Tsvangirai Fraud Scandal Deepens

The fraud scandal in which Zimbabwe’s Prime Minister Morgan Tsvangirai and his close relative Hebson Makuvise are accused of misappropriating US$1,5 million in public funds meant to buy a house for the premier in the up-market Highlands suburb in Harare has deepened as new information obtained this week further shed light on the high profile case.

Latest details clearly show that there were two different sums of money released from Treasury and the central bank to buy the same state-owned property, located at No 49 Kew Drive in Highlands.

One part of the amounts — US$1,5 million given to Tsvangirai — was allegedly siphoned off by the premier and Makuvise. A team of detectives from the Criminal Investigation Department (CID) has opened a criminal docket and are probing the case also being handled personally by Police Commissioner-General Augustine Chihuri.

Details show Minister of Finance Tendai Biti in his 2010 national budget presented in November 2009 set aside US$1 million for the house. The money from Treasury was used to buy the property and for renovations. This has been confirmed by officials at the Exchequer’s.

At the same time, Tsvangirai was given US$1,5 million by government through the Reserve Bank of Zimbabwe (RBZ). The money was approved by President Mugabe on November 13 2009, after a request by Tsvangirai through RBZ governor Gideon Gono for it to buy a house to live in. This followed Tsvangirai’s failure to move into State House or Zimbabwe House, apparently after being blocked by President Mugabe.

“There were two sums of money released in November 2009 to buy a house for the prime minister. One amount came from Treasury and the other from the RBZ. The money from Treasury was used to buy and renovate the property in Highlands, while funds from RBZ were apparently misappropriated,” a senior government official said. “The trouble is that the Minister of Finance was not aware of the money from the RBZ since the prime minister had arranged that separately.”

Documents show Tsvangirai requested for money to buy a house and it was cleared by Mugabe on November 13 2009. Although the premier had requested much more he only got US$1,5 million for the purchase and renovations of the house. It was also agreed at the time that if the US$1,5 million was not enough, more would be provided later.

Official documents say police are intensifying investigations of Tsvangirai and Makuvise, Zimbabwe’s ambassador to Berlin, Germany, involved in the handling of the US$1,5 million.

Police are also investigating to see if Biti had anything to do with the double-dipping on the project but latest information shows the minister was not aware of that.

Bank statements show Makuvise, who lived at 3 Everette Close, Avondale, Harare, was the one who withdrew most of the US$1,5 million. He made a series of withdrawals until the funds were almost exhausted as the money was transferred from one bank to another.

Since Makuvise is Tsvangirai’s close relative, police suspect he was acting as the premier’s agent or acted in collusion with him in the alleged embezzlement. The US$1,5 million was transferred from one bank to another after it was released from the RBZ in November 2009.

Police, armed with warrants from the courts, have seized bank documents, reports and files to support their investigations.

The theatre of action has been the RBZ and four commercial banks, CBZ Bank, ZB Bank, BancABC and Interfin Banking Corporation, which have handled the US$1,5 million. The money was transferred and cleared with the aid of top foreign banks, including Standard Chartered Bank, New York, and National Westminster Bank, London.

Highlights of developments in the case so far:

November 13 2009, Mugabe approves US$1,5 million to buy a house for Tsvangirai after a request by the premier who had been blocked from moving into either Zimbabwe House or State House, the two main state residences. At the same time Biti budgets and later releases US$1 million for the same project;

Later during the month, US$1,5 million is transferred from RBZ into a special holding account at CBZ, from which Tsvangirai was expected to make withdrawals to buy the house;

Beginning of 2010 the money (still US$1,5 million) is however transferred from CBZ to ZB Bank, where US$140 000 is withdrawn by Makuvise and used to buy a residential stand;

Funds (now reduced to US$1,349) are further shifted from ZB Bank to Makuvise’s personal flexi-current account in BancABC where US$99 000 is withdrawn;

Money (now US$1,25 million) is transferred again into an Interfin account which belongs to a local law firm and from which a series of withdrawals from Account Number 11000 are made;

June 2011 police open a criminal docket and intensify investigations into a case of alleged fraud;

July 7 police obtain a warrant of seize against Interfin and also raid other banks for documents, reports and files;

July 14 Chihuri writes to Gono demanding information. Gono replies but Chihuri is not satisfied about the response and writes to Gono again on July 20;

July 18 chief investigation officer Alison Nyamupaguma of the CID writes to the RBZ demanding information;

Throughout July police intensify investigations even though they say they are “not aware” of the probe;

Friday August 5, Tsvangirai, through his spokesman Luke Tamborinyoka, says he is “not shaken” about the allegations and wishes police good luck in their investigations. After that police further intensify investigations.