PPP levels more charges at Videomega over gov’t contracts

-company appears to have placed ads on behalf of Public Telecommunications Ministry

Catherine Hughes

Following more charges against it by the opposition PPP,  the media company owned by Public Telecommunications Minister Catherine Hughes appears to have confirmed that it placed advertisements on behalf of her ministry and others.

After claims by the PPP last evening that it had received government contracts totalling in excess of $10m, Videomega just after midnight today released a statement outlining the procedure it follows as an advertising agency and promising to release invoices after it retrieves them from its auditors.

Following calls by Stabroek News to Hughes and Videomega manager Russel Lancaster, Videomega released the following statement:

“This afternoon the PPP issued a statement in which they asserted that Videomega Productions  Inc. had received in excess of $10,000,000.00 from the Government of Guyana which sum  included  three contracts from the Ministry of Public Telecommunications.

“The statement itemized the sums which were alleged to have been paid to Videomega Productions Inc.

“Videomega Productions Inc. was incorporated in 1994 as an  advertising agency and video production company.

“In its capacity as an advertising agency,  the company would place  advertisements in the print, electronic and other media on behalf of its clients. Most advertising agencies extend a thirty day credit to the client which facilitates  large media placements without the necessity of paying in advance.

“The financial  process involves the advertising agency placing the advertisement in the media  on behalf of the client then invoicing the client for the advertisement. The monies received from the client are paid to the media entity who thereafter pays a commission at the rate of  10 or 15% to the  advertising agency. This payment of a commission by the media entity to the advertising agency  at the rate of 10 to 15% is standard international practice.

“The payments  received by Videomega  are paid over directly  to the media Houses and therefore it is disingenuous for the PPP to say  that $10.3 M  is revenue earned by Videomega Productions when they know that the payment goes directly to the media houses.

“The company will provide the invoices issued for the sums referred to in the PPP statement as soon as it retrieves it from its auditors.

“The management of the business of the company since May 2015 has been conducted  by veteran media expert Russel Lancaster.

“Videomega Productions Inc. wishes to repeat its earlier statement that Minister Catherine Hughes does not participate in the running  of the company”.

In a public statement on his Facebook page yesterday General Secretary of the PPP Bharrat Jagdeo claimed that from May to September 2018 Videomega Productions received eight contracts totaling $10.3 million from six ministries including the Ministry of Public Telecommunications.

The PPP said that in Hughes’ Ministry of Public Telecommunications three contracts were awarded to Videomega Productions:

1. June 4, 2018 – Advertisement of Vacancies – $939,738

2. June 25, 2018 – Facebook Page – $119,670

3. September 21, 2018 – CTU/ITC Roadshow 2018 – $2,291, 128

It said that Videomega Productions benefited, also, from another five contracts awarded by other ministries.

Ministry of Public Infrastructure:

4. September 19, 2018 – Television advertisement – $256,500

Ministry of Business: 

5. September 28, 2018 – Video for Caribbean Tourism Diaspora Forum – $198,800

Ministry of Education:

6. July 12, 2018 – Video Production – $1,487,700

Ministry of Natural Resources: 

7. May 25, 2018 – Artwork – $1,420,115

Ministry of Public Health: 

8. July 27, 2018 – Advertisement – $3,592,236

Hughes’ company benefiting from the placement of advertisements for her own ministry would be seen as a conflict of interest.

The PPP had already accused Hughes and Videomega of impropriety earlier this month in relation to  a $832,200 contract from the Department of Energy for the production of three sixty- second television Public Service Announcements.

In response to these allegation Hughes said that she had relinquished day to day responsibility for the company and was unaware of the contract.

Lancaster in turn had stressed that he had secured the contract for Videomega without the Ministers’ knowledge.

“I was contacted by the department, and informed that based on my experience and knowledge of the industry, they would like to get an example of the kind of work that could be provided and it was I that informed them that I was now managing Videomega and would like the work to be contracted to the company as opposed to me personally,” Lancaster said in a statement issued to the press.

The concerns raised about a possible conflict of interest has led to a call from Transparency International Guyana Inc for a clear policy on the ownership of private enterprises by Ministers of Government.

 “When you move into public life, especially with something like heading a ministry, I think it should come with some recognition of rules. You have to choose; if you are a private business owner, be a private business owner or stay in government. It cannot be both,” head of TIGI Troy Thomas told Stabroek News.

“There needs to be a policy about what people should do. This is something that they need to address urgently going forward,” he added stressing that such a document should clarify the expectations of ministers who also function as business proprietors,  “otherwise, you can’t get away from the appearance that something wrong is going on.”

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