A transition team report – exclusively obtained by AC – lists wholesale plunder, ethnic favouritism… and how ex-President Koroma profited from it
President Julius Maada Bio is to appoint a judicial commission of inquiry into massive state plunder and fraud during Ernest Bai Koroma's two terms of office after receiving an explosive report from his 12-member transition team, our sources in Freetown say. The team, led by Bio's new Chief Minister, Professor David Francis, was charged with taking stock of government finances and administration. The report, which landed on the President's desk this week, is expected to be published in the next few days.
The 130-page report details illegal sales of state assets and loans by state-run banks to business people connected to Koroma's All Peoples' Congress which were never repaid, as well as untendered, overpriced and unfulfilled state procurement deals. It lists the hiring of APC militants for government 'non-jobs', contracts with known criminals, and the purging of Mende (the main ethnic support base for Maada Bio's Sierra Leone People's Party) from the public sector. It also describes systematic misappropriation of monies sent to the country to help with the Ebola crisis, and corruption of contracts for medical equipment and ambulances.
The most serious of the report's claims is that in April 2012 the last government ordered the sale of the state's 30% share in the profitable Sierra Rutile company to its former chief executive, John Bonoh Sisay, at an artificially low price of US$12.3 million (plus $5.2 mn. in tax). The sale went through in spite of a law stating government assets may only be sold at public auction.
Sisay, whom Koroma groomed as his successor and who is his cousin, used a Sierra Leone-registered company, SRL Ltd., and a secretly-owned firm registered in the British Virgin Islands to make the purchase, the report says. In December 2016 the Australian mining company Iluka Resources bought Sierra Rutile for $375 mn., which would value Sisay's 30% share at $113 mn. The report claims that Koroma was 'presumably' a part-owner of the BVI company which held Sisay's shares. In 2015 Africa Confidential reported that it was 'widely believed' Koroma had a beneficial interest in the shares (AC Vol 56 No 13, The discord lingers on – read this article for free).
In August 2017 the Sydney Morning Herald reported that Sisay had paid bribes to government officials in order to acquire mining licences for Sierra Rutile. The bribes, which Iluka's lawyers uncovered during a post-acquisition investigation, included $50,000 worth of flights for Diana Konomanyi, then a cabinet minister. She was never prosecuted and continued acting as a minister until Koroma lost the election in March. Sisay vigorously denied the Australian newspaper's accusations and any illegality while he ran Sierra Rutile.
Iluka reapplied for the three suspicious licences through normal channels. British and Sierra Leonean officials say they are scrutinising the Sierra Rutile transactions. The bribe allegations scotched Sisay's campaign to become the APC's presidential candidate in the 2018 election. Sisay is a British citizen. Samura Kamara, who the report says overruled civil service objections to the sale of the Sierra Rutile shares in his capacity as Minister of Finance, became the party's presidential candidate in October 2017.
Africa Confidential put the allegations in the transition team report both to Sisay and to Koroma. Koroma described it as 'complete nonsense', saying he neither benefitted from the Sierra Rutile business nor any government property sales.
The team recommends that the judicial commission President Bio sets up have 'a limited timeframe and mandate to recover all stolen or inappropriately converted state funds and other assets'. It calls for the prosecution of officials of the previous government 'whose corrupt conduct is found to be particularly egregious'. There are dozens of names of individuals it says must be investigated.
The report slams Koroma's economic management: an external debt of $1.6 billion, domestic debts to the commercial banks of $658 mn., and invoices from local contractors and vendors amounting to 'an astonishing $1.4 bn.' All combined, the report says, the country's liabilities by the time President Bio took over were $3.7 bn. Interest on the loans alone, it says, amounts to $262 mn. a year. Salaries of government employees take another $263 mn., against domestic revenue of a trifling $539 mn., The report rejects Koroma's excuse that the Ebola outbreak in 2014 and the fall in commodity prices were to blame, finding instead 'an astonishing level of rampant corruption, politically organised racketeering, mismanagement, graft and lack of fiscal discipline.'
The Ebola outbreak, the team argues, occurred seven years after Koroma became President. 'In fact, in 2014, the year the Ebola outbreak began, the value of the country's export was US$1.6 bn., decreasing slightly to $1.4 bn. in 2015, when Ebola was contained,' the report says. 'Government must be blamed for the economic mess and near bankruptcy of Sierra Leone. Reckless spending, facilitated by the unrestrained use of the government's overdraft privileges at the Bank of Sierra Leone, was the norm, leaving the economy substantially burdened by debt,' it adds.
A few days before the report's submission to Bio, as snippets of its recommendations relating to a possible commission of inquiry circulated in Freetown, there were reports that Koroma was seen paying an unannounced visit to the President at State House on 21 June. State House gave no details of the meeting, dismissing inquiries with a tart response: 'Private visit.' The former President is said to be concerned about his personal safety, though he has had a large security unit since he retired to his home in Makeni.
Revenue collection has improved since Bio suspended customs and duty waivers – as well as creating a single account for all government ministries and agencies – but the economy would need considerable time to rebound. The value of the leone, which depreciated by over 149% against major international currencies under Koroma, continues to dip. Government employees' salaries are now paid on time, the streets of cities are much cleaner – with the introduction of compulsory monthly cleaning exercises – and civil servants can now be found at their desks by 8.30 am after Bio started spot checks at government offices.
Property and theft
Governments have long struggled with the legacy of housing stock to accommodate staff in Freetown and other key provincial towns or cities, inherited from the British colonial authorities and the defunct Sierra Leone Selection Trust and the Sierra Leone Produce Marketing Board. The best properties of this kind in Freetown are on Hill Station, Wilkinson Road and Spur Road, though there are dozens of others. Ex-President Ahmed Tejan Kabbah's cabinet concluded in a 2001 study that staff homes should be sold to serving civil servants, preferably those already occupying them, at market value. The better-appointed SLST and SLPMB buildings, it said, should be kept in reserve for visiting dignitaries.
However, the transition team reported that ex-President Koroma used Sisay as an agent to acquire 12 government-owned properties on Spur Road, mainly SLST and SPLMB homes, for $1.3 mn., well below their official valuation of over $12 mn. The permanent secretary at the Finance Ministry wrote on 25 June to his counterpart at the Ministry of Works to demand a full explanation and details of a Works Ministry account used to handle sales of government properties in 2016 and 2017. This allegation has also been put to Koroma and Sisay.
Other houses in the last government's hands, the report says, were sold in its final three months to APC partisans, most of whom are not civil servants. Another beneficiary was a Lebanese businessman, Mohamed Wanza, who had been expelled from Sierra Leone by ex-President Kabbah for allegedly contriving a fraudulent gunboat deal with a former military government. The report specifically urges the judicial enquiry to investigate ex-President Koroma; former Minister of Works, Housing and Infrastructure Alhaji Ibrahim Kemoh Sesay; John Sisay; Chief Justice Abdulai Charm; Mohamed Wanza; Fanny Koroma; Bockarie M. Foh; Ibrahim Conteh; Vicky Jusu; and K.O. Seisay.
The sharp tone of the report may surprise some, given that before the votes in March Bio was believed to be on friendly terms with former President Koroma. But Bio's attitude towards Koroma and the APC might have been hardened by several incidents before the run-off vote that Bio won on 30 March.
The report mentions a few. It says that Bio sought refuge at the Radisson Blu Hotel in Lumley Beach, the tourist area of Freetown, 'after armed men attacked his home.' The report also mentions 'cases of violence in parts of the country, the vandalisation of the Presidential Lodge at Hill Station presumably by the staff of former President Ernest Bai Koroma, and the frantic looting of government vehicles by outgoing officials.' On being sworn into office, Bio set up a team, led by Foday Rado Yokie, to recover vehicles that could not be immediately located. Yokie estimated that hundreds of vehicles had disappeared, and he confirmed that about 400 of them had been driven across the border into Guinea. Many other vehicles were quietly returned.
In a status report he submitted to President Bio in May, Yokie reported that his team had recovered 258 vehicles hidden by APC former officials, as well as 170 ambulances that were supposed to be new. But of those ambulances, only 30 were found to in good condition, 50 had been 'cannibalised with some having older engines and other parts instead of the new ones that they arrived with', and the rest were in poor shape. Bio seems to have his work cut out for him.
Transition team's box of horrors
Examples of fraud and theft described in the 'Report of the Governance Transition Team 2018', commissioned by President Julius Maada Bio.
• 'An ingenious scheme' whereby imports and exports were under-invoiced: 'Taxable goods like cooking oil were declared as non-taxable water… and sundry other taxable items as non-taxable commodities,' the report says – resulting in about US$390 million in unpaid duties. Beneficiaries 'of these duty waivers gave a percentage of their illegal savings to senior officials as bribes'. AC research shows that in 2007, the year that Ernest Bai Koroma became President, $24 mn. worth of rice was imported. In 2008, the figure was $59.2 mn., and in 2017 an astonishing $191.3 mn. Sierra Leone’s citizens had not suddenly become addicted to rice. The transition team concluded that other, taxable imports were reclassified as rice, such as cement, imports of which supposedly declined, in spite of an increase in construction.
• Diplomatic passports were issued to 'hundreds of ineligible citizens' and 'dozens could not be accounted for'.
• The government rented official buildings at 'extortionate cost' from top APC officials or their friends and relations.
• In 2013 alone, the Sierra Leone Commercial Bank wrote off loans worth Le 29.7 bn. ($3.7 mn.) because it concluded the loans, mostly to APC officials and government ministers, would not be repaid.
• Experts at the Sierra Leone Roads Transport Corporation claim that 100 buses bought in China in 2014 by Koroma's Minister of Transport and Aviation, Leonard Balogun Koroma, were overpriced. The experts said 'the $12 mn. spent on the procurement of the 100 buses from China could have been wisely spent to procure at least 200 buses.'
• Ebola: 'Government gave all the major Ebola-related contracts to a small network of businessmen, each owning several companies, and all of them with close personal ties to top APC Government officials.'
Questions were often asked as to where the government watchdogs were. An APC favourite, Ady Macauley, was appointed head of the Anti-Corruption Commission, after which no prosecutions of significance were mounted. President Bio has sacked him.
Copyright © Africa Confidential 2020
Prepared for Free Article on 30/09/2020 at 20:17. Authorized users may download, save, and print articles for their own use, but may not further disseminate these articles in their electronic form without express written permission from Africa Confidential / Asempa Limited. Contact firstname.lastname@example.org.