Tempo Semanal - Dili, 26/12/2012
Translation of article 17/12/2012
Journalists have been denied any comment or response from the Finance Minister despite their repeated requests for interviews with her or for information from her to try to clarify allegations that have recently arisen regarding her in the press, and this from a Minister who has in the past repeatedly declared herself to the public as the motor for transparency and accountability. The question must be asked; what is Minister Emilia hiding from the public?
On 27 November 2012, shortly before the commemoration of the 37th anniversary of Timor-Leste's independence, Tempo Semanal published allegations of Corruption, Collusion and Nepotism (commonly known by its Indonesian acronym "KKN") against the Finance Minister, Emilia Pires. The allegations against this senior member of the government, who has held the Finance portfolio for the second term of government, emerges from circumstances where budget funds were approved to enable acquisition of goods from a company owned by her husband.
This conduct by the Finance Minister, Emilia Pires is suspected of breaching the conflict of interest provisions for state agents established in article 32, chapter IV on Incompatibility, of Law No. 10/2005, The Legal Regime on Procurement. The Minister who is fond of claiming utmost transparency and accountability feigned at not knowing of and letting through to acquire a government contract her husband's company. To try and find answers to these questions raised about the conduct of the Finance Minister Emilia Pires, from prior to the date of publication, Tempo Semanal has tried on multiple occasions through various means to seek confirmation of certain facts from her. However, we have been unable to get any response whatsoever from her despite our repeated efforts.
On Tuesday, 11 December 2012, Tempo Semanal tried once again to get a response to questions from the Finance Minister personally during her attendance at the National Parliament. However, the Finance Minister herself declined making any comments to us. "I will not comment to the whoever in the press regarding this issue," the Finance Minister told Tempo Semanal.
The raising of these allegations have stirred great public controversy, because of statements made by the Director of the Guido Valadares National Hospital, Odete da Silva Viegas to Tempo Semanal on 23 November 2012, that according to her letter of request with reference number 130/adm/HNGV/III/2012, which she addressed to the Vice Minister for Health, Madalena Hanjan, there was no request for the equipment ultimately supplied by the company Mac's Metalcraft Pty Ltd, a company owned by and whose director is Warren Mc Leod, the husband of the Finance Minister, Emilia Pires. Worse, some state agents used the request from the Director of the Guido Valadares National Hospital as justification to seek additional unallocated budget funds, which had already been pre-arranged in February 2012.
Looking at the details born out in the documents in this case, there are things that were clearly not right. The request from the director of the National Hospital to the former Vice Minister for Health, Madalena F.N.H Costa Soares Bsn, on 22 March 2012 request the urgent purchase of medical equipment related to the work of the Hemodialysis Unit. This included equipment like two Hemodialysis machines, two sets of beds and consumables to enable the unit to undertake its work in caring for patients requiring hemodialysis treatment.
According to the list annexed to the letter signed by the National Director of NALA, Leao Borges, S Sos. MPH, Head of the Medical Equipment Management Department, Avelino Afonso Brites and former Vice Minister of Health, Madalena F.N.H. Costa Soares Bsn, a budget of US$2,004,100.00 was proposed to purchase 17 items for the hospital and health centres. But what is interesting from the items listed in the annexure to the letter sent by the Vice Minister for Health, Madalena Hanjan to the Finance Minister, Emilia Pires, the first five items listed were all equipment to be purchased from the company Mac's Metalcraft Pty. Ltd.
So if we look at the whole process from beginning to end, we conclude that there was "collusion" at high level between some members of government during which they tested one another on ways in which their family members could financially benefit from the budget of the state. Because, prior to the Director of the National Hospital sent off her letter on 22 March 2012, the Finance Minister, Emilia Pires had already approved the budget request that had been proposed by the Vice Minister for Health, Madalena Hanjan.
Immediately after the Finance Minister approved the request for additional budget funds from the government's contingency fund, on 24 February 2012, Warren Mc Leod, the Director of the company Mac's Metalcraft submitted his quotation to Agapito da Costa, the Procurement Officer for the Ministry of Health. Following this on 21 March 2012 the Vice Minister for Health wrote to Prime Minister Xanana and copied the Finance Minister. Madalena Hanjan proposed in that letter for the company Mac's Metalcraft to be the sole supplier because it was an emergency purchase.
Interestingly, in February the Vice Minister for Health used only the letter of request from the Director of the National Hospital for two hemodialysis machines and two beds as the basis for her justification to back up her request for funds as being an emergency. However, equipment ultimately supplied by Mac's Metalcraft including some of the eighty (80) beds are in storage at the National Hospital.
"The Finance Minister is a 'public official'. Because of this very reason she cannot approve funds to her family's company, but least of all her husband's. With this the Finance Minister has breached the Procurement Law," said the director of Luta Hamutuk, Mericio Akara to Tempo Semanal. According to Akara, 30% of procurement projects are awarded through single sourcing currently.
"But, the mechanism was also frequently breached. Such as single sourcing, which is justified when there is an emergency or something needs to be acquired quickly. But, if there is no emergency though I do not think it can be single sourced.
If there is a natural disaster we can understand if the procurement is treated as an emergency. But, too many times procurement that is not really an emergency are categorized as emergencies and treated accordingly. Because of this, indications of KKN (Corruption Collusion and Nepotism) arise in these emergency procurements.
Despite this, this is the course used to access funds to spend quickly. Because, with this approach, they can use single sourcing. But this way they can also engage in all forms of manipulation, because if it has to undergo normal procurement processes then there is no course available for them to engage in KKN. So, this is why they use single sourcing.
It is not only though single sourcing though, because via normal procurement processes they also try to manipulate things, then it is easier to do with single sourcing where there are no means of control. In these type of processes, whoever has the power makes the decisions. So, if they have family relations involved they do not need to be afraid of giving it to them. People are already used to it, use to saying that someone inside gave a contract to their relative," Akara accused.
Previously, in its edition number 42, Tempo Semanal published an interview with the Jose Neves, one of the deputy commissioner of the Anti Corruption Commission (Tetum acronym: "KAK"), wherein he said that the equipment acquired in the case in question could not be classed as emergency items. He added that they had simply invented this as being an emergency acquisition.
Akara explained that, KAK has to be proactive in investigating these cases. Because, it is an extraordinary institution created to be proactive in investigating such cases, not just wait to act on complaints. KAK has to be proactive and we recommend that that it should not fear anyone in Timor-Leste. KAK as an extraordinary institution should not be wary of anyone and if there are clear indications of KKN then it should investigate it immediately.