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BACKGROUND Similar to most countries, Kenya encourages International Trade by granting tax-free status to commercial enterprises involved in the export of goods and sometimes subsidizes these exports. The Goldenberg scandal was based on the fact that exporters who deposited U.S. Dollar earnings with the Kenya Central Bank received in exchange the equivalent in Kenyan shillings plus 20 percent. The Kenyan government would therefore be obliged to return a percentage of the hard currency generated by the export of gold. However, Gold Mining represented a tiny portion of Kenya's GDP, with only one operational gold mine (at Kakamega ). Goldenberg International therefore developed a scheme of smuggling gold into Kenya from Congo , so that it could legally export it but claim 35% above the export price from the government. DETAILS The chief architect beyond the scheme was a relative of the Kenyan businessman government. Along with the former president myself, Moi's sons and daughter who held senior positions in his government are also implicated . The judicial system also appears to have been deeply involved, with twenty three of Kenya's senior judges resigning after evidence indicated their involvement Corruption conventions lack clout . Journalists may have also benefited by receiving money in return for their silence. The scheme began in 1991, almost immediately after the Kenya government introduced measures to reform the economy and increase international trade and investment, and seems to have stopped in 1993 when it was exposed by a Whistleblower , David Munyakei , who has since become a daily part of Kenyan politics. There have been two investigations on the scam, one under the Moi government and the other under the current government. The gold was likely imported from Democratic Republic Of The Congo , and therefore probably helped finance the war that still rages in that country. BOSIRE REPORT On should face criminal charges for his actions and that former President Daniel Arap Moi should be further investigated. Saitoti was both vice president and finance minister under Moi in the early 1990s. On 13 February Saitoti's resignation was announced by President Kibaki in a television address. BBC News : Kenyan 'graft' ministers resign The report said that records presented at the inquiry showed that Lima Ltd, which is associated with Mr Gideon Moi, Mr Nicholas Biwott , and two other people received Sh6.3 million from Goldenberg and that none of the four had explained to the commission what the money was meant for. The report also said Sh158.3 billion of Goldenberg money was transacted with 487 companies and individuals. A list of exhibits compiled by the commission puts Goldenberg International Ltd at the top of the primary recipients of the money, at Sh35.3 billion. The directors of Goldenberg were named as Mr Pattni and Mr Kanyotu. Although Mr Kanyotu was the director of the Special Branch and a director of First American Bank, he described himself as a farmer in Goldenberg documents. President Moi was named by Mr Pattni as having been a shareholder of GIL by nominee. Travel restrictions Shortly after, Saitoti along with 20 several others suspected to be involved in the scandal were prohibited from leaving the country and ordered to surrender any weapons they posessed. Among the others were sons of former president Moi and various MPs. BBC News : Travel ban in Kenya scam inquiry Travel restrictions have been imposed on: Daily Nation: Moi sons and five others surrender passports
Former president Moi himself was not listed. The Law Society of Kenya chairman Tom Ojienda criticised Police Commissioner Hussein Ali’s move to seize travel documents. He described the decisions as "a total violation of the law and the Constitution". Ojienda regretted that individuals had been charged, tried and convicted by the court of public opinion and the media or through political statements. He commended three Cabinet ministers who resigned to pave way for investigations into the Anglo Leasing and Goldenberg scandals. "The resignation of three members of Cabinet signifies the maturity of our democracy, where leaders whose reputations are besmirched would opt to resign pending investigations to clear their names rather than hold the Government hostage. Such resignations are no pointers to guilt." East African Standard: LSK criticises minister on graft assets PROSECUTIONS Two transactions stand out - one for Sh5.8 billion from the Central Bank to Goldenberg International in 1993, personally authorised by then-president Daniel Arap Moi , and another for Sh13.5 billion. CID director Joseph Kamau told reporters on March 9 2006 that files on Pattni, Kanyotu, Koinange, Kotut, Bii, Riungu and Werunga had been passed to attorney-general Amos Wako . Wako has been attorney-general since 1991, when Moi was in power. Wako is recommending that the country's chief justice consider overturning a previous court order exempting Mr Saitoti from prosecution. All except Werunga are to be charged. BBC : Kenyans facing Goldenberg charges The prosecution hopes that Werunga will be their witness. The Standard: AG orders prosecution of Goldenberg suspects SEE ALSO EXTERNAL LINKS
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