How government officials fleeced billions:
In the late 2000s, the High court ruled that the over 1,000 former employees of the defunct East African Community had to be paid terminal benefits, due to them after the collapse of the community.
The money had been released to the late President Milton Obote's government, but had never been passed on to the rightful claimants. Prior to the ruling, the former employees had formed a pressure group - the East African Community Beneficiaries Association- to put pressure on the government, which was dragging its feet over the payment. Former employees were encouraged to join the association at the behest of Peter Sajjabi and Santos Alima, who would later on become general secretary and chairman respectively.
"It was the first time I met Sajjabi. He encouraged us to open up accounts in Greenland bank, as it was known then. We all trooped there," Capt Stephen Makyeli, a former pilot with the defunct East African Airways, told The Observer at Kibuli, the headquarters for the Criminal Investigations and Intelligence directorate.
Capt. Makyeli was one of many people that had turned up at Kibuli to record statements after the police published pictures in the media last week of purported recipients of the benefits.
Over 1,000 members opened up accounts in Greenland bank, which would later be transferred to Cairo International bank, where their benefits, in excess of Shs 300bn, according to Alima, would be paid.
The former EAC workers had lost their jobs following the collapse of the community in 1977. Its members were Uganda, Kenya and Tanzania at the time. The former employees demanded salary of six months in lieu, allowances for them and their families, transport fare from wherever they had been stationed back to Uganda, gratuity for those that were permanent and pensionable, and a 7% interest. The matter is still in the High court in Kampala, pending a ruling.
"[Sajjabi] was moving freely in the bank, asking us to sign here, there. He seemed to have his way around the bank. That is the last I saw of him," Capt Makyeli recalled.
Since he is not among the former EAC employees still demanding their benefits -- he already received his, in three tranches -- Makyeli was stunned when his picture appeared in the press, but under a different name, as a continuing recipient.
"I believe it is the office of the association that gave them my picture. It is similar to the one that was on my file when we were registering with the association," he said.
Police suspect that Sajjabi used his office to access members' files and later play around with their details. The police, while combing documents in the ministry of Public Service early this year, landed on a payment schedule showing that between February and October 2011, Shs 63bn had been paid out as gratuity to former employees in the Health and Local Government ministries.
The payments appeared suspicious. Police then asked Bank of Uganda to provide payment records for the period between January and December 2011. The Bank of Uganda payment schedule matched that of the ministry of Public Service.
Police wrote to the listed ministries, departments and government agencies, asking them to confirm whether the names of the people appearing on the payment schedules were former employees there and had been forwarded to the ministry of Public Service for their gratuity.
"The reply was 'no'," a police source told The Observer. The names did not appear anywhere in the pension registry, which was controlled by the ministry of Public Service.
The next stop for the police was Cairo International bank.
"Our interest was to look for the accounts and names behind the beneficiaries. On inspecting the accounts, we found that they were introduced to the bank in 2011 by Sajjabi, as former workers of the EAC, to get their terminal benefits through it," the source told us.
Investigators had also wanted to find out whether the names were indeed of former employees of the community, so they obtained a book containing all the names of the former EAC workers from Alima, the association's chairperson.
This inquiry confirmed the investigators' fears; the names in the register did not match with those into whose accounts the bank was paying benefits. Another curious thing is that even though the beneficiaries had opened up the accounts, their particulars were not fully captured by the system.
The police suspect connivance between the bank and Sajjabi, who had been introduced as the leader of the pensioners, with letters authorizing the pensioners' money to be paid to him.
"What was striking is that all the letters were similar -- to the effect that the beneficiaries were hailing from distant places, so they were unable to come to the bank. Can you imagine even people from as near as Mukono and Kayunga [districts] had allegedly written such letters similar to those from Arua? Word for word! That in itself was very, very suspicious," the police source said.
What the police did then was to follow the money trail, which revealed that the money was actually being paid to other people (not the pensioners), in different accounts, after someone signed on the withdrawal forms.
Another scan through the photographs revealed that the names did not match the photographs of their purported bearers. The suspicion that the pictures were picked from the association's files, and not the pension registry, as it should be when a civil servant retires, was confirmed.
A visit to the pension registry revealed to the investigators a story of its own, widening the racket to include the principal accountant in the ministry of Public Service, Christopher Obei; and the head of IT, Richard Lubega.
These, as well as accountants David Oloka and Steven Lwanga, are suspected of playing a pivotal role in the scam. The police combed the pension registry, assessment and verification sections to trace where and how the names of the ghost pensioners had been introduced.
As principal accountant, Obei was responsible for preparing the ministry's payment schedules, including all the names of persons to be paid. Police suspect that the ghosts were introduced onto the payment schedule at this stage.
After the principal accountant and Permanent Secretary, Jimmy Lwamafa, had signed it off, the schedule would be sent to the ministry of Finance by the head of IT (Lubega), where the names would be inserted in the bigger list, ready for payment.
The ministry of Finance would then pay the money into the individuals' accounts, in this case in Cairo International bank, which, according to the police, hardly presented a solid defence when its officials were interrogated.
"They said the names were introduced to them by Sajjabi," our source said, suggesting that the syndicate involves Sajjabi and some officials in the Finance and Public Service ministries.
Police say the Uganda Computer Services, which manages the electronic financial transfer or public servants' payments, will need to explain the possible multiple payments to beneficiaries, as in Capt Makyeli's case -- where details of former EAC workers that had already been paid remained in the system, and money continued to be paid to their accounts.
In an earlier interview, Alima, the association chairman, told The Observer that he had been unaware that payments were being made to members all along, and that the people appearing on the lists were unknown to him.
Although he was earlier arrested as a suspect, the police later said he would be used as a witness. Sajjabi, Obei, Lubega and Lwamafa were released on police bond as investigations, which so far indicate that as much as Shs 160bn could have been stolen, continue.