Debts may cost MPs re-election

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MPs in the newly refurbished Chambers during the official opening at Parliament Buildings August 7, 2012. Parliament will resume on November 20 and passage of the Finance Bill will be crucial in facilitating government spending as the 11th Parliament may only be sworn in after April next year, about two months to the end of the financial year. Photo|FILE|  NATION MEDIA GROUP

By ISAAC ONGIRI iongiri@ke.nationmedia.com
Posted  Monday, November 5  2012 at  00:40

IN SUMMARY

• Over 100 legislators are currently earning less than Sh30,000 a month as the bulk of their pay goes to repay loans and mortgages they took after joining Parliament in 2008.
• Two payslips seen by the Nation reveal some MPs’ precarious finances. One legislator was at one time taking home only Sh27,669.70 out of a gross salary of Sh851,000. Another one earned only Sh14,479.50, the rest went to a long list of loans and other commitments.
• MPs are now regrouping to pile pressure on Treasury to release the Sh2.1 billion severance allowances even as it emerged that dozens of lawmakers may go home empty handed because they have too many debts.

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MPs have been given until the end of next month to repay loans owed to Parliament if they hope to get clearance to seek re-election.

Two savings and credit cooperative societies (Sacco) serving MPs have told them they must clear all outstanding loans by the end of December.

This is the last full working month for MPs before the House dissolves itself on January 15, to pave the way for elections.

It is a requirement for candidates to pay all their debts to get clearance from the Independent Electoral and Boundaries Commission.

MPs are now regrouping to pile pressure on Treasury to release the Sh2.1 billion severance allowances even as it emerged that dozens of lawmakers may go home empty handed because they have too many debts.

Over 100 legislators are currently earning less than Sh30,000 a month as the bulk of their pay goes to repay loans and mortgages they took after joining Parliament in 2008.

Chairman of the MPs’ Sacco, Mr Bifwoli Wakoli, said though no official notice has been sent to members, the Sacco must collect all outstanding balances before Parliament is dissolved.

There is an increase in credit risk after two MPs, who lost in recent by-elections, declined to pay millions of shillings in loan arrears.

“It is sad that someone has taken matters regarding our Sacco to the Press. However, what I can say is that we have asked the two members who defaulted after losing elections to pay. We are still talking to them to pay us,” Mr Wakoli said.

“Everybody must pay. Normally we have good security and our Sacco is doing very well. Those who have loans must pay or we turn to their guarantors. If not we will also deduct the balance from their shares within the stipulated period.”

Refused to sign Bill

Because of this large stock of debt, MPs are hoping to twist the government’s arm and renegotiate the Finance Bill to pay each MP Sh9.3 million as gratuity. President Kibaki refused to sign the Finance Bill, the first time that a President has refused to do so, terming the pay to MPs’ illegal and unfair. (READ:Kibaki rejects MPs’ Sh2bn send-off pay)

Two payslips seen by the Nation reveal some MPs’ precarious finances. One legislator was at one time taking home only Sh27,669.70 out of a gross salary of Sh851,000. Another one earned only Sh14,479.50, the rest went to a long list of loans and other commitments.

Parliament will resume on November 20 and passage of the Finance Bill will be crucial in facilitating government spending as the 11th Parliament may only be sworn in after April next year, about two months to the end of the financial year.

On Sunday, Speaker Kenneth Marende said he had received a memorandum from the President on the Finance Bill. “Yes, I received the memorandum just before I left the country,” said Mr Marende on phone from Japan where he was on official duty.

To defeat the presidential veto, MPs who insist on the payoff deal must raise 145 members to vote with them. But Mr Wakoli warned that failure by the government to accept the proposed Sh2.1 billion send-off package may destabilise government operations.

“It might affect the Finance Bill. The way MPs are behaving they want this money paid. I am asking my colleagues to be patriotic as much as it is their right,” he said.

Kisumu Town West MP Olago Aluoch, who is also a member of the Parliamentary Service Commission, said that the gratuity was rightfully awarded warning that it may end up in court if not paid.

Other sources of funds

Mr Olago also said that PSC had rejected proposals to restrict the commitment of MPs’ salaries to a maximum of two thirds. “It is true that we have people whose payslips are at the moment reading zero, but most MPs have other sources of funds,” said Mr Olago.

Ikolomani MP Boni Khalwale warned that the country’s ongoing election plans and transition could be jeopardised if MPs made good their threat to sabotage government spending.