FIJI FACING GROWING CORRUPTION AND FRAUD

admin's picture

By Michael J. Field

SUVA, Fiji (December 22, 1997 - Michael J. Field/PACIFIC ISLANDS MONTHLY)---It’s a 25-page high-powered weapon sitting on Fiji Finance Minister Jim Ah Koy's desk.

Do nothing about its contents and corruption and fraud could engulf Fiji.

Act on it and the state will arm itself with tough new powers, with enormous political and civil liberties ramifications.

PACIFIC ISLANDS MONTHLY understands the report could lead to the creation of an elite office of criminal investigators and accountants with the power to peer into bank accounts, balance sheets and filing cabinets.

The report by lawyer and former New Zealand Serious Fraud Office (SFO) director Chas Sturt makes it plain Fiji is facing a growing tide of corporate and government corruption and fraud.

And while the report has not been made public, it’s understood it says the existing law enforcement agencies lack the skills and equipment to deal with the complex and growing corruption present in government and commerce.

It points to an astonishing lack of computers, much less skilled people capable of handling the world of forensic accountancy.

Currently the fraudsters in Fiji have more skill than the good guys, the report suggests.

Swept into the report are the Police and the office of the Director of Public Prosecutions as well as government regulatory bodies.

The report also points out the Inland Revenue Office is incapable of stemming the now F$100 million per annum tax evasion hitting the country and radically affecting the government deficit.

Sturt is not a tax expert, but Ah Koy asked him to look into the investigative abilities of Inland Revenue.

The report is understood to be critical of tax auditors who show scant knowledge of tax law, or methods of evasion.

The Sturt report calls for the formation of an SFO style office in Fiji as well as specialized training for the police and prosecution services.

The report was not commissioned to identify specific crimes taking place, but it did review how the National Bank of Fiji (NBF) scandal was investigated and the ability of agencies to detect crime without necessarily having it reported to them.

Several recent incidents of misappropriation are understood to have been noted by officials, but left uninvestigated further despite strong suggestions of larger scale corruption further in.

Sturt will not discuss the contents of his report other than to confirm a "straight to the point" document had been lodged with Ah Koy in November.

He was hired by Ah Koy and arrived on October 20, not to expose fraud and corruption, but to review how the agencies could cope. He praised Fiji's "determination and forward thinking" in coming to terms with the issues.

"They are very serious about dealing with things now," he said.

Asked if he was surprised at finding evidence of corruption and fraud in a place like Fiji, he replied "nothing surprises me" and added "Fiji has come of age."

He noted that even while he was in Suva for two weeks he noted incidents in the press that had "a distinct smell" to them and which, if they had occurred in New Zealand, would have led to SFO action.

Sturt said his report had not been the result of the NBF scandal. He had spoken with Fiji Prime Minister Sitiveni Rabuka about the SFO concept even before that.

Any SFO operation has serious civil rights implications. In New Zealand the SFO has the right to demand the production, without court orders, of key corporate documents. In law an accused person has the right to remain silent and silence cannot be used in a court against them.

Under the SFO such a right no longer exists. Silence can condemn.

Sturt grew up in Fiji, the son of a merchant whose firm Sturt and Ogilvie was taken over by Morris Hedstroms. He joined the New Zealand Police, quickly rising to the rank of detective inspector. He was a foundation member of the Armed Offenders Squad -- the only armed unit of police – but quickly specialized in commercial fraud.

In 1989 the world stock market collapse hit New Zealand hard and thousands of people lost their lives' savings. A panicked government of then Prime Minister Geoffrey Palmer set up the SFO with Sturt at its head. He says crime, by definition, used to be on the streets while those at the board room got away with whatever they wanted.

"It was a kind of culture that grew over the years and I have never yet seen any of the corporate fraudsters I've put behind bars even admit that they have done anything wrong. That's unbelievable, but they never admit it."

Ordinary people were victims of white collar crime.

"We are not dealing with a fellow with a balaclava, or the less intelligent fraudster."

Rate this article: 
Average: 3.5 (13 votes)

Add new comment