POLITICAL CORRUPTION AND CAMPAIGN FINANCING IN KENYA

Finance is a vital aspect of party politics. Strong political parties are essential to open competitive democratic politics, particularly in emerging democracies. Parties need funding in order to survive, compete and perform their democratic functions, both during and between election campaigns. Money arguably determines the very basics of democracy. It is a transferable and convertible resource which helps mobilise support for, and secure influence with, political parties. The lack of financial resources prevents the leaders and supporters of political parties from achieving political participation through representation, which would foster the democratic protection of their interests. The need to finance politics under conditions of uncertainty can, therefore, set the stage for political corruption. The achievement of sustainable democracy therefore demands that particular attention be paid to the issue of political finance (Austin & Tjernstrom Reference Austin and Tjernstrom.2003: 1–3; Johnston Reference Johnston2005: 3; Tshitekere Reference Tshitekere2002: 63).

Three months before the December 2007 elections there was no Political Parties Act in Kenya. Political parties were registered under the Societies Act. The Political Parties Bill 2007 which included proposals on public funding of political parties was passed by Parliament in September 2007. President Mwai Kibaki signed it into law on 22 October 2007, the day he dissolved the Parliament. The Minister for Finance had, however, announced prior to the President's assent that state funding of political parties would begin in the 2008/09 financial year since such funds had not been factored in the budget of the 2007/08 financial year. Hence there was no state funding of political parties in the elections of December 2007. The Societies Act has some restrictions on the financing of organisations, but none that apply specifically to parties. Nor are there any restrictions on donations that parties may receive. Political parties can accept contributions from businesses, unions and foreign sources. They can also own businesses. There are no limits to political party or candidate spending during election and non-election periods. Political parties and candidates are not required to file reports disclosing funding sources. Parties are, however, required to submit annual financial statements to the Registrar of Societies for audit. However, there has not been broad-scale compliance, and no action has yet been taken to increase compliance (Bryan & Baer Reference Bryan and Baer2005: 77–8; CGD 2005: 9–10; KBC 2007; Kibaki Reference Kibaki2007; Standard 4.10.2007).

Since independence, political parties in Kenya have been institutionally weak, thus rendering them functionally ineffective as democratic and democracy-promoting institutions in the political process. This has been primarily a function of poor doctrine, poor leadership, lack of effective programmes, lack of human and financial resources, and weak societal linkages. Many parties espouse no coherent or sound ideology or doctrine on which to articulate interests, mobilise supporters and shape or structure public opinion. They also lack effective programmes aimed at achieving their objectives, which is evident in their poorly designed manifestos and constitutions. These problems are often compounded by poor leadership that appeals to sentiments based on parochial interests rather than the common good. Parties also lack qualified personnel and adequate financial resources to run them administratively on a daily basis, as well to enable them perform their political functions effectively during electoral and non-electoral periods. Further, they lack the enabling societal linkages to enable them to act as effective agents of socialisation and to integrate the political system (Barkan & Henderson Reference Barkan and Henderson.1997: 27–8).

As a result of their institutional weakness, political parties in the country have been adversely affected by ethnopolitics and corruption. Political leaders normally form political parties and mobilise supporters by appealing to ethnocentric feelings, thereby reducing parties to ethnic-based outfits. Intra-party and inter-party competition for political power is therefore, in most instances, based on inter-ethnic competition, as different ethnic groups compete for or retain political power in a bid to have access to resources for political patronage. Political ethnocentrism, coupled with the lack of adequate financial resources and the desire to capture or retain power for patronage, has made parties vulnerable to corruption, impacting negatively on democracy in the country. Corrupt political financing, particularly campaign financing, has affected the Kenya African National Union (KANU) and the National Rainbow Coalition (NARC) under the Moi and Kibaki administrations respectively. These are the only parties that have held power since the country attained the status of a republic in 1964.

Political corruption dates back to the single-party period. Corrupt political campaign financing, however, was less rampant in this period than in the multiparty period. This was due to the authoritarian nature of the single-party state under Kenyatta and Moi regimes, and the lack of any meaningful political party competition. Out of political expediency, authoritarian regimes at times tend to control corruption. As Inge Amundsen (2001) notes, regimes that have an authoritarian control over politics and economy also maintain strict control over corruption levels and distribution mechanisms. In different types of authoritarian regimes, there is however a distinction between ‘developmental-oriented’ political elites or ‘benevolent autocrats’, and on the other hand ‘kleptocrats’. ‘Benevolent autocrats’ seek to maximise society's wealth and in many cases are development-oriented, whereas ‘kleptocrats’ are concerned only with their own financial gains, and are development-oriented only to the extent that it serves their parochial interests (Andvig & Fjeldstad Reference Andvig and Fjeldstad.2001: 38). Authoritarian leaders usually exercise strict controls over corruption, and the more powerful they become, the more they are able to determine who will gain how much from the resources of the state and from corruption in itself. Hence, the level and scope of corruption can be autocratically restricted and directed, making it relatively low in some strong, authoritarian states (Bjorshol Reference Bjorshol2006: 18). This was the case in Kenya under single-party rule. Both Kenyatta and Moi ensured that they were the prime beneficiaries of political corruption. They were interested primarily in economic and political aggrandisement.

The fact that corrupt political financing appears to have been less during the single-party state under Kenyattta than under Moi can be attributed to three key factors: the administration's reliance on the civil service rather than the party to maintain political power; Kenyatta's class support and the emergence of ethno-socio-political organisations; and the lack of any meaningful intra- and inter-party competition. Kenyatta relied heavily on the civil service, both as an instrument of repression and as a source of patronage to maintain political power. The ruling party KANU did not provide opportunities for political advancement, nor could it provide sources for dispensing patronage benefits. Due to lack of financial resources it began to decline, and eventually it was ‘not even worth maintaining as a façade’ (Leys Reference Leys1976: 244–5). The powerful economic and political class who moved into active party politics were primarily interested in supporting the Kenyatta administration for parochial reasons, rather than supporting KANU. Emergent ethnic-based organisations such as the Gikuyu Embu Meru Association (GEMA) provided alternative political outlets, and competed with the ruling party for state resources. There was no meaningful intra-party competition, since the party was merely a façade, where party nominations were conducted in preparation for general elections, Kenyatta relied on the state apparatus to ensure that only politically loyal candidates were nominated. In many instances negative rather than positive sanctions were used. The state also normally interfered with the electoral process, often leading to flawed general elections (Mwangi Reference Mwangi2002: 65–6). No opportunities for excessive corrupt political campaign financing therefore presented themselves under conditions of a moribund ruling party, coupled with the lack of meaningful intra-party competition.

Single-party rule under Moi witnessed the transformation of KANU from a moribund party to the supreme political body in the country. Unlike Kenyatta, who relied primarily on the civil service to maintain political power, Moi opted to transform the party as an instrument of augmenting and maintaining power. KANU thus became a powerful player in the political process. This did not however open up new channels or provide opportunities for excessive corrupt political financing, because there was no distinction between the authoritarian state and the party. Like the state, the party became authoritarian, and it closed up and usurped all alternative political outlets through which people could channel their political aspirations in its pursuit of wider control of social diversities. Party and general elections were often state-controlled and non-competitive. Party and state officials manipulated the vote, rigging candidates in or out according to political loyalty (ibid.: 70–1). As in the Kenyatta regime, there was thus little need for excessive corrupt political campaign financing. However, political corruption in general appears to have increased during single-party rule under Moi, because during the 1970s and 1980s the international setting had not yet turned against corruption as a serious hindrance to development. Due to Cold War politics, the legitimacy of many corrupt regimes went unchallenged. However, the end of the Cold War in 1989 saw a significant change in global politics. Western nations began imposing conditionalities based on standards of good governance and human rights on the part of former client states. Coupled with the return of multiparty politics, it is, therefore, not surprising that most of the corrupt dealings were documented under President Moi's regime (TI-Kenya 2002: 83–4).

Corruption related to party politics and campaign financing became pronounced with the reintroduction of multiparty politics in 1991. This was largely a function of the transition from authoritarianism to democracy. Democratisation can at times increase levels of corruption by providing new opportunities. Although some theories hold that the level of corruption decreases with the level of democracy, a slightly more refined theory holds that the relationship is not linear but bell-shaped. While many authoritarian systems are able to control the levels of corruption and thus keep it at an economically viable level, countries undergoing democratic transition are the most corrupt. If the transition period from authoritarianism to democracy takes a long time to be replaced by democratic checks and balances, and by legitimate and accountable institutions, the level of corruption increases and reaches a peak before it is reduced with increasing levels of democratic governance. Competitive politics, for instance, can increase the demand for campaign funds, and thus provide opportunities for questionable political influence. Both incumbents and office-seekers are tempted to sell their votes to the biggest campaign donors, and evidence from democratising countries indicates that politicians quite often pay groups of voters to vote for them (Andvig & Fjeldstad Reference Andvig and Fjeldstad.2001: 41–2).

The democratisation process during the multiparty period has provided new incentives for corrupt political financing in Kenya. Intense intra- and inter-party competition has opened up new opportunities for corruption, as candidates and political parties with limited financial resources seek electoral support. Corrupt campaign financing under multipartyism has taken various forms. During Moi's administration, most notable was the misuse of public enterprises in the form of political patronage and employment of incompetent persons to manage such enterprises. Political banks were created to channel stolen monies from public enterprises. The embezzlement of such monies was facilitated by the patronage appointees, and the money was used to campaign for Moi's re-election and to bribe his political opponents. Political corruption was used to acquire and retain political power by the elite, when KANU was facing stiff competition from other parties. Those who used political corruption to acquire finances were in turn elected to Parliament, and some among them were later appointed to cabinet positions that ensured that they protected the wealth acquired by corruption. Those who were not interested in party politics, but had economic interests to be protected, contributed to the KANU campaign funds directly or indirectly. Large-scale projects of questionable viability were also initiated as conduits for raising funds to be used for political activities. KANU's electoral victory in the 1992 and 1997 general elections was largely as a result of political corruption (CGD 2005: 7–8). Harambees (fund raising for community projects) became an election driven activity and a vehicle for bribing voters following the adoption of multiparty politics. In the 1980s, election years accounted for only 7% of the decade's total harambee funding, whereas in the multiparty 1990s, the two election years accounted for 60% of the total (TI-Kenya 2001: 18).

Although there were several incidences and scandals related to corrupt political financing in the Moi era, the most notable was the Goldenberg Scandal. Campaign funds for KANU were raised through fictitious export compensation raised by way of pre-shipment finance. The scandal involved the supposed import of gold and other precious minerals by Goldenberg International Ltd., whose registered directors were businessman Kamlesh Pattni and the then director of the Directorate of Security Intelligence, James Kanyotu. Goldenberg was paid huge sums of money by the Central Bank of Kenya (CBK), running into billions of shillings, as compensation for gold and diamonds, which were never imported in the first place. Through a series of fake papers, for over two years, the Treasury under Vice-President George Saitoti who was also KANU's vice president, and the CBK under Governor Eric Kotut, authorised and paid funds in export compensation to Goldenberg for fictitious gold and diamonds from Kenya supposedly sold to Dubai and Switzerland. Computed figures indicate that as much as US$1 billion could have directly and indirectly been siphoned through Goldenberg networks. For example, from March to May 1993, four ‘political banks’ with links to Goldenberg and senior KANU politicians acquired approximately US$860 million in credit from their respective Goldenberg accounts. Payments were made outside the formal clearinghouse mechanism controlled by the CBK. A month later, the four banks jointly received approximately US$107 million from the CBK, supposedly in spot exchange for US$116 million which they did not remit to the bank. In the following three months, the four banks used the free cash advance to purchase Treasury bills with a yield of 55% per year. The culprits created conduit political banks for siphoning public resources to fund political activities, which plunged the country into hyperinflation. These banks collapsed after powerful individuals completed illegal transactions, with several public enterprises causing government to lose huge sums of money (Bryan & Baer Reference Bryan and Baer2005: 75; Mwangi Reference Mwangi2002: 253; RoK 2005: 24–36; Warutere Reference Warutere2005: 1).

Money obtained from the state through Goldenberg was used to finance KANU in the multiparty general elections in 1992. Pattni confirmed this during the hearings of the Goldenberg Commission of Inquiry set up in 2003. Goldenberg and its sister companies received US$116 million by way of pre-shipment finance. Part of these funds, among other sources, was used for the elections. Goldenberg bought large amounts of food and cars for voters and candidates during the electioneering period. The food was distributed in famine-stricken areas. Pattni said that the food was ordered on credit by district commissioners and local leaders from the National Cereals and Produce Board. The bills were forwarded to President Moi's aide, Joshua Kulei, who then passed them on to Goldenberg International for payment. Kulei became KANU funds manager, determining who was to be given cash. He would send instructions to Goldenberg offices for Pattni to act on. Pattni said he also distributed cars to influential KANU politicians who had the ability to earn KANU thousands of voters in their own areas. Most of them were handed over to Kulei, who then distributed them and gave Pattni the list of beneficiaries. Pattni was later asked to hand over all the logbooks to the beneficiaries after KANU won the elections, which were marred by allegations of rigging. The total, including the cash, equipment and everything, came to approximately US$70 million (Bryan & Baer Reference Bryan and Baer2005: 75; CGD 2005: 8; Daily Nation 20.8.2004; RoK 2005: 197–203; Standard 2.7.2004).

Corrupt campaign financing did not end with the Moi administration. It has also occurred in President Kibaki's administration, which came to power under NARC in 2002. Many reports indicate that whereas petty corruption was reduced in the post-2002 elections under the NARC government, political corruption is rife. Observers indicate that the reason for the re-emergence of political corruption was to amass wealth in anticipation of Kibaki's re-election in 2007 (CGD 2005: 9; TI 2005: 21). A case in point is the Anglo-Leasing and Finance scandal, which involved raising campaign funds through the abuse of lease finance or supplies credit meant to finance security and security-related projects.

It is common practice in developing states for the procurement of security and security-related contracts to be shrouded in secrecy and corruption. International businesses and businesspersons with long experience in security procurement bid for secret contracts, often worth billions of shillings, with the help of senior political leaders or bureaucrats. The goods to be supplied will either be non-existent, or the prices will be highly inflated, or a ‘ghost’ financier will be roped in to provide fake loans to buy non-existent or inflated goods, which the government will then repay, sometimes even offering huge sums upfront as ‘commission’, ‘mobilisation’, ‘administration’ or ‘commitment’ fees. This is precisely how the Anglo-Leasing and Finance scandal was meant to work (Sunday Nation 22.1.2006).

Following the suspension of donor support and growing insecurity in the country, the cabinet in 2001 approved a specific policy of lease finance or supplier's credit to finance priority security and security-related projects. Lease finance or supplier's credit is a concept based on prior supply of goods and services for later payment, subject to payment of a commitment fee. Repayment of the debt would only commence subject to receipt of the goods supplied. The concept is sound but was greatly abused. In most of these contracts, payments for servicing the debts began even before the supply of the goods or the start of the projects. Anglo-Leasing & Finance Limited was part of an organised, systematic and fraudulent scheme designed to fleece the government through the so-called special finance vehicles for purported security contracts. The salient features of these contracts were as follows: first, all contracts were supply-and-finance contracts in which the contractor was purportedly financed by external credit through lease finance. In reality, it was the government that willingly paid upfront for these projects; second, most of the lease finance companies used in these contracts were considered to be non-existent; third, security was used as an excuse to procure these contracts using single sourcing, even where the projects merely involved the postal services and the meteorological department; and fourth, the effect of using non-competitive processes in procurement was over-pricing of the contracts. A few individuals used different companies as fronts to perpetrate these frauds with the support of government officials. Finally, these companies shared directors, shareholders, owners or agents (RoK 2006a: 6–7).

Eighteen separate contracts involving Anglo-Leasing worth over US$740 million were signed by the government between 1997 and 2003. Some of these were completed prior to January 2003, while others were cancelled by the government. A total of US$243 million had been spent on these contracts as at May 2005. Of this, US$14 million was refunded by these companies in unusual circumstances on account of three projects managed by Infotalent and Anglo-Leasing & Finance. Twelve of the projects are still on-going as the relevant contracts were not legally cancelled. However, no payments have been made on the projects since May 2005. Consequently, the projects have stalled. The total amount due on these ongoing projects as at February 2006 was US$202 million, including principal, interest and penalties. Key government officials questioned by the Public Accounts Committee (PAC) on the Anglo-Leasing scandal misled the Committee into believing that all payments relating to these contracts had been suspended since August 2004. Payments amounting to US$4.75 million were made to Universal Satspace between that date and May 2005. Out of the 18 projects listed, two were contracted in 1997 and 1998, before the policy was adopted by the cabinet. Ten of the projects were initiated, negotiated, contracted and signed between February 2001 and December 2002. The remaining eight were negotiated, contracted and signed in 2003 (ibid.). These projects included US$36 million to produce tamper-proof passports for the Immigration Department, and US$58 million to supply and equip forensic science laboratories for the CID. Other schemes involved the purchase of refitted Navy ships for US$55 million, and a US$81 million new computer and surveillance system for the police, known as E-Cop. Anglo-Leasing was an entirely fictitious company whose only business was to receive funds from lucrative government contracts, then channel them back to those who dreamt up the scheme (Otieno Reference Otieno2005; RoK 2006b: 1–3; Sunday Nation 22.1.2006).

The post-2002 Anglo-Leasing deals were perpetuated by senior cabinet ministers and bureaucrats in the Kibaki administration to raise money for political activities, in particular campaign funds for party and general elections in 2007. Among the senior cabinet ministers allegedly involved in the scandal were Minister for National Security Chris Murungaru, Finance Minister David Mwiraria, and Minister for Justice and Constitutional Affairs Kiraitu Murungi. Some of the senior bureaucrats allegedly involved were the Head of the Public Service and Secretary to the Cabinet, Francis Muthaura, and President Kibaki's aide, Alfred Getonga (Githongo Reference Githongo2005: 2).

According to the former permanent secretary for governance and ethics in the Office of the President, John Githongo, who was Kenya's anti-corruption adviser, the transactions of Anglo-Leasing were primarily meant to raise funds for both party and general elections. The ministers were part of a NARC insiders' group which pushed for payment of a questionable US$55 million naval ship contract, from which the party hoped to receive campaign funds (ibid.). This was openly admitted to him in one of the meetings he held with one of the ministers on 1 September 2004. Githongo (ibid.: 15) points out that:

Other ministers who also met Githongo admitted that some of their cabinet colleagues were involved in raising political funds through these schemes. Githongo also points out that following a cabinet meeting in State House, on 14 January 2004, Murungi went to his office and said that party elections were around the corner and accused him of holding up the financing of these elections. Murungi said some of the contracts had to be paid and, to ensure ‘transparency’, he, Mwiraria and Githongo would sit and agree which would be paid. Murungi later reiterated that party elections were on the way and that they would cost US$2.7 million, and this money would come from the stalled contracts, particularly that of the naval ship. Murungi essentially admitted that the suspect contracts Githongo had spent the past year pursuing were all along schemes to raise political finance and, by interfering with them, Githongo was undermining NARC. Githongo fled the country following threats on his life for investigating the scandal. He was also responsible for exposing the Anglo-Leasing and Finance scandal. In the weeks that followed, the government attempted, without success, to defuse the fallout from the scandal and its extensive media coverage (Githongo Reference Githongo2005: 15–19; Otieno Reference Otieno2005: 75–6). Corrupt political financing has been rife in the multiparty period, which in turn has serious political consequences. The political consequences of this kind of corruption in the country are examined in the following section.

POLITICAL CORRUPTION AND ITS IMPLICATIONS FOR DEMOCRACY

Corruption erodes some of the core values of a democracy, for example, the fundamental principle that governments are accountable to their citizens. Political corruption may erode the very legitimacy of the state. When political leaders are perceived to be pursuing their personal interests excessively, citizens become disenchanted, questioning the legitimacy of leaders and the state. In emerging or transitional democracies, democratisation provides new incentives for corruption. Political corruption, therefore, can lead to institutional decay (Amundsen Reference Amundsen1999; Bjorshol Reference Bjorshol2006). This section examines the implications of political corruption on democracy in Kenya, in the context of the transition from single-party to multiparty rule. It focuses on the impact of corrupt political finance on governance, and in particular, on political participation and competition, the rule of law, and transparency and accountability.

Corrupt political financing, particularly campaign financing, has adversely affected democracy in Kenya. It has negatively impacted on meaningful political participation and competition. Funds raised in a manner that lacks transparency and accountability or that is shrouded in secrecy discourage participation in political parties (Bryan & Baer Reference Bryan and Baer2005: 7; Mungui-Pippidi Reference Mungiu-Pippidi2006: 86; Tshitekere Reference Tshitekere2002: 64). The World Economic Forum (WEF 2004: 31) indicates that there is high political corruption in the country, insofar as the prevalence of illegal political donations to political parties is concerned. Corrupt campaign financing has discouraged participation in legitimate intermediate institutions such as political parties, hence reducing meaningful competition. The negative impact of money in politics or illegal campaign funds on democracy in Kenya is a topical issue, often discussed by politicians, parties and civil society groups. According to Ngunjiri Wambugu, chair of the Kenya Chapter of the lobby group Kenya Movement for Democracy and Justice (KMDJ-K), the culture of ‘big’ money in Kenyan politics is now threatening democracy. It has made Kenyan politics a market place where positions go to the highest bidder, making elections a money issue and locking out worthwhile contenders who can add value. It has also created a system where getting into politics is a business venture, with business plans and an expected rate of return on investment. This ‘is best indicated by what has become the norm, calling every rich person mheshimiwa (Honourable), whether they are political leaders or not’ (Onyango Reference Onyango2006c).

The negative impact of the role of money in politics in Kenya is also highlighted in a study conducted by the National Democratic Institute (NDI) on party financing in 22 countries. This points out that money in politics has had a negative impact, since excessive campaign funds have limited the independence of candidates and restricted the participation of vulnerable groups such as women and youth in running for office (Bryan & Baer Reference Bryan and Baer2005: 76). The issue of corrupt political financing and its impact on democracy has been similar in both the Moi and Kibaki administrations. Joseph Kamotho, secretary-general of the Liberal Democratic Party (LDP) (a constituent party of NARC) and a former secretary-general of KANU in the Moi regime, emphasises that both administrations are the same in as far as political corruption and democracy is concerned. He points out that there is a direct link between how a party governs the country and how it raises money to finance elections. Kamotho (Onyango Reference Onyango2006a) states that:

Corrupt political financing has also impacted negatively on the rule of law in Kenya. It has affected protection of human rights, and also interfered with the legislative processes that ensure the establishment of fair legal frameworks. Maina Kiai, chairman of the Kenya National Commission of Human Rights (KNCHR), points out that there is a clear link between human rights and misuse of public resources by political leaders in the country. He emphasises that human rights are about economic and social rights as much as civil and political rights. When the state uses resources in partisan campaigns, it diverts resources that could be used for development needs. This unfavourably affects the realisation of socio-economic rights which is an obligation of the state. Kiai points out that the misuse of public resources for political purposes is illegal under Kenyan laws and when such political leaders get away with it, then impunity is embedded in society. This in turn creates more human rights problems as it denotes a lack of accountability (Onyango Reference Onyango2006d). A state that does not adhere to the rule of law and violates human rights is irresponsible and poses a serious threat to democracy.

Corrupt political financing has made ruling political parties reluctant to pass strict laws on political party financing, since some of the funds on which they rely for their survival are illegal or secret. Both KANU and NARC were accused of delaying the enactment of the Political Parties Bill in order to prevent an even playing field for all parties (Onyango Reference Onyango2006b). This provided opportunities for further corruption. According to Transparency International (2005), political parties are perceived by citizens to be to a large extent corrupt. They have to a large extent been ineffective in the war against corruption. Kichamu Akivaga (Reference Akivaga, Kibwana, Akivaga, Mute and Odhiambo2001: 106–7) argues that the ineffectiveness of the political parties in the crusade against corruption can be attributed to: first, lack of commitment to a national agenda even when it is formulated; second, the pursuit of short-term personal interests as opposed to the long-term interests of the nation; third, obsession with ethnic considerations as the basis of politics; fourth, lack of leadership with vision, that is, an absence of leaders whose word is their bond, who possess principles and will, and who put integrity and character above wealth.

In his crusade against political corruption and the need to safeguard democracy, particularly transparency and accountability in government, Githongo (Reference Githongo2004) during his tenure as the permanent secretary for governance and ethics, emphasised that the ability to influence politics and buy political loyalty often comes via corruption, He argued that managing political finance and how the country pays for political activity, was one of the key challenges that the NARC Administration had to grapple with. Kiraitu Murungi, who resigned his cabinet post following the Anglo-Leasing scandal, also called for state funding of political parties, emphasising that if political parties do not get state funding, more scandals like Anglo-Leasing and Goldenberg would recur (Onyango Reference Onyango2006a). Joseph Kamotho, who is also of the opinion that laws governing political financing should be introduced in a bid to safeguard democracy in the country, emphasises: ‘Without a strong law that makes transparent how parties raise their money … corruption will continue … And that money will be used to finance elections to ensure the same government wins again’ (ibid.). Ngunjiri Wambugu also points out that strict laws on political financing are needed to ensure that campaigns are run on issues and not money. The lack of set guidelines on how much should be spent during campaigns, where this money should come from, and how it should be used, is a deliberate decision by some members of Kenya's political elite to place an obstacle to honest, just and democratic elections (Onyango Reference Onyango2006a, Reference Onyangob, Reference Onyangoc). Political parties and leaders have become irresponsible in as far as adherence to the rule of law is concerned due to political corruption.

Transparency and accountability in state institutions has also been adversely affected by political corruption. Decisions have been taken and enforced in a manner that does not follow established rules and regulations. State institutions have not, therefore, been accountable to the public as well as to their stakeholders, making them unresponsive. This in turn has eroded the legitimacy of such institutions and the state at large. Such institutions facing legitimacy crises include the legislature, the judiciary and other state institutions that are meant to play a key role in the fight against corruption, such as the Kenya Anti-Corruption Commission (KACC), the police and the state law office. The legitimacy crises of these institutions in the fight against corruption are reflected in a study conducted in 2006 on perceptions on corruption in the country. This found that most Kenyans doubt the state's commitment in the war against corruption. According to the study, only 9·9% of Kenyans feel that the NARC government is fully committed to the fight. The majority, 63·4%, said it was slightly committed, while 23·7% saw no commitment at all. Only a handful have faith in the Kenya Anti-Corruption Commission, as most would prefer to report graft-related cases to the Criminal Investigations Department (CID), which ironically falls under the Commissioner of Police whose officers are rated as the most ineffective in the anti-corruption war (Daily Nation 17.8.2006). The Report of the Judicial Commission of Inquiry into the Goldenberg Affair pointed out that state institutions whose legitimacy came under question due to lack of transparency and accountability in the scandal, included the Parliament, CBK, the Office of Controller and Auditor General, State Law Office and the judiciary (RoK 2005: 267–94). In the case of the Anglo-Leasing scandal, the legitimacy of the NARC government and KACC, and their political will to fight political corruption and safeguard democracy and development, were questioned by the public, opposition parties and civil society organisations. This led to public anger at the lack of commitment on the part of these offices. Otieno argues that at the end of June 2004, in an attempt to quell persistent wrangling in the cabinet and water down calls for action on political corruption, particularly on Anglo-Leasing, the president resorted to a cabinet reshuffle. Politicians of the Moi regime associated with the abuses of the past, and who were now in opposition parties, were invited into the cabinet without any democratic consultations among the parties concerned. This increased the government's parliamentary majority and escalated the transaction costs of pushing its projects through parliament. Projects now had to be negotiated on an individual rather than a party basis, and accusations of bribery within parliament proliferated (Otieno Reference Otieno2005: 75–6; Sunday Nation 22.1.2006, 19.9.2006). The lack of responsiveness on the part of the state and its institutions is also reflected in the long period of time it has taken to investigate and prosecute senior political leaders associated with the Goldenberg and Anglo-Leasing scandals.

Political corruption also poses a serious threat to the economic institutions that safeguard democracy and development. Corruption in Kenya accounts for about 8% of the country's Gross Domestic Product (GDP) (BBC 2006: 1). Mega-scandals in the country have had serious effects on economic and political institutions, threatening democracy. The Goldenberg scandal, for example, had adverse effects on the economy, particularly on money supply and inflation. It affected the country's political, economic and social affairs both during the years that the actual transactions took place and long afterwards. The spillover effects continued to be felt for over a decade thereafter, until President Kibaki's election under the NARC party. At the peak of the scandal in 1993, transactions associated with Goldenberg networks accounted for over 10% of the country's GDP. The scandal also had adverse effects on the country's local debt servicing, interest rates, public expenditure, employment and value of the currency (Warutere Reference Warutere2005: 1–2).

The opening up and expansion of the democratic space under mutipartyism has, nonetheless, had positive effects on corruption. The increase in freedom of expression and association, as well as the relaxation of restrictions that hinder the registration of civil society organisations, has ensured public disclosure of corruption. According to Freedom House, corruption remains a serious problem in the country, but non-governmental organisations (NGOs) and the media have unearthed examples of political corruption and malfeasance. Freedom House (2006) indicates that Kenya enjoys one of the liveliest press environments in the continent. Disclosure is now becoming an effective weapon in the war against political corruption. Kivutha Kibwana points out that there is a clear linkage between the return to multiparty democracy and the ability of Kenyans to debate corruption. The public outcry against corruption started to be consistently voiced during the 1990s. Media and other public exposure of corruption have proved to be critical tools for combating corruption. Both national and local NGOs have taken on board anti-corruption work. Rated highly in the war against corruption are the media and the Kenya Human Rights Commission (KHRC). In the 2006 study on perceptions of corruption quoted above, the media and the KHRC scored 89% and 79% respectively (Kibwana Reference Kibwana and Kibwana2001: 155–9).

Even though the independence of the media and freedom of expression have increased in the Kibaki era, the state and its officials continue to harass and intimidate the media as in the previous authoritarian regimes. Unlike in the previous regimes where the media were harassed for exposing political oppression, in the Kibaki regime the media has been harassed for exposing political corruption, which has resulted in public outcry from individuals, civil society organisations and opposition political parties. For example, Sir Edward Clay, a former United Kingdom high commissioner to Kenya, often stressed the importance of the media in disclosing or exposing corruption in Kenya. He emphasised that corruption is the biggest single impediment to good governance in the country, and that corruption is a challenge and a test for the investigative journalist (Daily Nation 2.2.2005). Clay also criticised the state, not only for harassing the media but also for its unresponsive attitude towards questions raised by the media on corruption. He pointed out that an independent media was an integral component of a healthy democracy. In a speech to a group of UK businessmen, Clay (BBC 2006: 4) had this to say of media harassment:

The theme of the role of the media in disclosing corruption in the country recurred in many of Clay's speeches. It is also a common theme for many other notable personalities in the country. Notable print media houses that disclose political corruption in Kenya are the Nation and The Standard group of newspapers.

Several other civil society organisations, such as NGOs, religious organisations, professional associations and business and private sector organisations, have entered the fray against corruption through disclosure and civic education initiatives. A varied and energetic civil society now plays an important role in public policy debates. Like the media, this is a function of the enlarged democratic space that now allows for greater freedom of association, and fewer restrictions on the registration of such organisations. Many of these organisations hold seminars and workshops aimed at educating the public against corruption, and also conduct research on corruption whose output is critical to the anti-corruption war. A number of civil society organisations in Kenya have achieved significant transparency in government, compared with many other countries coming to terms with the legacy of long-term authoritarian rule (Freedom House 2006). Such organisations include the Centre for Law and Research International (CLARION), the Institute of Economic Affairs (IEA), the Centre for Governance and Development (CGD), Transparency International-Kenya, and Name and Shame Corruption Network. Religious institutions involved in the anti-corruption crusade include the National Council of Churches of Kenya (NCCK), the Catholic Church and several Islamic organisations (Akivaga Reference Akivaga, Kibwana, Akivaga, Mute and Odhiambo2001).

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Political corruption has become institutionalised in Kenya. Since the re-introduction of multiparty politics in 1991, the level of political corruption related to political finance, particularly campaign financing, has increased. This is largely due to intense intra- and inter-party political competition. Both the Moi and Kibaki administrations under KANU and NARC respectively, have witnessed political corruption as they sought to retain political power in an atmosphere of political uncertainty. Corrupt political financing in particular, and political corruption in general, have had adverse effects on democracy in the country. They have negatively impacted on the nature of governance, with serious political and economic ramifications. Multipartyism has, however, provided new opportunities for the war against corruption in the country. The creation and expansion of the democratic space has provided civil society organisations with opportunities to enhance their war against corruption.

The impact of political corruption on democracy in Kenya raises broader issues for corruption and democracy in Africa as a whole. This applies especially to countries in transition from authoritarianism to democracy. African countries that are undergoing transition are likely to bear the same effects of political corruption as in Kenya. Many sub-Saharan African countries share similar social, economic and political characteristics, and have bore the brunt of many years of authoritarian rule. They are now rapidly implementing political and economic reforms that outpace the preconditions that must be met before democratic consolidation. This results in a poorly managed democratisation process that provides new incentives or opportunities for corrupt political financing and political corruption in general to emerge. Corrupt political financing is likely to pose a serious threat to the nature of governance in these countries, especially where ruling parties seek to retain political power in re-elections under conditions of political uncertainty. The state and its officials become unresponsive and irresponsible, thereby threatening democracy. It is also likely to have serious implications on the economies of these countries.

The introduction and return of multiparty politics in Africa has benefits as far as the issue of corruption is concerned. The creation and expansion of the democratic and political space has opened up opportunities for the emergence and enhancement of a vibrant civil society that is now taking an active role in the anti-corruption war. Civil society organisations, including individuals, business or private sector organisations can adopt anti-corruption initiatives, due to the expansion of fundamental rights and freedoms, such as the freedom of expression and association. As the levels of democratic governance increase due to expansion and consolidation of democracy, the levels of political corruption are likely to reduce on the continent.