The Administration of Prime Minister Hailemariam Desalegn made the full might of its power known last Friday, after ordering the arrest of 10 high and medium ranking officials of the Ethiopian Revenues & Customs Authority (ERCA), along with six businessmen, some of whom are well known.
The Federal Ethics & Anti Corruption Commission (FEACC) announced launching a probe against the suspects, but remained quiet about the wrongs they are being accused of.
“Following leads from the public, the Commission, in cooperation with the national security and information services, has been investigating the suspects,” said the Commission headed by Ali Sulieman on Friday night. “Compiling sufficient material evidence and people to testify, the Commission finds it necessary to take them into custody until their case is presented to a court of law.”
Prominent, among those arrested on Friday late afternoon, is Melaku Fenta, director general, of ERCA. He was in his office located off Equatorial Guinea St., (near Megenagna roundabout), when investigators arrested him at 5:00pm, according to eyewitnesses. At about the same time, his deputies Gebrewahed W. Giorgis, in charge of ERCA’s most feared intelligence unit, was arrested by members of the Federal Police Commission outside of ERCA, while Eshetu Woldesemayat, head of the prosecutors’ Directorate, was escorted by police officers from ERCA headquarters.
It is believed that they were heading to the Federal Forensic Department of the Federal Police Commission, a.k.a Maekelawi, on Dejazmach Belay Zeleke Road.
Asemelash W. Mariam, head of Kality Customs; Amegnie Tagel, head of Nazareth Customs; and Tiruneh Berta, team leader of confiscated goods inspection, were also taken into custody on the same day.
The list of people arrested late last week hardly stopped with those inside the government. Prominent businessmen were also arrested in connection with Melaku and his colleagues, including Nega G. Egziyabher of Nesta Trading Plc; Ketema Kebede of K. K. Plc; and Simachew Kebede of InterContinental Addis. Two lesser known businessmen, Zerihun Zewdie and Marishet Tesfu, both of whom run transit companies, were apprehended by police.
Mihereteab Abraha, a businessman who is the brother of Seeye Abraha, was arrested at around 2:00pm, when he went to his children’s school, according to a family member.
“There must be some kind of mistake,” a close family member told Fortune. “He fought ERCA all the way to the Supreme Court where he won his case.”
This is the second time Mihereteab has been arrested and probed by the Anti-Corruption Commission in ten years. Back in the early 2000s, he was arrested and spent close to five years fighting charges of corruption before he was released in the mid-2000s.
“I wonder how he could be implicated with the others,” said this family member.
But none of the officials from the Federal Police and Anti-Corruption Commission have disclosed to the public on what grounds the suspects were put under custody.
“The list is a tall-order,” said an administration official.
Searches were carried out by investigators on Friday night and Saturday morning in the homes and offices of the suspects, Fortune learnt.
However, the investigation directed at some of ERCA’s officials has been going on for close to six months, according to sources in the government. A taskforce from the Commission, the Information Network Security Agency and the Forensic Department of the Federal Police Commission was collecting material evidence, although “very few people were privy to the investigation,” according to a mid-level official from the Anti-Corruption Commission.
“I was aware that they were investigating Gebrewahid,” this official told Fortune. “But, Melaku’s was not something that was revealed to us. It must have come much later.”
The case involves alleged improprieties at customs processing, especially involving imports of steel, according to sources.
The arrests were, however, made after the information allegedly implicating the suspects was presented to Prime Minister Hailemariam Desalegn a week prior to the wave of arrests was carried out, according to a senior aide of the Prime Minister.
“He feels very strongly about this,” this aide told Fortune, but asked anonymity due to the sensitivity of the case. “I believe he started to make good on his promises that he will fight corruption provided that the public supports him by providing valuable leads and information.”
It is the first time since the early 2000s the government has conducted a wave of arrests against officials and businesspeople, including a member of the powerful executive committee of the ruling EPRDF.
Back in the 2000s, Seeye Abraha, former strongman of the TPLF, was arrested, along several businessmen and bank executives, and subsequently charged with corruption. They all had spent close to five years in jail before they were released. Prior to that, Tamrat Layne, former prime minister during the transitional government, was arrested in the mid-1990s, together with businesspeople, all accused of corruption.
Melaku, an economics graduate from Addis Abeba University, oversaw several tax reforms including widening the tax base, by requiring businesses to install cash registration machines and to become registered for Value Added Tax (VAT). He was appointed by former Prime Minister Meles Zenawi, to be director general of the newly organized ERCA, in June of 2008.
Under him, the amount of revenues the federal government mobilized has reached 71 billion Br in 2011/12, a dramatic increase from the 19 billion Br collected before he took the position. ERCA has also consistently managed to meet the revenue targets set for it by the government, though it fell short of the in-house goals it set for itself.
But reforms were not easy to implement and were not necessarily popular. Businesses have long complained of ill-treatment by lower level officials of ERCA, lack of uniform information, bureaucratic bottlenecks, and regulatory unpredictability, marred by inefficiency and unfair taxation.
Front and centre fielding such complaints from the business community at consultation meetings along with Melaku was his deputy Gebrewahed who headed the most feared law enforcement directorate within ERCA.
Most recently, officials from the ERCA have come to loggerheads with businesses, after demanding businesses pay undistributed dividends. During ERCA’s performance assessment meeting, higher level officials were accused of turning a blind eye towards some big businesses for which only lower level officials were bearing the brunt, sources disclosed to Fortune.
Last week’s wave of arrests on people known to be well connected within the political establishment no doubt has put many people off guard.
“Hailemariam wants to prove that there are no holy-cows,” said a senior official in the administration.
Transparency rarely transpires with the ruling Revolutionary Democrats.
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