Home > Corruption, Papua New Guinea > Namah alleges fraudulent payment of K71.8 million to Paul Paraka Lawyers

Namah alleges fraudulent payment of K71.8 million to Paul Paraka Lawyers

Opposition Leader Belden Namah alleges Paul Paraka lawyers has continued to fraudulently claim millions of Kina from the State since the Finance Department Commission of Inquiry uncovered Paraka’s scam. Namah says the latest payments, totalling K71 million, were paid between Feb. 2012 and May this year…

Belden Namah MP

Background

Paul Paraka Lawyers has been paid tens of millions of Kina between 2001 and 2006 under a retainer agreement with the Department of Attorney General for the law firm to defend the state against claims made against the state.  Large amounts of money paid to this law firm, and similar payments to others by the Department of Finance, raised eye brows in Waigani, which  resulted in the then Somare Government setting up a Commission of Inquiry, known as the Finance Inquiry.

The Finance Inquiry concluded its inquiry and presented a report to the then Prime Minister, the Right Hon Grand Chief Sir Michael Somare. As the Prime Minister prepared to table the report in Parliament, Paul Paraka Lawyers flew all the way into Alotau from Port Moresby to obtain a National Court Order (ex parte) restraining the Prime Minister from tabling the report in Parliament.

The order, which was a temporary order and returnable for substantive hearing, has never been heard of to this day and is collecting dust in the National and Supreme Court Registry. The Registrar’s office and the office of the Attorney General owe an explanation on what became of this case as the Finance Inquiry not only cost the people of Papua New Guinea K27 million but the report contains findings on how millions of public funds went missing and who improperly benefited out of these public funds.

The blatant neglect of duty and failure to prosecute the matter and have it discharged has resulted in the COI report, also, collecting dust somewhere in the Offices of the Prime Minister.

History would have it that this is the first time in Papua New Guinea that a Commission of Inquiry report, costing tax payers millions of Kina to produce, has been suppressed by any one, from being tabled in Parliament and made available for public consumption.

[The Commission of Inquiry Report can be accessed here: https://pngexposed.wordpress.com/2010/08/17/the-full-finance-department-commission-of-inquiry-report/ ]

Papua New Guineans have been deliberately, or by neglect of duty, denied their right to know whether hundreds of millions of their monies paid to Paul Paraka Lawyers and others by the Department of Finance, were legitimate payments.

Further to the above, the Hon. Bire Kimisopa, Member for Goroka upon becoming the Minister for Justice, commissioned in 2006, a Departmental Inquiry into “Brief-Out” of cases by the Attorney General’s Office. The inquiry was chaired by the former Chief Justice, Sir Arnold Amet, and the now Minister for Foreign Affairs, Hon Rimbink Pato was a member of the inquiry team.

Upon receipt of the inquiry report in late 2006, the Hon. Bire Kimisopa terminated the retainer contract with Paul Paraka Lawyers and all case files were returned to the Attorney General’s Office.

The Law Firm then took the State to Court claiming outstanding bills of around K6 million for the entire contract period. The National Court, in proceeding OS 876, decided in favour of Paraka Lawyers and ordered the state to pay a little over K6 million.

The state appealed the decision of the National Court, disputing among others, the amount awarded. Pending the hearing of the appeal, the state successfully obtained from the Supreme Court a stay order restraining the payment of any state funds against the National Court Order to Paul Paraka Lawyers. The stay order was issued through Supreme Court proceeding number; SCM 3 of 2007 which is current and on foot and has never been discharged.

The Honourable Davies Steven, now Minister for Civil Aviation was the lawyer acting for the state in both the National and Supreme Court proceedings and can attest to this fact.

This means that Paraka Lawyers is not entitled to any payment at all from the state. No new legal work has been given by the state to Paul Paraka Lawyers since 2007 to warrant any payment.

Paul Paraka Lawyers has been providing pro bono legal services to private citizens for some time now. However, this work is not authorized or contracted by the state and remains free legal services provided to people at the firm’s own accord. It is not entitled to make any claims against the state.

This is confirmed by the fact that at least three senior Judges of the National and Supreme Courts and the Attorney General, Honourable Kerenga Kua have spoken out against the law firm’s so called pro bono legal services as unconstitutional and without legal foundation.

Despite the fact that the Commission of Inquiry report on the missing millions from the Finance Department is yet to be made public, and despite the fact that the retainer agreement between the Attorney Generals Department and Paul Paraka Lawyers ceased or terminated in late 2006, and despite a current and effective Supreme Court Order barring any payment of funds to Paraka Lawyers, millions of Kina has continuously been paid to Paraka Lawyers since 2007 up to the present time.

No information is available on how much has illegally been paid to Paraka Lawyers between 2007 and 2012.

However, between February 2012 and up to May this year 2013, a staggering K71.8 million has been paid by the Department of Finance to Paul Paraka Lawyers. This indeed is a huge amount of public money going into a single Law Firm in just one year.

These payments are nothing but daylight robbery of the people of Papua New Guinea by various individuals colluding with Paul Paraka Lawyers to defraud the Independent State of Papua New Guinea of its monies.

People in the Departments of Attorney General and Finance, and the National and Supreme Court Registry and other public and private organizations, including the media, have been colluding and conniving with Paul Paraka Lawyers and facilitating the fraud and or preventing the fraud from being exposed and dealt with by the law.

On 17 February 2012, the first batch totalling K30 million was paid indirectly to Paraka Lawyers through a web of law firms and a company. The second batch of K14 million was paid on 2nd November 2012. The third payment of K13.8 million was made on 21 December 2012 The fourth batch of K6 million was paid on 13 March 2013 and the latest payment is an amount of K8 million paid on 6 May 2013. The grand total to date is K71.8 million and there is information that a fresh batch of claims, has been or is about to be lodged with the Department of Finance.

It is to be noted that the K14 million paid in November 2013 and the K13 million paid in December 2013 was from trust accounts as these payments were unbudgeted for.

Paul Paraka Lawyers have not been given any work by state and has not done any work for the state since 2007 and it is amazing how such a massive K71 million could be given away for free to this firm.

Mr Paraka has solicited and received these funds through false pretence and with intention to defraud the state.

Mr Paraka, the principal of Paul Paraka Lawyers being a lawyer and knowing full well of the existence of the Supreme Court Order barring his firm of being paid any money from his claim for outstanding bills, used a web of law firms and a company to be paid the first K30 million to avoid violation of the current Supreme Court Order.

At Mr Paraka’s instruction to the Finance Department, the K30 million was broken up and paid to the recipient conduit law firms and a company in the following manner,

1. Paul Othas Lawyers K6, 000.000

2. Harvey Nii Lawyers K6, 000,000

3. Sino & Company K6, 000,000

4. Jack Kilipi Lawyers K6, 000,000

5. PKP Nominees Ltd K6, 000,000

Total                             K30,000,000

Upon presentation of the cheques in the above amounts by the conduit recipients at the Bank of South Pacific, it appears the Bank was reluctant to allow deposits and subsequent transactions on the funds. However, with the intervention of two senior officers of the Department of Finance namely, Messrs Melton Bogege (Financial Controller) and Yeme Kaivila (Senior Accountant) the cheques were cleared. The two officers co-signed a letter dated 20 February which read in part, (quote):

“The payments were based on a valid Court Order and appropriate audit process was carried out and clearance from the Solicitor General.  The Department of Finance had no right to question such authority, and facilitated the payment on the endorsement and approval of the Secretary for Finance”.

The two officers deliberately lied and mislead the Bank, in particular the assertion that the payments were based on a valid court order and that the Solicitor General’s Office had cleared the payments.

Mr Paraka is also believed to have written numerous letters justifying the payments and even gone to the extent of issuing veil threats to BSP staff if they refused to clear the cheques.

Eventually, BSP allowed the cheques to be cleared. The cash from the funds are believed to have been remitted back to Paul Paraka Lawyers by the recipient conduit firms, minus their commissions.

Apart from the K30 million paid using conduit firms, all the other payments amounting K41 million have been made directly to Paul Paraka Lawyers.

It is believed that the decision by Mr Paraka to have later payments made direct to his firm is because the Bank of South Pacific has warned that it will not clear any more funds channelled through conduit firms.

The Solicitor General’s Office, upon learning of the above payments by the Finance Department filed a complaint with Task Force Sweep and the National Fraud and Anti-Corruption Squad to investigate this massive fraud. When investigations commenced and a search warrant was obtained to search and obtain documents at BSP, Paul Paraka Lawyers ran to the District Court and filed an application to set aside the search warrant with a view to concealing the whole saga.

Documents obtained from the District Court Registry at Waigani, confirm that Mr Paul Paraka has filed an application to set aside the search warrants, and further, for a permanent restraining order to restrain any investigations into these allegations.

In his affidavit in support of the application, Mr Paraka admits receiving those funds but for work undertaken in the past.  He deposes in his affidavit that there is no stay order and lists a number of Court orders.

The orders, which Mr Paraka refers to were consolidated in Os 876 of 2006 and was superseded by the Supreme Court decision in SCM 3 of 2007 which stayed the orders and the entire proceedings of OS 876.

Mr Paraka has lied on oath by making false and misleading statements that he was entitled to receive the payments, when clearly, he or his firm is not. 

Numerous visits and attempts are made to the Fraud and Anti-Corruption Squad and Task Force Sweep authorities investigating this matter to drop the investigations.  The case officers are believed to have been threatened and intimidated.

Questions for the Attorney General

Honourable Minister and Attorney General; The Government has been preaching about fighting corruption to the core, which has been welcomed by the people of Papua New Guinea and indeed, those of us on this side of the House.

High on the O’Neill-Dion Governments agenda would have to be fighting white collar criminals who continuously steal millions and millions of Public Funds. Our people are dying or suffering every day as a result of lack of basic services, simply because a very few selfish and greedy white collar criminals steal the money, that otherwise would have been used, to meet their needs.

The questions I am about to ask you relate to a massive K71 million fraud involving a major Law Firm. The questions are as follows;

  1. Can the Minister confirm or deny that a law firm called Paul Paraka Lawyers has any current and valid contract or retainer agreement with the Independent State of Papua New Guinea for legal services?
  1. Can the Minister confirm or deny that a retainer agreement signed in 2001 with Paul Paraka Lawyers was terminated in late 2006 by none other than the Honourable Bire Kimisopa, the Member for Goroka, then Minister for Justice, following an investigation into ‘Out of Court Settlements’ handled by this law firm?
  1. Can the Minister confirm or deny that Paul Paraka Lawyers, upon termination of the retainer agreement by the Hon Kimisopa, took the state to court, claiming a little over K6 million as outstanding bills for the contract period, that is, from 2001 to 2006?
  1. Can the Minister confirm or deny that the National Court awarded the claim of K6 million by Paraka Lawyers in Os 876 of 2006?
  1. Can the Minister confirm or deny, that the ‘Orders’ of the National Court obtained by Paraka Lawyers in OS 876 and the ‘Entire Proceedings’, in OS 876 were stayed by the Supreme Court in proceedings SCM 03  of 2007, on application by the state?
  1.  If the answer to Q5 is in the affirmative, can the Minister then confirm that Paul Paraka Lawyers is not entitled to be paid any monies against his claims unless the Supreme Court Orders are discharged or the substantive appeal is determined?
  1. If the answer to Q6 is in the affirmative, is the Minister aware that a massive K71 million has been paid to Paul Paraka Lawyers between February 2012 and May 2013 by the Department of Finance allegedly for outstanding bills or court orders?

For your convenience, the schedule of payments is as follows;

Feb 17/ 2012           K30, 000,000

Nov 02 /2012           K13, 800,000

Dec 21 /2012            K14, 000,000

Mar 13 /2013            K06, 000,000

May 6 /2013              K08, 000,000

  1. Can the Minister inform the Parliament and the people of Papua New Guinea if the pay out of this huge amount of public money has been sanctioned or cleared by the Solicitor General or your office?
  1.  If the answer is in the negative, will the Minister take immediate steps to have this DAYLIGHT ROBBERY of the people of Papua New Guinea dealt with swiftly by the Fraud Squad and Task Force Sweep and those who have schemed and facilitated and or benefited from this massive fraud brought to justice?
  1. As the Attorney General, will you refer the Principal of Paul Paraka Lawyers to the PNG Law Society to be dealt with by the Lawyers Statutory Committee for what is undoubtedly, a scandalous and unethical conduct by a very senior lawyer?
  1. Will you assure this Parliament that you will also pursue contempt proceedings against all those concerned for violating the Supreme Court Order SCM 3 of 2007, which stayed payment of any public funds to Paul Paraka Lawyers?
  1.  Honourable Minister, three senior Judges of the National and Supreme Courts and your self have come out stating that a so called pro bono legal aid service provided to the public by this particular law firm is unconstitutional. Could you confirm therefore, that Paul Paraka Lawyers is not entitled to any payment by the state in consideration of its pro bono legal aid service?
  1. Mr Minister, if the Solicitor General’s or your Office has not cleared and authorized the Department of Finance to pay K71.8 million to Paul Paraka Lawyers, then can you inform this Parliament who in Government authorized such a hefty and corrupt payment and for what?
  1. Finally, Mr Minister, will you inform this Parliament as to what became of the Finance Commission of Inquiry which cost the tax payers K27 million but was suppressed by this same law firm from being tabled in this Parliament by taking out a preventive Order through the National Court? The order was a temporary order and returnable for substantive hearing but is never heard of, to this day!
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  1. Kur Kient
    May 22, 2013 at 11:57 am

    The People of Papua New Guinea are eagerly waiting to see the outcome, whether this government’s undertakings to stop corruption and law and order problems in the country will hold true or not.

    The outcome will definitely set the president in PNG whether people should steal a few bucks from the banks only to be hunted down, imprisoned and killed or steal millions and billions from the State and run freely. The basis of the judgment and eventual handing down of the decision will reinforce the traditional perception of the two sets of laws in the country between white-collar criminals and real criminals.

    This is a fight between the real criminals and white-collar criminals over who should be above the laws of this country.

    Whatever the outcome is, PNG let’s wait and see, as this will be a defining moment in the history of our beautiful country.

  2. Charles Kaki
    July 3, 2013 at 12:56 pm

    I take it that these are just allegations. I have seen the response advertised by Paul Paraka Lawyers and Im satisfied.

  3. Joseph Kapone
    November 19, 2013 at 5:13 pm

    I am making my comment now as a concerned Papua New Guinean who is watching helplessly as our two top leaders in the likes of Prime Minister Peter O’Neill and Opposition Leader Belden Namah sling it out in the media, over the social network and in parliament. Hope it does not get out into the streets of Port Moresby.

    PNG is being dragged through the mud the more they continue their fight. The drop in the kina can to an extent be linked to this fight between our two leaders.

    Rumours, speculations, guessumptions, expectations, wishes and aspirations are also running around town, from one ear to the next, from one end of the down to the other and back again, magnified, glorified and sensationalised and perhaps exaggerated along the way.

    Namah is branding O’Neill and his government a corrupt government. So what’s new? He called the Somare Government (of which O’Neill was a part of) corrupt and he toppled it. Then he became Deputy Prime Minister in O’Neill’s Government and together they became drunk with power, had orgies and enjoyed the spoils of their victory. Using their numerical they bulldozed various changes to our laws. The marraige did not last long and they fell out during the 2012 General Elections and are now on opposite sides slinging mud at each other.

    Namah is banking on the Paul Paraka K71 million Fraud case to expose and dispose Prime Minister O’Neill and his government. Namah alleges that O’Neill directed the payments which are deemed illegal and in contempt of a courty order restraining the state and its agents from making any payment to Paul Paraka Lawyers. He produced a letter purportedly signed by O’Neill who has since denied the letter saying it is a forged document.

    Now from what I understand, and please anyone correct me if I am wrong, former Secretary Finance Steven Gibson was arrested and charged for making the alleged illegal payment of K71 million – K30 million before the 2012 General Election and K40-plus million in October 2012. Again, correct me if I am wrong, but Gibson acted upon instructions from his political masters. Why hasn’t O’Neill, Minister for Treasury Don Polye and Minister for Finance James Marape been arrested and charged by the sweep team as well. Polye and Marape both gave further instructions for the payout to take place. They and O’Neill are just as guilty, if not more than Gibson.

    It is far-fetched and I am surprised that Prime Minister O’Neill thinks the people of Papua New Guinea are gullible enough to believe that his signature was forged. I am sure Polye and Marape being the careful and prudent leaders they are and even more so as strong Seventh Day Adventists, they would have called O’Neill to confirm the payments. I will bet my entire savings (which isn’t much anyway) that O’Neill would have said, “Yes, pay. The money will fund our elections.” I could be wrong but how else am I going to think seeing as such a huge payment was made just before the elections. The payment of the balance afterwards would have been a thank you to Paul Paraka.

    This is a pretty clear cut case and the police or Task Force Sweep Team should not have any difficulty whatsoever in completing its investigations and charging everyone. O’Neill, Polye, Marape and Gibson are all involved, directly or indirectly, knowingly or unknowingly. They should be hauled before the Task Force Sweep Team and provide their statements.

    However, I want to appeal to the leaders, O’Neill, and especially Polye and Marape, not only as leaders in their own rights but as church leaders of the Seventh Day Adventist faith to come forward and tell the truth.

    And for Chairman Sam Koim, if you let this one go then you are a puppet and a spineless, gutless, unethical, dishonest, corrupt and loud-mouthed Papua New Guinean. You are just as corrupt and guilty as those people who swindled millions from the state purse because you and your team have costed us taxpayers millions of kina but have not made one successful prosecution. So my challenge to you is…do you job and do it honestly without fear or favour. You owe this much to your country.

    Now both Namah and O’Neill have been calling each other names. Namah has called O’Neill a pathological/serial liar when O’Neill allegedly lied about having signed the letter. Recently in parliament O’Neill denied that a certain PNG Defence Force Lt Colonel Benny was not a relative. Word on the streets is that O’Neill and Benny are maternal first cousins. So if O’Neill has lied about these two things what else has he lied to Papua New Guinea about?

    O’Neill on the other hand called Namah a mentally disturbed person. Pretty low for a prime minister when Mr Namah was putting forward issues which needed answers from him. Then lately O’Neill or his hench-men allegedly released information to the media which linked Namah to the sale of the land next to the Jack Pidik park. Copies of Namah’s letter was circulated to the internet (a copy is attached). From a layman’s view that letter does not prove any impropriety on Namah’s part. It simply demonstrates a leader’s intervention in ending what has been a long-standing dispute. As a leader he made a bold and decisive decision. I don’t support Namah but am basically making my opinion based on the letter before me. Please let me know what your views are on this.

    On the part of Lt Col Benny what I am reading between the line (and I could be wrong) is that Namah considers Lt Col Benny to be a threat. Is Lt Col Benny siding up with O’Neill? We all know that Namah has a strong support base both within the police and PNGDF. The potential is there for trouble so this has to be handled quickly and sensitively.

    Finally, in conclusion, let me remind O’Neill and Namah that you both will have to be made to answer for your actions during the impasse. It is my fervent hope that in the not too distant future when the political leadership changes both of you will be held responsible for your actions. I have not forgotten and I hope PNG has not forgotten how you used your political numbers to treat the judiciary and the National Constitution with so much contempt. Your days are numbered. You cannot hide. You cannot run.

  4. Joseph Kapone
    November 25, 2013 at 8:52 am

    Today’s headline in the newspapers: Paul Tiensten was found guilty of dishonestly applying K10 million to Travel Air Ltd. Now how different is this from the K71 million Paul Paraka case. Prime Minister Peter O’Neill, Treasurer Don Polye and Finance Minister James Marape should be hauled up before the courts to explain their involvement in the release of the money to Paul Paraka.

  1. April 17, 2015 at 6:36 am
  2. May 1, 2015 at 8:33 am

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