Huawei US$50,000 ‘gift’ raises question of ethics

Is it legitimate for governments to receive gifts from companies that have been awarded contracts?

The US$50,000 “thank you gift” from Chinese company Huawei to the Guyana government after being awarded a US$14 million contract to lay fibre-optic cables here, has raised questions about the propriety of such transactions.

“It is unethical. In some countries in Europe and North America, the company could be prosecuted,” Professor Clive Thomas told Stabroek News recently.   “What they [the company] can do through their corporate exercise [after winning the contract] is to make a contribution to a particular programme; to help persons with disabilities or contribute to sports but they can’t [directly] give the government a gift,” Professor Thomas said.

Recently, the former project manager of the One Laptop Per Family (OLPF) project Jud Lohmeyer disclosed that the 142 computers handed over at the official launch of the project in January were bought with the “thank you gift” from Huawei. Lohmeyer said the government did not go to tender for the project, and the contract was sole-sourced.

Lohmeyer said that after the “gift” was given to the government, despite his concerns about the unethical nature of this transaction, he suggested using the money to support a “public social project.” He told this newspaper that the initial plan was to use the money to acquire 50 high-value laptops for the President to distribute to whomever he chose.

Meanwhile, according to Thomas, both parties involved in this transaction are at fault. “Both parties are culpable. The one who gave the gift and the one who received it,” Thomas said.

When the issue was raised with former PPP/C foreign trade minister Dr Henry Jeffrey he opined that there was nothing wrong with a company deciding to give back to a country after it would have won a particular contract for a project.

President Bharrat Jagdeo, when asked during his most recent press briefing what may have prompted the company’s generosity, said that the computers were a gift from the company after the government would have asked for such instruments. “We basically have been asking around for free computers,” Jagdeo said.

Speaking specifically about the transaction between Huawei and the government, Jeffrey said that since the money was given after the award of the contract, it would be difficult to describe it as a bribe. “Unless it is given as something [beforehand] to get the contract it cannot be considered a bribe,” he said.  However, Jeffrey said, concerns about ethics and transparency would arise since the money was given directly to the Office of the President and not paid into the Consolidated Fund.

A former foreign service employee, who requested anonymity, told this newspaper that no government is allowed to receive gifts from a company that has won a contract. “What would an average Guyanese say when they see a company giving millions of dollars to Office of the President?” the source asked. According to the source, while the government may say that the money was given after the award of the contract, no one will be able to verify this.

The source noted that sometimes a government or a company may choose to give a present to the President, but this should go directly to the National Collection. There would need to be proper accounting for such funds, the source said.

Consumer activist Ramon Gaskin described the gift from Huawei as “a corrupt transaction” which was essentially “a bribe to secure the contract. American companies are prohibited from [doing] this, but I don’t think this is so with Chinese companies,” he said. Gaskin also pointed to the fact that Huawei has essentially been blacklisted from acquiring US telecom companies because of a perceived connection with the Chinese Army (PLA). It is alleged that the origins of the Chinese firm are closely linked with the PLA.

Gaskin raised concerns about the entire OLPF project, calling it a vote-buying exercise for the next election.  “This is a vote-buying exercise. It’s all corruption. It has nothing to do with education.” He said that if education was the main aim, the laptops should be put in the schools, and the students should be taught in the schools,” he said.

When contacted for comment, attorney-at-law and AFC Leader Raphael Trotman said while it is not uncommon for foreign investors to give gifts at the beginning of their journey in a country, “it is totally unacceptable and dishonest for a government, especially in election year, to beg for, receive, and then pass gifts off to the public as their own.”  He said the government should return the gift to the company. He also called for the Auditor General to carry out an immediate investigation into the transactions.

“There is not a single project that has been launched by Office of the President (OP) that has not been clouded in controversy and claims of dishonesty and corruption,” Trotman opined. “Jagdeo is the only politician I know who can take ordinary and wholesome projects like hydropower, roads, and now giving families a technological boost with these laptops, and mess them up big time through narrow, personal and twisted dealings.” Trotman further said, “The entire country is contaminated; not even a laptop project that is supposed to benefit ordinary Guyanese is pure and free from nastiness.”

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