Monday, May 16, 2011

Liberia: Controversial Nigeria Oil Deal

Paul Yeenie Harry

Source: allAfrica.com


In the wake of the General Auditing Commission's recent report revealing corruption at the Liberia Petroleum Refinery Corporation (LPRC), including the lack of accountability and transparency in the controversial "Nigerian Oil Deal," President Sirleaf has declared Mr. Greaves blameless.

The President, convinced about the transparent and accountable fashion in which Mr. Harry Greaves Jr., former Manager Director of the corporation, conducted the oil deal, declared at a press conference last week that the deal was transparent and that Mr. Greaves did not unilateral execute it, challenging: "Go there (to LPRC) and see for yourself. He left all of the documents there, including the Nigerian oil deal."

President Sirleaf's verdict indicates that she has more information and other details on the Nigerian deal than the audit presents, although these details have not been made public.

However, in spite of the President's implicit confidence in Mr. Greaves' role and managership at the LPRC, the GAC audit report reveals corruption, lack of transparency, accountability and proper documentation not only in the controversial oil deal, but also in other operations of the entity.

Page 13 of the report, for instance, states: "Overall, both financial and administrative activities undertaken by LPRC Management during the period under review (2006 and 2007) were marred by a number of financial irregularities and control deficiencies. The financial irregularities noted amounted to US$13,785,569.82 and L$100,360.00."

Considering other irregularities and discrepancies, pages 11 and 12 reveal the following: "LPRC reported accounts receivable as at 31 December 2006 and 2007 in the amounts of US$1,607,768 and US$1,303,462.00 respectively. However, during the audit, third party confirmation of accounts receivable revealed that there were differences between the balances on the books of some customers and the amounts reported by LPRC. The differences noted in accounts receivable amounted to US$103, 249.96 for the two-year period.

"LPRC management provided bank reconciliation statements for the United States Dollar-USD account held with LBDI;(a/c #02215/110963/02) and the general ledger for the period January-December2007. My review of the bank reconciliation statements, however, disclosed some significant errors. For instance, the unadjusted balance in the year-end reconciliation was US$1,970,493.08 while the balance in the general ledger was US$1,630,659.31, thus, understating the cash book balances by US$339, 833.77.

"Management made salary payments to senior management staff in cash and coupons. In my view, this arrangement was nothing other than a tax evasion scheme wherein the taxable amount on the payroll was far less than what it should have been. The effect of salaries being paid with fuel coupons is that expenditure on salaries and benefits were understated by US$263,350.00, while gas and fuel costs were overstated by the value of the fuel coupons. The eight management staff who received part of their salaries with fuel coupons failed to pay social security contributions and income tax in the sum of US$7,942.00 and US$67,040.00 respectively.

"I noted several undocumented and unexplained expenditure. For instance, an amount of US$12,000.00 was disbursed on three PVs with a narration - "confidential public relations services". The PVs were without supporting documents to indicate the exact nature of services rendered and the names of the beneficiaries. Memos from the MD, requesting the payments to be made, were attached to the PVs. Managing Director Greaves refused to account for the money, although an audit observation memorandum and the draft management letter was submitted to him. I have noted several instances in other audits wherein expenditure on purported "public relations" is used as means to misappropriate public funds. I recommended that Managing Director is held accountable and made to immediately restitute the US$12,000.00."

A Focus on the Controversial Oil Deal

President Sirleaf, in defending Mr. Greaves in relation to the controversial Nigerian Oil Deal, challenged journalists and others to visit the LPRC because, she's convinced, they would see that everything was done transparently and accountably.

However, the audit report reveals a completely different situation. Concerning an open bidding process that should have taken place according to the 2005 PPC Act, or whether Mr. Greaves unilaterally committed the Liberian government and its people to such a deal, the report says on page 4: "The oil was lifted by Addax, a Company contracted by Managing Director Harry Greaves, which was effectuated without applying the provisions of the PPC Act, 2005. The Board's approval was also not evidenced prior to awarding the contract to Addax, and it was therefore a unilateral decision."

Relating to irregularities and other bad practices connected with the quantity of petroleum product contained in the original contract, the audit report reveals: "The total quantity of crude oil that the Government of Nigeria through its NPPC agreed to supply to the Government of Liberia through LPRC was 3,650,000 barrels, amounting to 10,000 barrel per day. But through an extended audit procedure, I uncovered that Addax continued to lift crude oil in the name of the Government of Liberia/LPRC in excess of the agreed upon quantity. The total quantity that was uncovered as being lifted by Addax was 4,652,796 barrels at a total value of US$318,761,591.24. This means 1,002,796 barrels was lifted in excess of the agreed upon quantity. There was no contract, much less a contract modification that would provide the legal basis for Addax to lift the excess in the name of the Government of Liberia/LPRC. Although this matter was brought to the attention of MD Greaves, no evidence of any legal action was taken against Addax."

On the issue of whether the contract or transaction brought the Liberian government and its people the desired or requisite benefit, especially in financial terms, the report states: "The Government of Nigeria could have avoided the transactional cost by just giving Liberia the US$553,000.00 that was reported as being the total revenue generated from this transaction. Again, it is doubtful that value for money was achieved and this transaction was done for the sole benefit of the Liberian taxpayers. The Government received US$553,000.00 on a transaction valued at US$318,761,591.24."

In view of the President's readiness to put her neck on the chopping board for Mr. Greaves, and considering reports that he (Greaves) is contemplating suing the GAC for defamation of character, it is not known whether the President will stand as a witness for Mr. Greaves during the litigation.

Also, some reflect on what they describe as the President's continuous inaction on, or disagreement with, audit reports indicting officials of her government and wonder as to whether or not audit reports will ever be respected and acted upon in this country.

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Drawing the line in Liberia

Crimes sponsored, committed, or masterminded by handful of individuals cannot be blamed upon an entire nationality. In this case, Liberians! The need for post-war justice is a step toward lasting peace, stability and prosperity for Liberia. Liberia needs a war crimes tribunal or some credible legal forum that is capable of dealing with atrocities perpetrated against defenseless men, women and children during the country's brutal war. Without justice, peace shall remain elusive and investment in Liberia will not produce the intended results. - Bernard Gbayee Goah



Men with unhealthy characters should not champion any noble cause

They pretend to advocate the cause of the people when their deeds in the dark mirror nothing else but EVIL!!
When evil and corrupt men try to champion a cause that is so noble … such cause, how noble it may be, becomes meaningless in the eyes of the people - Bernard Gbayee Goah.

If Liberia must move forward ...

If Liberia must move forward in order to claim its place as a civilized nation amongst world community of nations, come 2017 elections, Liberians must critically review the events of the past with honesty and objectivity. They must make a new commitment to seek lasting solutions. The track records of those who are presenting themselves as candidates for the position of "President of the Republic of Liberia" must be well examined. Liberians must be fair to themselves because results from the 2011 elections will determine the future of Liberia’s unborn generations to come - Bernard Gbayee Goah

Liberia's greatest problem!

While it is true that an individual may be held responsible for corruption and mismanagement of funds in government, the lack of proper system to work with may as well impede the process of ethical, managerial, and financial accountability - Bernard Gbayee Goah

What do I think should be done?

The situation in Liberia is Compound Complex and cannot be fixed unless the entire system of government is reinvented.
Liberia needs a workable but uncompromising system that will make the country an asylum free from abuse, and other forms of corruption.
Any attempt to institute the system mentioned above in the absence of rule of law is meaningless, and more detrimental to Liberia as a whole - Bernard Gbayee Goah

Liberia's Natural Resources
Besides land water and few other resources, most of Liberia’s dependable natural resources are not infinite, they are finite and therefore can be depleted.
Liberia’s gold, diamond, and other natural resources will not always be an available source of revenue generation for its people and its government. The need to invent a system in government that focuses on an alternative income generation method cannot be over emphasized at this point - Bernard Gbayee Goah

Liberia needs a proper system
If Liberians refuse to erect a proper system in place that promotes the minimization of corruption and mismanagement of public funds by government institutions, and individuals, there will come a time when the value of the entire country will be seen as a large valueless land suited on the west coast of Africa with some polluted bodies of waters and nothing else. To have no system in place in any country is to have no respect for rule of law. To have no respect for rule of law is to believe in lawlessness. And where there is lawlessness, there is always corruption - Bernard Gbayee Goah

Solving problems in the absence of war talks

As political instability continues to increase in Africa, it has become abundantly clear that military intervention as a primary remedy to peace is not a durable solution. Such intervention only increases insecurity and massive economic hardship. An existing example which could be a valuable lesson for Liberia is Great Britain, and the US war on terror for the purpose of global security. The use of arms whether in peace keeping, occupation, or invasion as a primary means of solving problem has yield only little results. Military intervention by any country as the only solution to problem solving will result into massive military spending, economic hardship, more fear, and animosity as well as increase insecurity. The alternative is learning how to solve problems in the absence of war talks. The objective of such alternative must be to provide real sustainable human security which cannot be achieved through military arm intervention, or aggression. In order to achieve results that will make the peaceful coexistence of all mankind possible, there must be a common ground for the stories of all sides to be heard. I believe there are always three sides to every story: Their side of the story, Our side of the story, and The truthBernard Gbayee Goah

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