On Thursday 17th March 2016, the Office of the Prime Minster confirmed that the appointment of Housing & Urban Development Minister, Marlene McDonald, had been revoked. On Tuesday 22nd March 2016, the Housing Development Corporation (HDC) Board issued a Press Release to confirm that its Managing Director, Jearlean John, had been dismissed.
In less than one week, the two top public officials in our country’s housing program had been removed from office. It does not seem decisive that both those dismissed officials were female, but it is more likely that there is another connection between these events.
We have lacked proper standards of governance in our country for so many decades that some people are seeing these dismissals as a ‘breath of fresh air’ in which those new standards are being set. An apparent case of actions speaking louder than words.
I am not convinced, based on what has been officially disclosed thus far, that we are yet seeing any ‘breath of fresh air’. Even if one assumes that significant wrongdoing was established in both cases and further, that those led directly to both dismissals, how have those channels for potential wrongdoing been fixed?
There is a pattern of unacceptable mismanagement at the HDC since its establishment in October 2005. Culpability for gross mismanagement of Public Money extends to both sides of the so-called political divide. It may be emotionally satisfying to see public officials removed from office, given the widespread and disgusting impunity with which we are beset, but the temporary thrill at this or that dismissal is simply not enough. The only way this staggering level of corruption could have become a new normal is because of broken systems and intentional gaps.
Instead of clarity, we are once again being confronted by rumours, strategic silences and leaks. Sometimes it seems that we like everything but the simple truth. These tactics resemble the ‘Carefully Cultivated Confusion‘ I accused the previous administration of, during one of their Invader’s Bay smokescreens. It is therefore imperative that we examine these linked dismissals closely to clarify just what has happened and what has not.
The Marlene McDonald Case
The basic information is missing – Was Marlene McDonald dismissed or not? Did she resign? There are conflicting versions of these stories.
If she was dismissed, and assuming that she did have a personal relationship with Michael Carew, then why was Ms McDonald dismissed? Was it for
- helping Michael Carew to get his HDC application fast-tracked in 2008?
- her role as then Minister of Community of Development in the ‘Calabar Foundation matter’ in which public funds were allegedly disbursed improperly to a new charitable foundation headed by the said Michael Carew?
- her role in employing the said Michael Carew and his brother in her Constituency Office, in breach of the applicable regulations? Or all three?
Is it true that the PNM Chiefs knew all of this all along, but it was only the public exposure of Ms McDonald’s various actions which triggered her dismissal? There is also the distinct impression that the effective suspension of the Jearlean John management team triggered a series of disclosures which ultimately undermined Ms McDonald’s position.
Please also note the ‘zig-zag’ behaviour of the opposition who complained loudly at allegations of McDonald’s improper Constituency Office spending, but have now adopted bizarre evasions in the face of allegations as to their own improper treatment of those very funds. The silence of the government on this issue seems to me to be facilitating this nonsense.
The Jearlean John Case
Here we have yet another gap in that the HDC’s Public Statement gave no reason for Ms John’s dismissal, yet the dismissal letter which we have seen cited her ‘insubordinate and disrespectful’ behaviour when asked to explain two tax invoices for motor vehicle rentals. Was Ms John dismissed because of the audit? Are we to believe that HDC which has never published its audited accounts as required by law, invoked an audit to dismiss its Managing Director? It seems that some of these issues may be ventilated in Court, if the matter gets that far.
There are now a series of leaks and allegations emerging in the wake of Ms John’s dismissal –
- Rented Cars? – What of the allegations as to rented cars from TCM? We are hearing that a Mercedes-Benz was rented for $27,000 a month? What kind of Benz is that? Who has use of that vehicle and what is its registration number? The Public Statement issued on 6th April 2016 by TCM’s Kirk Waithe (who is also the spokesman for civil society watchdog Fixing T&T) provided certain important details, but not these points were not addressed.
- Deferred Gratuity? – What about the deferred gratuity reportedly being paid to Ms John by Pizza Boys? Are we being told that this is improper? If so, why?
- Large Loans? – What of the allegations of large loans taken by HDC from ANSA Finance? Are we being told that those were improper borrowings? If so, why?
All of those alleged matters would be disclosed in the course of proper management and accountability, which has been lacking as detailed here –
Companies Act breaches
S.99 (1) of this Act states that –
“…DUTY OF DIRECTORS AND OFFICERS
99. (1) Every director and officer of a company shall in exercising his powers and discharging his duties—
- act honestly and in good faith with a view to the best interests of the company; and
- exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances…”
It would be impossible to exercise proper management over a company of this size and complexity with no audited accounts.
HDC Act breaches
HDC was established on 1st October 2005 by the HDC Act, which stipulates at sections 18, 19 and 20 that the Commission’s audited accounts be published by the end of June of each year. Those audited accounts have never been published, so the law has been broken.
Public Money must be managed and accounted for at a higher standard than private money. That standard is irrefutable.
Yet, over one Billion dollars in Public Money is being spent every year with no audited accounts. That would be be an unacceptable performance in the private sector. That is also irrefutable.
Trinidad & Tobago Securities Exchange Commission (TTSEC) breaches
TTSEC made two Orders against the HDC in respect of contraventions of the Securities Industry Act 1995 and the Securities Industry Bye-Laws 1997. Those Orders are in relation to the failure of HDC to publish their accounts –
- firstly, on 19th March 2010, with fines totalling $121,000;
- secondly, on 25th July 2011, with fines totalling $400,000.
HDC raises money for its operations by selling bonds, which are ‘Securities’ regulated by the TTSEC. So, in addition to the prior breaches, the HDC raised funds via large-scale bond issues and formally agreed via those ‘Settlement Agreements’ that it did not conform to its legal obligations.
An earlier series on this topic had disclosed these HDC bond issues – September 2006 – $1.39 Billion, September 2008 – $700M and January 2009 – $500M. There may well have been subsequent bond issues, so the sums involved could be greater.
Integrity in Public Life Act (IPLA) breaches
S. 24 (3) of the IPLA specifies that “…(3) No person to whom this Part applies shall be a party to or shall undertake any project or activity involving the use of public funds in disregard of the Financial Orders or other Regulations applicable to such funds…”
The cited sections of the HDC Act comprise the “…Financial Orders or Regulations applicable to such funds…”. It is also my view that the HDC’s fund-raising via bond issues and the subsequent breach of the legal obligations constitute “…an activity involving the use of public funds in disregard of the Financial Orders or other Regulations applicable to such funds...”
JOINT SELECT COMMITTEE Report into HDC (June 2014 )
This JSC comprised the usual 12 members – 7 from the government (then PP); 3 from the opposition (then PNM) and two Independent Senators – under the Chairmanship of Independent Senator Elton Prescott SC.
Ms Jearlean John was Managing Director of the HDC from November 2009 to 22nd March 2016. This is a notable extract from her opening statement to the JSC’s November 15th 2013 hearing –
“…I hope that at the end of this inquiry you will make the determination that the HDC, the way it is managed, is grounded in good, sound principles of accountability and transparency, that we run a solid company based on solid, sound processes…I can assure you those processes are used at the HDC every, single day…” (pg 101 of the JSC Report of 25th June 2014)
Ms John was firm in her view that the HDC was properly managed.
The final recommendation of that JSC Report was –
“…Outstanding Audited Financial Statements
4.39 The Committee thought that the failure of the Corporation to produce audited financial statements for the years 2004-2007 was unacceptable and a definite red flag given the Corporation’s cash flow.
4.40 Even more troubling was the revelation that the lack of up-to-date financial statements has thwarted the Corporation’s ability to seek funding in the open market.
We recommend that the outstanding audited financial statements of the Corporation be prepared and submitted to Parliament and or the Auditor general as a matter of priority The line Minister must introduced (sic) the necessary oversight procedures within his Ministry to prevent lengthy delays in the production of audited financial statements on the part of the HDC and any other entity falling under the purview of his Ministry…” (pg 74)
The JSC used unmistakeable ‘Parliamentary language’ to identify the HDC’s failure to account as “…unacceptable and a definite red flag…”. Although the JSC was critical of missing 2004-2007 audits and Ms John was MD from 2009-2016, the point is that no audits have been published to date.
The HDC is a huge and important public institution, so any serious ‘breath of fresh air’ must decisively tackle this legacy of failed accountability and the lack of good governance.
This situation at HDC is not a unique one and can be found at a number of other public institutions. That is no excuse since this is an interlocking web of culpability within which the various administrations have traded. The approach of seeking the least-worst answer does not serve the public interest since we are witness to repeated selective and well-timed disclosures. The proper standard is for routine and regular reporting to international standards.
This situation requires strong leadership capable of simply doing the right thing and following the law.
Next, I will be outlining an OPEN DATA proposal for the HDC.