This article will examine the perennial issues of the ‘interlocking directorate‘ and the role of our professional institutions in maintaining standards.
The previous article examined the High Court ruling against valuers, Charles B. Lawrence & Associates, arising from the 2012 lawsuit of Intercommercial Bank Limited (IBL) for a negligent valuation of a property on San Fernando Bypass.
Lawrence valued the property for $15M and also made a defensive claim that the bank ought to have known that the property sold two months prior for $450,000. That claim of contributory negligence failed, unsurprisingly. It is literally unbelievable that any property could increase in value from $450,000 to $15.0M in two months.
The Court took expert witness evidence from two other valuers, Brent Augustus (for IBL) and Roy Gumansingh (for Charles B. Lawrence & Associates), who both gave opinions that the property was worth $15.0M in 2008, on the assumption of commercial use. The Lawrence Report assumed commercial use and that was found to be ‘wholly misleading‘. That Report also failed to properly point out the presence of occupiers/squatters on the site, which both Augustus and Gumansingh took account of. In any case, the best offer received for the property was $2.0M, two years after the Lawrence valuation. Continue reading “Property Matters: The Ethics Gap – part five”→
During my earlier writings on the CL Financial bailout I was very critical of the apparent silence of the Institute of Chartered Accountants of Trinidad & Tobago (ICATT) in the midst of that huge financial crash. I took a very dim view of ICATT’s failure to make any clear statements at that time, during the period in which my friend, Anthony Pierre, was its President. To his credit, Pierre later appeared on my ‘Sunday Talk’ TV show on CNMG on 24th October 2010 to discuss the bailout together with former CLICO Sales Director, Emmanuel ‘Manny’ Lawrence, and gave a great deal of insight.
This week’s column examines the struggles which have arisen from ICATT’s commendable attempts to exert its disciplinary procedures against one of its members, Chanka Seeterram, who testified at the Colman Enquiry on his role as auditor of the failed Hindu Credit Union. Chanka Seeterram is a Chartered Accountant of long standing, who was in his early career attached to Ernst & Young, now practicing as Chanka Seeterram & Co. in St Augustine.
This is the first time I am writing on the HCU, as I was advised to refrain from doing so by my attorneys due to the defamation litigation by both myself and our firm, Raymond & Pierre Ltd, against Harry Harnarine and the HCU group. That litigation arose from Harnarine’s scandalous statements against me and our firm on HCU’s Radio Shakti, spanned 2005-2013 and culminated in the High Court making a bankruptcy ruling against Harnarine. Continue reading “The Ethics Gap, part three”→
The previous article examined the ways that a culture which accepts unethical behaviour can stop even the best laws from working. This week, I will go deeper into those large-scale examples of improper practice in my own profession in relation to State property acquisitions.
As a context note, those are large-scale transactions in Public Money which therefore would be overseen by the new Public Procurement & Disposal of Public Property Act. Property acquisitions must be subject to robust oversight if we are to properly control transactions in Public Money.
The previous article ended with pointed questions on the delay in the implementation of the Public Procurement & Disposal of Public Property Act. I directed those questions to the President, who had invited applications for the post of Procurement Regulator with a closing-date of Friday, 1 September 2017.
The Ministry of Finance, in response to serial allegations of political delays, issued a Press Release on 1 November 2017 to emphasise that the implementation delay was coming from the President. That Release ended on a hopeful note anticipating complete implementation by the end of 2017. In response to a request from the Trinidad Express newspaper, The Office of the President issued a Press Release on the same day to advise of the various steps being taken to attain appointment of the Board of the Office of Procurement Regulation by the end of 2017.
This delay forced me to reconsider the approach of having this law effectively implemented by appointments made by Presidential discretion. Under our Constitution, the President is effectively immune from legal challenge if a decision is in his discretion.
Even when the new law is fully operational, we will have to confront the issue –
Can law alone reduce corruption in the absence of ethical standards?
If we are collectively unable to recognise up from down, or right from wrong, we are in peril. It is always comforting to think of a few individuals who keep pointing out these troubling issues, but what is the collective position? Writing as a surveyor, it is important to recognise our boundaries and of course, to take our bearings.
Let me give an example in the Eden Gardens case, in which HDC paid $175M for a parcel of land which could have been compulsorily acquired for no more than $35M. That was a complex fraud in which parties within different agencies and firms collaborated for personal benefit.
The Eden Gardens fraud would have been impossible without a signed opinion by a valuer. It was the Commissioner of Valuations’ office which issued a report stating the property value at $180M. When I started writing about that case in these pages, I was confronted with long, threatening letters from a certain colleague in the said Commissioner of Valuations’ office. I never named that individual and simply kept detailing this huge fraud, culminating in the Joint Consultative Council for the Construction Industry’s (JCC’s) July 2015 formal Report to all the relevant law-enforcement agencies.
At the same time I also approached the Law Association with my serious concerns, since the entire series of transactions relied on a directing legal mind and several misleading legal documents. All those documents are authored by named parties – the name of the attorney who prepares a deed appears in the upper right hand part of its first page. I asked the then-President of the Law Association and the then-head of its Disciplinary Committee, separately, when they would be taking action. Their reply was simply that they had not received a complaint and that my articles were not complaints. They both went on to say that I was not eligible to complain since I had not suffered any losses nor had I engaged any of the offending attorneys. Both of those men are worthy of my serious respect, but I tell you.
I pointed-out the flagrant double-standard which we routinely apply to white-collar crime. We don’t expect the police to wait on a formal report when a crime being committed in plain view, and rightly so. So why do we reserve those weak standards for these white-collar bandits? The JCC’s formal Report on Eden Gardens also went to the Law Association, so we may see some action at some stage, but I am not hopeful on that front.
More recently, we have seen extended statements from Minister of Works & Transport, Rohan Sinanan, on the questionable actions of certain valuers in the Commissioner of Valuations office. The key allegations were of inflated valuations being made on behalf of claimants for properties required for NIDCO’s project to extend the Sir Solomon Hochoy Highway to Point Fortin. The further allegation was that the professional civil servant in the Valuation Division handling those claims was the same person who prepared the same claims.
Several of those situations are known to me, but it is my view that the Minister needs to go further. If indeed he is satisfied, after proper checks, that those acts of fraud were committed by professionally-qualified civil servants, then we are still some way from a satisfactory position. My first question would be whether those persons are still employed by the State and if so, have disciplinary proceedings been taken against them? Have formal police reports been made in respect of these multi-million dollar frauds alleged by the Honourable Minister? Has the State made formal Reports to the professional bodies with which these civil servants are qualified?
RESPONSIBLE PROFESSIONAL ORGANISATION
On Tuesday, 14 November 2017, the Institute of Surveyors of Trinidad & Tobago (ISTT) issued this formal statement to recommend that the Minister of Works & Transport make formal reports of the alleged wrongdoing.
In all these cases of complex fraud, it is literally impossible for a small number of people to commit the crime in isolation. There are always other parties, outside the conspiracy, but in the know.
If we do nothing these dishonest professionals will continue to hold the same qualifications as the rest of us and we will all be the poorer for it. We must rusticate these bandits and banish them to obscurity.
There is little point in having strong laws if unethical conduct goes unpunished because it is not identified by our collective conscience.
Setting the Boundaries
This article condenses certain key points from my address on Public Procurement Law to the 6th Annual Caribbean Valuation and Construction Conference hosted by the RICS, IPT and ISTT at Trinidad Hilton on Friday, 3 November 2017. The video of that address is posted to my blog with the requested statement that these views are my own and not those of the professional bodies.