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OFFICE OF THE CONTRACTOR GENERAL OF JAMAICA Special Report of Investigation Conducted into the Circumstances Surrounding the Procurement of Contracts for the 4M Energy Saving and Light Bulb Distribution Project Petroleum Corporation of Jamaica (PCJ), the Former Ministry of Industry, Technology, Energy and Commerce (MITEC) and the Ministry of Energy, Mining and Telecommunications (MEMT) Ministry of Energy, Mining and Telecommunications (MEMT) Table of Contents Executive Summary………………………………………………………………. 02 Introduction………………………………………………………………………. 28 Terms of Reference………………………………………………………………. 31 Background……………………………………………………………………….. 33 Methodology………………………………………………………………………. 35 Findings……………………………………………………………………………. 42 Summary of Key Findings……………………………………………………….. 100 Conclusions……………………………………………………………………….. 110 Recommendations………………………………………………………………… 115 Appendices………………………………………………………………………… 124 ______________________________________________________________________________________ 4M Bulb Distribution Project Office of the Contractor General 2008 January Page 1 of 124 OFFICE OF THE CONTRACTOR GENERAL OF JAMAICA Special Report of Investigation Conducted into the Circumstances Surrounding the Procurement of Contracts for the 4M Energy Saving and Light Bulb Distribution Project Petroleum Corporation of Jamaica (PCJ), the Former Ministry of Industry, Technology, Energy and Commerce (MITEC) and the Ministry of Energy, Mining and Telecommunications (MEMT) EXECUTIVE SUMMARY The Investigation of the 4M Energy Saving and Light Bulb Distribution Project was initiated by the Office of the Contractor General (OCG) on Wednesday 2007 October 24. On 2007 October 23, under cover of letter of even date, the Prime Minister, the Honourable Orrett Bruce Golding, provided the Contractor General with an advance copy of a report which the Minister of Energy, Mining and Telecommunications, the Honourable Clive Mullings, had prepared on the 4M Energy Saving Project. The Honourable Clive Mullings tabled the referenced report in his presentation to Parliament later that same day. In his presentation, Minister Mullings invited the Contractor General to investigate, inter alia , the contract award process which was utilized for the procurement of contractors for the 4M Energy Saving and Light Bulb Distribution Project (hereinafter referred to as the “4M Project” or the “Project”). The allegations which were contained in Minister Mullings’ report to Parliament raised a number of concerns. Some of these alluded to impropriety, lack of fairness and transparency in the award of contracts, a breach of the procurement guidelines, mismanagement and a breach of applicable Government administrative and accounting procedures – all in so far as the 4M Project was concerned. ______________________________________________________________________________________ 4M Bulb Distribution Project Office of the Contractor General 2008 January Page 2 of 124 The OCG’s Special Investigation was initiated in accordance with the discretionary powers which are reserved to the Contractor General under Sections 15 (1) and 16 of the Contractor General Act. The preliminary review of the Minister’s allegations was informed by the Contractor General Act, the Government Procurement Procedures Handbook (GPPH), the Financial Administration and Audit Act, the Public Bodies Management and Accountability Act, as well as the Corruption Prevention Act. In general, these references guided the context within which the Investigation was conducted, the methodology which was utilized and the Findings and Conclusions which were reached therein. The primary means of data collection and evidence-gathering, which were utilized throughout the investigation, was the utility of written Requisitions/Questionnaires which were issued by the OCG in accordance with the provisions of the Contractor General Act, the Voluntary Declarations Act and the Perjury Act. Requisitions were issued to key representatives of the former Ministry of Industry, Technology, Energy and Commerce (MITEC), the current Ministry of Energy, Mining and Telecommunications (MEMT), the Petroleum Corporation of Jamaica (PCJ) and the Ministry of Finance and the Public Service. Responses to the said Requisitions/Questionnaires were returned by all respondents, inclusive of the Minister of MEMT, The Honourable Clive Mullings. The OCG also directed formal Requisitions to two senior representatives of Universal Management and Development Company (UMD), the company which was reported as having received the bulk of the payments, from the PCJ, in relation to the 4M Project. ______________________________________________________________________________________ 4M Bulb Distribution Project Office of the Contractor General 2008 January Page 3 of 124 Having regard to the serious implications which were inherent in Minister Mullings’ report to Parliament, it was believed that the UMD officials would have welcomed the opportunity to be heard. However, the sole Director of UMD and the Caribbean Communications and Media Network Ltd. (CCMN), Mr. Rodney Chin, acting on the advice of his Attorney, Mrs. Valerie Neita-Robertson, refused to comply with the lawful Requisitions of the OCG. By way of letter, which was dated December 20, 2007, a representative of Mrs. Neita- Robertson wrote to the Contractor General on her behalf, advising, inter alia , that: “Although her client may be compelled to attend your investigation, nonetheless he has been held out as a suspect in matter being investigated and in those circumstances he may not be compelled to give evidence that is likely to incriminate himself. The State may not, (even through a Supreme Court Justice,) compel a citizen to incriminate himself unless Immunity against Criminal Prosecution is granted .” (Attorney’s Emphasis). The Contractor General, in his written response to Mrs. Neita-Robertson, dated December 27, 2007, advised her that the OCG did not share “ the view which is implicit in your argument that your Client has the right to carte blanche refuse to comply with the subject Requisition of the Office of the Contractor General of December 10, 2007 ”. The Contractor General’s letter went on to advise that the OCG would “ therefore be taking the requisite steps to formally refer the matter to the Director of Public Prosecutions with a recommendation that criminal proceedings should be instituted against your Client. You may therefore choose to formally pursue yours and your Client’s positions directly with the Director ”. ______________________________________________________________________________________ 4M Bulb Distribution Project Office of the Contractor General 2008 January Page 4 of 124 The matter was formally referred by the Contractor General to the Director of Public Prosecutions, under cover of letter which was dated the next day, 2007 December 28. The referral, which was made pursuant to Section 29 of the Contractor General Act, currently resides with the DPP. The lack of cooperation on the part of Mr Rodney Chin, with the OCG’s Investigation, has left the OCG with critical questions which pertain to the 4M Project unanswered. Several of these questions could only have been answered by Mr. Rodney Chin, particularly in light of the absence of written contracts between UMD and CCMN and the Government of Jamaica, as well as given the absence of other pertinent documentation which relates to the 4M Project. One of the key questions which arises is whether UMD and CCMN were contractors who were competent and had an established business performance track record. With respect thereto, the OCG was particularly interested, inter alia , to learn how Mr. Chin would reconcile the fact that UMD was engaged as the Project’s principal contractor to provide project management services to the Government of Jamaica, against the following facts, namely: (a) that the 4M Project was commenced in 2006 July, (b) that UMD and CCMN were organized in the same month, on 2006 July 31 and July 20, respectively (c) that written declarations were made by Senator Spencer, to the OCG, to the effect, inter alia, that he had to “rely on persons that I was familiar with in the past ”1 and (d) that based upon records which were reviewed by the OCG, Ms. Sherine Shakes, the mother of Senator Spencer’s child, was ostensibly held out by UMD to be its principal project management, operations and administrative representative despite the fact that she, Ms. Shakes, conceded to the OCG that she had had no prior project management experience. 1 Kern Spencer’s Response to October 29, 2007 Requisition. Response to Question #19. ______________________________________________________________________________________ 4M Bulb Distribution Project Office of the Contractor General 2008 January Page 5 of 124 The Findings of the OCG have revealed evidence of breaches of the GPPH, the Contractor General Act, the Financial Administration and Audit Act and the Public Bodies Management and Accountability Act, in the procurement of contracts for the 4M Project and in the execution of the Project itself. These breaches were due primarily to (a) an apparent failure on the part of the PCJ and MITEC to apply adequate planning, procurement and accounting controls to the development, implementation and execution phases of the Project and (b) what appears to have been an unwarranted, improper and unlawful Ministerial intervention, by State Minister Senator Kern Spencer in at least the procurement processes of the Project – processes which are reserved

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