The East African (Nairobi)

23 April 2001

Tanzania to Probe Gold Scam

The Tanzania government has formed a four-man task force to investigate a massive corruption scandal involving government officials suspected to have pocketed millions of Tanzania shillings in compensation to some 900 people relocated from a gold mining area in Geita, Mwanza, on the shores of Lake Victoria.

Geita Gold Mine, formerly the Ashanti Goldfields Tanzania Ltd before Ashanti sold its majority shares in the mine, paid out a total of Tsh4.3 billion ($5.06 million) in compensation, but another 857 names of people have surfaced to claim a similar compensation.

It is also being claimed that most people compensated received less money than is shown in the government records, prompting the gold mining firm to express shock and dismay at the way the compensation was handled.

The investigating task force, led by the Mwanza regional head of the Prevention of Corruption Bureau (PCB), has been detailed to examine those involved in the evaluation and compensation to villagers displaced by the establishment of the Geita Gold Mines.

PCB's spokesperson in Dar es Salaam, Ms Lilian Mashaka, told The EastAfrican that the regional commissioner of Mwanza Region, Mr Stephen Mashishanga, had appointed the task force to get to the bottom of the compensation scam.

"The chairperson of the task force is the PCB Regional Bureau Chief of Mwanza and this task force comprises members from other government institutions," she said.

The Geita Gold Mine chief executive officer (CEO), Mr Harry Michael, told The EastAfrican that he had been informed that PCB would investigate the compensation issue, which was initiated two years ago, after new names of people claiming to have been left out the list of beneficiaries surfaced.

He said for nearly one year, his company had called for an independent investigation into what had occurred. "Finally, last month, we were informed that the PCB would in fact investigate the matter," he said.

However, a legislator from the Lake Zone area who attended a recent presentation by Mr Michael to Members of Parliament in Dar es Salam suspects that even officials from the gold mining company could have been involved in the scam.

"I believe that this development of fake or underpayment of compensation claims have been encouraged by not only government officials but also officials from the company, because some people working for the company are said to own land near or on mine property, all intended at getting compensation money," said the MP.

Mr Michael told the MPs during the presentation that according to the laws of the country, the evaluation of crops, structures or boundary determination and compensation for these items including the actual payment to the individual, is the responsibility of the government.

During the compensation exercise carried out for Geita Gold Mine, at least seven government officials were present, the CEO said.

He named these officials as being the district land officer, the regional valuer, the kitongoji (ward) chairman, ten cell leaders, the village executive officer, the village chairman and the property owner.

Officials of Ashanti Goldfields were observers.

"These people determined the boundaries and counted crops and structures, which had been assessed by the regional valuer, agreed and signed by each of the people mentioned," said Mr Michael. "We noticed that in the case of 461 entries that claim underpayment, the correct amount was paid by Ashanti into the government-controlled bank account, but did not reach the rightful person," he said.

"It is our understanding that fictitious names have been added to the claims and that some committee members were charging Tsh100,000 ($120) to prepare bogus claims," charged Mr Michael.

Ashanti Goldfields was the sole owner of the Geita mine until it sold half of the mine's shares to the world's largest gold producer, AngloGold, and the name of the mine was changed to Geita Gold Mine.

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