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State Capture Unlimited: The Intrigues Inside the Battle to Control Mombasa’s Second Container Terminal

7 min read. Even without a pecuniary interest in the KNSL transaction, a seamless operation that transfers all the freight logistics to Naivasha is sufficient motivation for Kenyatta to pursue the capture of the terminal as aggressively as he is doing. We may also have our answer as to why the Government is not enticing MSC to Lamu. Kenyatta does not own land there.

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State Capture Unlimited: The Intrigues Inside the Battle to Control Mombasa’s Second Container Terminal
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Sometime in the late 80s, at the tail end of the era of the state commanding the heights of the economy, the Moi government had an idea—to establish a national shipping line. The business case seemed straightforward enough. The country was leaking a substantial amount of its meagre foreign exchange earnings to foreign shipping lines that were ferrying our imports and exports. The total value of shipping services in 1986 was in the order of $230 million (Sh3.7 billion) equivalent to 10 per cent of the country’s $2.2 billion (Sh43 billion) foreign exchange earnings (the exchange rate was Sh16 to the US$). Saving some of this money looked like a splendid idea. As always, the devil is in the detail.

The country was not in a position to buy vessels. The plan was to establish what is referred to in the industry as a Non-Vessel Owning Common Carrier (NVOCC) that would lease space on third-party vessels, essentially a glorified freight forwarding company. The Kenya National Shipping Line (KNSL) was incorporated in 1987 as a joint venture, with Kenya Ports Authority and UNIMAR, a German investor, owning 70 per cent and 30 per cent, respectively (UNIMAR later sold half its stake to DEG, a development finance institution of the German government). KNSL began operations in 1988 by establishing a partnership with Mediterranean Shipping Company (MSC) to charter space on MSC ships plying the Mombasa-Europe route, calling in at Lisbon, Le Havre, Antwerp, Rotterdam, Hamburg and Felixstowe among other ports in that general geographic region.

Business did not go as planned. Chartering slots on ships and hiring containers was easy, getting customers, not so. KNSL quickly racked up debt with the shipping lines and with container leasing companies for slots and containers that it was leasing and not using. But even had business gone according to plan, it is doubtful that it would have saved the country much foreign exchange. At the time, the Mombasa terminal was handling 120,000 TEUs (twenty-foot equivalent units) of containerised freight annually. The total cost of shipping a container to or from Europe would have been in the order of $900, a total of $108 million annually. Even had KNSL been able to secure a monopoly and get a 10 per cent trade margin, which is doubtful, it would have earned the country just over $10 million, about 0.5 per cent of the foreign exchange earnings.

In 1996, Heywood Shipping, an entity linked to MSC, acquired a stake in KNSL. The exact circumstances and nature of the transaction are hazy but it appears that this was part of a restructuring that may have involved converting debt to equity and bringing in MSC as a strategic partner. Heywood Shipping does not appear to be an operating business. An internet search brings up the name in the company registry of the Isle of Man, a British offshore tax haven, which may or may not be of the same company.

Nothing was heard of KNSL for two decades, although to be sure, it had not been making headlines even before. Then, out of the blue, in August 2018, it was reported that the Government had signed a Memorandum of Understanding (MoU) with MSC to revive KNSL. The reports indicated that the government was eyeing a slice of the Sh300 million ($3 billion) that it claimed the country was paying foreign companies for shipping. As usual, the Jubilee numbers are exaggerated. The $3 billion is about right for the total imports of services, of which shipping represents less than a third ($830 million in 2017 according to WTO data). I have two observations. First, this is the same reasoning that had motivated KNSL’s establishment three decades earlier. What has changed? Second, MSC was already a shareholder and strategic partner of KNSL. Why then was the Government signing an MOU with MSC on the same? The plot would soon unfold.

In March 2019 the government introduced an amendment to the Merchant Shipping Act to give the Transport Cabinet Secretary power to exempt government entities from some provisions of the statute. The particular provision that needed to be circumvented prohibits a shipping line from operating port facilities. In competition law and policy, this clause is used to prevent vertical integration, the control of many stages in a business chain by one firm to undermine competition. If for example, a manufacturer also controls distribution and retail, it can use its market power to choke competitors by restricting supply and/or overpricing its goods. A shipping line that also operates port facilities can frustrate competitor shipping lines similarly by making it advantageous to use its seamless services while providing competitors with shoddy services. Yet this is precisely what this amendment was about: to pave way for KNSL to be awarded a concession to operate the second container terminal at the Port of Mombasa, referred to in the industry as CT2.

The CT2 facility has been built by the Government with debt financing from Japan. The first phase was completed in 2016. Under the financing agreement, CT2 would be leased out to an independent operator selected through a competitive process. In 2014, the Government invited port operators to make their bids. Several international port operators applied, but the process was cancelled before completion—but not before eliciting uncharacteristically pointed objections from the usually reticent Japan. Long after the bids had closed, the government sought to introduce new conditions that would have opened up financing of the second phase even though the government had already signed a financing agreement with Japan. In a letter to the Treasury, the resident representative of the Japanese aid agency, JICA, talked of their “obligation to assure accountability and transparency in the process”, and warned that mishandling of the process would jeopardise future assistance to Kenya.

In early 2017, it emerged that the government had entered into a bilateral agreement with the United Arab Emirates in which the UAE was to extend a loan of $275 million (Sh28 billion) for improvements to the port at Mombasa, including “enhancing operational and business efficiencies within the Second Container Terminal.” In return, the state-owned port operator, Dubai World, would get the concession for the second container terminal. Dubai World was one of the bidders in the cancelled tender, and according to media reports, it had emerged second. This particular deal seemed to have been designed to circumvent competitive bidding through a ‘government-to-government’ transaction. For whatever reason, it also floundered.

This brings us to the KNSL transaction. Like the UAE agreement, the revived KNSL is devised to circumvent competitive bidding under the guise that KNSL is a state entity. KNSL shareholding stands at 53 per cent Kenya Ports Authority (KPA) and 43 per cent Heywood Shipping. Heywood Shipping has two directors on the board of KNSL: a Mr Peter Reschke and a Captain G. Cuomo. The MoU between the Government and MSC was signed by a Captain Giovanni Cuomo, designated as Vice President. It seems reasonable to assume that Captain G. Cuomo and Captain Giovanni Cuomo are one and the same person.

Financial capacity is one of the standard requirements for concessionaires in public-private partnerships (PPP). According to the 2017 audit, KNSL made a loss of Sh44.7 million, up from Sh37 million the previous year. It had revenues of Sh723,000 against expenses of Sh45 million. On the balance sheet, it has accumulated a deficit of Sh376 million. In short, KNSL is insolvent. The audit is qualified, and the Auditor General’s basis for adverse opinion runs to a couple of pages. KNSL is a shell, and to all intents and purposes, a Trojan horse for MSC.

It has been reported that the business case for single-sourcing MSC is to leverage on the concession to create seafaring jobs for Kenyans on MSC’s ships. Media reports say that MSC has committed to employing several Kenyans on its cruise liners, and to docking them in Mombasa thereby creating more jobs. These may be good intentions, but single-sourcing an operator and stifling competition is not the way to go about it. MSC will be in a position to leverage its position to undermine competitors. The competitors will lose market share in Mombasa but they are unlikely to take it lying down. For transit freight in particular, the competitors are likely to respond by undercutting MSC in competing ports, notably Dar es Salaam, and even Djibouti. Far from enhancing Mombasa as the pre-eminent port in the region, vertical integration will undermine it.

It is worth noting that even as the Government railroads this transaction, it is woefully short of investors for the Lamu port project. So far, the government has completed one of the three berths that it is building—out of a total of 32 in the plan. It is shopping for private investors to build and operate the other 29. The government is also shopping for an operator for the berths that it will have built. According to its website, MSC has a subsidiary—Terminal Investments Limited—that invests in, and manages container terminals. Given that MSC has been a joint venture partner in the KNSL all these years, it is intriguing that the Government has failed to persuade them to take up the Lamu opportunity as either operator, or investor or both.

It is worth noting that even as the Government railroads this transaction, it is woefully short of investors for the Lamu port project. So far, the government has completed one of the three berths that it is building—out of a total of 32 in the plan

We are compelled to infer that someone is out to reap where they have not sown. The initial meddling with the first tender sought to not only influence the award of the operating concession, but to also prevent the Japanese Government from financing the second phase. We infer from this that there was another financier lined up who was amenable to paying the hefty kickbacks that are standard operating procedure for Jubilee mega-infrastructure projects. The deal with the UAE and Dubai Ports had embedded private interests written all over it. The KNSL Trojan horse is the third bite at the cherry.

There is only one office with the power to subvert the competitive bidding process consistently and incessantly, and there are no prizes for guessing which one it is. This is Uhuru Kenyatta’s racket. From the now ill-fated dairy industry regulations to the floundering Huduma Namba, we have learned that wherever you see presidential political capital being expended, family business is involved. Indeed an MP friend remarked the other day that the only business that Parliament is transacting these days is Kenyatta family business.

What we need to know is the what and the how. First, we should demand full disclosure of the ownership and beneficial interests of Heywood Shipping. The two Heywood directors on the KNSL board need to swear affidavits that they have not entered into any agreement to transfer such interest to anyone else in the future. Kenyatta should be asked to declare that he and his family have no current or future beneficial interest in Heywood and MSC.

From the now ill-fated dairy industry regulations to the floundering Huduma Namba, we have learned that wherever you see presidential political capital being expended, family business is involved

A direct beneficial interest in Heywood is by no means the only route that Kenyatta can use to profit from the infrastructure. We know that the terminal integrates with the SGR railway. The railway terminates in Naivasha where the Kenyatta family has extensive landholdings positioned to benefit from the anticipated dry port business. We have seen Uhuru Kenyatta personally offering land for freight stations to Uganda and South Sudan leaders; whether this is public or private land, we do not know, but it does beg the question why Uganda would build a facility in Naivasha if, as we are told, the railway is to be integrated with the revamped meter-gauge rail all the way to the Uganda border.

Even without a pecuniary interest in the KNSL transaction, a seamless operation that transfers all the freight logistics to Naivasha is sufficient motivation for Kenyatta to pursue the capture of the terminal as aggressively as he is doing. We may also have our answer as to why the Government is not enticing MSC to Lamu. Kenyatta does not own land there.

David Ndii
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David Ndii is a leading Kenyan economist and public intellectual.

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What is the Sinister Motive Behind the Mwende Mwinzi Probe?

4 min read. Mwende Mwinzi’s appointment as Kenya’s Ambassador to South Korea is fully within the law as Ambassadors and High Commissioners are not considered state officials.  Under Article 78 (3) (b) of Chapter 6 of the Constitution on Leadership and Integrity, she is qualified as a Kenyan whose dual nationality is linked to the laws of another nation. 

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What is the Sinister Motive Behind the Mwende Mwinzi Probe?
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How did the appointment of a Kenyan citizen as Kenya’s Ambassador to South Korea become so embroiled in controversy as to seem like a personal vendetta?

Early in the year, Mwende Mwinzi, a dual citizen of Kenya and the United States, went through the vetting process administered by the Defense and Foreign Relations Committee as the law requires. From its onset, some Members of Parliament began to question her suitability for the post as they openly questioned the authenticity of her Kenyanness and claimed that she does “not have any unique skills other Kenyans don’t have”.

The Mwende drama started with a delegation that went to the president to whisper in his ear about the problem posed by the nomination of a dual citizen, falsely claiming that her appointment was unconstitutional. As it turned out, her appointment was indeed fully within the laws of Kenya, as Ambassadors and High Commissioners are not considered state officials.  Further to this, under Article 78 (3) (b) of Chapter 6 of the Constitution on Leadership and Integrity, she is qualified as a Kenyan whose dual nationality is a result of the “operation of that country’s law, without ability to opt out” (in this case the US).

But the war to dislodge Ms. Mwinzi only intensified and, in a vicious campaign to disqualify her, has gathered the most ardent supporters of the call to remove her even before she has taken up her appointment. Ms. Mwinzi’s loyalty has been loudly questioned, with opinion-shapers peddling doubts about her ability—and by extension the ability of all dual-citizenship Kenyans—to be loyal to Kenya while holding another country’s citizenship.

This narrow thinking completely misses the point that diplomatic spies and sell-outs do not need dual citizenship to act out of greed, dissatisfaction or unpatriotic inclinations. A study of the history of espionage should be exciting and enlightening for those in thrall to this sensationalist propaganda.

Her appointment was indeed fully within the laws of Kenya as Ambassadors and High Commissioners are not considered state officials

It also misses the point that there are other dual-citizenship envoys in office. This is perfectly within the law, and there is no logical reasoning to support calls for the amendment of the constitution in order to disqualify them on the grounds that they are dual citizens.

The Mwende case has been fraught with hypocrisy and dubious intentions on the part of the vetting Members of Parliament who have now insisted that she must surrender her American citizenship in order to take up office as Kenya’s Ambassador to South Korea. This demand is not only unconstitutional but it is also sinister and cruel to require someone with family in the US to shoot themselves in the foot in order to serve their country.

It is also worth pointing out that it is global standard procedure for countries to appoint dual citizens as high-level diplomats. The United States has enough of these examples, starting with former Secretary of State Madeleine Albright who is Czech-American.  The generous Internet will yield more good examples from several countries that have discarded the self-defeating and parochial view that dual citizens are to be feared, shunned and their role in nation-building limited.

This fear of dual citizens and Kenyans in the diaspora in general, has often elicited the open disdain of Kenyan legislators for Kenyans living abroad. When this disdain and dismissal translate to a suppression of citizens’ rights and opportunities, then it inevitably becomes a legal battle.

Kenyans in the diaspora have never shied away from the fight for justice and inclusion. They have fought to make it clear that living a few hours away is a silly and unjust reason to be discriminated against and that legally holding more than one passport is not a measure of one’s loyalty or patriotism.

It takes smart leadership to recognise that inclusivity of all citizens regardless of their global residence is visionary in the globalised 21st century and that attempts at exclusion are toxic to the nation as a whole.

It is also astonishing that the oft-quoted diaspora remittances cease to count as a mark of loyalty for Kenyan legislators intent on dismissing the Kenyan diaspora’s fight to belong and to serve. Let us be very clear that recognised belonging is the right of every citizen. Kenyans in the diaspora actively show their belonging by investing their hard-earned billions in their home country and, like every other Kenyan, they partake in nation-building every day.

The familiar pettiness that surfaced about Ms. Mwinzi’s accent during her vetting is an example of what must cease if Kenya wishes to make good use of its citizens who have lived abroad. These irrelevant concerns undermine and detract from the more important issues of character, leadership and accomplishments that might be of benefit to our nation.

It takes smart leadership to recognise that inclusivity of all citizens regardless of their global residence is visionary in the globalised 21st century

The sheer hypocrisy of the case has been exposed by the call to probe members of parliament who hold dual citizenship. The Kenyans for Justice and Development organisation has named eight members of parliament and two senators as state officials who need to be probed. This alone puts the vetting Committee’s credibility into question. It demands that all their recommendations against Ms. Mwinzi’s nomination be thrown out and that the constitution that allows her to be nominated reign supreme on this issue.

Mwende Mwinzi has served Kenya in many different capacities. In 2001 she started Twana Twitu, an organisation that has for 17 years supported over 3,000 orphaned and vulnerable children in Kitui. She was a columnist for Sunday Nation and for 3 years served on the National Economic and Social Council (NESC).

Ms. Mwinzi was also part of the team that devoted itself to improving Kenya’s image in the US at a time when Kenya had been negatively branded and was struggling to attract support to overcome its security challenges, boost tourism and trigger investment.  In the last election, Ms. Mwinzi vied for the seat of Member of Parliament for Mwingi West. She has clearly focused her life in Kenya not only in word but also in deed.

This persecution of one person is also a remarkably familiar pattern in the murky and mafia-ridden world of Kenyan politics where backdoor wheeling and dealing is done to secure high-level positions. With the political strategising for the 2022 presidential race already in place, political factions have been seeking to have “their people” in lucrative missions. Diplomatic corruption is both an international and local reality and, South Korea being a coveted station, it requires someone who will not give in to grand corruption schemes.

Editorial note: On November 14, 2019, the High Court of Kenya ruled that Kenya’s ambassador nominee to South Korea Mwende Mwinzi should not be forced to renounce her American citizenship as demanded by Parliament. Justice Makau further noted that an ambassador is not a State officer but a public officer, therefore, Ms. Mwinzi is not required to renounce her citizenship.

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Trump, Ukraine, and the Whistleblower: Why Reporting Wrongdoing Remains a Perilous Activity

9 min read. The American media and Democrats have hailed the anonymous whistleblower who reported the US president’s shady dealings with his counterpart in Ukraine as a hero. However, most whistleblowers are not so fortunate; the financial and emotional price they pay is extremely high, and can even lead to collateral damage.

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Trump, Ukraine, and the Whistleblower: Why Reporting Wrongdoing Remains a Perilous Activity
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“I think we will not understand what is happening in our society until we listen to the tears, the screams, the pain, and horror of those who have crossed a boundary they did not even know exists. To be a whistleblower is to step outside the Great Chain of Being, to join not just another religion, but another world. Sometimes this other world is called the margins of society, but to the whistleblower it feels like outer space.” – C. Fred Alford, Whistleblowers: Broken Lives and Organizational Power (2001).

President Donald Trump’s thinly veiled attacks against the anonymous whistleblower who reported his shady dealings with the President of Ukraine, Volodymyr Zelensky, have once again highlighted what a dangerous activity whistleblowing can be. The US president is reported to have stated: “I want to know who’s the person who gave the whistleblower the information because that’s close to a spy. You know what we used to do in the old days when we were smart? Right? With spies and treason, right? We used to handle them a little differently than we do now.”

By equating whistleblowing with treason, Trump is doing exactly what many people in power do when confronted with a revelation that shows them in a bad light – they shoot the messenger by accusing him of being disloyal – a traitor – or of having damaged an organisation’s reputation. For this, the whistleblower is either fired, ridiculed or psychologically tortured. (In the case of Trump, he would prefer that the Ukraine scandal whistleblower be hanged.)

What most people don’t understand is that no one wakes up one day and decides to blow the whistle on their employer. I am sure that the Ukraine saga whistleblower, who is believed to be working for the US intelligence services, did not make the decision to report Trump’s “quid pro quo” request to the Ukrainian president because he sought notoriety. He probably believed that US national security was being compromised by the US president and that some law or code of ethics had been violated. So he reported it internally, which is how most whistleblowers report wrongdoing.

He probably also felt that he would not be able to live with himself if he had done nothing. Now, after being declared a whistleblower, he has to contend with the wrath of the most powerful president on the planet. Imagine the pressure of that.

The media and Democrats in the United States have hailed the Ukraine whistleblower as a hero. But I fear that this designation will not be enough to protect him from harm. I fear for this person, not so much for his life, but for the grim future that lies ahead of him, even within the intelligence community where he works. (I am assuming that the whistleblower is male, although there is a high likelihood that a woman made the official complaint against Trump.)

He may find that after this episode is over and President Trump is allowed to continue as president, he will be sacrificed – in what ways, I am not sure.

Alternatively, if Trump is impeached, a bright future might await him. His bosses within the intelligence services and Democrats in Congress might make a commitment to protect and reward him, as they did with Mark Felt, the “Deep Throat” whistleblower who exposed the Watergate scandal that led to President Richard Nixon’s downfall. He could be among the lucky few.

Most whistleblowers are not so fortunate; they suffer severe retaliation for reporting wrongdoing. Most lose their jobs. They do not receive any medals or awards for their whistleblowing, nor do they get their jobs back after they have been exonerated of any wrongdoing. On the contrary, the financial and emotional toll of whistleblowing affects their physical and mental health. Many lose their families or sink into depression. Others pay the ultimate price for speaking truth to power. For example, not long after the human rights activists Oscar King’ara and Paul Oulu released a report on extrajudicial killings by Kenyan state security authorities, they were gunned down in March 2009 by unknown assassins on a street in Nairobi not far from the State House.

Some whistleblowers do become famous – not because they want to be famous but because someone thought it was important to tell their stories. Some of them have featured in Hollywood films like The Insider and The Whistleblower; the most recent film is the just released Official Secrets, which tells the story of Katherine Gun, a translator who blew the whistle on America’s illegal spying activities at the United Nations prior to the Iraq war in 2003. (Dictionary definition of a whistleblower: a person who reports or discloses information of a threat or harm to the public interest in the context of their work-based relationship.)

Most whistleblowers end up finding out that institutional whistleblower protection policies will do little to protect them, even in institutions that claim to be protecting human rights and enforcing labour laws. For instance, no one protected me when I reported to my supervisors at the United Nations Human Settlements Programme (UN-Habitat) that some $350,000 of donor money was unaccounted for. Not suspecting that the people I reported this to might have been responsible for the theft or inappropriate use of this money, I found myself at the receiving end of various forms of psychological torture, which forced me to leave the organisation. I was publicly humiliated in office meetings; friends and colleagues stopped talking to me; I was threatened with non-renewal of contract and was denied a promotion. In retrospect, when I think of the things that I was forced to endure, I now believe that the amount stolen or “diverted” could have been as high as $1 million – the total amount of funds given by the donor country Bahrain to UN-Habitat the previous year.

The cost of whistleblowing

Many whistleblowers naively believe that their revelations will earn them kudos from their seniors, but usually the very opposite happens; the entire system conspires to make their life so miserable that they quit voluntarily, or comes up with trumped-up charges of impropriety that lead to their dismissal.

It is estimated that between half and two-thirds of all whistleblowers lose their jobs. In general, the more systematic the wrongdoing within an organisation, the greater the reprisal against those who expose it. Most find that their job prospects dwindle significantly after they report wrongdoing; career pathways are blocked, promotions are denied, rumours are spread about their state of mind, which deters others from hiring them.

Most whistleblowers are not so fortunate; they suffer severe retaliation for reporting wrongdoing. Most lose their jobs. They do not receive any medals or awards for their whistleblowing, nor do they get their jobs back after they have been exonerated of any wrongdoing.

Whistleblowers around the world have consistently reported feelings of isolation, betrayal and abandonment after they have denounced incidences of corruption, malpractice or abuse of office. One World Bank whistleblower said that the culture of conformity, silence and fear was so pervasive at the Bank that “as soon as you are seen blowing the whistle, your own colleagues won’t even sit next to you in the cafeteria”.

The case of the Kenyan whistleblower David Munyakei is illustrative of the fate that befalls whistleblowers. Munyakei is credited with bringing to public attention what is known as the Goldenberg Scandal that cost the Kenyan economy about one billion dollars in the early 1990s. Munyakei was arrested and charged with contravening the Official Secrets Act. He was denied bail and taken to remand prison.

While the case against Munyakei was later dismissed by the then Attorney General, the whistleblower found himself on the streets; the Central Bank had fired him on the grounds that they no longer had confidence in him.

Munyakei spent the next few years flitting from one casual job to another. While Transparency International and the Kenya National Commission on Human Rights recognised him for blowing the whistle on the biggest scam in the country’s post-independence history, he was not financially compensated by the government, nor did the awards bring him any financial security. He was clearly a broken man. He died penniless in 2006 at the age of 38.

Whistleblowing is extremely risky business in any place where governments or corporations have something to hide. It can also cause deep anguish to the whistleblower. In his book Whistleblowers: Broken Lives and Organizational Power, C. Fred Alford, a Professor of Government at the University of Maryland, College Park, provides a chilling and deeply pessimistic account of whistleblowers who have exposed corruption in high places. Most whistleblowers, he says, are unable to assimilate the experience of whistleblowing or to come to terms with what they have learned.

Whistleblowers see the truth, and that truth shakes their belief in the world they live in. “For many whistleblowers this knowledge is like a mortal illness. They live with it, and it with them, every day and night of their lives,” says Alford.

John Githongo, Kenya’s most famous whistleblower who is the subject of Michela Wrong’s book It’s Our Turn to Eat and who uncovered what came to be known as the Anglo Leasing Scandal in 2005, told me that for him the meaning of “normal” changed forever after he realised that the people he worked most closely with were involved in the theft of public funds, and when friends and colleagues disappeared from his life after he made the scandal public. “It is like post-traumatic disorder,” he explained. “The memories keep coming back and stay with you for the rest of your life.”

It is estimated that between half and two-thirds of all whistleblowers lose their jobs. In general, the more systematic the wrongdoing within an organisation, the greater the reprisal against those who expose it.

Ten years after I blew the whistle at UN-Habitat I still have nightmares about what was done to me, how easily I was sacrificed, and how the perpetrators and defenders of the wrongdoing suffered no consequences (though one of them was later removed from her cabinet position after she was implicated in a major corruption scandal in her country after she had left the UN).

My attempts to seek justice from the UN have so far come to naught. I have used every official internal channel available to me to seek justice, but I have been blocked every single time. Usually my complaint has ended up in the UN’s web-like bureaucracy, a labyrinth that ensures that there is no accountability. Meanwhile, my prospects of returning to a job that I loved – editor of UN-Habitat’s State of the World’s Cities report (which ceased to be published after my departure – because I was no longer at the helm, I would like to believe) – are getting dimmer by the day.

I have since spent a considerable amount of time learning and writing about whistleblowers, and have come to the conclusion that most whistleblowers report wrongdoing not because they hate their organisations, but because they love their work and are loyal to their organisations’ mission and mandate. I concur with the writers of a TIME magazine article on the three female whistleblowers – Worldcom’s internal auditor Cynthia Cooper, Enron’s vice president Sherron Watkins, and FBI agent Coleen Rowley – who the magazine named as “Persons of the Year” in 2002, when they wrote, “Sometimes it is the keepers of the flame who feel most compelled to set their imperfect temple to the torch.”

Alford says that whistleblowers are tortured and sacrificed “so that others might see what it costs to be an individual in this blighted world”. They are also political actors in a world that has been depoliticised by euphemisms such as “development” instead of social justice, “diversion of funds” instead of theft, “national security” instead of gross violation of privacy. Ask Edward Snowden.

Quite often the torture and retaliation will continue even after the whistleblower has left the organisation. Githongo faced libel cases after he left government and went into exile and, thirteen years after he first exposed the Anglo Leasing scandal, he is still fighting these cases – which have drained him both emotionally and financially – in Kenyan and UK courts. In May 2019, the High Court awarded Sh27 million ($270,000) to one of the people he had accused of being one of the masterminds of the Anglo Leasing scam – a ruling that many viewed as excessively punitive and a chilling message to those who might be tempted to expose corruption within the Kenyan government.

John Githongo, Kenya’s most famous whistleblower who is the subject of Michela Wrong’s book It’s Our Turn to Eat and who in 2005 uncovered what came to be known as the Anglo Leasing Scandal, told me that for him the meaning of “normal” changed forever after he realised that the people he worked most closely with were involved in the theft of public funds…

Whistleblowers threaten the very foundations upon which power rests. The very act of whistleblowing is, therefore, a deeply political act. This explains why whistleblower protection policies rarely work. Once a whistleblower is taken seriously, he becomes a threat to the entire power structure. He must, therefore, be sacrificed.

Collateral damage

Sometimes whistleblowing can lead to collateral damage; not only is the whistleblower harmed but the perpetrators of the crime go on to commit more crimes that harm other people, especially when they believe that they can get away with them. This further damages the organisation, and creates a toxic work environment where anything goes. These crimes can even lead to innocent people being killed.

I believe that President Trump is an irrational, narcissistic, and dangerous man. I think that he gave Turkey the green light to invade Syria because he wanted to “wag the dog” and divert attention from his impending impeachment. He doesn’t care how many innocent lives are lost as long as he comes out smelling like roses. His belated call to Turkey’s president for a ceasefire is nothing but a lame attempt to exonerate himself when the war gets really ugly and he is blamed for the mass killings. (I have yet to see the UN Security Council reprimand him or Turkey’s President Recep Tayyip Erdogan for waging this illegal and highly dangerous war.)

Whistleblowers threaten the very foundations upon which power rests. The very act of whistleblowing is, therefore, a deeply political act. This explains why whistleblower protection policies rarely work. Once a whistleblower is taken seriously, he becomes a threat to the entire power structure. He must, therefore, be sacrificed.

As a result of this totally senseless war in Syria, hundreds, if not thousands, of people will be killed or displaced, and the world will become a much more dangerous place, just as it did when George Bush and Tony Blair ordered an invasion of Iraq without UN Security Council approval in 2003. Not only has Trump betrayed America’s Kurdish allies in the fight against the Islamic State (IS), he has made the region and the world at large much more unstable and unsafe. Just when the world believed that IS had been vanquished, Trump threw the terrorist organisation a lifeline.

As the New York Times commented:

“President Trump’s acquiescence to Turkey’s move to send troops deep inside Syrian territory has in only one week’s time turned into a bloody carnage, forced the abandonment of a successful five-year long American project to keep the peace on a volatile border, and given an unanticipated victory to four American adversaries: Russia, Iran, the Syrian government and the Islamic State.”

Is there a link between the Ukraine whistleblower and Trump’s decision to support this war despite having claimed that as president he will end America’s military incursions in foreign lands? I believe so.

Will the whistleblower who exposed the Ukraine scandal be sacrificed? I hope not, but I do wish him all the strength he can muster to survive what will most likely be a very trying period ahead.

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Elite Feuds: Are the SGR Protesters in Mombasa Pawns in a Larger Battle for Control of Port Services?

5 min read. The evidence suggests that the protestors in Mombasa are actually crying for the scraps of what was already a broken system that benefitted the elite few. If the protests against the directive to transport all cargo on the SGR are successful (an unlikely outcome), this will result in the protection of businesses that have long enjoyed near-monopoly advantages at the expense of the wider public interest in Mombasa.

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Elite Feuds: Are the Sgr Protesters in Mombasa Pawns in a Larger Battle for Control of Port Services?
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Protests in Mombasa against a directive that all cargo passing through the Port of Mombasa should be transported via the Standard Gauge Railway (SGR), and cleared at the Inland Container Depot (ICD) in Nairobi, have continued despite a meeting between the political leadership of Mombasa County and the national government where – the public was told – the directive had been suspended. At the heart of the debacle, of course, lies the question of the high cost that was involved in building the SGR, and the fact that since it was launched in January 2018, the SGR freight service has not been able to compete favourably with trucks plying the Mombasa-Nairobi highway.

The protestors have argued that they are protecting jobs. A study commissioned by the County Government of Mombasa has shown that 2, 987 employees working in Mombasa for Container Freight Stations (CFSs), fuel stations, and as truck drivers have already been laid off since the SGR began its freight operations, and that over 8,000 more jobs are under threat following the directive. Granted, the fear of economic exclusion and the loss of jobs is bound to be a politically explosive issue anywhere in Kenya. But could the protestors in Mombasa be gullible participants in a larger battle between entrenched business interests for private control of cargo storage facilities? The evidence suggests that the protestors in Mombasa are actually crying for the scraps of what was already a broken system that benefitted the elite few.

It is notable that the leading protagonists in the SGR drama, and the politics surrounding the establishment of inland storage facilities at Nairobi and Naivasha – especially before the March 9 handshake – were President Uhuru Kenyatta and the County Governor of Mombasa, Hassan Joho, a powerful businessman with interests in freight stations at the Coast.

Both Kenyatta and Joho are members of families that own huge tracts of land in the country. The Kenyatta family is known to own massive acreage up-country, especially in the Central highlands and in Naivasha, and modestly less along the Coast, where Arab, Indian and some Swahili families (the Johos consider themselves Swahili) have dominated land ownership since long before Kenya’s independence.

Could the protestors in Mombasa be gullible participants in a larger battle between entrenched business interests for private control of cargo storage facilities?

History is replete with examples of struggles over the location, and therefore the control of commerce and collection of rent for port storage all over the world. With the expansion of its capacity in recent years the Port of Mombasa has become increasingly important to powerful economic players with control over land, and with influence over the country’s politics. In fact, the nexus between political influence, land ownership and port business became clearer when services at the port almost ground to a halt in 2008 following the post-election violence that broke out that year.

Business interests

Due to lack of container storage space, ships were forced to queue out at sea for indefinite periods of time while importers paid high ship delay surcharges. In fact, matters got so bad – cargo entering Mombasa could take up to 10 days to clear – that the then Managing Director, Abdallah Mwaruwa, was sacked two years into his appointment. It was in this context that a group of private investors proposed to the Kenya Ports Authority (KPA) that they provide storage units in order to ease the burden on the container terminal. Soon thereafter, Container Freight Stations (CFSs) – managed privately but licensed as sites for customs clearance by the Kenya Revenue Authority (KRA) – rapidly spread in and around Mombasa.

There are now more than 20 CFSs scattered throughout the town around which operates a ring of local powerbrokers and owners of extensive and commercially viable pieces of land in and around Mombasa. The CFSs have persisted and multiplied with the expansion of the port itself but ironically, they are threatened by the expansion in port infrastructure, in particular the SGR and its inland dry ports.

The nexus between political influence, land ownership and port business became clearer when services at the port almost ground to a halt in 2008 following the post-election violence that broke out that year.

From their inception, CFSs have been a source of aggravation for importers, shipping lines and the residents of Mombasa. The decentralisation of customs clearance to these facilities has caused problems of oversight, with accusations of corruption, including malpractice and smuggling. Many CFSs are also known for their incompetence, mishandling of cargo, overloading and fraudulent documentation. Containers have been damaged and cargo has disappeared. Clearing is deliberately delayed in order to extract higher fees from importers, which increases consumer prices.

Since 2012, powerful players, including major shipping lines and the governments of Uganda and Rwanda, have successfully lobbied to circumvent the facilities altogether, removing themselves from the CFS conversation long before the SGR was launched. In this way, some goods bound for Uganda are cheaper than those destined for Kenya. Less powerful importers have continued to operate at the mercy of CFSs whose owners have accrued greater profits, even as the cost of clearing cargo at the port has increased.

For Mombasa residents, CFSs have increased congestion, as cargo is moved around twice – from the port to the CFS, and then again out of the CFS to final destinations – worsening traffic, causing accidents and damaging roads.

Joining the handshake system

The threat that the SGR and its inland container depots posed to the CFSs in Mombasa was clear even before the SGR began its operations. The tussle between Uhuru Kenyatta and Hassan Joho between 2013 and 2017, while touching on various issues around the fate of devolution, was, in reality, deeply personal. To transfer cargo handling to Nairobi, and then to Naivasha, is to not only transfer the problems that CFSs have caused in Mombasa to other towns, but it is also to provide ample business opportunities to other large landowners there – members of families such as the Kenyattas – moving it away from the hands of families such as the Johos. This was a major contribution to Joho’s opposition to Jubilee before the 2018 handshake.

Amid claims that the SGR is threatening the Coast economy, companies associated with Hassan Joho and Mohammed Jaffer – both key financiers of Raila Odinga’s campaign for the presidency since at least 2007– are reported to have acquired lucrative deals with the SGR and the ICD in Nairobi under unclear circumstances; if you can’t beat the system, do business with it!

The tussle between Uhuru Kenyatta and Hassan Joho, while touching on various issues around the fate of devolution, was, in reality, deeply personal.

In sum, if the protests against the directive to transport all cargo on the SGR are successful (an unlikely outcome), this will result in the protection of businesses that have long enjoyed near-monopoly advantages at the expense of the wider public interest in Mombasa.

On the other hand, the state is likely to respond – as it did – with more violence, as such protests threaten entrenched business interests with influence on public policy that are located away from the Coast.

My argument is that the “protection” of CFS businesses in Mombasa from the noose of the SGR will not go a long way in fixing the economic problems afflicting the county in particular, and the Coast region in general.

Someone should impress it upon the protestors that scraps from a broken system benefitting the elite few will not end the region’s long-felt sense of exclusion.

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