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Scandal over Museveni’s Shs 6bn ‘handshake’

Stars of anti-corruption fight caught in secret deals with President

As debate rages over the controversial Shs. 6 billion reward (presidential handshake), former Attorney General (AG) Fred Ruhindi’s defence of it, might just be the winner.Ruhindi is one of the 42 select officials who received the reward from President Yoweri Museveni for winning two tax disputes; against Heritage Oil and Gas and Tullow Uganda.

“People went into serious battle,” Ruhindi, who says the reward was deserved, told The Independent, “People think this was a mere mediation but this was serious arbitration.”

He added: “Arbitration is serious litigation in courts of law and when you come out with a decision in an arbitration undertaking you get a binding judgment which can be enforced locally and internationally.”

To save the country nearly $700 million (Approx. Shs 2.4 trillion) is not easy, Ruhindi added.

In the arbitration cases, the government of Uganda managed to retain about $434 million in the case with Heritage Oil & Gas and $250 million from a settlement of a capital gains tax dispute that arose again following Tullow’s farm down of 66.6% of its stake to France’s Total and China’s CNOOC.

“These multi-nationals could have easily compromised the public officials.I think it is motivational [Presidential Handshake] in a way; it kept people on track and it gave them impetus to work and the President implemented.”

He said that the only challenge was in, may be, how the figure of 42 people came to be. Ruhindi joins Doris Akol, the Commissioner General, Uganda Revenue Authority (URA) in defending the reward, which has incensed many Ugandans. Akol who was the chief architect of the project has been forced to write an internal email to explain herself publicly asking her staff not to be demoralised.

On Jan.5, URA, for instance, issued a statement on its Facebook page saying Uganda’s victory over Heritage Oil & Gas Ltd saw a combined total of $700million brought into Uganda’s coffers.

The tax body explained that the decision to reward the winning team, which consisted of officials from the ministries of Justice, Finance, Energy and URA itself, was cleared by the Attorney General and the Auditor General duly issued an audit warrant to authorise the spending.

URA also said that it is standard international best practice for employees to receive bonus payments/honoraria for exemplary performance in both the public and the private sector. It added that equally under the Ugandan Constitution, the President has a prerogative to reward exemplary performance and this has been exhibited in the fields of health, academia and sports to mention a few. For the record, the body added, the payments went through the necessary approvals as required by the Public Finance Management Act as amended.

URA says the team brought in a combined total of $700 million into the government coffers after a series of court battles in Uganda’s tax appeals tribunal, High Court, Court of Appeal and the High Court of London, Court of Appeal of UK, and two international tribunals.

Apart from this litany of justifications, proponents of the reward, add that the Shs 6 billion paid to the officials represents only 1% of what was raked in from the case.

However, everybody else seems opposed to the reward and legislators want these beneficiaries to return the money.

The issue has since become emotive and threatens to reignite tensions between parliament, the executive and the judiciary. For instance, Parliament Speaker, Rebecca Kadaga, on Jan.10 said Parliament would not deal with the budget or approve recapitalization of the Uganda Development Bank (UDB) without talking about this matter.

Kadaga was incensed by an interim order issued by Stephen Kavuma, the Deputy Chief Justice, barring Parliament from investigating the controversial handshake.

The order followed a petition by Eric Sabiiti, a legal officer working with the Electoral Commission, seeking an order to block any investigation into the cash payout to the government officials. Sabiiti said Parliament or any person or authority purporting to investigate into the decision by the President as the head of State, interferes with powers of the Executive arm of government.

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