Nairobi — The US now claims that President Kibaki's inner circle, or what it calls the "black box", are the driving force behind the Lamu new port construction project.
The group has been holding meetings at State House Nairobi, according to US diplomatic cables released by the whistleblower website Wikileaks.
Other cables released suggest that Americans could be funding the local youth as part of a plot to break the old guard's grip on power.
According to diplomatic cables which the US ambassador Michael Ranneberger filed to Washington in January this year, Kenya originally held discussions with Qatar over the development of the Lamu port in return for a substantial allocation of farmland to the Qataris.
"Negotiations involving development of the Lamu port reportedly occur inside the "black box" of President Kibaki's inner circle at State House. We understand, however, that talks with Qatar are off, and that the Chinese are in play as a potential partner for the port development project and associated regional infrastructure (road and rail infrastructure to Southern Sudan and Ethiopia, and pipeline infrastructure to Southern Sudan and Uganda)," the cable reads.
The US claims that top government officials have been receiving kickbacks in order to award tenders to Chinese companies including those touching on equipment for the National Security Intelligence Services (NSIS).
In one of the cables dated February 17, 2010, Ranneberger warned Washington that China was arming Kenya.
Ranneberger said that in January 2010, the Kenyan government received weapons, ammunition supplies and textiles for making uniforms in support of the Kenya's Jubaland initiative in Somalia.
The material from the government of China was delivered through the China National Aero-Technology Import & Export Corporation (CATIC).
Kenya is said to be supporting Jubaland as an autonomous State in Somalia as part of a strategy to deal with the threat of the Al-Shabaab militias.
Ranneberger reported that China's interest in the Lamu project was linked to the presence of oil in Southern Sudan and Uganda which could be exported via Lamu as well as the greater export potential to Ethiopia, Southern Sudan and Uganda.
The potential of oil deposits in Isiolo had given additional impetus to China's interest in the port development which is estimated to cost more than $5 billion, Rannerberger said.
Last May, President Kibaki made a five-day trip to China with the construction of Lamu port being top on the agenda of the meetings he held with the Chinese President Hu Jintao.
The two leaders agreed that the port had the potential to open up vast parts of Northern Kenya and benefit regional economies of Southern Sudan and Ethiopia.
They agreed to prioritise the construction of the Lamu Port as a key pillar towards the attainment of Kenya's development blueprint, the Vision 2030.
The US ambassador told Washington that various tenders were being awarded to the Chinese after payment of kickbacks to Kenya's officials.
Ranneberger says President Kibaki and Prime Minister Raila Odinga and Cabinet ministers are part of the political and economic elites who have been supporting and benefiting from impunity, lack of accountability with respect to governance, state resources, and the rule of law.
Ranneberger says the grasp by the old guard had already started showing signs of fracturing hence the need to heighten activities to weaken it further.
He says the Obama administration needs to continue working on breaking the grip of power and economy by the old guard.
"The grip of the old guard political elite on the levers of state power and resources remains largely intact, hairline fractures are developing in their edifice which - if we continue to work them intensively - will develop into broader fractures and open up the potential for a peaceful process of implementation of fundamental reforms," Ranneberger wrote.
He informed Washington that the embassy has embarked on a $45 million (Sh3.6 billion) youth empowerment initiative.
Ranneberger said the "old guard of vested interests" already knew that the US and others within Kenya were fanning the winds of change and that they were threatened by such activities.
"The sharp reaction of the old guard to our efforts and growing domestic pressure indicates that the culture of impunity system is not as strong as it may seem on the surface," he said.
Last week, Raila admitted in Parliament that the government had officially raised its concerns over the activities of US government with local youth projects.
The admission came barely a day after Government Spokesman Dr Alfred Mutua claimed that there was an attempt by the US to overthrow the government.
Mutua said the government was aware that a lot of money had been allocated to fund the youth to cause an uprising against the leadership structure.
In his brief to Washington, Ranneberger further warned Kenya could descend into violence worse than the 2008 post-election crisis unless rampant corruption by the ruling elite is tackled. He expressed fears that some individuals could be out to frustrate the reform agenda.
Yesterday, President Kibaki dismissed the claims that he was anti-reform, saying his record spoke for itself.
"The Kenyan people have enjoyed unprecedented political, economic and social freedoms during his tenure in office," a statement from the Presidential Press Service read.
"The reform agenda culminated in the promulgation of a New Constitution that mirrors the hopes and aspirations of the Kenyan people." The statement added: "The Kenyan people must not be distracted from the path of transforming our country, especially at this moment when we are focused on implementing the constitution. That task will be undertaken by the Kenyan people with total support and leadership from their Government." Ranneberger also claimed that the US had forced Attorney General Amos Wako to start thinking of retirement after the US revoked his travel visa.
Ranneberger said revoking visas, or threatening to do so, was one of the best ways of forcing Kenyan leaders to change.