Conflicts of interest and procrastination

A conflict of interest occurs in a situation where a public official’s decisions are influenced by his/her personal interest. It has the potential to undermine the impartiality and objectivity of a person because of the possibility of a clash between the person’s self-interest and his/her professional or public interest. Where an individual or organization is involved in multiple interests, one could influence the action of another, hence the potential for a conflict of interest.

transparency institute guy incThe recently released draft Code of Conduct for politicians and senior public officials states that “Ministers, Members of Parliament and Public Office Holders should avoid using their official position to transmit any information made available to them in the course of their official duties to benefit themselves, their relations or any other individuals with whom they are associated. They should avoid compromising themselves or their office, which may lead to an actual or perceived conflict of interest. The failure to avoid or declare any conflict of interest may give rise to criticism of favouritism, abuse of authority or even allegations of corruption…” A conflict of interest could either be real or perceived, and therefore it is important to avoid situations that can give rise to both aspects.

 

The Fedders Lloyd case

The recent furore regarding the signing of a Memorandum of Understanding between the Government of Guyana and Fedders Lloyd Corporation for the design, construction and equipping of the Specialty Hospital, has raised concerns about conflict of interest involving Vice President Khemraj Ramjattan. The contract was awarded to the inexperienced Surendra Engineering Company Ltd. over Fedders Lloyd which had formed a consortium for the purpose of bidding for the contract. It was the Vice President, then Leader of the Alliance For Change, who took up what appeared to be unfair treatment of Fedders Lloyd.

TIGI has no reason to disbelieve the Vice President when he stated that there was no client relationship with Fedders Lloyd and that he acted in the public interest against what he considered an injustice. However, the fact that the continuation of the works on the Specialty Hospital was awarded to this company via an MOU without going back to tender and without legal support from the Procurement Act, raises the question as to whether the Vice President’s influence might not have been brought to bear in the decision to award the contract. The Vice President has denied that he had any involvement in the decision but later on went on to defend the Government. It would have been better if he had not said anything further on the matter.

 

Ministerial salary increases

There had also been criticisms in the award of a 50% increase in the salaries of Cabinet Ministers by the very Cabinet. Here again, one could view the situation as one of conflict of interest, and it would have been more appropriate for a body with no connection with members of the Cabinet to make that determination. TIGI is of the view that the Government should have awaited the outcome of the deliberations of the Commission of Inquiry set up to, among others, review to emoluments and conditions of service of the Public Service before deciding on salary increases for its Ministers. Perhaps, this very Commission could have been tasked with the responsibility of making recommendations for ministerial salary increases since its proposals for reform of the pay and grades for public servants could have been used as an important reference point. As it stands, the salary increases for Cabinet Ministers are arbitrary and have no sound basis for their determination.

While many have applauded the $50,000 bonus for public servants earning less than $500,000 per month, there are some who might be tempted to interpret the Government’s action as one of appeasement for its action in relation to the salary increases of Cabinet Ministers. A bonus is an incentive for good performance, and therefore the Government needs to reflect on what other incentive it can offer to public servants earning more than $500,000 per month. The previous Administration over the years had awarded the Disciplined Services only, one month’s tax free bonus. This action discriminated against other public servants, and in this regard, the Government’s move to widen the incentive is welcome. Sugar workers have not been included presumably because they have a different incentive scheme based on production.

 

Conflict of interest involving the audit of NICIL’s accounts

Both the former President Bharrat Jagdeo and the Executive Director of NICIL have boasted that NICIL has been receiving unqualified (“clean”) audit reports and therefore nothing is wrong as regards the financial management of the entity and its financial reports. However, this assertion is at complete variance with the results of the recently concluded forensic audit of the entity. That apart, how does one explain the following?

The spouse of the Chairman of NICIL had overall responsibility for the audit of NICIL; The Chairman instructed that the audits of all public corporations vested in NICIL be contracted out to Chartered Accountants in public practice but the audit of NICIL must remain with the Audit Office where his spouse holds the number two position;

As at September 2012, NICIL was ten years in arrears in terms of financial reporting and audit; and

Following a National Assembly resolution of June 2012 calling on the Minister of Finance to take steps to bring all outstanding accounts of NICIL brought up-to-date and the related reports presented to the National Assembly, on 27 September 2012, the Auditor General issued “clean” audit reports on NICIL’s accounts for four consecutive years, i.e. 2002 to 2005.

 

Procrastination

It is said that procrastination is the thief of time. Stabroek News’ editorial of 21 December 2015 is relevant in this regard. The editorial bemoaned the fact that: (a) some $133 million would have been expended in the conduct of numerous forensic audits of government agencies and department; (b) several of these audits have been completed some ago; and (c) the Government is yet to deliberate on them.

As a result, there is no official release of the results of such audits. The editorial cited another example of procrastination – the release of the results of the Commission of Inquiry into the sugar industry. One is left to wonder whether the results of the Commission of Inquiry into the death of Walter Rodney when the related report is issued, will ever be made available for public scrutiny. The same concern can be expressed in relation to the Commission of Inquiry into the Public Service now underway.

Suffice it to state that to the extent that the above reports are not made available for public scrutiny, some of those persons in possession of them may feel hard pressed to release the contents to the media, considering the effort they might have put in into the studies as well as out of concern for the public interest. Even if this does not happen, we have seen a growing degree of unauthorized access to the emails and computer files of persons and organisations, and some of the reports may very well find themselves in the public domain through this medium. In the circumstances, the Government should make every effort to release as early as possible the results of studies that it has commissioned, regardless of whether it is in agreement with the assessments or not. After all, it has selected persons of good repute to conduct such studies and should respect the results of such studies.

Around the Web

Comments