Archive for May, 2013

Wartoto faces more fraud charges

May 31, 2013 Leave a comment

Radio New Zealand

Papua New Guinea businessman, Eremas Wartoto, has been charged with additional fraud offences – this time for allegedly misusing funds intended to rehabilitate agricultural plantations.

The latest charges brought by the corruption busting group, the Investigative Task Force Sweep, involve missing funds of six million US dollars..

Don Wiseman has more:

“In charges brought to date Mr Wartoto has allegedly misappropriated more than 16 million US dollars. He was earlier charged with diverting to his own use, funds intended as incentives for an airline operation and for the rehabilitation of a high school. Task Force Sweep’s Sam Koim says the alleged agricultural frauds are glaring examples of paper farmers and front companies feeding from the funds appropriated for the National Agricultural Development Project. He says the government’s intentions may have been genuine, but greed, lack of management and monitoring, incompetence and political patronage resulted in millions of kina being stolen and wasted. Mr Wartoto, who had evaded authorities by fleeing to Cairns in Australia, returned to the country earlier this month and was arrested last week in Kimbe. He is out on bail. More charges are expected.”


PM’s Chief of Staff in K3.7 million Finance Dept fraud says Commission of Inquiry

May 29, 2013 2 comments

Prime Minister Peter O’Neill likes to talk tough about cracking down on corruption but his own Chief of Staff was recommended for prosecution in the Finance Department Commission of Inquiry report for fraudulently claiming K3.7 million as part of the Paraka Scams which have cost PNG hundreds of million…


Isaac Lupari, aided by Gelu and Paraka lawyers, stole K3.7 million

First published May 31, 2010

Former Ambassador to the European Union, Departmental Head and Consultant to the Prime Minister, Isaac Lupari stole K3.7 million from the people of PNG through false claims for breach of contract according to the findings of the Commission of Inquiry into the Finance Department.

The false claims were drafted and submitted by Guguna Garo, of Paul Paraka lawyers, and were illegally settled by the then Solicitor General, Zachary Gelu. In addition to the K3.7 million, a further K800,000 was paid to Paul Paraka lawyers from public funds for their role in facilitating the fraud.

The Commission of Inquiry has recommended Isaac Lupari, Zacchary Gelu and Guguna Garo all be investigated by the police with a view to prosecution for fraud and conspiracy.

From 1997 through to 2009, Isaac Lupari was employed by the State in a series of senior positions including Secretary Finance, Secretary Defence, Secretary Works, Special Advisor to the Prime Minister, Michael Somare, Secretary Transport, Ambassador to the European Union and Chief Secretary. In these positions Lupari was handsomely rewarded, receiving, for example K1,294,133 in the four-and-a-half year period between September 1997 and April 2002

But being paid over K270,000 a year wasn’t enough it seems because in December 2001 Lupari sued the State for breach of four separate employment contracts. Lupari claimed he had successively been unlawfully terminated as Secretary Finance, Defence, Personnel Management and Transport and was entitled to claim the balance of all pay and entitlements for the unexpired period of all four contracts. These claims were fraudulent as Mr. Lupari never suffered any loss of pay and entitlements and was employed by the State for the whole time that he claimed for and beyond.

However, Lupari’s initial legal claims were never pursued as when Somare was elected PM in 2002, Lupari agreed to withdraw them as part of the deal that saw him appointed as Ambassador to the EU. Lupari though did not honour that agreement and five months later, in January 2003, Paul Paraka lawyers resubmitted the four claims on behalf of their client.

Less than two months after the four claims were filed with the Court they were approved for settlement by Solicitor General Zachary Gelu. Gelu agreed to settle the claims despite clear instructions from the Department of Personnel Management that the claims were unlawful, without merit and should be vigorously defended.

Gelu personally signed the Deed of Settlement awarding Lupari K3,703,461.31 and at the same time approved the payment to Paul Paraka lawyers of an additional K800,000 for their costs (a hugely inflated figure given the claims had only been issued two months earlier).

Lupari’s illegal claims were drafted and filed by Guguna Garo of Paraka lawyers. The Commission found that Mr Garo must have known that at least one of the claims he submitted was baseless and that in all four cases he would have known Mr Lupari had suffered no loss. The Commission found Mr Garu knowingly misled the court from the very start.

Read the Commission report on Issac Lupari  (220KB)

PNG PM’s office issue alert

May 29, 2013 5 comments

From NBC News and Islands Business

The Prime Minister’s Office has issued an alert to all, to be wary of any correspondence, bearing the purported signature of the Prime Minister, Peter O’Neill.

The alert is to all service providers within the public and private sectors, provincial governments, district administrations, State-owned Enterprises, donor agencies, resident diplomatic corps, banks, law enforcement agencies and the community.

The Prime Minister’s Chief of Staff, Isaac Lupari, says it has come to the attention of the Office of the Prime Minister, that O’Neill’s signature has been forged, and dishonestly used by unauthorised persons, to fraudulently obtain money, goods and other services from State entities and private companies.

He says, this signature scam is widespread and is taking place without the knowledge and authorisation of the Prime Minister.

Relevant agencies of the government have been alerted to trace and stamp out the source or sources of this deception.

This came to light after Opposition Leader, Belden Namah, tabled in Parliament last week, a letter purportedly signed by the Prime Minister, authorizing payment of outstanding bills to Paul Paraka lawyers.

Is Minister Ben Micah living at the Grand Papua hotel?

May 24, 2013 8 comments

Ben MicahMinister for State Owned Enterprises, Ben Micah, is alleged to be living at the tax payers expense in a K2,500 per night suite at the Grand Papua hotel in Port Moresby.

Mr Micah is no stranger to allegations of corruption in public office.

Can anyone confirm or deny this latest allegation?


Questions to the PM from Opposition Leader Belden Namah

May 23, 2013 3 comments

Mr. Speaker,

I would like to direct my ‘QUESTION WITHOUT NOTICE’ to the Prime Minister.

But before I ask my question, I would like to commend you for restoring and maintaining the Parliamentary Democracy, impartiality, independence of the chair in this Honourable House and assuring the supremacy of Parliament.

Mr. Speaker,

I would like to take this time also to thank and commend the Prime Minister for putting “FIGHT AGAINST CORRUPTION’ as one of his government’s policy priorities. Prime Minister, your decision to establishing the Independent Commission Against Corruption (ICAC) and giving more teeth to Police Fraud Squad and Task Force Sweet is also highly commended.

Opposition stands ready to support the Bill when it’s introduced before Parliament. Opposition also welcomes your recent decision in engaging Australian Federal Police and Interpol to assist local authorities to investigate ‘CORRUPTION AND FRAUD’ at the Department of Finance and Treasury.

Opposition believes that this is the move in the right direction to addressing ‘CORRUPTION’ in our country.

Mr. Speaker,

At this juncture, I would like to quote two profound statements you made in your response to my series of questions without notice in relation to the K71.8m paid to Paul Paraka Lawyers on Tuesday 21st of May 2013, and I quote;

“I have suspended the Secretary for Finance and Deputy Secretary and if means sacking people from the top down and even if I have to sack the tea boy I will do it” end of quote.

Your second profound statement Mr. Prime Minister was, and I quote;

“I will ensure that anybody who is involved in facilitating this illegal payments, they will be dealt with the full force of the law” end of quote.

Mr. Speaker,

Before I ask my question, I would like to read a letter which I have so in order that my question can be better appreciated by the Prime Minister and all Honourable Members.

The letter reads; RE: PARAKA LAWYERS (read the letter here) signed Hon. Peter O’Neill, The Prime Minister.

Mr. Speaker,

This letter is the Letter of Direction from Hon. Peter O’Neill, the Prime of Papua New Guinea directing the Minister for Finance and Treasury then Hon. Don Polye dated 24th of January 2012.

Mr. Speaker,

The letter which I have just read is credible and undisputed. It was written and signed by the Prime Minister and Mr Paraka has been using this letter to persuade and intimidate public officials to receive payments and obtain clearance from the Bank of South Pacific and the Central Bank.

By the fact of this evidence and the two profound statements the Prime Minister himself made in parliament on Tuesday 21st May 2013 which I quoted earlier, I would like to ask the Prime Minister one simple question:

Mr. Prime Minister,

Will you do the most honourable thing which is morally and ethically proper for any Prime Minister whose integrity is put into serious question, sack yourself AS PRIME MINISTER OF PAPUA NEW GUINEA?

Thank you, Mr. Speaker.

Did O’Neill authorize payments to Paraka lawyers?

May 23, 2013 3 comments

From PNG Blogs

O'Neill letter 24012012

I could sack you all, says PNG PM Peter O’Neill

May 23, 2013 Leave a comment

Rowan Callick | The Australian

A JUDICIAL inquiry revealing a $300 million scam perpetrated by top officials and leading lawyers has provoked a sensation in Papua New Guinea, with Prime Minister Peter O’Neill warning that he may sack everyone in the Finance Department.

He is seeking the support of the Australian Federal Police and of Interpol in a “high-level investigation” of the corruption, with initial funding of $1 million.

He suspended Finance secretary Steven Gibson and his deputy Jacob Yafai yesterday.

The 811-page report of the inquiry – which was conducted for the parliament by PNG judges Maurice Sheehan, a New Zealander, and Cathy Davani, and by prominent businessman Don Manoa – was injuncted three years ago by the law firm of solicitor Paul Paraka, who is named throughout the report.

The report reveals a large number of bogus compensation claims made by and settled within the senior bureaucracy.

And fresh information reveals that massive corrupt payments have continued, despite the comprehensive findings of the report.

Although the Post-Courier newspaper – owned, like The Australian, by News Limited – failed to have the injunction lifted at the time, pressure has built to act on the inquiry’s recommendations, including the criminal prosecution of 57 prominent people.

When the report was originally presented to parliament three years ago, it was only reported by The Australian, which is published outside PNG’s jurisdiction [and on the PNGexposed blog].

Last week, Mr O’Neill issued a directive to fellow ministers that “the government act swiftly to determine the legal status of payments made by the Department of Finance”.

“It has come to my notice that massive payments in millions of kina have been made to law firms, companies and individuals for legal fees and out-of-court settlements by the department,” he said.

The Prime Minister told parliament on Tuesday:

“If I have to close the Finance Department for four months, I will do that.

“If I have to sack everyone including the tea boy at Finance, I will do so to clear the place up.

“It is not just one individual, company or law firm we are talking about. It is many that have been benefiting from public funds.”

Opposition Leader Belden Namah attempted to discuss the scandal at a press conference last Friday but the local media were still prevented by the injunction from reporting it.

The Speaker, Theo Zurenuoc, also prevented Mr Namah from raising the matter in the parliament.

However, the Speaker, receiving fresh legal advice, permitted Mr Namah yesterday to ask lengthy questions on the issue, enabling some of the matters to be reported freely through parliamentary privilege for the first time.

The sensational nature of this information immediately provoked a storm of public outrage, poured out through talkback radio and social media.