Blythe, left, and Paulwell
D. K. Duncan, Contributor
THE PRIME MINISTER continues to operate with a very narrow, legalistic definition of corruption. In accepting former Minister Karl Blythe's offer to be "relieved of his ministerial responsibilities" he reveals his understanding of corruption. Mr. Patterson said, "Nowhere in the Report is there any finding by the Commissioners which suggest that the responsible Minister, Hon. Karl Blythe has abused his public office for private gain or personal benefit." Party President P. J. Patterson is here clearly implying that while the former Minister "abused his public office," this abuse was not carried out for personal gain or benefit. If we accept that this is correct then the matter that arises is - Did Minister Blythe abuse his office and if so, why?
Attorney and human rights activist Lloyd Barnett, Q.C. proposed a definition of corruption. He says: "In its simplest terms, corruption is the misuse of office or power or the exercise of discretion, influence for personal gain, or partisan advantage."
In the particular article, Mr. Barnett continues: "corruption can occur in many forms, from the, perhaps, clearest offence of bribery to the more subtler conflict of interest and influence trafficking."
Against this background, let us examine the actions of Dr. Karl Blythe in the PRIDE debacle and Minister Phillip Paulwell in the NETSERV nightmare.
POLICY VS. IMPLEMENTATION
Both ministers professed their involvement in policy making, while denying "hands on" involvement.
The Angus Commission Reports - that: "...the Commission found significant documented evidence that the Minister of Water and Housing is far more involved in the detailed administration of Operation PRIDE than the Commission was led to believe during the course of his interview..."
Minister Paulwell not only attended meetings to discuss his offer to provide due diligence information but was also very active in personally procuring accommodation at the Mutual Life Building for NETSERV's Call Centre operations.
TURNING A BLIND EYE
Both ministers (Blythe and Paulwell) ignored advice from several sources (including public officials), which would have resulted in better management of the planning stages of their projects. To consider the many cautions would have resulted in delays in implementation time. Paulwell ignored information from his friend and consultant Delreo Newman while Blythe ignored the 1997 Auditor General's findings and recommendations.
COMPROMISING PUBLIC OFFICIALS
In both instances, PRIDE and NETSERV, public officers were either persuaded to or volunteered to make political deadlines their priorities.
In the NETSERV issue, former Permanent Secretary Faye Sylvester pleaded with the Loan Appraisal Committee on August 14, 2000 to fast track the NETSERV loan approval to facilitate a public announcement by the minister a few days later. Permanent Secretary Thorant Hardware in the Ministry of Water and Housing has been pinpointed by the Angus Commission as having acceded to the Minister's political imperatives in fast-tracking procedures, which were in the purview of the NHDC rather than the Ministry.
BREACHING POLICY GUIDELINES
Both ministers presided over projects where policy guidelines agreed and set by their own administration were breached. The NIBJ, in the case of NETSERV, disbursed funds without original invoices. No EQUITY FUNDING was in place as required by the guidelines.
Pride projects were advanced sums in the millions of dollars without designs being completed. As the Commission pointed out the minister directed that the "paper work must catch up with the construction."
The Barrett Hall project was advanced over $240 million before the relevant document was signed by the Ministry of Water and Housing. The Morant Farms project had a payment of $35 million without proper certification and in a situation where very little work was or has been done since.
INAPPROPRIATE SIGNING
In the NETSERV case, a Memorandum of Understanding was signed by its CEO Mr. Pereira with a space left unsigned by the Minister while the term agreement for disbursal of funds was signed by the NIBJ but not by NETSERV.
In examining loan agreements related to 6 projects in Operation PRIDE the Commission noted that "all loan agreements were undated."
The report continued "The Shaw Park I agreement was signed by the authorized officers of NHDC (National Housing Development Corporation) and the IP (Provident society), but was not signed by MWH (Ministry of Water and Housing).
Further, the sum of $1,592,014 was advanced prior to signing of the agreement by NHDC."
The Shaw Park II agreement was signed in the same way with an advance of over $50 million, the St. Benedicts agreement after $290 million was advanced.
The Barrett Hall agreement was similarly signed but only after $240 million was advanced.
INCENTIVE TO INFLATE COSTS
In the case of PRIDE, consultants in design selection were paid on a percentage basis. This meant that the bigger the project they chose to design the more money they made.
With the Intec Fund, the size of the loan was contingent on the number of jobs the investor claimed they would provide.
This meant the more jobs they proposed the more money they got to borrow. NETSERV moved their offer of providing 3,000 jobs to one of 10,000 jobs in less than two weeks to take advantage of this ridiculous formula.
DUE DILIGENCE
In the case of PRIDE, the Commissioners said "It is clear from information provides to the Commission -- that these conditions precedent were, in the main, ignored and disbursements were made without any proper due diligence with respect to documentation, the obtaining pf mobilization and performance bonds-- consents and approvals, and approved drawings, work programmes, delivery schedules and cash flows for the developments.
The Commission considers this to be a gross dereliction of the duties of persons responsible for ensuring the proper and prudent disbursement of public funds."
The abject lack of proper due diligence in the NETSERV case is well documented.
MISLEADING PARLIAMENT
AND THE COMMISSION
In an attempt to blame the Opposition JLP for the NETSERV nightmare, Minister Paulwell purported to quote from a document in Parliament suggesting impropriety on the part of Senator Robertson - palpably untrue.
As noted earlier, Minister Blythe misled the Angus Commission in regard to his role in a number of areas involving implementation.
CONSEQUENCES
The minimum loss in raw cash to the taxpayers in the NETSERV case, after expenditure of at least $200 million is $140 million. The start-up date announced for work at the call centre to be resumed (January, 2002) has not materialised.
The Commissioners investigating the PRIDE projects said, "Over expenditure in respect of a sample of 21 PROJECTS is $1,333,849,077.
This amount does not include five abandoned projects - Hope Valley, Beverly Hills, Mona Estate, Rock Springs and Haven Meadows, on which a total of $78.7 million was expended prior to abandonment.
It also does not include an amount of $35 million which was expended on the Morant Farms project, a development that the Commission understands is also slated to be abandoned."
It is to be noted that there are over 111 PRIDE projects. It is anybody's guess as to what the final figure for over expenditure is likely to be.
One could go on and on. A more extensive analysis and identification of examples of misuse of power can be obtained from a close reading of the 56 pages of the Angus Report.
In the case of NETSERV, the combined reading of the Auditor General's Report and the Price Waterhouse Coopers' Receiver's report will confirm the similarities of issues of misuse and abuse.
Is there a pattern of governance emerging here?
The article on corruption referred to earlier by Lloyd Barnett also noted that "Corruption tends to produce and often results in a variety of harmful consequences, such as:
1. The appointment of persons or the grant of benefits to persons who are not the most needy or deserving;
2. The selection of persons to supply goods or services who may provide them at prices which are not competitive or of a quality which is unsatisfactory.
3. The reduction of growth in the economy because of the consequent waste of public resources and, therefore, a diminution of the State's ability to provide its citizens with decent living standards;
4. The distortion of the priorities in public programmes so that public funds are devoted to schemes which are more likely to attract bribes or facilitate "kickbacks" than to advance the welfare of citizens."
GUILTY
On the basis of the evidence available there can be no doubt that both ministers abused their powers. However, both ministers only accept responsibility for exuberance, zeal or too rapid a response.
The Prime Minister has been unable to recognize the difference for election year 2002.
WHY THE ABUSE
Both ministers had partisan deadlines - i.e. 40,000 jobs and thousands of housing solutions for election year.
To achieve these deadlines policy guidelines were breached, advice ignored, sloppy documentation tolerated, Cabinet decisions set aside, public servants compromised and commissions and parliaments mislead. In the end millions of dollars of taxpayer's money is wasted.
As Shaggy said "It wasn't me." Bob Marley would have replied, "Time alone - time will tell."
