Guilt and Conviction

Guilt and Conviction: A tale of a grande pension scam

This is a tale of three public officials who were convicted on the 11th of November, 2016, of swindling money meant for pension for retired civil servants.

The accused:

  1.  Jimmy Lwamafa (Former Permanent Secretary, Ministry of Public Service)
  2. Christopher Obey (Principal Accountant, Ministry of Public Service – responsible for all funds disbursed by the Ministry)
  3. Stephen Kiwanuka Kunsa (Former Director of Research and Development and Vote Controller for all pension funds to the ministry)

The accused were all public officers with the duty to implement government policies in their respective official capacities. Although their demeanor throughout the case was calm, Judge Lawrence Gidudu of the Anti-Corruption Court of Uganda did not compromise in his 24-page judgment. This article sheds some light on the final court decision.

The Offences:

  • Charge I: Causing financial loss in Counts I & II
  • Charge II: Abuse of office in Counts III & IV,
  • Charge III: False accounting by public officer in Counts V & VI,
  • Charge IV: Conspiracy to defraud in Counts VII & VIII; and
  • Charge V: Diversion of public resources in Counts IX & X

A quick glimpse of the Judgment:

Without diluting Justice Lawrence Gidudu’s learned opinion, this article attempts to evaluate his judgment in the case.

In his judgment on the embezzlement case before him, the learned Justice found the accused guilty on each charge/count and convicted them on all charges.

The judge said that after careful scrutiny of exhibits P24, P25, P7 and P39, he established that Ushs.44.12 billion for each financial year was accounted for as social security contributions. This is a total Ushs. 88billion for the two years when the accused defrauded the government. He noted that the returns for the said amount were false and so was the account which he found deliberately was uploaded and not questioned appropriately.

Most of the money was paid off to ghost recipients and the judge specifically mentioned that the accused knew of it. -the accused had prior knowledge of the schedule’s falsehood and illegality.

Public officers are called to act according to established rules and regulations. In their policy and code of conduct, they are expected to act within their mandate, outside of which, the law provides that such actions are ‘ultra-vires’ and punishable, accordingly.

When the trio channeled money to an account which did not exist and later defended their mistake, they planted seeds of suspicion. This is because when money meant to pay pensioners through NSSF, which money was allocated but was not given to the rightful recipients, meant that a defrauding scheme was in play.

The most intriguing part in this is the trio’s failure to note the discrepancy in the first Financial Year of 2010/11 which the judge was right to comment on the mastermind plan as;

‘This syndicate was crafted in the Ministry of Public Service, modified in the Ministry of Finance, smoothened in the Bank of Uganda and perfected in Cairo Bank.’

 The trio had worked in the public sector for a long time and therefore had full knowledge of how the system works thus the carefully crafted process from requisition to disbursement. Besides, the period was enough for them to know their actual duties without acting outside of their powers.

Some of facts which the prosecution was required to prove on the above charges included, among others that;

  1.  Two or more people had an agreement to do an unlawful act;
  2. They had the intent to defraud; and
  3. They did not have the mandate to requisition for, and disburse the money.

The three accused set out to cover for each other’s shortcomings by budgeting, requisitioning and disbursing money meant to pay gratuities and pension for civil servants/public servants.

Whereas Counsel for Stephen Kiwanuka Kunsa argued that his client was not responsible for making the reports and never signed them, Judge Gidudu found him equally responsible for approving all claimants for the pension and gratuity. In essence, he was part of that grand conspiracy.

  • The accused converted, transferred or disposed of public funds; and
  • The purpose was unrelated to that for which the resources were intended.

The prosecution alleged that the accused budgeted, requisitioned and disbursed the Ushs.44.12billion in each FY (2010/11 & 2011/12).

In a public office like the Ministry of Public Service, budgeting, requisitioning and disbursing is a duty for which paying off pension and gratuity to retired public servants is the ultimate purpose.

In this case, however, the accused knew that the money had not been legally accounted for but chose to defend their wrong position before Parliament and Finance officials. They eventually paid it off to ‘ghost’ recipients, making it a case of fraud, which they committed against the government.

Judge Gidudu said that:

 ‘In conspiracy, it is trite law that the prosecution does not have to prove that a formal meeting was held. All that is required is evidence to prove actions from which an agreement to commit fraud would be inferred.’

He further said that the prosecution had proved that the said money was for NSSF and had to be paid to NSSF not anybody else.

 Conviction:

 Guilty – (the trio)

 Sentencing:

  •  Jimmy Lwamafa – seven (7) years
  • Christopher Obey – ten (10) years
  • Stephen Kiwanuka Kunsa – five (5) years

NB: Trio to also refund Ushs.50 billion to the government.

Question: Will government attach the trio’s property if they fail to refund the money?

Well, it has taken the case 4 years to be determined. Hopefully, government attaches their property because the victims are pensioners whose previous service to the public is commendable.

Plus, the attachment will send fair warning to all serving and intending public servants to beware of schemes intended at defrauding the wanainchi.

Conclusion:

 What this case has taught public officers is to always correct faults as soon as they arise and not assume that an illegality can be cleared by a later amendment. The law does not act retrospectively.

Secondly, this case has also opened up Pandora’s Box with snakes of blackmail within the public service and its officials. Perhaps all enthusiasts should beware.

In the meantime, it will be interesting to see whether government will go ahead and attach the accused’s properties to recover the stolen public funds. This is usual fair practice in recovering stolen funds. Otherwise, it may settle for the Ushs.50 billion refund, just fine.

‘In law, one cannot blow hot and cold at the same time.’ Judge Gidudu (11th November, 2016)

BY ATUHAIRWE AGRACE

This article appears in our weekly digital law magazine, The Deuteronomy Vol 8, Issue 3 of November 18th, 2016

To receive The Deuteronomy in real time, click HERE

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