PM Holness at centre of possible conflict of interest probe
Jamaica
Prime Minister Andrew Holness has been cited for a possible conflict of interest in the awarding of Government contracts totalling millions of dollars to an entity – Westcon Construction Limited – and has been referred to the Director of Corruption Prosecution at the Integrity Commission for possible further action.
The Commission’s 107-page report, which was tabled in Parliament on Tuesday, also implicates two state agencies, the National Works Agency (NWA) and the Social Development Commission (SDC).
The contracts were awarded between 2006-2009, which overlaps with the period when Holness was the Minister of Education, Youth and Information. The prime minister is the Member of Parliament for St Andrew West Central
The two directors of Westcon Construction—Robert Garvin and Donovan Simpson—are personally known to Holness for more than 20 years, the investigation, which started at the now-defunct Office of the Contractor General (OCG), found.
Pointing to the possible conflict of interest, the Director of Investigation at the Integrity Commission referred Holness to the Director of Corruption Prosecution for consideration with respect to breaches of the Contractor General Act, the Public Sector Procurement Regulations 2008, the Corruption (Prevention) Act, and/or any other applicable law.
The Integrity Commission said the investigation sought to ascertain, inter alia:
(a) the nature and particulars of Government of Jamaica (GoJ) contracts that were awarded to Westcon Construction Limited during the relevant period;
(b) the nature and extent of the relationship between… Holness and the directors/principals of Westcon Construction
(c) the extent of the involvement, if any, of…Holness in the award of GoJ contracts to Westcon Construction
(d) whether the circumstances surrounding the awarding of contracts and/or the process(es) utilised by (i) the Ministry of Education, Youth and Information (MOEYI)(ii) the NWA(iii) the SDC was devoid of irregularity and impropriety and was fair and transparent”.
The investigation found that 10 contracts valued at $21.8 million were awarded by the MOEYI to Westcon Construction during the period February 14, 2007 and November 10, 2009.
Of the 10 contracts, each valued between $1.4 million and $3.3 million, only five were reported to the OCG by way of the MOEYI’s Quarterly Contract Award (QCA) Reports for the period.
Additionally, the probe found that the NWA awarded 34 contracts to Westcon Construction valued at $33.7 million between July 16, 2009 and June 6, 2016. Of the 34 contracts, 26 fell within the value threshold that required the NWA to submit particulars of the contracts to the then contractor general by way of its QCA Reports. However, only six of the 26 contracts were reported to the OCG by way of the NWA’s QCA Reports for the period, according to the investigation.
Chief Executive Officer at the NWA, EG Hunter, advised the OCG that “…there are no records to indicate the method of procurement that was utilised for the award of the referenced contracts.”
Hunter also advised that “… the procurement records do not show where any of the referenced awards listed went before the committee for approval”.
Regarding the SDC, the investigation found that two contracts were awarded to Westcon Construction during the period December 20, 2007 and September 10, 2009.
Both contracts were reported to the OCG by way of the SDC’s QCA submission, where it was indicated that the Limited Tender procurement methodology was utilised for the award of contract in the amount of $375,000, and the Sole Source procurement methodology for the award of a contract in the amount of $1,450,000.
However, the Executive Director at the SDC, Dr Dwayne Vernon, told investigators that “there is no evidence of the SDC utilising formal tender procedures for the procurement for the works and services executed by Westcon Construction Limited.”
The OCG was also advised by Vernon that the records indicated that “…Westcon Construction was introduced to the SDC by way of letter from the MP”. Vernon also indicated that “…there is no evidence available to the SDC detailing how Westcon Construction was selected to provide services, as the SDC did not procure such services. This was done at the level of the constituency.”
According to the commission’s report, Westcon Construction Limited was incorporated on October 11, 2004, and was registered by the Companies Office of Jamaica (COJ) with Garvin and Simpson as directors/shareholders and Jerome Green as secretary.
The investigation also details the nature and extent of the relationship between Holness and the directors and/or principals of Westcon Construction. It said both Garvin and Simpson are known to Holness for over two decades.
“Based upon the disclosure, which was made by…Holness, Mr Robert Garvin is personally known to him and had been employed both in the prime minister’s [St Andrew] West Central constituency and his personal business. It was also disclosed by the prime minister that Mr Donovan Simpson is known to him ‘casually’, and was introduced to him by Mr Garvin, and that Mr Simpson was engaged by him ‘privately’ to undertake land surveying work,” the report said.
The investigation found that Garvin was also a director in Positive Jamaica Foundation Limited, where Holness is a director. It also found that Garvin, Finance Minister Dr Nigel Clarke and Warren Vernon were listed as “ceased directors” as at November 1, 2016.
Additionally, Holness and Garvin are listed as directors of Sunshine Mobile Company, with the core business activity being the provision of transportation consultancy. Holness has been a “ceased director” as of September 2007, and is listed as a shareholder alongside Garvin.
Both Garvin and the prime minister’s wife, Juliet Holness, the Member of Parliament for St Andrew East Rural and Deputy Speaker of the House of Representatives, were listed together as directors of Omega Bridge Finance, for which the core business activity is listed as investments.
In November 2016, Garvin was listed as a ceased director in the company, West Central Saint Andrew Trust, for which Holness was listed as a director.
Meanwhile, the investigation found that the then accounting and accountable officers of the then MOEYI breached sections 29(a) and (b)(ii) of the Contractor General Act as a result of their failure to submit the requisite QCA Reports to the OCG, advising of the award of five contracts to Westcon Construction during the subject period:
The director of investigation also concluded that the then accounting and accountable officers of the NWA breached sections 29(a) and (b)(ii) of the Contractor General Act as a result of their failure to submit the requisite QCA Reports to the OCG, advising of the award of 20 contracts to Westcon Construction Limited during the subject period, and which fell within the contract value threshold for reporting.
The director of investigation concluded further that the NWA failed to prepare and/or preserve documentation for 34 contracts which were awarded to Westcon Construction during the subject period.
“This failure, on the part of the NWA, amounts to a breach of section 2.10.1 and subsection 2150 of the then applicable GOJ Handbook of Public Sector Procurement Procedures, which stipulates the mandatory minimum period for the retention of public procurement records.
“This has had the effect of impairing the OCG’s efforts in determining (a) whether all the contracts were awarded transparently and on merit, and (b) the basis upon which certain contractors were selected to undertake a multiplicity of works, and (c) whether value for money was obtained by the GOJ,” the report said.
“Having regard to the foregoing, the DI (director of investigation) has reasonable grounds to conclude that the NWA displayed scant regard for established standards of accountability and transparency stipulated by the GOJ Handbooks of Public Sector Procurement Procedures,” the report added.
“The DI concludes that the failure of the NWA to retain and furnish the procurement records relevant to the subject award of contracts is probative of its contempt for transparency and accountability, and brings into question the agency’s commitment to principles of good governance and prudent financial management.”
The DI also concluded that a discrepancy exists between (a) the representations made by the SDC in its QCA Reports that the Sole Source procurement methodology was utilised in the award of contracts to Westcon Construction, and (b) the disclosure by Dr Dwayne Vernon on June 22, 2016, that “no formal procurement procedures were utilised” in the same contract awards.
It said: “Having regard to the dichotomy which subsists, given the absence of documentation to the contrary and the sworn testimony of Dr Dwayne Vernon, the DI accepts the testimony that no formal procurement procedures were utilised and, therefore, concludes that the SDC breached Section 29 of the then applicable Contractor General Act by its representation in its QCA Reports concerning the procurement methodology utilised in the award of contracts to the referenced contractor.”
According to the report, “the director of investigation has found evidence which provides grounds for forming the view that the SDC acted upon the instructions which were conveyed by the Most Hon Andrew Holness, by way of letters dated December 20, 2007, and September 23, 2009, and made payments to Westcon Construction Limited in the amounts of $375,000 and $1,450,000 without the utilisation of the mandatory formal GoJ procurement procedures. The payments were made by the SDC in respect of works which were stated to have been executed in the constituency of West Central St Andrew.
“Notwithstanding the fact that the SDC was the implementing agency entrusted with the authority to effect the administration of GOJ contracts and thereby enforce the stipulated formal procurement procedures, the director of investigation concludes that the Most Hon Andrew Holness, by his admitted recommendation of Westcon Construction Limited, may have influenced the award of the contracts to the mentioned contractor,” said the report.
Based on the findings of its director of investigation, the Integrity Commission has referred a copy of its Investigation Report to the director of corruption prosecution for such actions as the director may deem to be appropriate.
The NWA and the SDC were similarly referred.
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