By bob kasango
Judge Katutsi’s ruling on Jamwa sends mixed signals
In a world that prefers applause to justice, there is loud applause whenever justice is sacrificed on the altar of public appeasement. The rite takes place on the streets. Every time a “criminal” falls victim of the law, society feels some relief from the disease that makes it tremble. The incarceration of each “lowlife” has a pharmaceutical effect on those living the high life.
On Feb. 25, Judge John Bosco Katutsi found David Chandi Jamwa, the former Managing Director of the National Social Security Fund (NSSF), guilty of causing financial loss of Shs. 3.163 billion, convicted him, sentenced him to 12 years in prison and imposed other caveats on his future employment and career development.
The judgment has met with loud public applause and praise and exultation of the Judge and his credentials as a “tough anti-corruption judge”.
Judge Katutsi is a fine judicial officer before whom I have had occasion to represent a litigant. I was impressed by his management of the case, good grasp of the law and its practical application.
However, I am not convinced that Jamwa’s conviction was based on the facts before the judge. Of all witnesses that testified in the case, and the judge did well to reproduce at length the testimonies of these witnesses, not one gave incriminating evidence against Jamwa.
As a member of the Bar, to criticize a judge is always a difficult decision. It is not my good fortune therefore, now or in the future, to engage in active criticism of a judge, especially one who is a darling of the public. The Chief Justice Benjamin Odoki recently had to answer a question from the press as to whether the judiciary would “keep up with the standards set by Katutsi”!
When we analyze and critique individual judgments handed down by judges of any court, we do not do it because we have anything personal against the judge, but rather because we hold a divergent view.
Our critique serves as an appropriate (if limited) mechanism to hold the judges of the court accountable. This does not mean that judges must or do change their views every time they are criticized by the public or by lawyers. But such critiques generate a dialogue (in which judges always have the final say), and hopefully, improves the jurisprudence of our courts.
The gravamen of Jamwa’s conviction was that he caused financial loss to the NSSF when he sold off bonds before their maturity date. By selling off the bonds before their maturity date, the fund earned less by Shs. 3.163 billion. I use the words “earned less” advisedly. According to the judge, these bonds having been sold earlier than their maturity date and the NSSF having earned less than it would have had the bonds been sold on the maturity date, means Jamwa caused financial loss to the NSSF.
What the judge did not say in his judgment, which was clearly brought out by the testimonies of the witnesses before him, is that the NSSF made a profit of Shs. 6.6 billion from the bond transaction. It could have made Shs 9.72 billion in total if the bonds had been sold at maturity. And so the impression created in the public is that NSSF made only losses as a result of the bond transaction.
More curiously, the judge does not highlight the fact that the proceeds from the bond transaction were re-invested as a strategic decision of the NSSF to realign its investment portfolios. Jamwa, in his defense, made this point. He said the proceeds were re-invested in fixed deposit accounts in pounds, dollars, and Euros. Bonds issued by the government are very low-risk investments. However, they also offer lower rates of return than other investments.
Jamwa explained that the decision to move NSSF’s investments portfolio to higher risk but higher yielding ventures was collectively reached. He said on July 10, 2007, the then Minister of Finance Ezra Suruma approved this decision in a letter that Jamwa tendered in Court. In fact, Jamwa got approval to strategically shift 50 percent of the NSSF investment portfolio to the even riskier investment in equities. Only 30 percent would remain in bonds and 20 percent in fixed assets.
By not addressing the fact that NSSF re-invested the funds from the bonds transactions in other interest-bearing accounts, stocks and hedge funds, Judge Katutsi showed how lawyers often tend to be legalistic and not business-minded. We ought to open our minds to the business side of a transaction and not just the legal intricacies.
A similar misreading of an investment decision nearly occurred when Martin Bandebire, who was NSSF Corporation Secretary under Jamwa and became acting MD after him, told a committee of parliament that in April 2008, NSSF bought 238,200,100 shares in the Kenyan telecom giant Safaricom for Shs 44 billion. By the time of Bandebire’s testimony to parliament, the shares had lost 30 percent of their value. The investment decision of itself was a prudent and the loss in value was occasioned by the political crisis in Kenya and the world economic recession – two factors that could never have been foreseen at the time of the investment Had the Chairman of the NSSF Board, Vincent Ssekkono, not intervened, the committee members would have punished Jamwa for it. Ssekkono told the committee that losing that money was not criminal. Business is a gamble, he said, you make money and sometimes lose money.
A consideration of the decision to realign NSSF’s investments was, therefore, imperative. The judge ought to have considered whether long term, the decision to take the funds out of the Bond market into other investment options hurt the NSSF financially or was a financially better investment decision? To the extent that that is not addressed in the judgment, the judge in my view did not explore the entire transaction to its logical business conclusion.
The judge asked “whether the NSSF was in dire financial need” when Jamwa executed sale of the bonds. The answer was in the negative. He therefore concluded that there was no need to sell off the bonds before maturity. But the judge did not consider the fact, for example, that part of the proceeds of the bond transaction, could have been invested in time-barred ventures, like the purchase of shares in Safaricom. Such time-specific investments do not wait for NSSF’s bonds to mature. From that perspective, NSSF had to take a proactive decision as to whether to wait for the bonds to mature and miss out on, hopefully, more profitable ventures or sell and re-invest. These decisions are primarily business decisions and not legal games and so business sense was the primer in taking them. As Judge Katutsi noted, very few Ugandans are as competent as Jamwa to make such decisions. Those of us who have benefited from his expertise at personal and business level can testify to that.
Judge Katutsi ought to have called for evidence on the performance of the other investments in which NSSF had re-invested the funds from the bond transaction. It is only then that the Judge would have come to the conclusion as to whether or not in real terms, a loss was suffered by the NSSF or not.
Jamwa did not act arbitrarily and the Judge agreed with testimony to that effect and acquitted Jamwa of the alleged offence of Abuse of Office.
From the evidence before the judge, all the actions taken by Jamwa were the result of collective decisions. There was a Board position that the NSSF should re-align its investment portfolios to “higher yield investments”, a position arrived at after a study. The Investment Analyst, Chief Investment Officer, Management Investment Committee (MIC), the Board and the Minister of Finance, all reviewed the study and reached the consensus that the NSSF should withdraw from the bond market. Jamwa implemented a management decision taken at the very top level.
If there was financial loss suffered by NSSF, therefore, was that loss occasioned by Jamwa?
It is settled that criminal responsibility is individual responsibility.
But who is an individual? And who exactly is responsible? The traditional answer to the first question is: a natural person; the traditional answer to the second question: a natural person who voluntarily did an act and knowingly contributed to the criminal result.
However, a problem arises whether these traditional answers reflect the systemic structures of modern society. Since the entrenchment of division of labour, there is no longer a ‘central’ figure to charge with liability within the company. The company worker does not meet the legal requirements to qualify as the author of a crime (producer, exporter, etc.) and company directors or executives themselves are not the material authors of the facts contested in law. In the present case, they relied on a study by financial experts.
Indeed, there are at least three areas of crime where such problems arise: economic and environmental crime, which is typically committed within the framework of companies; organized crime which is committed within the framework of criminal organizations; and “state crime” which is committed within the framework of governments, armies, police bodies, bureaucracies etc.
In these areas, many legal systems have developed special legal regimes to cope with the problem of how to determine individual criminal responsibility in systemic contexts. These legal regimes are partly based on statute law. It is absolutely impossible to present even a small fraction of these many and different legal regimes in this article.
However, knowledge and intention are not sufficient to make a person individually responsible, and the Latin saying “cogitationis nemo poena patitur” (no one can serve a penalty for his thoughts) Secondo tale principio non può mai esservi reato , né di conseguenza pena , se la volontà criminosa non si materializza in un comportamento esterno.is still valid. One needs some contribution in form of an act or an omission in breach of a legal duty. Therefore, another key factor of responsibility is the power to act in an organization or to control it. Furthermore, the principle of proportionality limits responsibility.
Finally, even from a jurisprudential perspective, it is unclear how the judge arrived at a guilty verdict. The revelation by the Judge himself that he had actually acquitted Jamwa on both counts but then changed his mind is disturbing.
By design or default, the Judge has introduced a new standard to our criminal law, that of a “nosy but intelligent on-looker”!
By extension and example, what the decision in Jamwa’s case means, is for instance, if a customer walks into a bank and applies for a loan; a loan officer studies the application and okays it; a credit check is done on the customer and he is cleared; the Credit Committee of the bank considers the application as presented by the loan officer and passes it; the MD of the bank then okays the credit line and the customer’s branch manager accordingly disburses the loan but the customer defaults on the loan repayment and the bank losses money, the Branch Manager who executed the collective decision to extend the credit is guilty of causing financial loss. In this sense, Jamwa’s case is a dangerous precedent.
Soon after the judgment, I heard that the judge changed his mind on the verdict. I rubbished this as Kampala’s “oral tradition” (unfounded rumours). I was wrong. Judge Katutsi in Sunday Monitor of March 13, 2011, admitted it.
He said: “In fact, if you read my judgment between the lines, you will see that I was going to acquit up to the end.”
This was an extraordinary decision. Admitting it gives approval to a lack of fairness in exercising discretionary power. It has found its way into our law books. We need to seriously consider its implications for all.
Does a judge have a duty to provide reasons when he or she makes a sudden change of mind on an important legal pronouncement? Does it matter when the pronouncement is on a matter of legal principle that seems settled law? If a judge indicates that he or she disagrees with certain evidence produced before him or her, should that judge not provide reasons for this disagreement in the name of transparency and in order to foster a culture of justification?
After all, since 1995, the new constitutional order provides a bridge from a culture of authority to a culture of justification. Do judges not have a special responsibility to justify their decisions so that legal academics, other members of the legal community and the public at large can analyze those reasons and — if appropriate — can critique the judgment of a judge and the reasons advanced for that judgment by the judge?
As a cardinal principle of Uganda’s criminal law, an accused person must be convicted on the basis of the strength of the prosecution case and not on the basis of the weakness of his/her defense. And also that the prosecution must prove the case beyond reasonable doubt and any doubt in the prosecution case must be resolved in favour of the accused person. That is our settled law.
I am cognisant that beyond reasonable doubt does not mean beyond a shadow of doubt but when a judge reaches a “not guilty” decision, it implies the prosecution case was not convincing. So the wavering of mind by the Judge is evidence that there was sufficiently strong doubt for him to not have convicted. By his own admission, Judge Katutsi says: “It is the last paragraph where I said let things fall if they fall at all, but let me convict him because a wrong plus a wrong cannot make a right.”
The problem is that Judge Katutsi did not provide evidential reasons for his change of mind. He seems to have convicted Jamwa just because he could. It is disheartening to analyze or critique his stance or to say what motivated it.
We simply do not know why the Judge changed his mind in view of the evidence before him and why he declined to agree with it. By not providing reasons for his disagreement, Judge Katutsi has left himself open to criticism — not for expressing his views in a reasoned and careful judgment, but for not providing any reasons backed by evidence at all.
This silence has not served the principles of openness, transparency and accountability, which judges should be particularly attuned to. Judge Katutsi has, therefore unwisely failed to embody the culture of justification demanded by our Constitution.
If Judge Katutsi holds a fundamentally different view from that of the witnesses, it would have been great if he had expressed these views in a reasoned manner. We might have unpacked and criticized these reasons and might have had harsh words about his views, but at least we would then have engaged in a reasoned dialogue about the values and principles of one of our most revered judges.
In the absence of reasons, no such dialogue is possible. The public is not served by such silence. Neither is the Court nor the judge. It is surely always better to debate an issue on the basis of a reasoned set of arguments, than to leave things unclear and vague. Such silence creates unnecessary suspicion and invites uninformed speculation about the motives and views of a judge.
Judge Katutsi›s insinuation that hiring a smart lawyer points to possible guilt was is shocking and prompted the president of the Uganda Law Society to ably react to it.
Equally shocking is the Judge’s statement that Jamwa made mistakes because he was MD at age 37. Judge Katutsi feels sorry for someone who becomes a Judge at 40! With utmost respect, competence is not about age. There are many young excellent minds and old not-so-helpful minds. The world›s leading entrepreneurs today are mostly below 40 and managing companies hundreds of times larger than NSSF