Covid-19 millionaires season two – the untold story

When she was done with her testimony, legislators from joint health committee investigating the scandal were united in praise. One after another, they showered her with compliments for shedding light on the saga.

The most important message she passed was that neither she nor any other bureaucrat at the Health ministry interfered nor gave any directives to suspended executives at the Kenya Medical Supplies Authority (Kemsa) on what to buy and at what price.

She had succeeded in throwing Kemsa officials under the bus for the multi-billion-shilling procurement scandal that has erupted at the agency.

Produce documents

When it was time for Health Cabinet Secretary Mutahi Kagwe to give his side of the story, it was clear Kemsa was on its own.

Mr Kagwe, a public relations expert, had one rallying call: Kemsa should carry its own cross or produce documents and letters that proved allegations by its boss, Dr Jonah Manjari, that his ministry officials gave the agency procurement directives.

“It is not my job to advise anybody against anything that they are not supposed to do. In the event that I told a CEO to do something that is against the law, or something that they were uncomfortable with, the normal thing to do in government is to say, give me what you are telling me in writing,” Mr Kagwe said.

He added that in fact, he had never set foot at Kemsa. With this, the fate of Dr Manjari was sealed.  

But could it be true that officials at the ministry were never involved in the procurement mess?

What made Dr Manjari swallow his words almost as soon as he had uttered them? Who did what in the scandal that created the coronavirus millionaires?

The Nation investigations desk is in possession of documents picked up by Ethics and Anti-Corruption Commission (EACC) detectives when they raided Kemsa offices on Wednesday.

The files tell a completely different story from what Ms Mochache told Parliament.

Self preservation scheme

In the second part of our serialisation of the Sh7.6 billion Covid millionaires scandal, we reveal just how high the procurement fraud went, and the officials who pulled the strings behind the scenes, but who are now engaged in a self-preservation scheme at the expense of the truth.

On April 15, Ms Mochache wrote to the Kemsa boss asking him to discard earlier requests made in relation to Covid-19 procurement.

“This is to approve the procurement of goods worth Sh758 million. Disregard all other requests made in relation to Covid-19 as they have been captured under this approval,” she wrote to the agency.

Inflated prices

The letter received by April 24 by Dr Manjari's office, outlined what to buy, from which supplier, the quantity, unit price and total cost of each item.

This is contrary to what the PS told Parliament. She had claimed that at no given time did she advise the agency on who to purchase the items from, and that and had never instructed Kemsa to award tenders to the unscrupulous companies.

The document that the PS had earlier attached to Kemsa said the contrary.

The documents could also explain why a cornered Dr Manjari had to make a sharp about turn, disowning his own testimony made a week earlier.

When he first appeared before the committee, the Kemsa boss said he had received directives from both Ms Mochache and Mr Kagwe on procurement.

“We received requests from the health PS…Susan Mochache. There were requests from the Cabinet Secretary, Hon Mutahi Kagwe…most of them short messages and phone calls,” Dr Manjari said, adding that there were other requests from a brigadier at the National Emergency Health Response team.

The Kemsa boss also claimed that at some point, the emergency team threatened to take over Kemsa warehouses if they did not provide them with certain supplies.

“I remember at one stage they came direct to Kemsa and they wanted specific items which we didn’t have, and we were told we needed to respond to that aspect and if we were not able to respond…they would come and take it (that warehouse) over.”

But the PS distanced herself from the claims. She wrote a letter to the acting CEO, seeking evidence that she had directed Kemsa to procure the items from specific firms.

Giving tenders

After the protest letter, Dr Manjari denied before the committee that he was pushed by anyone while giving the tenders.  

He indicated that the said list attachment was generated by Kemsa to the Health ministry when it requested for funds to pay the suppliers.

In requesting for money, why would Kemsa generate a list of companies, the items to be supplied and their quantity rather than just highlight the firms and what it owes them?.

And if the list came from Kemsa, why would the PS attach it and instruct that the agency disregard all other requests and use the said list?

Then there is also the letter that was addressed to Dr Manjari by the PS directing him to buy 750 Abboit real-time SARS-COV2 test kits for Sh365,940, 000 directly from a supplier.

The Kemsa board chairman Kembi Gitura, also said Ms Mochache issued the instruction via a letter in April with list of companies, the price and the quantity.

“We received a letter from the Ministry of Health containing a list of where we should procure from, the prices and the quantity. I can vouch on the quality of PPEs we procured,” he said when he appeared before the Health committee of the National Assembly to shed light on claims of Covid-19 related procurement fraud at Kemsa.

Did the chairman lie that the list came from the ministry when it was from the same agency he heads?

Going by the attached list, several companies includingTikasan Holdings Co Ltd, KEMA Ltd, Medilab and Applied Products, supplied Personal Protective Equipment (PPEs) valued at Sh111.2 million to the agency.

Kemsa is mandated by law to procure, warehouse and distribute health products and technologies to public and other health facilities in Kenya.

Before Covid-19 reached Nairobi, Kemsa was mobilised to move with speed and secure as much supplies as possible to help the country get through the early days, which were characterised by shortages. 

“We started this process on February 9, where we were given a letter by the acting director general telling us to prepare for Covid,” Dr Manjari says.

Another preparatory meeting was held on March 5, at the ministry of health, where the ministry communicated the modelling that would guide their decision-making, following the advice from the World Health Organization (WHO). Dr Manjari says that at that time, Kemsa did not even know that a simple thing like a mask would be used in the management of the transmission of the virus.

Retrospective procurement

When procurement gates were opened, he would rush into a frenzy that saw him over-commit his budget, in breach of procurement laws, putting himself at the centre of the storm. He alleges that he handed out the tenders on the strength of assurances that money would be made available from the Ministry of Health. 

“We went into a full gear, and we were given assurance during the fund mobilisation meetings that we kept on having at the Ministry of Health, that the funds would come from the Ministry of Health…the funds would come from the Treasury through what we call the donor supported budget,” Dr Manjari said.

They were also counting on the Covid fund, which was being spearheaded by corporates in the private sector.

That is when Kemsa invented the retrospective procurement process, which saw it hand pick suppliers and dish out tenders to friends, newly registered companies, and some entities that did not have capacity to supply even one mask at the time.

“We invented what we call the retrospective procurement…and we did not have regulations,” Dr Manjari said.

Kemsa chairman Kembi Gitura said that between March and August, the agency had received a total of Sh2.1 billion from the Ministry of Health. In this amount, Sh1.5 billion was earmarked for procurement of reagents and test kits. The amount was received in full.

Another Sh300 million was for procurement of locally produced reusable facemasks.

Mr Gitura said this procurement is being done in collaboration with the Kenya National Chamber of Commerce, which is chaired by businessman Richard Ngatia. Another Sh77.7 million was received for the procurement of PCR Tests and extraction kits and virus transport medial for Covid-19. This was a partial payment against a total allocated amount of Sh88.9 million.

Then there is Sh304 million to settle payments for drugs under the World Bank funded Transforming Health Systems for Universal Health Care programme. This was a partial payment from the Sh758.6 million allocation.

Phone requests

Mr Gitura also said the Health Ministry made some of the requests via phone before following it up with written directives.

“I recall, that the ministry for instance asked us on the phone followed by instructions to procure 120 beds for Mbagathi Hospital because it was going to be declared an isolation centre,” he said.

In some contracts like that funded by the World Bank, Kemsa would write back to Ms Mochache after an award.

“Reference is made to your later Ref. No. MOH/PROC/6/3/1 dated 4th May 2020 authorising Kemsa to procure and distribute of PCR tests & extraction kits and virus transport medial for mass testing for Covid-19,” Dr Manjari wrote on June 30, 2020.

He attached the supplier invoice, LPO and contract, and other supporting documents for the Sh77.7 million consignment, which was to be supplied by Steplabs Technical Services Limited.

In the letter, Dr Manjari requests Ms Mochache to transfer Sh77.7 million to facilitate payment of the supplier as well its management fees to ensure smooth execution of the project.

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