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Published online by Cambridge University Press: 28 July 2009
Combatting the mismanagement of government funds by public officials remains a challenge in Kenya as well as in many African countries. Current mechanisms have not proved effective and need strengthening. This article argues that courts in Kenya should allow taxpayers standing to bring actions challenging allegedly improper government expenditure. Drawing upon the experience of courts in the United States, it demonstrates the potential effectiveness of such actions.
1 See Ojwang, J.B., “Legislative control of executive power in English an d French-speaking Africa: a comparative perspective,” (1982) Public Law 511. The author identifies the tasks then facing the new African states as being the creation of a national identity, the creation of conditions favourable to economic development and the evolution of a stable political order.Google Scholar
2 Thus T.J. Mboya, a minister in Kenya's independence cabinet, saw government participation in economic development as being absolutely essential because “it is inevitable if there is to be the swiftest possible development and if the meagre financial and technical resources are to be exploited in full.”
3 Ojwang, above at 514.Google Scholar
4 Slinn, P., “A Fresh Start for Africa? New African Constitutional Perspectives for the 1990s”, [1991] 35 J.A.L. 1, 3.CrossRefGoogle Scholar
5 An examination of all the mechanisms for dealing with this problem is beyond the scope of this article. However, see, for example, Coldham, S., “Legal responses to state corruption in Commonwealth Africa”' [1995] 39 J.A.L. 115, 120–123 for an analysis of certain institutional mechanisms for combating corruption, including the office of ombudsman.CrossRefGoogle Scholar
6 See Cornblum v. San Diego County Board of Supervisors, below.
7 See TRIM, Inc. v. County of Monterey, below.
8 Republic of Kenya, The Report of the Controller and Auditor-General Together with the Appropriation Accounts, Other Public Accounts and the Accounts of the Funds for the year 1995/96, 4 (1997).Google Scholar
9 Id. at 6–7.
10 Id. at 7.
11 Id. at 9.
12 Id. at 10. Part of this sum was subsequently included in the Office of the President Vote and repaid to the Consolidated Fund, leaving a balance of Kshs. 952, 751,700 as still illegally charged to the Fund.
13 Republic of Kenya, National Assembly, Sixth Report of the Public Investments Committee on the Accounts of State Corporations, Vol. 1, xv (1995).Google Scholar
14 Nwabueze, B.O., Judicialism in Commonwealth Africa London, 1977, 229.Google Scholar
15 Id. at 230.
16 Id. at 231.
17 McCormack, W., “The Political Question Doctrine—Jurisprudentially”, 70 U. Det. Mercy L. Rev., 793 at 799.Google Scholar
18 Nwabueze, above at 15.Google Scholar
19 Id. at 15–16.
20 Treister, D.S., Standing to Sue the Government: Are Separation of Powers Principles Really Being Served? (1994) 67 S. Cal. L. Rev. 689, 690.Google Scholar
21 Nichol, G.R., “Rethinking Standing”, (1984) 72 Calif. L. Rev. 68, 88.CrossRefGoogle Scholar
22 Id. at 25.
23 Id. at 27.
24 Galloway, R.W., “Basic Justiciability Analysis”, (1990) 30 Santa Clara L. Rev. 911, 915–917. This may be the case where the courts' evidentiary procedures do not provide sufficient information to permit sound judgment on the issue. Further, a matter is non-justiciable if the text of the Constitution ‘demonstrably’ commits its resolution to another branch of the government. Finally, a matter is non-justiciable if it will cause too much harm to the judiciary; thus the U.S. Supreme Court refused to decide the constitutionality of the Vietnam War despite several opportunities to do so.Google Scholar
25 These are proceedings brought by one or more taxpayers on behalf of themselves as representatives of a class similarly situated within a taxing district or area, upon a ground which is common to all members of the class, and for the purpose of seeking relief from illegal or unauthorized acts of public bodies or public officials, which acts are injurious to their common interests as such taxpayers. See Parsons, S.L., “Taxpayers' Suits: Standing Barriers and Pecuniary Restraints,” (1986) 59 Temp. L.Q., 951.Google Scholar
26 This is necessary, especially in the context of social goods, which are deemed necessary but can only be provided by the government since “the market cannot function in the public sector.” See Parsons, id. at 951–952.
27 Jaffe, L.L., “Standing to Secure Judicial Review: Public Actions”, (1961) 74 Harvard Law Rev. 1265, 1284.CrossRefGoogle Scholar
28 Nwabueze, above at 66.Google Scholar
29 Above at 1292.
30 Another justification often proffered is the presumption of pecuniary harm to the taxpayer whenever there is wasteful or unlawful use of public funds or property. The rationale for the presumption is that taxpayers, by virtue of their tax payments, are regarded as the equitable owners of public funds. Pecuniary harm is presumed because it is to the same taxpayers that the government turns, by imposing additional taxes, to replace any deficiencies caused by illegal appropriations. Taxpayers thus have a right to avoid pecuniary harm by ensuring that public funds are raised and expended in a lawful manner. The validity of the pecuniary harm rationale has, however, been questioned, especially because there is no guarantee that an illegal expenditure will result in a tax increase. Yet another justification for taxpayer actions is to be found in a trust theory, to the effect that public officials hold public funds and property in trust for the taxpayer. As the cestui que trust, the taxpayer has the right to attack any illegal diminution of the trust funds. Taxpayer actions have also been based on an analogy to shareholders' derivative actions, the taxpayer's right to sue public officials is analogous to the right of the shareholders of a private corporation to sue its officers to prevent the wastage of corporate assets. See Jaffe, , above at 1292;Google ScholarParsons, above at 953;Google ScholarBerghom v. Reorganized School Dist. 364 Mo. 121, 260 SW 2d 573.Google Scholar
31 The Constitution of the Republic of Kenya, s. 99(1). S. 99(2) further states that Parliament may provide that some of the revenue need not be paid into any established fund but may be retained by the authority which received it for the purposes of defraying its expenses.
32 Id.
33 S. 102(1).
34 The Exchequer and Audit Act, cap. 412, Laws of Kenya. This statute, at s. 2, vests the primary responsibility for the management of the Consolidated Fund in the Treasury, which appoints accounting officers—pursuant to s. 5(1)—for the various votes appropriated by Parliament. Though the primary responsibility for financial policy is with the Treasury, each accounting officer is accountable for his or her own vote.
35 The Paymaster-General Act, cap. 413, Laws of Kenya. The Paymaster-General is the office through which the Treasury controls the issue of money to the ministries and departments of government.
36 Constitution of Kenya, s. 100(1).
37 S. 48.
38 Ghai, Y. and MacAuslan, P., Public Law and Political Change in Kenya, London, 1970, 342.Google Scholar
39 Republic of Kenya, National Assembly, Standing Orders, Nos. 137 and 142.
40 Constitution of Kenya, s. 100(2).
41 S. 105(1).
42 S. 105(2)(a).
43 S. 105(2)(b).
44 S. 105(2)(c).
45 See Common Cause et al v. State of Maine et al, 455 A. 2d 1 at 9, per Justice Godfrey.
46 Rahdert, M.C., “Sprague v. Casey and its Seven Deadly Sins”, (1989) 62 Temp. L. Rev. 625 628–629.Google Scholar
47 See below.
48 262 U.S. 447,
49 Id. at 488.
50 See, for example, Jaffe, above at 1294.Google Scholar
51 392 U.S. 83, 88 S. Ct. 1942.
52 Flast has been applied consistently by the U.S. Supreme Court. See United States v. Richardson, 418 U.S. 166,Google Scholar 94 S. Ct. 2940, 41 L. Ed. 2d 678 (1974) where the court held that the plaintiff lacked standing because he alleged a violation of the Statement and Account Clause, art. I, s. 9, cl. 7 of the U.S. Constitution; Schlesinger v. Reservists Committee to Stop the War, 418 U.S. 208,Google Scholar 94 S. Ct. 2945, where the plaintiff failed to establish standing because his challenge to a Pentagon policy allowing members of Congress to retain their status in the Armed Forces Reserve concerned the Incompatibility Clause, not the Taxing and Spending Clause; and Bowen v. Kendrick, 487, U.S. 589,Google Scholar 108 S. Ct. 2562, where the plaintiff sought to challenge the constitutionality of the Adolescent Family Life Act on the ground that it violated the Establishment Clause.
53 Flast has, therefore, been subjected to immense criticism. In the first place, it has been criticized for precluding suits challenging expenditures pursuant to regulatory statutes: the taxpayer's interest in the expenditure of public funds, it is convincingly argued, should not depend on the form of the expenditure since pecuniary harm results whenever funds are expended in an illegal manner. See Parsons, above at 960. As Justice Harlan stated in his dissent in Flast itself, regulatory programmes are not necessarily less prodigal of public funds than are grants-in-aid; and it does not matter to the taxpayer whether an unconstitutional expenditure is put to use in either case. 392 U.S. 83 at 123. Secondly, Flast ignores the fact that general limitations, and not just specific limitations on Congress's taxing and spending power may occasion harm to the litigant's pocketbook which harm does not vary with the constitutional provision under which the claim is made. Parsons, above at 960. Thirdly, Flast ignores the fact that Congressional acts pursuant to other clauses of the Constitution may occasion the same injury as those pursuant to the taxing and spending clause. Thus the application of the Flast test is bound to produce absurd results. For instance, while a taxpayer has standing to challenge Congress's appropriation of funds to build a facility on a church-related college, there is no standing where Congress transfers property purchased with tax funds to the same college. See, for instance, Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464,Google ScholarFlast has also been criticized for not offering any guidance to the lower courts as to how they should determine the existence of specific constitutional authorization for congressional spending, especially where that authorization is unclear. Parsons, above at 961. This is why an approach that focuses on the fact of congressional spending, rather than specific authorization under the constitution is laudable. This is the approach that the U.S. District Court for the Eastern District of New York adopted in Katkoff v. Marsh, 582 F. Supp. 463 (E.D.N.Y 1984), 755 F. 2d 223 (2d Cir. 1985). By eliminating the need to determine the specific constitutional source of federal spending programmes, this court removed a barrier to litigants seeking to challenge congressional appropriations in cases where it is difficult to establish that Congress acted pursuant to the taxing and spending clause.Google Scholar
54 See Bjorge, K.R., “Standing to Sue in the Public Interest: The Requirements to Challenge Statutes and Acts of Administrative Agencies in the State of Washington”, (1978) 14 Gonz. L. Rev. 141.Google Scholar A number of states have, however, adopted the restrictive federal approach, which requires the plaintiff to show substantial, direct and immediate interest even in taxpayer actions. The courts of Connecticut, for instance, have adopted the federal requirements to determine state taxpayer standing. See Enama v. Weicker, 1994 WL 282165 (Conn. Super.). See s. VI(A)(B)(v) below.
55 Enrich, P.D., “Saving the States from Themselves: Commerce Clause Constraints on State Tax Incentives for Business”, (1996). 110 Harv. L. Rev. 337, 414.CrossRefGoogle Scholar
56 See J.D.L. Corp. v. Bruckman 171 Misc. 3, 11 NYS 2d 741.Google Scholar
57 Parsons, above at 952.Google Scholar
58 Foster v. Coleman 10 Cal. 278, 281 (1858)Google Scholar cited in Collins, R.K.L. and Myers, R.M., “The Public Interest Litigant in California: Observations on Taxpayers' Actions”, (1977) 10 Loy, L.A. Law. Rev 329, 332.Google Scholar
59 5 Cal. 3d 258, 486 P. 2d, 1242, 96 Cal. Rptr. 42 (1971).
60 Id. at 267–68, 486 p. 2d at 1248–49, 96 Cal. Rptr. at 48–49.
61 “California Taxpayers” Suits: Suing State Officers under Section 526a of the Code of Civil Procedure.” 28 Hastings L.J. 477 at 508.Google Scholar
62 Collins, and Myers, above at 333–34.Google Scholar
63 See Crowe v. Boyle 184 Cal. 117, 152, 193 P. 111, 125 (1920).Google Scholar
64 Collins, and Myers, above at 336.Google Scholar
65 Id. at 334.
66 65 Cal. 2d. 13, 415 P. 2d 769, (1966) 51 Cal. Rptr. 881.
67 Collins, and Myers, above at 335.Google Scholar
68 See Crowe v. Boyle, 184 Cal. 117, 193 P. 111,Google Scholar where the court entertained an action against the auditor of the City and County of San Francisco.
69 5 Cal. 3d 258, 486 p. 2d 1242.
70 31 Cal. App. 3d 769, 107 Cal. Rptr. 667 (1973).
71 Id. at 773, 670.
72 110 Cal. App. 3d 976, 168 Cal. Rptr. 294.
73 Id. at 982, 298.
74 86 Cal. App. 3d 539, 150 Cal. Rptr. 351.
75 195 Cal. App. 3d 982, 214 Cal. Rptr. 215.
76 49 Cal. App. 4th 1761, 57 Cal. Rptr. 2d 618.
77 State money provided only 15 per cent of the MTA's funding.
78 Boyles v. Whatcom County Superior Court, 103 Wash. 2d 610 at 614, 694 P. 2d 27 at 30.Google Scholar
79 This rule has been followed in numerous cases. See, for instance, Tacoma v. O'Brien 85 Wash. 2d 266,Google Scholar 534 P. 2d 114; and Calvary Bible Presb. Church of Seattle v. Board of Regents 72 Wash. 2d 912, 436 P. 2d 189.Google Scholar
80 Reiter v. Wallgren 28 Wn. 2d 872, 184 P. 2d 571 (1947).Google Scholar
81 Above at 876–77, 184 P. 2d at 573.
82 99 Wash. 2d 326, 662 P. 2d 821.
83 Id. at 330, 824.
84 See Calvary Bible Presbyterian Church of Seattle v. Board of Regents of the University of Washington, 72 Wash. 2d 912 at 918, 436 P. 2d 189 at 193.Google Scholar
85 124 Wash. 2d 402, 879 P. 2d 920.
86 Greater Harbor 2000 v. City of Seattle, 132 Wash. 2d 267, 937 P. 2d 1082.Google Scholar
87 Rizzo v. City of Philadelphia, 136 Pa. Cmwlth. 13 at 17, 582 A. 2d 1128 at 1129–1130, per Smith, J.Google Scholar
88 Above n. 87.
89 See Faden v. Philadelphia Housing Authority, 424 Pa. 273, 227 A. 2d 619 (1967), where a taxpayer brought an action to set aside a contract between the authority and a contractor because the contract was not awarded to the lowest responsible bidder.Google Scholar
90 The rule was adopted in Rickman v. Whitehurst, 73 Fla. 152, 74 So. 205 (1917) where the court stated at 207 that “[t]he principle on which the right [standing to sue] rests is that the taxpayer is necessarily affected and his burdens of taxation increased by any unlawful act of the county commissioners which may increase the burden to be borne by the taxpayers … The right of the complainant to maintain this suit therefore would seem to depend upon the particular injury which may result to him from the expenditure of the funds … The taxpayer's injury specially induced by the unlawful act is the basis of his equity, and unless it is alleged and proved, there can be no equitable relief.”Google Scholar
91 Department of Administration v. Home. 269 So. 2d 659 (1972).Google Scholar
92 Enama v. Weicker 1994 WL 282165 at 3. See also Losacco v. Reynolds, 1995 WL 371044 (Conn. Super.); Ridgefield Women's Political Caucus, Inc. v. Fossi, 458 F. Supp. 117;Google Scholar and Sadloski v. Town of Manchester, 235 Conn. 637, 668 A. 2d 1314. (1995).Google Scholar
93 See Order LIII of the Civil Procedure Rules made pursuant to s. 81 of the Civil Procedure Act, Chapter 21 of the Laws of Kenya.
94 See generally Lumumba, P.L.O., An Outline of Judicial Review in Kenya, Nairobi, 1999, 90.Google Scholar
95 Nairobi High Court Civil Case No. 5403 of 1989 (unreported) (cited in Lumumba, above at 91).
96 Id.
97 See, for instance, Republic v. Kenya Posts & Telecommunications Corporation, Nairobi High Court Miscellaneous Application No. 869 of 1995 (unreported), where the High Court granted standing to a group of consumers of telephone services to challenge a decision of the Kenya Posts & Telecommunications Corporation requiring all telephone subscribers to pay their telephone bills either in cash or by bankers cheque.
98 Nairobi High Court Miscellaneous Civil Application No. 403 of 1998 (unreported) (cited in Lumumba, above at 92).
99 Those procedural requirements are that the applicant must apply for leave not later than six months after the date of the proceeding or such shorter times as may be prescribed by any Act of Parliament. And when leave is granted, the applicant must file the Notice of Motion within 21 days from the date of leave.
100 Lumumba, above at 94 (arguing that “every responsible citizen has an interest in seeing that the law is enforced; and that is sufficient interest in itself to warrant his applying for certiorari or mandamus to see that it is enforced”).
101 Id. at 95.
102 Finlay v. Minister of Finance of Canada, [1986] 2 S.C.R. 607.Google Scholar
103 Tipping, J., in O'Neill v. Otago Area Health Board (High Court, Dunedin, C.P. 50/91, 10 April, 1992).Google Scholar
104 Craig, P.P., Administrative Law, 2nd ed, London, 1989 379.Google Scholar
105 This may, however, be changing: See, for example, the English case of R. v. Secretary of State for Foreign Affairs, ex. World Development Movement. [1995] 1. All E.R. 615, where standing was granted to a well-known and internationally recognized pressure group, which sought judicial review to challenge the decision of the Foreign Secretary to make a payment of aid.Google Scholar
106 S. 102 may also form the basis for such an action.
107 See s. 82 of the Kenya Constitution.
108 Above n. 53.
109 Collins and Myers, above at 340.
110 See Stanson v. Mott, 17 Cal. 3d 206 at, 551 P. 2d at 15, where the court noted that a determination of whether or not a public official has acted with due care would include a consideration of “whether the expenditure's impropriety was obvious or not, whether the official was alerted to the possible invalidity of the expenditure, or whether the official relied upon legal advice or on the presumed validity of an existing legislative enactment or judicial decision in making the expenditure.”Google Scholar
111 This is the approach taken by Tipping J., in O'Neill v. Otago Area Health Board, above, on the basis that if the plaintiff fails on the substantive issues then the question of standing will be academic.
112 See Cornblum v. San Diego County Board of Supervisors, above.
113 See TRIM, Inc. v. County of Monterey, above.
114 Above.
115 Nwabueze, above at 74.