The Goldenberg Scandal’s Echoes Continue to Be Felt Today


Many people would say that this is, simply and obviously, the promotion of justice, although defining this concept exactly has kept philosophers occupied for several centuries now. To keep things simple, let’s say that justice implies protecting the weak from the depredations of the powerful.

There’s a more cynical view of what the law is intended to do, namely that the courts, police and lawyers exist to promote public order and social tranquility. Why is this cynical, though, given that peaceful streets are generally a good thing?

In a perfect democracy, public order and justice are nearly synonymous and can dwell in the same house. In an autocracy or a fundamentally corrupt system, the two will often be at odds: keeping the peace may require maintaining the position of those at the top of the heap, even while they plunder those who happen to have less money and connections at will and with impunity.

This is the opposite of justice. When the law – or the organs of government expected to make it a reality – not only fails to prevent corruption or the looting of public coffers, but actually facilitates such crimes, we are not living in a lawful society. At the end of the day, it matters little if evil chooses force or fraud as its tool.

Rainbows and Leprechauns

Most people are willing to bend their morals a little when they’re shown a stack of cash, but just a glimpse of some shiny gold metal makes them willing to forget all propriety and reason.

The highlights of the Goldenberg affair are as follows: every country, especially developing countries, needs foreign currency to finance imports. In order to improve this situation, it was decided that exporters who deposited American Dollars with the CBK would receive 120% of their notional value in Shillings.

So far, so good, but the politically connected Goldenberg company simply imported gold from abroad, re-exported it and pocketed a 35% subsidy. In other cases, they “exported” gold and diamonds that didn’t even exist with the help of crooked government officials.

In total, the scam cost the country over Kshs 500,000,000, or 10% of Kenya’s annual GDP. Along with the Anglo-Leasing scandal, Goldenberg defines much of the country’s political history of the 1990’s.

The list of politicians, government officials and judges implicated in the fraud reads like a who’s who of Kenya’s upper crust at the time. Many resigned, some were prosecuted, but it seems that most will never quite face the music. At the same time, the man who exposed the whole mess, David Munyakei, was arrested, fired from his post at the CBK and lived in poverty until the end of his life.

Goldenberg Is Finished, but what About Today?

Are the Kenyan constitution and the legislation based on it no more than pieces of paper? Just because a document seems to have all the necessary stamps and seals doesn’t make it legitimate.

We all remember the violent events surrounding the elections of this year, 2013, and 2007. If nothing else, this clearly shows that politicians seek power not only from some selfless desire to help their people, but also for the unofficial perks that come with it.

The Goldenberg scandal was a very visible tip of the corruption iceberg. If the National Assembly should decide to purchase dedicated bluetooth speakers for each representative at a million Shillings per set, would the public even know about it?

It’s a proven fact that the systems intended to protect the public purse can be and have been circumvented. In the absence of credible enforcement, we can only expect to see more of the same.