Malawi’s graft-busting body – Anti-Corruption Bureau (ACB)’s decision to clear the State House of wrong-doing in a fraud-related case has raised suspicion. The State House was accused of paying inflated bills in accommodation to Crossroads Hotel for some Israeli guests – whose mission in the country remains a mystery.
In October last year, it was revealed that State House had some four Israeli visitors accommodated at Crossroads Hotel where it paid for room services at an inflated rate of K225,000 ($300) – but both Statehouse and Crossroads Hotel dismissed the story as “fake news”.
Private-owned and PIJ partner Nation Publications Limited gathered evidence that indeed state residences had issued a cheque worth about K12.5 million as payment for unknown foreign guests– prompting rights activists under the banner Human Right Defenders Coalition (HRDC) to report the matter to ACB for investigations.
In a statement released on Tuesday, ACB Principal Public Relations Officer Egrita Ndala said the bureau has closed the case due to a lack of evidence of wrongdoing.
Ndala said: “There was no inflation of figures by State House on the payments that were made to Crossroads Hotel. The payment made by Miguel Elias of Chitundu Distributors to Crossroads Hotel for the accommodation did not come from State House Account.
“The K12 500 000 payment was made by State House directly to Crossroads Hotel towards the accommodation costs of the guests. There was no corruption in the payments that were made to Crossroads Hotel as alleged in the complaint.”
But PIJ is privy to information that out-rightly contradicts the ACB findings – that indeed there was some inflation of figures in the accommodation of the unknown foreign visitors. A collaborated account between some hotel officials and a statehouse insider – shows that the foreign visitors were in the country for about two months between July and September – just days after the Tonse Administration rose to power.
While at the time of their visit expensive accommodation at Crossroads Hotel averaged about $120 dollars these visitors were charged $300 dollars (about K225, 000) – after negotiation from $350. This is also a figure which is captured in invoices that once circulated on social media but PIJ verified to be true.
Once an alarm was raised on these inflated figures, according to our sources, Crossroads Hotel had to move the guests to other rooms where it was charging the paymaster $90 dollars.
“They only stayed in these suites for few days {two weeks} at a cost of $300 but after they complained of the price we moved them to cheaper ones worthy $90 dollars where they stayed for a month or so” disclosed a senior official from Crossroads in a recorded interview.
This means that just for the four guests and one Malawian (Elias Miguel) Crossroads Hotel was cashing in about $1500 in accommodation which translates to about $20,000 just for two weeks at a rate of $300 per night. While at the rate of $90 it means per day – the hotel made $450 which comes to $13500 for 30 days for five guests.
Sources indicate that the Israeli guests had come in the country to provide security training for presidential bodyguards – a claim that has not been substantiated by both the police and Malawi Defence Force who provide presidential security.
Coincidentally the man who ACB claims to have also been paying for these guests apart from State House Miguel Elias of Chitundu Distributors was an MCP candidate for Blantyre Kabula constituency in 2019 parliamentary polls – who travelled with Chakwera to Israel in November 2019.
Chakwera in a tweet from Jerusalem said he had taken a break to pray for the country. This was the time when Chakwera and his number two Saulos Chilima had a case in court disputing 2019 presidential elections results.
The Centre for Democracy and Economic Development Initiative (CDEDI) has bashed the graft-busting body for what it calls incoherent and incomplete investigation – which leaves the public in suspense.
In a letter addressed to ACB director Martha Chizuma, dated November 3, 2021, and signed by CDEDI executive director Sylvester Namiwa – a former statehouse press officer under the previous administration punched holes in the ACB findings.
“Point no. 1 in the ACB statement states clearly that the guests in question came at the invitation of the State House, while point no. 4 in the same statement says the payment made by Mr. Miguel Elias, did not come from the State House. Point no. 5 in the statement goes on to say that payment of MK12.5 million was made to the Crossroads Hotel by the State House, in reference to the same guests.
Surprisingly, the ACB has not made any clarification as regards these two different payments, made to the same client, for the same purpose, by different entities. Why did the ACB not develop any interest to investigate the payment made by Mr. Miguel, a private citizen who used his hard-earned cash to pay for State House guests and activities? Queries CDEDI.
The Centre also claims that there was possible inflation of rates as their findings show that rooms at Crossroads hotel are lower than the quoted figures.
“Our investigations including quotations sourced from Crossroads Hotel show that accommodation rates range between MK 65,000 to MK81, 000. Knowing that these are public funds it baffles the logic that the ACB took no interest to investigate what appears to be an inflation of prices but instead rushed to close the case (see attached quotations)” further reads the letter from CDEDI which believes that the statement from ACB is meant to shield some people it has not named.
ACB is yet to comment on these allegations. Statehouse, which previously refused to comment on the basis of the investigation, has also not provided clarification on this matter although with the ACB clearance now the State House says it will still not comment on the Crossroads Hotel saga because the case borders on security.
While ACB has found State House with no case, PIJ wanted to find out what was the mission of the Israeli guests who spent over a month in the country and why both State House and a private citizen Elias Miguel of Chitundu Distributors paid for their accommodation.
But in response, acting Presidential Press Secretary Anthony Kasunda said; “It is sufficient that this matter has been settled by an independent investigative body as having no trace of wrongdoing.”
“As such, the State House does not wish to continue commenting on this issue. Additionally, the issues surrounding this incident are a matter of national security, which by its very nature, cannot be discussed publicly,” he added.
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