Annex 3.1: SNA financial management and misappropriation(STRICTLY CONFIDENTIAL)

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Annex 3.2: Misappropriation of funds at the Somali Embassy in Nairobi

1. The flow of funds between the FGS and its embassies has been subject to allegations of corruption and the misappropriation of some of those funds. The Monitoring Group revealed in previous reports (S/2012/544, paragraphs 72 and 73 and S/2013/413, paragraphs 18-21) financial irregularities concerning the production and issue of passports and the misuse of funds collected by Somali Government missions overseas. The lack of transparency and accountability and the absence of financial discipline continue to be an issue. Money collected from Somali nationals for passports or other official documents is not always accounted for in full. In fact some Somali heads of mission consider the revenues collected or the money disbursed by the FGS as their own personal reserve. There are no standard procedures for the collection of fees for passports and other travel documents. Due to the fact that Somali banks are not fully functional, the monies collected internationally are transferred to Mogadishu through remittance companies (hawalas) or sometimes in cash.

Misappropriation of funds at the Somali Embassy in Nairobi

2. The Monitoring Group has discovered serious irregularities concerning the management of public financial resources at the Somali Embassy in Nairobi and has conducted an investigation into funds collected by the embassy for passports and other travel documents for the period January 2014 to April 2015.

3. The former Somali Ambassador, Mohamed Ali Nur "Americo”, had been in office for more than10 years and was the longest-serving diplomat in Kenya. He was recalled to Mogadishu in early April 2015. The newly nominated Jamal Hassan began his mandate on 4 August 2015 after the Government of Kenya accepted his credentials. Sources informed the Monitoring Group that approximately 10 days prior to his recall Ambassador "Americo” brought a team of IT specialists into the Embassy,allegedly to perform updates on the embassy’s computers. In fact, information was removed from thecomputers and many documents were also destroyed.1

4. Every Somali national applying for a passport in Nairobi has to pay USD 130 and KES 2,000 (USD 19) (available in annex 3.2.a). The Ministry of Interior requires that USD 98 of the fee is transferred to its Dahabshiil account in Mogadishu and USD 32 is kept by the embassy. That means that, for each passport issued, the Nairobi embassy keeps USD 51, including the KES fee. For an emergency travel document, the embassy charges USD 55.2 According to high-ranking FGS officials interviewed by the Monitoring Group, all of the money collected by embassies for passports and

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1 SEMG interviews with former Somali diplomat and sources close to the Somali Embassy in Nairobi, 15 April and 10 July 2015.
2 For this kind of document, the embassy retains the entire fee.

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travel documents should be transferred to the Treasury Single Account (TSA) at the Central Bank and from there the FGS would disburse funds to its embassies according to their needs.3

5. Applicants for travel documents at the Nairobi Embassy deposit the relevant fees into two accounts in the Nairobi branch of the Transnational Bank.4 Over 7,500 Somali nationals applied for travel documents during the timeframe of the investigation. The total amount collected in both accounts for this timeframe was USD 960,836. Two remittance companies, Amal Express and Dahabshiil, were used to transfer the funds to Somalia. The assessments of the Group are based on the statements of the two accounts for the period mentioned above and the transfer receipts from the twohawalas for the same period.

6. According to bank statements, cash withdrawals were made from the two designated deposit accounts on a regular basis but the amount of money withdrawn was not consistent with the sums transferred to Mogadishu. According to receipts from the two hawalas, the total amount transferred between January 2014 and April 2015 to the Ministry of Interior’s Dahabshiil account in Mogadishuwas USD 486,258. That leads to a difference of USD 474,578. The receipts show that cash transfers were made mainly by an individual named Mohamed Ahmed Anwar (see annex 3.2.b).5 The Group learned that he was not even an employee of the Embassy but a friend of Ambassador "Americo”. Insome rare cases, the ambassador himself made transfers to Mogadishu.

7. The Ministry of Foreign Affairs allocates USD 49,200 for the operation of the Embassy in Nairobi per quarter. For the period mentioned above, in addition to the USD 474,578 from travel document fees that was not transferred to Mogadishu, the FGS allocated an additional USD 246,000 to the Embassy. This adds up to a total Embassy income of USD 720,578.

8. Ambassador "Americo” was recalled to Mogadishu on 2 April 2015. On 4 April, Anwar madesix cash withdrawals totalling USD 9,000. At the close of business on 4 April, the two embassy

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3 SEMG interviews with Minister of Finance Mohamed Aden Ibrahim by telephone, 10 September 2015, and Fawzia Yusuf H. Adam, Member of Parliament and former Minister of Foreign Affairs and International Cooperation and Deputy Prime Minister by email, 12 September 2015. Ibrahim and Adam confirmed to the SEMG that according to Somali legislation the money collected by embassies must be transferred to the Treasury Single Account (TSA) at the Central Bank. Adam also confirmed that during her mandate she gave instructions to all Somali foreign missions to transfer sums collected to the Central Bank, but that very few complied.

4 At the Transnational Bank’s Nairobi branch, the Somali Embassy in Nairobi’s KES account number is 15555/500TCA00/1 and USD account number is 15555/500TCA01/17.
5 When contacted by SEMG, Mohamed Ahmed Anwar initially agreed on 9 September 2015 to a meeting, from which he then withdrew on 10 September 2015, due to an unexpected trip outside Nairobi. He confirmed by telephone on 10 September 2015 that he had never been an employee of the Embassy but is a friend of Ambassador "Americo”, and was acting as his private accountant. He also denied knowing anything about the way in which the Embassy’s money was spent and that his only job was to manage the Embassy’s bank accounts.

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accounts were almost empty, with respective balances of only KES 534 [USD 5] and USD 400. This means that the Somali Embassy in Nairobi spent USD 720,178 over 15 months. For comparison, according to the Appropriation Act for the 2015 Budget, the Ministry of Health received USD 793,032 for a period of 12 months, the Ministry of Labour and Social Affairs USD 760,116, the Ministry of Youth and Sport USD 572,220.

9. The Monitoring Group corresponded with Ambassador "Americo” by telephone and emailbetween 7 September and 12 September 2015 while he was in London. When asked about the passport money he stated he used it for

...assistance of refugees in Dadaab and Kakuma, rent of vehicles for dignitaries, assistance toSomalis accused of piracy in Mombasa, assistance of needy Somalis in Kenya, i.e. tickets, school fees, hospital fees, etc. Function for the Embassy. Assist Somalis throughout Kenya who needed assistance. Paid for school fees for students who got good grades for encouragement. Held seminars for the youth in Eastleigh, Mombassa and other cities. Paid hospital fees for mothers, elders and other Somalis who could not pay their hospital fees (sic).6

He also claimed that all these expenses were documented.

10. The Monitoring Group contacted the Somali Embassy in Nairobi to verify if the above expenses were accounted for. Embassy officials who were in office when Ambassador "Americo” handed overhis duties informed the Monitoring Group that the former ambassador passed on no documents whatsoever at his departure and that even the rent payments for the embassy building were USD6,000 in arrears. The Monitoring Group also understands that Ambassador "Americo”personally handled the salaries of embassy employees and all expenses.

Chinese Government grant and confusion over legal payments

11. In addition, the Monitoring Group discovered that the Somali Embassy in Nairobi received a USD 1 million grant in April 2013 from the Chinese Government intended for the FGS (see annex 3.2.c), and only transferred USD 479,314 to the Central Bank of Somalia. The remainder was allegedly used to pay legal fees to Ibrahim, Issack & Company in Nairobi for a lawsuit concerning a Somali Government property in the Kenyan capital. In the 1990s, the last Somali ambassador of the Siad Barre regime sold the premises of the Somali Embassy in Nairobi to a local businessman.7Somali authorities challenged the sale at the Nairobi High Court and won the property back in 2013.

12. In a letter addressed to the Finance Minister of Somalia, dated 16 September 2013 (available in annex 3.2.d), the then-Minister of Foreign Affairs and International Cooperation and Deputy Prime

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6 Email to SEMG from Ambassador "Americo”, 8 September 2015.
7 The sale included both the former embassy building and over 9,000 m2 of premium real estate situated in Lower Kabete, Westlands, Nairobi.

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Minister Fawzia Yusuf H. Adam claimed that Ambassador "Americo” had received the Chinese grantinto his own personal account and not into the account of the Embassy. Furthermore, in this letter, Adam stated that Ambassador "Americo” allegedly paid USD 517,686 for legal fees to Ibrahim, Issack & Company law firm in Nairobi. Adam also stated that Ambassador "Americo” got approval for this expenditure from her deputy, Mohamed Nur Ga’al, then State Minister of the Ministry of Foreign Affairs and International Cooperation, while she was away on official business. She claimed however that before leaving Mogadishu, she had appointed the Minister of Justice and ReligiousAffairs to act on her behalf, not Ga’al. Adam also stated at the end of the letter that the law firm’soriginal invoice for services rendered was only USD 250,000 and that USD 140,000 had been allocated in 2011 for this purpose by then-Prime Minster Mohamed Abdulahi Mohamed "Farmaajo”.

13. Adam also noted that the law firm’s receipt for the payment received indicated the sum of KES 517,686 (USD 4,916) and not USD. The Monitoring Group verified Adam’s allegations and canconfirm that on 4 April 2011, then-Prime Minister "Farmaajo” wrote a letter (available in annex 3.2.e) authorising the releasing of USD 140,000 to

...cover legal fees for solicitors incurred in connection with the recovery of Somali Embassy’sassets in Kenya. Furthermore the aforementioned fund is additionally intended for other expenses that are owed by the injured people that were flown from Mogadishu to hospitals in Kenya. The money should be handed to Ambassador Mohamed Ali Nur.8

The money was released to the Embassy on 11 April 2011, where Ambassador "Americo” was the receiving official (available in annex 3.2.f).

14. On 25 April 2013, the law firm Ibrahim, Issack & Company sent a letter to "Americo”acknowledging receipt of payment for USD 517,686 for fees, costs and disbursements (available in annex 3.2.g). However a receipt from the same law firm obtained by the Monitoring Group dated 23 April 2013 indicates that sum of KES 517,686 (USD 4,916) was received from the Somali Embassy, as asserted by Adam (available in annex 3.2.h). The Group cannot confirm the exact amount paid to the law firm, but the fact that a payment of over USD 500,000 is far too large for services rendered in connection with such a lawsuit raises serious questions.9 The Monitoring Groupcould not verify Adam’s claim that the law firm’s original invoice totalled only USD 250,000, but the Group has obtained information from multiple sources that the Somali business community in Nairobi also contributed substantially to the legal expenses relating to the retrieval of the former embassy premises.10

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8 Unofficial translation.
9 SEMG interviews with lawyers, accountants and real estate experts in Nairobi, May to August 2015.10 SEMG interviews with former Somali diplomat and high-ranking FGS official in Nairobi, 15 April 2015 and 3 August 2015.

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15. The Monitoring Group contacted Ambassador "Americo” in order to give him the opportunity toreply. Regarding the account into which the Chinese Government grant was transferred, Ambassador"Americo” produced evidence that he had told the Chinese to transfer the funds an account opened atCommercial Bank of Africa (CBA) in the name of the Somali Embassy and not the usual Embassy account at the Transnational Bank. Embassy officials confirmed the existence of the CBA bankaccount and informed the Group that Ambassador "Americo” closed it just prior to his recall to Mogadishu. Mohamed Ahmed Anwar also confirmed the existence of the CBA account and itsclosure by Ambassador "Americo”. The existence of another Embassy account at different bank mayhave created the confusion that led to the allegation that Ambassador "Americo” had used hispersonal account to receive the Chinese funds.

16. Ambassador "Americo” denied having knowledge of the Somali business community in Nairobi’s involvement in the payment of the legal fees for retrieval of the former embassy premises. He also stated that, to his knowledge, the Transitional Federal Government only released USD 50,000to cover these legal fees, during the time that Nur Hassan Hussein "Nur Adde” was Prime Minister.11Ambassador "Americo” stated that he does not recall the USD 140,000 allocated by Prime Minister"Farmajo” in April 2013. The information regarding the USD 50,000 released by Prime Minister NurHassan Hussein is new to the Group and raises further questions relating to this case.

17. Ambassador "Americo” also told the Group that the Auditor General, Nur Farah, who has lookedinto the case of the Chinese Government grant has cleared him of all suspicions.12 However, in a telephone interview with the Group on 11 September 2015, the Auditor General confirmed that while an investigation into the Chinese grant is ongoing, no conclusions had been reached.

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11 Nur Hassan Hussein was Prime Minister of the Transitional Federal Government of Somalia from November 2007 to February 2009.
12 All responses from Ambassador "Americo” relating to the former embassy premises lawsuit and the Chinese Government grant are sourced from SEMG interviews by telephone and email with "Americo” between 7 to 12 September 2015.

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Annex 3.2.a: Receipts for passport fee payments at Somali Embassy in Nairobi

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Annex 3.2.b: Receipt for money transfer to Mogadishu by Mohamed Ahmed Anwar

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