Category: Letters to the editor

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The $18.3B which was cut from the LCDS needed to be covered by a conditional appropriation

I prefer to impute no motives to Government spokespersons or self-appointed, self-interested critics of the Budget “cuts”, including Drs. Ashni Singh, Roger Luncheon and Leslie Ramsammy, Mr. Juan Edghill and Carvil Duncan, Martin Goolsarran and Fuzzy Sattaur and Ms. Gita Raghubir and Alexei Ramotar for misrepresenting the “cuts”, including the removal of the LCDS money from the Appropriation Bill for the 2012 Budget. Shepherded by Mr. Martin Goolsarran into NCN to cry “heartless and unpatriotic”, none of them it seems, including Ms. Raghubir, an attorney-at-law, bothered to check the Budget “law”, the Fiscal Management and Accountability Act.

They would have learnt that the appropriation of expenditure of $18,394,650,000 had to be brought by way of a Conditional Appropriation Bill under section 21 of the FMAA, and not by way of an Appropriation Bill. But before I refer directly to section 21, I draw attention to both the Explanatory Memorandum to the Bill as well as the statement made by then Finance Minister Mr. Saisnarine Kowlessar in the parliamentary debate on the Bill on December 15, 2003.

The Explanatory Memorandum states that the bill “establishes the concept of conditional appropriation, whereby an agency may be appropriated sums that are conditional on the said agency achieving specified levels of revenue in accordance with an agreement entered into with the Minister.” In other words, the National Assembly authorises the expenditure but only if (or conditional upon) the money comes in.

For his part, Mr. Kowlessar in introducing the Bill said “… In addition, the Bill describes the concept of a conditional appropriation, as well as details the terms and conditions under which such appropriation may be made and accounted for.”

It is nonsensical for Dr. Singh to compare the expected LCDS sums with VAT and say that since VAT has not yet come in, maybe a Conditional Appropriation Bill will be required for VAT as well! Does he believe that in relation to him Guyanese are that stupid and cannot understand the difference between a tax (VAT) and moneys that come under an MOU with preconditions attached? Someone should have pointed out to Dr. Singh there and then that it was his Government that passed the Fiscal Management and Accountability Act because US$30 million of donor money depended on its passage. Details then did not matter. And if the PPP/C can ignore the Constitution, ignoring a mere law is no big deal.

The logic of linking the expenditure to income by way of a conditional appropriation is evident from the following example. For the year 2012, expenditure of $18.394 billion represents more than 12% of the non-LCDS budgeted Current and Capital Revenues. If that sum is spent but the money does not come in, the government’s expenditure will have exceeded its income not only by the $30.524 billion shown in the Budget but by an additional $18.394 billion, bringing the 2012 budget deficit to $48.918 billion, or close to quarter billion United States Dollars. No amount of juggling of figures or playing with the 2000 Series Bank Accounts can mask that reality.

To see how inconsistent Dr. Singh has been in relation to budget preparation for future revenue flows, one needs to look no further than the 2011 budget treatment of the Chinese vessels in which only the local expenditure of $366 million was included at the time of the budget presentation. It was not until one year later, when the resources had actually arrived in the country that Dr. Singh went to the National Assembly for supplementary appropriation of $2.588 billion. At the time, former Finance Minister Carl Greenidge drew Dr. Singh’s attention to section 21 of the Act, pointing out how it should have been treated in the first place. But so convinced was Dr. Singh that he could never be wrong, that he ignored Mr. Greenidge.

Much was made of the fact that the $18.394 billion that was removed from Budget 2012 included an unspecified amount for land titling for Amerindians. In fact, the issue of land titling for Amerindians (so far as necessary) fits neatly into the provision of the Act by allowing a “conditional appropriation” to consist of both a) an authority to spend a specified amount of money; and b) an additional authority to spend a specified amount of money, conditional (emphasis mine) upon budget agency receipts earned by that budget agency and being credited to the Consolidated Fund.

I say ‘so far as necessary’ because land titling is a constitutional requirement which since 1993 has been funded each year out of annual appropriations and need not be tied in with LCDS money. It would be a sad day indeed if our first people have to wait on foreign moneys to right the historical wrongs inflicted upon them centuries ago. But I suspect that the Singh/Luncheon formulation of including it was as bait to the international community with its soft spot for indigenous peoples across the world.

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Mr. Brummell’s purported appointment as acting Commissioner is unconstitutional

From the press, the public has learnt the Mr. Leroy Brummell DSM has been appointed as acting Commissioner of Police. It seems, once again, that the country is being treated with casual if not reckless disregard with respect to constitutional positions.

Article 211 of the Constitution provides for the Commissioner and Deputy Commissioner of Police to be appointed by the President after meaningful consultation with the Leader of the Opposition and the chairperson of the Police Service Commission. Specifically, Article 211(2) makes the appointment of an acting Commissioner subject to the same constitutional requirements as the Commissioner.

I am advised that there has been no consultation on the “appointment” of Mr. Brummell. It is therefore my opinion that Mr. Brummell’s purported appointment is unconstitutional, null and void.

For good measure Mr. Henry Greene who is the substantive Commissioner was required, under Article 211 (3) to vacate office when he attained age fifty five (55). He did not do so because according to Dr. Luncheon the government has entered into an agreement with him to continue until age 60. That agreement too is unconstitutional.

So we are in the unique position where both the substantive Commissioner (Greene) and the acting Commissioner (Brummell) exist in a constitutional illegality. What a country!

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Mr Ramnarine was exercising a right and duty under Article 32 of the Constitution

There has been a call from high-up for the disciplining of senior police officer David Ramnarine for exposing certain practices in the Guyana Police Force, and for claiming that his constitutional rights trump the Force Orders. The practice he identified was in connection with the payment of $90 million from Contingencies Fund to feed the Police over the November 28 elections period. On the question of the constitution, Mr. Ramnarine was in fact not only exercising a right but rather carrying out a duty which Article 32 of the Constitution imposes on every citizen. And as just about everyone by now knows, the Constitution is the supreme law of Guyana and not even the Parliament can make a law that is in conflict with it.

I cannot see then how some Force Order purporting to restrict a right could abridge a duty imposed by the Constitution. I would therefore like to receive from the Minister of Home Affairs an informed opinion on which instrument – the Constitution or the Force Orders, or which interest – secrecy of the Police Welfare Fund or the protection of public property – his Government considers paramount.

For, as Article 32 states: “It is the joint duty of the State, the society and every citizen (emphasis mine) to combat and prevent crime and other violations of the law and to take care of and protect public property.”

The country is fortunate and grateful that circumstances forced the lone Mr. Ramnarine to exercise his constitutional duty under Article 32. It is frightening to reflect on the several others in the Police Force, some more and others less senior to him, the GDF, the ministries and departments, and the hundreds of thousands of Guyanese who daily fail in their Article 32 duty.

Whether by accident or intent, Article 32 is a Whistleblowers protection in the public service. I would like to see some enabling legislation aimed at giving effect to Article 32, and to wrong-doings in the private sector as well.

I draw attention also to a further development from the same issue. In the process of his revelation, Mr. Ramnarine implicitly exposed a weakness in the State audits to which I have been drawing public attention: that a bare statement in the Audit Report that drawings from the Contingencies Fund did not meet the criteria set out under the Fiscal Management and Accountability Act was not enough. The Audit Office needs to go further and by a scientific sample, audit Contingencies Fund transactions for accuracy, authority, authenticity and completeness from what auditors call cradle to grave: in this case from the issue of the drawing right by the Minister of Finance to his timely request to the National Assembly for replenishment. The Minister of Finance has only up to the next sitting of the Assembly to seek approval.

I have noticed that the Auditor General (ag.), against a background of public concerns, has announced a special investigation into the $90 million fiasco. I should remind him that Dr. Ashni Singh’s Supplementary Appropriation for expenditure during the parliamentary break involved $5.7 Billion, of which $2.4 Billion was judgmental. I doubt that the public and the parliamentary opposition will be satisfied with another limited scope, incomplete and therefore inadequate exercise.

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There are numerous examples of the Finance Minister’s mismanagement

Mr. Nigel Hinds’ letter ‘Ashni is in the best and brightest category’ (Stabroek News, March 15, 2012) has drawn sharp comments on the meaning and intent of the term “best and brightest”, particularly from those who felt that Mr. Hinds was unjustifiably praising Dr. Ashni Singh, the Minister of Finance. In fact, “best and brightest” is a term of deprecation going back at least to a letter in a 1769 publication in which the writer used it mockingly and ironically to describe King George III’s ministers. Exactly two hundred years later, its place in infamy was sealed when journalist David Halberstam used it as the title of his #1 bestseller which exposed the intellectual bankruptcy of the whiz-kids of John Kennedy’s disastrous policy that led to America’s ignominious defeat in the Vietnam War.

That it was in that context of derision that Mr. Hinds identified Dr. Singh is clear from his paragraph calling for his “cleansing the Augean Stables filled with questionable deals, those facilitated by National Commercial and Industrial Development Limited (NICIL), sale of Sanata Textile Mills, Amaila Falls Project engineered by the infamous Fip Motilal, Georgetown Public Hospital Corporation [GPHC] contracts with New Guyana Pharmaceutical Corpora-tion [New GPC], and the absence of lottery funds from Consolidated Fund to name a ‘few’ ”.

It is public knowledge that Dr. Singh was personally involved in every one of these “questionable deals”, and in the case of the “infamous” Fip Motilal, Dr. Singh’s ministry caused to be issued through GINA a three page attack of undignified calumny on “Ram-like critics” who, on the bizarre selection of Fip Motilal as contractor for the road to the Amaila Falls, dared to expose Motilal as an unqualified contractor. They have been proved right and Dr. Singh wrong. In the case of the GPHC and New GPC contracts, it is the Dr. Singh-controlled National Procurement and Tender Administration Board that annually approves single source contracts, and outrageous of all, Dr. Singh chairs the truly egregious NICIL which spearheaded the tender for the Amaila Road Project.

But these were only a few examples of Dr. Singh’s “brightness”. Here are some others:

1. Every single audit report since Dr. Singh became Minister of Finance reminds us that “the Contingencies Fund continues to be abused”. And the abuser: the Minister of Finance in whom section 41 (2) of the Fiscal Management and Accountability Act (FMAA) invests sole powers and responsibilities over the Contingencies Fund.

2. Dr. Singh’s Finance Ministry has underwritten every one of the irregular transactions of the Jagdeo Administration since October 2006, including the infamous Pradoville 2 for which Dr. Singh’s NICIL allotted house lots to former President Jagdeo, Cabinet Members, members of NICIL boardand friends, all at below market price; computer purchases from a Brooklyn barbershop location; sole sourcing of school books for $90 million; disastrous multi-billion dollar road and other infrastructure contracts.

3. On all but one occasion of Dr. Singh’s presentation of the [annual] mid-year report under section 67 of the FMAA, the report pre-dates by months the date of its publication, prompting integrity concerns.

4. Dr. Singh has never once complied with section 21 of the FMAA dealing with conditional appropriations. Nor on his own recent admission in the National Assembly, has he ever complied with section 24 (4)of the FMAA, on each of the fourteen occasions he came to the National Assembly for supplementary funds, concealing the annual budget deficit.

5. Dr. Singh has begun to use creative financing to plug the ballooning budget deficit caused by over-spending and non-receipt of the Norway money. In 2010 he treated $11.117 billion as Miscellaneous Income, “the net result of the ‘closure’ of inactive accounts, and retiring long outstanding obligations in relation to the issuance and redemption of Government Securities.”

6. Dr. Singh was central to the sale of state property and the unlawful granting of tax exemptions to the Ramroop group. In these transactions, Dr. Singh had not one but three occasions to check the validity, legality and propriety of the transactions: as Minister of Finance, as Chairman of NICIL, and as a senior Cabinet minister. He missed them all.

7. As Minister of Finance, Dr. Singh controls the Consolidated Fund and has allowed the proceeds from the Lottery to be placed in a “special” account outside of the Consolidated Fund. He approves the operations of this extra-ordinarily special account from which only his mentor, former President Jagdeo could spend.

8. Dr. Singh was part of a transaction for $4 billion in which there was sufficient evidence to refer Minister of Housing Irfaan Ally to the Privileges Committee for allegedly misleading the National Assembly.

9. Dr. Singh has presented five budgets to the National Assembly totaling $627.5 Billion. During that time, we have had no natural disasters or economic shocks undermining the Budget. Yet, during the same period, Dr. Singh has returned to the Assembly with fourteen (14) supplementary appropriation bills covering over 440 transactions totaling $67.5 billion –conditions that would embarrass even a mediocre budget controller. For good measure, none of the transactions involving drawings from the Contingencies Fund, covering a minimum of $19.5 billion, was brought within the “next sitting” of the National Assembly timeframe required under section 41 (5) of the FMAA.

10. Dr. Singh has ministerial responsibility for the National Insurance Scheme and the Insurance Act. To him therefore, is due more than a quarter share of the blame in the Jagdeo-Dr. Singh-Luncheon-Gita Singh quartet for the NIS loss of $5 billion in Clico.

11. As Finance Minister Dr. Singh would have known of the mistake that led to the excessive VAT rate of 16%. In order to disguise the effect of the mistake and a windfall of close to twenty billion dollars, he sought supplementary spending provisions of $18 billion in the last two months of 2007! “Brightness” is certainly not the word to describe such shocking conduct. No wonder, neither Dr. Singh nor former President Jagdeo has responded to my several public challenges to them to release an unredacted copy of the report of the Barbadian consultant who was contracted to carry out the exercise. As a result the state has so far gouged the Guyanese taxpayer of more than fifty billion dollars.

As readers would expect, such a letter cannot address all the financial shenanigans hidden in the spending of $627 billion (US$3,135 million) during the last Parliament. Only a thorough investigation initiated by the National Assembly will reveal how the “best and brightest” Dr. Singh and his mentor, that other “best and brightest” Mr. Bharrat Jagdeo, have mismanaged the country’s finances for five years.

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Citizens have a constitutional right in relation to budget consultations

The exchanges between Dr. Ashni Singh, Minister of Finance and Mr. Carl Greenidge, former Finance Minister about whether or not there will be a meeting of the parliamentary parties on the 2012 Budget should not have been necessary given the country’s constitutional framework.

Prior to 2003, Article 11 (now Article 13), Chapter II PRINIPLES AND BASES OF THE POLITICAL, ECONOMIC AND SOCIAL SYSTEM provided that “The principal objective of the political system of the State is to extend socialist democracy by providing increasing opportunities for the participation of citizens in the management and decision-making processes of the State.” To the representatives of the PNC Government who questioned the justiciability of the specific Article, then Chancellor Keith Massiah responded in the 1987 decision in the case Attorney General v Mohammed Ally that “I see no reason to think that the articles in Chapter II of the Constitution have no juridical relevance and are merely idealistic references with cosmetic value only. So to think would be to seek to debase the Constitution.”

In a subsequent amendment, the strength and justiciability of Article 13 were put beyond doubt when by Act 10 of 2003 the right to be consulted was made into a fundamental right under Article 149C in the following terms: “No person shall be hindered in the enjoyment of participating through co-operatives, trade unions, civic or socio-economic organisations of a national character in the management and decision making processes of the State.”

However, since his appointment in 2006, Dr. Singh has shown a disdain and intolerance for the annual budget consultations – arguably the single most important decision made by the State in any year – and discontinued them for his first Budget in 2007.

Ironically, while Dr. Singh might have argued against any meeting with the parliamentary opposition on the grounds that they were not contemplated within “trade unions, civic or socio-economic organisations”, and that they have all the opportunities to participate in the debate in the National Assembly, he has agreed to meet with them even as he has blocked out entities as women’s groups, the professional accounting body, the trade unions, the private sector organisations, etc.

President Ramotar has to be careful that his preference for a more open presidency and non-violation of the Constitution applies not only to himself, but to his Ministers as well. It is not whether or not Dr. Singh cares for consultations or whether he thinks they are useful.

It is that citizens have a constitutional right to participate in such a process.

And as a Minister of the Government Dr. Singh has a corresponding duty to engage persons, and not only the parliamentary opposition, in such consultations.