Banks join fraud war

By FRANK SENGE KOLMA      

     

COMMERCIAL banks and financial institutions are being corralled in to assist in the fight against fraud and corruption in government, The National reports.

Stringent guidelines have been issued to cash dealers (banks) by the Financial Intelligence Unit of the Fraud Squad which direct how to deal with government payments above a certain threshold. No threshold figure is mentioned.

On the face of it, the guidelines appeared logical and effective, but banks are worried that the guidelines would create so much delay in the processing of payments which would create extra work and tension between the bank and its clientele.

In the end, the guidelines might even delay government projects for unnecessarily long periods.

The guideline, headlined “Due diligence in relation to government cheques and payments” was issued on June 2 under the Proceeds of Crime Act 2005.

In the preamble, the unit stated that the government and people of PNG “are suffering from fraud and corruption at levels that are preventing normal government functions from occurring hindering development”.

It stated in part: “Fraud against the government is currently the most significant financially motivated crime in PNG. It is estimated that about 25-30% of the government budget is misappropriated each year.

“These funds are, in most circumstances, processed through one or more of the commercial banks in PNG.

“By implementing this guideline, members of the AML Working Group acknowledge the unique opportunity available to break the cycle of fraud and corruption and, in so doing, make an unprecedented contribution to the future development of PNG.”

For government payments that are over and above the threshold amount, banks or cash

dealers are asked to:

*Obtain identification of the person or group that payment is made to;

*Names of directors or employees of the company (where government employees are directors it is an indication of fraud);

*Registration details from Investment Promotion Authority (large amounts to new companies or one that has changed its name recently is indication of fraud);

*Obtain tax records from previous years (failure to submit tax returns is evidence of illegitimacy);

*Obtain information on how and when a tender was called;

*Obtain a copy of the project proposal with details on how the money is to be applied;

*Timings of payments and when each tranche is to be released;

*Details of overseer and reporting process; and

*Obtain a detailed budget on how money is to be spent.

Banks or cash dealers will also be asked to:

*Conduct independent checks on the business of the company including identifying assets, employee numbers, previous projects, company accounts and so on;

*Checks on directors to ensure that there are no adverse records in relation to previous offences or suspicious transactions;

*Examination of previous payments from government with particular focus on how previous payments were used; and

*Search people for those on suspicious transaction listing, politically exposed persons list, and  high risk persons listing among others.

All out of court settlements and default judgments, are, by their nature “red flags” the financial intelligence unit, claims and will come under very close scrutiny.

These and other due diligence measures in the guidelines will now create a lot of problems for banks who might even be required to direct staff to travel out to remote districts to do phy­sical checks on locations of projects. This might tie down projects for long periods of time.

The guideline is signed by Bernard Barum, officer in charge of the Financial Intelligence Unit.

Teachers given week off to complete census

By ALISON ANIS

 

TEACHERS who need to complete the census this week have been excused from their schools, The National reports.

Chairman and careta­ker for the Teaching Ser­vice Commission Jerry Kuhena said the holiday had been extended for another week for the teachers in census sites which were running behind schedule.

Other teachers, who had completed their tasks in the census, had returned to school when classes resumed yesterday.

Meanwhile, regional census co-ordinators for Momase and New Guinea Islands declined to give any details on counting in their provinces saying they had forwarded all information to the National Statistical Office  (NSO) and the national census director.

Momase co-ordinator Dennis Gonnisso told The National from Lae yesterday that he had already sent updates to the NSO.

He declined to give any details on the status of counting in Morobe, Madang, East and West Sepik.

Apart from parts of the Highlands region, Madang is reportedly behind with the counting beginning only yesterday.

Census coordinator for Southeast (Central, Mil­ne Bay, Northern and National Capital District) Kila Geberi said he had not received any updates from the four provinces.

“All I can say is that census is progressing well for Northern, Milne Bay and Central.

“However, we have yet to receive census updates from co­ordinators from these provinces,” Geberi said.

He refused to comment on whether his officers had encountered any problems during the week.

The NCD coordinating team reported that zone managers were doing quality checks on information gathered by field officers during the census week.

“We are also sorting out final payments for those who participated in the census listings.

“These may be ready by Wednesday (tomorrow), while mop-up exercise for NCD may be introduced next week but that depends entirely on how fast the officers will send in the completed workload with all the listings from the census,” Geberi said.

Opposition urged to update nation on prime minister's post

The opposition has called on acting prime minister Sam Abal to be a man, a national leader, and tell the nation how and when the issue of a permanent prime minister is going to be resolved.

Deputy leader of opposition and Bulolo MP Sam Basil raised the issue on what is the five days after the anniversary of the seventh month since Abal was first appointed on December 13, 2010 as acting prime minister.

“When are the two medical officers going to be appointed and announced? Basil wondered.

“When are they going to do their job?

“Parliament will be sitting on August 2, 2011.

“Will the report be ready then?

“You owe this to the nation, Mr Abal and to your late father Sir Tei Abal, to rise up now and show that you are your own man, a chip of the old block.”

The opposition’s call follows the announcement of the National Executive Council chaired by Abal, announcing the activation of the constitutional provision to determine the fitness or otherwise of Sir Michael Somare to continue to hold office as prime minister.

According to Section 142 (5)(c) of the Constitution, NEC and Parliament are to advise Governor General to request the PNG Medical Board to appoint two medical practitioners to examine and provide two medical reports on the condition of the prime pinister to be tabled in Parliament.

If Sir Michael is unfit to perform his duties as prime minister, there will be a vacancy and a new prime minister has to be appointed.

Abal was appointed acting prime minister when Sir Michael stepped down to face a Leadership Tribunal on misconduct in office charges.

Abal has continued to occupy that office since Sir Michael stood trial, was found guilty, and suspended for two weeks from office.

Abal continued in office when Sir Michael fell ill and underwent medical treatment in Singapore.

“In case you have forgotten, Sir Tei Abal, as founding leader of United Party pre-independence, opposed then young Michael Somare in the push for political independence against a formidable push,” Basil said.

“PNG people – especially those familiar with history – have watched you ignore that legacy and associate yourself with Sir Michael and the National Alliance Party.

“You have been rewarded – against NA odds – with your appointment as acting prime minister,” the Bulolo MP added, highlighting that many saw the appointment as that of “one who is most vulnerable to manipulation by the real powers behind the scenes”.

“Mr Abal, now is your chance to break free.

“Now is your chance to assert your true inner self and demonstrate the leadership potential that Sir Tei deposited and groomed you into.

“Show the people of Wabag and Papua New Guinea that you are of that stock.

“Do it for Papua New Guinea – and leave a lasting legacy that will overshadow the charge against a member of your household on the body found in your residential yard.

“Do it and dispel the clouds of doubt that blocks some rays of the spotlight on your acting prime ministership.”

Duma: Politics got me sacked

By JAMES APA GUMUNO

 

UNITED Resources Party leader and Hagen MP William Duma has described as “pure politics” the term “incompetent” used by Acting Prime Minister Sam Abal to sack him from cabinet, The National reports.

Duma was petroleum and energy minister at the time of his sacking.

He told a gathering in Mt Hagen last Friday that he knew his job like any other trained professional.

Duma said Prime Minister Sir Michael Somare had given him the portfolio because the Grand Chief knew he would deliver.

He said the multi-billion-kina liquefied natural gas project in Southern Highlands and the InterOil gas project in Gulf were his projects.

However, many other leaders were claiming credit for them.

He said one of the clauses in the Waragoi Agreement, signed in Kokopo during the formation of government, called for mutual respect and consultation.

However, he said Abal did not consult him before sacking him. He read about his sacking while in Cairns, Australia.

He told his people: “I forgive the people behind my sacking because they did not know what they were doing.”

Duma said all nine URP MPs were united and would continue to move forward.

He also welcomed Engans and Southern Highlanders into Mt Hagen city to do business.

He said people from the resource provinces had money to spend and they must be respected and allowed to come in and spend their money.

Court refuses to drop Lelang's charges

By SAMUEL RAITANO

 

THE Waigani Committal Court last Friday rejected an application by former National Planning and Monitoring secretary Joseph Lelang to have certain charges against him dismissed, The National reports.

Lelang, through his lawyer Philemon Korowi, was responding to a charge of break-in, entering and stealing.

Korowi claimed that the charge was pre-meditated and orchestrated by people who wanted Lelang removed from office.

He was alleged to have broken into his office last month.

In the application, Korowi referred to certain letters and correspondence between the Department of Personnel Management, Public Service Commission and the ministers for Public Service, Finance and Treasury and National Planning.

The court was referred to a press release by the applicant of payments in billions of kina within the three months that he was suspended.

Magistrate Rossie Johnson said the applicant had committed an indictable offence, from which the charge of break-in and entering stemmed, and the argument entwining political and bureaucratic vested interest to the substantive matter did not hold any water.

“What has that got to do with the charge of break and enter and stealing? I do not see a connection of premeditated scheme orchestrated by persons with vested interest to oust the applicant, who was already at some stage suspended from office,” Johnson said.

She said there were no evidence as yet to commit the matter to a higher court and that the standard three months for completion and submission of police file had not lapsed yet.

“This motion is premature, out of context, waste of court’s time and frivolous and of no merits. This motion is dismissed,” Johnson said.

NCD ends counting

By ALISON ANIS

 

Counting for the national population and housing census for the National Capital District and most parts of the country ended yesterday, The National reports.

The NCD coordinating team confirmed that officers in the district last Thursday received lump-sum payments of K280 for the K40 daily field allowances from July 11–17.

However, some officers in NCD, doing final evaluation of completed workload yesterday, admitted “not everyone living in the nation’s capital had been counted”.

Team leader for Waigani and Morata area in NCD’s zone two said his officers had not covered all the houses because the sketches from listings last year were unreliable and contained many errors, especially for the most dangerous suburbs in the city.

Jimmy Peter blamed security and the clash with the common roll update for the national elections, as “the two events which happened simultaneously and created a lot of confusion for the people”.

Peter claimed the sketches and listings for census units were inaccurate.

“When we did the actual census, we found out that some houses were not included and that certain areas on the map where it says there were no houses actually revealed there were houses and people living there.

“We found out that there were some ghost names on the listings and that the descriptions of the houses were made up,” Peter said.

He said this was evident for places like Morata 4, Baruni and some parts of Waigani.

He said in some places, the number of people living in one house was more than what was on the listings.

“Some of our officers were shouted at and chased by residents at Morata next to the swamp.

Other residents, including some of Asian origin, simply shut their doors in our face when we approached them.

“Some residents in Waigani have complained that the census people did not visit their house to get data and wanted to know why,” Peter said.

National Statistician Joseph Aka said last week they would introduce a mop-up exercise for units that were left out during counting week.

He said the mop-up would take place after results were submitted and evaluated by provincial census coordinators who would properly identify which census units had missed out.

Tiensten queries K26.2m

By JEFFREY ELAPA

 

A GOVERNMENT minister has questioned how K26.2 million of the development budget was allocated when Joseph Lelang was reinstated as secretary of the Department of National Planning and Monitoring by the court early this year, The National reports.

Minister for National Planning and Monitoring Paul Tiensten said K26,287,777.75 was drawn from the development funds and paid to two organisations within three days after Lelang, who was on suspension, was reinstated by the court.

He said within two days, three separate cheques of K235,925.25 each were raised to be paid to the Korowi law firm as legal costs.

Altogether, K707,775.75 was paid to the law firm.

The cheques (000509 and 000512), for K235,925.25, were raised on June 23 this year.

A cheque (000514) for the same amount was raised the next day and addressed to Korowi Lawyers.

Tiensten said another cheque (000513) for K290,000 was paid to Vigilant Ltd for security services provided on June 24 this year.

Another cheque (000522), dated June 27, for the same amount was paid to the same company.

Tiensten also revealed a move to refer lawyer Philemon Korowi to the PNG Law Society for unprofessional conduct and for illegally obtaining development funds.

He said Korowi Lawyers was not engaged by the state, through the Department of Justice and Attorney-General, to provide legal services.

“No efforts will be spared by the government to recover all payments fraudulently paid to this Vigilant security firm and a company called Niugini Ltd belonging to Lelang and Jeffrey Yakopia,” he said.  

Tiensten said according to last year’s development budget expenditure report, two of Lelang’s political associates (named) had illegally obtained development funds totalling more than K25 million.

The matter is under investigation.

“I am of the view that Korowi Lawyers and its principal Philemon Korowi be referred to the police fraud squad and the law society for his unethical and unprofessional behaviour.

“Such actions by the government will minimise such practice by lawyers using the judiciary and court system to defraud the state,” Tiensten said.

However, Korowi yesterday welcomed Tiensten’s move to refer the matter to the police fraud squad and the law society.

He said he had no idea of three payments allegedly made to him.

“I only know of one cheque of the said amount and I do not know of the other two cheques.

“How can I be paid three times for the same amount?

“I was only owed one amount for legal fees and trying to get double payment is not my style.”

Lelang said Tiensten was trying to divert attention from the real issue of fraud of public funds by officers from his office and the department’s senior management.

He said the payment made to Korowi was in accordance with a court order in which the National Court ordered the state to pay for legal fees toget­her with the orders of his reinstatement.

Lelang said the payment made to Vigilant Ltd was done in accordance with the Public Finance Management Act, which allowed him to exercise his powers to make payments of less than K300,000.

He said the procurement processes were met and there was nothing sinister about the payments.

He said the security firm was picked because it gave the lowest quotation from the three received.

He also denied making any payments to the two people named.