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Wednesday, April 24, 2024 | Back issues
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Kenyan Whistle-Blower Loses Suit Over Reward

WASHINGTON (CN) - U.S. courts cannot help compensate a whistle-blower who reported a bank's illegal activities to the Kenyan government, a federal judge ruled.

Peter George Odhiambo claimed the Republic of Kenya reneged on advertised promises to pay a reward for helping to uncover alleged tax evasion at Charterhouse Bank, a private Kenyan commercial bank. In fact, Odhiambo said the Kenya Revenue Authority paid him twice - a total of $5,850 - for the information he provided.

Odhiambo claimed, however, that Kenyan authorities also exposed him as the Charterhouse whistle-blower, which led to harassing phone calls telling him to leave Kenya and "hostile surveillances." The U.S. government granted Odhiambo asylum in 2006.

Odhiambo said the Kenyan government promised him more reward money after investigations at Charterhouse confirmed that the bank helped its customers evade Kenyan taxes. Meetings with numerous Kenyan officials in the U.S. throughout 2008 and 2009 nevertheless proved fruitless. One such meeting even involved Kenya's prime minister during a trip to New York.

Odhiambo sued the government of Kenya in 2012 for breach of contract, claiming the country owed him over $24.5 million in reward money and $5 million in compensatory damages.

Finding that Kenya has immunity under the Foreign Sovereign Immunity Act, U.S. District Judge Amy Berman Jackson threw Odhiambo's case out of court Wednesday.

The 28-page ruling rejects Odhiambo's argument that Kenyan officials implicitly waived their sovereign immunity by helping him seek asylum in the U.S.

"Defendants' alleged actions in connection with Odhiambo's relocation to the United States cannot support a finding of implied waiver because they were not related to any 'conduct of litigation, let alone this one,'" Jackson wrote, citing Abur v. Republic of Sudan and Smith ex. rel. Smith v. Socialist People's Libyan Arab Jamahiriya. "This matter is not about Odhiambo's asylum in the United States; his relocation occurred more than five years before Odhiambo filed this suit, and Odhiambo has not pointed to any action taken by defendants 'in relation to the conduct of litigation' that indicated their amenability to suit in the United States."

Odhiambo also failed to make his case that his "commercial activity" with the Kenyan government in the U.S. created an exemption from immunity, the court found.

"All of the aspects of Odhiambo's breach of contract claims took place in Kenya: the reward scheme was advertised in 'Kenya's print and online newspapers;' the reward was to be paid in Kenyan shillings; Odhiambo 'accepted' the offer by providing information in Kenya; defendants allegedly disclosed Odhiambo's identity as a whistleblower in Kenya; and defendants allegedly paid Odhiambo less than he was owed while he was in Kenya," Jackson wrote.

"Charterhouse's alleged diversion of approximately $2.11 million from Kenya to New York is not necessary to prove any of the elements of breach of contract," she added. "It is not relevant to the determination of whether there was a valid contract between the parties or whether an obligation or duty arose from the contract.It is also not necessary for the court's determination of whether there was a breach of the contract because whether Charterhouse diverted money to the United States does not establish whether defendants disclosed Odhiambo's identity as a whistleblower or whether they failed to pay him the reward money."

Jackson also rejected Odhiambo's argument that the breach of contract was "a direct effect" of his seeking asylum in the United States. Similarly, Odhiambo failed to show the Kenyan government implicitly agreed to pay the reward money by helping him come to the U.S.

"Odhiambo has failed to show that the United States was the 'place of performance' where the reward payment was 'supposed' to be made by defendants or to Odhiambo," Jackson wrote. "Contrary to his assertions, defendants' agreement to help Odhiambo relocate to the United States did not necessarily indicate their implicit agreement to designate the United States as the place of performance for the reward scheme. Defendants might have paid Odhiambo in the United States, but they might just as well have done so in Kenya and left it up to him to transfer the funds to his U.S. accounts. Moreover, Odhiambo does not allege that Kenya paid whistleblowers in the United States or that it had a practice of paying whistleblowers based on their location."

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