Business Page   The Lottery fund issue should be tested in court

Sunday, March 6th, 2005

 

                                        

 

 

Introduction

All revenues or other monies raised or received by Guyana, (not being revenues or other monies that are payable, by or under an Act of Parliament, into some other fund established for any specific purpose or that may, by or under such Act, be retained by the authority that received them for the purpose of defraying the expenses of that authority) shall be paid into and form one Consolidated Fund. Thus speaks Article 116 of the Guyana Constitution. There is no doubt in the minds of the Auditor General or the Public Accounts Committee (PAC) of the National Assembly that the proceeds received by the Government as its share of the Lottery Funds are public revenues which 'are required to be paid into the Consolidated Fund.' Instead, in flagrant violation of the constitutional provisions, the Government has effectively commandeered these funds which are being used to 'meet public expenditure without Parliamentary approval'.

This action by the Government stands out as one of its more culpable acts of financial impropriety and appears in every Report of the Auditor General since the establishment of the Lottery from which the Government derives 24% of the gross revenues. The PAC on which sits both the members of the Government and the Opposition in the National Assembly has repeatedly taken up the matter insisting that the funds be placed where they belong and form part of the national budget of the country. The PAC is one of the more effective Committees of the National Assembly and in his Needs Assessment Report of the National Assembly published late last month Sir Michael Davies, Commonwealth Senior Parliamentary Staff Advisor to the Guyana National Assembly recommended the collegiate approach to its deliberations be a model for the sector committees of the National Assembly.

The PAC's problem

In his report, Sir Michael said that he 'was told that the principal problem the Committee faces is that the Ministry of Finance does not respond to the Committee's reports. Each year recommendations are made in similar terms to recommendations made in previous years but the Committee never learns whether any action is taken to implement these recommendations. It should be a required practice that the Ministry of Finance should lay before the National Assembly its response to a report of the Public Accounts Committee within three months of the report being made. This is something which the National Assembly should insist on, either by Resolution or, better still, by means of a new Standing Order', Sir Michael recommended.

Just a couple of days later, the Minister of Finance in his 2005 Budget Speech announced that the Ministry of Finance would begin tabling a Treasury Memorandum responding to the concerns of the Auditor General taken up by the PAC. Sir Michael's Report was handed in days before the Budget and cynics would wonder whether the announcement was co-incidental. It would be sad but not surprising if the Government favourably and promptly responds to the recommendations of a foreigner, having refused to do the same with its own PAC for over a decade.

$2.2B

Source: Annual Report of the Auditor General

Over the period 1999 to 2003, the last year for which the Auditor General's Report is available, the Government has collected $2.2B which has been spent at the President's pleasure and that perhaps explains its refusal to comply not with any ordinary law but the Constitution of the country. Apart from the increasing sums at its disposal through the national budget, the additional sums from the lottery are there for handouts and patronage.

For example, for the year 2001 when the last elections were held, a total of $673M was spent even though only $285M was collected, the balance coming from earlier years. In that year a staggering sum of $240M was paid as 'Others' - described in the Auditor General's Report as 'Directors fees and assistance to Other organisations'! It would be interesting to learn which directors and if it is that of the Lotteries Commission, then who authorised the payments, to whom and how much.

When in 1993 the late President Jagan invited interest in setting up a national lottery he said that it was to raise funds for social projects. That objective seems to have been abandoned as monies are given to Ministries, the CIOG and a motley group which cannot be placed in any single category. What is particularly unfortunate is the number of persons who stand for transparency and accountability but who in time of need are quite prepared to accept money from unlawful sources. Why the CIOG and not the Christian or Hindu community, why the Rifle Association and the Rugby Association and not cricket or football, why the GDF and not the Police? Why indeed any of them? Why was the Civil Defence Commission which was severely criticised for its unpreparedness in the recent floods not given any money after the $36M in 1999/2000?

Control

The lottery funds are controlled by a small group including the Political Advisor to the President and the Chairman of the Lotteries Commission Mr. Brindley Benn who has been quoted as saying that he does not believe that Stabroek News has a right to know how the funds are spent.

One disturbing and surprising feature of the matter is that even the Auditor General appears to have given up hope that the funds would be accounted for in accordance with the provisions of the Constitution. In his 2000 Report he notes that 'This matter (of the lotteries funds) was discussed with the Government, and it was agreed that at the end of each year transfers would be made to the Consolidated Fund to the extent of funds utilised from the Lotteries Account. A corresponding supplementary estimate would then be passed in the National Assembly to ensure Parliamentary approval of the expenditure and the recording in the Public Accounts'. The basis of any such discussion and agreement is not apparent and seems to conflict with the Auditor General's interpretation of the law. It may very well come back to haunt the PAC as it tries to restore order.

Doing something

Can anything be done? The PAC should take heart from the significant commitment by the Minister of Finance for the re-introduction of a Treasury Memorandum. It should move expeditiously to complete its own review of the 2003 Report of the Auditor General, publish its report and request the Minister to honour his commitment. The PAC should push for a bipartisan approach to the recommendation contained in the Davies' report 'that the Ministry of Finance should lay before the National Assembly its response to a report of the Public Accounts Committee within three months of the report being made. This is something which the National Assembly should insist on, either by Resolution or, better still, by means of a new Standing Order'.

While it is fashionable to criticise the judiciary for its efficiency, independence and timely action, the Courts still remain our best guarantee for ensuring that the rule of law prevails. The improvements in the Constitution have been the result of the investment of years of hard work, the exercise of our best parliamentary minds and considerable resources. If the Constitution is to mean anything at all, then the citizenry and more importantly the political opposition must be prepared to test in the Courts the constitutionality of questionable actions by the state. The possibility of receiving an adverse court ruling on a matter that goes to the foundation of good governance is likely to benefit any responsible government as it feels compelled to consider very carefully any action of a questionable nature.

Compliance with the law is not only a test of sound governance but also the best guarantee against corruption, misappropriation and the abuse of power.