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'Scams" at State house. By Suzgo Chitete


Image taken from The Nation Online

They come with pomp and splendor, enjoying massive support from a wide spectrum of donors. But once their founders are out of power, the entities disappear with no one holding them to account for the millions they will have made.

These are initiatives and charities founded by successive heads of State and their spouses during the 26 years of multiparty rule and which have benefitted from robust funding from the State and private sector as well as from countries such as China and Taiwan. The State support also includes use of public resources, office space, cars and personnel.

The four presidents and their spouses- up to Peter Mutharika – have founded nine charities and three presidential initiatives – five under Bakili Muluzi’s regime; three under the late Bingu wa Mutharika’s administration; three in Joyce Banda’s two-year rule and one in the Peter Mutharika reign.

While all the 12 entities raised millions of kwacha, there has been no accountability on the resources, according to the NGO Board executive director Voice Mhone.

In a written response, Mhone said the board only became operational in 2015 – meaning it could enforce accountability prior to its existence.

“There was no accountability mechanism prior to 2015 due to many factors, including lack of government seriousness to register and regulate the NGO sector as it operated without an NGO policy [while] the NGO Board secretariat was not supported financially”, explained Mhone.

Muluzi formed the Bakili Muluzi Institute (BMI), Bakili Muluzi Foundation for the Poor, Bakili Muluzi Aids Foundation, Bakilil Muluzi Health for All Initiative while his wife Shanil formed the Freedom Foundation.

Muluzi’s Foundation for the Poors and the Aids Foundation were registered with Congoms [Council for Non-governmental Oragnisation of Malawi]. All the five are no longer operational.

President Bingu wa Mutharika’s three initiatives were Bingu Silver Grey Foundation, which was his own while his first ladies ran two similar initiatives – Ethel Mutharika Foundation and Callista Mutharika Safe Motherhood Foundation. The first two are no longer active and were never registered as NGOs. Even when operating as such, according to NGO Board and Congoma.

Banda formed the Presidential Initiative on Maternal Health and Safe Motherhood, which later metamorphosed into a government initiative. She also ran the Presidential Initiative on Hunger and Poverty Reduction and Mudzi Transformation Trust.

Both presidential initiatives on hunger and poverty reduction and Mudzi Transformation Trust were phased out when the Democratic Progressive Party (DPP) took over government in 2014. But the DPP government seemed to have replaced Mudzi Transformation Trust, which focused on construction of houses for the poor, with the Affordable Cement and Malata Subsidy Programme funded directly by the national budget.

While all the nine charities fit into the legal definition of non-governmental organisation (NGO), three were not registered as NGOs and were operating illegally, according to the NGO board.

The NGO Act of 2001 defines an NGO as any organisation that solicits funding for public benefit and based on this law, such organisations are supposed to register with the NGO Board and provide yearly financial reports as part of an accountability mechanism.

The development has prompted analysts we spoke to, to propose an end to presidential initiatives, which they described a “potential area for fraud”.

The Beautify Malawi Trust (Beam) is the only presidential charity established under Peter Mutharika’s six year rule. Beam, which is registered as an NGO and has been active for the past five years, faces an uncertain future and it is “unlikely to continue following change of power”, a trustee, speaking on condition of anonymity, confided in us.

Another trustee, who has been speaking for Beam, Dingiswayo Jere, said he could not tell the future of the organisation because there is no communication from the patron [Gertrude Mutharika].

“It is only the patron who can tell you what will happen next”, said Jere.

The financial statements at the NGO Board, we have seen, show that in the first two years (2015-2017) Beam Trust raised about K290 million; K134 million in 2015; K119 million in 2016 and K38 million in 2017.

The organisation, which was formed to promote sanitation, has not complied with the law to submit financial statements for years 2018 and 2019, according to records from NGO Board.

A technical report, which we have seen, shows that 88 percent of Beam’s funding came through donations and fundraising and 12 percent from indisclosed sources. Beam has enjoyed support from public institutions such as city councils and utility companies. Private companies such Motal Engil, Sawa Group and Lafarge Cement also made donations to Beam at one time or another.

The presidential NGO also had China as one of the major donors, which in 2016 donated three refuse collection trucks to the organisation. In 2017, China donated K21 million and K33 million in 2018.

Beam has been oragnising some well-patronised fundraising activities at State House, some presided over by the president and raking in millions of Kwacha.

Early last month First Lady Monica Chakwera launched her charitable organisation – Shaping Our Future Foundation (Soff) – which will focus on promoting under privileged girls in attaining education.

Donors seek recognition from President – ex – first lady

In separate interviews, former first ladies – Callista Mutharika and Shanil Muluzi – admitted that State House fundraising activites help to raise resources because most people want to have a connection with the President.

The two first ladies, though passionate about their foundations, indicated that it is not easy to run the same once out of power since donors or people who provide support are not necessarily interested in the initiative but to enhance their visibility before the President.

“Most of those that supported me were interested in securing a relationship with the president or were the president’s friends. So, the support came as a result of our position”, explained Shanil Muluzi.

Former President Bakili Muluzi blamed lack of continuity to politics, saying when regimes change the environment becomes naturally hostile for survival of initiatives established in another administration.

Another former president Banda said it’s not wrong to have initiatives phase out once the founder is out of power, saying they are specific to the vision incumbent. Banda said the essence of creating intiatives is for the president to fast-track their agenda and this is a personal choice.

“We create such initiatives to accelerate achievement of some development goals. It is a personal choice,” Banda said in an interview.

Potential fraud area, for political mileage

Governance experts hold that the country ought to have a legislation to stop presidents and their spouses from establishing initiatives and charities and have them concentrate on State functions. They claim such initiatives are a distraction and a potential area for fraud.

Legal expert Justin Dzonzi said the president ought to focus on State duties and concentrate on government business. He said running charities and personalized initiatives have two possible risks-lack of accountability and distraction from established government business.

“Accountability becomes a challenge. Who wants to question the President’s initiative or charity? And these charities eventually become vehicles for corruption. For example, if a president forms a trust or foundation people who benefit from government business will find this a convenient way of donating to the President. And because this creates this opportunity, it must not be encouraged,” argued Dzonzi.

He said even the president’s spouse must not be allowed to run charities, because there is also a high potential for abuse of office citing how parastatals and the National Aids Commission (NAC) were forced to make donations to Beam.

Chancellor College political scientist Blessings Chinsinga argues that presidential charities or initiatives are mostly formed for personal gains and less for public benefit, and observed that government business was already a huge responsibility which calls for concentration and focus.

“If, for example, the focus is on women empowerment or gender, let the first lady or president work with an existing government ministry or institution,” said Chinsinga.

He observed that presidential initiatives are created less to make a difference but more to enhace one’s political visibility as well as financial gains.

Charities are money – minters

Muluzi’s initiative on health worked mostly with Ministry of Health and focused on provision of drugs and medical equipment. At one point, in 1999, when most hospitals had reported a drug stockout, the initiative claimed to have not been affected as its targeted centres (260) had drugs, according to the then deputy minister of Health Phillip Bwanali, as captured in our file stories.

Bwanali also said the initiative was to establish health centres with eight kilometres across the country – a promise that was never achieved, according to a Ministry of Health official.

The Foundation for the Poor had its focus on supporting the needy. For example, in August 2002 the foundation had sponsored 19 needy students in Phalombe district. There are no readily available records to show what more the foundation did and the source of income and Muluzi has not furnished us with this information.

The Aids Foundation was established just few weeks before Muluzi left office and never continued after his successor came in.

BMI, which started in 2002 but was officially launched at Sanjika Palace in February 2003, appeared to be MUluzi’s biggest personal organisation. Its focus was on capacity-building for Malawians as a vehicle for poverty alleviation.

In just about three years of existence 2002-2005, BMI had an income of over K1 billion ($1 365 000) deom Muluzi’s pocket - $305 000 (over K228 million) fees raised from trainings, fundraising and donations. According to a financial report which we have seen, the income largely catered for salaries, allowances and other administrative costs.

The Institute also owned assets such as cars, computers and land in Limbe, allocated by the Blantyre City Council at Queen’s Park, covering 25 051 square meters – where the BMI campus facility was to be constructed at a cost of $15 million.

One former chief executive officer (CEO) in a public firm who closely worked with BMI described it as one rich presidential initiative which paid salaries more than parastatals and corporate institutions.

The financial report shows that in 2003/2005 the CEO for BMI was earning a monthly salary of over K3.6 million at current value. Drivers and received more than K200 000.

“As CEO, we were forced to attend leadership trainings BMI organized and ran for a week. We had to pay participation fees. If you didn’t participate, there were subtle penalties, so to avoid those we attended and in a way financing BMI”, said former CEO.

But while government agencies financed BMI in form of training fees, the BMI financial report shows that the founder – Muluzi financed the trainings.

The report reads, in part “The founder also sponsored leadership workshops throughout the year at an average of $20 000 per workshop”.

Muluzi also had provided $100 000 “for the establishment and management of the BMI secretariat and launching activities”.

With all that it achieved in a short period of time, it is known what happened to the resources – funds and assets – when the institute wound up. The land it acquired in Limbe was later given to Mulhako wa Alhomwe, according to Blantyre City Council public relations manager Anthony Kasunda.

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