Minister of Public Telecommunications Cathy Hughes is in clear breach of the Integrity Act and should immediately relinquish all ties to her company which recently received a government contract, or resign if she wants to keep it, former Auditor General Anand Goolsarran says.
“To the extent she continues to retain ownership of the company in question, or an interest in it, she is in breach of the Code of Conduct contained in the Act. This could trigger an investigation by the Commission and possibly criminal proceedings,” Goolsarran told Stabroek News. He said that alternatively, Hughes could “choose to resign from her position” as the Integrity Commission Act is clear on the issue of conflict of interest and she should “divest” herself of the conflict of interest.
Hughes has been accused of impropriety after her company, Videomega Productions, was awarded a $832,200 contract by the Department of Energy (DoE) to produce three 60-second television Public Service Announcements. However, she has said that since becoming a Minister of Government, she had relinquished day-to-day management of the video production company and was unaware of the transaction.
Pointing to both Hughes and Minister in the Ministry of Communities with responsibility for the Central Housing and Planning Authority (CH&PA) Valerie Patterson, Goolsarran said that the two ministers need to decide swiftly what their choices would be. In the case of Patterson, the CH&PA awarded a contract for the construction of houses to her husband.
Goolsarran also pointed to the Code of Conduct for public officials enshrined in the Integrity Commission Act which states that a person in public life must not allow private interests to conflict with his or her public duties or improperly influence his or her conduct in the performance of his or her public duties.
“Where any such conflict is perceived to exist, the public official must seek the guidance of the Integrity Commission, and any resolution must be in favour of the public official’s official duties. The Code further states that a person in public life and members of his or her family shall upon assumption of office declare their private interests as well as their and assets with the Integrity Commission; and 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. Article 4 of the Code specifically states that a person in public life shall, among others, ‘refuse or relinquish any outside employment, shareholdings or directorships which create or are likely to create a conflict of interest’,” he emphasised, while also highlighting the penalties contained in the Integrity Commission Act.
For him, the Act is clear on the issue of conflict of interest and Hughes and Patterson have to make a choice. “If they wish to remain in office as Ministers, they have to divest themselves of the conflict of interest. In the case of the Minister responsible for the CH&PA, an investigation should be launched to ascertain the basis of the award of the contract. If it is found that the spouse won the contract in an open, competitive and transparent manner, the issue becomes of lesser importance. However, he should be precluded from bidding for future government contracts, giving the status of his spouse as a Minister of the Government,” Goolsarran said.
As regards Hughes, to the extent she continues to retain ownership of the company in question, or an interest in it, she is in breach of the Code of Conduct contained in the Act, he said.
The former Auditor General also noted that this is not the first time that Hughes has been embroiled in allegations of a conflict of interest. He recalled that in his accountability column in the Stabroek News of October 29, 2018, he had noted that the Minister’s spouse, the Managing Director of a law firm in Guyana, had announced the setting up of offices in Houston, Texas, to provide legal services in the oil and gas sector to potential clients desirous of setting up operations in Guyana.
“ExxonMobil is also headquartered in Houston and operates in Guyana through three subsidiaries – Esso Exploration and Production Guyana Ltd, CNOOC Nexen Petroleum Guyana Ltd and Hess Guyana Exploration Ltd. According to the Petroleum Agreement with the Government of Guyana dated 27 June 2016, the registered offices of these three companies are the same as that of the law firm in question. It is, however, not clear to what extent the firm is associated with these subsidiaries but in a court matter relating to environmental permits, the Managing Director is reported to be representing two of the above companies,” Goolsarran wrote at the time.
He had also pointed out that the Minister had indicated that she notified the Integrity Commission on 10 October 2018 as well as Cabinet of her spouse’s involvement and was awaiting further legal advice. He had noted that up to that point, neither the Integrity Commission nor the Cabinet had issued any statement on the matter.
“There was also no indication if the Minister is in receipt of the requested legal advice. The Minister further stated that until such advice is provided, she would refrain from attending Cabinet meetings. However, given that oil revenues are expected to flow in early 2020 – mere months away – it is very likely that oil and gas matters will be a standing item in Cabinet’s agenda for its weekly meetings. This implies that, unless there is a resolution of the conflict, the Minister will be absent from all Cabinet meetings for the foreseeable future, a most undesirable situation. Besides, the Minister is likely to have access to all Cabinet papers and other related material, notwithstanding her absence from Cabinet meetings,” Goolsarran had added.
The minister subsequently said that if there were a discussion that had anything to do with oil and gas in Cabinet, “I would recuse myself.” She had said that she had gone to independent legal advisors to have an idea of what else she should do but has not disclosed the nature of the advice she received. Earlier this month, in a letter to this newspaper, she said that her actions have been consistent with the advice she received.
Goolsarran also highlighted another incident. In 2013, he noted, Hughes’ husband, Nigel Hughes, the Managing Director of the law firm in question, was also the Company Secretary of the Amaila Falls Hydro Inc at a time when he was the chairman of the Alliance For Change (AFC). The AFC had voted against an amendment to the Hydro Electric Act as well as the lifting of the ceiling for government guarantee of loans to public entities to facilitate the proposed power sharing agreement between the company and the Guyana Power and Light.
“Three weeks later, the AFC had a change of heart and voted in favour of the two amendments when they were re-tabled in the Legislature. The Managing Director resigned as chairman, but it is not clear whether such action had to do with the perceived conflict of interest or whether it was as a result of internal disagreements within the party. However, his spouse, another senior executive member of the AFC and a Member of Parliament at the time, through her company, was at the same time providing public relations services to Synergy Holdings Inc and Sithe Global, both of which were connected to the Amaila Falls Project,” Goolsarran had pointed out.
As it relates to the latest allegation of conflict of interest swirling around Minister Hughes, Goolsarran observed that she has said that since becoming a government minister, she had relinquished day-to-day management of the video production company and was unaware of the transaction with the DoE.
Goolsarran emphasised that there is need for elected officials to avoid conflicts of interest. In outlining ways of mitigating conflicts of interest, he said that for elected public officials, the options are very limited by virtue of the fact that they hold positions of public trust and the first and foremost consideration is the public interest. “As such, the highest standards of integrity, ethics and probity are expected of them. Elected public officials should at all times avoid conflicts of interest, and where such conflicts are likely to exist, elimination by removal from the setting is perhaps the best option,” he said.