Former Solicitor General, Zacchary Gelu, should never be employed again in a senior position in the public service. This is the stark recommendation from the Commission of Inquiry into the Department of Finance after it found Gelu implicated in many of the scams in which a total of K780 million was stolen from the people of PNG between 2000 and 2006.
The particular scam that prompted the Commission’s recommendation involved the former Administrator of the Southern Highlands, Tau Liu. In 1999 Liu claimed over K220,000 in damages from the State for alleged wrongful dismissal although in fact he had in fact only been suspended from duty, not terminated. In February 2003, then Solicitor General, Zacchary Gelu, agreed to the claim and signed a deed of release in the sum of K305,410.61 (which included more that K70,000 in interest payments).
The claim was approved by Gelu even though the State had initially filed a defence and had several good grounds to ask the court to dismiss the claim. This included the fact that Liu had not been terminated, that he had failed to answer the disciplinary charges against him and had failed to give proper notice of his claim. Even if the State had been liable then Liu would only have been entitled to damages equivalent to three months pay – a fraction of the sum he actually received.
The Department of Finance paid out over K773,000 to Mr Liu in settlement of this claim and a second claim in respect of his employment as Administrator for Western Province. That claim was also approved by Gelu.
The Commission concluded:
The amount paid by the State in settlement of the Plaintiffs claim is exorbitant, unreasonable and may have been calculated with a view to defraud the State of a large sum of money
In light of such conduct Mr. Gelu should never be allowed to hold a high position as that of SG ever again.
His conduct clearly showed that he was not there to protect the interest of the State but perhaps for his own gain.
This-is clearly negligence on the part of Mr. Gelu.
The Commissions report on the Liu scam is also scathing of the conduct of then Attorney General Michael Gene for his failure to protect the interests of the State in the advice that he gave in the matter.
The parts of the Commission report relevent to Mr Liu’s claim can be downloaded here Liu
Minister for Public Enterprises, Sir Mekere Morauta, says Motor Vehicle Insurance Ltd had confirmed to him that it had not authorised the statement released by Woodlawn Capital today, purportedly on MVIL’s behalf.
“The statementis a fabrication,” he said.
“MVIL confirmed to me that it had not approved its release.
“It also omits one central fact: the transaction was illegal because MVIL did not obtain any of the approvals it was required by law to get before proceeding.
Morauta added that Woodlawn should “stop tryingto confuse the issue and just bring the money back.”
Australian financial services company, Woodlawn Capital, says it is disappointed with suggestions that it has acted inappropriately in managing funds on behalf of the Motor Vehicle Insurance Limited (MVIL).
This is in response to allegations by Minister of Public Enterprises Sir Mekere Morauta that K96m in proceeds from an illegal share transfer has been traced to an account at the Commonwealth Bank in Lismore, New South Wales, owned by Woodlawn Capital.
Yesterday a statement was supposedly released on behalf of both Woodlawn Capital and MVIL although it was later announced through an e-mail as representing the views of Woodlawn Capital alone. Mekere Morauta also says MVIL had confirmed to him that it had not authorised the statement released by Woodlawn Capital, purportedly on MVIL’s behalf, and added Woodlawn should “stop trying to confuse the issue and just bring the money back.”
The Woodlawn statement says:
“Statements made by both the Ministry of Public Enterprises and the media that money has gone missing are completely false, as is any implication that Woodlawn Capital has acted inappropriately or illegally in its dealings with the funds under management it holds under the terms of its investment management agreement with MVIL.
“The directors of Woodlawn Capital Pty Ltd are disappointed by the lack of professionalism and due diligence of the parties who have made these accusations.”
Woodlawn Capital also says it is an Australian-based financial services company, regulated by the Australian Securities and Investment Commission and is a holder of an Australian Financial Services licence. It also claims it is regulated by the Australian Transaction Reports and Analysis Centre to comply with anti-money laundering legislation.
“Any suggestion funds are ‘missing’, ‘siphoned off’ or ‘owned by Woodlawn Capital’ or any other third party is incorrect.”
“Investment funds are currently, and have always been, held in a trust account on behalf of and for the benefit of MVIL.
“Woodlawn Capital has at all stages met all reporting requirements both in Australia and to its clients. MVIL is provided with regular reports in relation to the funds under management and MVIL have been issued with independent verification of the funds under management.”
Criticism: something which is encouraged by the dominant class as long as you are not criticizing the dominant class – The Overt Dictionary
By Martyn Namorong
The best way I can define the dominant class is to use what the Occupy Movement refers to as the 1% – the owners of Capital and their agents.
The rest of us belong to the 99%.
The dominant classes, being the psychopaths that they are, are very good at twisting words and stories to shift the blame back to the 99%. They will only want to take credit when things go right but will not bear responsibility for their flaws.
I have had to debate these psychopaths on Facebook and have become familiar with their tactics.
One of the lessons I’ve learnt is that the dominant class – the 1%, don’t mind if the 99% criticize and hold each other accountable yet they frown when attention is focused on them.
Proceeds of Corruption in Australia
Let’s take a look at recent blogs from PNG Exposed BLOG regarding money that was transferred to a Commonwealth Bank account in Lismore, New South Wales, Australian. Basically, the articles called on the Australian Authorities to help PNG recover these funds.
Predictably the psychopaths decided to shift the argument towards blaming PNG Authorities for failing to prevent the money from leaving the country. They decided to ignore the glaringly obvious fact that these same ‘Authorities’ were facilitating these deals and the least the Australians could do was to decline such transfers.
Someone went on to defend Australian Banks by saying they do due diligence checks. This person was clearly distracting attention from the fact the IPBC is currently trying to recover money from the Commonwealth Bank in Lismore. Obviously Bankers at Lismore didn’t do proper due diligence checks. Yet this fact was blatantly ignored.
Transparency International’s failure to speak out
The folks at PNG Exposed Blog also accused Transparency International of being biased and racist towards Papua New Guinea because the Organization failed to highlight Australia’s involvement in laundering proceeds of corruption in Papua New Guinea.
Not surprisingly the psychopaths decided to divert attention from Transparency International back to the Government’s failures. The point that they wished to gloss over is that if Transparency International is to be fair and balanced about criticizing corrupt practices it must criticize the recipients of the proceeds of corruption.
Sadly, Transparency International’s PNG Chapter is supported by the Australian Government via AusAID. One does not bite the hand that feeds you. And that is something the psychopaths don’t want the sheeple to know.
Suppression of Freedom of Expression
The Post Courier Newspaper has been taken to court for defamation, by Malaysian logging giant Rimbunan Hijau aka RH for reporting on RH’s antics in Pomio, East New Britain Province.
The Pomio fiasco was a major Public Relations disaster for RH and it (RH) scored several own goals while pathetically trying to defend itself.
The attacks on the Post Courier including referrals to the Media Council are attacks on freedom of speech and Media freedom.
Had the Post Courier not reported on the Pomio fiasco newspaper readers in PNG would have received biased reports from RH-owned National Newspaper.
And remember how Nasfund once used to be all about good governance and fighting corruption until someone leaked its dirty secrets on PNG Blogs. The administrators of PNG Blogs had to pull down the information after Nasfund threatened to sue them and offered K50 000 to anyone providing information leading to apprehending the source of the leak.
Ken Mondiai from the Eco-Forestry Forum writes to the 1% stating;
“Don’t be like the politicians trying to suppress media and freedom of speech in this country when their bad decisions and weaknesses are exposed and in reaction for their guilt they go to the media issuing all kinds of threats about controlling and regulating NGOs and the media.”
And that’s the thing about the 1%, politicians may come and go but the 1% belong to undemocratic capitalist cartels that continue to wield enormous influence behind the curtains even when politicians like Sir Micheal Somare are out of Office.
Nautilus Experimental Deep Sea Mining
A recent scientific report on Deep Sea Mining highlighted that there is insufficient knowledge about this activity to allow it to proceed.
The debate on the issue is best summarized by the exchange on Facebook between Tiffany Twivvey and Richard Kassman:
“Tiffany, my point is that Alup and her people must set about putting a plan of action together. Get information and engage with Nautilus as part of this plan. Be proactive and not stuck in too much talk.”
But of course what Mr. Kassman does not say is that it’s actually pointless in trying to engage with Miners. Just look at the Ramu Nickel case and what happened on Bougainville. To explain why it is pointless, I’ll use Mr. Kassman’s own words:
“Sharpies I work for a foreign petroleum coy exploring for gas primarily in the Western Province. I am part of management and have some influence. I am an employee, I am a citizen and I consider myself a Nation builder. Yes I have a responsibility to my shareholders, I also am fully aware of the obligations that the corporation has signed up for as a convention and its values talk about the environment, treatment of indigenous people etc. As a senior officer I am compelled to raise these issues and up to the Board Chairman if required. At the end of the day if I feel my personal principles and values are compromised I will have no hesitation in tendering my resignation.” [Emphasis mine]
The 1% and their agents have to make a profit from their investments. That’s what Mr. Kassman refers to as “a responsibility to my shareholders.” Shareholders make money from shares they own in companies. This is a legitimate business practice.
But what happens if you were opposed to Experimental Deep Sea Mining and decided to do what Mr. Kassman suggested:
“Get information and engage with Nautilus as part of this plan. Be proactive and not stuck in too much talk.”
Would the miner listen to you if it had spent tens of millions and would make a loss by pulling out? Would its shareholders be happy? The manager of the mining company would be reluctant to stop the project because as Mr. Kassman puts it, he would say “I have a responsibility to my shareholders”.
To be fair to Mr. Kassman, he did say he would resign if he felt his values were being compromised. But if a good manager like Mr. Kassman resigns, the company can always employ a demon to create havoc.
One other interesting point that pops up in the exchange above is this statement by Mr. Kassman:
“Judith your assertion that Mel is betraying Pngeans is harsh and does little to help Alup do something constructive.”
Here Mr. Kassman makes reference to Mr. Mel Togolo who works for the Experimental Deep Sea Miner, Nautilus. When defending Nautilus, Mr. Kassman was open about being employed by Talisman Energy he did not publicly disclose that he and Mr. Togolo were both Board Members of Transparency International (PNG) Inc.
For resource exploiters the word “constructive” which was used by Mr. Kassman takes up a more literal form in terms of construction of the project as opposed to constructive dialogues. What this implies is that anyone totally or partially opposed to the 1% is deemed unconstructive.
And that is why Ms Twivvey who is the lawyer representing Madang Landowners fighting against proposed Deep Sea Tailings Placement, replied;
“Richard – sorry but I agree with Judith – she was not being harsh. It is pointless for individuals to engage with Mining companies. They are here – they have all the permissions – they are full steam ahead – what do we do say “oh please Mr. togolo could you tell your bosses, who are bankrolled by the chinese as they are, to not do any mining until we have proof it is safe ? Which will take a very long time and a lot of researrch – which will only prove that it is not safe ?”No we need to stop it before it is too late.” (sic)
PROFESSIONAL PUBLIC RELATIONS SPIN
One thing the 1% are good at is to make themselves look good. As I was looking up links for this article I came across what I saw as a good example of PR SPIN on Mine Watch Blog: My responses are in italics.
Tindi Apa (@oripng) November 25, 2011 at 12:12 pm
Congratulations Mine Watch… The miners have certainly developed jaundiced eyes after reading your ‘jaundiced’ reports.
§ Wesely November 25, 2011 at 4:31 pm
You are pulling your own leg!
Sad to say it is typical of the unwashed to trivialize the issues here.
[Notice above how Wesley deliberately misspells Tindi’s name and refers to him as ‘unwashed’. That’s because the 1% know that the 99% who are mostly sheeple are most likely to react to such personal attacks and in the process discredit themselves. By discrediting themselves, the 99% make themselves look evil while the 1% start claiming to be victims of the 99%. Thank goodness Tindi didn’t fall for this trick by the psychopaths]
Actually, the Mining Industry is not at all concerned with what gets posted on this blog.
The Mining Industry, far more so that the citizens of PNG and its government, have a vested interest in a properly regulated industry.
[I’ll use Tindi’s response to that: “I actually believe what Wesley rightfully pointed out: “the Mining Industry is not at all concerned with what gets posted on this blog”. Probably explains why Wesley spends too much time here while I’m on Twitter with my ‘jingoistic CROWD’. Wesley should be awarded for ITS regular contributions to RAMU MIND WASH _ perhaps a blog post to commemorate ITS 1000th comment on RAMU MIND WASH”]
But look what they have to work with, TAKE A GOOD LOOK!
A bunch of corrupt ministers and PNG cowboys who are, with a couple of exceptions, are clearly JUST INCAPABLE of understanding and implementing any transparent policy with regard to regulatory practice.
Yes, in the past there has been a tragic legacy of incompetent administration of Mining Act matters by the government of PNG itself.
You obviously simply side step this compelling and abundantly obvious fact.
All the RAMU MIND WASH has done in the last 18 months is to distract people in PNG from the real issues, namely, that the organs of state are largely responsible for the problems in PNG.
I don’t suppose you would appreciate this, how could you when you clearly treat this like a rugby match where you support your favorite team.
[Same old, same old… shift the Blame to the Government. But when Byron Chan the Mining Minister decides give mineral ownership to the 99%, Guess what? the 1% Cry Wolf and say it will split the country. Well I suppose what they mean is that the resources will be taken from their hands and given to the 99% so the 1% gets split out. You see folks what the 1% believe is that the Government isn’t right unless it listens to them. Unfortunately Prime Minister O’Neil bought into their bluff and over-ruled the Mining Minister. If you look at Panguna and Ok Tedi you realize that the State listened to the 1% but when the miners messed up we the 99% paid the price and the State got blamed for the troubles. The 1% just conveniently vanished – BHP in Ok Tedi and Rio Tinto in Panguna]
But its not a Rugby match and RAMU MIND WASH has done the community a great disservice by promoting a perception that it is the Mining Industry at fault.
That’s why PNG just flounders in every respect, politically, socially at all.
RAMU MIND WASH has done nothing to support a proper approach to regulatory process.
Most if not all of what has been said and done by RAMU MIND WASH has floundered in a sea of ineptitude, emotion and silly partisan barracking with no focus and apparently no knowledge of the real issues, but worse, a complete incapacity to work productively toward a properly regulated process for the management of mining matters.
How can you expect the industry to respond to this sort of a rubbish other than to raise their eyes with incredulity and near total frustration.
[Oh so now they wanna sound like the victims… typical. The 1% will lobby regulators and Ministers to get what they want, yet when they screw-up, they pass the blame to the Government. It’s hypocritical because the Government’s actions had been influenced largely by the 1%]
In the minds of the psychopathic 1%: raping your resources, plundering the state coffers, exploiting workers and destroying the environment and the livelihoods of indigenous communities are legitimate forms of doing business. They do not want to be held accountable for these acts of violence. They don’t want to be criticized for their wrongs.
Yet when the 99% react to their injustices, the 1% immediately bring in thugs in Police Uniform to suppress the resistance against their violent acts. They treat people who seek justice as if they are criminals.
There is one major weakness that the 1% have and that is they only care about MONEY. So the sheeple of Papua New Guinea can resist with their wallets and their labour. They lose money when you don’t do business with them and that’s what hurts the most. For a large corporation, a strike by workers costs millions per day.
The shareholders wouldn’t be too pleased with the company if this was to happen and mangers who say “I have a responsibility to my shareholders” will realize that they have a responsibility to the 99% as well.
Now folks I don’t want to exonerate corrupt Politicians and Public Servants nor do I wish to absolve the State from its fiduciary duties. But when one is presented with the basket case that this nation has become, one would expect that so called Development Partners, Civil Society Organizations and Good Corporate Citizens would step up to meet the challenges faced. Instead they fail to do so and by their failures enable the Dominant Class – psychopathic 1% to run amuck.
The PNG government alleges K96m has been stolen from the public purse in a fraudulent share transfer overseen by former Public Enterprise Minister, Arthur Somare. But what has not yet been revealed is the money has been invested in a company that bears the same name as the school attended by Arthur’s brother, Sana. Further, Lismore, where the money is sitting in a Commonwealth Bank branch, is described by friends as “home turf for the Somare family”. It is also alleged the family has close personal ties to the bank staff at the branch at 86 Woodlark Street Lismore, which is just around the corner from the registered office of the investment company.
New Minister, Mekere Morauta, says the stolen K96m, or what now remains of it, is in a bank account owned by an obscure Australian company, Woodlawn Capital Ltd.
Sana Somare was schooled at the exclusive St Johns College at Woodlawn near Lismore in northern New South Wales. St John’s is commonly referred to as Woodlawn college and bears the name Woodlawn on its school crest.
There is also another connection between the Somare’s and Woodlawn college. In 1992 Michael Somare and his wife attended the funeral in Lismore of Jack Reilly who worked in the PNG Department of Education and was headmaster of Port Moreby High School as well as being a teacher at Woodlawn college.
Morauta has described Woodlawn Capital as “a dubious investment company” involved in “a crooked Australian investment scheme”.
Woodlawn Capital is owned by Timothy Breen and Desmond McNamara, aged 72 (through his company Seahound Holdings).
The Directors of Woodlawn are Breen and Timothy McNamara. McNamara lives at the same address in Tower Street, Manly as Megan Cracknell, 41, who is the sole Director and and Company Secretary for Seahound Holdings (which was previously owned by Timothy McNamara).
Timothy McNamara is presumably Desmond’s son, the pair being aged 41 and 72 respectively and Timothy having previously shared the same residential address as Desmond at 6 Fuller street in Bulleen Victoria before moving to Sydney.
It is perhaps time the Australian police paid a visit to Breen, the McNamaras and Cracknell to ask them how K96m which should be paying for health and education services in rural PNG has, allegedly ended up in their hands…..
Former Solicitor General Zacchary Gelu and lawyer Mundua Kua have been recommended for prosecution for fraud by the Finance Department Commission of Inquiry over yet another theft from the people of PNG – this time in the sum of K1.7 million
In 2001, Mundua Kua in the Solicitor General’s office conspired with private lawyer Joe Wal, to fraudulently resurrect an old and out-of-date claim for damages against the State. Not only was the claim resurrected, the lawyers added 77 new plaintiffs to the claim (new plaintiffs that the Commission describes as “patently false”) and increased the amount of damages claimed from K123,000 to over K2 million.
Despite the fact the resurrected claim was out of time, there was no requisite Section 5 notice and the Solicitor General’s office had clear instructions disputing the facts of the original claim, the Solicitor General’s office consented to the changes.
Then in October 2002, Zacchary Gelu signed off on a Certificate of Judgment in the sum of K1.7 million despite the claim being patently flawed and never having been tested in court and without seeking the necessary Ministerial approval. Gelu then sent the Certificate off to the Finance Department with a covering letter asking for immediate payment.
Although by the time of the Commission hearings Joe Wal had died, his daughter Maryanne, who had taken over his legal practice, had already collected the K1.7 million from the Department of Finance. The Commission has recommended legal action to recover this money.
Read the full Commission findings on this scam here Kua and Gelu
The Papua New Guinea government is trying to recover K96m which it says are the proceeds of a fraudulent share transfer facilitated by former Public Enterprise Minister, Arthur Somare, and the Independent Public Business Corporation.
The funds, according to the new Minister, Mekere Morauta, are sitting in a Commonwealth bank account in Lismore Australia that is owned by an Australian company, Woodlawn Capital Ltd.
Woodllawn Capital was first registered in 2009. The company is jointly owned by Timothy Breen, 37, who lives in Fredericks Lane, Tintenbar in northern New South Wales, and Seahound Holdings Ltd, a company registered in Victoria, Australia. Breen and Seahound each own 25,000 shares in Woodlawn which were issued in October this year.
The two directors of Woodlawn are Timothy McNamara, aged 40 who lives in Tower Street, Manly, and Timothy Breen. McNamara is also the company Secretary.
The company has a registered address at the offices of Wappetts accountants at 158 Molesworth Street Lismore, but lists its place of business as Level 40, Governor Philip Tower in Sydney.
The landmark Governor Phillip tower is perhaps the most prestigious office complex in the heart of Sydney. Real estate agents describe it as offering “superior finishes, services and facilities befitting the needs of its leading national and international tenants”. The towers soar to a height of 243m and offers “magnificent views over the Royal Botanic Gardens to Sydney Harbour”. Rents start at around $1,000 per square meter. Woodlawn Capital moved to its current address from Bond Street in 2010.
The K96 million which is alleged to be sitting in the bank account owned by Woodlawn Capital is missing from the state owned Motor Vehicle Insurance Limited. The money is the proceeds of the sale of shares in Bank South Pacific which were owned by MVIL and sold to Nominees Niugini Limited. The transaction is the subject of a police investigation as it was in breach of Section 45B of the IPBC Act and Section 110 of the Companies Act in that it was not approved by the IPBC board and there was no shareholders’ resolution approving the sale, as was required under law.
The new IPBC board has instructed MVIL to rescind the sale contract, called an Equity Monetisation Contract Agreement and IPBC has also begun legal proceedings against MVIL and Nominees Niugini.
We wait to hear who placed the K96 million with Woodlawn Capital or on whose behalf the company is holding the money.
It is not known whether either Woodlawn Capital or the Commonwealth Bank did any due diligence on where the money was coming from and whether it was the proceeds of crime.
It is also not known how or why the K96 million did not attract the attention of the Australian anti-money laundering agency (AUSTRAC).
The Commonwealth bank could be vulnerable to a civil law suits if it can be shown they have handled stolen wealth, and administrative measures and even criminal prosecution if they have failed to practice proper due diligence on anti-money laundering grounds. Although in practice Australian banks are relaxed about accepting probable corruption proceeds from PNG, because they have figured out the Australian government doesn’t care too much about this issue.