Unlawful $4.5B gov’t expenditure is grounds for Finance Minister, AG to go – Ram

Attorney and financial analyst Christopher Ram says Finance Minister Dr Ashni Singh and Attorney General Anil Nandlall should not continue in office over what a court has held to be the government’s unlawful spending of $4.5 billion on programmes not approved by the National Assembly.

Ram, writing on his blog at chrisram.net in wake of the recent finding by acting Chief Justice Ian Chang, also says the Audit Office has been functioning more as a “protector and concealer” of the financial improprieties of the government and he has urged the resignation of the Auditor General Deodat Sharma, whom he calls “a danger to the public purse.

“This decision has confirmed what has been public knowledge as exposed by commentators like Anand Goolsarran and Raymond Gaskin and the two major dailies. It would be the worst form of lawlessness for the Govern-ment to continue spending in violation of the Consti-tution even though one is not assured by the brashness of Minister [Robeson] Benn who said that he would continue spending illegally and would be prepared to serve time,” Ram writes.

On Friday, Chang ruled that controversial government spending was unconstitutional although he refused an application made by opposition leader David Granger for a conservatory order to stop more “unauthorised” expenditure.

Justice Chang noted that Granger’s case pertained to spending in the year 2014, which has already elapsed, whereas expenditure in 2015 is governed by specific constitutional provisions.

Based on the decision, Ram notes, Singh acted in violation of the Constitu-tion and the Fiscal Management and Account-ability Act (FMAA) in spending the sum of $4.553 billion up to June 16, 2014 for purposes specifically disapproved by the National Assembly. He says also that it is clear that the minister cannot use one article of the Constitution to engage in spending that is disapproved in any other article and that support of expenditure in 2012 and 2013 in similar circumstances did not mean that no court challenge could be brought in respect of 2014.

However, the court also held that the breach of constitutional authority regarding expenditure in 2014 is not a proper basis to fear that the government would exceed the limits of their authority in respect of any other period. Granger had sought the conservatory order to halt any unauthorised spending due to concerns about government spending public monies without any parliamentary scrutiny after Parliament was prorogued by President Donald Ramotar on November 10, 2014.

Ram contends that the court is “more concerned about form rather than substance,” saying there can be no other explanation for the decision to deny, on procedural grounds, an application in respect of expenditure on disapproved programmes for 2014 that the court considers to be in violation of article 219 (3) of the Constitution and the Fiscal Management and Accountability Act 2003. Having found that the Minister of Finance violated the constitution and the law, he further adds, the court “passed the buck regarding any cure or sanction by ruling that those are matters of the internal affairs of the National Assembly!”

 

‘Cannot escape

responsibility’

According to Ram, it seems that the court expects the National Assembly to decide “whether to give legitimacy and legality” to the Minister’s action by passing a Supplementary Appropriation Act, “thus taking the Minister off the hook, or leaving the Con-solidated Fund with a massive hole” of $4.5 billion up to June 16, 2014 and several million dollars more to December 31, 2014.

“The court must be aware that once the National Assembly comes to an end the Minister cannot even be rapped on his knuckles,” he, however, points out, while adding that it seems the court did not acknowledge or consider sections 48 and 49 of the FMAA, which enjoin the Minister of Finance “from misusing, misapplying, or improperly disposing of public moneys and makes him liable where any loss occurs as a result of misconduct or through deliberate or serious disregard of reasonable standards of care.”

Ram argues that Singh “cannot escape responsibility” by reliance on Nandlall, whose competence and judgment, he says, have been shown to be seriously lacking when it comes to constitutional issues. “Now that the court has found that at least ten billion dollars of public funds have been spent unlawfully by the Govern-ment based on his poor advice, Nandlall surely disqualifies himself as an Attorney General,” he adds.

However, Ram says Nandlall alone cannot take all the blame and Singh must be held accountable for his “disregard” for the Constitution and the law. “It does nothing for the development and respect for the rule of law that any person who so carelessly ignores the Constitution and the law,” he says. “His judgment having been proved so lacking and costly, his continued role as a Minister of Finance is not something this country can afford,” he further adds.

Ram also singles out the Audit Office and says he holds its entire top brass “complicit in the financial improprieties” of the administration. “Let us not for one moment think that the spending of the $4.6 billion is all that has gone wrong,” he says, while noting that he had pointed out that billions of dollars had been transferred from dormant accounts to the Con-solidated Fund in breach of the law. “The Audit Office never addressed that. Hundreds of millions were spent to develop Pradoville 2 but the Audit Office has never addressed that abomination. And these are only two examples,” he adds.

According to Ram, the Auditor General holds no professional qualification and should never have been confirmed in the position in the first place. “He is a danger to the public purse and should resign. Any qualified accountant from the Audit Office who subscribes to any ethical guide or code must also resign,” he adds.

 Gravity of delay

Based on Chang’s ruling, it would appear that if Granger had brought his case much earlier last year the prospect of securing a restraint against government spending would have been greater. In his post, Ram also laments Granger’s delay in initiating the legal action. He notes that Granger had proof since mid-June 2014, in the form of Financial Paper I of 2014, that Singh had openly defied the National Assembly and the Appropriation Act of 2014.

“He must have known that the defiance was not a single act but a continuous act as the Minister was continuing to spend further sums on the disapproved programmes even as he presented Financial Paper No. 1,” he says, before pointing out that it took Granger close to six months to bring an action.

“The gravity of that delay has been exacerbated by the prorogation of the National Assembly which has now gone on well beyond the six months since the end of the last session, allowed by the Constitution. Not only was unlawful spending taking place post June 16, 2014 but it is almost certain that unconstitutional and unlawful spending is taking place in 2015 in violation of another article of the Constitution. The prorogation, then dissolution, then elections, then four months allowed for the 2015 Budget means that no one will know the extent of the illegalities until later this year,” he adds.

In a previous post on his blog in January, Ram had highlighted the constitutional and legal restrictions on spending in the first four months of 2015, which is restricted for each month in respect of each budget agency “to one-twelfth of the amount that was expended by that budget agency in the immediately preceding fiscal year….” He added that further restriction imposed by the FMAA is that the Minister cannot issue a drawing right in relation to a subject matter or for a purpose for which there was no appropriation in the immediately preceding fiscal year.

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