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should the government name names in the Cashgate scandal?

28 February 2014

The British High Commissioner to Malawi today issued a statement about a forensic audit funded by the UK to investigate allegations of corruption in Malawi’s public finances, dubbed the Cashgate scandal. I draw your attention to one part of his statement:

As the forensic audit report makes clear, the auditors and other investigators have not completed their work. Investigations are still in progress and continuing. The aim is to identify the full extent of the scandal, identify all the beneficiaries and attempt to recover lost funds. Releasing names now would be premature and may jeapordise [sic] the evidence trails. As the independent auditors stated in their report, releasing names may also prejudice any current or future legal action.

The excerpt above is directed to civil society activists and citizens vocal about wanting to bring to justice those who stole from government accounts. Just yesterday, roughly 100 Malawians took to the streets of Blantyre to protest the handling of the Cashgate scandal. Some protesters’ placards specifically targeted their messages to President Joyce Banda. The AFP reports one of the demands made by the protesters was that the government name all suspects involved in the Cashgate scandal.

Though the official forensic audit report released last week details the process of investigating the financial mismanagement, it does not name any names. The auditors’ reasoning, from the report:

To limit the risk of prejudicing any current or future legal action, this report does not comment on specific transactions, names or companies. Where we believe fraud, theft or unethical actions have taken place, these have been and / or will be referred to the relevant Law Enforcement Office of the Police and Anti-Corruption Bureau through the Office of the Auditor General.

Yesterday, the Public Accounts Committee in Malawi’s parliament voted to reject the forensic audit report as incomplete, and the committee also called for a more detailed audit that named names. This move in parliament is not surprising given the committee is run by politicians of parties in the opposition (Banda’s party is a minority party in parliament).

Should the Malawi government name names? Though civil society organizations (and some citizens) and opposition party politiicans are demanding they do, the signal from one of Malawi’s major donors is that they don’t have to. Given the weak turnout for Thursday’s protest and the reasonable excuse that exposing names could hamper investigations, a self-interested government would avoid naming names prematurely. The potentially worse outcome for government than having public funds stolen on its watch is not being able to successfully prosecute those who stole public funds.

Nonetheless, there are some findings in the forensic audit report that civil society organizations could use in the campaign to improve economic governance. One point to pressure government about is declarations of conflicts of interest. From the forensic audit report:

Neither the [National Audit Office] nor the [Government of Malawi] Ministries we visited maintained a schedule of business ownership showing which businesses or political parties (where relevant) the principal secretaries and senior management figures owned or were members of. This would have aided the identification of any related party transactions and potential conflicts of interest. These records should be maintained going forward and annual updates should, be required. Importantly, during our work no conflict of interest registers were located.

In an earlier Cashgate post, I wrote about calls from civil society for the president to publicly declare her assets, which she has not yet done (nor did her predecessor, Mutharika, when faced with the same demands). The Public Officers Bill (sometimes referred to in the Malawi press as the “assets bill”), passed in Parliament and then signed into law by Banda in late 2013 that established the Office of the Director of Public Officers Declarations, has yet to make any progress on Malawian politicians actually declaring their personal wealth.

Section 15 of the Public Officers Bill stipulates what must be disclosed, including assets owned by the politician or his immediate family, income, bank accounts, debts/liabilities, and ownership (even if only partial) of a company. Perhaps of greater significance to civil society leaders is Section 17 of the Public Officers Bill, which requires that declarations made by public officers be treated as public information. The Director of Public Officers Declarations only has 14 days to respond to requests for information.

Civil society leaders should be pressuring the president to appoint a Director of the Office of Public Officers Declarations and should be submitting requests for information about the president and all other officials whom they suspect of mismanaging or misusing public funds. Pushing for names of Cashgate scandal suspects will be fruitless whereas asking for public declaration of assets owned by public officials is in accordance with the law — one President Banda herself signed.

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3 Comments leave one →
  1. Mzungu wa China permalink
    1 March 2014 1:50 am

    Six months ago I was surprised with the lukewarm feeling about Joyce amongst the bwana class in Mzuzu. But after repeated conversations about Joyce’s handling of cashgate I have a little better grip on what my Malawian friends are thinking. Despite the professed shock at looting from the government, no one is really surprised. Politics in Malawi (like many places to varying degrees) is understood to be a business. Most people I talk to give her no credit for “revealing” or “dealing” with Cashgate. They believe it wasn’t within her power to keep the corruption quiet and she has been reactive rather than proactive. Following upon that they believe either that she was in on it (the majority) or that she was incompetent to have let it happen at such a scale and such noise under her watch, or both. The divide between international approval of Joyce and local disaffection can hardly be overstated. Everyone I know (admittedly my sample size is heavily biased to middle class northern region Malawians) is waiting to see if Joyce tries to rig the election. They largely see the PP as having no real chance of winning and see it as a toss up between MCP and DPP. Once/if PP loses all its MPs will move back to MCP and/or DPP from whence they came. Personally I have a hard time seeing how DPP could come back so quickly but then being in the North I am biased as DPP has its power-base in the south. With Tembo out of the MCP it has been attracting a fair bit of new young blood.

    • 4 March 2014 11:52 am

      Thanks for sharing your insights, Mzungu wa China.

      Interestingly, I wonder if it even matters if Banda’s hands are clean. Whatever the truth is, perceptions will drive people’s choices on election day. I agree your sample is not necessarily representative of all Malawians (still, I’m glad to learn from the sample you have) — and I wish there was more political polling done in Malawi to get a sense of how the general population is reacting to the scandal. I’m dissatisfied with the “surveys” done by the newspapers, since much of the data draw from SMS and one has to self-select into the survey (which definitely leads to selection bias).

      • Mzungu wa China permalink
        8 March 2014 5:30 am

        It would be hard to find an organization that would be seen as both credible by Malawians and allowed by the Malawian Government to do such polling. One good thing that I think did come out of Joyce’s reign is the surprising (to me) extent to which her being a woman is now a non-issue amongst many rural people I talk to. It certainly wasn’t a non-issue to them in 2012. Again my sample is biased to an area that is prone to be pro-Joyce anyway (Nkhata Bay District) but still even they were skeptical of the suitable-ness of a female leader in 2012. Not to say that if Joyce loses that the door to another female president will remain wide-open, but I doubt it will close altogether.

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