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Posts Tagged ‘Thaddeus Kambanei’

Peter O’Neill, Jubilee University and Thaddeus Kambanei: A match made in heaven

January 22, 2016 3 comments

O'Neill kambaneiSometimes  life delivers up moments of sublime parody, moments so incredible you have to laugh. No more exquisite moment has been served up in recent years – yes years – than when Prime Minister O’Neill received an award recognising his financial management skills from Chancellor of Jubilee University (sometimes also spelt Jubillee), Thaddeus Kambanei. The award has been issued by Australia’s Institute of Certified Management Accountants (ICMA), under the leadership of Emeritus Professor Janek Ratnatunga, who has found fine friends among Jubilee, its Chancellor and the PM.

Dr Kambanei claims, ‘I put together a very detailed nomination and forwarded it to the nomination committee at ICMA-Australia. The nomination then went through a rigorous process before he was accepted for the award’.

Should we have any reason to doubt Dr Kambanei? According to the Commission of Inquiry into the Department of Finance, yes. During his infamous period as Finance Secretary between 2001-2006, the Inquiry found:

Mr. Kambanei tried his level best to disassociate himself from many questionable and fraudulent payments processed during his tenure in office. He stated that Deputy Secretary Gabriel Yer would have been responsible for these claims. The Commission finds Mr. Kambanei’s evidence to be misleading, evasive and not credible. At all material times he was responsible for directing his staff to process settlement of claims against State. The Commission further noted that he pooled funds improperly and illegally to settle these claims and it was evident that he was in control and knew exactly what he was doing contrary to the PFMA and the Appropriation Act … Mr. Thaddeus Kambanei abused his position as Secretary for Finance to access funds illegally from monies legally set aside for other purposes.

And what of this fine higher education institution Dr Kambanei leads? It was born under rather interesting conditions so says the Commission!

The Commission of Inquiry found that Dr William Taggis, Director of the Office of Higher Education had ‘advised the National Executive Council that the submission done by Mr. Kambanei who was also Finance Secretary at the time was not a convincing one because of factual errors and weaknesses in other areas including the Finances of the University and how exactly it would source funds to run its programmes’. The commission notes, while ‘no Financial commitment was ever made by the Government’, nevertheless, ‘a total of three (3) payments aggregating K3 million were made [to Jubilee University] from three (3) different Trust Accounts that were never intended for AOG Jubilee University, thus breaching Sections 14 and 17 (a) of the PFMA Act’. It was concluded, ‘Mr. Thadeus Kambanei abused his position as Secretary for Finance to access funds illegally from monies legally set aside for other purposes’.

Another K4 million was pumped into Jubilee University from the 2015 budget, but needless to say that would not have effected the integrity of Dr Kambanei’s vetting process.

After all, Peter O’Neill’s credentials as a financial manager speak for themselves. The Commission of Inquiry into the NPF scandal, gave a glowing review of Mr O’Neill’s creative accounting abilities. ‘Mr O’Neill had definitely benefitted from the proceeds of the NPF Tower Fraud’, this Commission concluded. Special ‘praise’ was reserved for the efforts that O’Neill and his partners had allegedly gone to, to ‘hide’ their role from the Commission through ‘fabricating’ evidence.

Mr O’Neill’s economic credentials have again been brought into focus, through such achievements as the US$1.2 billion loan which was taken out from USB Bank, allegedly without necessary approvals, in addition to another alleged US$24 million payment to Paraka Lawyers for unauthorized invoices.

All of which takes place as O’Neill’s gamble on permanent blue skies in the resource sector has proven a catastrophic blunder. Each day new stories emerge of PNG’s slip into economic crisis.

So perhaps there is some poetry here, the most infamous Finance Secretary in PNG’s history, who now heads a University built on a foundation of illegal payments, felt it proper to recognise Peter O’Neill’s economic credentials.

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Disgraced Finance Secretary slammed in COI Report gets PhD & Teaching Fellowship in Australia

May 27, 2015 4 comments

What does a disgraced former Finance Secretary do after they are sacked for presiding over one of the biggest scams in PNG history. They go to Australia to get a PhD!

Thaddeus Kambanei was Finance Secretary from 2001-2006. During this period hundreds of millions in Kina was paid out through a range of frauds, including the infamous bogus lawsuit scam.

The Commission of Inquiry into the Department of Finance report [6.7MB] notes:

‘The Inquiry found that Mr. Kambanei tried his level best to disassociate himself from many questionable and fraudulent payments processed during his tenure in office. He stated that Deputy Secretary Gabriel Yer would have been responsible for these claims. The Commission finds Mr. Kambanei’s evidence to be misleading, evasive and not credible. At all material times he was responsible for directing his staff to process settlement of claims against State. The Commission further noted that he pooled funds improperly and illegally to settle these claims and it was evident that he was in control and knew exactly what he was doing contrary to the PFMA and the Appropriation Act … Mr. Thaddeus Kambanei abused his position as Secretary for Finance to access funds illegally from monies legally set aside for other purposes’.

But that did not stop Thaddeus from obtaining a Phd at the University of Canberra – which rather shows how much Australia really cares about corruption and good governance in PNG!

Unbelievably the PhD, awarded in March 2014, was based on a case study into the Department of Finance! And Kambanei thanks one of his co-conspirators in the Department of Finance debacle, Gabriel Yer (his Deputy during the heist) for granting him access to data:

‘I am also thankful to Mr Gabriel Yer, the Secretary for the DoF, for granting me access to the department and making all of the information available for the data collection  segment of my doctoral studies’.

More worryingly the man at the centre of PNG’s grand heist was given a Teaching Fellow Award at the University of Canberra. Yes, the University actually paid Kambanei to teach fellow students!

Thaddeus writes in his PhD acknowledgement:

I also want to thank the Faculty of Business, Government and Law, and the School of  Information Systems and Accounting, University of Canberra—especially Professors  Monir Mir, Milind Sathye and Mark Evens—for considering me worthy of receiving the  Teaching Fellowship Award in the discipline of Accounting, Banking and Finance. The  award been rewarding for the past four years, and teaching students at the  undergraduate and postgraduate diploma levels, as well as rubbing shoulders with  visiting international academics and fellow academics in the faculty and the university  generally, has been the experience of a lifetime’.

COI Finance Department: Lest we forget

November 18, 2013 Leave a comment

By PNG Echo

‘Cabal’ (Wikipedia) “… is a group of people united in some close design together, usually to promote their private views or interests… often by intrigue … The use of this term usually carries strong connotations of shadowy corners, back rooms and insidious influence.” 

Corruption: systemic, systematic and contrived

The findings of the Commission of Inquiry into the Finance Department (COI) stands, now, more than five-years-old, as a damning indictment of the inefficacy and lack of will of PNG’s criminal investigating agencies and those with the power to direct them.

Had the findings of this Inquiry been acted upon, PNG could have avoided up to seven additional years where large amounts of money remain unsatisfactorily accounted for. (Read: misappropriated – stolen).

It’s been described as a ‘cabal’: a high level conspiracy involving lawyers, public servants, banking officials, judicial officers, Members of Parliament (and, in a seeming continuation of the practices beyond the remit and time scope of the COI) even up to and including the current Prime Minister, all seemingly colluding to rob the coffers of the State of PNG – money that rightfully belongs to the people.

High Treason

The most shocking revelation of the COI is that the massive theft was perpetrated not just by outside lawyers and their clients, but facilitated by the very people who were paid and tasked with protecting the State’s interests in a breathtaking display of treachery, self-interest, venality and/or incompetency – (including, but not confined to) the Attorney General, the Solicitor General and the Secretary of Finance.

These trusted employees and representatives of the people of PNG callously and wilfully betrayed them.  Their crime, should it be proved, must surely be ‘high treason’.

The system exposed

An elaborate scheme had been put in place going back to the year 2000 to by-pass all checks and balances, enabling the payment of exorbitant and/or false claims – to the enrichment of everyone concerned in the cabal, who all got their cut.

It was so entrenched that it prevailed through various Secretaries of Finance, starting with Thaddeus Kambanei in 2000, his replacement Gabriel Yer and finally Stephen Gibson who inherited the system and, in some cases, increased the stakes and enhanced the unwritten and corrupt rules. Gabriel Yer, for unstance,not content
with his role as facilitator,  (with whatever riches that brought) launched his own claim from an incident involving a botched police raid that the COI suspected was bogus.

Officially, it was the job of the courts to determine the legitimacy of a claim and the Solicitor General’s job to defend the State’s interest in court but this system was constantly and consistently by passed.

…except for a very small number they [compensation awards against the State] comprise payment on liability incurred under default judgments or out of court settlement. (p12)

The State’s agencies ignored stated procedure, rules and even directives.

In evidence before the Commission current and past Secretaries of Finance, and former Attorneys General and Solicitors general have all acknowledged they were fully aware and conversant with the directions but incredibly, each stated that they were “mere policy” [original emphasis] statements that need not be followed. (p20)

Instead:

  • Late lodgments that should have rendered compensation claims unenforceable by law were entertained and paid out.
  • The Solicitor General’s Department, whose job it is to defend claims against the State in court, didn’t. Counsel for the defense failed to show up in most cases – and lost the case by default.
  • Nor did the Solicitor general follow up in court on the quantum.

Thus the Department of Finance acted as a de facto court, often making arbitrary decisions detrimental to the financial welfare of the State of PNG.

Whereas, the Finance Department’s only task was to find legally available funds in a ‘reasonable time’ to pay out adjudicated claims, in reality, their hand was constantly ‘in the cookie jar’ at their own pleasure.

The bastardized system had become normalized and deeply ingrained. Rorting of it was rife. Cooperating with this system was the bank that cleared and cashed compensation cheques immediately.

For the benefit of private lawyers

The Solicitor General’s Office and Department of Justice “failed to maintain its law office with adequate staff” according to the COI, This became the Departments’ excuse for failing in its duty to defend the interests of the state.

Yet there was always available money to brief private lawyers (the Departments in the period 2000-2006 exceeded the allotted budget by a whopping 10 million kina per annum in payments to outside private law practices, known as ‘brief outs’.)

Those sums [brief out fees] have provided a sure income for small law firms which have now grown on State business to 5 and 10 times the staffing of the Justice Department. (p34)

One of those private legal practices was that of Paul Paraka.

In a recent statement, a self-testament of good character, written subsequent (or a little prior) to his arrest, Paraka stated that his firm has 22 law offices nationally and that his firm “…prides itself in recruiting half of the Legal Training Institute pass-outs every year.”

Had the Department of Justice adequately staffed the department (the overspend of K10 million per annum would have been more than adequate) the state of PNG would not have been responsible for the unnecessary over enrichment of Paul Paraka Lawyers to its own detriment and, by association, the people of PNG.

Legally available funds and the Transfer Fund Suspense Account No 2

In 2000 and 2001 there were no allocations [by NEC] under the Appropriation Act for settlement of claims against the State.  However, the Secretary [Finance Department] illegally sourced well over K83 million to settie [sic] claims against the state… (p51)

…notwithstanding that NEC rulings have “…the force and authority of law.” (p18).

The establishment of a ‘slush fund’ helped him.

‘Trust Fund Suspense Account No 2’ was established illegally by the then Minister for Finance, Hon Andrew Kumbakor, after which the Secretary for Finance sought clearance from the Attorney General Mr Francis Danem – who cleared it.  Did he understand it to be illegal?  As the highest law officer in the land he ought to have.

The fund accrued monies to pay out the dubious claims when ‘legally available’ funds, weren’t.  It was kept topped up by monies sourced from unpresented cheques, cancelled cheques meant to be relodged in the original accounts, cancelled cheques that had been reissued (hence presented twice), refund cheques and other entries “…with no basis in accounting,” (p49).  This seriously skewed budgetary consideration for the departments and accounts where these cheques rightfully belonged.

At some stage, this account was revoked by the Minister in response to “…concerns about the way the trust was being used.” This notwithstanding, the cash book confirmed,  “…that the sum total of K130 million was paid out of the Account during the period 2002 to 2006 despite the ministerial assurance to the Auditor General that the Trust Deed was revoked.” (p56)

A law unto itself

The Finance Department had become a law unto itself answering to no one including and especially, the COI.

Senior officers of the Finance department have at all times been difficult even combative with the Commission. (p57)

Sam Koim of Task Force Sweep was prompted to ask an audience of AUSTRAC officers and bankers in Sydney (October 2012)…

… to imagine what would happen in Australia if your Department of Finance refused to answer to Parliament; if its members disbursed money without recourse to the national budget; if they colluded with each other and people outside the department to circumvent all controls, and misappropriated half of your government budget?

They would surely be prosecuted to the full extent of the law is the answer.  Corruption,on that level, once exposed, would never be tolerated in an Australian context.

Sadly: “Only in PNG.”