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Integrity Commission Value 'Reinforced' By Contract Woes

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Ministry of Finance's questionable contract awards have "reinforced the value" of the Integrity Commission Bill and other planned anti-corruption laws, governance reformers said yesterday.

Matthew Aubry, executive director of the Organisation for Responsible Governance (ORG), which is about to launch a National Integrity campaign, said the probes into the ministry's computer supply and apartment rental deals had highlighted the absence of protection for public service whistleblowers.

He told Tribune Business that ORG was "keeping the pressure" on the Minnis administration to move forward with the Integrity Commission and other reforms vital to overhauling Bahamian governance, including the creation of an Ombudsman's office, public procurement legislation and bringing the Freedom of Information Act into full effect.

Mr Aubry said the probes, conducted by FTI Consulting on behalf of the Auditor General's Office, had provided "concrete" evidence to confirm what many had suspected was occurring inside government when it came to awarding contracts.

They found that neither of the two companies involved in supplying $1.46m worth of computer equipment, and arranging the lease of three apartments, to the Ministry of Finance had a proven track record in these respective fields.

Xua Company Ltd, the computer supplier controlled by Island Game web shop boss, Pete Deveaux, and the Bahamas Striping Group affiliate that executed the leases, were incorporated specifically to handle these deals and had none of the permits normally required by the Ministry of Finance for doing business with private companies.'

FTI Consulting, the Bahamas-based advisory and accounting firm, said its findings raised "concerns" over whether Bahamian taxpayers received "value for money" from both deals, with the computer contract award having been instigated by political influence.

Neither contract was put out to competitive bidding, with the reports both confirming that the Government's Tenders Board is routinely bypassed in the awarding of contracts that should go before it. The Financial Administration and Audit Act and accompanying regulations, plus the Ministry of Finance's own guidelines, also appeared to be ignored or breached routinely.

Asked whether the findings showed ORG and other governance reform campaigners have an almost impossible task, Mr Aubry admitted they face "an upward haul" but added that all Bahamians have "a vested interest" in demanding greater transparency and accountability from the Government.

While the Fiscal Responsibility Bill's recent passage should introduce better reporting, Mr Aubry said the FTI Consulting report showed there were no internal mechanisms within the Government for civil servants to expose irregularities and political pressure being exerted by ministers.

"One of the reports pointed out that there doesn't seem to be any current, existing mechanism or body that you would be able to report concerns to," he told Tribune Business. "That adds to the value of the Integrity Commission. That becomes really important, and this shows why it is so critical.

"We're on the verge of launching a National Integrity campaign to create more value around the Bill. We remind them [the Government] time that's a priority, be it the Prime Minister, Deputy Prime Minister or the Attorney General, letting them know it's important and keeping the pressure on.

"We see it as being critical for people who have concerns to bring them forward to an independent body who can evaluate them. The reports identified no existing body that could have received them."

Simon Wilson, the Ministry of Finance's former financial secretary who is still on leave, told FTI Consulting investigators that the computer supply deal with Mr Deveaux originated at a meeting with the web shop boss and "a senior elected official" in the former Christie administration three months before it was awarded just five weeks before the general election.

"Wilson stated that no specific projects were discussed at this meeting, and there was no mention of computer equipment. He added that he did not interpret this official's suggestion as an implicit instruction to do business with Deveaux," the FTI Consulting report found.

"Rather, Wilson said that he tried to accommodate the official's suggestion that Deveaux could be a suitable counterparty, and noted that it is not uncommon for such an official to offer suggestions to their subordinates with the expectation that they find a way to carry these outs, provided they do so in accordance with applicable laws and regulations."

The report concluded that Mr Wilson's account raised "several concerns about the control environment at the Ministry of Finance" - especially the ability of civil servants to resist pressure from their political superiors over irregular contract awards that violate procurement laws and processes.

"Although Wilson stated that he did not interpret [the meeting] as an implicit or explicit instruction to do business with Deveaux, it may still represent an example wherein Ministry of Finance personnel feel pressured to select vendors based on input from their superiors rather than through a competitive bidding process," FTI Consulting said.

"If Wilson had felt pressure to engage Deveaux as a counterparty but disagreed with doing so, it is unclear what independent ethical review bodies or reporting mechanisms, if available, would have or could have prevented such a non-competitive selection.

"Ministry of Finance does not appear to have any internal written policies or procedures that could provide an objective justification for its personnel to challenge irregular requests, explicit directives or implicit instructions from senior officials in regard to the selection of engagement of specific vendors."

Mr Aubry yesterday said the Government was still "hashing out" the Integrity Commission Bill, based on a conversation he had with Elsworth Johnson, minister of state for legal affairs in the Attorney General's Office.

"They're still working on it and deciding where they go with it," he added, pointing out that it also included a "code of conduct" section that dealt with "conflict of interest" situations.

The ORG chief acknowledged the extent of the "challenge" to transform the governance "culture" within the public sector, and said the FTI Consulting reports had confirmed what many long suspected.

"I think this gives you some concrete examples of what is going on," he told Tribune Business. "I don't think this is beyond what anyone suspected anyway. There are obviously people not following through with the procedures put in place, and the need for transparency and accountability.

"We need Freedom of Information. The Procurement Bill, which is coming up, will hopefully address some of this. We need to move to e-procurement, clear lines of procurement, and understand what we're putting forward. There's no reason why rents and leases are not put up for competitive bid.

"We have to change the culture, and we will change the culture by having as much openness as possible, standardised and open contracts and doing things by the book, which needs to happen across the board.

"These reports show that has not been done in the past. If we're going to make the change, we have to start with acknowledging there are issues. Hopefully, the tabling of these reports in Parliament is the start of that."

Mr Aubry added that the FTI Consulting reports had "given us insights to understand what is going on in these systems", and admitted: "It is an upward haul, but it is not being done by ourselves.

"We all have a role. There is a cost to all of this. If procurement mechanisms are not being followed to ensure money is being spent in the most efficient and cost-effective way, that's wasting taxpayers' money. We have a vested role in making this change."

Government spending that fails to obtain "value for money" ultimately rebounds on taxpayers to their detriment, as it inevitably leads to increased taxes to cover this inefficiency and waste.

Mr Aubry, meanwhile, said the Government itself also had a vested interest in reforming its internal policies and processes if it was to reverse the growing mistrust among many Bahamians.

"This lack of trust is so pervasive that the Cabinet may have done everything right but there would still be questions by the public," he added.

Comments

Porcupine 2 years, 5 months ago

Let's just hope that the foreign investors we are crying for don't read the Bahamian newspapers.

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