Investigative Reports

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Organized Corruption: How Government Appointees and Employees Are Pillaging Coffers through their Private Companies

According to Somaliland government records examined by Somaliland Chronicle, two companies, BIOSOM Diagnostic Care and Modern Medical Laboratory, owned and operated by government employees and presidential appointees, are supplying COVID-19 reagents and related supplies to the COVID-19 testing facility at Hargeisa Group Hospital.

BIOSOM’s company registration shows four of its shareholders are government employees who work at the COVID-19 testing facility at the Hargeisa Group Hospital, this includes the Deputy Head testing facility Mr. Hassan Mohamed Abdi, and Mr. Mohamed Ahmed Hergeye, the brother of the Ministry of Health Development’s Director General Mr. Mohamed Abdi Hergeye.

Modern Medical Laboratory is owned and operated by Mr. Abdirahman Hassan Derie, the ultimate insider who has served as an advisor to successive ministers of Health and a member of Central Committee of the ruling party of Kulmiye. In addition, Mr. Derie is a presidential appointee to represent Somaliland on the DP World Berbera venture since former President Ahmed Mohamoud Siilanyo’s government.

Mr. Derie’s company, Modern Medical Laboratory, has sold a whopping $766,369.69 worth of COVID-19 reagents and other unspecified supplies since March 2021, while BIOSOM has done $295,822.80 worth of business in the same period. The two companies have billed more than million US dollars to the Ministry of Health Somaliland and the Somaliland taxpayers.

Although official government reports on COVID-19 infection trends are no longer issued consistently, BIOSOM and Modern Medical Laboratory’s business of selling reagants and other COVID-19 supplies to the Ministry of Health Development has been steadily on the rise at times more than the height of the pandemic.

In addition, the Ministry of Health does not issue statistics on number of travelers served by the COVID-19 testing facility. Negative COVID-19 PCR test result which is still a requirement for most travel destination costs $45 US dollars. According to the 2022 budget, Ministry of Finance expects 2.3 million US dollars to be generated from COVID-19 testing fees.

Areas of revenue for the 2022 budget. Page 39 of 2022 Budget.

A closer inspection of BIOSOM and Modern Medical Laboratory transactions shows massive inconsistencies. BIOSOM is charging more than a thousand dollars for a box of reagents that are available in the market at around 300 US dollars. Modern Medical Laboratory seems to cut and paste the same amount for eight consecutive times down to the cents. It is unclear how a company’s cost can stay consistent for eight billing periods with the rise in transportation and fuel costs.

Although government policy mandates that all contracts exceeding fifty million Somaliland Shillings be put through bid through the National Tender Board, there is no indication that BIOSOM and Modern Medical Laboratory have won their contracts through the National Tender Board.

Representatives of the companies we have spoken to disputed any wrongdoing, including conflict of interest, and did not seem to be aware that multiple laws prohibit government employees and appointees from directly benefitting from their position.

With BIOSOM, where half of the company’s shareholders also work at the COVID-19 testing center and include the brother of the Director General of the Ministry of Health, self-dealing seems to be business as usual as the entire lifecycle of the purchasing process is done by the same people on both ends of the transaction.

In Somaliland, where systemic corruption has been the norm, an appointment or a government job has become license to steal and a shortcut in landing coveted government contracts.

According to a legal counsel we consulted for this report, multiple statutes and laws prohibit government employees and officials from directly participating in business ventures that can create a conflict of interest.

Mr. Derie the owner of Modern Medical Laboratory denied any wrongdoing and claimed he has owned the company before his appointment, despite all the company’s business with the government starting last year and stated that he pays his taxes before abruptly stating that he did not wish to make any more comments to us.

BIOSOM shareholder Mr. Mohamed Ahmed Hergeye, the Brother of the Director General of the Ministry of Health, accused us of unprofessionalism and that it was inappropriate to ask if he and the Director General were siblings.

According to sources, the World Health Organization which donated the COVID-19 equipment to the Ministry of Health has stopped supplying COVID-19 reagents and related supplies last year. World Health Organization Officials in Hargeisa who work directly with the Ministry of Health and COVID-19 testing center did not respond to repeated calls for information.

Repeated attempts to reach the Minister of Health, Mr. Hassan Mohamed Ali (Gaafaadhi), and the Director General, Mr. Mohamed Abdi Hergeye for answers to questions for this report were unsuccessful.

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