Former president Joyce Banda was on Wednesday named in court as having been involved in what has come to be known as Cashgate.
This transpired in the High Court in Lilongwe during the conviction of former chief tourism officer in the Ministry of Tourism, Leonard Kalonga, who pleaded guilty to three counts of money laundering. The court convicted him on his own plea.
Charges against Kalonga included conspiracy to defrauding government, facilitating money laundering and money laundering.
Director of Public Prosecutions (DPP) Mary Kachale told the court that Kalonga narrated how former president Banda and former budget director, Paul Mphwiyo, were involved in the looting.
She said the stolen money was meant to fund the then ruling People’s Party (PP).
Kachale told the court that the Office of the President and Cabinet (OPC), Accountant General, Financial Intelligence Unit (FIU), Reserve Bank of Malawi (RBM), Office of the Director of Public Procurement (ODPP) and Treasury are among the top government institutions that were closely involved in the looting.
“On the involvement of the then Head of State, Dr Joyce Banda, Kalonga had no direct dealings with her. Most of what he knew, he heard from Mphwiyo. Mphwiyo informed Kalonga and others that the money he collected was delivered to State House. However, Kalonga stated in his affidavit that on just one occasion, he was present when Oswald Lutepo, another Cashgate convict and kingpin, deliberately put a telephone conversation he was having with then president Banda on speaker phone. He thus once heard what Lutepo was saying assuring her about bringing more money for the campaign.”
And when fears of discovery started gripping the conspirators, the court heard, former principal secretary in the Ministry of Tourism, Tressa Senzani—currently serving a Cashgate jail term—assured Kalonga that the president would protect them.
According to Kalonga, it was Mphwiyo who explained the scheme to him and later asked him to sell the idea to people who matter at the Ministry of Tourism.
Kalonga said Mphwiyo also instructed him to recruit contractors within the construction industry to avoid suspicion when drawing large sums of money.
“Initially the scheme entailed actually requesting for extra funding and production of fake documents to process the payments, but once Mphwiyo became budget director, the modus operandi changed. There was no longer need for the Office of the Director of Public Procurement to issue no objection letters to the department of buildings to issue fake interim completion certificates. It was said that the Accountant General Department was fully on board,” reads the court statement.