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Will Suruma survive the NSSF Scandal?

By Independent Team

  • He appointed friends to board

  • Temangalo money Used to pay loan

The parliamentary investigation into the National Social Security Fund (NSSF) purchase of land belonging to Security Minister Amama Mbabazi continues to raise dust. Now, sources within the Parliamentary Committee on Commissions and Statutory Bodies say the first casualty in this mess could be the minister of Finance, Planning and Economic Development, Dr. Ezra Suruma.

In a strange twist of fate, the man who sparked the controversy, Mbabazi, may survive recommendation for censure.

According to a highly placed source on the committee, Mbabazi is likely to be exonerated. ‘Look,’ the source told The Independent, ‘the evidence of the Solicitor General exonerated Mbabazi, and so did the testimony of the board of directors.

The case we have is against Suruma.’

According to committee members The Independent spoke to, Suruma has two cases to answer: conflict of interest and influence peddling. Sources said that Suruma is director and promoter with NSSF board chairman, Edward Gaamuwa and board member Joyce Acigwa of a company called Agency for International Development Ltd, housed in former International Credit Bank (ICB) building along Nkrumah Road, Kampala. Suruma and Gaamuwa also go to the same church.

According to the source, the company was floated by Peter Nyombi, currently MP for Nakasongola County.

MPs argue that Suruma appointed his friends to the board of NSSF and then used them to approve purchase of land belonging to his personal friends ‘“ Mbabazi and businessman Amos Nzeyi. They argue that this is made worse by the fact that Suruma is a shareholder in the National Bank of Commerce (NBC) together with Mbabazi and Nzeyi.

‘Look,’ an MP on the committee told The Independent, ‘Mbabazi and Nzeeyi wanted to buy shares from the majority shareholder. Their friend and fellow shareholder approved NSSF’s plan to purchase their land so that they can buy the shares. In approving the deal, Suruma did not seek the advice of technical staff in the Ministry of Finance. This clearly was his personal decision and therefore shows not only a conflict of interest but also political influence peddling. I can assure you the committee will recommend he be censured.’

When The Independent talked to top officials in the Ministry of Finance, they confirmed these allegations. They say that Suruma has been running NSSF from his pocket (not even office) as if it is a family estate.

‘Normally,’ a top Ministry of Finance official said, ‘when the ministry is supervising a public body, it does two things: either it selects one of its members of staff to sit on the board of that organisation or it creates a desk officer inside the ministry to coordinate the supervision. In the case of NSSF, Finance is not represented on the board and there is no desk officer for it in the ministry. So the minister has been running a one-man show. We tried to advice him but he refused to listen. If he pays the price for this conduct, it is not because he was not advised.’

The committee plans to summon the technical people in the ministry especially its permanent secretary and also secretary to the treasury, Chris Kasami, to testify. Also, parliamentarians want to summon Kasami’s deputy, Keith Muhakanizi and the director of economic affairs, Lawrence Kiiza. ‘If they testify that Suruma blocked them from performing any role in the process,’ a source said, ‘the minister’s fate will have been sealed.

Another source said that Suruma can only avoid accusations of political influence peddling and conflict of interest if he shows that in approving the NSSF-Mbabazi deal, he was only following technical advice from his team. Here, he can argue that his approval was only a formality; that the real technical assessment was done by experts and senior people in the Ministry of Finance.

‘But we already know that this was not the case,’ the source said, ‘We also know that the guys at Finance are very honest so they will not lie for him. And if they do, they will be committing perjury which is a serious crime.’

As the saga expands and spews more dirt, Suruma should be worried. Unlike Mbabazi who can count on backing from Museveni or who can mobilize some sections of the NRM MPs to support him, Suruma has neither; he is an ex-officio MP. ‘The sad thing is that Mbabazi may have used Suruma to get the deal and the poor fellow will fall without any backing from anyone,’ a source said.

Some Suruma supporters feel that the minister can only save his skin by firing the board and possibly management in order to satisfy an angry public. There have been unconfirmed reports that Suruma has in fact previously asked both the NSSF MD, Mr David Chandi Jamwa and his deputy, Prof. Mondo Kagonyera to resign over the land scandal but they had rebuffed him. This proves that firing them would be a difficult position because they took the deal to him and he approved it. ‘If he thought it was okay,’ a source said, ‘how can he be the same person to turn around and fire these people? If there is any wrong doing, he already made himself responsible.’

NSSF money used to pay loan

However, there are new details emerging about the deal that may place Mbabazi back in a more dangerous corner. A highly placed source at Tropical Bank told The Independent that actually Mbabazi and Nzeyi got a Shs10 billion loan from the bank as early as February to pay for the shares in NBC.

‘I think they had a limited time within which to pay off the shares,’ the source said, ‘So they came to us and got a loan under very irregular circumstances. However, they rushed to arm-twist NSSF to buy their land as a retrospective way of raising money to clear the loan. That is why NSSF paid them in record time.’

In an interview, Mbabazi confirmed to The Independent that NSSF land deal money was channeled through Tropical.

‘I did not touch a penny,’ he said.

However, he denied borrowing money from Tropical Bank and then getting the NSSF money to repay it. He said he only borrowed Shs 2 billion from Tropical Bank as a ‘top ‘“up’ to pay for the National Bank of Commerce shares.

‘How could we get Shs 10 billion to pay off Shs 2 billion?’ he said.

New information about Mbabazi’s loan dealings with Tropical Bank changes the entire dynamics of the saga. Its credibility is even buttressed by the fact that when NSSF bought the Mbabazi-Nzeyi land, it paid them on the same day it signed an agreement with them. Another issue is that the fund paid them to an account different from the one in the loan agreement. Apparently, analysts say, the payment was into their loan account. It would be unusual for the two to have two joint current accounts in the same bank. Tropical Bank refused to speak to The Independent saying that they are bound by ethics to maintain client confidentiality.

A financial expert who preferred not to be named told The Independent that Mbabazi and Nzeyi were possibly desperate to avoid accumulating interest on the Shs 10 billion loan from Tropical Bank. The commercial interest rate per annum stands at 24% which would mean that in only one year the duo would have to pay interest amounting to Shs 2.4 billion! The Mbabazis possibly negotiated a lower interest but it could not have been lower than 18%, the expert said.

Museveni close to ditching Mbabazi?

Even though Mbabazi may be exonerated by the committee, information from State House now indicates that President Yoweri Museveni is growing ever more uncomfortable with his ‘favourite’ minister. The Independent has reliably learnt that talk inside State House is that Mbabazi is increasingly becoming a political liability on the president.

‘His stay in cabinet and at the helm of NRM [National Resistance Movement where he is Secretary General] is now being seen as increasing division within the ruling party,’ an insider who spoke on condition of anonymity said. ‘Apparently, the president is afraid that if he keeps Mbabazi, he may not contain the current open rebellion by senior members.’

Over the last month, senior leaders of the NRM have come out openly to challenge Mbabazi’s stay in government and party leadership. During the party’s Central Executive Committee (CEC) meeting on September 9, prominent party leaders like national vice chairman, Haji Moses Kigongo; Deputy Speaker and NRM second vice chairperson, Rebecca Kadaga; businessman, Hassan Basajabalaba; Maj. Gen. Jim Muhwezi, openly criticised Mbabazi in front of the president. Such open confrontation in an NRM meeting chaired by the president has never been seen before.

Meanwhile, other NRM heavy weights including the Vice President Gilbert Bukenya and senior cabinet ministers like Maj. Gen. Kahinda Otafiire (Local Government) and Cryspus Kiyonga (Defence) are believed to be opposed to Mbabazi.

Unconfirmed reports say Bukenya has met MPs from Buganda to mobilise them to vote against Mbabazi should a censure motion be brought against the minister in Parliament. With such open rebellion in the leadership, it will be very difficult for Museveni to keep Mbabazi. Equally, most NRM historicals are hostile to Mbabazi and would love to see him fall.

Another cause of Museveni’s worry about Mbabazi is the apparent opposition the minister is getting from his home region of Kigezi. Of all the MPs from the area, only one is supporting him. And even here, it is his sister-in-law, Hope Mwesigye, the state minister for Local Government. The other MPs ‘“ Henry Banyenzaki, David Bahati, Muhwezi, Winnie Matsiko, Sarapio Rukundo, Chris Baryomunsi and Wilfred Niwagaba ‘“ are all opposed to him. Some like Banyenzaki are openly supporting his possible censure. Many NRM insiders say that without a home base, Mbabazi’s influence and ability to hold his job is diminished.

Sources inside NRM also say that even outside of Kigezi, the rest of western Uganda is hostile to Mbabazi; MPs from Ankole and Toro are also opposed to him. Sources inside NRM accuse Mbabazi of sponsoring the chairman of the Uganda Broadcasting Corporation (UBC), Godfrey Mutabazi, against the MP for Kibaale, Frank Tumwebaze. Mutabazi is a Mukiga like Mbabazi and the majority of the people of Kibale are Bakiga. Sources claim that Mbabazi and Mutabazi want to use the tribal card against Tumwebaze who comes from the minority Bahima sub-ethic group.

Some State House sources say that to quell a potential open rebellion in the top leadership of the ruling party and Parliament, Museveni may have no alternative but to sack Mbabazi. However, Mbabazi’s supporters say the minister enjoys support from NRM MPs outside of the western region and Buganda. For example, all NRM MPs from Karamoja, West Nile, some districts in the east, especially Sebei area are backing him.

‘This is clear evidence that Mbabazi is not a tribal chief,’ a close Mbabazi ally told The Independent, ‘He is the only senior politician who can legitimately claim a true national constituency.’ The source who declined to be named added that many inside NRM are fighting the minister because he is considered clean and close to the president. ‘Many people just want to damage him so that he can look as dirty as they are,’ the source said.

However, some MPs from the west shoot down this pro-Mbabazi argument. They say that he has support from obscure MPs from Sebei, West Nile, Karamoja and the north because they think he is close to the centre of power and therefore need him for favours. ‘MPs from the west and Buganda do not need Mbabazi for favours,’ the parliamentary source said, ‘they can go to the president directly.’

There has been concern within NRM that Mbabazi is arrogant. Many historicals from the west accuse him of disrespect. Other sources say that outside of the historicals’ camp, new comers like Bukenya have issues with Mbabazi because he has always undermined them. However, Mbabazi’s allies say that most of the allegations against their man are lies that have not been substantiated. ‘Where is the evidence that Mbabazi undermined Bukenya or anyone else in the NRM,’ a close Mbabazi ally asked, ‘It is just speculation.’

However, Mbabazi’s enemies point out, for example, that he gave Yeri Ofwono Shs 5m to run against Sanjay Tana in Tororo. Now Tana is one of the leading voices against Mbabazi. They point to Bukenya accusing Mbabazi of leading a ‘mafia’ inside government to bring him down. They accuse him of fighting Baryomunsi during the last election and using dirty tricks in the process.

But Mbabazi’s allies say that those fighting him have a hidden political agenda. One of Mbabazi’s supporters at Parliament accused Banyenzaki of saying that he prefers Bukenya as next president because he would have increased chances of becoming a minister.

In recent press interviews, Mbabazi equated himself to a rock, saying: ‘when you are hitting a rock, especially if you are hitting it with weak weapons, it is the weapons that break and the rock remains intact. So I have absolutely no doubt in my mind that this thing is not going to taint my image in any way.’

Over the next few weeks, it will become clear whether the rock will indeed survive the ‘political vultures’ that Mbabazi says are waiting to devour his carcass.

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