Basajja case: Court failed to punish offending banks

It is against this background that we should review the decision of the Constitutional Court delivered on Tuesday, March 24, in a case filed by Legal Brains Trust against Hassan Basajjabalaba and 19 others, including the Governor, Bank of Uganda (BoU), two former ministers, and four commercial banks.

The case was heard and determined by a prominent panel of five distinguished justices of appeal: Kenneth Kakuru, Geoffrey Kiryabwire, Elizabeth Musoke, Cheborion Barishaki and Stephen Musota. It took the court a shocking eight years to hear and determine this case.

Fraudulent schemes
Briefly, the case challenged the constitutionality of two schemes through which public assets were dubiously given to private persons. In the first scheme, Mr Bassajabalaba’s Haba Group of companies was given four city markets and the Constitution Square (a gazetted green space) by the administration of the defunct Kampala City Council.

In the second scheme, a consortium of four commercial banks (Tropical Bank, Orient Bank, Bank of Baroda, and United Bank for Africa) sought and obtained over $65m (about Shs253b) of public funds from the national treasury on account of “letters of comfort” issued by BoU Governor Emmanuel Tumusiime-Mutebile in favour of their esteemed customer, the Haba Group.

The petitioner, Legal Brains Trust, a vibrant NGO in the fight for the rule of law, democracy and accountability, argued that both schemes had been conceptualised, concluded and implemented in contravention of the Constitution, and were, therefore, illegal, null and void. It asked the court to order the beneficiaries of these corrupt schemes to refund taxpayers’ money.
This was a novel case and a golden opportunity for the court to walk the talk against corruption.

As will be shown later, the Judiciary failed to walk the talk. The five justices could not even agree on whether the schemes in question amounted to corruption, and if so, who should bear the liability for depleting our overburdened treasury.

Wheels of corruption
In his 106-page judgment, Justice Kakuru swiftly denounced the first scheme based on admissions made by both counsel for Kampala Capital City Authority (KCCA) and the Attorney General that the conspirators had sidestepped the relevant authorities, especially the Attorney General, whose advice and consent was a constitutional prerequisite.

He then elaborately traced how the four commercial banks and BoU got involved in the second scheme. He notes that the push to have BoU involved was clearly initiated by former Finance minister Syda Bbumba, who twisted the hand of the BoU governor to issue “letters of comfort”
to the commercial banks, effectively guaranteeing repayment of loans requested by Mr Basajjablaba’s Haba Group of Companies on the basis that “Parliament would very soon approve” a supplementary budget compensating the Haba Group.

The learned justice further found that the four commercial banks completed a “fraudulent scheme” that started with the bogus tenders of city markets and a public park to their esteemed customer. To use his words, these banks were ‘part of the oil lubricating the wheels of corruption’.

He further pointed out that then Attorney General, Prof Khiddu Makubuya, and Ms Bbumba, were the masterminds behind this scheme of “fraud and corrupt dealings”.
These are very serious findings, which required serious consequences or penalties.

Yet throughout the 227-page judgment of the court, it is clear that only Justice Kakuru came close to understanding the gist of the case.
In my opinion, this case was not just about a refund of stolen public money – it was about holding all the conspirators to the fraudulent schemes accountable!

Softness and silence
Whereas Justice Kakuru pinned the four commercial banks as conspirators to – and beneficiaries of - a fraudulent scheme, he shied away from ordering them to refund the millions of dollars which they individually siphoned from the national treasury, with the assistance of the BoU governor in contravention of the Constitution.
Instead, he proposed that a fine of $10m (about Shs39b) be imposed on each of the four commercial banks and that it should be paid within 30 days.

Against Ms Bbumba and Prof Khiddu Makubuya, he proposed that the Director of Public Prosecutions and the Inspector of Government, take appropriate action against them.

He found that the BoU Governor failed to properly advise the President and left the matter for him to handle.
The orders that Justice Kakuru proposed were novel and so serious that they would have helped deter private persons from participating in fraudulent schemes that are likely to lead to a loss of public funds. However, Justice Kakuru’s orders were conspicuously sidestepped by all the other members of the coram, who preferred softness and silence instead.

Justice Elizabeth Musoke’s 21-page decision boldly denounced both schemes complained of by the petitioner as unconstitutional, illegal, null and void because they had resulted into a withdrawal of taxpayers’ money from the Consolidated Fund without the approval of Parliament.

However, the lady justice was conspicuously silent on the liability of the commercial banks and two former ministers implicated in this fraudulent scheme. She instead heaped all the blame on Mr Basajjabalaba and his Haba Group of Companies.

Justice Kiryabwire, who served as a longtime judge and head of the Commercial Court before his promotion to the Court of Appeal/Constitutional Court, delivered a 53-page decision that is accentuated by its deafening, unexplained silence on the fraudulent scheme spearheaded by the financial institutions.

Justice Kiryabwire restricted his judicial power to finding that the first scheme involving city markets and a public park was unconstitutional and unlawful. He then ambiguously referred the matter to the High Court to investigate and determine the appropriate redress and/or liability for each of the parties regarding ‘the constitutional violations which were conceded’.

However, former Attorney General Peter Nyombi (RIP), whose evidence Justice Kiryabwire ignored, had conceded that the two schemes complained of by the petitioner were undoubtedly unconstitutional, unlawful, null and void.

After reading Justice Kiryabwire’s decision, I could not help but think about the time and effort that the petitioner’s lawyers had put in, only to be hit by silence on the most important issue where the opinion of a former commercial judge would have mattered the most!
Only God knows when the Supreme Court appeal from this case will be heard and determined in case the petitioner decides to take that course of action.

Dissenting judges
The other two justices Barishaki and Musota took the easy way out. Focusing extensively on the petitioner’s complaints regarding the first scheme, the duo simply chose to dismiss the petition on grounds that the remedies sought could be granted by another court or authority, not the Constitutional Court.

It is not immediately clear from their 46-page analysis whether they gave adequate attention to the petitioner’s complaints regarding the second scheme.

There are a number of fraudulent schemes for stealing public assets that daily escape our individual and collective scrutiny for a host of reasons, including legal and financial illiteracy, shifting priorities, scarcity of resources, and most important of all- political sensitivity of the investigations.

But this case has vividly shone a spotlight on two of such schemes and, therefore, stands out as a high watermark for citizen advocacy against corruption.

Despite the immunity that has been wittingly or unwittingly given to the four commercial banks by all the five justices of appeal, Legal Brains Trust has, at least in theory, saved over Shs170b of taxpayers’ money, which could have been used to build hospitals that are so much needed to help Covid-19 patients today.

Unfinished business

Not yet over. Unfortunately, the controversy is far from over. After eight years of limbo in the Constitutional Court wherein five distinguished justices of appeal ultimately failed to render a clear and unanimous resolution of all matters in controversy, it is somewhat embarrassing that a 3:2 majority consensus emerged in favour of referring the matter to a single judge of the High Court for “appropriate remedy”. I almost feel sorry for the miserable wig into whose docket this hot potato shall fall.

Lastly, public interest litigation (PIL) is an expensive undertaking. Aware of the attendant risks and resources invested in a PIL case of this calibre, the least the court should have done was to appreciate Legal Brains Trust by ordering the guilty respondents to pay all the expenses the petitioner incurred in exposing and combating the illegal and fraudulent schemes we have all learned about this case. Instead, the court ordered that the organisation should meet the expenses it incurred in saving taxpayers’ money.

The writer is a lawyer