$740m fighter jets scam sneaks under the radar

In a deal reminiscent of previous purchases of military hardware in which the army bypassed civilian oversight, the Ministry of Defence and Bank of Uganda are in the news again following revelations that on the express instructions of President Yoweri Museveni, the ministry withdrew money from the central bank without due parliamentary approval, to buy six fighter jets and other military equipment from Russia worth $740 million. 

It also emerged that this money is from the supplementary budget and that part of it — over $400 million — has already been spent. Hence government only wants parliament to rubberstamp the acquisition.  

The deal marks a return to the late 1990s, when under the cover of classified expenditure, the country lost $6 million after shadowy middlemen sold the Uganda People’s Defence Forces attack helicopters that could not fly.

In a belated attempt to regularise the deal, Defence officials sought parliamentary approval last week and ruling party MPs have been asked to support the purchase of the jet fighters.

“Let’s say the president is trying to cover his tracks. Agreed, this is under classified expenditure, but why do it behind parliament’s back? If we find out tomorrow that we spent $740 million on jets that can’t fly or that the money was used to bribe voters, Museveni has parliament’s resolution to fall back on,” said a member of the Defence and Internal Affairs Committee of Parliament who asked not to be named.

Although the central bank has breached no procurement procedures this time, its unquestioning execution of Museveni’s orders to release the cash has raised eyebrows.

Consequently, the Public Accounts Committee of parliament has written to BoU Governor Emmanuel Tumusiime Mutebile to explain why he sanctioned this irregular withdrawal.  

“This money was withdrawn from the central bank without parliament’s approval. We have now asked BoU to explain. I am sure [the BoU] governor knows the rules under which such money can be withdrawn,” PAC chairman Nathan Nandala Mafabi told The EastAfrican.   

This came in the wake of the PAC’s failed attempts to get answers from the Defence Ministry. 

Last week, the committee summoned Defence Permanent Secretary Rosette Byengoma, who offered no explanation of the purchase, but made the telling statement that she had been “ordered not to talk about this particular procurement.”  

As usual, the president is once again on hand to let Defence off the hook.

On the night of March 24, Museveni met the National Resistance Movement parliamentary caucus at State House Entebbe and told the legislators to support the $740 million supplementary expenditure.  

Although he did not mention the country the jets were bought from, the Daily Monitor reported last week that Russian defence websites claimed that Uganda and Algeria had gone shopping in the Russian capital.

It further revealed that the two countries paid a joint price of $1.2 billion for 22 jets — Uganda’s being only six.

Hence each of Uganda’s jets should have cost $54.5 million, translating into a total of $327 million.

Why Uganda should end up paying an extra $413 million remains a mystery.

Although opposition legislators have claimed that they will block the House from giving this deal the all clear, it is a fait accompli given the ruling party’s numbers.  

As has happened in past Defence and army procurements, there are no guarantees that the taxpayer will get value for money.

“There is nothing wrong with the purchase of fighter jets. Everyone knows that Defence spending is classified, but all we are saying is, follow the rules. This deal did not, and Ugandans want to know what value they are getting out of it,” said Mr Mafabi.   

Under the Public Procurement and Disposal of Public Assets Authority (PPDA) Act, security and Defence procurement operates under what is referred to as the “dual list.”

There are two lists, one of which is the classified items, while the other is subject to normal procurement procedure.

Although both lists are submitted to the PPDA, overall responsibility for executing purchases and ensuring value for money rests with the accounting officer of the Defence Ministry, who is the permanent secretary.  

Classified

PPDA spokeswoman Dorah Egunyu told The EastAfrican this procurement did not go through the government’s watchdog because PPDA only receives the ministry list of items to be procured but cannot regulate what is classified or even discuss whether the jet fighters were part of the list.  

“I cannot discuss contents of the dual list,” she said. According to Defence and army spokesman Lt Col. Felix Kulayigye, there are justifiable grounds for this purchase because the jet fighters are part of the required equipment “for strategic management of Uganda’s security.”  

Museveni’s instructions to BoU have a precedent.

In 2002, he directed Governor Mutebile to bail out businessman Hassan Basajjabalaba to the tune of over $20 million to clear a loan he owed to Standard Chartered Bank.  

In 1998, the army, procured four MI-24 helicopters, their spares and ammunition at a cost of $12 million. 

The helicopters were faulty and came to be known as the “junk choppers.” No official has been prosecuted or convicted over this scam.  

There have been a myriad other military equipment purchases that have cost the taxpayer millions of dollars, including a consignment of malfunctioning guns from South Korea and an order of undersize army uniforms.  

The army also bought some 90 tanks from Bulgaria, only 10 of which proved operational. 

The purchase earlier of another set of MiG jet fighters also followed a similar pattern: They arrived with one wing, had no spare parts nor bomb loading capacity. 

Public policy analysts argue that these dubious procurements are not just bad luck hounding Uganda’s military.

Rather, they say, defence spending is the conduit through which public finances are channelled to fund politics.

Significantly, the timing of this $740 million procurement comes right after the February 18 election in which the ruling party bought its way back to power.

It might well have done so with the taxpayer’s money.