OCG launches major corruption investigation (Pt I)
The Office of the Contractor General (OCG) yesterday launched a major investigation into allegations of impropriety and irregularity in the award of certain government contracts by the St Catherine Parish Council to Strathairn Construction Company Limited.
The allegations, some of which have already been corroborated by an OCG preliminary enquiry, have implicated at least one member of parliament and one senior public official, and have raised several questions regarding possible breaches of the Government's Procurement Procedures, the Contractor General Act, the Financial Administration and Audit Act and the Corruption Prevention Act, among other laws.
Formal notice of the OCG's commencement of its Investigation was given under cover of letter of even date to the relevant public officials. Copies of the letter were also directed by the contractor general to the prime minister, Bruce Golding, under whose office the local government portfolio falls, as well as Robert Montague, the minister of state in the Office of the Prime Minister with responsibility for local government.
In the interest of public transparency, the full text of the contractor general's letter is reproduced, verbatim, hereunder.
Re: Notice of Commencement of Investigation - Concerning Allegations of Impropriety and/or Irregularity in the Award of Certain Contracts to Strathairn Construction Company Limited by the St Catherine Parish Council
Pursuant to the powers which are vested in me, by the Contractor General Act, I hereby formally write to notify you that the Office of the Contractor General (OCG), acting on behalf of the contractor general, has commenced a formal special statutory investigation into the allegations of impropriety and/or irregularity in the award of certain contracts, by the St Catherine Parish Council to Strathairn Construction Company Limited.
The OCG's decision to commence the referenced special investigation has been prompted by certain considerations which include, inter alia, the following:
1. The fact that the OCG is in receipt of a sworn written statement, which was tape-recorded by the OCG and which was given under the pain of criminal prosecution pursuant to Section 29 (a) of the Contractor General Act, which alleges that the award of certain works contracts, which were issued by the St Catherine Parish Council for performance in the St Catherine South Western constituency, were influenced by a Mr Clifford Everald Errol Warmington, the member of parliament for the St Catherine South Western constituency, and were awarded to Strathairn Construction Company Limited a company in which Warmington was a director up to September 1, 2007.
In the sworn statement which was given to the OCG in December 2008 and formally executed in writing in March 2009, it was also alleged that, as at the date of the statement, Strathairn Construction Company Limited was the beneficiary of the majority of the contracts which had been awarded in the St Catherine South Western Constituency, along with two or three other companies.
It was further alleged that although Warmington had said that he had 'resigned' from the company, this was not true and, in fact, he, Warmington, was, as at the date of the statement, still actively in control of the company and, as such, Strathairn Construction Company Limited is 'Warmington's company'. The formal Statement, which was given to the OCG, also alleged that Mr. Everald Warmington was, at the time, in possession and control of the chequebook for Strathairn Construction Company Limited.
The sworn statement, which was provided to the OCG, also alleged that Warmington, subsequent to resigning from his post as a director in Strathairn Construction Company Limited, added the names of his sister and brother to the particulars of the company's documents.
Further, the sworn statement, which was provided to the OCG, also implicated at least one senior public officer/official of the St Catherine Parish Council as having received kickbacks for his role in the improper and/or irregular award of contracts to the said company.
It was further alleged that Strathairn Construction Company Limited was operating from the same address as that of Warmington's Member of Parliament Constituency Office, which it was alleged was located at 40 East Street, Old Harbour, St Catherine.
The referenced allegations were sufficient to trigger, in February 2009, an ongoing OCG preliminary enquiry into the said allegations.
2. The preliminary enquiry, which was conducted by the OCG, into the above-referenced allegations has so far either corroborated the veracity of some of the said allegations or has raised serious questions regarding the said allegations. They are as follows:
(a) By way of a letter which was dated May 31, 2006, the Parliament of Jamaica, disclosed particulars of eight Exemption Motions, regarding certain parliamentarians, to the contractor general. In the referenced letter, it was disclosed that a motion for exemption was approved in favour of Warmington, MP, on April 23, 2003. The disclosure in respect of Warmington confirmed that Warmington is the chairman and chief executive officer of Strathairn Construction Company Ltd, a general construction, management engineering and quantity surveying company, which, from time, to time enters into contracts with the GOJ or its agents.
(b) The exemption motion did not disclose any further details as to the public body/bodies which had engaged or which would be engaging the services of Strathairn Construction Company Ltd, nor did it disclose the details and/or value of any past, current and/or prospective contracts which had been or which were to be awarded to the company.
(c) Checks by the OCG of the official documents which are available at the Registrar of Companies have confirmed that a Warmington did in fact cease to hold office as a director in the company, Strathairn Construction Company Limited, as at September 1, 2007.
(d) Further OCG checks with the Registrar of Companies have revealed that on September 1, 2007, the names of three persons, whose surnames in two instances and maiden name in the other, was that of 'Warmington', were added to the company's registration documents, in the capacity of directors of Strathairn Construction Company Limited.
However, further checks of the records of Strathairn Construction Company Limited, at the Registrar of Companies, revealed that the said three persons, who are named 'Warmington', ceased to be Directors of Strathairn Construction Company Limited as at October 31, 2008.
Of critical note, however, is that a person who was alleged in the above-referenced sworn statement to be a councilor of the 'Old Harbour Bay division' was identified by the OCG as having been appointed as a director of Strathairn Construction Company Limited as at March 26, 2003. Recent checks by the OCG have indicated that, as at February 2009, when the records were 'last updated', the referenced person was still listed as a director of the company.
(e) An examination of the Quarterly Contract Award (QCA) Reports that were filed by the St Catherine Parish Council with the OCG, in respect of the eight quarters of the period January 1, 2008 to December 31, 2009, has revealed that the St Catherine Parish Council, during the referenced period, awarded a grand total of 39 QCA based contracts, having an aggregated value of $135.29 million of the referenced amount, as many as 18 contracts, totalling approx $65.36 million in value, was awarded by the council to Strathairn Construction Company Limited alone.
(f) The OCG's examination of the St Catherine Parish Council's QCA Reports for the 2008 and 2009 calendar years has further revealed that during the third Quarter of 2008 (July to September 2008), only 10 contracts in total were awarded by the St Catherine Parish Council. Of critical note, however, is that all ten (10) contracts, totalling $20.61 million in aggregated value, were awarded to Strathairn Construction Company Limited. Further, all 10 contracts were awarded by the St Catherine Parish Council to Strathairn Construction Company Limited on a single day, August 28, 2008.
(g) Further, the OCG's preliminary enquiry has revealed that of the 10 contracts which were awarded by the St Catherine Parish Council on August 28, 2008, as many as eight of those contracts were for the execution of works in Sydenham, St Catherine.
The locations, descriptions and values of the said works, as reported by the St Catherine Parish Council, would suggest that the eight contracts which were awarded to Strathairn Construction Company Limited were 'splintered'. This would have enabled the said contracts, at a minimum, to escape the scrutiny and oversight of the National Contracts Commission (NCC) which, under the Government's then Procurement Rules, and having regard to the total value of the contracts, would have had to endorse the said contracts prior to their award.
(h) Additionally, a review of the QCA Reports for the St Catherine Parish Council for the third Quarter of 2009 has revealed that the St Catherine Parish Council awarded eight contracts during the referenced three month period with an aggregated value of $61.78 million. Of the eight reported contracts, as many as five were reportedly awarded to Strathairn Construction Company Limited for the purposes of 'Road Rehabilitation'. The five contracts, which had an approximate aggregated value of $39.19 million, were all reportedly awarded to Strathairn Construction Company Limited on a single day, July 28, 2009.
The above-referenced QCA Reports were submitted to the OCG by the accountable officers of the St Catherine Parish Council in furtherance of the OCG's lawful statutory requisitions that are issued pursuant to Section 4 (2) (a) and 4 (3) of the Contractor General Act. The requisitions are submitted under the pain of criminal prosecution under Section 29 (a) of the Contractor General Act which makes it a criminal offence, inter alia, for any person to wilfully make a false statement to mislead a contractor general.
The particulars of all QCA Reports that are submitted to the OCG, by the country's more than 190 procuring public bodies, are matters of public record. All QCA Reports, inclusive of the referenced QCA Reports, which were submitted to the OCG by the St Catherine Parish Council, are available for public examination on the OCG's official website at www.ocg.gov.jm.
(i) It is also important to note that the OCG, during the course of its preliminary enquiry, was advised, in writing, on May 1, 2009, by the secretary manager of the St Catherine Parish Council, Christopher Powell, that "Since the advent of the Constituency Development Fund, the council has not written approval letters to any contract winner; what we have done is call in the respective winners. This approach we now realise was erroneous and we will now in going forward write to all successful bidders."
3. The fact that the OCG, as recently as August 10, 2010, received a further verbal complaint which alleged the involvement of senior public officials, at the St Catherine Parish Council, in the facilitation of the irregular and/or improper award of contracts to Strathairn Construction Company Limited.
I am of the considered view that the foregoing considerations are singularly and collectively grave in their import and have raised several public-interest issues which would warrant the institution of a formal OCG statutory investigation into the allegations which have been made in this matter.
See Part 2 in tomorrow's Gleaner.