The government, through the National Land Commission, bought property on which there was outstanding rates arrears running into billions of shillings, anti-corruption investigators believe.
Documents seen by the Nation on Wednesdayindicate that the land in Ruaraka, for which the government has paid an estimated Sh5 billion on three highly questionable transactions, had an outstanding rates balance of Sh3.9 billion as at July 2018.
It is not clear how the amount is arrived at. However, according to a representative of one of the authorities involved in the current fight against corruption, and on the basis of what investigators say are rates records for the land, it appears that the government has not only splashed out billions of shilling of taxpayers' money on land for which it has no papers, but also inherited at least hundreds of millions of shillings in rates debt.
The land -- part of which is occupied by two public schools -- attracted rates of at least Sh1.7 million a year from 2012 to 2014, when the amount went up to Sh3.4 million.
There was a huge backlog of unpaid rates, totalling Sh772 million by March 2014 and attracting penalties of at least Sh35 million a month, according to these documents.
By the due date of March 2015, the rates debt was Sh1.1 billion.
On March 17, 2015, the proprietor appears to have been granted a rates waiver of Sh1.05 billion, according to the documents, which also show that on July 5, 2018 -- slightly over a week ago -- a penalty of Sh3.8 billion was inserted into the account of the vendor, bringing the total rates debt to Sh3.9 billion. Why this was done is unclear.
The documents also show that the vendor issued a cheque on January 14, 2015 of Sh757,151, and on April 22 issued four more cheques for amounts totalling Sh3.5 million.
These revelations bring into sharp focus the possible role of officials of the Nairobi County Government in a land transaction described by Parliament as a conspiracy "to fleece and swindle" public funds.
On Wednesday, Nairobi County lands minister, Mr Charles Kerich, refused to comment on the waiver of land rates, saying the matter was under investigation by, among others, the Ethics and Anti-Corruption Commission, and so he did not wish to prejudice the probe.
"It is being investigated by the Senate, the National Assembly, and the anti-corruption commission," said Mr Kerich. "Allow me not to talk about it."
Last week, Parliament adopted the report of the departmental committee on lands, which accused the chairman of the National Land Commission, Prof Muhammad Swazuri, together with top officials of the Ministry of Education, Treasury as well as other NLC commissioners and officials, of orchestrating an unlawful transaction. The MPs also want detectives to investigate possible collusion between Afrison Import Export Ltd and Huelands Ltd -- the supposed owners of the land -- and officials from the National Treasury and Ministry of Education. The government officials are suspected of failure to sub-divide the land and to protect government interests.
In evidence before the committee, Prof Swazuri defended the transaction, saying the land was private and the commission followed the advice of the Attorney-General in its compulsory acquisition.On Wednesday, the Nation asked him whether his office had been issued with a rates clearance certificate by the vendor before going ahead with the transaction, but he directed reporters to the National Assembly, which is probing the matter.
"You people have an agenda to malign my name," said a furious Mr Swazuri, who protested at the way the Nation has reported the multi-billion-shilling land scandal involving his office and other government agencies. "Ask Parliament; I don't know the rates."
Already, the EACC has lined up 25 suspects for charges relating to the purchase. The charges will range from conspiracy and wilful failure to breach of trust, money laundering, fraud, and abuse of office.
Detectives have been investigating the compulsory acquisition, and believe these payments were fraudulent because the land in question was a public utility, so the government bought its own land.
Former Attorney-General Githu Muigai has already written a statement relating to a legal consent he gave for the purchase to proceed, as has Interior Cabinet Secretary Fred Matiang'i, who was at the time the Education boss.
The whole deal started on August 17, 2016, when a complainant wrote to the National Land Commission that two schools were sitting on its land.
The Ministry of Education's Quality Assurance and Standards department did an inquiry and established that the two schools were public institutions, and that the land on which they sat had been surrendered to the government -- as a condition imposed by the Commissioner of Lands on developers who wanted to set up an estate -- and an allotment letter issued to the PS Ministry of Lands in the 1980s.
In the opinion of that team, the question of compensation did not arise at all. There were other problems with the land as it had a long-standing charge and the title had been taken by the receivers of the bank that had given the loan.
It is the same position taken by MPs who have demanded an investigation and prosecution of officials involved.