The Caribbean Development Bank (CDB) Diplomatically calls it Misprocurement: we call it misappropriation – the usual fraud and corruption perpetrated by the ULP Regime
Timeline
We are here to deal with a very serious matter that goes to the heart of the reputation of the Government of our country. More specifically, the matter concerns the declaration by the CDB of misprocurement of contract in the work titled Infrastructure Rehabilitation and Upgrade – River Defense Works at Yarabaqua done under the Natural Disaster Management – Rehabilitation and Reconstruction (December 2013 Trough Event) Project. The contract is valued at EC$ 1, 421, 567.00.
I will now briefly set out the timeline in the matter.
By letter dated 14th September 2018, Mr. Cameron Balcombe managing director of Bally and Bally Investments Limited, wrote to the Chief Engineer in the Ministry of Transport and Works, Urban Development and Local Government objecting to the award of the contract in question to a company called Reliable Construction Services Limited. Bally and Bally was one of several tenderers for the work. The Letter of Objection was copied to Mr. Daniel Best, Director of Projects of the CDB. In the letter of objection, Mr. Balcombe, wrote, in part:
“I am confident from my own knowledge and inquiries, that Reliable Construction Limited has not done any Gabion basket or river training works of that magnitude or at all in this State or elsewhere to even qualify under the assessment as substantially responsive. Therefore, there has either been a false declaration made in their forms or unlawful and unfair intervention by someone of influence on their behalf.” (p. 1 of Objection Letter)
By letter dated 8th March 2019, the Chief Engineer Mr. Alistair Campbell responded to Bally and Bally acknowledging their letter and saying, among other things:
“…we engaged the consultant of record, IBI Group, to conduct a further review of the experience of the recommended Contractor, Reliable Construction Services Ltd. (RCSL), in the areas of gabion basket works and river training works. The result of this further investigation confirmed the previous conclusion of the consultant (embodied in the Tender Evaluation Report) and by extension, the MTW. The decision of the MTW to award a contract to Reliable Construction Services Ltd. therefore remains unchanged.”
Meanwhile the CDB, having received a copy of the Letter of Objection, was conducting its own investigation. And several weeks later, by letter dated May 23, 2019, the Vice-President of Operation of the CDB, Monica La Bennett responded to Bally and Bally saying:
“We are writing to advise you that the Caribbean Development Bank (CDB) has conducted a thorough review of the procurement process to award the above-referenced contract. As a result of this review, CDB has declared misprocurement, in accordance with Paragraph 1.13 of CDB’s Guidelines for Procurement (January 2006), and will not be financing this contract.
All inquiries related to this matter should be referred to the Government of St. Vincent and the Grenadines.”
That was pretty much all that was said in the letter. It was copied to Mr. Edmond Jackson, Director General of Finance and Planning and head of the Tenders Board.
On 27th June 2019, the Chief Engineer in the Ministry of Transport and Works, wrote to all seven tenderers as follows:
“As a result of a complaint received from an unsuccessful bidder on the Contract for the River Defense Works at Yarabaqua, the Caribbean Development Bank (CDB) conducted a review of the procurement for the Contract, and has declared misprocurement for the Contract for the River Defense Works at Yarabaqua under the captioned Project.
The CDB financing allocated to this Contract will be cancelled and any amounts already withdrawn and paid in relation to the Contract will be repaid by the Recipient, the Government of St Vincent and the Grenadines, with interest. CDB will therefore no longer finance this Contract.”
That letter was copied to several relevant people including two from the CBD. The letters were made public shortly thereafter and the matter became a major topic of public discussion, starting with the NDP’s New Times programme and taken up by other radio programs and the print and electronic media. Prime Minister Gonsalves and other government and ULP personnel spoke publicly in response.
Then, on 22nd July 2019 the Government issued a written two-part statement on the matter. The first part of the Statement was prepared by the Director General of Finance and Planning, Mr. Edmond Jackson and basically set out the process for awarding the tender and comments generally about the tendering process in SVG. It also sought to relieve the government of blame or any taint of corruption. Part two of the statement was signed by Prime Minister Gonsalves and spoke about “The Way Forward”. It stated that the project would go ahead unchanged with Reliable Construction Ltd continuing to do the work, only now to be funded by the government, not the CDB. (The Media has a copy of that Statement)
Fraud Against the CDB
It should be evident to all by now that what we are talking about here is the most recent example of the corruption by the ULP regime, and I want to set out the basic proposition that is simple and clear. It is clear, despite all the protestations and long, drawn-out attempts at explanations by Dr. Gonsalves and his acolytes, that there was fraudulent misrepresentation in the tendering process for the project, resulting in what was essentially a fraud against the CDB. The CDB was made aware of the issue, the CDB investigated the issue and the CDB acted to recover its money and preserve its good name.
So far, that is clear, and that is known. But there is some useful background information that everyone needs to know to understand the nature of the corrupt intent of this ULP regime.
First, let me talk a bit about the Caribbean Development Bank. The CDB is a financing institution that was established in 1970 to act as a development bank for Caribbean countries – these are the Borrowing Member Countries (there are 19 of them). Its mission is to “reduce inequality and halve the incidence of extreme poverty by the end of 2025, through supporting inclusive and sustainable growth and promoting good governance.”
The bank is headed by a Board of Governors, which is “the highest policy making body of CDB” (see CDB’s Website). The website goes on to state that “All of the powers of CDB are in the hands of the Board of Governors…”. The board of Governors delegates oversight of Bank operations to the Board of Directors, which is chaired by the President of the Bank.
You will note the reference above to “good governance”. About that particular subject, the CDB says that the bank “strives to ensure that its processes, practices and systems conform with, and adhere to applicable corporate governance standards.”
And as a result of its strict adherence to international standards of good governance, the CDB enjoys top of the line ratings on the international financial markets: “CDB is rated Aa1, Stable with Moody’s; AA+, Stable with Standard and Poor’s; and AA+, Stable with Fitch.” (See CDB’s Website). Indeed, the CDB is one of the most highly regarded institutions in the entire region, possibly the world, and justifiably so.
Finally, in relation to the CDB’s governance, you would note (from the CDB’s website), that Camillo Gonsalves, who was elevated to the position of Minister of Finance in SVG by his father Ralph Gonsalves, is one of the CDB’s Governors. As Minister of Finance, Camillo Gonsalves sits on the CDB’s Board of Governors – at the highest decision-making level in the CDB. Ralph was on the CDB’s Board of Governors, for the previous 15 years or so prior to Camillo, when he was Finance Minister.
I make the point about Ralph and Camillo being at the highest decision-making levels of the CDB for the past 18 years, to put the matter into context. As members of the CDB’s Board of Governors, these two men were responsible for ensuring that, across the Caribbean, the CDB performs in accordance with the highest principles, standards and practices of good governance (as the CDB’s mandate says). That obligation comes with the position.
(I invite you all listening to me today to check the CDB’s website, to see all of this for yourself. And I want Vincentians to reflect on this fact, because when you look at that in context of what Ralph is doing now, it demonstrates exactly what is happening here).
I want to emphasize that the CDB did not take its decision to declare misprocurement lightly. It is not a small matter when the CDB declares a ‘misprocurement’ on a project being executed by one of the ministries of a borrowing member country and calls back for its money.
The action taken by the CDB has greatly displeased Dr. Gonsalves, whose son, as Minister of Finance of SVG, is on the CDB’s Board of Governors, its highest decision-making body. Dr. Gonsalves has made his displeasure public and he is using all sorts of tortured explanations and deflection to make it look like the CDB is somehow at fault or in error here. The CDB however has stood its ground, because they have a responsibility to act in the interest of the bank and the public. This is enshrined in their charter and their mission. But what we see, very clearly here, is that Dr. Ralph Gonsalves has absolutely no concern for the public interest, and no intention of being guided by the CDB’s best practices and good example.
What is Dr. Ralph Gonsalves’ interest? Let’s go to the heart of the process. On a properly organized public project where rules and ethics are being observed, several things must happen. First, there is a minimum number of bidders allowed, normally three. The reason for this is obvious. You don’t want a situation where only one company is allowed to bid for a large contract, because that encourages corruption. You need an element of competition, to protect the public interest.
Remember, this is not Ralph Gonsalves spending his own personal money on his estate. He is spending public money. Our money. The money provided to this government by the CDB under the terminated funding arrangement must be repaid, one way or the other, and this is done by taxing you the people… all of us. The Prime Minister and the Minister of Finance and Minister of Transport and Works can’t just decide to spend your money, our money, however they like.
But, that’s exactly the problem! Let’s get back to the process. After the bids are submitted, they must be evaluated. The bid evaluation (or tender evaluation) is based on technical and financial factors and the evaluation process results in a ranked list of bidders. The bidder who achieves the best overall score in the evaluation is invited to negotiate a contract. So, when the evaluation is complete, there is a ranking of bidders. Number 1, number 2, 3 and so on.
If for any reason the number 1 evaluated bidder is removed from contention, the second-ranked bidder is invited to negotiate to perform the project.
The intervention of the CDB in this project in question (Yarabaqua River defense work) was decisive: it essentially removed the number 1 ranked bidder from contention – even though this happened after the contract was awarded. In this case, an ethical government interested in doing the right thing would have simply invited the next evaluated bidder, whoever that was, to come in and negotiate for a contract to carry on the works. There is no need for any “long tendering process” at this point, as Gonsalves has claimed. The tendering process has already taken place and it would be an automatic process. That is, it would be an automatic process if the people in charge are interested in following the rules, to move to the next evaluated bidder.
Any government having any interest in ethics, good governance or the public interest would have done this! But the behavior of Ralph Gonsalves in this matter confirms the fact that he is running a dishonest, unethical and corrupt regime, and they have no intention of following any rules, laws or code of ethics. They are contemptuous of the CDB’s rules (even though they are required to observe the rules) and, it is clear also as in many past instances, that they have nothing but contempt for you, the people of this country. When you don’t respect the people you govern, in my view, you have lost the right to govern.
Ralph will award a contract, using public funds, not borrowed from the CDB, to continue the Yarabaqua project, using the same contractor that was rejected by the CDB, even though it is now clear that there was a fraudulent misrepresentation involved in the award of the project. In other words, contrary to what we know to be true, Ralph feels that this is indeed his plantation – and he will do as he pleases on his estate.
Well, we are here to tell Ralph Gonsalves: this is not his estate. This is a proud, independent country of people who are now tired of Gonsalves and his corrupt ULP administration.
Now, I will address more directly and dispose of some comments that were made recently by the ULP government and spokespeople to defend the lack of accountability and ULP corruption.
1. Regarding the CDB not alleging fraud
The chairman of the Tenders Board (Mr. Edmond Jackson) in the Statement mentioned above (dated July 22, 2019) wrote that the CDB’s decision of misprocurement did not contain any “allegation of corruption, fraud, impropriety or misbehaviour in public office by any official in the Government of St Vincent and the Grenadines or elsewhere”
Well, the CDB is a bank, not a police force or prosecutor. So, naturally, the CDB would not make any allegation of fraud or corruption or anything of the sort. Think about it; how many banks here in SVG have had employees steal from them and they never charged the employee with fraud? Usually, they fire them and, in most cases, that’s the end of it. Well, it’s the same thing here. But the CDB saw the fraud, though, and they acted on it. They saw the fraud and they moved to end their involvement to recover their money from the fraud and normally that would have been the end of it for them. But now, because their position is being misrepresented by the ULP government to cover their corruption, the CDB obviously felt obliged to release a statement in which it says clearly that “it is not the Bank’s practice to comment publicly on the specific details of individual procurement contract awards”
So Gonsalves and his acolytes using the fact that the CDB did not call it fraud as a justification to say that it was not fraud, is simply being disingenuous. There was fraud and corruption, and that is clear for all to see. What we see now is a continuing lack of accountability, which has led to more corruption. We have warned the nation about this many time before and will continue to point it out when we see it. We have done that here!
2. On the No-Objection granted by the CDB
The second point I want to make is in relation to Gonsalves’ defense that the CDB issued a no-objection to the award of the contract. Gonsalves is basically trying to suggest that the CDB approved the award of the contract because it issued a no-objection. The clear implication is that if it is a fraudulent contract, then the CDB is somehow liable for approving such a contract.
As usual, Gonsalves is misleading Vincentians. The fact of the matter is that the CDB, as the funding agency, provides funding on the basis that their rules will be followed and that the various parties involved will act ethically, honestly and in good faith. The government receives the funding on this basis and the ministry is responsible for executing the particular project that is being funded.
It is the government’s responsibility to evaluate the tenders and to explain the basis of the evaluation to the bank, in a written tender report. This report will contain the Ministry’s recommendation for the award of the contract. The Ministry may hire a consultant to perform this evaluation. But it is the responsibility of the government’s machinery to ensure that the evaluation is carried out fairly, competently and based on the rules identified by the CDB. The CDB does not examine or evaluate the tenders. This is the job of the executing agency – i.e.: the government!
When the government submits a tender evaluation report to the CDB and asks for their no-objection to negotiate a contract, the no objection will be granted once the CDB determines, based on the submitted tender evaluation report, that the recommendation has been arrived at in accordance with the accepted principles, rules and practice. But at every stage, the onus is on the executing agency – the government ministry – to ensure that rules are being followed and requirements are being met.
If someone in government and/or some other party is intent on perpetrating a fraud (say, for example by falsely claiming a contractor has some particular expertise or experience that is required), and if the tender evaluation report does not expose the deficiency, there is no way the CDB can find this out on their own. This is where Bally and Bally came in. The CDB allows for protests to be made for this very reason – as a second line of defense against fraud and corruption. It, website refers to whistleblowers as a means of protecting its process, and encourages the practice.
So, we see that the CDB’s “no-objection” is not an approval of a fraudulent contract, as Gonsalves and ULP spokespeople are trying to suggest. The CDB does not expect fraud to come from the chambers of its borrowing member countries, so it takes the submitted tender evaluation report at face value. Of course, it anticipates that fraudulent practices can occur, and it places specific provisions in its procurement process to allow avenues for the discovery of and consequences for fraud. Every contract that the CDB finances has a clause dealing with corruption and “fraudulent misrepresentation”. The “no-objection” granted by the CDB therefore assumes that the government and its agents are acting ethically and have done their job properly. It did not amount to an approval of a fraudulent contract in the present case.
But, as we now know, this is where the CDB has run into a problem. In their dealings with the Ralph Gonsalves administration, they are dealing with an unethical, corrupt administration. And don’t be fooled, they know it. And that is why they are now standing up for ethics and saying no to fraud and corruption.
We Vincentians must do the same thing. When the time comes, the people of this country will take the necessary action. In the meantime, and acting on behalf of the people of our dear mistreated and abused country SVG who want ethical, honest and transparent government, we call on the Prime Minister to:
1. Provide full disclosure of the complete tender evaluation report:
This tender was subject to a public opening; the prices were already read out in public, so the prices proposed by the various contractors are known. Therefore, there is no secret or impediment to releasing the full tender evaluation report;
2. Provide full disclosure of the names of the owners and beneficial owners of the company Reliable Construction Ltd:
The company is being paid by taxpayers. Therefore, every taxpayer has the right to know who they are paying. It’s as simple as that; and
3. For a statement by Camillo Gonsalves, St Vincent & the Grenadines’ representative on the CDB Board of Governors and Minister of Finance, on the matter:
As SVG’s representative on the CDB’s Board of Governors, Camillo Gonsalves is required to uphold the integrity of the institution and to ensure that it always acts in accordance with the public good and the principles of good corporate governance. As this country’s Minister of Finance, he has the same responsibility for ethics and transparency in dealing with matters relating to the public finances, in short, to adhere to principles of accountability! We need to hear from the Minister of Finance to ensure that the government does not bad-spend taxpayers’ money as it appears that they are determined to do.
The government’s response so far has done absolutely nothing to answer the legitimate questions of everyone’s mind. What went wrong to lead to a case where the CDB declared misprocurement on the contract?
4. We call for an Investigation of the Matter:
On behalf of the People of St. Vincent and the Grenadines, we call on the Government to immediately open a thorough investigation of the matter to be conducted by a competent and independent person or agency.
All the facts that led to the declaration of misprocurement by the CDB must be established and responsibility for this shameful and costly breakdown of the process be established.
The result of this investigation must be made public, and so too any and all corrective measures to be taken to ensure that this does not happen again.
Our country’s good name is important to all of us. The ULP government must stop tarnishing it!
Contact: Lavern King, Public Relations Officer
Email: [email protected]