There have been reports in the Kenyan press about the False Claims Bill 2013 (“the Bill”), which proposes to give individuals and civil society groups the power to initiate civil proceedings against corrupt Government officials in respect of illegally acquired public resources including funds, assets, land and other property.
The proposal is that individuals or civil society would bring the claim on behalf of the Republic in situations where the Attorney General fails to initiate recovery proceedings and fails to issue a written explanation as to his refusal. Were the Attorney General to intervene, the State would have responsibility over the claim but the petitioners would still remain parties to the action.
The Bill seeks to punish those who illegally buy, receive or otherwise benefit from public property with a fine of at least 5 million Kenya Shillings (approx. £37,500), and imposes harsher penalties on suppliers and contractors who make false claims to the Government.
Should the claim lead to the recovery of illegally gained assets, the person(s) who initiated the claim would be entitled to a reward from the court of between 15% and 20% of the recovered assets, depending on the extent to which the person(s) contributed information or evidence about the corrupt transactions. If the evidence were obtained from public records or investigation by news media, however, the reward would be discretionary.
The incentive for Parliament to pass the Bill is that the costs of proceedings would be borne in their entirety by the petitioner(s) and could potentially lead to the recovery of some very significant assets for the Republic. The incentive for members of the public, who often hold important information about corrupt transactions, is the opportunity to hold corrupt officials to account while standing to gain from potentially substantial financial rewards.
The Bill was drafted by a group of lawyers led by former State Counsel Wamuti Ndegwa and will come before Parliament pursuant to Article 119 of the newly reformed Kenyan Constitution, which grants all Kenyans the right to petition Parliament to consider matters within its authority, including the enactment, amendment or repealing of legislation.
The Bill appears to be based on the US False Claims Act (“the Act”), which was enacted in 1863 during the American Civil War to pursue defence contractors who defrauded the Government. Under the Act, lawsuits are filed under seal in the US District Court and after 60 days (or more if an extension is granted) the Department of Justice decides whether to intervene. The petitioner stands to receive a reward of 15% to 25% of the recovered amount, but the reward is less if the Department of Justice decides to intervene. The Act has enabled the US Government to recover over $36 billion since amendments were made to the Act in 1986. The difference between the US framework and the proposed Kenyan framework is that the latter appears to have introduced the concept of pursuing corrupt government officials, whilst the former has historically been used to pursue third parties that have defrauded the government in the defence and health sectors.
The Bill, if approved, could go a long way towards tackling corruption at governmental level and could potentially give asset recovery in Kenya the jumpstart that it needs. Kenya is yet to set up its Asset Recovery Unit pursuant to the Proceeds of Crime and Anti-Money Laundering Act of 2009 and according to Attorney General Githu Muigai, has performed poorly in its objective of recovering funds stashed abroad by powerful figures.
The Bill also comes in the wake of President Kenyatta’s announcement on 12 June that anti-corruption agencies should immediately take steps in identifying and removing corrupt public officials from office in Kenya.
It remains to be seen whether Parliament will approve the Bill. No doubt there will be a powerful, self-interested lobby opposing its introduction.