REPORT: MILLIONS UNACCOUNTED FOR UNDER SOMARES

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Indications son paid $69 million ‘dividends’ to father

PORT MORESBY, Papua New Guinea (The National, Sept. 21, 2011) – Millions of kina were lost through poor investment decisions when former minister Arthur Somare single-handedly controlled the State Enterprises ministry.

A report by the Minister for Public Enterprises Sir Mekere Morauta revealed that huge sums of money were lost while some were unaccounted for, which need to be investigated.

The report recommended major corrective measures to rectify the rot in the department and allow the entities to be run effectively and not as separate entities run by the minister and the managing director as had been done over the past nine years.

Public Service Minister Bart Philemon said the Independent Public Business Corporation (IPBC) was run as a second treasury, controlled by Somare and managing director Glenn Blake, a crony of the Somare family who was paid AU$700,000 [US$716,681].

"We cannot continue with these crony syndromes if the people need to benefit," he said.

He said two separate dividends of 85 million kina [US$37.5 million] and 72 million kina [US$31.8 million] had been paid by the son to the father but there were no records to show that.

[PIR editor’s note: Prior to Sir Michael Somare's dismissal as prime minister and then as East Sepik representative in Parliament, PNG's "Grand Chief" was indicted on 13 counts for failing to file financial returns to the PNG Ombudsman Commission in a timely manner, although his sentence was only a temporary suspension for two weeks.]

Meanwhile, Philemon said the NA-led government had enjoyed a massive 59.4 billion kina [US$26.2 billion] windfall and spent about 6.6 billion kina [US$2.9 billion] a year over the years but nothing to show for it.

He said it was about 52 percent of the 116 billlion kina [US$51.2 billion] spent over the past 36 years which indicated that the ousted government had performed poorly. Deputy Prime Minister Belden Namah said more than 31 million kina [US$13.7 million] of public funds was lost when the two men invested the money in Lehman Brothers just before the global recession.

Namah said the country was sold cheaply when, through IPBC, it borrowed AU$1.6 billion [US$1.64 billion] from Abu Dhabi through mortgage but lost more than AU$300 million [US$307 million] when transferred to US dollars, as advised by ExxonMobil.

He said the 1.6 billion kina [US$706 million] was to finance 22.5 percent of the state equity in the liquefied natural gas project, but only 19.4 percent was financed. He questioned where the remainder had gone. Namah said there was more to be uncovered and the government would table all reports for public consumption.

[PIR editor's note: Earlier in May 2011, the director of the Institute for National Affairs in PNG said ongoing corruption in the country's public service, particularly nepotism in administration, has not been used to meet "the public need," effectively negating much of recent booms in economic activity.]

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