'Collusion to defraud'

“They know the rules, they didn’t play by the rules; they went ahead and did their own thing, knowingly breaking the rules. Corruption is anything to do with fraud and whatever ways of gaining personal gains, that’s corruption” – Chairman of Public Finance Committee, Papali’i Niko Lee Hang

It is not finished. That’s the message from Member of Parliament, Papali’i Niko Lee Hang, and Members of the Officers of Parliament Committee (O.P.C). Despite the recent resignation of the former Minister of Finance, Faumuina Tiatia Liuga, over a number of allegations – including claims of “corrupt practises” raised by the Controller and Chief Auditor and backed by the O.P.C – they say their mission is far from over.

So much so Papali’i, who is also Chairman of the Public Finance Committee, is prepared to go to Court to make sure public servants he claims have “defrauded” taxpayers through “collusion” and acts of “corrupt practises” are held accountable.

“I have the things here signed by the Minister all ready for Court if required,” Papali’i told the Samoa Observer during an interview at Parliament’s Complex at Mulinu’u. “I can safely say that collusion to defraud public funds has been done. “So it’s not the end, it’s just the beginning.”

According to Papali’i, the O.P.C “didn’t make up these recommendations for nothing.

They need to be implemented and (put to) action.” Asked if it was not enough that a Cabinet Minister has resigned, he said: “Well, if justice is not only seen but being done, it has to go to Court.

Millions of tala have been…” Pressed about going to Court, Papali’i said: “Oh yes, because our Committee will stand firm together. "It’s our report, a joint Committee (report) not just me or the Chairman. This is a report paid for by taxpayers. We spent a lot of time (to put it together).

“The government pays us a lot of overtime allowances to (do this).

"This report took us about five to six months to investigate and to prepare. It took us a long time to make sure that we have all the evidences and supporting witnesses that we need to ask questions and confirm all these irregularities raised by the Auditor.”

About the Samoa Land Corporation (S.L.C), some of the Committee’s recommendations are quite clear. The ones that particularly concern the O.P.C and Chairman of the Finance Committee are:

Firstly, “On the examination of the overall evidence, it is reasonable to state that due to the seriousness of discrepancies and corrupt practices reported in the Chief Auditor’s Report, and that the Committee has confirmed these matters from its findings, Government is therefore recommended that these Committee findings as mentioned in the report be noted, and appropriate legal actions be implemented and applied to all those who are involved in this investigation to ensure corrupt practice and that relevant provisions of the law.”

Secondly,“That Government take seriously, the usage by the Samoa Land Corporation (S.L.C.), or any other Government Ministry or Corporation, of the so called “intermediary company” (Middleman), for any services or the procurement of goods or fixed assets, and to strengthen the adherence to Government procurement policies under the terms and conditions for the purchase of fixed assets, including bids in the tender process.”

Thirdly, “That Government take note seriously of the Tender System using design and build concept, which allows corrupt practice or prejudice, especially in the interpretation and reading of design plans. The Committee believes, that the provision of an actual plan at the beginning of the Tender process, gives the notion that this is the same job that will be done, with all the contractors witnessing, and in that respect, all the contractors will have equal opportunities at the tender that will be made. With this in mind, that will make things easier and the final decision of the Tender will be very transparent.”

According to Papali’i, since Faumuina’s resignation, “as it stands now, our report has been approved by Parliament. So the procedure now is for the Government to respond within 90 days.” Papali’i said by Parliament accepting their report, “all our recommendations are approved.”

However, “if the reply (by the government) does not satisfy us, or our recommendations are not adopted, then there is another procedure that we will follow from there.”

Papali’i was reluctant to discuss what that procedure is. Instead, he is hopeful that the Government would do what’s right.

“We have concrete evidences proving that collusion to defraud public funds were done,” he said.

“It’s just a matter of waiting for the process to end. And if they do not respond to address our recommendations properly, then we have to go to Court. There must be a way.”

Asked to give an example of how “collusion to defraud public funds” was involved, Papali’i pointed to a certain contractor and how payments were made. The contractor was not named. “I have the contract here. The payments clearly violated some of the procedures, for example, the withholding tax.”

Papali’i said the 10 per cent retention, which should have been withheld until 12 months had lapsed, was ignored.

“(The idea is that) if there are any defects in the building, that money will be used for those but (in this case) the retention was released, signed by the Minister before the work was completed and (by doing so it) violated the agreement that retention should be held for 12 months.”

Papali’i said the “damaging thing” was that the approval for the release of the retention was done “using a fake insurance” as “a security for the funds released.”

“That is in our report and we have the documents,” he said. “The Minister signed the letter to the C.E.O, acknowledging the company’s request, with their submission of a fake insurance.

“It’s a bid security bond insurance but in the contract, it should be a performance insurance which they never paid.

And the contract always says that the performance security bond, if not executed and delivered to the principal before the scheduled date, then the principal is entitled to terminate the contract.” Papali’i said the contract should have been terminated.

“What I’m saying regarding the retention is that not only that they violated the (terms) by releasing the retention fund, 10 per cent of the total contract price, before the building was completed, they also used a fake insurance to secure the funds that had been released.”

Papali’i pointed to two issues there. Firstly, he said there was a violation of the “agreement, which says you have to hold on to the retention until 12 months after completion of works then the 10 per cent retention should be released.

“And given that the contractor provided a fake insurance… in providing a bid security insurance is just fraud because they never paid any premiums on it.

“It was just for the sake of releasing the retention, they provided that security which I’m sure the Minister and C.E.O clearly understand that it wasn’t genuine insurance.

“Now the building has been completed, there’s an inoperative elevator, which is the subject of another issue that was not properly handled because in the original contract, the bidder included in his bid price a lift (for) $180,000.

“That was why the work was given to this contractor regardless of. There was another contractor who bid less by 200. “But since this contractor had offered an elevator as well and bid $200,000 more, so the Minister directly submitted a submission to Cabinet.

“I was the Chairman of the Tenders Board, and I know very well. In hindsight, now I understand why he prompted that bidding of the headquarters because of the timeframe… near election time. “And then in hindsight, I can understand now why he brought his submission as an urgent matter so Cabinet had to endorse it so the works will be done immediately.

“But all the works done were not within provisions or conditions of the agreement. I would say, it’s all corrupt. That’s why I’m saying they colluded – the Minister, C.E.O and the contractor to defraud public funds.” Papali’i said he and the O.P.C have evidence to back up their claims.

“I have the things here signed by the Minister all ready for Court if required,” he said.

“I can safely say that collusion to defraud public funds has been done.”

Papali’i also suggested that it would be “a good idea” to consider all the other contracts involving the same officials.

“We only acted upon what has been reported in the Auditor’s report but unless complaints regarding any other contracts after what has been seen and done in the Samoa Land Corporation, then I would say it’s a good idea.

“Because I’m sure there are a lot of these kinds of transactions being carried out illegally.” Faumuina was not immediately available for a comment yesterday. But in a detailed response published on the Sunday Samoan, the former Minister attempted to explain his actions.

Asked how he felt about Faumuina’s response, Papali’i said: “Well at the start of his statement, he was singing praises to himself,”

“We were sick of it. We were waiting for a response to our report and he goes praising himself, saying this and that and that if it wasn’t for him, nothing would be done by now.

“Then he went on and touched on our findings and he somehow summarized as if he didn’t do anything wrong (making it sound as if the) report from our Committee was not right. “So I find his statement very misleading and inaccurate because his response did not cover the using of the Middleman which involved a lot of tala.”

Papali’i also questioned the Board of directors. “Where is the Board of Directors?” he asked.

“They’ve heard and they’ve known all this right from the time we exposed the report.

“Once the Auditor’s Report was tabled, it was public, they should’ve known from the Report the irregularities; they should have asked the C.E.O; asked her what are these? Discipline her. Sack her.

“Now that the Minister has resigned because of all these serious allegations against him because of his involvement with S.L.C, what are they doing to the C.E.O? “She should be out first, not the Minister. And that’s why I’m asking, where is the Board of Directors? What are you doing?”

Finally, Papali’i said justice must be served.

“This is totally not fair,” he said, adding that public servants must be “held accountable for the amount of millions” that have been “mismanaged and abused.”

“It’s not right for someone to misuse public funds - only $1,000 or less and they serve a jail term of 3-6 months. So where’s the justice here? "

He added: “We fought very hard for this case and it took us a long time to investigate. It’s downright corruption. “How can they deny the facts that are out there?

They know the rules, they didn’t play by the rules, they went ahead and did their own thing, knowingly breaking the rules. Corruption is anything to do with fraud and whatever ways of gaining personal gains, that’s corruption.”