Tue | Aug 4, 2020

David Salmon | Sweetheart deals: Why ministries are susceptible to corruption

Published:Thursday | July 23, 2020 | 12:18 AM

Recent scandals involving Petrojam and the Ministry of Industry, Commerce, Agriculture and Fisheries (MICAF) have highlighted issues that arise with the excessive involvement of political actors in the functioning of the public sector. However, when discussing these latest instalments of malfeasance, it is important that we recognise the reason why some ministries, departments and agencies (MDAs) are more susceptible to corrupt practices. While this is often recognised, especially after public furore, more analysis is needed in order to craft solutions to this problem.

LARGE RESOURCES, WEAK OVERSIGHT

The fact is that MDAs that handle large resources are simply more vulnerable to corruption. Petrojam is one such example of an entity that manages large resources. For instance, based on the current estimates of expenditure for public bodies, the organisation is projected to have a net profit of over $2.3 billion. Although, managing large resources is only a part of the picture.

Even though agencies with enormous capital budgets are not unique to this country, the fact is that corruption can occur as actors merely bypass established procedures. The Integrity Commission emphasised this observation as it explained that weak oversight creates the perfect storm for corruption-enabling mechanisms. The report found that, “Petrojam Limited deviated from its policies, procedures and practices which were established in the receipt of requests for and the subsequent approval of donations.”

It added, “Requests for donations were required to be approved by the full complement of the board of directors. The entity altered this process by implementing a practice in which … (officials) approved donations without the full complement of the board.” Thus, bypassing procedures easily nullifies any established system of accountability. Large budgets exacerbate this issue as it is easy to siphon away resources, given the difficulty in supervision.

Interestingly, the 1973 DaCosta Commission noted a similar finding as it investigated the administrative failings that led to the World Bank school-building fiasco. The commission stated that a major cause of the debacle was “the abandonment of well-tried procedures and fundamental principles” as mechanisms used to ensure proper administration, such as the Contracts Award Committee, simply “withered from lack of use”.

Compounding this finding was excessive interference of then state minister, Dr Arthur Burt, who, as the report added, “had a vested interest in over-expenditure” in regard to contracts. Occurrences like this led the commission to aptly brand the then education ministry as ‘Chaos Incorporated’. This case underscores the incentives that encourage politicians to become intoxicated with the trappings of state resources. Having government agencies manage large resources with weak oversight creates a recipe for mismanagement.

Unfortunately, there is an international precedent for this finding. For example, Angola used its massive windfall from oil to finance rapid reconstruction efforts after its civil war. As former Angolan Prime Minister Lopo do Nascimento explained, spending on construction had been “like opening a window and throwing out money”. These funds were used in sweetheart deals to enrich the beloved children of former President José Eduardo dos Santos. And yet, resources were also used to provide political patronage disguised under the benevolent cloak of “community development”.

Therefore, corruption persists as it is used to provide benefits for communities in order to secure their support in contested elections. Simply put, our governance system incentivises institutionalised political patronage. Howard Mitchell, chairman of the Jamaica Accountability Meter Portal (JAMP), noted this in an article published in The Sunday Gleaner, when he said, “People see their elected representatives as a means to getting scarce benefits … . A person can lose an election because of their inefficiency in giving out spoils.” In order to address these issues, a new approach is needed to tackle the hydra of cronyism, nepotism and patronage.

ROLE OF ELECTED REPRESENTATIVES

An improvement in accountability mechanisms is needed to reduce opportunities for corruption by elected representatives. This can start by having the Constituency Development Fund (CDF) publish reports drafted by members of parliament (MPs) each year as well as audits of their constituency expenditure. These reports should detail completed projects, the progress made with others, the budgets for these endeavours, as well as the contractors and agencies involved in their implementation.

When examining JAMP’s website, very few MPs had publicly disseminated reports that outlined expenditure on projects done within their constituencies. In my discussion with JAMP’s Executive Director Jeanette Calder, Julian Robinson was a notable exception. She explained that he submits annual reports, available to the public, even though this was not a requirement of the revised CDF operational procedures. While this does not mean that reports are not given to constituents by other MPs, a physically drafted document should be the norm and not the exception.

Furthermore, transparency can be improved within MDAs by publishing the names of board appointees of public bodies. In some instances, biographies of appointees exist on these agencies’ websites, while in other cases only their names are present. And yet in some instances, one would search a lifetime and still not find the list of board appointments for these departments. Thus, in order to serve the public weal, these appointments should be published consistently.

Moreover, I am proposing that board nominees should also be vetted by an independent commission of Parliament, which is currently practised in jurisdictions such as Scotland. The primary role of the proposed Office of the Commissioner for Public Appointments would be to ensure that candidates selected by the minister are competent and this process adheres to government policy. An alternative suggestion is to have parliamentary committees responsible for specific ministerial oversight to vet the suggested appointments.

Dr Andrew Wheatley made a valid point by stating that there is collective responsibility as Cabinet approves all board appointments. Thus, greater scrutiny of appointments, beyond the Cabinet, would ensure that the public sector is staffed by competent professionals and that it is no longer a place for sweetheart deals.

David Salmon is a public policy and management student at The University of the West Indies and a member of the National Youth Parliament of Jamaica. To send feedback email davidsalmon@live.com or follow him on Twitter @DavidSalmonJA.