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

The Gazette (Montreal)
July 30, 2006 Sunday
Final Edition

By BARRY MOODY, Reuters

NAIROBI

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.