The National Assembly did not challenge the constitutionality of the Lotto fund and other extra-budgetary funds; its difficulty was with their administration

Dear Editor,

I have noted with sadness the press statement attributed to the Attorney General (AG), Mr Anil Nandlall, in connection with the December 28, 2012 decision of the High Court, in a case brought against the government in relation to the constitutionality of the mode of deposit and use of the Development Fund of Guyana (Lotto funds). The disgust arises from the fact that although Justice Diane Insanally has handed down a decision in this most important case we do not have the benefit of a written opinion. The AG has taken the opportunity of this lacuna to relay the decision to the media using his own peculiar interpretation which is consistent with his well known penchant for spin.

The main legal counsel to the cabinet has implied that the court has, in effect, ruled that the PPP regime enjoys a carte blanche under Article 216 of the Constitution to deposit in and spend from the Lotto funds as it wishes.

After outlining his version of the decision dismissing the case filed by Mr Desmond Trotman, the AG goes on to urge that in the light of this decision by the courts, the opposition should bring to the courts those other concerns it has about the constitutionality or legality of the numerous controversial government actions. He would say that wouldn’t he!

Let me add, however, that I have no view to offer on the decision of the judge in the absence of a written explanation of the logic of the decision. I am little surprised by it however.

Two implications of the AG’s statement are that the House erroneously approved the motion because it regarded the fund as illegal and that the court decision has some bearing on the relevance of the motion. By implication, the AG alleges a close link between the case and a motion passed by the National Assembly. Presumably he was referring to Resolution 15, passed by the House on June 27. I have been cited by the AG as having shepherded that motion through the House.

I am certain that the AG is destined to be disappointed about the decision especially since, as he cast it, it could not possibly “put this matter to rest.”

The facts surrounding the controversy are simple and clearly not as set out by the AG.

The motions to which he has made reference gave rise to Resolution 15 which clearly states in the preamble that “whereas the FM&A Act caters for Extra-Budgetary funds to be established…”  There can, therefore, be no doubt that the House did not challenge the constitutionality of the Lotto fund or extra-budgetary funds in general.

The National Assembly’s difficulty is not with the acceptability of the fund under the Constitution or the Fiscal Management and Accountability Act, but with its administration.

The preamble and resolution of the motion cite the fact that the permission to establish and hold such funds is conditional on the submission of annual reports and audited accounts within a time period, as well as a specific requirement to account for the use of the funds. In that context the motion mentions two agencies with such funds: the Lotto funds and NICIL.

In the case of the Lotto fund, over the decade 1996 to 2006 alone, some $3B of revenues have still to be accounted for. In the case of NICIL the figure is a multiple of that. So, we are not looking at a minor esoteric debate.
Countless reports of the Auditors General have pointed to the refusal of the PPP government to account for these extra-budgetary funds.

Let me take the opportunity to also remind readers that the National Assembly is still awaiting the reports and audited accounts from the government for the use of the millions of dollars of funds associated with

1. the2005 floods;
2. the Cricket World Cup;
3. the hosting of Carifesta X; and
4. the ICC Twenty/20 tournament.
The motion, is concerned with the fact that the law establishing extra-budgetary or other agencies which do not transfer funds automatically to the Consolidated Fund, is conditional. It requires that the agency report in various forms within 4 months. Since the PPP regime has failed to report as per the law, the resolution called on the government to pay over to the Consolidated Fund, the surpluses being held by these agencies beyond February 2012. The government has also been required to conduct a special audit, etc.
Nowhere in the motion does the word ‘unconstitutional‘ appear at all.

As is common, this AG seems to see his task as one of PR and ‘spinning’ for the PPP regime rather than properly and professionally advising the cabinet and the public. Happily, no judge can usurp the power of the National Assembly to authorize the spending of funds and, by the same token, the judge cannot purport to remove conditions associated with the establishment and operations of the said funds.

In closing it is worth bearing in mind two points:

i) Of the $2.950 billion received from the Guyana Lotteries Company 1996-2006 and deposited into account No 3119, $2.875 billion were expended to meet expenditure defined by persons unknown and Mr Jagdeo. This use was challenged on many occasions. Subsequently, it was the subject of an unsolicited opinion of the then Attorney General. That action was designed to prevent the Auditor General from further reporting on the retention of the Lotto funds and their unauthorised use.

ii) the IBRD report on Tracking Poverty-Reducing Expenditures and their Public Expenditure Management Action Plan (AAP) both recommended the reduction, if not elimination, of these too numerous extra-budgetary funds in Guyana.

Yours faithfully,
Carl B Greenidge

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