Accepted paper:

How to rob a country and get away with it: Kenya's Goldenberg Fraud, 1991-2019

Authors:

David Anderson (University of Warwick)

Paper short abstract:

This paper explains the operation of the largest known fraud that has ever been committed against a state exchequer, Kenya's Goldenberg Scandal of 1991 to 1993, and considers why the perpetrators and beneficiaries, though named in a judicial investigation, have never been prosecuted.

Paper long abstract:

Between 1991 and 1993 a carefully designed export compensation fraud saw at least 10% of Kenya's annual Gross Domestic Product (850 million USD in 1991 alone) siphoned into the hands of a small group of investors, politicians, and a few key state officials of the National Bank and the Treasury. The fraud, which became known as the Goldenberg Scandal, was so severe that it brought Kenya's economy to its knees, ironically contributing to a worsening foreign exchange crisis. Repercussions continued over the next decade, as the fraudsters used their stolen wealth to fund other dubious deals and acquisitions. This remains the largest known fraud ever committed against a state exchequer. The scam was first revealed at the end of 1993 by a whistle-blower, bank official David Munyakie. But it was not until after Moi stood down from the Presidency that a judicial enquiry into Goldenberg was launched. Justice Bosire's investigations, begun in 2003 and reported in detail in the Kenyan press, brought to light the involvement of senior civil servants, Cabinet Ministers, and even the family of President Moi. More than 30 persons were named as being directly complicit in the scam, yet attempts to prosecute these individuals have been consistently thwarted by Kenya's judiciary. This paper explains how this fraud was perpetrated, and how its principals have escaped justice for over two decades, enjoying apparent impunity.

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