IIEC”).

Defendants: Christopher Smith, Nicholas Smith, and Smith & Ouzman Limited

39. There are 7 contracts or groups of contracts which are the subject of count 1. The defendants who dealt with these contracts, and are charged under count 1, are Christopher Smith and Nicholas Smith. The company S&O is also charged because both Christopher and Nicholas Smith are and were guiding minds of the company.

Trevy James Oyombra was the agent acting for S&O at the direction of Christopher and Nicholas Smith in all of these seven sets of contracts. He had become agent for S&O on 5/10/08 [AFM 0162] and he had been an official at the predecessor to the IIEC, the Electoral Commission of Kenya (“ECK”) before becoming S&O’s agent. He therefore had a relationship with S&O and specialist knowledge of the requirements of the IIEC.

UNSUALLY HIGH

40. The commission payments: It is a feature of the commission payments in contracts with the IIEC that the commission payments are unusually high. The average commission for a transaction with the IIEC during the count 1 period was approximately 27%, and in some cases it was significantly higher.

The commission on contract 2 was 31.8% of the total contract price, on contract 3 it was 37.5% and on contract 7 it was 32.5%. The defendants’ case is that this commission was predominantly legitimate commission to pay the agent Trevy. If all the commission payments were to be retained by Trevy he did very well in the 18 month period that these transactions took place. He received £380,859.

41. Contract 1: Shinyalu and Bomachoge By-Election.

On the 16th June 2009, Nicholas Smith wrote to the IIEC chairman, Ahmed Issack Hassan [Ex AFM 0293]. The letter referred to a meeting between S&O and Hassan at IIEC’s offices in Nairobi and quotes for printing voter registration forms, voter ID cards and ballot papers for the urgent Shinyalu and Bomachoge by-election. The price quoted was £32,526. The 200,000 voter ID cards and 20,000 voter registration (“OMR”) forms were quickly produced by S&O and delivered on 27/6/09. There remained the ballot papers to produce and ship. The S&O invoice makes clear that they were delivered on 18/8/09 [AFM 0018].

42. Between the first and second shipments email discussions had taken place between Nicholas Smith and the agent Trevy Oyombra about payment of commission to Trevy and the necessityto pay the Senior Procurement officer at the IIEC, Kenneth Karani and other officials. On 29/6/09 Nick Smith sent Trevy the “attached calculation of payment for the by-election requirements”, adding that Trevy had been allotted £750 for his efforts. [AFM 0292].

ACCURATE FIGURES

Trevy replied by email on the same date 29/6/09, asking for his £750 to be increased to £1,000.
Nicholas Smith replied the following day, 30/6/09, saying he had just texted Trevy and attaching what he described as the accurate figures. [AFM 0292] That attachment was a spreadsheet [AFM 0291] relating to this contract. It is clear that the payment to Trevy is £1,000. It is described on the spreadsheet as 4.6% of the total contract price of £32,526. The remainder off that contract price is divided up between funds from the contract for S&O: £21,950 and a sum of £10,576 for “comm”. Comm, the prosecution suggest is short for “commission”.

The email traffic makes clear who this “comm” is for. In the email of 29/6/09, which Nicholas Smith replied to, Trevy made it clear that it was necessary to distribute this sum covertly by sending it to Trevy’s account.

“Karani says since his email is tagged with the government website it will not be safe to highlight the same on his email so the understanding is to have everything wired to my account and ill cash it out and give them the amount as expected.

were doing this putting in mind the big jobs that will come in the future. they are happy and i know were on the right track…….[Karani] also mentioned to me we should be discrete since all peoples eyes and the government intelligence are watching their every move even on phone to ensure transparency.”

43. The need to be “discrete” arose from the illegality of what was being done. It had to be kept away from “government intelligence”. Wiring to Trevy’s account would avoid suspicions according to Trevy and, Trevy informed Nicholas Smith, Karani had been in communication with the seven other members of the committee about this.

He added that they (IIEC officials) had been informed that “this would be done” [i.e. payment made to the officials] after S&O received their money. In a further email from Trevy the following day, 30/6/09, [AFM 0263] Trevy again tried to review the amount he was getting and discussed paying money to IIEC officials.

Referring to the mark up on this deal he said “I knew what we did for omr and voter card was just for the iiec guyz” as Trevy was expecting his cut from the ballot papers part of the deal. This email exchange makes it clear that both Nicholas Smith and Trevy understood and intended that Karani and the other IIEC officials would be paid bribes.

44. There was further email contact before the delivery of the ballot papers on 18/8/09. On 4/8/09, Trevy emailed Nicholas Smith: [AFM 0261]: “i had a meeting i the morning and assured Mr. Karani and es team that once you are paid that’s when you will send over something and Karani got it clear from you at the Hilton that this will be done on payment. once that has been done I told them we shall all go to my bank and ill give the chicken to Karani although Karani hasn't told them how much it is but that’s their business.

I think all this came about since they are anxious and very broke.” He added that they wished to speed up payment and that he explained to them that it took three days for cash receipts to clear his bank account.

CUP OF TEA

Trevy added “anyway that was just my brief to you on my meeting with the 7 tender committee members including Karani over a cup of tea at the restaurant down at anniversary tower.” Trevy added, somewhat unnecessarily, “these people are after making money since they know they are soon going back to the government, I think they also wanted to confirm through me that what karani has been telling them is the truth” This email relates two meetings with the officials of the IIEC, or some of them.

‘Chicken’ is the word used by Trevy, on this and other occasions, for bribe. Trevy had been reassuring the officials that they would get their money once IIEC had paid S&O.

45. In the event S&O shipped 142,350 ballot papers. Nicholas Smith knew about this and gave instruction to his staff to leave the quantity off the shipping invoice. [AFM 0190] Karani queried this with Nicholas Smith by email on 15/8/09.

[AFM 0260] Nick Smith contacted Trevy about this and Trevy advised Nicholas Smith to let Karani know that the number of ballot papers actually needed was less than 200,000. Trevy stated that he was having breakfast with Karani and others and that payment would be made on the contract as agreed.

46. The ballot papers were delivered to the IIEC on 18/8/09, and on 28/8/09 S&O issued a final invoice for the contract in the sum of £32,526.56. [AFM 0018] (Admissions 11-12) The invoice included a price of Ksh 11.52 per ballot paper. This reflected Trevy’s observation in his emails of 30/6/09, where Trevy stated that the commission for the voter forms was just for “the IIEC guyz” and that the reason for increasing the price of the ballot papers from 9Ksh to 11Ksh was to pay Trevy his commission. [See AFM 0263] On 22/9/09, the Kenya Ministry of Finance paid the contract amount to S&O. [AFM 0013], (admission 15).

KEEN TO RECEIVE THEIR MONEY

47. Trevy emailed Nicholas Smith the following day, 23/9/09. [AFM 0259] The officials were keen to receive their money. Trevy wrote that he “did let them know that they will be taken care of once you get the pay…..they are desperate for the chicken….Once I have the chicken ill duly pass it to them as agreed no matter where they are.” On 24/9/09 Nicholas Smith, as he admitted in interview, created an updated pricing summary [AFM 0019]. The total commission figure was shown as £11,236.

This reflected the payments to the IIEC officials and the £1,000 for Trevy, less a payment of £250 which had been made by S&O on 11/8/09 [AFM 0189]. The following day, 25/9/09 S&O sent a payment of £11,576 to Trevy [AFM 0016, AFM 0013], (admission 17)

48. There was a delay before Trevy distributed the payments. Karani got in touch with Nicholas Smith by email on 13/10/09 asking Nicholas Smith to contact him urgently. Nicholas Smith then emailed Trevy: “Karani has been in touch saying he hasn’t heard from you.

I guess he is after chicken. Please confirm all is distributed.” Nicholas Smith was using the word ‘chicken’to mean bribe as well. Trevy replied saying that he’d distributed to the others but not yet to Karani as Karani had not been in town. Trevy added that he would let Nicholas Smith know once Trevy had settled with Karani. [AFM 0311]

49. Others in the IIIEC group were already looking to the future. Trevy emailed Nicholas Smith on 17/9/09 [AFM 0307] stating that Dena and Nyaundi were “asking that if at all for the big orders what would be their percentage?”

He added “now that’s tricky….but you don’t have to compromise your work for a bigger chicken. He stated later in the email that “if they go contrary to set regulations it will be an advantage to use but pay has to be fast….I hope you get my point” and “hope we make it….its big cash and good chicken for everyone who has played a role.” IIEC subsequently placed some large orders with S&O.

50. Nicholas Smith in interview stated that he made no arrangements to pay corrupt payments to IIEC officials, that he did not know if they were in fact paid and that his request on 13/10/09 for confirmation that chicken had been distributed was, he assumed, a reference to facilitation payments being distributed to customs officials. He said that there was no reason for Karani to receive a payment.

To be continued tomorrow...