Bank of Uganda’s Governor Emmanuel Tumusiime-Mutebile this week lifted the lid on the funding mechanisms for political patronage in the country, which critics say were responsible for “buying” the 2011 elections for President Yoweri Museveni.

Mr Mutebile told a gathering of academicians meeting outside Kampala that the central bank had sold so many Treasury bills to create cash for the government in the run-up to the elections, he could not determine how much of the money “ended up in political electioneering” in 2011.

The large injection of cash into the economy that saw inflation rise to 30 per cent — the highest in two decades — led to Walk-to-Work street protests over the rising cost of living, and left Mr Mutebile’s reputation seriously damaged.

Mr Mutebile sought to wash his hands of the affair by rejecting claims of quantitative easing, or printing of money.

“You should remember that the economy of this country was thrown into total chaos after the last elections allegedly because Bank of Uganda had printed a lot of money to finance the elections,” he said this week.

“I was there as Central Bank governor. I didn’t participate whatsoever, but because there was some spending by government dependent on Treasury Bills, which I was issuing, I was financing government indirectly. But ever since we understood that, we have never done it again and I will not do it this time.”

However, it was Mr Mutebile’s subsequent claim that raised most eyebrows. “I have never accepted an order from President Museveni where that order was inconsistent with my duties,” he said. “Never!”

A cursory analysis of events around the central bank and the Finance Ministry shows that far from being an isolated incident, this kind of backhand financing has, in fact, become the norm over the past decade.

In June 2011, with the mercury steadily rising on the inflation scale, Mr Mutebile told the London-based Financial Times newspaper that he had disagreed with President Museveni over the decision to spend as much as $740 million on jet fighters out of the country’s savings, pushing the import reserve cover from six to four months.

“He gave me some promises which he has not kept — like a way to redress the reserves,” Mr Mutebile told the FT. “I’m still fighting with him.”

READ: Mutebile like Uganda shilling, hard pressed

The purchase was classified and retrospectively approved by parliament without scrutiny, and the real cost of the Russian fighter jets has never been made public.

Russian media reported that the country was selling a total of 22 jets to Algeria and Uganda in a deal worth a combined $1.2 billion, which would put the average cost of each jet at $55 million. Uganda’s contract could have been higher due to the additional costs of training, supplies and armaments.

It is another transaction that occurred in the central bank at around the same time, however, that better establishes a pattern of suspicious transactions involving public money and at least one regime financier, Hassan Basajjabalaba, the head of the NRM entrepreneurs league and a member of its highest policy-making body, the central executive committee.

The central bank, acting on the instructions of President Museveni and the Finance Ministry, guaranteed loans worth Ush142.7 billion ($53 million) to companies associated with Basajjabalaba under the umbrella of Haba Group.

READ: Museveni blames corruption on mafias as parliament closes in on his cronies

There were at least four major problems with the guarantee, which the businessman immediately cashed in. First, the legality of the central bank guaranteeing loans to a private company in this manner was open to debate and interpretation.

Second, the Bank of Uganda, which enjoys constitutional autonomy, was clearly acting on external directives, from the president and the finance minister.

In fact, in some of its documents, Haba Group said their claim for payment had already been evaluated “following a directive from the president that the legal basis of compensation to Hassan Basajjabalaba be looked into.”

Third, and crucially, was the fact that the claim for payment was entirely baseless. The companies under Haba Group had been awarded, and then lost, tenders to manage markets and a public square in Kampala. They were claiming compensation from the government for sunk costs and loss of future earnings.

However, the Office of the Auditor General had commissioned an audit that found, inter alia, that the claim for compensation was based on invalid documents, expired or non-existent contracts, and that instead of claiming money from the government, Haba Group owed Ush994 million ($367,000) in back fees and taxes.

A consent judgment allegedly signed between the firm and the Attorney General — which was the legal basis for the compensation claim — could not be traced in the courts and was in all likelihood a forgery, the audit found.

If these reasons weren’t enough to spook the central bank, the fourth should have: The bank was already engaged in a legal battle to recover billions of shillings that had earlier been guaranteed to Haba Group — again on the orders of President Museveni and the Finance Ministry — before the 2006 elections.

Mr Basajjabalaba had taken the money, and land titles to his properties across the city offered to Bank of Uganda as security had, with the connivance of officials in the Lands Office, been cancelled and ownership returned to him.

Augustine Ruzindana, the first Inspector General of Government appointed in the early 1990s when the promises to fight corruption still sounded credible, says these instances are too similar, and too practised, to be coincidental or accidental.

“There is the possibility that the money goes through him for party purposes,” Mr Ruzindana, who has since fallen out with the Museveni regime and joined the opposition FDC party, told The EastAfrican. “This trickles down to individuals because regime survival depends on individuals who then also become untouchable.”

In the 1990s, the ruling NRM set up a company, Danze Enterprises, as a trading entity to raise money for the party. It soon ran into trouble over allegations of smuggling and non-payment of suppliers, before it collapsed amidst a corporate scandal.

The fundraising baton was then handed over to a new class of individual “tenderpreneurs” who, in exchange for winning big tenders and receiving tax rebates and holidays, would contribute cash to the regime and pay for its elections and its patronage.

Hassan Basajjabalaba, a lanky, chain-smoking man with small, darting eyes, burst onto the scene at the turn of the millennium with what seemed like bottomless pockets.

He had taken over the family hides and skins operation based in the cattle-keeping areas of western Uganda, but was soon one of the largest real estate owners in central Kampala as he bought one marquee property after another. Hotels. Malls. Parking yards. Universities. Office blocks. He bought them all.

The Uganda Commercial Bank mansion on the shores of Lake Victoria, which sits on a hectare of land, enjoys stunning views, and was once considered the largest private residence in the country? He bought that too.

As speculation continued about the source of his money, Mr Basajjabalaba warned his critics in a rare, October 2001, newspaper interview: “I have now decided what to do with them. I am going to buy their property and put an end to this [malice] once and for all.”

Mr Basajjabalaba’s luck appeared to have run out in January 2013, when he was arrested at Entebbe Airport as he was leaving the country.

Police had summoned him to the police station to assist them in investigating the forged consent judgment. He presented immigration officers with documents showing that he had attended court and been released on bail. When consulted, the head of the Police Criminal Intelligence and Investigations Department, Grace Akullo, said these, too, were forgeries.

Justice delayed

Mr Basajjabalaba was formally charged with forgery over the consent judgment, remanded briefly, and then released on bail. The trial continues.

However, three years after President Museveni ordered the recovery of money paid to the businessman and more than two years after officials from the Finance Ministry said they planned to auction his known real estate assets to recover the money, not a penny has been paid back.

Keith Muhakanizi, the Permanent Secretary in the Finance Ministry and Secretary to the Treasury, told The EastAfrican that the Bank of Uganda had been asked to lead the effort, but a bank spokesperson said no recovery has been made so far.

Bank of Uganda’s director of communications Christine Alupo said, by the consent judgment dated February 3, 2014 between Bank of Uganda and M/s Basajjabalaba Hides & Skins Ltd, the latter undertook to repay a debt of $9,150,000 and another of $2,425,000, owed to the government of Uganda within a period of six months from the date of the consent judgment.

After failure to pay on demand, the Bank of Uganda filed two suits against the guarantors of the debt, which are being contested by M/s Basajjabalaba Hides & Skins Ltd and the guarantors. The suits are before court.

The dust has all but settled on the compensation claims and cases. The earlier claim has all but been forgotten and the most recent story tracking recovery of the $53 million payout in the major daily newspapers is from almost a year ago. The true cost of the jet fighters may never be made public.

The Director of Public Prosecutions recently dropped charges against former attorney general Khiddu Makubuya and former finance minister Syda Bbumba — who both resigned from Cabinet over their role in approving the dodgy compensation claims — citing lack of evidence. Charges against Mr Mutebile had been dropped earlier.

At the end of June 2013, the Ugandan government recapitalised Bank of Uganda by issuing bonds worth Ush410 billion ($151 million). Some of the money went into the bank’s books to plug a hole that had been created after BoU wrote off the guarantees it gave Mr Basajjabalaba.

The government had, in effect, borrowed money to pay back the money it had asked BoU to give to Haba Group. As with the original amount paid out in compensation, this debt will be paid by Ugandan taxpayers. More could be required; the IMF estimates that BoU will need further capital injections of Ush835 billion ($308 million) by 2018.

With many scandals involving public money in Uganda, media exposés are typically followed by angry rants, parliamentary inquiries and, once in a while, prosecutions that go nowhere.

If it weren’t for Mr Mutebile’s revelations this week, few would have remembered the financial wheeling-dealing around the 2011 elections, where soaring inflation and rising interest rates left many borrowers out of pocket and led to a record number of foreclosures.

“If you are able to get the public to look away from a scandal long enough, or if you can create a distraction that takes attention away from these kinds of things,” a senior government official told The EastAfrican, speaking on condition of anonymity, “you can get away with anything in Uganda.”

Efforts to speak to Mr Basajjabalaba on Friday were unsuccessful. He had been expected to attend an NRM CEC meeting to plan the party’s road to the 2016 elections.