Police to probe fraud in award of government contracts

KINGSTON, Jamaica, Wednesday June 1, 2011 – Information implicating three Opposition People’s National Party (PNP) Parish Councilors in alleged fraud in the award of Government contracts is now being investigated by police and has also triggered a wider probe.

The multi-million dollar scam involved a fake contractor getting contracts from the country’s largest Parish Council, the Kingston and St. Andrew Parish Council (KSAC), and then passing over money paid for that work to the three implicated Councilors and a KSAC staff member. 

Contractor General Greg Christie said the particulars of 114 contracts valued at J$98.4 million (US$1.16 million), as well as taped interviews and other evidence, was sent by his Office to Police Commissioner Owen Ellington yesterday, following the submission of statements the previous day.

The Office of the Contractor General (OCG) said of those contracts in question, 104 valued at a total J$83.4 million (US$985,233) were awarded to the sham contractor by the KSAC, while the others were given by five other public bodies – the Ministry of Education and Youth; the Ministry of Education; the Factories Corporation; the National Water Commission; and the Social Development Fund.

“The OCG, commencing today, will be working very closely with police investigators to assist them in their investigations into the matter,” Christie said in a statement issued yesterday.

The names of those implicated in the scandal are not being released even though it has been ascertained that they are from the PNP.

Christie revealed what his Office had discovered in statements issued to the media over the past two days. The first one said the OCG had “uncovered evidence of corruption and what appears to be another major fraud in the award of Government contracts”.

According to the OCG 104 contracts, mostly for gully and drain cleaning, were awarded between November 2006 and November 2010 to a contractor who has admitted, in a sworn, tape recorded and signed statement, that she is a fake who was merely acting as a front for the three Parish Councilors and a staff member of KSAC’s Roads and Works Division.

“The fake contractor who, based upon OCG internal investigations, fraudulently secured registration with the National Contracts Commission (NCC) as a Government works contractor, had listed three staff members on her NCC Contractor Re-registration Application Form. However, two of the persons, when interviewed by the OCG, disclosed that they neither knew of the contractor nor had they worked for her,” the statement on Monday said.

“The fake contractor, who was summoned to the OCG to account for the discrepancy in the sworn representations which she had made in her application form, cooperated fully with the OCG and disclosed the extent of the alleged scam.”

According to the OCG, she disclosed that she was simply used as a “front” and did not have any construction experience or any real business. She explained that she received the contract awards or projects from the implicated Councilors and staff member and the projects were then undertaken by their own agents. After being paid by KSAC, she took the money from the bank and paid it over to the KSAC personnel who gave her a fee, equivalent to 10 percent of the contract sum.

She said there were also other Councilors with whom she worked but said she could not recall their names.

Following on the heels of this information, Christie yesterday announced that his Office is widening its own investigation into the contractor and will also review the NCC files of all works contractors who have received contracts from all of the island’s Parish Councils since 2006. 

“The OCG’s investigation will be aimed, among other things, at identifying if any of the referenced contractors are sham contractors and, if so, whether and to what extent such contractors may have had illicit links with Parish Councilors or other public officers or officials,” he said.

Meantime, the PNP has indicated that the Councilors have maintained their innocence and have vowed to defend themselves vigorously.  

They met yesterday with party leader Portia Simpson-Miller.

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