Kampala, Uganda — At 10am on June 12 Col. Edith Nakalema, Assistant Inspector General of Police (AIGP) Grace Akullo and their team arrived at Bank of Uganda (BoU).
Nakalema who is the head of the Anti-corruption Unit-State House and Akullo who is the director of the Criminal Investigations and Intelligence Department (CIID) headed straight to the topmost floor of BoU--Level 7.
This floor has very few offices. Governor Tumusiime Mutebile's office and that of his Deputy Louis Kasekende are the most notable.
But Nakalema, Akullo and their team did not enter any of these. They went straight to the boardroom, where the senior management of the bank--Executive Committee (EXCOM)--usually meets.
Governor Mutebile was not in office. Neither was his Deputy.
Mary Katarikawe, the Executive Director Operations (EDO), who was chairing the meeting in the boardroom, introduced the Nakalema, Akullo delegation and explained why they were there.
Katarikawe told the meeting that the governor had requested Nakalema to investigate the circumstances under which a plane chartered by BoU to bring 1400 boxes of currency notes from France to Entebbe on April 27 ended up with extra unauthorised cargo.
By now all the BoU officials in the room knew about the incident.
What some did not know is that on May 03, a week after the incident, Governor Mutebile had called Nakalema on his personal mobile phone, informed her about the incident and asked her to investigate. Nakalema had asked him to put the request in writing and the Governor on May 08 had done exactly that.
Leaked documents show that Dr. Natamba Bazinzi, the Assistant Director Administration Currency Department who was at the time the Acting Director Currency, was the first to report the matter of extra cargo. Insiders say he reported to his other immediate bosses and together they secured a meeting with Governor Mutebile on May 03. That meeting started at about 3pm. But details about it remain scanty.
"How could this happen?" Governor Mutebile muttered during the meeting, "That cannot happen."
When officials briefed him that they had been investigating, Mutebile decided the matter could not be investigated by internal bank staff.
Given that time had passed and the cargo had since been taken away, Mutebile wanted to know what was in the five extra cargo pallets.
The Independent could not confirm whether Governor Mutebile called Nakalema during or after this meeting. But we confirmed that Nakalema received a call from Mutebile that very day.
After the meeting, Mutebile tasked the officials to come up with a proper brief, which he would base on to officially write to Nakalema requesting her to investigate the matter.
After receiving the brief, he fired off the official letter to Nakalema on May.8.
8 BoU officials detained
That is how Nakalema and Akullo ended up at BoU a month later. Given the sensitivity of the matter, Nakalema had decided to work with Akullo's CIID.
Now in the BoU boardroom, Nakalema told the BoU officials that eight of them would be accompanying her to record statements and help in the investigations. Tension mounted. The officials were not even allowed time to return to their desks to windup whatever they had been doing.
Instead, a white Nissan omnibus was already waiting in a parking at Level 2. The eight BoU officials were told to board. It was about 11am. None of them knew where they were headed.
But a few minutes later, the omnibus stopped at the former President's Office building next to parliament about 500 metres away.
Here, each one of the eight recorded a statement or was interrogated separately. This went on up to about 6pm. Then they were put into sets of two still in separate rooms.
One pair was told they would be taken to Special Investigations Unit (SIU) in Kireka, another one to Central Police Station (CPS), and another one to Katwe Police Station. Only two officials were allowed to return to BoU and then go home.
An official involved in the investigations told The Independent, the two allowed to return home because their statements were consistent while the others gave contradictory statements.
But even those released were told to stay within Kampala and keep their phones on. Back at BoU, they relayed the events of the day to anxiously waiting colleagues, a source at BoU told The Independent.
The hunt for extra printed currency
Details of this investigation have remained largely unreported. But relying on sources inside Nakalema's unit, the police, and Bank of Uganda, The Independent has pieced together the events.
Apparently, Nakalema's team did not start at BoU. They first went to Uganda Revenue Authority (URA) and had decided to work with Akullo's CIID.
A source who is privy to the details told The Independent that when police officers arrived at URA to check the extra cargo from the BoU plane, they expected to open it and find extra printed money.
"It was clear, they were disappointed when they did not find the money," the source noted.
Weeks later, the investigators visited BoU where they picked the eight officials and released two. Among those detained was the team that went to France comprising Francis Kakeeto, the Assistant Director Mbale Currency Centre and Fred Vito Wanyama, the BoU Verification Officer. These were interrogated for two days and released on Friday June 14.
At this point it was clear that the investigators were most interested in Kakeeto and Wanyama. It was, therefore, not surprising when they were re-arrested on June 19.
This time it was also together with Milton Baluku, the BoU official who headed the team that went to Entebbe Airport to pick the currency, and their boss, Charles Malinga, the Director Currency at BoU.
Another pointer to how the case was developing is that on June 21 it was only Kakeeto and Wanyama who appeared before the Anti-Corruption Court in Kampala on charges of corruption and abuse of office.
Prosecution alleges that Kakeeto and Wanyama on April 26, 2019 between France, Belgium and Entebbe International Airport allowed the inclusion of unauthorised cargo on a plane chartered by BoU.
They are also accused of corruptly neglecting to perform their duty when they failed to refute or report the inclusion of unauthorised cargo on the plane. At their first appearance in court, the duo denied the charges and Grade one Magistrate Herbert Asiimwe remanded them to Luzira Prison until June 25. When they reappeared they were joined in the dock with their boss, Malinga.
Initially, the investigation focused on Kakeeto and Wanyama because the two had on April 20, been nominated by Malinga, the Director Currency, to travel to Chantepie in northwest France, home of the currency printer Oberthur Fiduciaire.Kakeeto and Wanyama were to carry out quality assurance for the procurement of the currency.
They were to witness as the currency was loaded and even send photographic evidence to Kampala where another team would be waiting amidst tight security.
The cargo in question was 70 million currency notes of the UShs 5000 denomination with a value of Shs350 billion loaded in 1400 boxes, according to details from leaked documents.
That is a very heavy load because, if each note is about one gram, it means each of the 1400 boxes weighed about 50kg. Which means transporting the notes would require a minimum of seven 10 tonne trucks as each would carry 200 boxes maximum. In other words, this was a major logistics operation, even without factoring in the extra unauthorised cargo.
Kakeeto and Wanyama spent a week in France. As is the practice, they had been given a checklist. They were supposed to note each detail surrounding the printing, packing and loading of the currency.
According to insiders, this is a rigorous process. Officials are supposed to ensure that the ordered notes are packed in boxes. A certain amount of cash is supposed to fit in a box. Then a certain amount of boxes are supposed to fit on a single pallet.
The two officials were supposed to record the loading arrangement and communicate it back to Kampala such that the team waiting at Entebbe would use it to verify. This process is meant to ensure that BoU cargo is not tampered with at all along the way.
The cargo departed France on April 26 and arrived at Entebbe on April 27 at 8am.
Dickson Kateshumbwa, the URA Acting Commissioner General, said in a statement to journalists on Saturday June 15 that when the plane arrived, and as normal practice for sensitive cargo, customs facilitated clearance of the currency at the tarmac in presence of BOU officials, aviation security, and other security agencies.
He explained that the BoU consignment was then loaded on BOU vehicles and taken to Kampala with heavy security escort. The extra cargo, which belonged to other individuals, companies and organisations, he added, was cleared after paying taxes.
The BoU team that picked the currency was led by Milton Baluku.
Baluku was answerable to Dr. Natamba Bazinzi, the Assistant Director Administration Currency Department. Bazinzi was standing in for his boss, Charles Malinga who was the Contract Manager but away on leave. It is Malinga who selected Kakeeto and Wanyama to go to France.
The case of extra cargo
Sources at police have told The Independent that while being interrogated, Bazinzi said that on April 26, he received information that the cargo had set off. The cargo would land in Entebbe at about 8am on Saturday April 27, he was informed. The two officials in France; Kakeeto and Wanyama, did not notify him of any extra cargo on the plane.
BoU had a strategy meeting in one of the hotels in Kampala starting on April 25 and Governor Tumusiime Mutebile and his Deputy Louis Kasekende were in attendance.
According to sources at the centre of the investigations, Bazinzi says once he got information that the plane had set off and everything was in order, he informed authorities, and headed to the BoU retreat. He reportedly assigned another official, Juliet Piloya, to be in charge of the consignment.
Piloya's job was to ensure that Baluku's team would be at Entebbe to inspect and pick the cargo. That is exactly what happened. But even after Entebbe no official mentioned the extra cargo. So between Saturday April 27 and Monday April 29, neither Piloya nor Bazinzi heard about the incident at the airport.
Then on Tuesday April 30, Bazinzi received two reports--the quality assurance report and another from Baluku, who led the team to Entebbe. The report had photos showing that there was extra cargo on the plane.
This three-day delay to report would be the start of troubles for Baluku. But even bigger trouble awaited Kakeeto and Wanyama.
Why hadn't they reported these details while still in France? Better yet why hadn't they reported these matters on arrival? Could they have been covering up something? Was there extra currency in these pallets? Investigators grappled with these questions.
Amidst all this it emerged that even the currency BoU ordered did not, as agreed, fly directly from France to Entebbe. It was diverted to Liege Airport in Belgium. This raised new questions: How did the cargo land at Liege? Were Kakeeto and Wanyama at Liege? Did they even see the cargo being loaded on the plane?
Leaked documents seen by The Independent reveal that Dr. Bazinzi fired off memos to the Bank's Legal Counsel and even the printer, Oberthur Fiduciaire seeking to get to the bottom of the matter.
On May 02, Bazinzi wrote to a one Christopher Montet, the Commercial Director Oberthur Fiduciaire, demanding an explanation and citing a breach of contract.
Bazinzi wrote: "Reference is made to your letter dated March 22 2019 notifying the Bank about the different flight options, types and indicative prices for cash of them for the delivery of 70 million bank note pieces of printed matter. The letter highlighted that the flight type was full charter; however, during the inspection of cargo in the plane the team noted that 5 out of the total 25 pallets had items that did not belong to Bank of Uganda as per the fixed labels. This contravened the freight terms of Full Charter and, presented a high risk to the Central Bank of Uganda. The purpose of this letter, therefore, is to request you justify the contract breach, given the risks associated with this kind of action."
It is the cargo company that responded.
Sam Lindsey, the Commercial Manager, Network Airline Management Ltd, replied:
"Unfortunately, during a routine inspection of the MD-11F aircraft due to operate charter flight AJK4042/LGG-EBB/26th April 2019, the maintenance team identified a technical issue deeming the aircraft AOG in EBB and unable to operate. To eradicate any risk of delaying this important charter, we took the decision to utilise our B747-400BCF to operate on schedule. In addition to the printed matter, there were also some spare parts for the unserviceable MD-11F and some general cargo loaded onboard to mitigate the losses of operating the B747F on this routing.
Please accept our apologies that this was not declared when the change of the aircraft was made. We fully appreciate and understand the importance, and security required when carrying such cargo and apologise for any inconvenience caused."
Then on May 07 Oberthur Fiduciaire also wrote:
"The two Bank of Uganda representatives were informed about the 1 raw material pallet. For the four remaining pallets, the cargo company "Network Airline Management" did not inform us and have presented their apologies in writing. Fortunately, we were able to maintain delivery as per the initial commitment.
However, we would like to compensate Bank of Uganda for the misinformation regarding the 4 pallets and the inconvenience caused. Would you please tell us whether you prefer a 10% discount on the coming delivery of the UGX10,000 notes or 15,000 US Dollars off of your invoice to pay for the UGX 5000?
Bazinzi had also written to BoU's Legal Counsel for an opinion on whether the service providers breached the contract."
Christopher Montet, and Claire-Lise BASSAGET, the Back office Manager, Oberthur Fudiciaire, signed the later.
Investigations by The Independent show that Montet also visited BoU around the same time. But details of what he discussed with the officials remain scanty.
A memo written by Bazinzi to BoU's Legal Counsel also revealed several details about the contract BoU had entered with Oberthur.
According to the memo, the contract dated July 26, 2018 required Oberthur to reprint 170 million pieces and 130 million pieces of UGX 5000 and UGX 10,000. Oberthur was required to select two reputable carriers and insurers, from which BoU picked Kuehne+Nagel.
The Independent wrote to Oberthur Fudiciaire and Kuehne+Nagel.
Charlotte Lafont, the Group Communications Manager, Oberthur Fudiciaire responded: "Many thanks for your email and your interest. Please note that we do not have any additional information to give." Kuehne+Nagel did not respond.
This saga is a major setback for BoU although Nakalema now says the focus of her investigation is on how extra cargo ended up on a plane that was supposed to carry only BoU cargo.
Apparently, the cargo belonged to over 10 entities including organisations like the United Nations, USAID, and individuals like businessman Charles Mbire, the chairman MTN Uganda, Omar Mandela, the proprietor of City Oil fuel stations and Café Javas.
Despite these clarifications, however, there is a story that has refused to die down. It alleges that the investigation includes alleged printing of unauthorised excess currency notes.
This story grew wings when police confirmed it had raided homes of officials BoU officials at the centre of the controversy.
The Independent understands that police decided to intensify the investigations. That is how officials who had been released, were recalled, interrogated again, and others detained.
This time, Kakeeto, Wanyama, Baluku, and Malinga, the Director Currency were all arrested on June.19. Initially, only Kakeeto and Wanyama were charged. We had not established Baluku's fate by press time.
That day Malinga was asked to bring all the documents surrounding the procurement to police. Apparently, when he took them to police, he was detained. He too was on June.25 brought before the Anti-Corruption Court and charged.
Malinga's troubles rotate around two issues. During investigations, authorities learnt that he was the Contracts Manager for the Contract with Oberthur Fiduciaire.
But sources also claim that during interrogations, investigators learnt that even though he was on leave, the officials that travelled to France kept informing him about the details of the procurement and yet he had not reported the same. "Investigators are trying to find out why?" a source privy to the investigations told The Independent before he was brought before court.
So was extra currency printed?
Nakalema has dismissed reports that her investigation includes alleged printing of unauthorised excess currency notes.
This could be because printing this currency involves what insiders describe as "the usual rigorous contracting process" that lasts a year and involves many signatures and paper trail.
That is the process Oberthur Fudiciaire went through to win the contract. Apparently every quarter, BoU assesses the stock of currency in circulation. Mainly it looks at how currency in circulation matches conditions in the economy, especially its growth. There are other factors; including feculent currency that is withdrawn.
Once the currency department determines that there is need to print new currency, it tables the demand before the Currency Policy Committee (CPC). Once this committee approves, the process of procurement begins. In the case of this contract, the process began around April 2018.
Prequalified companies including Oberthur, De La Rue, and G&D were invited to bid. Oberthur won following evaluation by the BoU's Contracts Evaluation Committee. The committee made recommendations to Governor Mutebile.
In July 2018, BoU entered a contract with Oberthur Fudiciaire. There was another elaborate process that involved ensuring that the printer used the right raw materials. Throughout all these processes, BoU would send officials to do quality assurance.
Charles Malinga, the Director Currency had been appointed the Contract Manager with Martin Lukagga as the Assistant Contract Manager.
The job of the Contract Manager and his Assistant is to ensure everything around the contract goes according to plan.
That is how Malinga came to appoint the team that went to France and the one that went to Entebbe to pick the cargo. And that is where the trouble started.