Detectives on Friday interrogated the Head of State House Legal Department and Presidential aide, Ms Joy Kabatsi, for more than four hours over the pay-out of Shs146 billion to city businessman Hassan Basajjabalaba as compensation for city markets.
She was later released at around 3pm after the officers extracted a statement from her at the Criminal Investigations Directorate headquarters in Kibuli, sources said.
On Thursday, Ms Kabatsi and Mr Edward Muhoozi, the private secretary to the President in-charge of economic affairs, appeared before the Public Accounts Committee (PAC) of Parliament where they denied any wrongdoing and said the President was aware of Mr Basajjabalaba’s petition to revise the pay-out upwards.

PAC chairman Kassiano Wadri handed the duo to police for further investigation.

The Director of Criminal Investigations, Ms Grace Akullo, yesterday declined to divulge details of the matter but confirmed that Ms Kabatsi appeared at CID. Ms Kabatsi and Mr Muhoozi drafted letters which were signed by the President and forwarded to the former Attorney General Khiddu Makubuya (now minister in the Office of the Prime Minister) for further directives.
However, appearing before the parliamentary Public Accounts Committee during the week, Mr Museveni blamed Ms Bbumba and Mr Makubuya for the “inflated” compensation to Mr Basajjabalaba and also ordered his two aides to appear before the committee to explain the contents of the letters they drafted for him.
BoU Governor Tumusiime Mutebile, Ms Bbumba and Prof. Makubuya have all pinned the President, who maintains that his ministers should take responsibility. But the question of who made the decision to pay the Shs142b claim to Mr Basajjabalaba still dogs government. It has now pitted President Museveni and his ministers and aid against each other.Who is to blame?
Whereas the President has distanced himself from the compensations, opposition politicians insist that he knew about the deal and wondered how he could sign documents containing the Shs142.6 billion figure without scrutinising its content.

In his statement to PAC, Mr Museveni said his letters contained two positions: Basajjabalaba should be kicked out of the markets and be compensated out of natural justice, the mistakes of those who sold to him notwithstanding. The President said he strongly supported the principle of compensation but not the Shs142b.
Also revealed in Parliament is information that Mr Muhoozi allegedly misled the President in his letter to Bank of Uganda Governor Emmanuel Tumusiime-Mutebile. It is alleged that on January 8, 2011, Mr Muhoozi helped the President draft a letter for his signature. This was the letter, the governor used to issue letters of comfort to commercial banks on behalf of Mr Basajjabalaba.
Kabatsi shifts goal posts?
In a September 30, 2011, press release, Ms Kabatsi refuted media reports that indicated that the President knew of Mr Basajjabalaba’s claims. She wrote at then: “At no time did the President mention a figure, either by word or in writing that would be a basis for such compensation. This is not his work. He does not have the competence to do it. This is the work of government valuers.”

“The public should be informed that State House is looking into forgeries of its documents, perpetuated by some crook,” Ms Kabatsi’s letter, that now shows a twist of position, said at the time.
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