Wednesday 15 July, 2020

A close-up look at Dr Wheatley’s dilemma

Dr Andrew Wheatley

Dr Andrew Wheatley

Minister of Science, Energy and Technology, Dr Andrew Wheatley, is increasingly coming under pressure to resign, but has so far stood his ground in relation various assertions relative to the operations of Petrojam.

The situation with the state-owned oil refinery, which falls within his ministerial portfolio, has naturally also put some political strain on the Government.

Wheatley has been wrapped in controversy supposedly on three fronts, but his general stewardship of the refinery appears to be the most serious area of focus by his detractors.

On a lesser scale, also falling within the portfolio of Wheatley is the National Energy Solutions Limited (NESOL), where operations engineer, Lawrence Pommels, is presently before the courts on an $85 million money laundering and breaching of the Corruption Prevention act charge.

While that matter is not known to have any direct bearing on the minister’s stewardship, the mere fact of it happening relative to a senior staff member at one of the entities within the minister’s portfolio; the volume of funds that are reportedly involved, and reported question marks about the circumstances within which Pommels’ came into the position that he held at the time he was charged, have only added to Wheatley’s challenges.

Thirdly, the refinery’s practice of offering multi-million dollar ‘gifts’ to community organisations and entities over time, including institutions within his South Central St Catherine constituency, have also now seemingly come back to haunt Wheatley, although there are clear indications that the practice is ‘nothing new’ at the refinery.

Wheatley’s misery started on May 23, when the Opposition People’s National Party’s (PNP) Spokesman on Science and Technology, Julian Robinson, sounded an alarm in Parliament, calling for a probe into the operations of Petrojam.

Robinson called for the intervention of both the Auditor General and the Integrity Commission, to investigate Petrojam, stating that the entity was steeped in nepotism and corruption.

Robinson then said: “There are victimisation of staff and persons who are standing up for principle, and who are either being fired or sidelined. There are major project overruns that are taking place at Petrojam. And, Mr Speaker, what is happening at this state-owned agency is what I would call the wild, wild west.

“We have a situation, for example, where in this entity, donations were made last year of $30 million to a number of entities, to constituencies of politically-connected persons, where there is no proof that the donation that would have been made, for example, to a school to undertake a particular project, has been done,” Robinson said in Parliament.

Shortly after, the parliamentary Opposition was again raising concerns, this time with Spokesman on Industry, Peter Bunting, highlighting a $12 million remuneration package that a recently recruited human resource manager was getting.

According to Bunting, who went to Parliament with specifics to some of the allegations that were made by Robinson, the HR manager was getting three times the amount that is being paid in the private sector.

Bunting also questioned the departure of a number of senior staff members from Petrojam since March 2016.

But Wheatley would fire back in a presentation to Parliament.

While not giving the full figure, Wheatley said that $67 million went to projects in constituencies held by both the PNP and the governing Jamaica Labour Party (JLP). He said this was in keeping with a well-defined system which has spread across both JLP and PNP administrations.

Wheatley said: “Mr Speaker, I have taken the liberty to provide those details to show that Petrojam’s donation policy and implementation is serious business, governed by a system of checks and balances, superintended by professionals and adhering to the guidelines set down in the policy procedure manual governing the activity.”

Opposition members of the House were not pleased with the response, and requested a breakdown of the donations by Petrojam to various constituencies.

Leader of Opposition Business in the House, Phillip Paulwell, said: “Don’t you think that to bring transparency, the country should know at the start of the year, how much money Petrojam is going to be donating, and the categories?”

This stirred the ire of Government members, who argued that no government had done that before.

By the beginning of June, however, Wheatley would come under even more pressure, with the island’s business district, through the Private Sector Organisation of Jamaica (PSOJ), expressing concerns about public boards, specifically targeting that of Petrojam, especially for the HR Manager’s $12 million remuneration.

The powerful private sector lobby group said it noted with disquiet an increasing number of allegations of impropriety in the affairs of statutory boards, and what appeared to be a drift away from the emphasis on good governance, accountability and transparency that was a welcome direction in recent times.

But again, shortly after, the six-member board, chaired by Dr Perceval Bahado-Singh, in a press release, defended decisions that were taken.

The release stated: “Donations are made to entities as part of our corporate social responsibility, and in an effort to contribute to national development. As a statutory body and governed under joint venture agreement, the company acts with responsibility and transparency while exercising due diligence in its affairs.

“We have always been a company frequently audited by our shareholders. Additionally, we are routinely audited by reputable firms and the auditor general to ensure that procedures are understood, respected and followed,” said the board, which was made up of three Jamaicans and three Venezuelans because Venezuela has an almost 50 per cent stake in the refinery."

The release continued: “Much has been made about staff compensation at Petrojam. The records will show that the requisite salary ranges, as approved by the Ministry of Finance in determining the appropriate remuneration for the recruitment of talent, have been maintained.”

But with the Opposition hunting for scandals and having Petrojam on its focus, it soon came to light that two of the three Jamaicans on the Petrojam board live overseas, and the entity has had to foot the bills for their travels to and from board meetings.

Before long, the three Jamaicans on the board, Chairman Bahado-Singh, Richard Creary and Harold Malcolm, resigned days after preliminary findings of an investigation pointed to “grave and troubling matters at Petrojam, which have dominated public discourse in recent weeks.”

Former Jamaican Petrojam board members, from left, are Dr Perceval Bahado-Singh, Harold Malcolm and Richard Creary.

That was in a release from Wheatley’s office, which also stated that the minister would take decisive action, and had summoning the three Jamaicans.

It was also revealed that the Venezuelans had taken offence to the earlier release that the board had refuted claims by the Jamaican Opposition.

Bahado-Singh was also drawn into further controversy when it was revealed at a Public Administration and Appropriations Committee (PAAC) meeting in Parliament, that he was reimbursed US$8,000 by Petrojam for a trip to London that he had not made.

Although Petrojam General Manager, Floyd Grindley, had assured that Bahado-Singh had recently given back the money, PAAC members were not pleased with the chairman’s out-of-pocket purchase of the tickets, which was said to be against Government guidelines.

More pressure would mount at another of the weekly PAAC meetings, as it was disclosed that a perimeter fence that was initially estimated by the National Works Agency (NWA) to cost $30 million, ended up costing $98.8 million, with explanations so far pointing to increases in the scope of the project as having produced the sharply increased price tag..

Among other things that Grindley was tasked to provide answers to were:

  • Why public relations and marketing firm, Main Events Limited was retained at a cost of $13.9 million, and whether in addition to the retainer, Petrojam is billed by the company each time Main Events does work on its behalf.
  • How and why a company that goes by the name Asha Corporation, which is incorporated in the United States, was contracted for consultancy and other services, and why cheques for work done were made payable to the consultant who is affiliated with the company, and not to the company itself.
  • Why established procurement procedures were not followed when an airline ticket in the amount of approximately US$8,000 (J$1 million) was purchased for the then board chairman of Petrojam, Dr Perceval Bahado-Singh, to attend a function in London on the company’s behalf in February. The chairman, who resides in the United States, having not attended the meeting, did not return the money for the ticket until last week, a full two weeks after Opposition Spokesman on Energy, Phillip Paulwell, raised the matter in Parliament.
  • Whether an airline ticket was purchased for the chairman to travel to Brazil on company business. The committee also wants to see the total spent on the chairman’s travels, including hotel accommodation. Pointing out that Bahado-Singh was not an executive chairman, (committee member Dr Wykham) McNeill said: “we would like to know the specific expertise that he brings (to the position) that we cannot find in Jamaica.”
  • The PAAC also wants to know whether the proper procurement procedures were used when the human resources manager was employed at a salary in excess of $12 million, as well as her qualifications.
  • Why up to 10 per cent of the technical staff left the company last year…

In the middle of the Petrojam saga, Wheatley’s ministry found further problem when police raided the gated community of New Harbour Village in Old Harbour, St Catherine, and seized a reported $35 million and four luxury vehicles while arresting Pommels and mechanic Ricardo Harris.

The figure has since jumped to $85 million, with Pommels and Harris only last week getting bail.

With Wheatley fully engulfed in controversy and accusations, he once again fired back, with a threat to sue Opposition Spokesman on Finance, Mark Golding, for comments that were made on social media about the NESOL case. That threat was carried out last week.

In the lawsuit, Wheatley claimed that damage has been done to his character and reputation as a reputable and trustworthy elected official.

But the pressure has only intensified against the minister, with anti-corruption campaigner, Trevor Munroe, who heads the National Integrity Action (NIA), joining the fray in also calling on the Public Service Commission and the Integrity Commission to investigate and sanction whoever breached the rules at the state-owned oil refinery.

Speaking at a symposium on law, governance and society at the University of the West Indies’ Faculty of Law, Munroe said: “Where violations of rules and regulations are confirmed, action must be taken to rectify irregularities and to apply sanctions, up to, and including the minister, if he is found to be in breach.”

While all that was taking place, however, former Chairman of Supreme Ventures Limited, Paul Hoo, was appointed as the new Chairman of the Petrojam board, where he now has two former Vice President of Scotiabank, Rosie Pilner and Wayne Powell, as the Jamaicans on the board.

The PNP would not back up, however, with Paulwell saying that the resignation of the Jamaicans on the previous board was not enough.

Paulwell asked that Wheatley state why the board members were forced to resign, and why the board did not meet in nine months.

Paulwell called it a damning indictment on the oversight of the major state agency, and gross dereliction of duty on the part of Wheatley.

He said: “The agency was left with no oversight,” and said Bahado-Singh, who also sits on the board of the parent body, Petroleum Corporation of Jamaica (PCJ), “needs to step down from that agency as well.”

He would use the opportunity to suggest that there were similarities between what has allegedly happened at Petrojam and the NESOL incident.

Paulwell said: “I am also very concerned about what is happening at NESOL. I believe we’re seeing similar instances, such as evidence of nepotism. I have been told and believe that a number of senior people were made to resign at NESOL, and have been replaced by unqualified persons occupying senior positions.”

After keeping quiet on the matter, Prime Minister Andrew Holness, through his office, issued a statement that Permanent Secretary in the Ministry of Science, Energy and Technology, Hillary Alexander, was instructed by Cabinet to prepare a report on the operations of Petrojam, with specific attention to “various allegation in the public domain”.

But that was not good enough for the Opposition PNP, which voiced its disapproval at the decision of the Government to have the Energy Ministry lead the probe into the allegations of impropriety at the public oil refinery. The PNP said the ministry has oversight responsibility for Petrojam and, as such, would be investigating itself. Therefore, the party wants the police to get involved.

The PNP called for the Major Organised Crime and Anti-Corruption Agency (MOCA) to get involved, while another business group, the Jamaica Manufacturers and Exporters Association (JMEA), also weighing in by expressing “grave concern” about the situation, while stating that anyone found guilty of criminal activity out of the investigations, must face the full force of the law.

Opposition and PNP leader, Dr Peter Phillips, called the situation at Petrojam “the mother of all scandals” while demanding that Wheatley steps aside.

Phillips said: “It has all the ingredients of all the other scandals put together,” insisting that Wheatley should go.

As pressure mounted, Holness announced that the Government has established a Public Accountability Inspectorate to examine the management of the scandal-hit Petrojam, the country’s sole oil refinery.

He told the JLP’s Central Executive: “When we won the election, I said that the cost of victory is going to be accountability, because we were able to convince the public that we will be an accountable Government. If we proceed towards accountability as the objective, then every member of the party, even without enforcement, that is ultimate accountability.”

But Holness’ announcement would be followed by a raid on Petrojam by MOCA, while Wheatley failed to show in Parliament, which sparked speculations, led by the Opposition.

Speaking in the House of Parliament, Holness said that he would be announcing a policy action that will be taken by Cabinet regarding weaknesses in the governance and management at Petrojam.

But Parliament would descend into a shouting match that day, with Petrojam being the divisive point. The sitting went deep into the night.

Opposition Senators would later join the call for Wheatley to resign.

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