A cabinet-ranking government official yesterday claimed that the state was very much aware of the stolen billions hidden in Swiss banks, but failed to act because of the ingrained culture of protecting the culprits—some of whom are members of the ruling clique.
His claim comes amid reports published by The Guardian Saturday edition two weeks ago that corrupt Tanzanians, including prominent business tycoons and some top government officials, have secretly stashed away a whopping Sh315.5 billion ($196.87 million) in Swiss banks.
While winding up debate on his budget last week, Prime Minister Mizengo Pinda told the National Assembly that he first learnt about the stolen billions after reading the paper and promised to work on the report.
Prevention and Combating of Corruption Bureau (PCCB) director general Edward Hosea also told this paper recently that it was the first time he was hearing about the stolen billions, promising to contact the Swiss authorities in order to establish the individuals who stashed the billions away.
According to a report by the Swiss central bank - Swiss National Bank – which was released early last month, Tanzania is among eleven African countries whose nationals secretly stashed away millions of dollars in the country’s banks.
But yesterday’s claim by the top government official that the government was aware of the stolen billions currently being kept in Swiss banks casts grave doubt on whether there would be any serious efforts to investigate and recover the stolen billions as earlier promised.
According to the senior official, who once worked at the Finance ministry, the recent reports that some high profile government officials and businesspeople had stashing abroad trillions of shillings was not new as the information was well known in government circles.
The official, who spoke on condition of anonymity for fear of possible repercussions, said it was not true that such information was secret, adding that the government and its organs knew it pretty well.
According to him, the culture of protecting one another was the reason behind the government’s failure to track down the money hidden in foreign banks.
The official was responding to a question posed to him regarding the government failure to track down the billions of shillings stashed away in foreign banks despite the existence of the Financial Intelligence Unit (FIU) within the Ministry of Finance and the Prevention and Combating of Corruption Bureau (PCCB).
“You think such information is not known to the government? No way. It is very much known within government circles. The problem is, who will bell the cat?” he queried.
The government established the Financial Intelligence Unit (FIU) in 2007 to tackle money laundering activities, but the economic crimes watchdog has been largely ineffective. The unit was set up with technical assistance from the US government. It was supposed to have a 300-strong workforce.
The FIU was established with donor funding under the Anti-Money Laundering Act of 2006 as an extra ministerial department under the Ministry of Finance and Economic Affairs. The primary function of the FIU is to fight money laundering and the financing of terrorism in Tanzania.
The reaction from the governmental official comes at a time when reports are unfolding detailing Tanzanian government officials and businesspeople who have hidden trillions of shillings abroad, including Switzerland.
Last week Kisesa lawmaker LuhagaMpina (CCM) said in the national Assembly that Tanzania was losing Sh 478billion every year due to illicit capital flight, urging the government to use the World Bank’s Stolen Asset Recovery (StAR) strategy to recover the stolen assets.
He said funds amounting to Sh11.6 trillion were hidden abroad by business tycoons and government executives between 1977 and 2008 almost a week before The Guardian Saturday edition reported that Sh315.5billion had been stashed away in Swiss bank accounts.
However, the Kisesa MP couldn’t justify the authenticity of his claims. He said the StAR strategy could enable a country or an international agent to follow up, nationalise, liquidate and later bring the assets back to the country which had lost them.
Mpina mentioned Nigeria, Peru and the Philippines as some of the countries which had used it to recover their lost assets.
The MP told the House that the theft of public funds was on the increase because the authorities were not issuing regular reports to enable the nation gauge the gravity of the vice.
“Findings of a 2008 report by Ndikumana and Boyce 2008 in ‘The One Billion Dollar Question’ with a heading “How can Tanzania stop losing much revenue?” shows that Tanzania is losing Sh 478 billion every year,” Mpina was quoted as telling his fellow MPs.
He said apart from efforts by the office of the Controller and Auditor General, various internal and foreign institutions had been giving reports on how public funds were being stolen and deposited abroad.
He said the Global Financial Integrity( GFI) report of 2008 with the heading: ‘Illicit financial flow from Africa: Hidden Resources for Development’ indicates that Tanzania is the 13th African country out of 20 that are leading in illicit financial flows of public funds.
He blamed the government, BoT and PCCB for keeping quiet about the lost funds when BoT had all the records of people who hold accounts abroad.
However, BoT Governor Prof BennoNdulu, when reacting to the press inquiries about the matter three days ago, said he had no knowledge about the billions stashes away in foreign banks.