Tuesday, September 28, 2010

Corruption in Fiji Military Among Reasons for 2006 Coup

The unpublished RFMF Budget 2006 and Coup Nexus


Posted on COUP FOUR POINT FIVE - 28 September 2010
Dictator carried out coup to suppress fraud and police investigation into falsification of LPOs and Invoices by military
 
Cabinet Memo: “The Auditor General’s Report of 2004 highlighted a surcharge of $1,612,630 for unauthorized purchase from LOTUS Garments. Given the above it is indeed unethical for RFMF to continue to do business with LOTUS Garments until the surcharge action is finalized … No further dealing should be made with LOTUS Garments forthwith.”

By VICTOR LAL

The dictator Frank Bainimarama and his bula skirt and dhoti-clad pompom cheerleaders defending his 2006 treasonous coup do not fail to remind us of the so-called ‘Agriculture Scam’ which they claim warranted military intervention to weed out corruption. Now, it has emerged that the military had overspent over $45million since the coup, as highlighted in the 2007 Budget.

We should not be surprised with the recent revelation. When the Laisenia Qarase government tried to rein into the military and its expenses, the dictator unleashed his gun-toting dogs of war, led by Esala Teleni, the ‘Holy Joe’ sacked police commissioner, then deputy to the dictator. 

The military began terrorising the democratically elected government, and finally overthrew the SDL-FLP multi-party government on 5 December 2006, claiming it was corrupt. While it inducted the FLP leader Mahendra Chaudhry into its interim illegal Cabinet, it later used FICAC to charge the ousted Prime Minister Laisenia Qarase, to justify the coup. What about the fraud on the part of Frank Bainimarama and those around him, including businessmen doing business with the military?

Documents in my possession since the 2006 coup, made available to me from strategically placed military sources (those against the treasonous coup) inside the Military High Command, reveal that as far back as June 2006, the Ministry of Home Affairs (MFA) had been expressing alarm over the RFMF Budget 2006. 

However, the highly confidential MHA documents were being leaked to the Military High Command from inside the MHA by one of their former own – a military man. In other words, the dictator and his coup conspirators were acutely aware of what might befall on them, so they began creating ‘smokescreen and mirrors’ until they treasonously overthrew the Qarase government.

A memo prepared for the then Minister for Home Affairs highlighted some of the irregularities that were surfacing in the RFMF Budget 2006. The Memo reads: “The Auditor-General’s Report highlighted the falsification of documents. The brief will show that RFMF is yet again committing the same mistake incurring expenses of $6,179,000. Another LP of $6,136,578.00 is yet to be signed. RFMP is also making purchases without Major Tender Board approved and is stockpiling on its protection and winter issues.”

RFMF BUDGET – IRREGULARITIES

AIM
This submission is to inform you of some of the RFMF 2006 Budget irregularities as follows:
 
Unauthorised purchases; 
(b) Manipulation and falsification of the LPO’s processed and paid to indicate that good had been received and taken on charge when in fact, they were yet to be supplied or partially delivered; 

 Approval of Tender Board were not obtained for all purchases resulting in the unauthorized issue of LPO’s as follows:
$1,900,000 – against a provision of $70,200 for Sinai only – This has been paid in full;
$3,879,000
$6,136,578 in pipeline but yet to be signed
350,000 – This has been paid in full
50,000 – This has been paid in full

 Manipulation and falsification of invoices to ensure that they are processed for payment by issue of Certified Receipt Vouchers (CRV) (confirming that goods have been delivered and taken on charge in RFMF stores).

However upon inspection, it was found that good have either yet to be delivered, partly delivered and taken charge in RFMF stores. The CRV’s provided the certification for payment authorizing the Accounts Section to issue the cheques. These have been paid. RFMF Accounts have paid $1,900,000 (full amount) only to find out later that the supply of goods was questionable. RFMF has also paid item c) iv and v) above.

 Goods have been ordered and (in some cases, paid already) without due regard on the financial impact of the purchases on the RFMF 2006 Budget

Quantities approved by the Major Tender Board (MTB) was only 270 totalling $133,650, whereas RFMF actually issued LPO’s for $350,000 for quantities ranging from 2000 to 10,000. Some of the goods purchased were not approved by the MTB – eg Laundry Bag (270, cost $50,000; Winter Long John, 10,000, cost $1,170,000)

RFMF therefore did not comply with the MTB approved quantities and far exceeded it thereby incurring an excessive unauthorized expenditure amount of $2,250,000 against the approved amount of $133,650.
 g) LPO’s were signed and issues in excess of the approved limit of $10,000

BACKGROUND
The 2004 Auditor General’s report is recommending the surcharge of the Director Military resources for the unauthorized purchases from LOTUS Garments (owned by regime supporter Padam Lala, who in 2008 was appointed chairman of the Land Transport Authority by Timoci Lesi Natuva, the interim Transport Minister after the 2006 coup; he was contingent commander in Iraq before taking up his Cabinet post in 2008).

At the conclusion of this submission there is grave concern that RFMF is again committing the very same mistakes and unauthorized expenditures as highlighted in the 2004 Auditor General’s Report. 

At this rate and, and even at this early stage, it can be confidently predicted that RFMF will again excessively overspend its 2006 Budget.

Lastly, it will be demonstrated that since January 06 RFMF has been stockpiling on its protective gear and winter issues. It has taken advantage of the period of “internal unrest” since 13/1/06 and the lead up to the General Elections to stockpile on its equipment.

UNAUTHROISED PURCHASES
$1,900,000 (refer Annex A).
Annex A is the LP No 573506 of 12/1/06 totalling $1,900,000. A-2 is the relevant invoice no 3556 of 17/1/06. The LP quotes a tender No 89/20005.

Comments
This LPO is for the purchase of winter issues. However tender 89/2005 was for the purchase of protective gear (not winter issues). The Tender was withdrawn. RFMF is in this case quoting the Tender Board number and falsifying the document to circumvent the Tender Board Process.
LPO was issued on 12/1/06. Invoice was dated 17/1/06. A CVR No 037/06 of 9/2/06 was stamped on the invoice signifying that the goods have been received at RFMF Stores.
Upon receipt of the CRV, RFMF Accounts have proceeded to pay $1.9million (from VAT allocation). However, after payment and upon inspection with stores it was discovered that the goods have been partly delivered. Payments should only be made after receipt of all goods. Documents were therefore falsified and manipulated for payment.
The quantities ordered for these Winter Clothing (Sinai & Iraq) were far too excessive as the deployed force is only 582. The 10,000 Winter Long Johns is far too excessive for a force ceiling of 3257 pax. Why is RFMF stockpiling?
The total amount incurred on these expenses is $1.9million against a provision of $70,200 for winter issues for Sinai; not Iraq and definitely not for the home or local battalions.
$3,879,000.00

 Refer Annex B
Annex B is an LPO issued to Lotus Garment on 20th Jan 06 for 1000 Body Amour Vest. Total cost is $1,875,000. Annex b-1 is the invoice for the above with a Confirmed Received Voucher (CVR) No 218/06 of 26/4/06.
Further Annex B-2 is an LP No 573511 dated 14/1/06 totalling $2,004,000. Annex B-3 is an Invoice No 3557 dated 17/1/06 (only four days after issuing LPO) totalling $2,004,000 with CVR No219/06 of 26/4/06. Total for the two invoices is $3,879,000
 
Comments
Please note the following irregularities: (a) The items purchased are as follows: 1) 1000 Ballistic Helmets; 2) 1000 Gas Masks; 3) 1000 Hydration Packs; 4) 500 Gas Masks; 5) 1000 Body Canister Amour Vests.
(b) The quantities are absurd to say the least! Were these meant for Sinai & Iraq? Firstly the total deployed force is only 582.
c) Secondly, I remember distinctly that for the initial deployment to Iraq (Guard Units (GU) the Australians provided the Protective Gear. Subsequently, for Basra and Erbril it is my understanding that the Protective Gear will be provided in theatre upon deployment. So why is RFMF buying all these gear? 

In any case, Cabinet finally agreed on the provision of Protective gear for Sinai on 31/1/06
d) The LPO’s were issued on January 14th and 20th 06 the period of ‘internal unrest” at QEB, well before the Cabinet approval
e) The CO Staff is only authorized to sign LPO’s up to $10,000. At the time of the issue of the LPO no funds were available. i.e. Funds were only wired and approved in late April 06.
f) The Auditor General’s report of 2004 highlighted a surcharge of $1,612,630 for unauthorized purchase from LOTUS Garments. Given the above it is indeed unethical for RFMF to continue to do business with LOTUS Garments until the surcharge action is finalized.
g) The RFMF is quoting a Tender No 89/2005 (required for UNAMI, 2FIR deployment). This Tender was cancelled when it was noted that the Protective Gear for UNAMI would be met by donors i.e. Australia, (for Baghdad) and UN (for Basra and Erbril). See Annex D. Hence the issue of these LPO’s were unauthorized, over the limit and did not undergo the Tender Process.
h) Not all the goods have been received yet CVR’s were issued from the RFMF Stores to secure payment.
i) This invoice/purchase is yet to be paid. However, RFMF stores have stamped the invoice CRV on 218/06 of 24/4/06 confirming that goods have been delivered; however upon inspection it was confirmed that goods were outstanding
$6,136,578

Refer Annex C
The LP is yet to be signed. However this document refers to the purchase of additional protective equipment. Please note that this same equipment were earlier purchased on LPO’s 573539 and 573511 being Annexures B and B-2 respectively. 
If Annex C were to be issued then the total number of items purchased would the be: a) Body Armor Vest – 1000+1582=2582; b) Ballistic helmets – 1000+1582=2582; c) Gas masks – 1000+1582=2582; d0 Hydration Packs – 1000+1582=2582’ e0 Gas masks ganister – 5000+7910=12.910
Again these quantities are grossly over purchased against total manpower strength of 3257. On 28/4/06, RFMF again attempted to purchase additional items specified herein totalling $6,136,578. Upon enquiry with stores it was revealed verbally that the above is for “election preparation”. This has serious implications indeed.
$350,000

See Annex E
Annex E is LPO 573505 of 12/1/06 for $350,000.000. E-1 is Invoice No. 3555 of 17/1/06 for the following: a) Fiji Badges 10,000=50,000; b) Balaclavas 2,000=50,000; c) Gloves 2,000=50,000; d) Goggles(sand & dust) 2000=170,000; ID card holder 2000 = 30,000 – 350,000
This has been paid. It is not ascertained whether this have been delivered as there is no CRV NO.
$50,000

Refer Annex F
Annex F is an additional payment for LPO 573505 which means an additional payment of $50,000 was made to the same LPO.

Conclusion
Indeed this whole saga shows a blatant disregard for established financial regulations and management and expenditure of public funds. There has been a deliberate attempt to manipulate and falsify documents to effect payment. RFMF has been quoting Tender 89/2005 for all these bulk purchases as a cover to imply that the purchases have been approved by the MTB. They have deliberately circumvented the MTB processes.

Within a span of four months RFMF has incurred expenses of $11,915,578. RFMF has not disciplined the officers implicated in the 2004 Auditor General’s Report on Falsification of Documents and the possibility of fraud.

It can be concluded that during the period of “unrest” at QEB, and the lead up to the General Election RFMF took the opportunity to stockpile on their protective equipment. Although in Annex C the LPO is yet to be signed and issued the fact remains that RFMF has proceeded to stockpile its protective gear and winter issues.

Recommendation:
It is recommended that a special surprise Audit check be immediately conducted on the above LPO’s
No further dealing should be made with LOTUS garments forthwith.
An investigation should be carried out for huge payments made with false CRV when goods have yet to be delivered.
Procedures for procurement of goods and services should be strictly complied with to ensure proper management of public funds and prevent abuse.
Internal control put in place to ensure that payments are made only on invoices for which goods and services have been satisfactorily received and accepted be reviewed.
The Director Military Resources should be disciplined for signing LPOs and approving the purchases well have his approved limit
The approval of the Major Tender Board must be obtained for any purchase above $30,000
Officers involved in falsifying LPOs, CRV and invoices to ensure that they are processed for payments should be disciplined and surcharged.
The false certification of LPOs and invoices to indicate that goods have been received in order to be passed for payment was intentional and tantamount to fraud.
Police should be informed of the possibility of fraud.

Instead of allowing the due process of law, the dictator manipulated his military officers to overthrow the Qarase government, claiming in his takeover speech of 5 December 2006 that he carried out the coup to weed out corruption and make Fiji a race-free nation. 

There was no mention in his speech to make his military corrupt-free, and to hunt down corrupt Indo-Fijian businessmen who have tied their business empires to the military’s boots. So, don’t believe in the filth he and his bula skirt and dhoti-clad pompom supporters have been churning out since 2006 about a race-free Fiji. 

Editor’s Note: One of the beneficiaries of the misuse of military budgets was the illegal acting Prime Minister Epeli Ganilau and his wife, especially in the abuse of the Regimental Funds, running into thousands of dollars.

Pictures: Bainimarama salutes misspending (top left) and Padam Lala, (right) the managing director and found of Lotus Garments, who is also the chair of the Land Transport Authority. Report found the military made unauthorized spending of $1,612,630 with Lotus.

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