Judge dismisses opposition challenge of Lotto Fund constitutionality

Justice Diane Insanally on December 28, 2012 dismissed legal proceedings filed in the High Court challenging the constitutionality and legality of government’s placing of Lotto money in the Development Fund referred to as the Lotto Fund, ruling that it was misconceived.

The judge, striking out the case, ordered the applicant – APNU Member of Parliament Desmond Trotman – to pay the respondent – Attorney General Anil Nandlall – the sum of $50,000 in costs. Senior Counsel Miles Fitzpatrick and Attorney Christopher Ram represented Trotman in the matter.

Speaking on the case, Nandlall through the Government Information Agency (GINA) said that “for several years now, opposition politicians and critics of the government including Christopher Ram, a Chartered Accountant and Anand Goolsarran, a former Auditor General, have been heavily critical of the government on this issue of depositing money in the ‘Lotto Fund’ as opposed to depositing same directly into the Consolidated Fund.”

He said the government’s contention has always been that it is “perfectly lawful and proper and constitutional” to place those monies in a fund separately and apart from the Consolidated Fund.

“[APNU Member of Parliament Carl Greenidge] had moved a Motion in the Parliament last year seeking to
compel the Minister of Finance to deposit these monies directly into the Consolidated Fund contending that it was unlawful and unconstitutional to deposit it elsewhere,” he said, according to the GINA statement.

Anil Nandlall
Anil Nandlall

He said that during the debate on Greenidge’s motion in the House, government had argued that the motion was misconceived, given the provisions of the Fiscal Management and Accountability Act and Article 216 of the Constitution and the Lotteries Act. “Using their one seat majority, however, the opposition passed their motion,” he said in the statement.

“The court, in dismissing the matter, found that the deposit of the monies in the Development Fund of Guyana (Lotto Fund) is in accordance with Article 216 of the Constitution, the provisions of the Fiscal Management and Accountability Act and the Lotteries Act, thereby vindicating the government’s position. The administration hopes that this would put this matter to rest,” GINA quoted Nandlall as saying. “The government takes this opportunity to encourage the opposition to take more of these issues with which they have difficulties to the court for resolution rather than using… the press and elsewhere to perpetuate their self-induced perception of lack of transparency and accountability in government’s business and to lend sustenance to their omnipresent zombie of corruption in all spheres of governmental activities,” said Nandlall.

In his 2011 Auditor General’s Report, Deodat Sharma, then acting Auditor General said $3.214 billion had been spent from the Lotto Fund from 1996 to 2011. At the end of 2011 the balance in the account was $853.7 million and for the year 2011 a total of $134.8 million was utilized to meet expenditure for 2011. From 1996 to 2011 a total of $4.022 billion was received from the Guyana Lottery Company and deposited into account no. 3119 – the Lotto Fund account.

Sharma in his 2011 report said that the sectors on which the money from the Lotto Fund was spent were in accordance with the guidelines for accessing the funding, which included activities “that promoted cultural and youth and sports development, financed medical treatment overseas and economic support for disadvantaged groups” among others.

Sharma noted that in previous reports, the Audit Office had highlighted the Ministry of Finance’s failure to pay over government’s share of 24 percent of the proceeds of the lotteries to the Consolidated Fund. He said that instead, the proceeds were paid into a special bank account 3119 and were used to meet public expenditure without parliamentary approval. He said the balance of this account was not refunded to the Consolidated Fund as required by Section 43 of the Fiscal Management and Accountability Act but was retained by the ministry.

“However the Attorney General provided an opinion in 2011 concerning the deposit and use of the fund which stated that there is no legal obligation to transfer money from the Lotto Fund into the Consolidated Fund and that the fund is however subject to an audit by the Auditor General under the provisions of the Fiscal Management and Accountability Act of 2003.”

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