By PAUL CLEARY of The Australian
Despite buying in the depths of the global financial crisis, William Duma didn't aggressively negotiate for a better price.
He paid $585,000 for the 330sq m, five-bedroom, two-bathroom home with water views after securing the services of a
``I was thinking, where did he get the money from? It was all too quick and easy,'' says real estate agent Shane Trimby, who sold the property.
Duma was involved in a much more lucrative business than coffee. As petroleum minister in the government led by PNG's 74-year-old founding father Michael Somare, Duma is the country's oil supremo. At the time of the purchase he was negotiating with ExxonMobil's consortium to build a mammoth $US15 billion liquefied natural gas project.
As PNG looms as an oil-rich country verging on state failure, some of its political elite have been quietly building up assets offshore, coinciding with huge development of the country's gold, petroleum and copper riches.
In the past five years, key political figures have invested $6 million in
Some of these politicians may have exploited an exemption in
In 2008, foreigners used this exemption to buy $15 billion worth of residential real estate.
PNG is emerging as an extreme case of the two-speed economy, with boom conditions in Port Moresby driven by liquefied natural gas and other resource projects, while the rest of the country sinks deeper into poverty and state dysfunction.
While proving ineffective at running the country, Sir Michael and his family have shown themselves adept at buying real estate and hanging on to power.
After a no-confidence motion back in July, Sir Michael suspended parliament for the rest of the year, and then agreed to stand down in December pending an investigation into allegations of misconduct. But PNG's ``grand chief'' still remains very powerful, with his son Arthur and other party lieutenants in control.
The push to remove Somare reflects growing concern among PNG's elder statesmen over Somare's handling of important developments. The LNG project is one, but more controversial is
An investigation on behalf of a major oil company found it cost about $500,000 in payments to landholders and other interests to get an oil permit approved. The company that commissioned the research decided not to invest in the country.
Another emerging concern is that vast tracts of rainforest are being leased to foreign logging companies in opaque arrangements involving corporate fronts controlled by foreign interests. As much as 10 per cent of the country has been handed over through these arrangements.
The Somare family made its first real estate purchase in
The purchases by Somare's children followed his return to power in August 2007. Arthur Somare's home is listed under his name in the phone book and he returns there regularly.
A Somare spokesman declined to respond to questions about how these properties were purchased.
But Duma tells The Australian he was ``quite well off'' before entering parliament, having been a partner in the
``I purchased a property in
Duma says he declared the property to the Ombudsman Commission, which serves as ``the watchdog for leaders in PNG''. But the commission does not publicly release this information.
Duma acknowledges ``there may be a perception that because I am the Minister for Petroleum and Energy, I may have received some form of benefit from ExxonMobil''.
``All that I can say is that I was a wealthy person before I became a politician. The funds I used were from my savings account.''
Duma denies he was ``on the take'' and says ExxonMobil was very rigorous in its running of the project.
``They want to do it the ExxonMobil way -- very bureaucratic, very thorough.''
Businessman Peter Aitsi, who heads the PNG branch of Transparency International, a global anti-corruption watchdog, says MPs are not required to tell the public about these purchases.
``Given we have a general idea of the salary levels of MPs, this raises questions of how they have financed these purchases'' Aitsi says.
``For the man in the street, this should raise serious questions. So let's make this information public.''
Some of Somare's opponents, however, are also among the biggest property owners in
Land title records show that Morauta's Australian wife, Roslyn, bought a $3.6m riverside mansion in the
Former minister Allan Marat bought a
Marat resigned in May last year after making comments critical of the nickel mine and the benefits for PNG from the LNG project. A spokesman for Marat -- his son Immanuel -- says the properties were acquired with proceeds from Marat's
A spokesman says secrecy provisions prevent it from making any comment.
While some of PNG's political elite are accumulating wealth, life expectancy is falling and infant mortality is rising as the government becomes increasingly dysfunctional, unable to deliver basic services to its poor.
The LNG project is also fanning conflict as landholder groups squabble over the spoils. Earlier this year there was as shoot-out at
AusAID says about 40 per cent of PNG's population lives in poverty, below the international benchmark of less than $US1 a day. HIV-AIDS is rising inexorably. The latest estimate is almost 100,000 sufferers -- 2.56 per cent of the population.
There is no evidence that Duma, the Somare family or Marat acquired their properties inappropriately, but the federal government has been pushing PNG to consider adopting an anti-corruption regime known as the ``extractive industries transparency initiative''.
This program is designed to produce a set of double accounts showing what the government receives from oil companies and what the companies pay.
The initiative has in-principle support from 32 resource-rich nations, with PNG remaining a notable exception.
A spokesman for ExxonMobil says the company has never given any special benefits to Duma or Arthur Somare. He says there is no connection between their real estate purchases and negotiations on the LNG project.
Tel: +61 2 9288 3045 Fax: +61 2 9288 7576 Mob: +61 431 055 584