06 09 06 - Subject: An 'Armenian' in Kenya: June 30,2006 Montreal Gazette

Montreal Gazette
(From Annette Melikian USA) BARRY MOODY, Reuters
Published: Sunday, July 30, 2006

http://www.canada.com/montrealgazette/news/insight/story.html?id=1af3028a-60fc-47e1-a53c-d2576f64f903&p=1
An 'Armenian' in Kenya
Are they Armenian? Are they brothers? The latest corruption scandal to hit Kenya is a strange one in a dizzying series of corruption cases that are hurting the country's potential





Who, exactly, are you? Artur Margariyan, an "Armenian" national, gestures during an interview at his home in Nairobi March 16. A government inquiry does not know the real names of two men it is investigating, nor their nationality, nor whether they are brothers as they claim.

Photograph by : REUTERS





A government inquiry does not know the real names of two men it is investigating, nor their nationality, nor whether they are brothers as they claim.

A lawyer trying to represent the two alleged "Armenians" was sent away and told to come back when he works out who they are.

These are two of the more bizarre aspects of a dizzying series of corruption scandals, piled one on another, which have deepened Kenya's reputation as one of the most graft-infested places in the world, rated 144th out of 158 in the latest survey by the Transparency International (TI) corruption watchdog.

And in another surreal twist, the Kenyan branch of TI last month fired its executive director. For corruption.

Recently, new scandals have involved the central bank - whose governor is on trial for nepotism - a private bank suspected of money laundering, Kenya's biggest supermarket chain accused of massive tax evasion and perhaps most seriously a glaring security breach at Nairobi airport.

This is in addition to two long-running graft cases worth more than $1.2 billion U.S. that have forced the resignation of three ministers in President Mwai Kibaki's government this year.

The new wave of corruption, stunning even by local standards, has caused deep disappointment among both Western donor nations and Kenyans who voted Kibaki to a sweeping victory in 2002 on promises to root out endemic graft.

"Until we deal comprehensively and ruthlessly with corruption, we can't even begin to talk about being proud to be Kenyan," said Lucy Oriang, a Daily Nation newspaper columnist.

An official commission of inquiry is now sitting to investigate the self-styled Armenians, known as the "two Arturs" - partly because despite their fraternal claims, they have different surnames, which are believed to be false anyway.

Kibaki ordered the commission after the Arturs were summarily deported to Dubai after an incident where they stormed into the closed security area at Nairobi airport carrying guns.

According to evidence at the inquiry, the men, alleged to have wide criminal connections, also punched a customs official and drew weapons to confront a hostile crowd.

Not only had they somehow been given passes to the closed areas of all airports in Kenya, but furnished with the rank of deputy policy commissioners.

The incident caused howls of protest from Western envoys deeply concerned at the breaches in aviation security.

"This was another incident of the rot going deep," said a Western diplomat in the region who asked not to be named.

Press transcripts of the commission hearings are compulsive reading for many Kenyans, though there is widespread cynicism over whether senior officials will be prosecuted.

Opposition politicians say the hurried deportation of the "Armenians" and the commission itself are a cover-up to hide the fact they enjoyed protection from powerful figures.

The Arturs, known for their tight black shirts, gold "bling" and big parties, first came under public scrutiny in March when an opposition leader accused them of being mercenaries who led a police raid on Kenya's second biggest media house.

Internal Security Minister John Michuki staunchly defended the raid as being in the interests of national security despite a storm of domestic and international criticism.

Spreading corruption has serious implications for Kibaki, who is thought to be planning to run for re-election next year.

A recent survey by the government's own anti-corruption body showed that Kenyans saw the Security Ministry and the police as the country's most corrupt institutions and this is widely seen as contributing to a rising wave of violent crime.

Taken with the security breaches at the airport, police corruption concerns Western diplomats. They see Kenya as a growing centre for narcotics trading, illegal immigration and money laundering.

They also believe corruption makes Kenya vulnerable to terrorism.

"We can't achieve what we want on terrorism. We can't work with the police and security services," one diplomat said.

"It is very difficult to deal with the country on terrorism if the police force is corrupt, if the judiciary is corrupt, if ministers are clearly up to their necks in it," said Ian Taylor, senior lecturer in International Relations at St. Andrew's University, Scotland.

The graft also has an economic impact, frightening away Western investors, although China and rising Asian powers are eager to step into the breach.

"Corruption continues to hold back Kenya ,which is supposed to be the economic powerhouse of east Africa. It gives a very negative perception to potential investors particularly in the West," Taylor said.

Both analysts and diplomats agree there is one bright side to the current wave of scandals, saying a lively democratic press is playing a leading role in exposing venal politicians.

"It is encouraging that scandals are being exposed. It shows more progress in openness and transparency," said Taylor.

Government Pledged to Fight Graft, So New Scandals Disappoint

A wave of graft scandals causing deep disappointment among both foreign donors and Kenyans has rocked the government of President Mwai Kibaki, who came to power in 2002 vowing to root out corruption.

Here are key facts about some of the latest scandals to hit east Africa's largest economy.

"ARMENIAN" SAGA

-Two men who identified themselves as Armenian brothers Artur Margariyan and Arthur Sargsian burst into the limelight in March after a politician accused them of being mercenaries hired by the government to raid Kenya's second largest media house.

-Accused of receiving high-level protection for shady dealings, the flashy, jewellery-bedecked pair were deported to Dubai in June after a scuffle with customs officers at Nairobi airport in which one drew a gun. A government inquiry is under way.

NAKUMATT

-In what could be Kenya's biggest corporate scandal, supermarket chain Nakumatt was accused of evading millions of dollars in taxes, helping put its main rival out of business.

-An unpublished 2004 central bank report said Nakumatt turned over much larger volumes than its closest competitor Uchumi, but paid as much as 20 times less tax.

CHARTERHOUSE BANK

-Charterhouse bank - accused of being used by Nakumatt and six other firms to cover up massive tax evasion - was closed by Kenya's central bank in June. The small privately-owned bank has denied any wrongdoing.

MULLEI

-Kenya's former central bank governor Andrew Mullei was asked to step down from his position in March after he was charged with four counts of abuse of office.

-Accused of awarding lucrative consultancies to his son and three associates, Mullei's trial started on July 12.

ANGLO LEASING

-The Anglo Leasing scandal surfaced in April 2004 when questions were raised in parliament about why the government overpaid a tender for forgery-proof passports.

-Contracts to a fictitious firm - covering a range of deals from passports to naval ships and forensic labs - were believed to be worth about $200 million. The money was mysteriously returned as outrage grew.

GOLDENBERG

-The Goldenberg saga saw Kenya lose $1 billion in central bank money via bogus gold and diamond exports in the 1990s.

-Kibaki ordered a probe into the scandal, which occurred under then-president Daniel arap Moi. Four former high-ranking officials are on trial over the scandal.

© The Gazette (Montreal) 2006

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