September 4,2017
The ministers, other government officials and ExxonMobil executives during the visit. (ExxonMobil photo)
Anand Goolsarran.
Former Auditor General, Anand Goolsarran says ExxonMobil’s funding of a recent trip by five government ministers to its Texas headquarters was improper and that the Guyana Government should reimburse the company.
Writing in his accountability column in today’s Stabroek News (see page 8), Goolsarran also cited several laws that would have been breached as a result.
“First, both the Government and Exxon-Mobil should have been aware that it is highly inappropriate from an ethical and moral standpoint for the latter to fund the trip. The agreement with ExxonMobil is in the nature of a procurement contract, and our Procurement Act prohibits the acceptance of gifts and other favours from suppliers/contractors”, Goolsarran declared. He said that the acceptance of the gift/favour has the potential of influencing decisions in favour of suppliers/contractors and therefore presents a potential conflict of interest.
“Additionally, the Integrity Commission Act has a … Code of Conduct (schedule) that prohibits the acceptance of gifts and other favours. The Code has since been revised and gazetted but the related amendments to the Act are yet to be tabled in the National Assembly”, he noted.
He pointed out that in an apparent attempt at damage control, Government officials have said that the cost of the trip will be included in Exxon’s investment to be recovered against revenue when oil production begins in 2020.
“This explanation should be rejected since the US oil giant’s investment cannot include expenditure incurred on behalf of the Government of Guyana. A competent and independent auditor is more than likely to reject such an expenditure as a charge to Exxon in its books. This practice can also open the floodgates for all sorts of government expenditure to be incurred and included in Exxon’s investment”, the chartered accountant said.
Further, he said that there is no provision in the Fiscal Management and Accountability (FMA) Act or the Constitution that allows expenditure to be incurred and charged against future revenues neither can there be netting off of expenditure against revenue. In fact, he noted that Section 38(1) of the FMA Act specifically states that “All public moneys raised or received by the Government shall be credited fully and promptly to the Consoli-dated Fund …” The cost of the trip should therefore have been financed by the Govern-ment through the budget process, he declared.
He said that one also needs to consider whether such a costly visit to obtain an update on progress by ExxonMobil, was indeed necessary, considering that in the technological age virtual meetings can be conveniently held via Skype, conference calls and other technology-related means.
“Is it not a case of waste and extravagance in the use of public funds?” he queried
He said that ExxonMobil should be asked to present to the Government an invoice for the expenditure incurred and reimbursement made at the approved travelling rates for Ministers and other officials. As it stands, Goolsarran said that the expenditure will not be reflected in the public accounts and added that he hopes that there will not be a repeat of this practice.
He also said that he is not impressed with the explanation provided by the government for failure to make the agreement with ExxonMobil available to the public.
“Everything that our neighbour to the west needs to know about the agreement is already in the public domain. If there are some clauses that border on territorial integrity or national security, a redacted version of the agreement can be released to the public”, Goolsarran stated.
On August 17, at an AFC press conference, it was disclosed that the trip by the five ministers: Minister of Public Infrastructure David Patterson, Minister of Natural Resources Raphael Trotman, Minister of Finance Winston Jordan, Minister of Business Dominic Gaskin and Foreign Affairs Minister Carl Greenidge was paid for by ExxonMobil and was the second of its kind.
Answering questions at the press conference, Patterson said that while some would believe that the ministers are influenced by having the company pay for their travel and accommodation this is not the case.
Minister Gaskin added that the AFC ministers are above being influenced.
“I speak for all of us here when I say we are not bribable,” Gaskin told reporters.
This confidence in their own integrity is one of the reasons the ministers cited for why they are not concerned about the secrecy surrounding the ExxonMobil contract.
Meanwhile, AFC Chairman, Minister of Public Security Khemraj Ramjattan, explained that the contract is secret as a result of both a non-disclosure clause and an amendment to the Petroleum Act. “This government is not one to have secret agreements but we are confined by the reality of the contract and legislation…. These things are not such that another administration can go wrecking because it will affect what Exxon can do,” Ramjattan explained.
Patterson also noted that government has been advised as part of a United Nations review process to keep the agreement secret.
Following an editorial in the Stabroek News on the matter of ExxonMobil funding the trip, Gaskin penned a letter in the August 29 edition of the newspaper in which he said
“As is relates to the Ministerial visit to ExxonMobil’s Houston Headquarters, you may be aware that the company has provided regular Ministerial briefings on its activities so far. Generally a team of Executives from Houston would fly down to Guyana to conduct these briefings and whatever other business they may have.
“On this occasion the briefing took place at the company’s headquarters in Houston and the Ministers travelled up instead. This was not the first such visit nor is it likely to be the last.
“There are benefits to occasionally meeting at the company’s headquarters where there is access to human and technical resources which allow for a more thorough briefing than those held in Guyana.
“Whether a team from Guyana travels up or a team from ExxonMobil travels down makes very little difference in the grand scheme of things since, as long as the company pays for this travel the costs will be added to the cost of the project to be recovered down-the-line anyway.
“There is nothing mendicant about this as you hysterically suggest. The Government and by extension the people of Guyana will bear this cost eventually.”
True businessman perspective, but it is a violation of the code of conduct of large corporations.
