draining development.pdf - Khazar University

The Kleptocrat’s Portfolio Decisions 439• As a result, each of the cotractors was presented as a single-sourcesupplier on the basis of either no tender process whatsoever or, atbest, a deeply flawed tender process.• No due diligence was carried out on any of the contractors.• There was little or no negotiation of the contractual terms, whichwere dictated by the supplier and not adequately scrutinized by thecommissioning department or the Finance Ministry.• Contractors frequently represented that they were based in majorcommercial jurisdictions, such as the Netherlands, Switzerland, orthe United Kingdom, whereas they were registered in offshorejurisdictions.Links among the contractsInvestigations have clearly established that, apart from the numerousshared features summarized above, there are also numerous links of personnel,addresses, banking arrangements, and other matters in respect ofthe companies involved in the contracts. Broadly, the contracts can beshown to fall into two groups: 13 can be shown to be associated with theKamani family, and 5 were associated with Anura Leslie Perera.The Kamani family includes prominent Kenyan businessmen who arealso involved in businesses overseas, most notably in India and theUnited Kingdom. In the mid-1990s, the family, which had been heavilylinked to contracts with the Kenyan government, was involved in twomajor scandals, one concerning defective boilers sold to the Kenya PrisonsDepartment and the other concerning Mahindra jeeps that weresold to the Kenya Police Department and were wholly unsuitable for therequirements. As a result, in 1997, the family was blacklisted from governmentbusiness. The structure of these newer contracts, with a seriesof apparently unconnected companies used as fronts, appears to haveevolved as a way of avoiding this prohibition.Anura Leslie Perera has lived in Kenya and done business with theKenya government for many years, but is said currently to reside innorthern Cyprus. He is of Sri Lankan origin and has an Irish passport.Kenya is not alone in having suffered from such dubious contractingpractices. A combination of corrupt officials and unscrupulous