Protection Racket and the Pharmaceutical Bond

20140325transparencyIt is difficult to adhere to principles that have no resonance in core values and beliefs; and the evidence suggests that the APNU-AFC coalition government has said things on the campaign trail that it did not mean. Hence it is now clear that what was promised then cannot be regarded as the standard of transparency and accountability to which it holds itself. In fact, even while attempting to reaffirm its commitment to transparency and accountability, the coalition government appears to foster impunity for improper use of public funds. We refer here to the pharmaceutical bond fiasco which seems, for the moment, to have dropped from the view of the public.

Lack of Sincerity

The pharmaceutical bond fiasco resulted from a single sourcing of a facility from the company, Linden Holdings that is owned by Mr. Larry Singh. It is important to note that Mr. Larry Singh has been identified as a friend and member of the PNCR party which is a major component of the coalition government. When the contract was signed, and the first disbursement made, the facility was yet incomplete, contrary to the Minister of Public Health’s utterances to parliament that pharmaceuticals were already being stored in the facility. Furthermore, the amount of money transferred on the first occasion reportedly equalled that required to complete works on the facility leading commentators to question whether the government was using public funds to pay for completion of the facility so that it can then rent it with public funds. The Honuorable Minister of Natural Resources, Mr. Trotman referred to this as “nothing more than a coincidence” (Stabroek News, August 19, 2016).

Following the initial revelations about the deal and outcry from the opposition, individuals and civil society, the government defended the single sourcing approach on the grounds that there was an emergency created by hiking of the fee by the former suppliers of the service. This was refuted by contributors to the daily newspapers who showed that the new deal with Linden Holdings resulted in a higher fee per square footage of storage space.

The government also indicated that the Linden Holdings bond was closer to the Georgetown Public Hospital Corporation (GPHC) and this proximity addressed traffic congestion problems that would jeopardise timely supply of pharmaceuticals given that the storage unit used previously is situated on the East Bank of Demerara. This explanation was similarly debunked by commentators who explained that supplies are not accessed from the bond on a daily basis when needed. The GPHC has enough storage capacity to satisfy its immediate needs. What is therefore needed is only a schedule for moving supplies to Georgetown. In any case, it is nonsense for the hospital to send to an offsite storage facility on a daily basis for needed supplies.

The state of emergency declared therefore appeared, at best, contrived to justify a deal that was going to happen by any means. In fact, the flip-flop between emergency due to cost and emergency due to accessibility constitutes an admission that neither explanation was adequate. The justification of the deal lacked sincerity. In the absence of a state of emergency, the single sourcing of the bond is a violation of the Public Procurement Act.


In response to pressure from the opposition, civil society and individuals, the government moved to appoint a Cabinet Sub-Committee to review the deal. This was wholly inappropriate since it was Cabinet that approved the deal in the first place. Up to that point, the promised establishment of the constitutional procurement body that was not implemented under the previous government had not yet been finalised, although the nominees had already been agreed on by parliament. In the absence of the constitutional body, Cabinet continued its no objection role on procurement matters. It was therefore a clear conflict of interest for Cabinet to directly investigate the deal. The approach was a half-measure that no one expected to yield results with the best interest of the people in mind.

Though the committee found the deal to be “inappropriate” – a carefully selected euphemism for corrupt – it stopped short of saying plainly that it violated the Public Procurement Act and it recommended no sanctions. It also failed to recommend the appropriate corrective action which was to rescind the “inappropriate” deal and move to transparent tendering. Instead, it recommended renegotiation to address the cost of the facility and that the government moves to construct its own bond. Essentially therefore, the Committee condoned the deal by opting to allow Linden Holdings to benefit at the expense of taxpayers from what the Committee itself acknowledged as an “inappropriate” deal. Ultimately, it condoned continued misuse of public funds to pay a company owned by a friend who has been fingered as a financier of the PNC/R component of the government.

The review of the deal by the Cabinet Sub-Committee was little more than, if not entirely, a charade. The deal should have been reviewed/investigated by an independent body that would approach the issue objectively. TIGI calls on the coalition government to rescind the storage bond deal and move to open tendering if it wishes to project an anti-corruption image and one of transparency and accountability.

Protection Racket?

An obvious issue is that someone notified Linden Holdings about the intent of the government to rent a storage bond. The contract reportedly indicated that the facility rented was an apartment building, but it was being converted into a storage bond. Somewhere along the line, insider information was used to secure the contract for Linden Holdings, but the Cabinet Sub-Committee showed no interest in investigating this. When asked why the Committee did not investigate these issues, the Honourable Minister of State, Joseph Harmon was quoted as saying  “I can’t say why they didn’t” and “I cannot pronounce on that. That is a different type of investigation which I have not done ” (Stabroek News, September 9, 2016). But how could the Committee be expected to investigate these matters when such an investigation would be an investigation of one or more of its own? What the Committee ultimately provided was a slap on the wrist and perhaps enough consolation by identifying the deal as inappropriate and agreeing that the Minister should apologise. Indeed, it appears to have been successful in this endeavour. However, TIGI is unimpressed with the way this matter was handled by the government.

To date, the public has not been officially informed about who initiated the deal and knows of no action taken against them. This concealment of the identities in defiance of the expressed desire of the public to know even while recommitting to transparency and accountability are contradictory. The Honourable Minister of Public Health has apologized to the nation – unprecedented in Guyanese politics – but the apology is undone by his and others’ concurrently fostering and condoning impunity for the perpetrators. This appears lost on Vice President, Mr. Ramjattan (of the AFC) who was quoted as saying that “I don’t know what a further investigation might prove, … should we then bang our heads against the wall in finding out what is all about or who started it?” (Kaieteur News, September 10, 2016). This simple utterance by Vice President Ramjattan is perhaps the most damning bit of evidence in the entire fiasco.

Corruption in government, cannot be effectively addressed when those culpable are protected by their peers and when the government itself lacks the will to act. Withholding of the relevant information and failure to investigate thoroughly create the appearance of a protection racket.

Stop Impunity – A Time to Act!

Impunity is a major impediment to the fight against corruption and it was the apparent recognition of this fact by the APNU+AFC party prior to the elections that made it appealing to many. However, the positions taken on the pharmaceutical bond issue betray selective understanding of corruption. Furthermore, given the composition of the Cabinet Sub-Committee; the Honourable Minsters of State – Mr. Harmon (of the PNC)  – and Natural Resources – Mr. Trotman (of the AFC)  – and the Prime Minister – Mr. Moses Nagamootoo (of the AFC) – and the utterances of Mr. Ramjattan, the AFC has become deeply entangled and appears to be squandering its almost depleted credibility to clean up after the coalition.

A few months ago, President Granger said that corruption is more widespread outside of government (Stabroek News, May 29, 2016). The message was clear that citizens and civil society should focus their anti-corruption efforts elsewhere. However, TIGI wishes to indicate that it has fixed its eyes squarely on the coalition government. Application of the Public Procurement Act would be a cornerstone of a transparent and accountable government and a government that is intolerant of corruption would rescind an “inappropriate” deal forthwith. Investigations and prosecutions for misuse of state funds should be thorough and done in all cases if there is to be any credibility of the articulated stance against corruption. The APNU-AFC’s coalition is now the government and its commitment to fighting corruption must be demonstrated by actions.

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