TFG: most corrupt entity in the world

[ModerateMuslim]

TFG Corruption: An Exclusive Report
Part I: The Cash Kleptocracy
02/21/2012


In the lead up to the London Conference on Somalia, Somalia Report will be publishing a three-part series on alledged financial corruption and mismanagement within the Somali Transitional Federal Government (TFG).

The findings presented here are sourced from a recently issued report, Audit Investigative Report-2011, by former TFG financial officer Abdirazak Fartaag.

With the release of this controversial private report, Fartaag issues his third straight annual look at TFG finances.

From April 2009 until April 2011, he served as the head of a newly created Public Finance Management Unit (PFMU) under former TFG prime ministers Mohamed Farmajo and Abdirashid Shermarke. Shermarke resigned on September 21, 2010 after disagreements with President Sharif. Fartaag was fired shortly thereafter in January of 2011.

This third report is privately funded and not related to the TFG.

In June 2011 Fartaag released an audit showing exactly where $300 million had gone under the the TFG. Although many Somalis insisted their government was not completely honest, it was Prime Minister Sharmarke who created the PFMU to track the $20 million in funds collected by the TFG and figure out where they went. In 2010, Fartaag did the first internal audit in twenty years. What he found was disturbing.

In 2009 the TFG collected about $8.2 million from taxes and $11 million from foreign donors. After investigating what he thought were simple cash input and outputs, Fartaag realized that the major amount of money collected by the TFG was almost ten times higher when foreign donor funds are included.

Fartaag's original report caused a sensation but not much change. A ten man anti-corruption committee was created in January of 2012 but little has been heard from them. Somalia's reputation as the "most corrupt" nation was also bolstered in the most recent Transparency International Corruption Perceptions Index. None of these organizations, including the TFG, have provided anything close to the detailed documents gathered by Fartaag upon which he makes his case.

After Fartaag left government, he became a whistle blower and continues to use internal documents to publish his latest report that shows a temporary Somali government without any fiscal restraint or oversight. His official PFMU 2009-2010 document revealed a government with access to not just only $8 million in taxes and $11 million in UN funds but $300 million dollars once donor funds were included.

His conclusions back then were:

i. Gross public financial mismanagement;
ii. Large scale misappropriation of public funds;

iii. Large scale misappropriations of donor funds (Arabian);

iv. Unethical and unacceptable professional negligence;

v. Financial intimidation at the Executive’s office compromising transparent and accountability;

vi. Concealment (under) collection of government budget revenue receipts;

vii. Concealment (under) payment of outstanding government expenditure receipts

That was a year ago and he continues to audit the TFG and present his results. As a private individual and he puts blame squarely with Somalia, not the donors. On Saturday, Fartaag presented the report card to an audience of Somali stakeholders and politicians at Nairobi’s Grand Regency Hotel. Although the conference hall was filled to capacity, few Somali politicians were in attendance.

“I met with a Somali MP (Member of Parliament) the day before the presentation,” Fartaag said with a sly grin. “He asked me if my allegations implicated the Minister of Finance. I told him ‘yes,’ and he didn’t show up to the presentation the next day. This shows that loyalties still lie with individuals, not the government.”

“Fartaag,” he explained to me, is a nickname handed down from his father, meaning “one who raises his finger.” To judge from his animated gesticulating at the podium, it is a sobriquet he has not merely inherited, but earned for himself.

The presentation was in Somali using a number of financial tables of numbers projected on the screen behind him. Although the content of his slides were just numbers, he had the audience hanging on his words.

Fartaag’s 50-plus page audit painted a picture of corruption, malfeasance, and outright theft facilitated by an out of control temporary government funded almost entirely of unmonitored cash transactions.

In fairness, Somalia does not have traditional banking or accounting institutions. Troops, civil employees and contractors must be paid in cash, by halwallas or money transfer firms like Dahabshiil. The last time he made similar accusations, the TFG reacted angrily pointing out Fartaag's numbers were not derived from an official audit and presented with no attempt to work with the TFG's auditor general.

A Government That Runs on Cash

Fartaag makes the accusation that the Somali Central Bank, the repository for all TFG revenues and most international financial assistance, exists as a de facto personal bank account for the TFG’s top executives.

“There is no accountability, no rules at all,” Fartaag explained to Somalia Report over coffee following his presentation. “Civil servants aren’t paid ‘salaries,’ they’re given ‘allowances,’ which are not paid with any regularity. What happens is that once a civil servant hasn’t been paid for a while, he goes to the PM or President—whomever he has personal connections to—who will then write him a letter asking the Central Bank to pay him X amount of dollars.”

“80% of the budget is paid out in this way—transfers of cash to individuals,” he explained.

In other words, $37 million of a total of $45 million spent on ministerial salaries and administrative expenses (by far the largest item in the TFG budget) were dispersed to gofers sent on behalf of various ministries, often without the authorizing officer properly identified. Records to which Somalia Report was granted access showed withdrawals as high as $800,000 in cash being handed over to individual recipients.

In one month, over $750,000 was paid to employees at the Office of the President alone.

As for what happens to the money after it’s withdrawn, let’s just say that the TFG’s accounting safeguards are about as sophisticated as what one would find on the average ATM machine: astonishingly, no systematic records ore kept of how the money is spent.

Donor Cash

And that's just the cash that actually makes it into the Central Bank coffers. The TFG receives bilateral assistance from the United Arab Emirates (UAE) of around $5 million per month, in cash. Every month, TFG officials fly to the UAE, where they are literally handed $5 million in a suitcase. Where the money goes from there is unclear.

Only two months in 2011 show Central Bank deposits for the full $5 million. In January, UAE deposits totaled just over $1.5 million. In October, only $130,045. Whether a remnant moral compunction or outright shame compelled this piddling concession to financial propriety is a question not answered by the records.

In total, of the $60 million donated by the UAE to the Somali government, only $34 million is accounted for in Central Bank records.

The government of Sudan has also reportedly pledged the TFG $1 million per month, piped directly into the office of the president. Only one deposit of $800,000, registered on April 9, appears in Central Bank records.

What appears to be systematic, monthly looting may also be trumped by one-time opportunistic thievery. Such was the case during the Salama Fikira incident, in which six private security contractors were arrested in Mogadishu's Aden Adde airport on May 24, 2011, while en route to do a pirate ransom drop.

The $3.6 million in ransom money was subsequently confiscated, and while Central Bank records show that a signed banking slip for the deposit was issued, the cash mysteriously disappeared somewhere along the way from the teller window to the vaults. ($3.6 million wasn't quite adequate, apparently, and Salama Fikira was extorted for a $100,000 "fine" to spring their employees from 15-year sentences in Somali prison).

Requests for comment from the TFG Prime Minister and Finance Minister were not immediately answered.

Joint Financial Management Board
One of the stated purposes of the upcoming London Conference on Somalia, which takes place on Thursday, is to deliver "a new international approach to Somalia."

Over the last year, the "two Sharifs," TFG President Sheikh Sharif Ahmed, and parliament speaker Sharif Hassan, have been able to run roughshod over the UN and its special representative to Somalia, Augustine Mahiga. In August of last year the two Sharifs hijacked the "transition" by jetting off to Uganda and unilaterally extending their terms in office for one year, establishing a two-headed rulership under what became known as the Kampala Accord. The Kampala Accord has led to the Garowe meetings that have forged a caretaker, but semi-permanent Somali government. This disregard for democratic and rule of law seems to be reflected in the handling of what should be public not private funds.

Fartaag is hopeful that a proposed caretaker system called the "Joint Financial Management Board" will help.

"I think this report is going to make a big difference in London," he said. "The British are out to help Somali citizens by improving transparency and accountability."

"This is information they cannot get anywhere else."

The Joint Financial Management Board proposed by the British will begin operating after the national elections scheduled for August. So far, however, the Board is not much more than a bullet point on the conference agenda.

When asked the motivation behind his potentially dangerous challenge to Somalia's entrenched political kleptocracy, Fartaag was quick to answer.

"Somalis from the diaspora only want to talk about how the international community has got things wrong in Somalia," he said. "This is my main point: the problem doesn't lie with the international community at all. It's us."

TO BE CONTINUED

In Part II of Jay Bahadur's exclusive report: Briefcase Ministries, Somalia Report will take an in depth look at the TFG’s ministries-in-name only.

[ModerateMuslim]

http://www.somaliareport.com/index.php/ ... ive_Report
http://www.somaliareport.com/index.php/ ... ive_Report
http://www.somaliareport.com/downloads/ ... datedx.pdf

[AbdiWahab252]

Akhii,


Are you alive ?

[tightrope]

THIS IS WHY PUNTLAND SHOULD NOT GIVE THE SOUTHIE GOVERNMENTT A PENNY OF PUNT OIL MONEY

[ModerateMuslim]

Akhii,


Are you alive ?

salam AW. am i suppose to be dead?

AW, since i bet you know more than anyone else how corrupt tfg, can you enlighten us a little just how corrupt it's and who are the most corrupt?

[OAF]

Is there any video where the guy is talking about this on youtube? cba to read all that

[Amilla]

Although I agree that TFG is one of the most corrupted governments in the world, I couldn't help but consider the source of this information.

Somalia report

[AhlulbaytSoldier]

Somalistar,

Afgooye is gone.
What happened to shabaab

[skywalker25]

Lol,

The west is so scared of those skirt wearing nutjob's why they will go to any lengths to eliminate them. If it means placing Somalia in the hands of a corrupt group of thiefs, even better. They kill too birds with one stone. Remove the Shabab and control Somali.

Horta ninyo, why are you Southerner's either, charlatan conman, or extremist nutjob's.
I say this because of the way this HUTUKING abuses the diin and also Granpa. Im amazed people would twist the diin and pass fatwa's like they have the power or knowledge. WTF?

[Arabmann]

Interesting investigational report.