New Ireland Province probe recommends prosecution for law breakers

By HENZY YAKHAM

An investigation into the financial dealings of the New Ireland Provincial Government between 2002-2007 has found instances of systemic and blatant abuse of financial and administrative process, gross misuse and misappropriation of public funds totaling over K64 million in five years.

As well, the investigation report made staggering revelations of an illegal financial and administrative system, known as the "Lemus Structure" created by former New Ireland Governor Ian Ling Stuckey.

Sir Julius Chan (left)- Governor of New Ireland Province

According to the report, the illegal Lemus Structure was organised by Ling Stuckey and Kavieng MP Martin Aini. It was a pyramid-type structure where Iing Stuckey was positioned at the top followed by the two open MPs from the province (Kavieng and Namatanai) then the district coordinators, local level government coordinators, ward coordinators then down to segments of the community then onto individuals.

The report said the Lemus Structure was a political network and did not come within the formal government framework. Therefore the involvement of this network by Ling Stuckey in conducting government business was an illegal act.

While Ling Stuckey was in office, state law enforcing agencies including the Ombudsman Commission, Auditor General’s office, Police Fraud Squad and Pubic Services Commission visited the province and carried some form investigations, but nothing much has eventuated.
The investigations carried out by RAMS Business Consultants have confirmed much of the concerns and issue raised then.

The report highlighted that the public service delivery system was highly politicised and made totally inefficient and ineffective while the province’s annually provincial budgets were prepared outside of the Provincial Government machinery with no inputs whatsoever from professional, experienced and career public servants.

It also stated that there are enough evidences for both former and serving politicians and public servants to be charged for criminal offences as well as public service disciplinary charges.

Tabling the report in the New Ireland Provincial Assembly on September 9 2009 by Governor Sir Julius Chan recommended for the Ombudsman Commission to carry out a detail investigation into the leadership culture perpetrated under Ling Stuckey’s administration.
During the five-year period over K64 million of public investment funds belonging to the Papua New Guinean taxpayers were unaccounted for.

The New Ireland Provincial Executive Council through its decision number 11/2008 appointed an independent investigation to be carried out by RAMS Business Consultants supported by Loani Henao of Henao Lawyers to investigate the financial affairs of the New Ireland province from 2002-2007.

RAMS was engaged by the current Provincial Government in February 2008 following widespread allegations of gross misuse of public funds and alleged abuse of power by the previous administration under the Lemus Structure rendering the public service idle and useless.

"There existed a chaotic and unstructured administrative system famously called the Lemus Structure which not only conflicted with established systems and structure of Government, but also promoted and environment of cronyism and lack of accountability and transparent," highlights the report.

The report further stresses that: "It appears the established systems of governance were deliberately manipulated to suit vested political interest. The Provincial Government completely disregarded the public service machinery of New Ireland Province in policy formulation, strategic planning and budgeting as well as programme implementation".

In fact, the report strongly recommends for appropriate criminal, civil and leadership action against Ling Stuckey and former Provincial Administrator (PA) Robinson Sirambat. Repeatedly highlighted in the report is that the powers and functions of the public servants were performed at the Governor’s office by his political staff and cronies. Most public servants were therefore made to remain idle for the whole five years, but still on full pay. Basically, the public servants were pay for doing nothing over the five years.

The report noted that a under Ling Stuckey leadership a Provincial Executive Council (PEC) decision No: 11/2002 directed the then PA withdraw all awfully delegated financial powers from all public servants except the First Secretary to the Governor’s office. From the date of that PEC decision all requisitions for expenditure for Public Investment Programme (PIP) were initiated at the Governor’s office.

The First Secretary signed as Section 32 officer while the PA signed as Financial Delegate for claims to be committed and payments made. In certain instances Ling Stuckey himself signed on top of the claim forms. The financial powers were vested with the PA as the Chief Accounting Officer thus the direction from PEC was an unlawful act. The PA should have refused to accept the PEC direction or could have advised the PEC that the direction was unlawful.

The report also states that fund for PIP or the Development Budget for the five years totaling K64,002,258 was directly controlled and managed by Ling Stuckey’s political staff. Consequently, there were no proper project appraisals done, projects were not monitored and valued, and they lacked a system of measuring the impact of the PIP.

As well, it was apparent that under the pretext of project funding, public funds were disbursed without much regard for the requirements of the land principles of transparency and accountability creating an environment of fraudulent acts and cronyism, the RAMS investigation report stated.

Capital assets such as motor vehicles, out boat motors, water tanks, generator sets, office equipment including computers and accessories were bought under the PIP and given to individuals and groups without proper assets register and record.

The report referred to an amount of K100,000 expended annually from the PIP funds towards the Mansava Oval Redevelopment Project. Payments were noted to have been made to suppliers and individuals in relation to this project. However, there were no progress reports or completions certificates available. In the absence of such records the project status remains unknown.

As well, in 2004 two individuals from Ling Stuckey’s office received cash advances totaling K85,500 to carry out community development forums. There were no proper acquittals and reports of the exact work done.

The report also highlighted discrepancies in the Tender Process. The New Ireland Provincial Supply and Tender Board did not meet between 2002-2007. There were not many minutes and tender documents available to indicate otherwise. Yet between 2003-2004 fixed assets to the value of K4,029,603 including motor vehicles, boats, engines and water tanks were bought.
Also in 2004, road works projects costing of K2,005,808 were awarded to contractors without following tender processes.

Relevant state law enforcement agencies were fully aware of the existence of the illegal Lemus Structure. The new incoming New Ireland Provincial Government after the 2007 general election, under the leadership of Sir Julius as governor has done its part by engaging RAMS to carry out an independent investigation.

The RAMS report is now a public document now that it has been tabled in the New Ireland Provincial Assembly. The report has highlighted gross abuse of processes, misuse of public funds and breach of laws including: Supply and Tender Board approvals not obtained for purchase of motor vehicle and payments to contractors; Auditor General’s financial statements for 2005, 2006 and 2007 does not the PA’s statement which is prescribed under Section 117 of the Pubic Finance (Management) Act 1995; New Ireland Provincial Government did not maintain proper accounts and records breaching Section 68 (1) of the Public Finance (Management) Act 1995; Receipt, payments and investments of monies and acquisitions and disposal of assets not in accordance with the Public Finance (Management) Act 1995 and the Organic Law on Provincial and Local Level Governments.

The Ombudsman Commission, Auditor General, Public Services Commission, Police Fraud Squad and all relevant state agencies should take their cue from the RAMS report if they have not done any investigation of their own to take corrective action and set the records straight.
That would be the most appropriate action for purposes of transparency, good governance and accountable leadership. The very act of State agencies not acting in a timely manner to attend to corruption may well amount to corruption too.

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