On January 25, 2017, Parliament’s oversight committee on Commissions, Statutory Authorities and State Enterprises (Cosase) started investigating how 42 government officials came to be rewarded with Shs 6 billion for winning a tax case against Heritage Oil and Gas Limited.
Uganda Revenue Authority (URA) commissioner general Doris Akol led her team to defend themselves over the controversial “presidential handshake”. Akol’s team came in for some tough grilling by Cosase chair Abdu Katuntu (Bugweri) and other MPs. OLIVE EYOTARU brings you excerpts from the highlights of the proceedings.
After introductions of the URA team, URA boss Akol presents the genesis of the arbitration dispute on the capital gains tax between URA and Heritage Oil and Gas, after the latter sold off its 50 per cent participating share to Tullow for $1.35 billion and another contingent amount of $150,000.
Government later hired an international arbitration firm, Curtis, Mallet-Prevost, Colt & Mosle LLP to handle the case in London, while the attorney general’s office constituted a 24-member team to form the equivalent of the local law firm to support the international lawyer in defending the country.
Katuntu: At this point, we need clarification. Who formed this team and how was it formed and who constituted the team? Can you give us documentary evidence because government institutions work with evidence and record?
Akol: This committee was formed in 2011, prior to the start of the arbitration process. There were also background procedures for the constitution of the arbitration panel, as well as the procedural aspects relating to the arbitration and that process was all managed by the Attorney General’s chambers and the documentation is within their realm.
At the jurisdiction stage of the arbitration, the first issue of contention was whether the arbitration had jurisdiction to handle tax matters that were the preserve of national legislation. The production sharing agreements that the two companies had signed had a clause that all tax matters would be handled in line with provisions of national legislation and that national legislation provided appeal mechanisms for people who had grievances on taxation decisions. Heritage challenged that decision and felt that…
Katuntu: Did it challenge the procedure provided in an agreement which they signed?
Akol: Yes and even after succumbing to the national appeals mechanisms in the legislation, they still challenged that procedure at arbitration and that is why it was important for the arbitration to be divided into those two stages; to determine whether the arbitration tribunal had jurisdiction to deal with matters of taxation that were the preserve of national legislation and thereafter, if they had jurisdiction…
That process took about, my memory fails me, about a year and a half, and a decision was awarded in favour of the government of Uganda to the effect that tax matters that fall within the realm of national legislation are not matters that can be arbitrated upon at international arbitration and therefore Heritage Oil and Gas [had] to pay the capital gains tax that had been assessed and collected in Uganda. That was the first stage.
Katuntu: Okay, you did say that it took around one year. How many hearings were they and in terms of hours, how many hearings were they?
Akol: The jurisdictional award was given on the 3rd of April. I will need to refresh my memory on the number of hearings that it took.
Katuntu: Did you participate in them?
Akol: Yes I did.
Katuntu: In London?
Akol: Yes, I did
Katuntu: How many times did you travel?
Akol: We had a number of travels for preparation, but like I mentioned, chairman, I would need to refresh my memory on the actual hearings. What I can remember is I think there was a hearing where we had the Honourable MPs, I think there was one…
Ali Ssekatawa, URA Commissioner for Litigation: They filed around 2011 and the jurisdiction award was on 3rd April 2013. Before that, we first had what is called a bifurcation hearing on whether the tribunal should bifurcate issues of jurisdiction and the final award. That was a separate hearing altogether and in doing that for close to two years, we were filing memorials and some of the hearings were…
Katuntu: Just answer the question so it is not very difficult. How many hearings?
Ssekatawa: I think I would say, the bifurcation and then the jurisdiction one
Akol: But there were a number of preparation meetings for those different hearings which the team travelled for as well to work with the lawyers… (interruption)
Katuntu: Let me tell you why I am asking this question because we don’t want to ambush you. We are acting honestly. The issue about exceptional, complicated and so on goes with the number of court hearings and so on.
You are senior lawyers so it helps us to gauge how serious the effort you put in; the hearings you undertook and so on. I think it is in the interest of the team to inform this committee how many hearings? What sort of hearings? Then we can gauge how complicated this matter was.
Akol: I would like to clarify that in the process of the arbitration, the appearances in London, if I can say it that way, was not only for hearings. The appearances in London included appearances for hearings but we had appearances in London for preparation meetings as well. These meetings included identification of witnesses.
You know the legal procedures around that, preparation of witnesses; preparing of the memorials prior to the actual litigation process, starting the discovery of documents, examination of the witnesses and that is the entire, call it, engagement process that the local team with the international team had meetings about in London and we shall be able to provide details of those meetings at an opportune time.
Ssekatawa: Hon. Chair, as the case progressed, we were working as a team with the external lawyers. So as and when the need arose, we would travel. Yes, we had invitation from the external lawyers and for every time we travelled to London.
Akol: The documentation is within the realm of the Attorney General’s chambers because the Attorney General’s chambers took lead of the arbitration and therefore all the documentation relating to the international arbitration is in the office of the Attorney General, chairman.
So, after having received the jurisdiction award, then the case proceeded to the merits, what was called the merit stage, and the merit stage was primarily to decide on whether Heritage Oil and Gas had been disadvantaged by the government of Uganda in their investment by certain decisions we had taken, which included a change-in-law argument. That because we had had certain changes in our tax laws, we had disadvantaged them and therefore we needed to compensate them for…
Katuntu:…I just want to have two or three questions. The first one is, after the arbitration tribunal had made a decision on the jurisdiction and literally upheld the decision of the appeals tribunal, what was left of that arbitration? That is number one.
After the arbitration tribunal in London had made a decision to uphold to uphold the local processes, which had culminated into the assessment and contesting the tax appeals tribunal and the agency notices you had issued, what was left of the arbitration? Because to determine the other one would literally be an indirect appeal against the decision which the tribunal had said the jurisdiction lies squarely with the local processes.
Number two, can you tell us how much money you had paid your lawyers, Curtis? Because I thought when they award you costs, these are costs which you should have incurred. It is a cost to the party; it is not the cost to the lawyers so whatever you had paid for the lawyers or through the processes, you are entitled to disbursements and fees payable and here you are talking about $4.3 million yet you had paid your lawyers almost $10 million.
And then, the expenses which Hon. Okupa was reading here amounted to almost Shs 52 billion, which, if you had been awarded costs, that should have been your computation; the monies you paid to your lawyers, together with the reasonable disbursements. I don’t know whether I am making myself clear? I am sorry I am sort of speaking as a lawyer here though I shouldn’t.
Akol: Chairman, you have made yourself clear, but I stand to be corrected if I don’t get you clearly. The contract management between the government of Uganda and Curtis, the contract fees process, that whole process was managed by Attorney General. At the point of arbitration, URA was just a member of the technical team and we were not involved in the contracting process with external lawyers so I am not able to give you the figures.
Katuntu: Because here is, we have spent close to Shs 88 billion and yet when we claim… (Interruption)
Akol: I would like to clarify that figure that the Shs 88 billion and supplementary list that has been read out involves legal fees for four cases. The government of Uganda has been in arbitration with four companies. The first one and the one that we are talking about is Heritage Oil and Gas.
Katuntu: So this particular one, how much?
Akol: This particular one, the details are with the Attorney General. I don’t have that information, sir. (Point of procedure raised)
Eng Abraham Byandala (Katikamu North): Madam Akol correctly said you hire someone abroad, you need a local corp. That the moment you hire someone abroad, it is upon him or her to look for a local counterpart, not you. Because now, you went in the situation, how do you separate you who were on this task, from being consultants and doing your normal work?
Because even if there was a local counterpart here, still, officials of URA, Finance and others would be doing on this job. Can you show us how you separated, that today we are working as consultants of Curtis and today, we are working as civil servants for Uganda?
Akol: URA was not a client of the AG on this matter. The arbitration was handled by the AG, on behalf of the government of Uganda. At the time the case was filed at arbitration, URA does not have audience in arbitration and therefore, the matter was taken up by the office the AG, who is the chief legal advisor and who defends government in litigation.
I want to clarify that our role at that point ceased from being a litigant to being part of the government team, headed by the AG. Now, the decision to create a local team to work in lieu of the hiring of a local firm is outside of my mandate. It is not a decision that we [URA] made and that question would properly be answered best by the office of the AG.
Katuntu: I think let’s get it clearly, if I understood Hon. Byandala correctly. He gets this question from what you had submitted that ordinarily the international company would work with a local private firm. A decision was therefore taken to constitute what would have been a local, private firm which comprises you people, the 20 of you. And that is the question Hon Byandala is asking which I don’t know whether you got it.
According to him, if I understood, you are doing ordinary duty when you were called, say what happened, and so on and then you constitute yourself to give facts to the AG and therefore to your private lawyers. He said where is this distinction that you ceased being ordinary civil servants doing their ordinary work and became now this “private consultant”. I think that is the question he was asking.
Ssekatawa: Mr. Chairman, the arbitration team, the Curtis team could have used Ojambo and Company Advocates here or whichever firm, but the issues before arbitration, as earlier submitted, related to tax law in Uganda…As a local partner, there is no arbitration where you go and you don’t have a local lawyer to advise you on local law.
Instead of using private lawyers on an issue of tax, government chose the best tax experts within its local resource. It chose the best oil law experts within its resource; it chose the best tax policy expert within its resource and the best international law lawyers in Uganda within its resource and it formed that core team.
That core team was supposed to, first of all, take care of the Ugandan interests, but also advise on any matters that arise on those four areas and that arbitration was about those four areas.
Katuntu: Mr Ssekatawa, do you find that ordinary or not ordinary? Why should government, having its best law experts, best oil policy experts, best everything, and really I appreciate, I know they are very good, why should it have another option of leaving the people it pays and it goes to hire private lawyers.
You just give me one justification. You have this best team, duly constituted in your service, paid for and you leave them and you go there to hire private lawyers.
Ssekatawa: Mr. Chairman that is what we are saying that we did not then hire anyone here. So then, we constituted that core team and then the international lawyers dealt anywhere. So here in Uganda, we did not hire anyone. That is the point.
Akol: The constitution of the local team was not a contractual issue between government of Uganda and Curtis, and therefore there were no terms of reference between Curtis and government f Uganda.
The constitution of the local law firm was a decision that the government made in lieu of hiring a private law firm to do the same work that the local team would still have done, because even the private law firm was not going to get the paperwork, the proceedings at arbitration and making the legal arguments. This work had already been done by the local team and because of the expertise and experience… (point of procedure)
So, the work that we did as the local team replaced or was instead of the work that could have been done by, and I am sorry to use, Akol and Company Advocates, because government could have chosen to contract Akol and Company Advocates.
Sseggona: With great respect, Mr. Chairman, I beg to differ. I think the distinction that we have not drawn is that I appreciate a decision that was taken in the best interest of the country that we will not hire experts when we have our own experts. I welcome that 100%. The question is, and that’s what Hon Byandala was asking, we have the best in all these fields. What was their work and how different is their ordinary work from what they did, that makes it extraordinary to deserve something extraordinary?
Abala: I have so many questions…they talked about the many witnesses and they were in the U.K. I don’t know how many they were and who they were by name. Do we have a list to that effect? So you begin from there.
And then the other is, I am sure the principle witness is saying she has been approving members who were going to the U.K. she was part of them yet at the same time, there was no documentation. I don’t know the basis under which they were cleared. I don’t know who was paying their allowances, air ticketing arrangements; then invitation.
I don’t know who was handling it. Maybe they already paid. Maybe Parliament was approving money which was not being spent and it was entering somewhere. That’s why I need something to be very clear there. Then at the same time, Mr. Chairman, the Shs 6 billion they are talking about paying to non-teaching staff of URA. I don’t know when it became a university. (Laughter)
Presentation by MPs and URA continue. Akol explains to MPs on the Attorney General’s defence of URA in the arbitration process.
Akol: URA’s principle involvement in this dispute was from the time when we raised the assessments, issued the third party agency notices, defended the appeal at the tax appeals tribunal and there was an application at the High Court which Justice Obura ruled on, which was defended by URA.
When a notice of arbitration was filed, it was filed against the government of Uganda, it was not filed against URA and it’s at that point that AG chambers took over the matter to arbitrate it, not as the lawyer for URA but the AG defending the Republic of Uganda in arbitration filed by Heritage. URA, at that point within the arbitration, became a subject matter expert that would support the defense by the AG and international law form.
Therefore a lot of the documents being asked derive from the process of arbitration, which arbitration was handled by the AG. Suffice to note, that the documents that are within our possession, we have the assessment on the first transfer price of $ 1.350 billion, the assessment for $ 404 million. We have the additional assessment of $ 30 million on the second payment of the contingency amount of $100 million.
We have the third party agency notice issued to Tullow Uganda to withhold and pay to government of Uganda the money would have been passed on to Heritage. We have copies of the rulings from the tax tribunal and High Court…we have copies of the receipts of the taxes, the money that was receipted by us on the $121 million and $283 million and we are able to provide them.
All other documents being requested relate to a process managed by the AG and would request the indulgence of the chairman and the committee that the best person who could be able to provide the documents would be the AG when they appear before the committee.
The money was paid to the Bank of Uganda (BOU) consolidated fund account not to URA.
Katuntu: What communication do you have from BOU to yourself that that money has been paid and is on this account because that is an issue which is part of the issues to be investigated? I don’t know members whether you appreciate the point because that is the most important actually.
Akol: The money was paid into the consolidated fund and receipted by URA. We have copies of the receipts. We do have statements from BOU and they can be provided confirming that the money was received in the consolidated fund account.
Just to clarify, the assessments were made in US dollars but because we didn’t have a dollar account in the Bank of Uganda, the money was receipted in shillings at the prevailing dollar rate at the time.
We received dollars, receipted in shillings because there was no dollar account in BOU at the time.
(Murmurs from MPs)
Akol: Hon chair, we beg your indulgence because we did not have the motion and the TORs so it was difficult for us to anticipate in detail. The timing was short; we received this in the evening yesterday (Tuesday) really it was not enough time for us to prepare. Nevertheless, we do have documentation with us.
The first receipt of $273,583,122 reflects a receipt for the 30% of the tax in dispute of $121 million which was paid by Heritage on filing at the tax appeals tribunal and this was receipted on 10th August 2010. There is a second receipt in the names of Tullow Limited but of the account of Heritage that reflects the $283 million that was paid on the strength of an agency notice by Tullow to the account of Heritage and this was receipted…
The second receipt, the agency notice from which this receipt arises but we don’t have a copy with us but we will submit, we have a receipt for 748 billion and this was receipted on the 7th April 2011.
SECOND PHASE
Akol: Having successfully defended government in the collection of the tax above in the two cases $434 million and an extra $4 million in costs, His Excellency extended an appreciation to the government team. The appreciation which he called a presidential handshake was requested by the Hon. Attorney General, in reminder of a promise made by His Excellency to the team that, on winning the case, he would appreciate the team.
Having received the award in favour of the government, the AG then wrote to the President and reminded him about his promise he made to appreciate the team and following that letter, the AG sought a meeting with His Excellency the President, at which the President was requested by the AG and reminded as a way of follow up.
Katuntu: Talk about letter letter letter, do you have that copy?
Akol: Yes I have a copy of the letter but later after referring to it, please. The AG wrote to His Excellency on the 143th April 2015 and reminded him that in the case of Heritage against Uganda, we had collected $434 million and several different government agencies, Ministry of Energy, Justice, Finance and URA had compelled Heritage to pay this tax before it exited this country and that the company had filed arbitration cases in London and that the AG had constituted a joint government team, with representatives with the institutions mentioned above to support the process of defending the country and that the government, using this team together with external lawyers, had defended itself and a tribunal has now dismissed the company’s claims in entirety, meaning that Uganda had retained the amount of $434 million that it collected in capital gains tax which was a subject of dispute and also awarded the country $4 million.
This letter was authored by Hon Freddie Ruhindi, who was AG at that time and it was copied to a number of people who are listed.
Katuntu: Read the letter verbatim before you give it to us
Akol: The letter is from the AG’s chambers, referenced MJ/AJ39 dated 13th April, 2015 addressed to the President. Subject: Commendation of the Uganda government arbitration team… Your Excellency will recall that the government of Uganda has been involved in two arbitration matters filed by Heritage Oil and Gas…In 2010; Heritage sold all its participating activities in Uganda which were in exploration areas 1 and 3A to Tullow Oil PLC.
Following this, URA levied a capital gains tax on this transaction amounting to $434 million. Although the different government agencies comprising Ministries of Energy, Finance, Justice, together with the URA, in joint effort, compelled Heritage to pay the tax before it exited the country, the company went on to file two arbitration cases in London against the government in 2011.
Under these cases, Heritage wanted the arbitral tribunal to compel government to fully refund all the monies collected as capital gains, with interest and also pay damages for the other claims that the company raised. Shortly thereafter, government led by the AG, constituted a joint government team, with representatives from the institutions mentioned above, to support the process of defending the country against these claims by Heritage.
The government successfully defended itself and the tribunal has now dismissed the company’s claims in their entirety, meaning that Uganda now retains the amount of $434 million that it collected in capital gains tax which was a subject of the dispute. In addition, the tribunal awarded Uganda sum of $4 million to cover the costs the country may have incurred in defending itself.
As your Excellency fully understands, the process of defending government in a foreign territory required unprecedented sacrifices and concentration on the side of the team, including preparation of documentation into the late hours of the night, collection of evidence and continuous working without breaks in many instances.
When this government team appeared before you in Cabinet on the 19th November, 2014, your Excellency promised that he would reward their tireless efforts when the final award from the tribunal came out. Considering that the tribunal has now issued the final award, this is to humbly request that you consider a reward for this noble team that has exhibited exemplary service to the country. A full list of the team members is attached herewith.
Signed, Fredrick Ruhindi, MP, Attorney General…There is a list of 24 attached Fredrick Ruhindi, Peter Nyombi, Francis Atoke, Harriet Lwabi, Christopher Gashirabake, Elizabeth Nakkungu, Robinah Rwakoojo, Mary Nankabirwa, George Kalemera, Harriet Tukamushaba, Martin Mwambutsya, Ernest Rubondo, Honey Malinga, Alex Nyombi, Moses Kagwa, Doris Akol, Mesarch Kajubi, Ali Ssekatawa, Peter Muliisa, Mathew Mugabi, Robinah Nakakawa, Samuel Kahima, Rodney Golooba and Sison Ainembabazi. This was the list attached to the letter of the AG.
Katuntu: For purposes of the record, the AG then Hon Fred Ruhindi constituted a list of 24 would-be beneficiaries and you don’t know how it was constituted.
Akol: I don’t know because it was authored in the AG’s office. We were working as a team but I don’t know who wrote the list. I know the people on the list but I don’t know who wrote the list.
Subsequent to that letter, His Excellency the President invited the AG together with members of the team, not the entire team to his country home in Rwakitura at which the matter was discussed and the AG in that meeting reminded him…
Katuntu: Was this particular payment the subject of that meeting? He invited you by letter?
Akol: No, it wasn’t by letter. I don’t believe I have seen the letter. I think it was by phone, maybe through his office. From my perspective as the Commissioner General, I was informed about the meeting.
So at that meeting, the AG presented the matter to His Excellency and reminded him about the promise that he had made to reward the team and it is at that meeting that his Excellency directed me or instructed me to recommend an adequate reward to him. As a result of that meeting, that I authored this letter following on his instructions to recommend an adequate reward and this is the letter, signed by myself dated June 26th 2015. The meeting with His Excellency was on the 17th May 2015 so that is the chronology of the dates.
Anywar: We appreciate the submission by the Commissioner General but we request that that letter is read for record purposes by her.
Akol reads letter, dated June 26, 2015 addressed to the President: Re: Presidential handshake in appreciation of the team that delivered the win against Heritage in the London arbitration…….
Your Excellency, reference is made to the meeting of May 17th 2015 at your country home in Rwakitura. At the aforementioned meeting, you instructed me to recommend an adequate reward for the team that delivered victory for the government in the landmark and groundbreaking case against Heritage Oil…I do hereby propose that a sum of Shs 6 billion be allocated as a reward to the team, out of which Shs 2, 358, 000,000 will be deducted as tax and the net sum of Shs 3, 642,000,000 will be given to the team as a take home package.
PHILOSOPHY BEHIND THE RECOMMENDED REWARD
Your Excellency, the amount recommended as a reward is an amount that will enable the beneficiaries use the funds for something tangible, that is, to leave a legacy to remind them and their off string of their contribution of the nation. For instance, the recommended amount could enable one to acquire a decent plot of land, pay a deposit on a mortgage or perhaps facilitate finishes on home construction.
Your Excellency the amount proposed will be distributed among 42 individuals that make up the core, non-core and support staff of the team. I believe it will be motivation, sufficient for them to gallantly face future challenges and bring glory and victory to our nation. The amount proposed constitutes less than 1% of the amount in the award and is about 50% of the costs awarded to government of Uganda.
After such a groundbreaking achievement, I believe this would be a reasonable amount to thank and congratulate the team and I do hereby recommend it…Your Excellency, I also propose that a letter of commended be extended to each member of the team and the external lawyers that worked on this matter. These letters of commendation, handed over to individual team members possibly at a public function, would be greatly inspirational to the recipients…
In the meeting with the President, in discussing an appropriate reward, reference was made to previous gifts that given to people who had done exceptional work for the country. Specific reference was made to gifts given to people like Dorcus Inzikuru, Moses Kipsiro.
So reference was made to previous gifts that were given to specifically sports people who had done exceptional work and the reference to the houses that had been built for these sports people informed the kind of justification of the reward. Secondly, in that meeting, the President was very specific in saying that we must include, notwithstanding the list that the AG had submitted, each and every one that had contributed in some way to this success by the government against Heritage.
He specifically mentioned that we must include even the support staff who had supported the government team and that is what led to the schedule that I am about to submit. The schedule is divided into three categories; a core team of 22 people; a non-core team of 12 people and support staff of 8 people.
This schedule is what led to the 42 members, some of the names on this schedule are not in that schedule because many of them participated in earlier stages and some participated in phases and left the institutions and that is why there is a difference between this schedule and that schedule.
Just to clarify the amounts; the amount proposed for Category A core team, the gross figure of Shs 200 million; category B non-core team Shs 100 million and
Category C support staff is Shs 50 million.
Katuntu: The list which was initiated by AG had 24 names. Now what you are calling core team has 22, meaning there are two officers less. Who are these officers?
Akol: On the list of AG, one of the officers mentioned is Hon. Robinah Rwakoojo mentioned in the list of AG, who in our list appears as a non-core member. Hon Fredrick Ruhindi also appears as a member of the non-core team, as well as Harriet Tukamushaba who appears on the AG’s list but is in the non-core list.
Katuntu: 24 and 22, the difference is only two. Let’s have this clear first. According to the Commissioner General, there are three officers on the first list but that will make it 25 not 24. We want to see those you eliminated from the first core team list.
Akol: Hon Rwakoojo was moved to the non-core team; as well as Hon. Ruhindi and Harriet Tukamushaba, is on that list but is in the non-core team. Someone who is not on this list is Madam Allen Kagina, as well as Martin Muhangi… (Murmurs from MPs)
Katuntu calls for 10-minute health break
MEETING RESUMES
Katuntu: Let us reconcile the first list and then the second one
Akol: The first list has 24 people and on this, three names Hon Ruhindi, Hon Rwakoojo and Tukamushaba are categorized on the second schedule within the non-core team.
Katuntu: No there is a first list which was submitted by Hon Ruhindi and he was actually number one. He nominated himself as number one (Laughter) Hon Ruhindi, Mrs. Rwakoojo then and Tukamushaba disappeared from the first core list.
Akol: This list was not classified and did not have categories, just listed names for 24. Now the second schedule is where we see classifications, which was agreed within the team after identifying the different categories of people who had contributed to this case at the various stages…
Katuntu: Okay did you sit in a meeting to categorise these people?
Akol: There was a meeting held in the Ministry of Justice but I can’t remember if it was minuted. (Murmurs from members)
Katuntu: Who chaired the meeting?
Akol: It was chaired by, the Solicitor General, I think.
Katuntu: We want to be on record because we are going to be asking people to come and explain and if they come and say, no no it wasn’t this, it goes back to what Mama Mabira is saying; so I just want us to be consistent. We want that meeting where people were categorized and who chaired this meeting and if it was a meeting, definitely it must have minutes.
Ssekatawa: Mr. Chairman, just to clarify the process of this schedule. After the meeting with the President as the Commissioner General said and the President indicating that everyone must be included, we came back and sat. The original list had only people with their names…
Katuntu: Mr. Ssekatawa, let us finish that before we go to that. Because I asked, who sat and where did you sit? Who chaired that meeting and eventually, we are going to ask for the minutes. Then you can try to do the explanation of how it happened.
Ssekatawa: I can confirm that the meeting was in the Attorney General’s chambers. I don’t remember exactly who the chair was.
Katuntu: Did you attend the meeting?
Ssekatawa: I attended the meeting
MPs murmur
Ssekatawa: I can’t recall right now because we have held many meetings on this matter and this specific one I cannot say whether it was the Solicitor General or not. What I should say is that, this matter we have held over 200 meetings so if you ask me one specific one since it started in 2010, over 200 meetings on the whole matter…
Katuntu: No, we are not talking about the whole matter Mr. Ssekatawa…let us limit ourselves to this payment now.
Ssekatawa: What I can say, I attended the meeting. I do not recall the chair of the meeting but I can consult with my colleagues and then we get back to you on that.
Katuntu: Don’t leave issues hanging. Just imagine a record which says, Mr. Ssekatawa says I attended this meeting and don’t remember who chaired the meeting and that is the record we have. Just imagine the sort of conclusion people who were not in the meeting will be reaching and at that point you won’t be there to explain.
Ssekatawa: I agree but what I am saying is that you should be fair to us. We were called to say come answer this now you are asking me specifics and I am saying, I have had over I don’t know how many meetings on this matter. In fact my colleague has reminded me that when we sat, we had another matter on Tullow on that day and then this item. So, my request is that we can come back to the committee on that and specify.
Byandala: I am saying the technical team and the Ruhindi list he took to the President, were all the technical experts on that list?
Akol: Not all of them, no. On Hon Ruhindi’s list, there are some people who were not on the list but were part of the technical list. We have Allen Kagina; from Ministry of Finance Mr. Kiiza, Mr. Muhakanizi, the late Chris Kassami, Mr. Twinamatsiko, Mrs. Jennifer Musisi. Kabagambe Kaliisa and support staff who were not on Hon. Ruhindi’s list.
Turyamuhweza: I would like to know the basis of classification of the beneficiaries into core, no core and support staff? What did those categories mean and back with quantifiable terms of reference?
Akol: The basis of the classification was informed by the level of contribution of the different beneficiaries throughout the life cycle of this case, and this case took a period of five years from 2010 right up to the issuance of the arbitration award. At different stages of the case, we had different people participating in different ways and that is what informed the basis of the core team.
The core team is people who participated in this matter almost throughout the entire case. The non-core team are people who participated in this case at some point during the lifecycle of the case, either during the process of the evolution of the tax dispute, throughout the hearing of the tax dispute, the procedures that led to the resolution of the tax dispute at the tax appeals tribunal and in the High court and then progressing thereafter to the arbitration.
There are people who participated at the time of generation of the tax dispute; there are those who participated in the process of trying to resolve the tax dispute through meetings and negotiations with Heritage right through to the tax appeals tribunal, the litigation and hearings and there are those who participated at the later stage during the arbitration of the case.
The support staff is the administrative support who worked with the core and non-core staff in generating documentation and all administrative support that led to this matter being concluded.
Baryayanga: The Commissioner General alluded to the fact that rewards were being given to the Dorcus Inzikuru’s and Kiprotich’s but I want to know whether any of those rewards were solicited for… I understand Akol is responsible for Vote 141 of URA. I have never seen an accounting officer soliciting to be an accounting officer for a particular work and in particular Shs 6 billion.
So she asked the PSST to allow her to be the accounting officer for it. I don’t know how this transaction came up and which vote number she used. I also want to know whether the URA Board blessed this transaction and resolutions of the board meeting?
Akol: The request for the reward was originated by the Hon AG at the time and it was specific to the government team that successfully defended Uganda in this case to the point of winning $434 million for Uganda.
Very many people in Uganda will perhaps be justified in claiming a share of the handshake but there was a framework submitted by the AG and that is the framework within which the handshake was paid. The justification of the team that defended government in the case, in submitting that framework to the President, he expanded the framework to include each and every person who had contributed to the process in some way during the lifetime of the case…
The people and some are sitting here who left URA all played a role in this case while they were still in URA. They were not being appreciated for the time they left, but for the contribution they made during the time they were in URA. Mrs. Jenifer Musisi was the head of Legal at the time this case began from 2010-2011.
She participated in the preparation of the cases right from the evolution of the tax dispute to hearing of the tax case in the tax appeals tribunal and even the negotiations that led into the case ending up in the tax appeals tribunal.
Mrs. Allen Kagina was Commissioner General of URA. She was a principle witness in this case at the tax appeals tribunal. She participated in this case right from inception up to the point when she left URA. She was even involved in the case at arbitration in London and you will find her name on record…
To put the record straight, Hon Ruhindi only became the team leader on this case when he became AG. For the lifetime of this case, Hon Peter Nyombi was actually the AG and led the team right from inception of the case, right from the time of arbitration.
Katuntu: Is any member of the tax appeal tribunal part of this
Akol: No, they are judges
Katuntu: Judges don’t deserve awards?
Ssekatawa: If the President awarded a judge for giving a judgment in favour of the Republic, I don’t think there is an investor that will ever file a case here. They will be filing in London. The tribunal, High court there were judges. The president’s promise and what he gave was to the government team…
Katuntu: But you see that is the unfairness and maybe that’s why you need medals.
Ssekatawa: We are happy to receive the medals, sir, in addition to, because the President has said we are economic heroes.
SOLICITATION OF REWARDS
Ssekatawa: None of us ever requested the President for this reward. It should be clear that when we won this case, it is the President who said, “Thank you very much. I am going to reward you”. (Murmurs) Yes and that fact can be verified. The AG’s letter the subsequent letter, it was follow up on the President’s promise to the team, having known…he will confirm to you, he is still the President of this country…
Katuntu: Mr. Ssekatawa, don’t speak on behalf of the President. We shall have opportunity to talk to him. Speak about what you know, whether he will confirm it or not, we shall get it.
Ssekatawa: Our answer is that none of the members of the team, and I was part of the meetings, solicited for anything from the Head of State. It is him who called us and said, I am happy with the work you have done and I am going to give you a reward. So the issue of soliciting in my view does not arise in that matter.
The second issue, did the URA Board bless this transaction? This was a presidential reward. The commissioner General was only directed to facilitate the payment of this money but it was a presidential reward to specific individuals for a specific assignment. It was not one of the bonuses that fall under URA.
Katuntu: Don’t walk that path. Who owns URA accounts? Is it the Board or the President?
Ssekatawa: They are owned by the accounting officer.
Katuntu: No the accounting officer is an accounting officer.
Akol: The accounts of URA are the preserve of the accounting officer who is appointed under the Public Finance Management Act by the Permanent Secretary, Secretary to Treasury. The board does not own the accounts of URA.
Katuntu: So what is the statutory role of the board?
Akol: It is policy guidance for URA. It does not own the accounts. The accounts are part of the assets…
Katuntu: Do you have a budget? Is it approved by the board?
Akol: Yes, they are approved by the board.
Katuntu: Do you know what that means? It means they have owned them. Are they signed?…
More discussions
Cuthbert Abigaba: I understood the President promised a reward but there are many ways we can reward. So I want to know how this reward turned into monetary reward. Why not a medal for that matter?
James Kakooza (Kabula): I want to be clear in the minds of the committee that you were not part of the people who requested the money. According to the document what the President wrote, because he is going to be a witness also, did you write to send a request, you are telling us it is wrong, you did not request. And if not part of the people who requested, who are these? Because the President’s letter is clear, he even gave a directive that please look for Shs 6 billion and give it. Is it wrong to request because they are denying?
Katuntu: Would it have been wrong for you to solicit for a reward?
Ssekatawa: First, my answer is we did not solicit. I want to be clear. The second one, I will answer it that even if we had, I do not see any law or anything wrong because I think he is the Head of State; he has the prerogative.
Katuntu: No, it is about you; forget about the Head of State. Would it have been wrong legally and ethically for you to solicit?
Ssekatawa: I don’t see anything wrong, Mr. Chairman
More discussions and later the chairman directed that the URA officials return to the committee on Monday to resume its probe.
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