The tax exemption of the president’s pension package is an abomination

The defenders of the Former Presidents (Benefits and Other Facilities) Act 2009 including Prime Minister Sam Hinds, Dr. Roger Luncheon, Mr. Robert Persaud and now Dr. Nanda Gopaul are having a hard time trying to convince the Guyanese taxpayer that President Bharrat Jagdeo was less than greedy in initiating and approving legislation providing for benefits that are patently overgenerous.

The best that Mr. Persaud could do was question the timing of the questions, seemingly unaware that as far back as May 2009 Prime Minister Sam Hinds was vainly defending the Act with misrepresentations.

Mr. Hinds incorrectly wrote that all Mr. Jagdeo and his spouse would have is a single vehicle owned and maintained by the State. In fact Mr. Jagdeo is entitled to an unspecified number of such vehicles with drivers. In addition, Mr. Jagdeo is also entitled to duty-free concessions for motor vehicles and every other item he chooses to import. Mr. Hinds would also wish us to believe that free medical expenses are limited to the former president and his spouse. In fact taxpayers would have to pay for the medical costs for him and the dependent members of his family, for the rest of his life. And if Mr. Jagdeo or any one of them opts for treatment abroad, no big deal – the Act places no restriction.

Dr. Luncheon and others have been saying that all the Act did was to put into law payments made to former presidents, completely forgetting that neither Burnham nor Jagan lived to become former presidents.

With a slight twist Dr. Gopaul then tries to confuse the issue by listing eight types of expenses that former presidents were entitled to but fails to state what they actually received which is the real concern over the Act. What Dr. Gopaul seems to miss is what the parliamentary opposition and civil society have been saying all along, i.e. that there are no caps to any of the facilities; no conditions for receipt of benefits and no consideration of cost.

A former president working abroad is still entitled to tax-free pensions and most if not all the benefits and facilities permitted under the Act. And even if resident, s/he is entitled to clerical and technical staff even for private consultancy work, and can run up the most outrageous utilities bill for electricity, telephone and water to be paid for by the state. As drafted, the legislation would seem to impose on the state all the costs where the former president decides to have two or more residences. And we know from the advertisements, our soon-to-be former President is actually constructing on the sprawling state-owned land he awarded himself two houses and a distinctly un-low carbon hot and cold swimming pool for which the monthly electricity bill will easily run to $600,000. We will pay for all of that.

Even while visiting friends that individual likes to travel with an entourage often consisting of five vehicles and several staff providing security. If he is unwilling or unable to give up such show of power and influence, we the taxpayers will pay for them too, including overtime late into the night.

We may take some comfort in the two services that seem to be limited in number – the gardener, though even that could be circumvented by retaining a landscaping service, and an attendant. And if the soon-to-be former president joins one of his buddies in business or enters in business in name, either on his own account or for their benefit, all the income will be tax-free. This abomination has no parallel or precedent anywhere in the world and is deserving of its own Champion of the World Award.

The menu of benefits and facilities hardly seems what the Constitution intended as payments to former presidents when it states that “A person who has held the office of President shall receive such pension or, upon the expiration of his term of office, such gratuity as may be prescribed by Parliament. Any such pension or gratuity shall be a charge on the Consolidated Fund.”

One is forced to wonder whether the attempts by Hinds, Luncheon and others to confuse the public about the contents and consequences of the Act really show their inability to defend its inherent obscenity. What one does not have to wonder about is the frightening disregard for rules and cost on the one hand, and the interest of self on the other, which are symptomatic of how the PPP/C has been managing the financial resources of the country.

Estimates do not disclose total cost of overseas visits for Office of the President

In responding to concerns about the cost of presidential travel, Finance Minister Dr Ashni Singh is quoted as saying that “over the past three years, the average annual expenditure for the entire government on travel has been $200M.”

The 2010 Estimates which Dr Singh presented just three days ago has a head ‘Transport, Travel and Postage’ under which is a line item ‘Overseas Conferences and Official Visits.’ The Estimates disclose nil costs for the Office of the President, the Ministry of Foreign Affairs and indeed all the ministries, departments and regions, barring the Finance Ministry and the Guyana Defence Force. It is under these two budget agencies from which Dr Singh would have derived his $200 million figures. But it would have been helpful and reassuring if Dr Singh had indicated, at least for the Office of the President, the total cost of overseas visits for the period, the subject of concern and speculation.

Dr Singh should have explained whether that line item includes per diem allowances and other costs associated with overseas visits, and indicate if payment for any such trips is reflected under any other line item, or channelled through any other government agency or controlled entity. The entourage to witness the President receiving an honorary doctorate in Russia included Mr Winston Brassington, head of NICIL. Details that would indicate the propriety of the financial arrangements for that trip (which had some private elements to it), would help to dispel many of the public concerns and neutralise speculation.

The in-country costs of presidential visits are invariably met by the host country. Dr Singh should disclose whether Dr Jagdeo has been receiving per diem for such visits, and the amounts paid to him for the past three years.

Finally can Dr Singh please say whether he agrees with a response to an Audit Office 2003 query on overseas travel, that the “concerned official” (suspected to be the President) is exempted from clearing his travel advances. If the President is not exempted, can Dr Singh tell us the number and value of advances the President has outstanding.

The constitution continues to be flouted in respect of the presidential assent

In a recent interview on Plain Talk, I asked the Prime Minister in his capacity as Leader of the National Assembly whether he was concerned about bills being passed by the National Assembly and not being assented to within the period (twenty-one days) required by the constitution. This problem first surfaced in a big way in 2006. The Prime Minister estimated these to be “about six.”

I knew that was not correct and visited the Parliament Office on Tuesday January 12, requesting an update on 2009 bills not assented to. I was asked to come back later in the day. After making several attempts to contact the person her supervisor told me that the information could not be made available to me.

In any case it was public knowledge that for 2006 ten bills lapsed because of presidential inaction and from records we maintain at Ram & McRae, I was aware that for 2009 only, twenty-six of forty bills had been published in the Official Gazette. What surprised me not a little is that after my enquiries there appeared a flurry of activities involving “the printers” and I wondered whether there was any mischief afoot, even though the Gazette in which the legislation is published had already had moved on to 2010.

It was a shock, but not a surprise, therefore, to receive this past Wednesday several Extraordinary Gazettes containing legislation that dates back, in some cases, several months.

This information provides clear evidence that the constitution continues to be flouted by the President with the tacit or expressed agreement, or neglect of the National Assembly. And even if we assume that the backdated publication is constitutional and legitimate, that leaves eight bills passed in 2009 by the National Assembly which the President has not dealt with in compliance with the constitution.

The implications are more than academic. To force public servants either directly or indirectly to engage in backdating any documents, let alone the Official Gazette, is to make corruption part of their work. Second, it is dangerous for the President to break the very constitution which he took an oath to uphold. Finally, an Act comes into operation on the date of publication. Those Acts published in predated Gazettes are therefore considered to be of retroactive effect, an equally dangerous issue.

Integrity Commission on shaky ground – conclusion

Last week we ended the column with the offices listed in Schedule I to the Act, the holders of which must automatically file with the Integrity Commission, declarations of their income, assets and liabilities of themselves, their spouses and minor unmarried children by June 30 of the following year. Formidable as the list may appear, it leaves out some very vulnerable positions. For example, it does not include members of tender boards responsible for the award of contracts; members of Go-Invest which is responsible for recommendations on concessions to investors by the government; head of the prevention of money laundering unit; police and special prosecutors; members of the Securities Council; members of tax appeal boards and possibly some statutory bodies as well. Nor does the list go deep enough. For example it includes only four positions in the GRA/Customs and would have excluded those persons allegedly associated with the Fidelity scam. The offices of Chancellor and Chief Justice are not included but would have to file as members of the Judicial Service Commission.

Complaint required
Section 42 of the Act does however make provision for the following categories of persons not listed in Schedule I. Submission of declarations by them is not automatic and requires a complaint to the Commission, an investigation and findings while any resulting declarations will be in respect of specified years only. The categories are: public officers; officers of Regional Democratic Councils; officers of the Bank of Guyana; officers of state-owned and controlled banks; officers of public corporations and other bodies corporate and agencies (including companies and bodies established by or under any statute) owned by the state or in which the controlling interest is vested in the state or any agency on behalf of the state; members of tender boards.

The Act does not define “officers” but looking at section 42 alongside Schedule I, mandatory annual submission applies only to the top echelons. In any case, any appearance of overlap should cause no problem since once the position is listed in Schedule I, submission is mandatory. The problem faced by a person seeking to utilise this provision is that s/he has to have good grounds while section 28 (3) has the effect of discouraging complaints by providing sanctions for complaints that are considered frivolous, mischievous or spiteful.

Investigation into the assets of those GRA officers allegedly involved in the Fidelity scam would therefore require a complaint by any person which would include the President. Public posturing does not constitute a complaint which in any case has to be made to the Commission and not to the Audit Office.

Code of Conduct
The Code of Conduct set out in Schedule II to the Act applies to all persons in public life, but experience has shown how hard it is for breaches of the code by both scheduled and non-scheduled persons to be uncovered and penalised. Many of the provisions of the code aim to establish proper conduct by public officers but this will require a complaint or self-disclosure, hardly a reasonable expectation. It expects, quite unrealistically in our environment, that a person who has received a gift in excess of $10,000 or who has misused his/her public office for private gains will report those facts to the Commission.

Powers of the President
The Act is also very clear on the independence of the Commission and provides that “in the exercise and discharge of its functions, the Commission shall not be subject to the direction or control of any other person or authority.”

Perhaps it is timely to correct a view held not only by the President but also by the press, that is, the President’s role in relation to receipt of statements and publication of a list of defaulters. Section 13 is clear: the statements by persons other than members of the Commission go to the Commission. Only statements by members of the Commission are submitted to the President. The right to examine statements, make enquiries, request statements or publish names as set out in sections 17 to 19 is circumscribed by the use of the words “the Commission or the President, as the case may be” (emphasis mine). The President simply does not have the powers he claims and those who seek to speak on his behalf think he has.

The Commission is required within three months after the end of the year to submit to the President a report containing an account of the activities of the Commission including any difficulties experienced by the Commission in the performance of its functions. Surely non-submission by relevant persons and not only MPs constitutes difficulties. The Commissioners have failed to discharge this particular responsibility for each year of the Commission’s existence, which constitutes a dereliction of their duty.

The nation is owed a full and proper explanation by the Commission’s acting Chairman, Mr Ferouz. Both as President and the self-appointed minister responsible for the operation of the Act, Mr Jagdeo owes the nation an explanation for his failure to have reports laid in the National Assembly within the prescribed time.

With the Commissioners’ continuing failures – I understand that they are now trying to work on their past reports − there are sufficient grounds for their removal under section 5 of the Act which include breach of any of the provisions of the Act, absence from meetings for two consecutive months or for three months during a period of twelve, and failure to carry out any of the functions and duties of the Commission. On these grounds, there can no longer be a basis for the pretence regarding Bishop George or the continued membership by Mr Fazeel Ferouz of the Central Islamic Organisation of Guyana (CIOG), Mr Nigel Hinds of the Guyana Council of Churches and Pandit Rabindranauth, Director of the National Commission of the Family. Interestingly, while the Leader of the Opposition has to be consulted on appointments it seems that removal is a matter exclusively for the President.

Legal action
During this past week head of GINA, Dr Prem Misir, and Minister of Health Dr Leslie Ramsammy, both persons required to file declarations under the Act, wrote letters to the press on the question of the submission of declarations by persons concerned. Dr Ramsammy’s letter was refreshing and persuasive and could have easily been intended for all declarants, including his political colleagues. Dr Misir’s, on the other hand, was more concerned about opposition MP’s non-filing. Another letter signed by Mr Learie Barclay actually and dangerously sought to justify an improper “dictating” by the President, incredibly, on moral grounds.

Leader of the Opposition Mr Robert Corbin, an attorney-at-law argues that since his party has challenged the appointment of the Commissioners on the grounds that the President had failed to consult with him as required by the Act, their MPs do not have to comply with the Act. The press has given few details of the action brought and the relief sought by the PNC but as far as I am aware the party did not ask for any interim relief and accordingly Dr Misir has a point that compliance is required until the court rules otherwise. The PNC could have asked, for example, either that the court grant an order staying any requirement for the submission of declarations or that declarations be submitted but sealed so that the Commissioners whose appointment is subject to the court challenge are prevented from accessing them.

The opposition should also have considered how a court would interpret and apply section 9 of the Act which allows for acts of the Commission to retain their validity even if there is any defect in the appointment or qualification of “any person purporting to be a member.” Taken literally, even if the court finds a defect in the appointment or qualifications of all the members of the Commission, they may still rule the actions of the Commissioners as valid, despite the breach of the important consultation provision of the Act. In this connection and to avoid any embarrassment, the Chief Justice needs to ensure that the judge assigned to adjudicate in the matter has been submitting the annual declaration required by the Act.

The view of some legal minds outside of Guyana with whom I discussed the matter is that the legal action against the appointment does not constitute a stay but another person took a different view − there should be no second hurdle – the first (consultations with the leader of the opposition) was not crossed so no need to consider the second (compliance). For good measure he said that only in Guyana could such things take place.

The Act was intended, as stated in its long title, to secure the integrity of persons in public life and creates a new offence at law – Possession of Unaccounted Property or Pecuniary Resource. That is most desirable and can go a long way in cleaning the Augean stables so far as persons in public life are concerned. It can also help to raise revenue and curb tax evasion. I can see a Commissioner General ringing his hand in glee knowing that he can demand from relevant persons further statutory evidence against which to check the accuracy and completeness of information by an important class of taxpayers. And let us be clear – that includes all those persons whose official emoluments are exempted from taxation, such as the President, the Chancellor, the Chief Justice and persons in receipt of foreign-funded salaries.

The President has retreated from his misplaced two-week ultimatum for naming those MPs who fail to submit declarations. The PNC has already stated that its MPs will not submit, rendering the threat inconsequential. The President now says he is resuscitating the Commission, an admission that he has misunderstood and sought to misapply the provisions of the Act, not dissimilar to his pronouncements on tax holidays. The result is that the Act’s noble purposes have been delayed if not defeated. We can only hope that the President and the Leader of the Opposition can agree on five persons to serve as Commissioners. Will they also address the other shortcomings of the Act such as the list of persons required to file declarations? We have to hope as well that the court has been listening and reading about the consequences of its lethargy. Something tells me that we will have a long time to wait before this issue is resolved.

Finally, public officers may feel badly done by, being subject to more stringent ethical obligations than their private sector counterparts. Perhaps it is time to repeat a call made earlier by Business Page for a Code of Conduct for persons serving in a representative capacity in private sector organisations to prevent them abusing that role for their personal and specific business interest.

Integrity Commission on shaky ground

There has been unprecedented focus this past week on the Integrity Commission established under the Integrity Commission Act 1997. On Monday, President Jagdeo announced that he would be meeting the Commissioners two days later to tell them that he expected they would publish within two weeks the list of MPs who were failing to comply with the Act. Simultaneously, he announced that steps would be taken to have defaulters charged. On Tuesday it was reported that in a high profile family proceedings matter a declaration made under the Act was tendered in negotiations outside of the court to support a settlement offer. On Wednesday the promised meeting did not take place even as the two main opposition parties were reported as criticising the statements by the President. On Thursday the government claimed in an advertisement that the President’s call for sanctions was consistent with the law and that the criticisms by the opposition warranted “the most profound explanation” and on Friday the PNCR leader rebuffed the President’s call.

The Act was intended to promote transparency and integrity among public officials and sets out penal sanctions for non-compliance. Unfortunately the Act met with a court challenge in 2005 by the PNCR that the appointment of the Commissioners breached the consultation requirement set out in the Act. Despite the Act’s obvious significance, the court has not yet found time to deal with the case and in the view of the PNCR, the Act is effectively in abeyance. While Parliament has continued to allocate sums of money for the Commission’s secretariat, reports are that the Commission has not been functioning for want of a quorum and questions concerning the Commission are referred to chief government spokesman, Dr Prem Misir. Meanwhile the Commission has itself not been complying with the Act, suggesting that they too consider the Act as being held in abeyance.

All the President’s Men
Desirable as it is, the President’s apparent impulsive call made without due consideration of all the provisions in the Act may have the very opposite of the objectives he intends. What the President needs to do at this stage is take legal counsel and ensure that his action does not undermine achieving transparency and corruption. He should realise that he may get as much resistance from his own people as from the opposition. Specified declarants include all the presidential advisors and many from the party who hold top positions, and disclosure may place them in the uncomfortable position of having to explain any sudden wealth.

Calling it George
The Act provides for a Commission made up of a chairman and not less than two or more than four other members, to be appointed by the President after consultation with the Minority Leader. The persons who have been appointed by the President are Anglican Bishop Randolph George as Chairman, Fazeel Ferouz of the Central Islamic Organisation of Guyana (CIOG), Nigel Hinds of the Guyana Council of Churches and Pandit Rabindranauth, Director of the National Commission of the Family.

Usually such legislation comes under a particular minister and while the Act refers to “the Minister” it does not identify which one, while the bill setting up the Commission was piloted by the then Attorney General, Mr Bernard De Santos. It seems, however, that the President has assumed ministerial responsibility for the Act, though this is certainly not clear.

Bishop George resigned as Chairman close to three years ago, but according to the Commission, which does not speak on the record, since his resignation has not been accepted by the President, the Bishop remains the Chairman. In fact there is nothing requiring such acceptance as section 5 (2) of the Act provides that “The chairman or any other member may resign by letter addressed to the President.”

More confusion
The announcement that the Commission has not been meeting because of a lack of a quorum seems equally misinformed since section 9 (4) provides that three persons constitute a quorum and that in the absence of the chairman the persons present can appoint a chairman. Perhaps the framers of the Act knew what they were doing by requiring the chairman to be a judge of the High Court or any other fit and proper person, and the other members to have “experience in law, administration of justice, public administration, social service, finance or accountancy, or any other discipline.” The appointments based solely on religion appear to have put in overall charge of the Commission persons whose knowledge and experience seem limited indeed, defeating the one of the objectives of the Act.

Appointments are for specified terms subject to reappointment with the terms of appointment, remuneration, etc, being determined by the President after consultation with the Leader of the Opposition.

The principal requirement of the Act is that designated persons set out in Schedule I of the Act must submit annually by June 30, a statement of the income, assets and liabilities for the preceding calendar year of themselves, their spouse and unmarried children under the age of eighteen. Assets and liabilities include those held in Guyana as well as those held abroad. The statements by persons other than Commissioners are to be submitted to the Commission while members of the Commission are required to submit their statement to the President. Persons who are not designated in the Act but who are in public life may also be required to submit a similar statement if a complaint has been lodged with the Commission. Section 28 (3) has the effect of discouraging certain kinds of complaints and provides for penalties for complaints that are frivolous, mischievous or spiteful.

Persons who must file statements
The President of Guyana; The Speaker of the National Assembly; Ministers including Ministers of State; Secretary to the Cabinet; Parliamentary Secretaries; Members of the National Assembly; Members of the National Congress of Local Democratic Organs; Members of the Regional Democratic Councils; Clerk of the National Assembly; Attorney-General (if not a Member of the Cabinet); Head of the Presidential Secretariat; Director of Protocol, Office of the President; Chief of Protocol, Ministry of Foreign Affairs; Permanent Secretaries and Deputy Permanent Secretaries; Ombudsman; Director of Public Prosecutions; Deputy Director of Public Prosecutions; Solicitor-General; Deputy Solicitor-General; Chief Parliamentary Counsel; Deputy Chief Parliamentary Counsel; Auditor General; Deputy Auditor General; Secretary to the Treasury; Deputy Secretary to the Treasury; Commissioner of Police; Deputy Commissioner of Police; Chief of Staff, Guyana Defence Force; Director General, Guyana National Service; Commandant, Guyana People’s Militia; Members, Elections Commission; Members, Judicial Service Commission; Members, Public Service Commission; Members, Police Service Commission; Members, Teaching Service Commission; Members, Public Service Appellate Tribunal; Police Complaints Authority; Heads of Diplomatic Missions of Guyana accredited to any other country or any international organization; Governor, Deputy Governor and Heads of Division of the Bank of Guyana; Managing Directors and Managers of State owned or controlled banks; Heads of all Government Departments; Commissioner of Lands and Surveys; Deputy Commissioner of Lands and Surveys; Commissioner of Geology and Mines; Deputy Commissioner of Geology and Mines; Commissioner of Forests; Deputy Commissioner of Forests; Commissioner of Inland Revenue; Deputy Commissioner of Inland Revenue; Comptroller of Customs and Excise; Deputy Comptroller of Customs and Excise; Judges of the Supreme Court; Presidential Advisors; Magistrates; Commissioner of Title; Registrar of the Supreme Court; Registrar of Deeds; State Solicitor, Official Receiver and Public Trustee; Chief Planning Officer; Chief Executive Officer, Deputy Chief Executive Officer and Heads of Departments, Public Corporations Secretariat; Chairmen, Managing Directors, Chief Executive Officers, General Managers and Heads of Departments of all public corporations, and other bodies corporate and agencies (including companies and bodies established by or under any statute) owned by the State or in which the controlling interest is vested in the State or in any agency on behalf of the State; Vice-Chancellor, Registrar, and Deans of Faculties of the University of Guyana; Registrar General; Chief Elections Officer and Commissioner of Registration; Mayors and Deputy Mayors and Town Clerks of the City of Georgetown, Town of New Amsterdam and other towns; Members of the Integrity Commission; Regional Executive Officer and Heads of Departments of Regional Democratic Councils.