During the mid-1990s, the Ugandan National Resistance Movement (NRM) government became concerned about controlling insurrections in Northern and Western Uganda by the Lord’s Resistance Army (LRA). The LRA began as a rebellion group against the takeover of Uganda by Museveni in 1986 but the militia took up arms and turned into a brutal Christian extremist and terrorist organization led by the infamous Joseph Kony, who has been waging an insurgency against the NRM ever since.
The LRA served as a proxy militia, once backed by Sudan’s Omar al-Bashir to destabilise South Sudan. Mr Museveni supported South Sudan’s Sudanese People’s Liberation Army (SPLA) led by John Garang in retaliation.
The NRM hoped that by procuring more advanced weaponry, the armed forces of Uganda officially known as the Uganda People's Defence Force (UPDF) would prove more effective in combating any Sudanese aggression and rebel activity. The purchase of four Mi-24 Helicopter Gunships would provide effective aerial firepower against the rebels.
However, the procurement of these gunships created opportunities for military corruption and led to a huge political scandal throughout Uganda. Senior politicians and close family members to the Ugandan President received bribes in exchange for the defence contract and payments were made to intermediaries through a shelf company on the British-Virgin Islands.
Yoweri Museveni: President of Uganda since 1986.
Emmanuel Katto: A Ugandan businessman, intermediary and prominent rally driver. Katto’s wife was a sister of the Ugandan Chief of Defence Staff, General James Kazin. Katto offered bribes to secure the deal and to sell the Ugandan government helicopters via his British Islands based shelf company.
Major General Caleb Akwandenaho (aka Salim Saleh): Half-brother of President Museveni, Special Adviser on Military and Political Affairs for the NRM government. Received bribes from Katto to push the deal through.
Kwame Ruyondo: Aide to General Saleh. Foster child of President Museveni. Allegedly received bribes by Katto.
Colonel Kizza Besigye: Former Chief of Logistics and Engineering for the UPDF. Authority for pre-shipment assessments of aircraft.
Consolidated Sales Corporation (CSC): British Virgin Islands-based shelf company purchased by Katto in January 1996.
Belspetsvneshtechnika: Belarussian state-owned arms company.
Triton SAL: little known but described as a ‘Lebanese arms dealing company’.
Caleb International: Marketing company owned by Museveni's younger brother, Salim Saleh. Saleh used this marketing firm to market his services for a commission.
Credit Suisse Group: Financial services company and private bank headquartered in Zurich, Switzerland. A 2022 leak revealed the bank’s involvement in hiding £80 billion worth belonging to its secret clientele.
Almavale Limited S.A: British-registered company. Introducing Triton to Katto.
Summary of Corruption Allegationscontents
The Ugandan government was offered eight Mi-24 gunships by Katto, a Ugandan businessman, for just $1.5 million each, less than a quarter of the price when new. However, for reasons that remain unclear, the government instead agreed to pay $12.26 million for four of these helicopters. No bidding on these deals took place. Eventually, four gunships were purchased for $4.7 million from Belspetsvneshtechnika in Belarus.
After inspections of the helicopters, two were deemed worthless, with rusted pipes and worn-out tires. These two helicopters were deemed junk and have since been grounded at Entebbe International Airport.
Two more helicopters were expected shortly afterward but after misappropriate renovations they never arrived, remaining till today in Minsk, Belarus. The government eventually, including renovations, paid $6.5 million for two Mi-24 gunships.
The 2022 OCCRP report details how these deals invariably involved bribes, kickbacks and massive overpayments for grossly inflated equipment from which army officers, top government officials, and middlemen profited. Intermediary companies made $6,919,850.00, while CSC offered Saleh a commission of $800,000 and allegedly paid Ruyondo a similarly large commission.
It is estimated that the NRM government made a loss of at least $8 million.
- JanKatto’s account at Swiss bank Credit Suisse was opened.
- 18 SepOriginally Katto approached Almavale Limited S.A., a British-registered company. However, as Almavale Ltd was unwilling to get directly involved in the arms deal they instead advised Katto to acquire his own company in the form of CSC.
- Almavale then connected CSC to Triton Sal, a Lebanese arms dealing company, who in turn purchased the helicopters from Belspetsvneshtechnika
- JanKatto purchases a British Virgin Islands-based shell company called Consolidated Sales Corporation (CSC). Officially CSC was incorporated as an offshore company in the British Virgin Islands on
- Katto offered government officials eight Mi-24 helicopter gunships for just $1.5 million each, less than a quarter of what they cost when new.
- Mid-1996: Ruyondo conveyed information about the offer from Katto to Saleh, who was at that time commander of the counter-insurgency operations against the LRA in the north.
- Katto offered Saleh a commission of $800,000, while allegedly paying Ruyondo a similarly large commission. Katto made these payments through CSC.
- Saleh then discussed with President Museveni the matter of CSC providing the helicopters to the UPDF.
- OctMuseveni directed officials at the Ministry of Defence (MoD) to acquire four gunships through CSC.
- CSC was to buy the gunships from the Belarusian state arms company, Belspetsvneshtechnika, via Triton SAL, a Lebanese arms dealing company.
- 7 FebThe Ugandan government signed a purchasing arrangement for four helicopter gunships from Belarus.
- MayThe MoD sent Besigye, the Chief of Logistics and Engineering, as head of a team from Entebbe Military Airbase to Belarus to carry out a pre-shipment assessment of the gunships. Besigye reported that the gunships had not been overhauled and that the logbooks were in Russian. He suggested Uganda purchase directly from the manufacturer rather than through intermediaries, but his advice was ignored.
- JulCSC informed the government that the gunships had been overhauled as provided for in the contract and were ready for reinspection before being sent to Uganda.
- OctOnce again a team headed by Besigye, and including Katto, visited Belarus. The Belarusian intermediaries produced logbooks in English and convinced the Ugandan team that the gunships were airworthy. Besigye reported that although they had not actually inspected the gunships, the log books suggested that the planes were in order, and that the MoD should accept them.
- 9 JanA fax by Valerie Kopeikirie of Triton Sal confirmed that Triton was an intermediary in the deal, purchasing the helicopter gunships from Belspetsvneshtechnika. Triton made a profit of $1,105,120 acting as an intermediary.
- MarCSC delivered two helicopters. These proved not to be airworthy to the surprise of the CSC proprietors. The Belarusian intermediaries had duped CSC. The log books were different to those inspected in Belarus.
- CSC invited the manufacturers from Belarus to come to Uganda, and it was then discovered by unknown Ugandan officials that the cost of the helicopters had been grossly inflated.
- Two more helicopters were expected shortly afterward but never arrived, remaining till today in Minsk, Belarus.
- The first two gunships have since remained grounded at Entebbe Airbase. The Government has lost over at least $6,545,275 on the deal.
- Katto closes his Credit Suisse account, it was unclear whether funds involved in the deal transferred through this avenue, but OCCRP revealed the account had a maximum balance of just over 78,000 Swiss francs ($56,000) in August 2003.
- A judicial commission of inquiry was overseen by High Court Justice Julia Sebutinde to investigate the 1997 deal. This inquiry was famously known in Uganda as the ‘Junk Helicopters Inquiry’.
- 3 AprOfficials of the ‘Junk Helicopters Inquiry’ inspect some of the helicopters in Entebbe.
- 24 AugSebutinde handed the report to the Ministry of Defence. The report recommended that the 'inducements offered to Ruyondo and Saleh jeopardized transparency', 'eliminated healthy competition', and 'guaranteed contractual terms that favoured' CSC rather than the government. It suggested criminal prosecution of Saleh, Katto, Ruyondo and Besigye on corruption charges. There was no follow-up by the government.
- The director of Public Prosecution, Richard Butera, started independent investigations of Saleh and Besigye, while the Cabinet recommended the prosecution of army officers, businessmen and civil servants implicated by the judicial commission report. The cabinet also directed that implicated army officers should face an army court martial.
- The commission report of enquiry’s findings were never officially made public, although they were controversially leaked by Ugandan media.
- Katto was briefly detained at Luzira prison after being charged and prosecuted for corruption under the Prevention of Corruption Act 1970, bribing a government official. However, some of the implicated officials were instead turned into state witnesses to exonerate Katto. Ruyondo and Saleh were able to skirt criminal liability by acting as prosecution witnesses.
- JunKatto was acquitted of wrongdoing after Buganda Road Court Chief Magistrate Margaret Tibulya absolved the accused under section 127 of the Magistrates Court Act 1980. It was held that Saleh, who was not an officer of a public body at the time, was entitled to do private business through his marketing company, Caleb International, in which Katto approached Saleh to market his services for a commission. Although, it is clear Saleh did hold a public position at the time, and furthermore, enjoyed a special relationship with the president as fraternal brothers.
- Saleh confessed to having been offered a $800,000 commission from CSC to expedite the contract. He proposed to return it as well as resign from the ministry. However, his half-brother and current President of Uganda, Museveni, pardoned him, directing Saleh to instead use the commission earnings for military operations against the LRA.
- The commission report read that “The cost of transacting through the two middlemen; Triton Sal and CSC would have been a whooping US$6,919,850.00. To put it differently, that is the saving that the government would have made simply by procuring the goods directly from Belspetsvneshtechnika and avoiding middlemen,”.
- Besigye, now a retired Colonel, was a historical member of the NRM and one of the original 27 who started out with Museveni in his guerrilla war. Some believe that the inquiry was initiated with the intention of getting rid of President Museveni’s political opponent, Besigye, who had a short while before the inquiry announced that he would be challenging for the presidency in the 2001 elections.
- For more than two decades, the government has been setting up commissions of inquiry into crimes but most of them do not yield fruit. Not a single leader has been faced with prosecution or punishment for corrupt military procurement.
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