PNG Facing Big Legal Fees For 2012 ‘Political

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Pacific Islands Development Program, East-West Center With Support From Center for Pacific Islands Studies, University of Hawai‘i

Transparency group decries 'disturbing' $16.6 million bill

By Alexander Rheeney

PORT MORESBY, Papua New Guinea (PNG Post-Courier, June 6, 2013) – Last year’s political impasse between the O’Neill and Somare governments will cost the State over K37 million [US$16.6 million] in legal fees.

Documents obtained by the Post-Courier show legal firms connected to the Attorney General and Justice Minister Kerenga Kua and Foreign Affairs and Immigration Minister Rimbink Pato will be the biggest beneficiaries of the payout.

Posman Kua Aisi Lawyers, which the Attorney General was a partner in, has submitted a bill of K14.1 million [US$6.3 million] while Mr. Pato’s Steeles Lawyers has lodged a claim of K12.5 million [US$5.6 million]. Another firm, Thomas & Co. Lawyers, submitted a claim for K10.2 million [US$4.6 million].

Copies of the documents were sent to Mr. Kua yesterday for his comment but he did not get back to the Post-Courier last night when the paper went to press. It is understood the Finance Minister James Marape will release a statement today on the matter.

But Lawrence Stephens, the chair of the PNG Chapter of Transparency International, last night decried the scale of the legal fees and questioned whether there should have been competitive tendering amongst firms to offer their services to the State.

"I am basically horrified by the enormity of the payments claimed by law firms. There is no indication of competitive tendering. It (payments) appears to be extremely suspicious and from our point of view disturbing," he said.

A letter dated February 28, 2013 with the Ministry of Finance letterhead signed by first secretary Yauka A. Liria and addressed to the Finance Secretary Steven Gibson gave the approval for the payout in line with a court order.

Posman Kua Aisi Lawyers was to get K6 million and Thomas & Co. Lawyers K4 million [US$1.8 million] for legal services to the Government. However, the payments were amended a week later to K5 million [US$2.2 million] for Posman Kua Aisi Lawyers and the same amount to Thomas & Co. Lawyers, on the instructions of the Finance Department’s first assistant secretary (cash management & expenditure control division) Margaret Tenakanai in a letter dated March 7, 2013 to the acting assistant secretary (accounts payable branch) Mary Martin. The balance was to be paid at a later date, depending on the availability of funding. Signed and approved Department of Finance general expenses forms GE 00063256 and GE 00063257 confirm the payments were processed for Thomas & Co. Lawyers and Posman Kua Aisi Lawyers in March.

The payment of K3 million [US$1.3 million] to Steeles Lawyers as the first installment was processed via Department of Finance general expenses form GE 00064107, which was dated and signed on March 15, 2013.

The legal fees charged by the three firms and the payments are likely to trigger a public outcry and comes on the back of recent revelations in the National Parliament of controversial payments to another local law firm, Paul Paraka Lawyers.

However a Department of Finance letter dated March 18, 2013 from Margaret Tenakanai and addressed to Jacob Yafai, the caretaker secretary, shows there were other firms who also submitted their legal claims for settlement. These were Twivey Lawyers and Young & Williams who each submitted K2 million bills [US$899,386].

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Dear Readers, First Secretaries in PNG government ministries have NO powers to "authorize payment"!!. Hi All, This is rather a very late response (because I did not see this story till now!) but I still have to say this for public consumption and record. For those people who are not familiar with the organisation and set-up of government ministries and ministerial staff, let me make it very clear here that "First Secretaries in any PNG Government Ministry DO NOT hold any legal powers or lawful authority to authorise payments of any nature". This is a mere fact. First Secretaries are advisors, cousellors, facilitators, office managers and administrators. But they certainly DO NOT have any powers what-so-ever to authorise payments from their respective Government Departments! So my letter this article here is reffering to (indeed my Memo to Secretary Finance dated 28/2/2013) must be a memorandum to the Secretary for Finance to "consider" those law firms for payment "after the department's due diligence work proved that their requests for settlement were all in order". That was the trust of my memo and NOT a directive nor an authorization for payment because, at that time (and even to this day), I as the First Secretary, simply did not have the lawfull authority to give those directives and authorisations. Department Heads and senior officers in departments know this fact and act accrodingly: 'all Memos from First Secretaries are mere requests and suggestions for follow-up and action, and not to be confused with directives and authorizations coming from legitimate officials in authority. Simply put, the PNG's Public Finance Management Act (as amended) has never given any financial powers to the First Secretary of the Ministry of Finance (at that time, it was I). Thus, as very belated as it may be, I hope that readers of the article above do not confuse themselves with what I did at that time: which was to duely do my job as the First Secretary and forward what my office received from the general public to the Secretary's Office (which is the First Secretary's main point of contact with the department). Hence, the "claims for payment (bills)" from those law firms were sent to the Finance Secetary's Office for the necessary "checking, vetting and due diligence" prior to the department advising the Minister for Finance on whether they should be setteled or not, and their reasons. So I donot see evil or corruption in handling correspondences (including bills, claims and requests for settlements) that came into my office the way I did. They were duely handled the way they should have been handled by any other First Secretary doing my job at that time. I hope this explanation helps to clarify my role in this matter as the First Secretary. It appears to me that this article seems to say that 'I authorised the payment' which is further from the truth; this is absolutely incorrect and misleading. First Secretaries have NO powers to authorise such payments in the PNG government system!, unless the relevant laws are ammended. I hope the editor of this site and other media organisations take time to understand the different roles and functions of First Secretaries in PNG government ministries, and also the roles and functions of Government Ministers and Heads of Departments (Secretaries) in PNG. Understanding their roles and the legitimate powers bestowed upon them via the relevant legal regimes such as the PNG's Public Finance Management Act will help the editors and their senior staff to do a better job and avoid implicating people recklessly! Kind regards. Yauka Mr. Yauka A. Liria Former First Secretary in the Ministry of Finance - 012 email: Mobile: + 675 721 51 945 N.B. Comments and criticisms are welcome!

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