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N6398 PAPUA NEW GUINEA [IN THE NATIONAL COURT OF JUSTICE] CR (FC) No. 255 OF 2015 CR (FC) No. 254 OF 2015 CR (FC) No. 246 OF 2015
STATE
V
ATI WOBIRO (NO. 1) MODOWA GUMOI (NO. 1) NORMAN MAY (NO. 1) -Accused-
Daru & Waigani: Ipang, J 2016: 7, 8, 11, 12 April 26th July
CRIMINAL LAW –Three (3) accused charged under Criminal Code Act, Chapter 262 – section 407(1) conspiracy to defraud Independent State of Papua New Guinea the sum of K7, 060, 000.00 and misappropriation of K7, 060, 000.00 belonging to Independent State of Papua New Guinea – whether the three (3) accused conspired with each other to defraud & whether actions of the three (3) accused amounted to dishonesty.
CRIMINAL LAW – Movement or transfer of Public funds from Provincial Treasury into Fly Care Foundation Inc. a charity organisation through a Memorandum of Agreement (MOA) (undated) between governor of Western Province and Founder of the charity organisation Fly Care Foundation Inc. for Fly Care Foundation to manage public funds and keep records for acquittal purposes – whether compliance with Public Finance Management Act, PSIP Guideline 2013 and 1A/2013 PSIP Financial Instruction. CRIMINAL LAW –Entering into MOA with a charity organization whether is in compliance with Public Private Partnership Policy (PPP) and Public Private Partnership Act No.30 of 2014.
Papua New Guinea Cases cited: Application by John Mua Nilkare, Review Pursuant to s. 155 (4) of the Constitution [1998] PNGLR 472 Brian Kindi Lawi v. State [1987] PNGLR 183 Fly River Provincial Government v Pioneer Health Services Ltd (SCA No. 73 of 2000) SC 705 State v. Gabriel Ramoi [1993] PNGLR 540 (15 February, 1993) State v. Havila Kavo [2014] PGNC 112, N538 (24 September, 2014) State v. Iori Veraga [2005 ] PNGLR 332 State v. Laumadava [1997] PNGLR 291 State v. Paul Tienten [2013] PGNC 234; N5422 (22 November, 2013) State v. Sebulan Wat & Miskus Maraleu [1994] PNGLR 582 State v. Tanedo [1975] PNGLR 395
Overseas Cases: Browne v Dunn (1893) 6ER 67 R v Whitaker (1969) N576
Relevant Legislations
Criminal Code Act, Chapter 262 Public Private Partnership Act, No. 30 of 2014 Public Finance Management Act, 1995 PSIP Guidelines 2013 A1/2013 PSIP Financial Instruction Organic Law on Provincial and Local Level Government
Abbreviations
JPPBPC – Joint Provincial Planning & Budget Priority Committee JDPBC – Joint District Planning & Budget Priority Committee DDA – District Development Authority PSG – Provincial Support Grant DSG – District Support Grant PSIP – Provincial Support Improvement Program DSIP – District Support Improvement Program LLGSIP –Local Level Government Support Improvement Program PPP – Public Private Partnership PIP – Public Investment Program CSTB – Central Supply & Tenders Board PT – Provincial Treasurer DT – District Treasurer FCF – Fly Care Foundation PSTB – Provincial Supply & Tenders Board PTOA – Provincial Treasury Operating Account DTOA – District Treasury Operating Account P (FM) A – Public Finance Management Act LLGOA – Local Level Government Operating Account BSP – Bank South Pacific Ltd PMT – Project Management Team OLPLG – Organic Law on Provincial & Local Level Government MOA – Memorandum of Agreement FRPG – Fly River Provincial Government NEC – National Executive Council
Counsel : A. Kupmain, for the State G, Egan, P.J. Wright & J. Wohuinangu, for Accused persons
DECISION ON VERDICT
26 July, 2016 1. IPANG, J: The three (3) accused persons pleaded not guilty to two (2) counts each of conspiracy to defraud s.407 (1) of the Criminal Code Act and s.383A (1) (2) of the Criminal Code Act. A trial was conducted and this is the decision on their verdict. The two (2) counts on which the three (3) accused were indicted are;
Count one (1): Ati Wobiro of Wipim Village, Norman May of Daru and Mondowa Gumoi of Tati Village, all of South Fly District, Western Province stands charged that they then said Ati Wobiro, the said Norman May, and the said Mondowa Gumoi between the 1st day of January, 2013 and the 31st of December 2013 at Daru in Western Province, Papua New Guinea conspired with each other to defraud the Independent State of Papua New Guinea of the sum of Seven Million and Sixty Thousand Kina (K7, 060, 000.00).
Count two (2): Ati Wobiro of Wipim Village, Norman May of Daru and Mondowa Gumoi of Tati Village all of South Fly District, Western Province stand charged that they, the said Ati Wobiro, the said Norman May, and the said Mondowa Gumoi between the 1st day of January and the 31st Day of December 2014, at Daru Western Province, Papua New Guinea, dishonestly applied to their own use and to the use of others the sum of Seven Million and Sixty Thousand Kina (K7, 060,000.00) property of the Independent State of Papua New Guinea.
2. The fact on which the accused persons were arranged are as follows; the accused Norman May is the owner of the fuel company known as May Fuel Distributors. He is also the founder and chairman of the charity organisation Fly Care Foundation. May is the sole signatory to the Fly Care Foundation Bank South Pacific Ltd (BSP) Account No. 1010226106. The Accused Ati Wobiro is the Governor of Western Province as of 2012 after the National Election. The accused Norman May is the Political Advisor to the Governor Ati Wobiro. The accused Modowa Gumoi was in 2012, the Economic Advisor to the Governor Ati Wobiro, Modowa Gumoi is the Chairman of Western Province Provincial Supply and Tenders Board. The State therefore alleged that all three (3) accused persons know each other very well.
3. State also alleges that there was no Joint Provincial Planning and Budget Priority Meeting No. 1 of 2013 held on the 28th March, 2013. Monies in the sum of K7, 060,000.00, the State allege were PSIP Funds for Middle Fly District, North Fly District and South Fly District and were not Governor Ati Wobiro’s discretionary funds. PSIP and DSIP Funds increased and appropriated to be used in line with or according to the PSIP and DSIP Administrative Guidelines.
4. State alleged the accused persons Ati Wobiro, Modowa Gumoi and Norman May when they signed the MOA to commit the public funds in the sum of K7, 060, 000.00 to the charitable organisation Fly Care Foundation conspired to bypass normal financial procedures for the expenditure of PSIP and DSIP Funds. The signing of the MOA amounted to conspiracy as set procedures such as; projects identifications, formulation procedures project proposals, public tendering processes etc... were not followed.
5. State also alleged the accused persons collectively agreed to transfer funds to Fly Care Foundation Inc. under Public Private Partnership Policy which is fraudulent, illegal and dishonest. As the Act of Parliament to give effect to PPP Policy was yet to be enacted. The Act came into effect in 2014 (Act No.30 of 2014). State claimed the public funds transferred to charitable organisation open up for misappropriation as there are no guidelines in place to safeguard public funds. State therefore, alleged certain payments were made to certain individuals who were election officials for the accused Ati Wobiro in 2012 National Election and for infrastructure projects not completed. State therefore alleged the three (3) accused persons conspired to defraud the State and dishonestly applied to the use of others and themselves of the Public Funds.
6. At the outset, I enquired with the counsels for the three (3) accused, who indicated that their clients’ defence is that through FRPG JPP & BPC approval was given and the MOA facilitated for funding of these projects.
The Offence 7. All three (3) accused persons are charged under section 407(1) and section 383A (1) & (2) of the Criminal Code Act, Chapter 262. I consider appropriate to restate the respective provisions.
407. Conspiracy to defraud
(1) A person who conspires with another person –
(a) by deceit of any fraudulent means to affect to affect the market price of anything publicly sold; or
(b) to defraud the public; or any person (whether or not a particular person) or
(c) to extort property from any person is guilty of a crime.
8. There are several cases in this jurisdiction that deal with the offence of conspiracy to defraud pursuant to section 407 of the Criminal Code Act, Chapter 262. See State-v-Tanedo [1975] PNGLR 395; State-v- Sebulon Wat & Miskus Maraleu [1994] PNGLR 582, and State-v- Iori Veraga N2489.
9. In State-v- Tanedo (supra) it was stated at pp.418 that;
“If two or more persons agree together to do something contrary to law... or wrongful and harmful towards another person... or to use unlawful means in the carrying out of an object not otherwise unlawful, the persons who so agree commit the crime of conspiracy... So long as the design to do such an act rests in intention only it is not criminal, but as soon as two or more agree to carry it into effect, then their act becomes punishable.” (Halsbury 3rd ed. Vol.10, pp.310 and 311) 10. The State or Prosecution for that matter bears the obligation to prove not only an agreement between the alleged conspirators to carry out an unlawful purpose (or a lawful purpose by unlawful means) or other means of communication between them, but also an intention in the mind of any alleged conspirator to carry out the purpose. Their agreement may be seen as an advancement of the intention which each has conceived in his mind, which then passes from a secret intention to the overt act of mutual consultation and agreement. Archbold 38th ed., p.1253 as quoted in Tanedo’s Case (supra) pp. 418-419.
11. In the State-v- Wat (supra) Her Honour Doherty, J (as she was then) referred to the English Court of Appeal case Re Senate (1968) Cr App R 282 at p.285 which considered that “conspiracy” can be inferred from the facts. Her Honour in Wat’s case (supra) went further and considered Court of Appeal approval of Lower Court’s definition of conspiracy (p.289) in the following;
“... in most cases it was to be inferred from what somebody does or says. Of course, it can also be inferred from what they don’t do and from what they don’t say when, if they were innocent, you would expect them to do or say something.”
12. In State-v- Iori Veraga (supra) Sakora, J held that; “The offence of conspiracy consists of an agreement between at least two persons to do an unlawful act or a lawful act by unlawful means.” His Honour Sakora, J further expounded with assistance from English Common Law cases in relation to conspiratorial agreements in the following;
“The ‘chain’ and ‘wheel’ conspiracies adverted to already are the two more complex ways of forming conspiratorial agreements, highlighting the principle that each party need not speak to all the other parties. Thus, as was explained in the English case of R-v- Meyrick and Ribuff [1929] Cr. App.Rep.94 in a wheel conspiracy there is; ‘one person ... around whom the rest revolve’, and in a ‘chain’ conspiracy: “A communicates with B, B with C, C with D, and so on to the end of the list of conspirators.” 383A. Misappropriation of property
(1) A person who dishonestly applies to his own use or to the use of another person-
(a) Property belonging to another; or
(b) Property belonging to him, which is in his possession or control (either solely or conjointly with another person) subject to a trust, direction or condition or on account of any other person, is guilty of the crime of misappropriation of property.
(2) An offender guilty of crime of misappropriation of property is liable to imprisonment for five years except in any of the following cases when he is liable to imprisonment for ten years.
(a) Where the offender is a director of a company and the property dishonestly applied is company property; (b) Where the property dishonestly applied is the property if his employer; (c) When the property dishonestly applied was subject to a trust, direction or condition; (d) Where the property dishonestly applied is of a value of K2, 000.00 or upwards.
13. There are also cases in this jurisdiction dealing with the Offence of misappropriation under Section 383 A (1)(a) of the Criminal Code Act, Chapter 262. In the Supreme Court case of James Singo-v- State SC 700 the Supreme Court held the following to be elements of the offence of misappropriation;
• A person • Dishonestly • Applies to his own use or to the use of others • Property belonging to another
14. It is the second element of the offense of misappropriation which most cases seemed to be revolved or centered around. See Brian Kindi Lawi,-v- State [1978] PNGLR 183. State-v- Gabriel Ramoi [1993] PNGLR 390 and State-v- Laumadava [1994] PNGLR 291.
15. The Brian Kindi Lawi case (supra) defined the word “dishonestly” as follows;
“Dishonestly... only relates to the state of mind of the person who does the act which amounts to misappropriation, whether an accused has a particular state of mind in relation to the application of property which is dishonest is a question of fact for the trial judge to consider on all of the facts of the case before him and accordingly to the ordinary standards of reasonable and honest people.”
16. Regarding this test, his Honour Salika. J (as he then was) held in the case of State-v-Gabriel Ramoi, (supra) as;
“The Supreme Court in Lawi’s case held that the word “dishonestly” in S.383A of the Criminal Code relates only to the state of mind of the person who does the act which amounts to misappropriation. The state of mind when a person applies the property is a question of fact for the trial judge to determine on all the facts presented before him. And when the judge considers the facts on how the property was applied, he uses the ‘ordinary standards of reasonable and honest people’ test to determine whether or not the property so applied”. His Honour went further to define what ‘dishonesty’ is, and he stated:
“Dishonesty” comes from the word ‘dishonest’. Dishonest is defined in the Oxford Advanced Learners Dictionary of Current English a ‘intended to cheat, deceive or mislead’ 17. Some very important matters pertinent in the above definition of dishonesty are worthy of note here:
1. Firstly, the state of mind of the person
2. Secondly the state of mind of the accused must be examined using the “Ordinary Standard of Reasonable and Honest People” test.
3. Thirdly, the court considers “all the facts” presented before it to make that determination. On “all the facts” means all the facts relating to the acquisition and application of the property in question
4. Fourthly, the facts must show, on the evidence that the accused person’s conduct and approach in acquiring the property and applying the property was intended to cheat, deceive and mislead.
18. In the case of State-v- Laumadava, [1994] PNGLR 291 the word Dishonestly in S.383A once again came into the spotlight for further extension of its definition. The learned trial judge, Injia. AJ (as he then was) correctly found another test to be also applicable, the subjective test. His Honour stated:
“The second issue, which is the main issue, depends on my findings of fact, but also is a question of law. And so it is convenient for me to first set out the law regarding dishonest application of money. The crucial issue here is the meaning of the word “dishonestly” in the context of s.383A (1) (a). This issue was decided by the Supreme Court in the case of Lawi-v- The State, [1987] PNGLR183. In brief, it was decided that, “dishonestly” relates to the state of mind of the accused. It is a question of fact which the court has to decide. The court has to decide whether, according to the ordinary standards of decent, reasonable, and honest people, what the accused did was dishonest. The test here is an objective one. At the same time it is also a subjective one. The court must look into the mind of the accused and determine whether, given his intelligence and experience, he would have appreciated as right minded people would have done, that what he was doing was dishonest”.
19. It is these two tests that will be applied in this case to determine whether there has been dishonest application of the property.
20. The following documents were tendered in to evidence with consent from the Defence counsels. I will include them into a Table Form for easy reference.
No Date Documents Marked As Statement Annexure Made 1 13.03.2014 Statement of John Maddision pages 108-124 A1 on Norman May File 2 09.03.2015 Statement of Ceasar Fernandez A2
04.0.2014 Cheque payable to New Century No.8b for A3 K350,000.00 (pg 167)
24.03.2014 Letter from Governor to Treasurer to Fly A4 Care Foundation – funding commitment small business grant support (pp.168-169)
List of receipts for New Century (pp. A5 170-173) 4 pages 3 12.06.2014 Statement of Sialis Taman A6 4 24.03.2015 Statement of Samuel Koi and photographs A7 exhibits from pp.179-188 5 Referral complaint letters pp.101-107 (3 A8.1 letters) A8.2 15.09.2013 1. Aide Ganasi A8.3 21.11.2013 2. B. Bisuli A8.3.1 Chq. No. 4559 A8.3.2 Chq. No. 4851 A8.3.3 Chq. No. 4914 A8.3.4 Chq. No. 4979 6 Letter from Director, National Fraud Squad A9 (p.108) 7 28.10.13 Governor’s Expenditures Estimates for 2013 A10 PSIP Final K6.5 million (pp.109-111) 8 09.02.2013 Governor’s PSIP Projects for B1 Implementation from K6 million (pp. 112-115) 4 pages 9 Undated Memorandum of Agreement between Ati B2 Wabiro and Norman May (pp.116-119) 10 28.03.2013 Joint Provincial Budget & Planning B3 Committee Meeting No. 1 of 2013 dated 28th March, 2013 (pp. 120-122) 11 01.01.2013 PSIP Guideline 2013(pp.120-130) B4 12 1A/2013 PSIP Financial Instruction (pp. B5 131-153) 13 15.12.2013 Letter to Manager BSP from Provincial B6 Treasurer (p.158) 14 12.05.2014 PSIP Funds Acquittal Report (pp.159-163) 5 B7 pages 15 26.11.2013 Letter from Wobiro to Gumoi (p.166) B8 16 16.03.2015 Letter to officer In-charge from Moses Ase B9 (pp.174-176) 17 16.03.2013 Letter from Walepo Kurokuro to Director B10 National Fraud (pp.177-178) 18 02.02.2015 Record of Interview (English) for Wobiro B11 pp.189-209 19 04.02.2015 Record of interview for Gumoi (English) B12 20 27.01.2015 Record of interview for Norman May B13
21. The following State witnesses were called and also the following documents were tendered during the State’s case.
No Name Documents Marked as Exhibit 21 Alois Statement to Police dated 30.06.2014 C1 Thompson 22 Aide Ganasi Statement to Police (2 pages) dated C2 12.01.2013 23 Bob Danaya Statement to Police dated 15.04.2014 C3 24 Roy Biyama Statement to Police (1 page) dated C4 02.05.2014 25 Boka Kondra Statement to Police (2 pages) dated C5 01.05.2014 26 Gabriel Apai Statement Given to Police (1page) dated C6 13.03.2015 27 Samuel Gausa Statement to Police dated 15.03.2015 C7 28 Paul Sai Statement to Police (2 pages) dated C8 23.02.2015
Paul Sai’s Letter to Mathew Damaru C9 dated 23.02.2015 29 Moses Ase Statement to Police dated 16.03.2015 (2 C10 pages) 30 Wi l l i a m . D . Statement to Police (11 pages) dated D1 Goinau 31.07.2014 Tobby Warap’s letter to the Provincial D2 Administrator dated 02.10.2012 31 S g t . S t e v e n Statement of Sgt. Jungi dated D3 Jungi 07.04.2015 D4 Walepa Kurokuro’ Letter dated 16.03.2015 to Sgt. Juni ( 2 pages) D5 Governor’s letter dated 26.11.2013 to Dr. Gumoi 32 Laka Renagi Statement to Police dated 07.01.2016 D6 33 Vagi Kapi (not Statement to Police (1 page) dated D7 c a l l e d 14.03.2016 statement tendered with objection) 34 Benjes Alusi Statement to Police (1 page) dated D8 06.03.2015 35 Ati Wobiro Governor Expenditure for 2013 dated D9 09.02.13 – Development funds: List of projects for implementation 36 Ati Wobiro Letter addressed to Gumoi by Wobiro. D10 Letter dated 28.10.13 37 Modowa Western Province 5 Year Development E1 Gumoi Plan 2013 – 2017 38 Modowa 2013 Provincial Accounts: Payee E2 Gumoi History Report 39 Modowa Letter dated 19.04.13 attaching PSTB E3 Gumoi Resolution (Tendered through the witness by State) 40 N o r m a n . C . Business Profile for Fly Care E4 May Foundation Inc. 41 Norman May Constitution of Fly Care Foundation Inc. E5 42 Movea Affidavit sworn 18.02.16 and filed E6 Kurokuro 13.04.16 43 Willie Gadua Affidavit sworn 13.02.16 and filed on E7 13.04.16 (19 pages) 44 Arusa Sisa Affidavit sworn 13.02.16 & filed on E8 13.04.16 (4 pages) 45 F r. M a t h e w Affidavit sworn 02.03.16 & filed on E9 Juang 13.04.16 46 Trevor Samson Affidavit sworn 11.02.16 & filed on E10 13.04.16 47 William Yari Summary of Acquittal Report F1 48 William Yari Administration: Law & Justice F2 49 William Yari Infrastructure A F3 50 William Yari Infrastructure B F4 51 William Yari Economic & Agriculture Sector F5
22. Apart from the witnesses’ statements and other documentary evidences tendered without objections from the Defence Counsels, the following persons gave evidence in Court as State Witnesses; Alois Thompson, Bob Danaya, Aide Ganasi, Roy Biyama, Boka Kondra, Gabriel Apai, Samuel Gausa, Paul Sai, William Goinau, Stg. Steven Jungi, Laka Renagi, Benjes Alusi and Kable Lepasi.
Public Finance Management Act, PSIP Guidelines and Financial Instructions
Evidence by Alois Thompson
23. Alois Thompson is the Provincial Treasurer (PT) for Western Province. He holds an Associate Degree in Business from Southern Cross University through Institute of Business Studies (IBS). He has been the Provincial Treasurer for Western Province since November, 2005. Prior to his appointment as PT for Western Province, he worked at Vulipindi Haus, Waigaini. He worked with Department of Finance for a total of 12 years. With his 12 years experience, it can be safely concluded that he is well versed with Finance Practice and Procedures in terms of dealing with PSIP, DSIP and LLGSIP funds.
24. As the witness said his duties as PT involved safe guarding P(FM)A implementing Financial Instructions and Circulars from the Secretary, Department of Finance. He said any public funds will have to be spent according with P(FM)A.
25. He gave his statement dated 30th June, 2014 to the Police, which was tendered in to evidence and marked as Exhibit “C1” was shown Exhibit “B6” (Letter to BSP Manager from PT) which PT confirmed he was the author confirming the Cheque payment Cheque dated 12th December, 2013 for K1.6 million payment. In relation to approval and payment process, he said he has not seen financial forms FF3, FF4 etc… and section 32 officers approved the payment. As to who in particular approved the payment, he said he does not have documents before him to verify that. 26. PT was shown Exhibit “A.8.3.4”Cheque No. 4774 dated 15th December, 2013 for K4060, 000.00. Payment made to Fly Care Foundation Inc. three (3) days after payment of K1.6 million to the same organisation. Referring to the Remittance Advice, he was cross-examined as to payments done in portions and not in one payment. PT said there’s nothing wrong. Referring to K1.6 million payments and K4060, 000.00 payments paid separately and not in one (1) payment, PT said he cannot answer that question. He said Public Accounts close around December of each year. In Re-examination, PT agrees that PSTB should have been a party to that agreement with a private contractor, or say PSTB signs the contract with the contractor.
Evidence by Bob Danaya
27. Bob Danaya is a Medical Doctor by profession who holds a Degree of Master of Medicine from University of Papua New Guinea (UPNG. He was the former Governor for Western Province. He has given his statement to the Police as Exhibit “C2”. His Statement comprised two (2) pages. He gave his experience as former Governor on how public funds are spent and the process involved. In relation to 3rd paragraph of his statement Exhibit “C2” in regards to the capacity and ability of a Provincial Government to enter to agreement(s) such as MOA, he said depends upon level of funding. He said;
(i) K5 million and less goes to PSTB; (ii) K5 million to K15 million goes to CSTB; (iii) K15 million and above goes to NEC. 28. He also said any agreement to be entered with Provincial Government will need to seek verification or clearance from the office of State Solicitor. He was shown Exhibit “A8.3.3” Cheque No. 4914 dated 12th December, 2013 for sum of K1.6 million and in relation to the Remittance Advice, the witness emphasised that ‘every project must be written a separate cheque. When asked by the State Prosecutor as to why this is so, he (Danaya) said P(FM)A spelt out how public funds are to be expended or spent. He said charity organisation like Fly Care Foundation Inc. should be self-sustained and should not be given public funds. He said public accounts normally close two (2) weeks in to the month of December of each year. Evidence of Paul Sai’i
29. Paul Sai’i is the Acting Secretary for the Department of Implementation and Rural Development since 2011. However, he was with Office of Rural Development (ORD) in 1998 and left and went back in 2003. The function of his Department is to monitor development grants disbursed to the Provinces, Districts and LLGs and report to the Minister for National Planning.
30. He gave two (2) pages statement dated 23rd February, 2015 to the Police which was tendered in to evidence and marked as “Exhibit C8”. He also wrote a letter dated 25th February, 2015 to Detective Chief Superintendant Mathew Damaru providing him with information requested. See Exhibit “C9”. The witness provided the evidence as contained in Exhibit “C8” in which he stated;
The Western Province is no different to other Provinces, Districts and Local Level Governments across the country, was paid Provincial Service Improvement Program (PSIP) starting in 2013 with calculation formula for the PSIP as K5 million multiplied by number of districts in the respective provinces across the country. So for Western Province it was (K5 million X 3), which the Fly River Provincial Administration received K15, 000, 000. 00 in 2013 and K15, 000, 000. 00 in 2014 totalling up to K30, 000, 000.00 (K30 million).
The Provincial Service Improvement Funds are disbursed by the Department of Finance through electronic transfers to the Provincial Treasury Operating Accounts. In regards to the Public Projects funded and implemented under the PSIP, DSIP and LLGSIP in the Western Province, the Department is unable to provide the information due to lack of monitoring funds since 2013.
However, in regards to the above allegation of the transfer on more than K7 million to the Fly Care Foundation, the Department of Implementation and Rural Development was never consulted any way by the Governor nor the Acting Provincial Administrator, therefore have no idea as to the arrangement of the transfer of the public funds (PSIP) from the Fly River Provincial Treasury Operating Account in to the Fly Care Foundation private account.
The Service Improvement Financial Instruction 1A/2013 and Administrative Guidelines 1st January, 2013 are self- explanatory and very clear with the;
• Project Identification, Selection and Approval Process. • Procurement, Tendering and Selection Process • Payment Process • Implementation, Monitoring and Report Process
It is therefore unfortunate and very clear that the transfer of the PSIP funds to the Fly Care Foundation is illegal and abuse of established process and procedures, as per Financial Instruction and the Administrative Guidelines of the Service Improvement Program (SIP), there may no compliance.”
31. Sai’i said under the guidelines it is the Chairman or Project Management Team (PMT) which do the acquittals. In acquittals the Department of Implementation and Rural Development consider Tender process, Implementation, completion certificate (Provincial Works Manager complies completion certificate).
32. In specific, the witness said there are criteria for use in compiling acquittals and these are;
• Project identifications and endorsed (approvals) by JPP & BPC (specific forms) • Project Formulations (specific forms used) • Approved by JPP & BPC – meeting minutes. • Project Resolutions endorsed • Procurement Process
The above are some of the checklist to be followed to see if there is compliance.
33. Witness was shown Exhibit A.8.3.3, Exhibit A.8.3.4 and the respective Remittance Advice. He said this was his first time to see the cheques however, he said the normal practice is to pay one (1) cheque per project and not all together or lump the payment in one (1) cheque.
34. The Witness also clarified that the PSIP funds are development funds for projects and are not to be confused with constitutional grants per section 95 of OLPLG. Provincial Support Grants (PSG) for Governor and District Support (DSG) Grants for Open Members, shown Exhibit B4 PSIP Guidelines. Section 6 at p.7 Project Implementation documents. Where there is requirement for three (3) quotations it is a strict requirement, however in areas where there are not many suppliers, there is need to consult DIRD and Department of Finance. Sai’i said under Project Identification – Kuru to Aberemuda Road Project needs to comply with PSIP Guidelines.
35. Sai’i said currently his Department cannot carry out monitoring and evaluation of the development grants as they are still waiting for the acquittals.
Evidence of William D Goinau
36. William Goinau was the former Provincial Administrator for Western Province until replaced by the accused Dr. Gumoi on 31st January 2013. He holds a Degree of Master of Arts (MA) in Social Works from Queensland University of Technology, Australia. Prior to his appointment as Provincial Administrator, he has held various senior positions in Public Service especially within the Department of Community Development.
37. He gave an 11 pages statement dated 31st March, 2013 to the police which was tendered in to evidence and marked as Exhibit “D1” He was shown Exhibit “D2” (Letter dated 02nd October, 2012 addressed to Provincial Administrator by Tobby Warapa). The witness was the Provincial Administrator at that time and confirmed receiving and sighting the letter. The letter revealed the names of officers accompanying Governor Ati Wobiro from Moresby to Daru for PEC meeting and Provincial Assembly meeting held form 7th October, 2012 to 14th October, 2012. Among these officers were;
•Tobby Warapa – First Secretary to Governor •Norman May – Political Advisor •Modowa Gumoi – Economic Advisor
38. Goinau was shown Exhibit “B3” JPP & BPC meeting minutes dated 28th March, 2013. Having gone through Exhibit “B3”, the witness noted the following;
•No resolutions passed by the JPP & BPC •No persons moving and seconding the motions •Decisions to be recorded by way resolutions.
39. He also said the normal practice is for one (1) cheque payment for one (1) project. He also said Fly Care Foundation Inc. cannot look after PSIP funds as PSIP Guidelines don’t allow.
40. These three (3) witnesses Aide Ganasi, Roy Biyama and Boka Kondra who are the current sitting members for three (3) Open Electorates in the Western Province namely Aide Ganasi – South Fly, Roy Biyama – Middle Fly and Boka Kondra – North Fly; gave evidence in relation to JPP& BPC meetings and the purported signed MOA (undated), and PSIP, DSIP and LLGSIP funds.
41. Aide Ganasi said he did not attend the JPP & BPC meeting on the 28th March, 2013 as he was not a member, as he was ousted through an Election Petition. He was elected and declared as South Fly MP on the 24th July, 2012 and ousted on the 26th February, 2012 and got reinstated back by the Supreme Court on the 27th September, 2013. As in relation to Governor Ati Wobiro’s letter to Dr. Gumoi in relation to JPP & BPC meeting on the 26th November, 2013, Ganasi said he cannot recall attending the meeting on this date.
42. In relation to meeting minutes of 28th March, 2013 Ganasi questioned how the minutes were formulated. Normally the Agendas for the meeting are in Policy Submissions or say Project Proposals so during the meeting, the meeting progresses through Policy submissions i.e. Policy Submission No.1 etc… then the Chairman calls for debate whether to approve the Project or not. Therefore, a member for JPP & BPC moves a motion and someone seconds the motion.
43. Ganasi said in his current term as MP, Member’s discretionary Fund income are DSG in the sum of K500, 000.00and is divided into two (2) components.
•K250,000.00 is discretionary; •K250, 000.00 is not discretionary.
44. The money is deposited into the District Treasury. Submissions are drawn up and submitted to JDP & BPC meeting now DDA.
45. Ganasi maintained that he had never attended any JPP & BPC meeting
46. Roy Biyama spoke of District Support Grants (DSG). He said he received a total of K500, 000.00 as DGS. The grant is in two (2) components;
(1) K250, 000.00 is discretionary; and (2) K250, 000.00 is non discretionary. In terms of DSIP and PSIP Funds, he said for 2013; DSIP was K10 million and PSIP K5 million per member. For Western Province its K15 million. He sternly denied seeing any meeting minutes of JPP & BPC meetings. When shown Exhibit ‘B8’ he denied attending meetings with the Governor and he said he has no idea about the said meetings. Even when shown Exhibit ‘B3’ JPP & BPC meeting No.1/2013 (28.03.2013), he denied his attendance and said the meeting minute was not properly formulated, in terms of Agendas, resolution(s) passed, mover of the motion and seconder. He said he never heard of PPP with Fly Care Foundation, so as Boka Kondra when shown Exhibit ‘B3’, he denied attending the JPP & BPC meeting on the 28th March, 2013. In fact he said since the Governor was elected there were no JPP & BPC meetings held. Regarding the contents of the said meeting, he said there were;
(i) No official letter head of Fly River Provincial Government (ii) No mover of the agendas (iii) No seconder of the motion
47. When shown Exhibit ‘B8’ he denied attending the JPP & BPC meeting held on 21st November, 2013.
48. Boka Kondra gave similar evidence to that of Roy Biyama. When shown Exhibit ‘B3’ he denied his presence at that meeting of 28th March, 2013. He went further and stressed there were no JPP & BPC meetings held. He also denied attending the meetings on the 21st November, 2013 when shown Exhibit ‘B8’. In relation to meeting minutes of 28th March, 2013 he said the problem with the minute is that;
•Not in letter head •No mover of the agendas •No seconder
49. He generally expressed difficulties him and his District Administration of North Fly District try to get projects through PSTB. Roy Biyama, Middle Fly MP has expressed by same sentiments.
Recipients from Cash and goods from New Century
Evidence of Gabriel Ipai and Samuel Gausa 50. The two (2) witnesses for the State namely Gabriel Apai and Samuel Gausa both gave oral evidence and documentary evidences before the Court. Gabriel Apai’s one (1) page statement given to the Police Investigators is dated 13th March, 2015 marked as Exhibit “C6”. Samuel Gausa’s statement given to Police Investigators and tendered into evidence is marked as Exhibit “C7”.
51. Gabriel Apai reached and completed Grade 10 educational level. He is a matured person (55 years) and current Chairman of Board of Governors for Daru Secondary High School in South Fly in Western Province; He originated from Samari Village, Kiwai Island but said he lived most of his life in Daru Town. He is self-employed and a Leader in Daru Town.
52. Both were shown Exhibit “A5” which contained List of Recipients of Goods and Cash Money from New Century Store (Supermarket) in Daru. The recipients each received K2500.00 in Cash Money and K2500.00 in store goods totalling the sum of K5000.00. The sum of K350, 000.00 was drawn out from Small Business Support Grant, the sum of K500, 000.00 withheld by Fly Care Foundation Inc. as per Remittance Advice for Cheque No. 4559 dated 10th November, 2013, Refer to Exhibit marked “A8.3.1”.
53. Both Gabriel Apai and Samuel Gausa are recipients of goods (K2, 500.00 worth) each and K2, 500.00 cash money each. Both signed their names and had their names listed as Team Leaders which both had confirmed those in Court. As Team Leaders, both men and others (Pisini Haunda and Gidama Gaoro) identified the recipients to collect the cash money and goods at the New Century Ltd.
Issues
54. What is the purpose of the goods worth K2, 500.00 and K2, 500.00 cash money collected by each recipient? Total of K350, 000.00
55. Defence has submitted that the sum of K350, 000.00 paid to New Century Ltd were for the Informal Sector Market. A scheme devised to empower locals to participate and be self-reliant through various Informal Sector Activities as described in Exhibit “A4” and “A5”.
56. Both of these two (2) witnesses Apai & Gausa signed as Team Leaders. See Exhibit “A5” at the bottom last page (page 174 on Accused Norman May’s Court File).
57. The lists of Recipients were compiled by the Team Leaders and also the Office of the Governor Ati Wobiro. The Team Leaders then organised the recipients and identified them to collect their goods (K2, 500.00) and K2, 500.00 cash from New Century Ltd.
58. Gabriel Apai and Samuel Gausa were Campaign Managers for Governor Ati Wobiro during 2012 National Election which Governor Ati Wobiro won the election. They assisted the Governor, travelled with the Governor and campaigned for the Governor. When on Election Petition (EP) No.12 of 2012 was filed to challenge the election, they filed separate affidavits supporting the Governor.
59. With the assistance Apai and Gausa provided to the Governor they were expecting something in return. In Gabriel Apai’s Statement given to the Police and tendered as Exhibit “C6”, he stated and I quote;
“I am the election campaigner, supervisor, coordinator as well as the Team Leader of Hon. Ati Wobiro during the 2012 National Election. I coordinated and supervised the Campaign Teams of Hon. Wobiro throughout South Fly District. As a successful coordination, supervision and campaigning we achieved the result, the Hon. Wobiro won the Western Provincial Regional Seat.
After the elections, we did not receive nor paid our allowances for the job we did, so we kept asking the Governor’s Officers for our allowances which were long overdue. We kept waiting for our payment up until April 2014, when we were informed by the Governor’s Officers to proceed to New Century Supermarket and did shopping there; got goods and mostly food stuff worth of K2, 500.00 and received cash K2, 500.00.
When receiving the goods and payment I signed my signature; likewise other Governor’s Scrutinizers’ and election officials did the same in a prepared sheet list provided that containing our names which indicated as informal sector market participants. But in reality this was the case. I am not the Informal Sector Participants nor participated in any informal sector market activities within Daru Island. We signed our signatures on this prepared list as acknowledgment and confirm that we have received our allowances. 60. Samuel Gausa in his statement to the police and also tendered in Court as evidence, marked as Exhibit “C7” stated and I quote;
“In 2012 for this National General Election Mr. Norman May engaged me and Mr. Gabriel Apai as Campaign Managers and Supervisors to campaign for the Ati Wobiro who was contesting for Western Regional Seat.
Besides the two (2) of us, we also organized other teams who covered South Fly areas. The two of us covered the whole province with Ati Wobiro.
After Ati Wobiro won the election, we thought he was going to offer us job in his electoral office but he never did. By then Mr. Norman May had more influence over Ati Wobiro. Norman May made decision for Wobiro. Because we were dumped so we wrote our submission for sea transport in order for us to sustain our families but nothing up until now.
So my son namely Brendan Gausa got drunk on Sunday the 9th February, 2014 and smashed May’s Field Office and he was arrested by police and appeared in Daru District Court.
Because of my son’s action, Governor Ati Wobiro and Norman May decided to pay all the Campaign Managers and Scrutinizers’”. Gabriel Apai and Samuel Gausa were vigorously cross- examined. Q. It was not the Governor who told you the purpose of payment? A. No. Q. Payment for scrutineers? A. Yes Q. You waiting for your allowances? A. Yes Q. For EP. No.12 of 2012 you filed an affidavit in support? A. Yes. Q. You expected to be paid? A. Yes Q. You were not paid? A. No Q. You gave statement to Police? A. Yes Q. Your statement is a lie? A. No Samuel Gausa Q. You employed? A. No Q. You were paid K2, 500.00 cash and collected K2, 500.00 worth of store goods? A. Yes Q. Who in particular from Governor’s office told you, Governor told you of the payment? A. Tera Lifu told us, Governor has made funds available for us. Q. You did not know the purpose of the payment? A. No, we rendered service (campaign) for the Governor and waited for the payment.
Evidence of Bishop Renagi Laka
61. Bishop Renagi Laka is the Bishop of United Church East Central – Papua Region – Central Province. He gave his statement to police dated 07th January 2016 and tendered into evidence as Exhibit “D6”. He stated that the accused Governor Ati Wobiro was the Guest of Honour to the 4th Graduation of DKBC in 2013. He made a commitment to assist in the College infrastructure development purposely to cater for students from United Church Western Region attending DKBC. Accused Ati Wobiro gave K30, 000.00 cash money. On the same subject, Kapi Vagi gave his statement dated 14th March, 2016 to the Police and was tendered in to evidence as “D7”. Vagi told of how he went and collected K30, 000.00 cash money and deposited the money into the Bank Account of United Church East Central, Papua Region. The Payment of K30, 000.00 was made through Fly Care Foundation Inc.
Evidence of Benjes Alusi
62. Benjes Alusi is the Ward Counsellor and also the President of Oriomo Bituri Locaal Level Government (LLG) in the South Fly District, Western Province. He said he learnt of this project, Kuru-Aberemuba feeder road project or contract was given to Fly Care Foundation, a local Charity Organisation based in Daru. He said he was not aware of the contract and the engagement of Fly Care Foundation and whether the engagement went through proper process before the said Organization was engaged.
63. Ausis’s evidence is similar to that of Moses Ase. Moses Ase is he Acting District Administrator for South Fly District Daru, Western Province. He gave his two (2) pages statement to police which was tendered in to evidence and marked as Exhibit “C10”. He clarified that the selection and approval of funds under PSIP grants, go through JPP & BPC which endorse and approve the respective projects in their meeting. The members of JPP & BPC comprised;
•Governor – Chairman •South Fly MP – Member •North Fly MP – Member •Middle Fly MP – Member
64. He stated that all District Administrators (South /North / Middle) Fly are observers plus advisors to three (3) Open Members. He said he has not attended any of JPP & BPC meetings.
65. He gave some of the projects within Oriomo – Bituri LLG Areas as follows;
1. Kuru-Aberemuda Feeder Road Ausi said he heard about the proposal from the people and villagers affected. No discussion took place between his administration – Project section and even Capital Works. He said he does not know of the amount of money involved. He said is not done and is pending.
2. Dorogori Church Building The church Building is completed opened in 2014 and is in use.
3. Masingara – Irupi/Tati Footroad He was not consulted and does not have any clue about this project. He even does not know whether the project was implemented or completed.
66. Daru Urban LLG Area
1. Daru ECPNG Church Hall Church built and completed
2. Daru United Church Fencing Project completed. No consultation with District Administration – Project section. Project cost unknown.
3. Daru CLC Church Hall No consultation with District Administration – Project Section. No idea whether project was completed.
DEFENCE CASE
Evidence of Ati Wobiro 67. Ati Wobiro is the Governor of Western Province after won the 2012 National General Election. He holds a Masters’ Degree in Economic form Manchester University and another Masters’ Degree in Development Administration form Australia National University (ANU). He has held several senior positions both in the public sector and private sector.
68. He said after he won the election, he said he realized there were lots of development challenges faced and the province was not moving. So he made changes within the Provincial Administration. He made change at the Province’s top post, the Provincial Administrator position which PEC approved the appointment of Dr. Gumoi as Acting Provincial Administrator. He said public servants were not loyal and worked against him and the Acting Provincial Administrator.
69. Wobiro said soon after he was declared Governor, Bob Danaya challenged his election victory. So he was fighting the election petition case for some time.
70. He tasked Acting Provincial Administrator to work on the Western Province’s Five (5) Year Development Plan which was approved by PEC and the Provincial Assembly.
71. Wobiro was shown “Exhibit B3” (JPP & BPC) Meeting Minutes dated (28.03.2013). He said Boka Kondra and Roy Biyama were present and said Acting Provincial Administrator Dr. Gumoi will provide necessary proof of their attendance.
72. The witness was shown Exhibit “A10” and “B1” (Governor’s Expenditure for 2013: Development Funds) he said these are total List of projects for Implementation in 2013.
73. In relation to paragraph 2.6 of Exhibit “B3” (JPP & BPC meeting minutes 28.03.2013); that PPP Tom implement Provincial Budget, Wobiro said some of the funds went straight to the recipients for others who do not have bank accounts and for the purpose of acquittals, funds went to Fly Care Foundation. He was shown Exhibit “B2” (undated MOA) to engage with Private Sector Entity, “Fly Care Foundation” to take good care of the project funds, disburse funds. He said on page 2 of the MOA there is a clause on administrative costs, the clause has not been implemented. He said the MOA undated is an honest mistake. In relation to Exhibit “D2” he denied Norman May being his Political Advisor. He also denied Gumoi as his Economic Advisor. However, he admitted that PSTB should be a party which should sign the MOA.
Evidence of Dr. Modowa Gumoi 74. Modowa Gumoi is from Tati Village, Daru Western Province. He is the Acting Provincial Administrator for Western Province as of 23rd January, 2013. He holds a Master’s Degree in Economics from New England University NSW and a PHD from Lincoln University, Christ Church. He previously worked with National Research Institute (NRI) of Papua New Guinea (UPNG).
75. He is the author of the Five (5) Year Development Plan for the Western Province. He said since he was appointed as Acting Provincial Administrator for Western Province, he was faced with lots of developmental challenges such as; serious staffing problems, financial management issues, epidemic corruptions, non- existence of boards, no development plan in place, mistakes from senior staff management. He said confronted with all these problems, he took the challenges head by re-structuring the Western Provincial Administration and drawing up the Western Province Five (5) Year Development Plan. Exhibit “E1” is the 2013-2017 Five (5) Year Development Plan.
76. He said as Acting Provincial Administrator he sits in various Boards, committees and Foundation. He is the Chief Advisor to PEC and Chairman of JPP & BPC. He was shown Exhibit “B3” (JPP & BPC Meeting Minutes of 28th March, 2013) and drawn to comment on;
1. No Letter Head He said there is only one (1) single letter head and there are various divisions within Western Provincial Administration. So, he said which letter head would he put on. So he put on the title of the committee.
2. No Seconder He said there are several ways of taking minutes
77. Also in relation to Exhibit “B3” it was put to Gumooi that Boka Kondra and Roy Biyama did not attend the JPP & BPC meeting on the 28th March, 2013 to which Gumoi said they (Biyama & Kondra) are lying.
78. It was through Gumoi that the 2013 Provincial Account Payee History Report was sought to be tendered. The said report was received by Defence Team on the 13th April, 2016 and sought to be tendered in today (14.04.2016) after State had closed its case and especially after Kondra and Biyama had already given their evidence. State objected on the bases that the evidence sought to tender is contrary to the rule in Browne v. Dunn. Refer to Exhibit “E2”.
PSTB Resolution No.14 (19.04.2013)
79. During examination In-chief Gumoi was asked that the tendering process for Fly Care Foundation Inc. was not properly followed, to which Gumoi said grants are not subject to tendering. He said you don’t tender for grants. Exhibit “E3” (PSTB Resolution No. 14(19.04.2013). There was no public tender for fund to the Fly Care Foundation regarding four (4) cheque payments.
Evidence of Norman Carl May
80. Norman May is a 42 years old man and was born and raised up in Daru. He is the owner of May Fuel Distributors and the founder of Fly Care Foundation Inc. he briefly gave the reasons why he established this charity organization. The business profile of Fly Care Foundation was tendered which shows the FCF was registered on the 16th November, 2012 (16.11.2012) – Exhibit “E4” and the Constitution of FCF is Exhibit E5”.
81. The structure of the Fly Care Foundation is ;
1. Founder – Norman May 2. Secretary – Tamil Tape 3. Treasurer – Vicky Sariman
Undated MOA
82. May said, given the state of Western Province Administration, The Fly Care Foundation Inc was engaged to facilitate the services of managing and disbursing funds to the people. The Acting Provincial Administrator approached him (May) and approached Tamil Tape to draft the MOA. May said no other legal advice was sought prior to drafting the entering in to the MOA. He said Fly Care Foundation Inc. never charged for Administration costs. He cannot recall when and where the MOA was signed.
83. May said, it is the Secretary and the Treasurer for Fly Care Foundation Inc. who are Tamil Tape and Mrs. Vicky Sariman who are facilitating the MOA on behalf of the Fly Care Foundation Inc. What is normally done is that Fly Care Foundation Inc release funding based on authority letter authorising release of funds with the quotations.
84. When asked during the examination in-chief if Fly Care Foundation Inc has report on those funds, May said there’s need to consult the Treasurer Mrs. V Sariman. However, Mrs. Sariman was not called as a Defence witness so the Court could not verify if there’s any such report produced by Fly Care Foundation Inc. May said Fly Care Foundation bank account was frozen in August 2014 and K1.7 million was remitted by Bank South Pacific Ltd (BSP) back to Western Province Provincial Treasury’s account.
85. He denied being a Political Advisor to the Governor Ati Wobiro. In examination in-chief when shown Exhibit “D2” he said he may have travelled on that trip to attend the meeting but he cannot recall. The crucial question to ask is that if he had travel, then in what capacity would he had travel under.
86. In cross-examination he was asked about the Constitution of the Fly Care Foundation Inc. He told the Court that he does not know when the Constitution came in to effect as it was drafted by the Secretary. The Constitution provided for two (2) Audit Reports per year however, for 2013 there were no such reports and May’s explanation was that the reports depend on the availability of funds.
Evidence of Movea Kurokuro 87. Movea Kurokuro is from Gamaewe Village and he is the Chairman of Wipi Development Association. He is also a Baptist Church Pastor. He is the person who travelled with Gusom Wobiro to Moresby and purchased equipments to construct or do clearance for Kuru-Aberemuba Feeder Road. 88. He was shown his affidavit sworn on the 18th February, 2016. He confirmed that the affidavit was his. Affidavit tendered in as evidence, Exhibit “E6”. He said the establishment of Wipi Development Association is to mobilize village people to bring development in to the area which comprises of 15 villages of Olzim, Kuru, U’ume, Gama-ewe, Sogale, Gtabi, Biabond, Bobare, Wipim, Kapal, Ruad, Wim, Mutim and Iamage. There are around 3000 members of Wipi Development Association.
89. The witness said some funds were given by the Fly Care Foundation. The arrangement he said is that they obtained quotations and submit to Fly Care Foundation and the Fly Care Foundation made the payments to the suppliers. In relation to the current status of Kuru-Aberemba Feeder Road Project he said the equipments were purchased however the Fly Care Foundation Bank Account was frozen.
90. He was referred to Annexure MK7 of his Affidavit: CHM Invoice for K7, 886.00 in which at CHM Vision City a Sisiva Music CD was purchased. The witness said K2.50 was left so the supplier gave them the music CD. It was not a cheque payment but payment was through Save Card (BSP Card). The sets of office furniture, computers, stationary purchased he said was to do report and give it to Fly Care Foundation.
Evidence of Willie Gadua 91. Willie Gadua is a Village Court Margistrate from Masingara Village. He gave evidence in relatin to Masingara – Tati Foot Road. He filed an Affidavit which comprised of 19 pages. Affidavit was sworn on the 13th of April, 2016. Tendered into evidence without objection from the State and marked as Exhibit “E7”. The project Masingara Tati Foot Road was for road clearance. A total of K200, 000.00 was allocated. Only K73, 950.00 was utilized. He said Masingara Ward Development Committee has Bank Account. He also said none of the officers from Fly Care Foundation Inc. went to check the Masingara Tati Foot Road Project.
Evidence of Arusa Sisa 92. Arusa Sisa is from Masingara Village. He is a former employee of Fly River Provincial Government. He is the Assistant Project Co-ordinator for Masingara Tati, Foot Road. His role is to implement the project and especially keeping the Time Sheet. He filed an Affidavit which was sworn on the 13th of February, 2016 and filed on the 13th of April, 2016 comprised of 4 pages. His Affidavit was tendered in to evidence without objection from State and was marked as Exhibit “E8”.
Evidence of Fr. Mateus Juang
93. Fr. Mateus Juan is a Catholic Priest and based at St. Joseph’s Parish Balimo, Middle Fly District. He filed an Affidavit sworn on the 2nd March, 2016. The Affidavit was tendered in to evidence without any objection from the State and was marked as “Exhibit E9”. He said he heard of Fly Care Foundation. He said in 2012, there was declaration of Governor. In 2013 he gave his submission for funding of sago flour (Agriculture) and rice farming. Also he heard that year that K320, 000.00 was approved. However, he said on the 13th August, 2014, he received K60, 000.00 from Fly Care Foundation that was after the launching of the Sago Biscuits on the 7th of June, 2014. He said, none of the officer(s) from Fly Care Foundation visited the project or took photos.
Evidence of Reverend Trevor Samson
94. Reverend Trevor Samson is the General Secretary for United Church. He overlooks several sectors within the United Church. He has a Affidavit sworn on the 11th February, 2016 and filed on the 13th Of April, 2016. The Affidavit was tendered in as evidence without objection from State and marked as “Exhibit E10”. This witness was called to give evidence in relation to payment to Dorogori United Church. He said he saw the project but said he has no knowledge of how much was given, spent and whether quotations were obtained from suppliers. However, he said Red Sea Contractors built the Church Building. He said the Bishop would know how much was spent.
Evidence of William Yari 95. Willaim Yari is the Executive Officer to the Provincial Administrator and holds a Bachelor’s Degree in Commerce from University of South Pacific (USP) Fiji Campus. He compiled the PSIP Acquittal Reports 2013 and 2014 and he is currently working on 2015 PSIP Acquittal Report. It is through this witness that the following report were tendered in through him;
1. Summary of the Report – Exhibit “F1” 2. Administration – Law & Justice – Exhibit “F2” 3. Infrastructure A – Exhibit “F3” 4. Infrastructure B – Exhibit “F4” 5. Economic & Agriculture Sectors – Exhibit “F5”
96. He was shown Exhibit “A5” (Recipients of New Century) goods (K2, 500) and cash (K2, 500) and asked whether there’s acquittals of this funds (K350, 000.00) compiled to which he said no. Also shown Exhibit “E7” (Payout list Masingara Tati Foot Road) the witness said no acquittals be found in the Acquittals Books. Shown Exhibit “A10” (Governor’s Expenditure Estimates) on payment to Wipi Development Association, he said he can’t answer.
SUBMISSION BY DEFENSE
97. Mr. Egan submitted for the three (3) accused that they each have been charged with charges of;
(i) section 383 A (1) misappropriation; (ii) section 407 (1) conspiracy;
98. Both these two (2) sections has the element of “dishonestly”, which the Defense counsel submitted has not been established by the Prosecution to the requisite standard of proof and that is prove beyond reasonable doubt.
99. Mr. Egan of Counsel for the accused persons submitted that when Governor Ati Wobiro was elected, the Western Province and especially the Fly River Provincial Administration was in total chaos i.e verification of expenditure, unsatisfactory acquittal of funds. So in April, 2013 MOA was entered. Entering in to the MOA was to rectify the problem. Enter in to MOA with an entity with an expertise. There was no personal gain clause in the MOA and the intention was for the Fly Care Foundation Inc. to only facilitate.
100. He said after the MOA was entered in to cheques Exhibits A8.3.1, A8.3.2, A8.3.3 and A8.3.4 were raised for expenditures approved by JPP & BPC. Funds were partly used and then funds were frozen and reverted back to the Provincial Treasury Operating Account. He said cheque No. 4851 (10.12.13) for mobilization costs went back to the Provincial Treasury.
101. In regard to the JPP & BPC meeting held on the 28th March, 2013 Mr. Egan submitted that Boka Kondra and Roy Biyama did attend the meeting and received their allowances.
102. Mr. Egan raised defence under section 23(2) of the Criminal Code Act. The section 23 (2) reads;
“23. Ignorance of law, bona fide claim of right
(1) .....
(2) A person is not criminally responsible, as for an offence relating to property, for an act done or omitted to be done by him with respect to any property in the exercise of an honest claim of right and without intention to defraud”.
103. When the defence of claim of right is raised, the onus is on the prosecution to negative it. See R-v-Whitaker (1969) N516. In this present case the defence under section 23(2) of the Criminal Code Act was not raised by the Defence until at the final submission stage. Thus, no opportunity was accorded to the prosecution to negative such a defence.
Guidelines 104. Mr. Egan submitted that guidelines are just guidelines and do not have the force of law. As such the guidelines are simply bureaucratic or administrative guidelines reflecting the political aspirations of the Government. The learned counsel relied on the case of Application by John Mua Nilkare, Review Pursuant to s. 155(4) of the constitution [1998] PNGLR 472 (15 April, 1997) in which Amet CJ (as he then was) stated;
“The principle policy rationale for the introduction of these different electoral developmental funds, it seems to me, is to enable and facilitate expeditious expenditure on minor developmental programmes in the electorates by the incumbent member of Parliament by overcoming what he perceived to be bureaucratic delay in the delivering of goods and services to the vast majority of grass-roots constituents. I consider therefore, that in consideration of whether or not a leader has infringed any provisions of any guidelines, regulations or rules in relation to the administration and expenditure of such developmental funds, one ought always to bear in mind the primary purposes for the developmental funds. Given this principle policy basis for the appropriation of these funds for implementation and expenditure by the members of the Parliament directly into their constituencies, the consideration of whether or not leadership code provisions have been breached in the management and expenditure of these funds in the implementation of projects and services related to the purposes of the programmes, cannot be one of strict liability in a purely technical and legal sense.
On the basis of this policy rationale, it is my view that the liability for breach of the Leadership Code and thus misconduct in office is not to be limited to strict technical non-compliance with letter of rules, guidelines and regulations but rather whether in the final analysis the primary purposes for which the funds were allocated where fulfilled or realised substantially. Viewed from this perspective, the issues would be, in my view, not as much as whether the specific regulatory provisions of administrative guidelines have been strictly complied with but whether the general purpose for which the funds where allocated were achieved or implemented.And ultimately whether the policy basis for which this developmental funds were appropriated by Parliament are substantially fulfilled, that is to say whether the general purposes of the developmental programmes or projects for the benefit of the public constituents was achieved or developed by the expenditure of the funds. (Underlining mine)
In the majority of the charges relating to the developmental programme being MTP, RTAP, LGTG and RADP, it is not in dispute that the funds allocated to the applicant leader were expended on substantially programmed related purposes. It is not in dispute that none of the funds under those programmes were appropriated and expended by the applicant for his personal benefit or purposes. The evidence quiet clearly reveals that the purposes to which the funds were expended were public institutional purposes for the benefit of the member’s constituency as well as several other constituencies for the general benefit of the public.”
105. Thus His Honour Amet CJ(as he then was) continued:
“There is no question in my mind that the purchase of plant and equipment for the purposes of upgrading and improvement to the roads in the electorate was legitimate rural transport assistance expenditure for the purpose of the programme. There is ample evidence that permission was obtained from the Minister for Transport and that discussion and consultation had taken place with appropriate representatives of the Provincial Department and the district of the electorate concerned. Whilst the letter of the guidelines as to the changes of scope of a particular designated project may not have been strictly complied with, there is abundant evidence that approvals were properly obtained from the Minister responsible for the administration of these fundsas well as approval obtained to acquire the plant and equipment without going to public tender for reasons of expediency.
106. In the Nilkare case (supra) the counsel for the respondent was asked by the Court to show or to trace the origins of the Guidelines in order to demonstrate whether the power to make them can have the force of law. However, the Counsel was unable to point to any statutory provision, which may form the basis of the Guidelines.
107. Defence submitted that it is not disputed that the charges for which three (3) accused were charged arose out of financial arrangements as recorded in Memorandum of Agreement (MOA). This MOA was entered into between Governor Ati Wobiro (Wobiro) in his capacity as Chairman of the Joint Provincial Planning and Budget Priorities Committee (JPBPPC) of the one part, and Fly Care Foundation Inc. (FCF) of the other part. FCF is a corporation registered under the provisions of the Associations Incorporations Act, whose representative was Norman May (May).One of the witnesses to the signing of the MOA by Governor Wobiro was Dr. Modowa Gumoi.
108. Clause 1 of the MOU makes it clear that FCF was engaged to act as the agent of Governor Wobiro and the FRPG in respect of the management and allocation of funds earmarked for the carrying out of projects designed to benefit the people of Western Province. The question arises, therefore, whether such arrangement was one entered into for a lawful purpose or not. The State alleges that the MOA was intended to bypass PSIP Guideline requirements (in particular Project Identification, Formulation, Documentation, Tendering, Evaluation and Reporting Requirements) and that therefore it was entered into for an unlawful purpose. On the other hand, each of the Defendants gave compelling evidence to the effect that there was no ulterior motive in setting up such arrangement, and that the only purpose was to achieve the objectives of the PSIP Guidelines.
109. As submitted by the Defence the MOA for all intents and purpose was entered into (consistently with the requirements of the PSIP Guidelines and the Fly River Provincial Government Five Year Rolling Plan 2013 to 2017) so as to enable the projects approved by the Joint Provincial Planning and Budget Priorities Committee (JPPBPC) meeting on 28thMarch 2013, to be fully and properly implemented in pursuance of the objectives of the PSIP Guidelines, and not for any other purpose.
110. Defence submitted that though not admitted that any departure from the Guidelines has been established, even if it was established that there has been some departure from strict adherence to such guidelines, any such departure does not constitute an unlawful act, simply because the evidence adduced at trail established that, through the agency of FCF, and at no financial benefit to FCF, the objectives of the PSIP Guidelines were achieved and project outcomes were in fact met. That proposition is consistent with what the Supreme Court confirmed in Applications by John Nilkare, Review Pursuant to section 155 (4) of the Constitution(supra). The Court in that case clearly stated that Guidelines are mere administratively guidelines, the terms of which do not have the force of law so as to give rise to any criminal act, even if one or more of the guidelines was breached. The guidelines were held to be merely administrative in nature and were designed to enable the attainment of the objectives of the Guidelines. There are two important points to here note:
(i) The Court will look at whether there has been practical achievement of the objectives of the guidelines, and errors or omissions in terms of adherence to guidelines procedures does not thereby necessarily constitute any unlawful act. (ii) Full compliance with the administrative requirements of the guidelines is not required, only achieving or substantially achieving the objectives of the guidelines. (See Amet CJ in Nilkare at pages 4-5 inclusive).
111. Defence therefore submitted that the MOA was entered into not for any unlawful purpose, but rather to achieve the intended objectives of the PSIP Guidelines. Defence therefore submitted that the charge of conspiracy to defraud cannot be sustained.
112. Defence Counsels submitted the following for the three (3) accused persons;
(a) A determination of whether or not each of the Defendants is guilty of conspiracy to defraud depends on whether or not their actions or omissions fall within the language of section 407 (1) (b) of the Criminal Code Act. It says relevantly,
“A person who conspires with another person ... to defraud the public, or any person (whether or not a particular person) ... is guilty of a crime.”
(b) It is settled in this jurisdiction that there are two critical elements that needs to be satisfied in order to prove a charge of conspiracy to defraud. That is, on the one hand, there must be an agreement between two or more persons (First Element). On the other hand, such an agreement must be one where it is intended to do an unlawful act or a lawful act by an unlawful means. Pertinently, Sakora J in the case of State v Verga (supra) said,
“The agreement of two or more to do an unlawful act, whether criminal or tortuous in its nature, or to do a lawful act by unlawful means, whether the act is committed or not.” 113. His Honour also said, that,
“theState needs to prove a “community of purpose”; that is, the State needs to prove that there was an intent by each of the conspirators to perform an unlawful act and each of the conspirators agreed with one or more members of the group.”
(c) It follows that a determination of the issues in turn depends on a determination of whether all of the First Element and Second Element of the charges are satisfied.
(d) With regard to the First Element, it is conceded that because there was an agreement for certain acts to be done, this element has been made out. That is, there is evidence of a MOA, and secondly, it clearly shows it was signed by Governor Wobiro as Chairman of the Joint Provincial Planning and Budget Priorities Committee (JPPBPC) of the one part, and by Norman May as founder of Fly Care Foundation of the other part. In addition, it was witnessed by Dr. Gumoi. However, this, we respectfully submit, is not sufficient on its own. One needs to consider the question of whether the Second Element of this offence has been satisfied.
(e) As to the Second Element of the offence, a determination of whether the MOA was intended to facilitate the doing of an unlawful act depends not only upon a determination of what the objectives of the MOA were, and whether its terms are consistent with those terms of the PSIP Guidelines, but also whether the accused had some common criminal intent to defraud the at the time that the MOU was entered into. We submit that neither of those two criteria has been proven to the requisite high standard of beyond reasonable doubt. A perusal of the MOA reveals that its purpose is covered off in the Recitals. Of relevance are the following provisions:
(i) The objective of the MOA can be clearly gleaned out from its Recitals part. Clearly, at Recital C it provides, relevantly, that “Parties enter into this agreement based on Public Private Partnership Policy adopted by the National Government for purposes of effective and transparent delivery of goods and services to the people”. (Our emphasis)
(ii) Those very same objectives as embodied in the MOA are found in the PSIP Guidelines at section 3.1. That is, the PSIP Guideline provide,
“to provide a minimum service delivery standards through re-establishment of basic infrastructure and facilities, including socio- economic activities for essential services such as health, education, law and justice, quality water and sanitation, transport, (air, sea and land), communication and rural electrician.”
(iii) The terms of the MOA, particularly clause 1.1(a) to (e) were incorporated to ensure that the objectives of both the MOA, and the objectives of the PSIP Guidelines, were each achieved. That is, through FCF being a facilitator of PSIP Funds being paid to community and church groups. FCF would receive the funds, then release funds to community groups, and church groups, amongst others, and would then provide a report to Governor Wobiro for the purpose of ensuring acquittals were made to the Department of Implementation and Rural Development in accordance with the PSIP Guidelines.
(f) No doubt, as per the evidence of Governor Wobiro and Dr Gumoi, this was exactly the arrangement that was recommended and adopted at the JPPBPC Meeting held on the 28th February 2013. What is disputed is the validity of such a meeting. That dispute is readily addressed as follows: (i) Whether there was a properly constituted JPBPPC meeting on 28 February 2013 and whether the approvals given by the JPPBPC were in accordance with the PSIP Guidelines.
(ii) Whether the process to approve the projects the subject of the meeting on 28 February 2013, had been complied with;
(g) A determination of whether there was a properly constituted meeting depends on what section 25(2) of the Organic Law on Provincial and Local-Level Government (OLPLLG) provides. A properly constituted meeting is constituted by a member of the Provincial Executive Council appointed by the Governor as Chairman, the Chairman of each District Development Authority (in this case open members) and any other members not exceeding three in number appointed on an ad hoc basis, by the PEC. Whether this provision was complied with depends on what evidence was adduced at trial.
(i) The meeting minutes show that each of Governor Wobiro, Boka Kondra, Roy Biyama and Dr. Gumoi (as CEO) were present.
(ii) Notwithstanding that paragraph g (i) of the meeting minutes records that each of Boka Kondra and Roy Biyama were present, their evidence was that they were not present. This they maintained in cross-examination. However, a payee history (Exhibit E23) shows that they were paid allowances for the periods beginning 25 February 2013, and for a 10 day period. It was Dr. Gumoi’s evidence, not rebutted, that such allowances were paid in relation to attendances at JPPBPC meetings and Provincial Assembly meetings. It was established by evidence adduced at trial that there was a JPBPPC meeting before a Provincial Assembly meeting for periods beginning 28 February 2013 onwards. Clearly, despite their evidence denying their attendance at such meeting, there is evidence showing they were present at the relevant times. It is submitted that as a matter of fact, they were present at that meeting because there was a quorum as per the requirements of the Organic Law on Provincial and Local Level Government (OLPLLG) and Provincial Government Act.
114. Section 156(6) of the OLPLLG provides,
“The quorum for a meeting of a committee of a Provincial Executive Council is half the total membership of the committee”
115. This was confirmed by Cannings J in the Supreme Court case of Reference by East Sepik Provincial Executive Council. In this case there was half of the required membership present.
(h) In turn, a determination of whether the JPBPPC meeting was properly conducted and recorded depends on what its functions were as per section 25(3) of the OLPLLG. Critical to this are three points:
(i) Firstly, one of the functions of the JPBPPC, as per section 25(3)(a) of the OLPLLG, is to,
“...Oversee, co-ordinate and make recommendations as to the overall planning in the province, including budget priorities, for consideration by the National Government.
116. Consistent with this requirement as stated above, the Defence submitted that, “The Committee fully endorsed this list of projects for funding under PSIP in 2013 dated 9 February 2013. The lists of projects were;
(A) The total K15 million PSIP Funds dated 9th February 2016. The allocation of percentages was consistent with section 2 of the PSIP Guidelines.
(B) It was Dr. Gumoi’s and Governor Wobiro’s evidence (uncontradicted) that given allocations of PSIP Funds not coming in quickly, the budget was broken down into two parts. One was put before the meeting and was dated 9 February 2013. This was for K6 million. The other was put later on 28 October 2013 for another K6.5 million. (Exhibit D10)
(C) In relation to the projects the subjects of this proceeding, it will be noted these were as follows:
(1) Kuru/Aberemubda Road Project was allocated K1, 000, 000.00. It was shown in evidence of Movea Kurokuro that the amount of K272, 000.00 was used and there are no invoices to show its expenditure. The balance was given back to the Provincial Government.
(2) For the Masingara /Tati Foot Project it will be noted in the approval of 28th October 2013, that an amount of K200, 000.00 was set aside for the project. It will be noted from the evidence of Sisah Arusah and Willie Biriga Gadua, that the amount of K73, 000.00 was paid out, but that the balance outstanding was not used because the FCF accounts were frozen. However, all monies paid out were applied for the purpose that they were intended for.
(ii) What is important to note about each of the Projects approved is that they were developed consistent with the Fly River Provincial Government Five Year Rolling Plan that had involved wide consultations with Wards and Districts and Provincial Management teams to develop a comprehensive plan for the Province. The list developed basically took its que from the plan. This was consistent also with section 25(3) (c) which is,
“to draw up a rolling five year development plan and estimates for the province.”
(iii) Also consistent with section 25(c) of the OLPLLG is paragraph 2.6 0f the meeting minutes. It provides relevantly, “The Committee agreed that the main challenge for the Province was to fully implement the Budget given the staffing and logistical shortfalls. It was agreed that PPP strategy be fully used to assist in the implementation of the 2013 Budget.”
117. There is evidence before the Court, particularly that of Paul Sai’, that PPP refers to Public Private Partnership and that such policy existed despite there being no formal legislative enactment to that effect. It can also be found in the PSIP Guidelines as a tool to be utilized for purposes of achieving the objectives of the guidelines.
(iv) As to whether JPBPPC procedures were complied with in conducting the meeting, section 25(1) of the OLPLLG refers to an Act of Parliament to regulate such matters. In this case, there is no provision to be found in the Provincial Government Act 1997 which refers to such a procedure, in particular the requirement for letter head, the names of the motion mover and the seconder, and the form the meeting minutes should take, so in the event of a legislative vacuum, the procedure is as determined by the JPBPPC.
(i) The only probative evidence (evidence which is of no assistance to the court) contained in each of the statements of William Goinau and Bob Danaya is that they have experience in so far as the expenditure of PSIP Funds is concerned. However, in terms of the details of the MOU arrangement the subject of the charges against the accused, it became apparent during their evidence that neither knew of, nor could therefore be speculate upon, what arrangements were lawful. The Court cannot rely on such evidence, based as it is upon conjecture and speculation. Further, neither of them comes to court with clean hands. Goinau was terminated by, and Danaya lost his election to Wobiro. There evidence must be viewed as tainted, in that they continue to challenge generally the legitimacy of actions of both Wobiro and Gumoi.
(j) In addition, Fly Care Foundation was set up as a charitable organization to assist the people of South Fly District. The signatories to the account were not only Norman May, but two others as well. In this case, the treasurer, Vicky Sariman and Company Secretary Timil Tape. This was what Norman May said in his uncontested evidence, which remain unchallenged.
(k) Defence also submitted that, there is no evidence that the MOA was entered into for the purpose of either carrying out an unlawful act or carrying out a lawful act by unlawful means. Case authorities have also established that mere proof of the existence of personal relationships does not constitute evidence that there is any increased likelihood that the accused had entered into a criminal agreement to participate in an unlawful act. There must be some form of criminal agreement properly established by cogent evidence to the high standard of beyond reasonable doubt before guilt is established. In this case there was no such evidence. It follows that the second element of the offence cannot be satisfied.
(l) In any event, as indicated above, even if there was some error or omission in relation to compliance with the PSIP Guidelines, then the position in law (consistent with Nilkare’s) case is that the PSIP Guidelines are mere guidelines, which don’t have the force of law, a breach of which cannot give rise to criminal sanction. What is important to note, as a matter of law, is that if the objectives of the guidelines has been achieved or substantially achieved prior to the implementation shutdown as was the case here, then irrespective of whether there have been errors or omissions in adherence to the strict terms of guidelines, such actions as had in fact been carried out constituted lawful acts. In contrast, if there had been full compliance with guideline procedures, but the program objectives had not been achieved, then that would necessarily constitute an unlawful act if money had been diverted to an unauthorized objective.
(m) In Nikare’s case a number of important findings were made relating to the legal effect and status of guidelines, findings which we submit relate to the PSIP Guideline with which the Court is presently concerned. They are:
(i) Kapi DCJ and Los J held that National Executive Council Guidelines prescribing the use of funds were bureaucratic or administrative guidelines reflecting the political aspirations of the day. They did not have the force of law. Consequently, the application of funds in breach of the applicable guidelines could not be unlawful.
(ii) Amet CJ, said,
“I consider primarily that if the purposes to which the funds were legitimately applied in the general spirit of the particular developmental programme are good general public purposes for the benefit of the people, with bona fide good intentions and substantial procedural regularity in the allocation and expenditure of the funds, then it could not be said to be unlawful application for the purposes of Organic Law. (Emphasis added)
(iii) Kapi DCJ also said,
“Additionally, the applicant leader has taken issue with the legal status of the irrelevant programme guidelines. It has been vigorously contended that the guidelines are precisely what the term implies that is they are merely guidelines only and do not have force of statue or regulations to have legal status, the non-compliance with the provisions of which the application of funds could be said to be unlawful. This to my mind is a valid proposition. The guidelines are mere guidelines promulgated by the National Executive Council to Government and as quietly was manifested by this particular Government in 1992 in December of that year, new program guidelines were endorsed replacing the previously existing form 1988”. (Emphasis added) (iv) Los J said
“The first issue relates to meaning of the word “lawfully” cited in S13 (a) of the Organic Law on Duties and Responsibilities of leadership. His Honour (the DCJ) discussed the meaning of the word and concluded that it imported the notion that the purpose for the money must be set or required by law. The Guidelines had no statutory basis therefore they did not have the force of law. Consequently the funds applied outside the Guidelines would not be unlawful. With respect I agree with the conclusion...
For all these reasons in my view, the Tribunal had erred in concluding that the purposes to which the funds were applied were unlawful and thereby the applicants have been guilty of misconduct in office.”
(v) Kapi DCJ went on to say, “It would follow from this conclusion that where funds are applied to purpose outside the Guidelines, this cannot amount to applying money to “a purpose to which it cannot be lawfully applied” under s 13(a) of OLDRL.”
(n) It follows, in our respectful submission, that each of the elements of the offence has not been made out, and that, therefore, each of the Defendants should be found not guilty.
118. Defence submitted that the payment of K7, 060, 000.00, in accordance with the MOA, to FCF, does not constitute misappropriation because the evidence at trial adduced on behalf of the accused established that the entering into of the MOA, for all intents and purposes, was designed to achieve the objectives of the PSIP Guidelines, and for no other purpose. It therefore cannot be said the PSIP funds were dishonestly applied to the use of each of the Defendants or FCF, or any other person or entity.
119. It follows that the MOA was entered into for a lawful purpose, namely to achieve the intended objectives of the PSIP Guidelines. Defence therefore submitted that the charge of conspiracy to defraud cannot be sustained.
120. It is the Defence submission that in order for a person to be convicted for the offence of misappropriation, each of the elements of that offence needs to be satisfied. Those elements referred to were set out in Brian Tindi Lawi v The State (1987) PNGLR 390. That is, there must be a person (First Element), who must be found, to the requisite standard of beyond reasonable doubt, to have dishonestly applied (Second Element), to his own use or to the use of another (Third Element), property belonging to another person (Fourth Element). 2
121. There is no dispute that the First and Fourth elements have been made out. The key issue for determination is whether the PSIP funds were “dishonestly” applied to the use of each of the Defendants, or the use of another.
122. Thus, the Defence submitted that it is settled law in this jurisdiction that the test for dishonesty has two elements. First, the test to be applied is an objective test, commonly referred to as the reasonable man’s test. Here the Court has to decide whether, based on the facts, and according to the ordinary standards of decent, reasonable, and honest people, the accused acted dishonestly (First Part). Secondly, the test is to an extent subjective. The Court must look into the mind of the accused and determine whether, given his intelligence and experience, he would have appreciated, as right-minded people would have done, that what he was doing was dishonest (Second Part).
123. With regard to the First Part, it is respectfully, submitted that a reasonable person, being cognizant of all the relevant facts, would not come to a conclusion that the subject application of PSIP Funds was dishonest because:
(i) The weight of the evidences establishes that there was a properly constituted and properly conducted JPPBPC meeting on 28 February 2013 at which properly approved projects were to be undertaken in accordance with the NEC approved PPP arrangement (which took shape) in the form of the MOA). It is this very same PPP arrangement that was contemplated in the FRPG Five year plan which is also found in the PSIP Guidelines.
124. The specific projects for the purpose of this trial that were approved Kuru/ Aberemuba Road Project, Masingara Tati Road Project and Small Business Grants
125. Defence say the MOA was established consistent with the JPPBPC resolution on 28 February 2013 and also the FRPG Five year plan and the PSIP Guidelines were contemplated such an arrangement. Paul Sai’i also gave evidence of the existence of such a policy despite it not having legislative backing. Some its key features were:
(A) Firstly, it provided at Recital C the following,
“Parties herein enter into this arrangement based on Public & Private Partnership Policy adopted by the current National Government for purposes of effective and transparent delivery of goods and services to the people.” Despite allegations to the contrary, this provision is consistent with paragraph 2.6 of the JPBPPC meeting minutes and the PSIP Guidelines itself which recommended the use of Public Private Partnership to deliver projects as approved on 28 February 2013.
(B) Secondly, the MOA provides at Recital F the following,
“The JPBPC in its meeting minute 1/2013 dated 28 March 2013, considered that for proper record keeping purposes as well as proper management and disbursement of the Governor’s discretionary funds, Fly Care Foundation Inc. was nominated for purposes of management of some of these funds, proper disbursements of the same and proper report back to the Governor on how these monies have been applied especially by unregistered community groups, churches and other such groups which have no proper bank accounts and lack capacity to account for funds”.
126. This is consistent with the evidence of Governor Wobiro, Dr. Gumoi and Norman May in so far as the intention behind the arrangement was concerned.
(C) Thirdly, Recital G of the MOA provides,
“The Provincial Supply and Tenders Board approved and endorsed in its meeting of 19th April 2013, resolution No. PSTB 14/13, in which an umbrella decision was made that covers the arrangement between the parties herein which captures the tasks to be performed as stated in clause F above.”
127. Defence therefore submitted that, this is consistent with Exhibit E3 PSTB resolution.
128. Defence say the MOA therefore contemplated procedures for appropriation and acquittal of funds in a way which was consistent with the JPBPPC approvals and recommendations, namely the carrying out of projects essential to the improvement of the lives of the villager beneficiaries. By clause 1.1 (a) to (e) inclusive of the MOA, FCF was to hold the PSIP Funds, manage and control the allocations, monitor how those funds were used on behalf of the Governor, keep proper financial records and provide such financial reports to Governor Wobiro for purposes of acquittal back to the Department of Rural Implementation and Development.
129. On the other hand, Defence further submitted that Governor Wobiro would pay to FCF an administration cost. It was revealed in evidence (which was not contradicted) that such administration costs were never paid because Norman May waived his entitlement to payment of money to FCF, notwithstanding that such payment was properly payable under the terms of the MOA. 130. The PSTB thereafter gave a blanket approval of the payments to FCF. It was this approval that enabled payments to be made through to FCF. As Dr. Gumoi gave evidence showed, it was he who suggested the arrangement to Governor Wobiro. He said that he would not give such advice had there been no Public Private Partnership Policy in place at the relevant time.
131. The PSTB then approved the payments to Fly Care. It is the States allegation that the approvals took the characteristic of being paid above and beyond the financial limit of Dr. Gumoi as Administrator because his ceiling is K500, 000.00 and the PSTB approved was for K5, 000, 000.00 as per the PSIP Guidelines. The evidence however shows otherwise:
132. In respect of the four different cheque payments the subject of the particulars of charge, it was Alois Thompson’s (Provincial Treasures) evidence that the funds were together inadvertently lumped together, therefore appearing to have exceeded the PSTB limits. But this is not the case because when one looks at the estimate of projects before the JPBPPC, and then compare those with the payment descriptions on each of the cheques, they are for a lesser amount. They were four cheques delivered to F.C.F. At the time of delivery of the cheques 1,3,4 a summary of projects accompanied the cheques, setting out the actual amounts to be spent on each of the nominated projects. Cheque no.2 did not have such a list because it was for mobilization costs.
133. For the First Cheque No. 4559 dated 10th November 2013 although it was for K1.3 it was broken up as follows. Firstly, K300,000.00 was allocated for Dorogori Church Building, K500, 000.00 was allocated for Kuru/Aberemuba Feeder Road Construction and K500, 000.00 was allocated for Small Business Group Grants. Each of these allocations were within the financial limits of the Provincial Administrator. However, when he forwarded them to the PSTB for approval, the cheque was for a higher amount than strictly allowed. Though that was an administrative error on his part, we submit that that does not impute any dishonest intention on his part. Rather, it establishes it bona fides in carrying out program objectives.
134. Defence submitted that for the Second Cheque No. 4851 dated 10 December 2013 for K100, 000, this payment was for mobilization costs. Again, this amount according to the PSIP Guidelines falls within Dr. Gumoi’s financial limits. Again he erred by forwarding this to the PSTB for blanket approval.
135. The Third Cheque No. 4914 dated 12 December 2013, was for the amount of K1.6 million. It was broken up as follows:
(A) Mobilization capital assist-Governor-PSIP K500, 000.00; (B) Kuru/Aberemuberide Feeder Road-PSIP assist- K500, 000.00; (C) Gigiraride United Church assist-PSIP Prog- K50, 000.00; (D) ECPNG Daru Church Hall/PR House Complex- K200, 000.00; (E) Daru United Church Fencing Assist-PSIP- K100, 000.00; (F) Daru CLC Church Hall completion-PSIP- K100, 000.00; (G) Rants Support-Governor Program Admin- K150, 000.00.
136. Defence further submitted that each project is within Dr. Gumoi’s financial limits and therefore he erred administratively when forwarded projects PSTB approval. That does not establish dishonesty.
137. The Fourth Cheque No. 4974 is for K4.6 million dated 15th December 2013. On the face of it, it appears within the limits of the PSTB approvals. However, it was broken down as follows and comes within financial limits of Dr. Gumoi which he erred in forwarding to PSTB:
(A) Church education support grant- PSIP Funds- K50, 000.00; (B) Church edu-infra. Assit-PSIP Funds- K 2 5 0 , 000.00; (C) Educ.anti fraud & corruption assist – PSIP- K 1 5 0 , 000.00; (D) Health Support grant-PSIP Funds- K500, 000.00; (E) Health Infrast. Support grants-PSIP Funds- K 5 0 0 , 000.00; (F) Health Support grant-PSIP Funds- K 5 0 0 , 000.00; (G) Governor’s support grant-small business- K 4 8 0 , 000.00; (H) Education Infrast. Support grant-PSIP Funds- K300, 000.00; (I) Education Infrast. Support grant-daru sport- K300, 000.00; (J) Health Infrast. Support grant-food road- K200, 000.00; (K) Small business dev. Support grant-PSIP Funds- K480, 000.00; (L) Educ. Infrast. Support grant – PSIP Funds- K 1 5 0 , 000.00; (M) Foot Road Sasingara/Iruipi/Tati-PSIP Funds- K200, 000.00. 138. In accordance with the provision of the MOA (made pursuant to the JPBPPC meeting minutes and Five year rolling Plan) the evidence revealed the very same arrangements were followed as those contemplated under the Guidelines, as was reflected in the terms of the very same MOA. That is:
New Century Payments-K350, 000.00
139. Defence submitted that there is no dispute that the amount of K350, 000.00 was paid. Consistent with the arrangement contemplated under clause 1.1 of the MOA, Governor Wobiro furnished a letter dated 24 March 2014, authorizing such payment, consistent with the JPBPPC resolution, for the release of the above amount. The purpose was recorded clearly in the letter as follows,
“Supply of marketable items to the value of K5, 000.00 to informal Sector Market Participants (list attached herewith) Activities covered under this scheme will be as follows; 1. Canteen Food Sales 2. Baking 3. Sewing/ Tailoring 4. Fishing equipment assistance 5. Mini kai bars.
140. The list was prepared by Terrah Lifu and each of Gabriel Apai, Samuel Gausa, Pisni Hauda and Gidama Gaoro.
141. The purpose of the list was to identify the purpose/objective for payment of the funds. What is disputed is the purpose. Defence submitted that the evidence of Gausa and Apai, saying that the purpose was to pay scrutinizers, should not be accepted. When cross-examined, Defence submitted that Gausa admitted that he was the one telling recipients it was for scrutineers, not the Governor. Further submitted by Defence that Apai was evasive and said something entirely different from what he said in his statement. Defence therefore submit that their evidence was clearly unreliable, cannot be relied upon, and that this allegation must fail.
Kuru/Aberemuba Project- K1, 000, 000.00
142. Defence submitted that the arrangements as per the evidence of Movea Kurokuro again mirrored the very same arrangements contemplated and found in term of the MOA. That arrangement as it revealed itself was for FCF to hold funds as trustee, and where such funds could only be released upon production and disclosure of an invoice and letter of authorization similar to that shown in the New Century Payment arrangement.
143. This project was an impact project (consistent with FRPG Plan) and the amount approved for and allocated through FCF as a facilitator was K1, 0000 0000.00. It was revealed that K272, 000.00 was spent. The balance was forwarded back to FRPG as FCF accounts were frozen.
144. Defence submitted that the evidence of Benjes Alusi cannot be relied upon as his, at its highest, is purely hearsay evidence. He indicated in cross-examination that he heard from someone else who heard from someone else the arrangement for the project. This evidence is clearly hear say upon hearsay evidence and should not be admitted or received. His account of the project, in any event, does not accord with what was intended.
Masingara/Tati Road Project
145. The arrangements as per the evidence of Asusah Sisah and Willie Bigira Gadua again mirrored the very same arrangements contemplated and found in terms the terms of the MOA.
146. The amount of K200, 000.00, consistent with the JPBPPC approvals, was allocated for this project. The cheque No. 4917 clears show an allocation of K200, 000.00 to this project. The evidence revealed only K73, 000.00 was paid for labourers. Again, the arrangement was to produce a list of workers and funds were then released. The list was prepared by Arusah Sisah. The evidence of Kable Mapbase.
Payment to David Kini Bible College
147. The arrangement as per the evidence of Bishop Leka again mirrored the very same arrangements contemplated and found in the terms of the MOA.
148. The evidence adduced at trial showed that payment was made to the college to build dormitories which would provide housing for Western Province students attending that college. They, as people of Western Province, were in fact contemplated within the program objectives, and did in fact benefit from such allocation. The evidence also revealed that these students, upon the completion of their studies, would come back to the Western Province and serve the people of Western Province, who are also beneficiaries, in that context, in a wider sense.
Balimo Catholic Church
149. Defence submitted that this project was for K60, 000.00. It is an impact project. Again, the process followed to access and expend the fund is consistent with the requirements of the MOA and beyond that it is ongoing, growing and impacting the lives of the ordinary populace of Balimo, the people of Western Province, the intended beneficiaries.
Daru United Church Fencing
150. Project completed. This is for the benefit of the people of Western Province living in Daru Town, the intended beneficiaries.
Dorogori United Church
151. Project completed. This is for the benefit of the people of Dorogori in the Western Province, the intended beneficiaries.
152. Defence submitted that what should be noted is that clause 1.1 (e) of the MOA could not be complied with because the FCF Funds were frozen. This is quite clearly revealed in the PSIP acquittal reports that were forwarded back to DIRD. FCF is mentioned as a PPP partner. William Yari’s evidence is that FCF projects could not be reported on because, on the one hand, FCF relied on project completion when reporting back and Governor relied on FCF reports. This was hindered when FCF funds were frozen.
153. It follows that a determination on whether the monies paid to FCF were “dishonestly” applied is dependent on firstly whether the MOA was intended to facilitate the doing of an unlawful act, and secondly, whether the payments were made in accordance with the MOA. It is clear from the evidence that the MOA was for all intents and purposes legal, and also that the arrangements as evidenced in different projects are the very same arrangements contemplated under the MOA.
154. Defence submitted that the payments made to FCF were properly recommended on 28 March 2013, pursuant to JPPBPC resolution to use PPP strategy in implementing the projects, and further in circumstances where there was PSTB approval through resolution no. 14 of 2013. Even the PSIP Guidelines and FRPG Five Year Plan contemplate such as arrangement. There was no evidence to the contrary. Dr. Gumoi in his evidence indicated PSTB followed through on JPPBPC recommendations and the MOA, PSIP funds totalling K7, 060, 000.00 were paid to FCF from the Western Province Treasury Department and dispensed in accordance with the MOA.
155. As submitted by Defence, even if the Court was to find that there was technical non-compliance with the PSIP Guidelines, the Supreme Court case of Nilkare is the authority for the proposition that at its highest, the Guidelines are merely administrative in nature being designed to achieve the object. There is no criminal sanction in the event of the guidelines not being complied with administratively. Based on all of the above, Defence respectfully submitted that the evidence does not establish, beyond reasonable doubt, that any of the accused had any intention to commit any criminal act. We submit that in such circumstances, each of the Defendants must be acquitted of all charges.
Submission by State
156. Mr. Kupman of Counsel for the State argued that there are different guidelines. Some guidelines are discretionary and other are non-discretionary. In terms of PSIP Guidelines and Financial Instructions 1A/13, Mr. Kupman said they have the force of law.
157. Kupman submitted that there is no evidence before the Court that funds which were not used were refunded back to the Fly River Provincial Treasury. Kupman submitted that it is for the Defendants to acquit and they can’t blame the State.
158. In relation to the Defence of Honest claim of right pursuant to section 23(2) of the code, Kupman said this defence was not raised and tested. Kupman further submitted that the Defendants did not seek legal advice from the State Solicitor’s Office especially when PPP Policy was not in place. In terms of payment of K100, 000 as for mobilization costs paid to the Contractors, Kupman submitted that there were no contractors.
159. Mr. Kupman of Counsel for the State submitted that at the relevant time, the accused Norman May was the owner of the Fuel Company May Fuel Distributor Ltd. He was also the founder and Executive Chairman of Fly Care Foundation Inc. The Fly Care Foundation Inc. is a charitable organization providing delivery of goods and services for charitable purposes. May is the sole signatory to the Fly Care Foundation Inc. Bank South Pacific Ltd (BSP) Account No. 101022106.
160. State submitted that Wobiro was the Governor for Western Province in 2012. May was his Political Advisor and Gumoi was his Economic Advisor. Eventually, Gumoi became the Acting Provincial Administrator of Western Province and by virtue of that office he is also the Chairman of the Western Provincial Supply and Tenders Board (WPSTB). State further submitted that there was no JPP & BPC meeting No.1 of 2013 held on the 28th March, 2013 (Exhibit B3).
161. The State alleges that the accused Mr. May conspired with Mr. Wobiro and Dr. Gumoi to defraud the State in that on the 16th November 2013 the accused registered Fly Care Foundation Incorporation with Investment Promotion Authority(IPA) as a charity organization to provide and delivery of goods and services for charitable purposes. On an unknown date a Memorandum of Agreement (MOA)was signed by Mr. Wobiro and Mr. May who is the founder and Executive Chairman of (Fly Care) which was witnesses by Dr. Gumoi and Tony Warapo, Exhibit B2. The effect of this MOA is that Fly Care Foundation was appointed to:
a. Undertake upon the advice and direction of Mr. Wobiro to hold monies for local community groups, church groups, social clubs and the like.
b. Monitor on behalf of Mr. Wobiro on how funds are used and ensure that funds are used for their intended purpose for which it is given.
c. Provide acquittals and
d. The arrangement was made under what the MOA states as “a Public Private Partnership” arrangement.
162. It is submitted that at that time when this arrangement was made the Public Private Partnership Act, which sets out the mechanism and principles of how to expand Government funding under this PPP arrangement, was not enacted as yet.
163. State alleges that Mr. Wobiro used his position as the Governor for Western Province to direct four (4) Fly River Provincial Government cheques:
a. 004559 dated 10th November 2013 and valued at K1, 300, 000.00, Exhibit A8.3.1
b. 004851 dated 10th December 2013 and valued at K100, 000.00, Exhibit A8.3.2
c. 004914 dated 12th December 2013 and valued at K1, 600, 000.00, Exhibit A8.3.3 d. 004974 dated 15th December 2013 and valued at K4, 060, 000.00, Exhibit A8.3.4
164. To be drawn from Fly River Provincial Government Grant account no. (328)1001680784 with Bank South Pacific Ltd. and Fly River Provincial Government BSP Operating Account No. (328) 1000943315 in favour of Fly Care Foundation Inc. BSP account no. 1010226106
1. K350, 000.00 to New Century Limited as 2012 election payments
165. On the 24th March 2014, Mr. Wobiro granted approval to Fly Care to release K350, 000.00 to New Century Limited for the supply of items to participants in the informal Sector Market funded under his PSIP Western Grants in 2013. It was stated in the letter dated 24th March 2014, Exhibit A4 that the purpose of the fund was to supply marketable items to the value of K5, 000.00 to informal sector participants. Activities covered under this scheme were canteen food sales, sewing and tailoring, fuel business and mini kai bars, Exhibit A5, the Distribution List.
166. States evidence shows that K350, 000.00 was released as payment to persons who assisted Mr. Wobiro to campaign during the 2012 National Elections. It is further submitted that K5, 000.00 was paid to each participants. The participants used K2, 500.00 as shopping money and received K2, 500.00 in cash, Exhibit A5. The evidence if Gabriel Apai and Samuel Gausa also confirm this fact. The Distribution list itself contains number of persons from the same family with the same surname and they are all from South Fly in Daru area only. One wonders whether this is equal distribution of Public Monies. It leaves only one conclusion to be drawn and that is that the monies were paid to Mr. Wobiro’s campaign officials in the 2012 General Elections.
167. The payment of Campaign officials and voters doesn’t just finish there. There is evidence of huge payments being made to Wipim Development Association directly from Provincial Administration Exhibit F5and also through Fly Care Foundation, Exhibit E6, the affidavit of Movea Kurokuro. Movea Kurokuro gave evidence that their liason officer was Mr. Gosom Wobiro a relative of the Governor. He denied receiving fund any other funding from the provincial treasury except those that came through Fly Care Foundation. However, this is not the case when Exhibit F5 was tendered, (page 1of Expenditure Transaction Details, the second last entry). Mr. Kurokuro said they got some office materials from Port Moresby for their office. If this is the case then what was the payment of K350, 000.00 paid directly to Wipim Development Association as per Exhibit F5?
168. Mr. Movea Kurokuro’s evidence also shows that they the Wipim Development association had no control over the payment made to distributors of goods on Port Moresby but they just went and got the goods. Among one of the receipts in his affidavit music CD of SISIVA was purchased at CHM. In all these transactions there were no proper acquittals. The items collected from Port Moresby are unaccounted for. We submit it was given away to voters around Wipim area where the Governor comes from. Mr. Kurokuro gave evidence too that Wipim Development Association has 3000 plus members. That is a big number of voters.
Kuru Aberemuba feeder road construction
169. This project was one of the projects that came under cheque no.004559. This project was worth five hundred thousand kina (K500, 000.00). State alleges that no such project took place. The place where the road supposed to be is just swamps creeks and marshy land. Again there is no proper acquittal. This road was not completed. Wipim Development Association was given the job to be done. There are many unanswered questions here; such as, why Fly Care Foundation didn’t build the road? Whose job was to manage the project and acquit the funding? This basically shows that there were no proper legal framework or Guidelines as provided in the Public Finance Management Act and the PSIP Administrative Guidelines was followed. Fly Care Foundation appears to be taking over the responsibility of the Provincial Treasury, like a duplicate. It appeared to be a parasite attached to the Government system to benefit. Just like in the case of State-v- Zebedee Jabri Kalup.
Masingara/Irupi Tati feeder road
170. This project was one of the projects that came under cheque no. 004971. This project was worth two hundred thousand kina (K200, 000.00). The people from Masingara and Tati village did some cleaning for the feeder road. The payment was made in the village and the people got their payments but no acquittals. Fly Care Foundation was not there to supervise and acquit the public monies. The project was not completed. We once again submit that the payment was for the voters and election officials in the 2012 National General elections. All these alleged projects are within the Governor’s locality.
Daru Town Evangelical Church of Papua New Guinea
171. This project was one of the projects that came under cheque no. 004914. This project was worth two hundred thousand kina (K200, 000.00) on or about February 2013, the church hall was built by Red Sea Building Construction Company). This project was facilitated and coordinated by May Fuel Distributors. The Pastors house was not built.
Daru Town Christian Life Church
172. This project was one of the projects that came under cheque no. 004914. It involved the extension for the administration block, the walls and the Pastor’s house. This project was worth two hundred thousand kina. This project was never completed.
Daru United Church Fencing
173. For this project about K500, 000.00 was spent on building a fence around the church. We submit it is a low quality fence and the Fly Care Foundation could not provide receipts and invoices of the purchase of the materials and who built the fence.
174. The so called PSIP acquittals in full bind volumes were provided very late in the trial during defence case. That was in breach of the rule in Brown v Dunn. The relevant state witnesses such as Paul Saii could have responded to materials in the Books. His evidence was that he was only given a brief summary of that and not the full volume of the acquittal. We have gone to the extent of demonstrating that some of the PSIP Development funds were used for Medical Expenses of Public Servants.
175. The State’s submission is that the three accused persons being known to each other conspired with each other to devise a scheme to divert Government funding away from the Government institutions such as the Department of Treasury, and away from the Legal Framework that governs the expenditure of Development Funds, such as the Public Finance Management Act and the PSIP Administrative Guidelines. When the Memorandum of Agreement was signed that Conspiracy between the three became evident. The scheme was devised to pay for election officials and campaign managers for the Governor. Mr. May and Mr. Gumoi being the Governor’s Political Advisor and Economic Advisor were better suited for this scheme. This scheme was devised as a deception and made the public believe that Public Private Partnership was legal and also the use of a Charitable Organisation for that illegal purpose was a perfect disguise. Some projects were not completed; others were completed but were of low standard and quality. For this we submit that it was purposely to divert public attention that the projects are being implemented.
176. As His Honour Salika. J (as he then was) held in the case of State-v- Gabriel Ramoi, [1993] PNGLR 390that:
“Dishonestly” comes from the word ‘dishonest’. ‘Dishonest’ is defined in the Oxford Advanced Learners Dictionary of Current English as ‘intended to cheat, deceive or mislead’.
177. The three accused persons did exactly that by cheating, deceiving and misleading the people and the authorities with their scheme. We therefore submit that there is sufficient evidence for the Court to safely find the three accused persons guilty of Conspiracy to Defraud and Misappropriation as charged.
Facts in Dispute
1. Whether there was a JPP & BPC meeting No. 12/ 2013 held on the 28th March 2013. 2. Did Boka Kondra and Roy Biyama attend the JPP & BPC meeting No. 1 of 2013 held on the 28th March 2013?
3. The purpose of the funds paid to the New Century (K350, 000.00)
4. Are the recipients of cash money and goods from New Century involved in Informal Sector business?
5. Whether there was chaos with Public Servants within Western Province Administration
6. A total of K7, 060,000.00 PSIP funds was paid to FCF
7. Whether there was control and transparency in the use of PSIP Funds held by FCF
8. Chaotic and developmental challenges such as staffing issues in the province
9. FCF has the expertise
Facts not in Dispute
1. There was MOA signed between Governor Ati Wobiro and FCF
2. PSTB gave blanket approval for the PSIP projects
3. Governor Ati Wobiro provided List of Projects
4. Most of the projects to be funded through PSIP Funds held by FCF not completed
5. Tera Lifu, Gabriel Apai, Samuel Gausa, Pisini Hauda and Gidama Gaoro prepared List of Recipients for goods and cash money at New Century Ltd, Daru. 6. Projects not visited, inspected or supervised by FCF
7. Dr. Bob Danaya, former Governor of Western Province and William Goinau, former Provincial Administrator of Western Province.
APPLICATION OF THE LAW TO THE FACTS
Joint Provincial Planning and Budget Priority Committee Meeting Minutes of 28th March, 2013, No.1/2013
178. Whether there was a JPP & BPC meeting held on the 28th of March, 2013 has been vigorously contested by the State. The State argument is that there was no JPP & BPC meeting held on the 28th March, 2013. Whilst on the contrary, the defense argued that there was a meeting held on that date. The purported meeting minutes of 28 March 2013, makes it difficult to follow and determine whether submissions were debated and resolutions passed.
179. Determining this issue is crucial as it was through this JPP & BPC meeting that approved a list of Projects submitted by Governor Wobiro on the 09th of February 2013, refer to Exhibit ‘B1” and also it was through this meeting that approved for the Public Private Partnership (PPP) which subsequently led to the administrative appointment of Fly Care Foundation Inc. and the signing of the MOA with the said Fly Care Foundation Inc.
180. Governor Ati Wobiro as chairman of JPP & BPC does not have the authority to appoint or handpick FCF for the purpose of effective and transparent delivery of goods and services to the people. In clause 1 of MOA and the functions FCF undertake to perform are services provided to FRPG.
(a) Hold monies in trust for local community groups, etc…
(b) Keep, manage and control funds allocated for charitable purposes (c) Monitor on behalf of party A on how funds are used….
(d) Keep proper financial records….
(e) Provide such other reports…
181. The amount of K7, 060,000.00 (PSIP Funds) paid to FCF for the above stated renders such a contract to go through tender process under Public Finance Management Act, 1995. In the case of Fly River Provincial Government v Pioneer Health Services Ltd (SCA No. 73 of 2000) SC 705 the Supreme Court (Amet CJ, Sawong & Kandakasi JJ) held that;
(i) The requirements under ss. 59 and 61 of the PF (M) A are mandatory and where a contract is entered in to breach of those requirements, it is illegal and is therefore null, void and unenforceable.
(ii) The requirements under the PF(M) A are to enable transparency in all public contracts and to safeguard against corruption and enable securing of fair contracts with public institutions and/or bodies for the best services at a competitive or best price.
(iii) A failure to ensure compliance of the requirements of the Act operates to the detriment of the party contracting with the state or a public authority to which the Act applies,
(iv) In the present case, the contract between the Appellant and the Respondent is null and void for non compliance of the public tender and Minister for Finance’s approval under the PF (M) A.
182. The three(3) open members for South Fly, North Fly, and Middle Fly, namely Aide Ganasi, Boka Kondra, and Roy Biyama are members of the JPP & BPC. The only exception given was that of South Fly MP Aide Ganasi who was ousted by Court of Disputed Returns and was not a Member of Parliament. He was declared as South Fly MP on the 24th July, 2012 up to 26th February 2013 when he was removed as an MP and was reinstated by the Supreme Court on the 26th of September, 2013.
183. The JPP & BPC meeting minutes No.1 of 2013 dated 28th March, 2013, Exhibit ‘B3’ recorded the two (2) Open MPs when giving evidence vehemently denied their attendance. Both have gone a step further and told the Court since the accused Ati Wobiro was elected as Governor for Western Province he has not conducted any JPP & BPC meetings up till the time of this case.
184. However, the Defence through Modowa Gumoi tendered Exhibit “E2” 2013: Provincial Accounts: Payee History Report which the Defence relied on to say that both Boka Kondra and Roy Biyama had received their sitting allowances for the JPP & BPC meeting held on the 28th March 2013. It was very unfortunate that this piece of evidence was never put to the State witnesses when state case was still in progress. This is clear breach of the rule in Browne v Dunn (1893) 6 ER 67. If a challenge is to be made to the evidence of a witness, the ground of the challenge be put to the witness in cross examination. Without this, the court will disregard the piece of evidence or give less weight to it. Trials are not run by ambush.
185. First, the fixing of issues for trial proper as contained in the Pre Trial Statement (PTR) is stated in Order 2 – Pre Trial Review of the Criminal Practice Rules, 1987 (No. 1 of 1987). In state v Rovin Waren & ors Unreported (18.06.03) N2417 Kandakasi, J clearly explained the purpose and effect of Pre Trial Review in the following and I quote;
“Pre-trial is a process in our Criminal Justice System (order 2 - Criminal Practice Rules 1987) that enable s the parties and the Court to settle amongst other issues for trial. This is very critical and important part of our case management process. It a necessary process when judicial time and resources are very limited an so are the resources and the ability of the law and justice to promptly each and dispose of cases within the dictates of the a Constitution, particularly s. 37(14)….Accordingly it is imperative that parties should be held to their representations at the pre- trial with the Court staying guided with what was settled at the pre-trial when conducting a trial” (underlining mine)
186. His Honour went further and stated:
This will bring about certainty in approach and getting cases disposed off within the time periods allocated rather than be faced with adjournment challenges and/or blowing out circuit time and resources. There would off course be cases in, which there will be a need to depart from representations by the parties. In such a case, I am of the view that a party wishing to depart from what was settled should make out of a good and a convincing for it”
187. The general concerns raised by the three (3) Open MPs and Paul Saii about the meeting minutes of JPP & BPC 28.03.2013 No. 1/2013 are;
a. No official Letter Head b. No policy submissions i.e. Policy No.1… c. No mover of the agendas or motions d. No seconders e. No resolutions passed
188. The accused Ati Wobiro when questioned by Mr. A. Kupmain for the State as to why there is no FRP Government logo on the meeting minutes, replied the signatures are important further questioned whether agendas were debated. The accused Wobiro said that meeting minutes did not capture that. The minutes’ taker and accused Dr. Gumoi said there is a single letter head for FRP and various divisions and he was confused which letter head he would put on as title of the committee. As in relation to no mover of the motion and no seconder, he (Gumoi) said there are several ways of taking meeting minutes. But Gumoi confirms there were no policy submissions to JPP & BPC but list of projects submitted by Governor’s office were discussed.
Undated MOA between Governor Ati Wobiro and Fly Care Foundation Inc
189. Tamil Tape is the Lawyer with Japson & Associates Lawyers who acted upon Instruction from the accused Dr. Gumoi to draft the said MOA. Tamil Tape is at the same time Secretary of Fly Care Foundation Inc. The accused Ati Wobiro signed the MOA representing the Fly River Provincial Government while accused Norman May signed the MOA for and on behalf of Fly Care Foundation Inc. It is the normal standard practice for PSTB to sign contract with the contractor as in this case FCF. It is not for Governor Wabiro to sign MOA with FCF.
190. Governor Ati Wobiro has entered into an undated MOA with FCF. The Recital 3 of the said MOA states that;
“Parties herein enter into this arrangement based on Public & Private Partnership Policy adopted by the current National Government for purposes of effective and transparent delivery of goods and services to the people”
191. At the time, the undated MOA was entered in to, the Public Private Partnership Act, 2014, No30 of 2014 was not in force. So the MOA was based on a policy that was not in operation and has no legal effect.
192. In the case of State v Paul Tiensten [2013] PGNC 234; N5422 (22 November 2013), it was revealed in court that at the time K10 million was paid to Travel Air the Air Freight subsidy policy or programme was not in existence. The Air Freight subsidy was a pilot programme or an intervention by the Somare Government to pilot the delivery of the subsidized air services to uneconomical routes in the South Coast Economic Corridor (in East & West New Britain). It was also noted that at that time the Department of National Planning & monitoring (DNPM) did not have a policy framework to administer funds disbursed under PPP Programme. At the time the money was given to Travel air, it was revealed Travel Air had no aircraft on the ground in PNG. However, it was revealed that as soon as MOU was signed between DNPM and Travel air, the cheque of K10 million was paid to Travel Air on the same day 6 May 2011, Because DNPM did not have a policy frame work to administer funds disbursed under PP Partnership Programme so it was necessary for MOU to be drawn up to implement Air Freight subsidy.
193. The three (3) accused persons in this instant case argued that the MOA is valid and the payment of PSIP Funds to Fly Care Foundation Inc is lawful and valid for the purpose for which they said MOA was signed. This is contrary to the State argument and the State has raised serious issues in relation to this MOA. The State argued that the MOA is;
• Undated • Does not disclosed the location where MOA was signed • Why PSTB was not made part to the said MOA. • No approval or endorsement for MOA by JPP & BPC.
194. In this instant case, the MOA entered in to between Ati Wobiro and FCF clearly distanced or put off all the processes under the PF (M)A, the PSIP, DSIP & LLGSIP Administrative Guidelines.
195. The evidence by Moses Ase (Exhibit C10) revealed he has no knowledge of most of the projects undertaken and are subject of this court proceeding especially projects within South Fly District. Ase is the acting District Administrator for South Fly District. Mr. Ase, Roy Biyama and Boka Kondra all would not have any knowledge of those projects because they all have not attend any JPP & BPC meetings included the purported JPP & BPC meeting of 28 March 2013, because there was no such meeting on the 28 March 2011. The List of Projects (dated 9th February 2013) Exhibit B1 and revised List (dated 28 October 2013) Exhibit B1, Exhibit D10 were hijacked by Governor Ati Wobiro. The due process pursuant to PSIP, DSIP and LLGSIP Administrative Guidelines were not followed. The following provisions not complied with;
Section 5 Projection Identification, Selection and Approval at three (3) different levels
5.1 Local Level Government Level
i) The Ward Development Committee (WDC) consults with all villages identifying projects and submitting proposals through Ward Councilors to the LLG Council, legitimate associations and individuals may also present their proposals directly to the LLG Manager, who will register and direct the proposals to the LLG Council.
ii) LLG Council selects and prioritizes proposals and submits the PIDs of prioritized proposals to DPMT or Provincial Works Unit (PWU) for scoping and technical assistance up to the formulation of PFDs.
iii) The LLG Council is composed of the President as the Chairperson and all the Ward Councilors, Representatives of Church, Women and Youth (refer to amended OLPLLG (Amended No11-2006, section 29: sub-section (1)] iv) DPMT or PWU sends completed PFDs to LLG Council, for review, endorsement and budget allocation for the approved projects.
v) LLG Council sends copy of approved projects and budget to District Administrator, Provincial Administrator and DIRD
vi) DIRD to guide and facilitate where required.
5.2 District Level
i) The LLG Councils in consultation with District Administration Sectoral Advisers consult with WDCs and other interested parties identifying projects and submitting proposals through LLG Presidents to JDP & BPC. Legitimate associations and individuals may also present their proposals directly to the DPMT or PWU, who will register and direct the proposals to the JDP & BPC.
ii) JDP & BPC selects and prioritizes proposal and submits the PIDs of prioritized proposals to DPMT or PWU for scoping and technical assistance up to the formulation of PFDs.
iii) The JDP&BPC is composed of the Open Member as the Chairperson and all the LLG Presidents, Representatives of Church, women, Youth etc/ refer to amended OLPLLG [Amended No11-2006, section 33A: sub-section2]
iv) The DPMT or PWU sends completed PFDs to JDP&BPC for review, endorsement and budget allocation for the approved projects.
v) JDP&BPC send copy of approved projects and budget to District Administrator, Provincial and DIRD. 5.3 Provincial Level
i) The JDP&BPCs in consultation with Provincial Administration Sectoral Advisers and other interested parties identify projects and submit proposals through the Chairpersons of JDP&BPCs to JPP&BPC. Legitimate associations and individuals may also present their proposals directly to the PPMT, who will register and direct the proposals to the JPP&BPC
ii) JPP&BPC select and prioritize proposals and submit the PIDs of prioritized proposal to PPMT or PWU for scoping and technical assistance up to the formulations of PFDs.
iii) The JPP&BPC is composed of the PEC member appointed by the Governor, as the Chairperson, all Chairpersons of the JDP&BPC (or nominees), Representatives of Church, Women and Youth, [refer to amended OLPLLG (Amended No11-2006, section 25: sub-section 2b] iv) The PPMT or PWU sends completed PFDs to JPP&BPC for review, endorsement and budge allocation for the approved projects
v) JPP&BPC send copy of approved projects and budget to Provincial Administrator, District Administrators, and DIRD
5.4 The role of Provincial Project Management Team (PPMT), District Project Management Team (DPMT) or Provincial Works Unit (PWU) shall be project scoping, documentation and appraisal in consultation with relevant provincial, district and local level government sector advisors and nation’s agencies; and provide technical advice to JPP/JDP&BPC and LLG Councils. Their scoping and mobilization expenses should be covered out of the 4% Mobilization and Scoping component prescribed in paragraph 4.2, for all PSIP, DSIP and LLGSIP PIDs and PFDs they process.
5.5 PPMT shall comprise of the Provincial Administrator as Chairperson, Provincial Works Manager as Deputy Chairperson, Provincial Planner, Provincial Treasurer and appropriate sector advisors. DPMT shall comprise of the District Administrator as Chairperson, District Engineer (cases where there is no District Engineer, then the Provincial Civil Engineer) as Deputy Chairperson, District Planner, District Treasurer and appropriate sector advisors 5.6 In the event Department of Works (DoW) and other sector agencies are unable to assist in the scoping and documentation or new infrastructure, upgrade, maintenance and renovation of existing infrastructure, it could be outsourced in consultation with DIRD. 5.7 The relevant provincial, district and local level government sector advisors shall provide all technical oversight for the PSIP, DSIP and LLGSIP implementation 5.8 All copies of Project Documentations and Contract Agreements shall be submitted by the Provincial and District Administrators to relevant national agencies consistent with the Financial Instructions for compliance. Section 6: Project Documentation Requirements Section 7: Procurement, Tendering and Selection Process Section 8: Payment Process Section 9: Project Implementation and Reporting
Chaotic Situation at FRP Administration 196. Both Ati Wobiro and Modowa Gumoi who gave evidence said they faced problems with the Public Servants at the Provincial Headquarters. Some are loyal to them and others not. Gumoi stated that he was faced with lots of developmental challenges such as serious staffing problems, financial management issues, epidemic corruptions, non existence of boards, no development plan in place, mistakes from Senior Staff management, etc... They said these problems led them to signing up MOA with FCF who had the expertise.
197. Modowa Gumoi as acting Provincial Administrator by virtue of the position he holds, he is the Head of Public Servants in the province. He was appointed to that position on the 23rd January 2013. By the time the JPP & BPC held its first meeting on the 23rd of March 2013 (and the signing of undated MOA) he would have been the acting Provincial Administrator for a period of two (2) months and five (5) days. Given this very short period, how could he be in a better position to make such observations of the developmental challenges he said he was faced with. This is especially so as he was not a staff of FRP Administration at the time of his appointment.
198. Also with the mentioning of FCF on the Governor’s List of Projects dated 9th February 2013, which would be viewed that the possible engagement of FCF was contemplated prior to JPP & BPC meeting of 23rd March 2013 and only less than one (1) month when Modowa Gumoi was in office as acting Provincial Administrator. So, is one (1) month, a too short period to jump to consider engagement of FCF.
Fly Care Foundation Inc
199. The FCF was registered as a Charitable Organization on the 16th November 2012, (Refer to Exhibit E4). So from 09th February 2013, when Governor Ati Wobiro had FCF on his List of Projects (Exhibit B1) FCF would be less than one (1) year in operation and on the 23rd March 2013 (JPP&BPC meeting) FCF would be one (1) month, 07 days in operation. In Exhibit B1, FCF to receive K600, 000, 00 and in Exhibit A10, FCF to receive K650, 000.00 and in Exhibit D9 FCF to receive K1.5million being for Administration.
200. When the FCF was appointed by the Governor, FCF would have established by one (1) month, 07 days. FCF staff Vicky Sariman and Tamil Tape worked for FCF an adhoc basis and so FCF is not fully staffed. FCF is not fully established. As per its Constitution (Exhibit E5), the Board of Trustees non-existence, no financial reports, etc... There is staffing issues with FCF. It was not demonstrated and deliberated on what expertise FCF has. It seems very clear that FCF is in its infancy stage. Therefore, does not have the capacity to deliver what was is engaged to do as per the MOA.
201. FCF as per its registration (Exhibit E4) it is a charitable organisation. It is not a business entity as such it is not captured under the Public Private partnership Act, 2014. Refer to the definition of “company” under the said Act. FCF has not certified the criteria under Section 5 Public Private Partnership Arrangements as specified under schedule 3 of the Public Private Partnership Act, 2014(can apply to it).
Non-compliance with Guidelines 202. The State alleged that the signing of MOA amounted to conspiracy as set procedures such as; project identifications, formulation procedures, project proposals, public tendering, etc.... were not followed. Defence argued that guidelines are just guidelines and do not have the force of law. Relying on John Nilkare’s case (supra) in which the Supreme Court made remark that the court should not be limited to the strict technical non compliance with letter of rules, guidelines and regulations but rather whether in the final analysis the primary purposes for which the funds were allocated where fulfilled or realised substantially. Thus Amet, CJ (as he then was) was of the view that the issue before Nilkare’s case (supra) would be as much as whether the specific regulatory provisions of administrative guidelines have been strictly complied with but whether the general purpose for which the funds were allocated were achieved or implemented.
203. In the Nilkare’s case (supra) the court was not able to determine whether the guidelines had the force of law thus enabling Amet CJ (as he then was) to take the view he took. In this instant case, the PSIP, DSIP & LLGSIP Administrative Guidelines (1st January 2013) in section 2 provides;
“2.1 The purpose of this Administrative Guidelines is to assist agencies involved in the implementation of the Provincial Services Improvement Program (DSIP) and Local Level Government Services Improvement Program (LLGSIP) on the requirements they should meet in selecting, approving, procuring and implementing projects funded under the PSIP, DSIP and LLGSIP.
2.2 The Administrative Guidelines should be read in conjunction with the PSIP, DSIP and DSIP Financial Instructions No.01/2013 of 1st January 2013 by the Secretary for Department of Finance.
204. The PSIP, DSIP & LLGSIP Financial Instruction A1/2013 reads;
1. Purpose
1.1. The purpose of this Financial Instruction is to communicate the amendment made to the Public Finance (Management) Act and to bring in to force and practice, the requirements of the amendments made.
1.2. This Instruction is part of and is to be read in conjunction with the Public Finances (Management) Act as amended (see attached). Non-compliance will attract the penalties as are provided for under the Act.(Underlining mine)
205. From my reading of the above, it clearly reveals that the PSIP, DSIP & LLGSIP Administrative Guidelines has the force of law.
Conclusion
1. I find Boka Kondra MP and Roy Biyama MP were not present and did not attend the JPP & BPC meeting held on the 23rd March 2013 and as such there was no quorum for the meeting and moreso, there was no such meeting held.
2. Governor Ati Wobiro, Modowa Gumoi and Norman May knew each other. This is per Norman May, Ati Wobiro, Gabriel Apai & Samuel Gausa’s evidence.
3. I find the MOA was entered into illegally as provision of Public Finance (Management) Act 1995 on procurement & tendering process was not complied. 4. Defence raised defence under section 23 (2) of the code at the submission stage contrary to Order 2 Pre Trial Review of the Criminal Practice Rules 1987.
5. Provision of services by FCF is for service(s) of K7, 060, 000.00 and such Service should have gone through tendering process
6. Since the engagement of FCF by Ati Wobiro through MOA, all processes and requirements of PF(M)A, PSIP Guidelines & Financial Instruction A1/2013 have been hijacked, by-passed and not complied with;
7. FCF being a charitable organization does not have the capacity and expertise to deliver the services tasked or engaged to do. As such there was no report compiled by FCF even though some projects were completed and delivered.
8. The funding of K350,000.00 to New Century Ltd, Daru for Informal Sector Business was in fact established by evidence that the payments were for scrutineers and election officials for Governor Ati Wobiro.
9. By Affidavit of Movea Kurokuro (Exhibit E6) demonstrated lavish spending like Annexure MK7 CHM vision City – Music CD Sisiva Crew K35.00 no evidence of K2.50. It was the payment by Bank Card. Followed by sets of furnitures, computer sets for K16, 660.78 and stationeries for K7, 275.90. FCF were to do report on acquittals not Wipi Development Association.
10. Payments to churches Gigirade United Church (K150,000.00), ECPNG Daru Church Hall & Pastor’s house (K200,000.00), Daru United Church Fencing (K100,000.00), Daru CLC Church Hall (K100,000.00), all these fundings and approval for these church projects need to get approval for DIRD and Department of Finance pursuant to section 4.2 of the PSIP, DSIP & LLGSIP Administrative Guidelines 01st January 2013, and section 4.4 of the same Guidelines. The section 4.4 states;
4.4 Funds for PSIP, DSIP and LLGSIP may be moved from on priority sector to another except for Administration component, provided that the following conditions are met;
* there must be JPP/JDP & BPC/LLG Council approval in line with 5 years Development;
* this/these must be justified in a letter to the Minister for Planning
* Minister for Planning assesses and may/may not approve the submission in consultation with DIRD and DoF Secretaries
206. There is no evidence that approval was sought from the relevant State Agencies to move from funds broken down in 6 sectors described in section 4.2 and that conditions set in section 4.4 were complied with.
Summary of Findings:
207. By the purported JPP&BPC meeting of 23rd March 2013 in which Boka Kondra MP and Roy Biyama MP did not attend thus no quorum and questionable meeting minutes which endorsed for PPP arrangements when such policy or law wasn’t not in operation coupled with the entering of the MOA in which FCF was engaged to provide services in the form of controlling PSIP Funds and by by- passing the PF(M)A and PSIP Guidelines demonstrated that the three (3) accused persons who knew each other had intention to defraud the Independent State of Papua New Guinea in the sum of K7, 060, 000.00 of PSIP Funds. Given their level of education and experiences the three (3) accused (Ati Wobiro holder of two (2) Master Degrees, Dr. Gumoi, a PhD holder in Economics & Mr. May, a business man) ought to have sought clearance or legal advice from the office of State Solicitor or Solicitor General’s office. Under this scheme of arrangements. The Governor Ati Wobiro then issues written request with what he wants authorizing payments and then FCF facilitated the payments to the respective recipients. Refer to Record of Interview for Norman May. This arrangement basically suits the definition of crime of conspiracy as stated in Tanedo’s case (supra).
208. The State did not substantiate that all of K7, 060,000.00 were misappropriate but there is overwhelming evidence that the sum of K350, 000.00 paid to New Century Ltd, Daru was not for Informal Sector but for payments to Governor Ati Wobiro’s scrutineers and Election officials. The claim that the amount of K350, 000.00 was for the Informal Sector was just a ‘cover up” or just an icing on the cake. No Defence witnesses were called to give evidence to rebutt this allegation. The payments for Kuru-Aberemuba road paid to Wipi Development Association was use to pay for Office Furnitures and computers, stationeries, etc.... all these evidence amount to misappropriation. Refer to Affidavit of Movea Kurokuro. This arrangement and the funds misappropriation befit the description of offence of misappropriation in James Singo’s case (supra).
209. Considering the above facts before me and applying the ordinary standards of reasonable and hones people, I am satisfied beyond reasonable doubt the three (3) accused persons have devised a scheme of arrangements and dishonestly applied to their own use or to the use of others the PSIP Funds belonging to the people of Western Province and Independent State of Papua New Guinea.
VERDICT
210. Guilty of conspiracy to defraud (s. 407 Criminal Code Act, Chapter 262) on all three (3) accused
211. Guilty of misappropriation (Section 383 A Criminal Code Act, Chapter 262) on all three (3) accused ______Public Prosecutor : Lawyer for the State Posman Kua Aisi Lawyers : Lawyer for the Accused Persons