Attorney General Faris Al-Rawi says he will act soon on an audit that suggested misappropriation of $50 million for a 2015 Government Information System Limited (GISL) project allegedly used instead to campaign for the former administration during the last general election.
In April 2018, SpotlightTT uncovered a thread of emails between Anthony Deyal and Mr. Doodnath Bhola, then chairman of GISL, in March 2015 that suggested that Deyal had been acting illegally regarding Project ICON to the extent that the board at the time was concerned about his integrity.
Read story here: ICON’S ILLEGAL ACT
The 41-page audit produced by GISL’s internal auditor Christian Pallai-Hernandez recommended GISL seek legal advice to determine if the state enterprise’s former CEOs, Andy Johnson and Anthony Deyal, behaved irregularly in signing contracts. Johnson was CEO from 2010-2014 and Deyal from 2014-2015.
Pallai-Hernandez questioned if the $50 million that had been allocated to GISL for its Project Integrated Communications Outreach Network (Project ICON) was instead used for election campaigning, and why bills related to the programme were $20 million over the budget. Project ICON, managed by Deyal, was designed to provide a platform for highlighting the policies, programmes and projects of the then People’s Partnership administration.
In December 2013, Cabinet approved $50 million for “strategic plans and action items” for the Ministry of Communications, GISL’s line ministry. Although only $31 million was eventually disbursed, signed contracts for the project were nearly $77 million but with little to no value to show for money. Additionally the audit stated that both Deyal and Johnson had signed contracts beyond their $100,000 budget, sometimes without proof of their being any board approval. Proper tendering processes were also not followed, according to the audit.
“There was poor implementation and oversight and an egregious override of controls and disregard for public procurement policies and practices by senior members of the board of directors and chief executive officer of GISL. There are several red flags and symptoms of intentional deception to obtain gain. A forensic audit is recommended into the following areas: the contract awarded to Columbus Communications (Trinidad) Ltd (Flow) and the services provided. The contracting and awarding and monitoring of contracts to the agents Label House Group and Ashmir Mohammed/Lidia Mahabir and the awarding of contracts to billboard owners and locations of screens to ascertain whether fraud occurred,” the auditor stated.
Since the project was to be completed by September 30, 2015, the auditor theorised it was merely a gimmick used for the campaign and to block billboard suppliers from working with the then-opposition, the PNM, especially since among the breakdown of Project ICON’s costs were $8 million for billboards.
“The overall financial management of Project ICON was poor. There is no evidence of written approval for any specific contracts, just board minutes highlighting approval in principle of a budget for the project, which was not followed. Despite the rules and requirements of public procurement, vendors and freelancers contracted to work on Project ICON were all solely selected. There is no evidence of required documentation to support the rationale of the selection for these individuals or institutions as required under merit awards,” the audit said.
Contracts with Ashmir Mohammed, Label House Group and Flow were signed as early as March 28, 2014, months before the $50 million was even approved. Billboard contracts were issued from as early as June 2014. By July 1, 2014 contracts amounted to $65,259,030, or $15 million more than the Cabinet approved figures. Contracts were supposed to run until September 30, 2015—the termination of Project ICON— and the final tally was $76,938,205. Contracts beyond that date had a potential liability of $1,576,500.
Flow owed $21m
On March 28, 2014, Johnson signed a three-year-contract with Flow, but the audit found no evidence relating to the contract’s origination or its purpose. There was no written approval from then finance minister Larry Howai or his ministry. There was also no approval from the board.
The State Enterprises Performance Monitoring Manual under 3.1.14 says that state enterprises or their subsidiaries must obtain prior approval of the finance minister in order to, among other things, enter into significant contracts. On August 8, 2014, a letter was sent to Howai from GISL’s chairman Doodnath Bhola, confirming the Flow contract was consistent with standard procurement methods.
The contract was for digital content distribution at 500 government sites on 46-inch LED display monitors, which were to be supplied, installed and activated by Flow. The supplemental terms of the contract between Flow and GISL, done on November 18, 2014, stated that all invoices past due will attract a two per cent monthly interest fee on outstanding balance.
Another letter was sent to Pamela Warner, Flow’s vice president for finance and administration, saying GISL agreed to reimburse the company for all duties and charges for clearance on items for the project, including 500 Samsung monitors, and 500 iBase media players. The cost of terminating the contract would be $23.6 million. By the end of September 2015, GISL owed Flow $21 million.
Lidia Mahabir, who supplied electronic billboards, was given ten contracts for 48 screens totalling $3.5 million for the period June 30, 2014 to July 1, 2015. Five contracts were signed by Johnson in 2014, while the other five were signed by Deyal in 2015. The auditor said there was no evidence to show that the tenders committee approved any of the contracts. He also highlighted that some of the locations billed for screens had screens belonging to another company and there was no evidence to show that there were ever screens at those locations belonging to Mahabir’s company.
The Ashmir Mohammed Agency contract was signed on April 2, 2014. Again, the auditor found no evidence of a tender process. The only evidence of approval was an e-mail from Deyal on March 26, 2014. The contract was signed by Johnson. Mohammed was selected “because he holds a monopoly in the market,” Pallai-Hernandez noted he was told, which he found strange since there were also other companies providing a similar service.
Mohammed was paid $526,148 as at September 30, 2015 in commissions for the screen network.
The audit also suggested improper hiring practices during the project, where employees with salaries in excess of the CEO’s $100,000 limit were still hired, approved either by Johnson or Deyal. Some were hired with little to no qualifications for the job including one photographer who had a one sheet resume and was last employed as a fisherman. Despite the requirements that three names be submitted for consideration, the auditor noted all personnel were “sole selected.”
A black Honda CRV was purchased on June 16, 2015 for $395,000 for use by the ICON teams to monitor billboards and to transport equipment. GISL also rented a Nissan X-trail for a month for $11,615 for use on the project. Initially, a proposal was submitted to the tenders committee for the purchase of a Mercedes-Benz on March 27, 2015 but that was not approved.
In April of that year, Deyal, via e-mail, threatened to quit citing the board’s alleged concerns of a possible conflict of interest arising out of Deyal’s simultaneous roles in GISL and ICON. Deyal’s concerns were subsequently addressed and he agreed to stay on but, by mid-June, chairman of the tenders committee Usha Rampersad was replaced and Gail Prince-Persad took over. A tender note for a Honda CRV was then approved and the award of tender signed by Prince-Persad.
Asked about his role in Project ICON, Johnson said that nothing he did was outside of the board’s approval as he was working under the instructions of the board. Maxie Cuffie, who was the line minister at the time of the audit, said he laid the document report in Parliament in October 2015, and handed it over to the Attorney General.
How $50m was to be spent:
Billboards: $8 million
Publications: $7 million
Television productions: $8.9 million
Social media: $8 million
Internal communications (broadcasting at all government buildings): $12 million
Administrative costs: $6.09 million
GISL’s Flow bill:
Customs duties 2014 for 500 screens: $789,600 (only 102 imported)
Recurring charges 2014: $11,302,500
Recurring charges 2015: $20,017,200
Recurring charges 2016: $20,017,200
Recurring charges 2017: $9,495,200