Cashgate sentence
September 4, 2015
A court in Malawi has handed down a prison sentence to a major figure in the "Cashgate" scandal, which led to several donor countries cutting their contributions to the government. The scandal helped push former president Joyce Banda out of power. Her successor, Peter Mutharika, has appealed to the World Bank for more aid and last month canceled a trip to a regional summit in Botswana in order to save money.
Cashgate is the biggest financial scandal in Malawi's history. Government officials allegedly exploited a loophole in a computer-based information storage system to divert up to $250 million (225 million euros) from government coffers. Donor countries were outraged and withheld $150 million of aid. Up to 40 percent of Malawi's annual budget is donor-funded.
Last year, Germany, one of the countries that suspended aid to Malawi after news broke of the graft scandal, granted the nation $25 million to conduct an audit into the fraud.
On Friday the High Court in Zomba, southern Malawi, sentenced businessman Oswald Lutepo to a total of 11 years in prison, eight for money laundering and three for conspiracy to defraud the government. Lutepo's lawyer Oswald Mtupila had pleaded for leniency at the start of the week. He told the court that Lutepo had taken "a bold decision" to plead guilty to the crimes committed between April and September 2013. However, presiding Judge Redson Kapindu said a custodial sentence was the only verdict possible for such serious offenses. Online newspaper Nyasa Times says Lutepo "looked grumpy" as the sentence was handed down. He has pledged to fight for minority rights while in prison.
Banda and Cashgate
Prior to the sentencing, Lutepo addressed the media and said he had been just a minor player in Cashgate, and he urged others to confess their wrongdoings. He said Joyce Banda had used him to plunder state resources. Banda was president of Malawi from April 2012 to May 2014 and was the southern African country's first female president. In 2014 Forbes Magazine named her the most powerful woman in Africa.
As the investigations into Cashgate continue, many Malawians believe Banda is in some way connected to the massive plundering of government funds. DW correspondent Mirriam Kaliza says "Some quarters, such as civil society groups, say she needs to come and clear the air."
Banda has released several statements, but Kaliza says the Anti-Corruption Bureau is still gathering evidence of possible links between the former president and Cashgate, and she may be required to return home for questioning. She has been out of the country on private engagements since late June, 2014, and is currently in South Africa.