Again, Peter O’Neill features heavily…
Below is the sixty-first part of the serialized edited version of the National Provident Fund Commission of Inquiry Final Report that first appeared in the Post Courier newspaper in 2002/3.
NPF Final Report
This is the 61st extract from the National Provident Fund (now known as NASFUND) Commission of Inquiry report. The inquiry was conducted by retired justice Tos Barnett and investigated widespread misuse of member funds. The report recommended action be taken against several high-profile leaders, including former NPF chairman Jimmy Maladina. The report was tabled in Parliament on November 20 by Prime Minister Sir Michael Somare.
Executive Summary Schedule 6 Continued
At paragraph 12.3.8.4, after exhaustive investigations, the commission found that:
(a) The commission finds that Mr O’Neill’s money had gone out of the PMFNRE No.1 Trust Account prior to March 25, 1999, and the money in the account was less than sufficient to meet unpresented cheques.
(b) Mr O’Neill’s evidence cannot be accepted.
The commission set out to investigate what happened to the aggregate of K167,300.94 paid into PMFNRE No.1 Trust Account in four payments between January 20, 1999 and March 10, 1999, as detailed earlier in paragraph 12.3.8.3 sub paragraphs (a)-(d).
The commission searched the company records of PMFNRE. They are in clear breach of the Companies Act but also they showed Jack Awela owned 89 of 100 shares.
Other searches have shown this same name appear as the major share holder in other companies which are clearly (and admittedly) owned by Mr O’Neill. At paragraphs 12.5.2.5 and 12.5.2.6, the commission has found that Mr Awela (if he exists as a real person at all) is holding his shares in all these companies for Mr O’Neill. The result is that Mr O’Neill is the beneficial owner of PMFNRE and this accords with the overwhelming weight of other evidence – as set out in paragraphs 12.5.2.2, 12.5.2.3, 12.5.2.4 and 12.5.2.6.
At paragraph 12.3.8.5.3, the commission finds:
The directors of PMFNRE should be referred to the Registrar of Companies for further investigation and with a view to their each being prosecuted for failure to comply with their clear statutory obligations.
That failure renders it difficult to ascertain how the moneys of Mr O’Neill received by PMFNRE were either expended or invested on Mr O’Neill’s behalf.
On March 11, 1999, the No.2 Trust Account was said to have been opened and funds totalling K790,451.10 were recorded as transferred to it from the No.1 Trust Account. In fact, only K120,157.56 was so transferred (see paragraph 12.3.8.6.6(b)) the deficiency between funds actually deposited as against funds recorded as received is K600,293.54. (See commission’s conclusions at paragraph 12.3.8.6.6).
At paragraph 12.3.8.6.7, the commission has found:
(a) Despite Mr O’Neil’s explanation, the commission finds that none of the funds attributable to Mr O’Neill were transferred from PMFNRE No.1 Trust Account to PMFNRE No.2 Trust account between the time the latter was opened on March 11, 1999, and March 31, 1999;
(b) Further, the reconstructed cashbook for the No.2 Trust Account for the periods March 25, 1999 up to September 29, 1999 with this No.1 Trust Account show that none of the funds deposited into PMFNRE No.1 Trust Account and which were attributable to Mr O’Neill were recorded as having been received into the PMFNRE No.2 Trust Account during the same period;
(c) That the funds held by PMFNRE for Mr O’Neill in this No.1 Trust Account were paid out to third parties from the No.1 Trust Account prior to March 25, 1999, as the reconstructed cashbook shows. They were not paid out after that date.
In paragraphs 12.3.8.6.8 to 12.3.8.6.13, the commission makes a detailed study of the “off-book” entries in 1999. These are listed at paragraph 12.3.8.6.10 as follows:
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Large sums of money were being transferred. The net effect of what occurred was that there were three contributions to the “off- book” receipts being:
(a) Nambawan Finance Limited, which contributed K321, 593.72;
(b) Mr O’Neill who contributed K189,570.01 as follows:
21/01/99 – K 91,467.63
09/02/99 – K 54,166.65
11/02/99 – K10,833.33
10/03/99 – K22,269.07
10/03/99 – K10,833.33
K189,570.01
(c) Carter Newell Lawyers who contributed K70,000 as follows:
25/01/99 – K50,000.00
12/02/99 – K20,000.00
K70,000.00
There were three payment destinations for the “off-book” payments:
(i) Carter Newell Lawyers K420,000
(ii) Nambawan Finance Limited K100,000
(iii) Recipients of cash:
25/01/99 – K20,000
28/01/99 – K30,000
29/01/99 – K1000
10/03/99 – K10,000
K61,000
As at March 10, 1999 – some two weeks before the K300,000 of NPF Tower fraud money came via Ken Barker’s bank account into the PMFNRE Trust Account on March 25, 1999 – a residue of only K163.73 of this “off-book” money remained in the PMFNRE No.1 Trust Account.
Thus, at March 10, 1999, only K163.73 of the K189,569.91 previously for Mr O’Neill remained in the No.1 Trust Account. The rest of Mr O’Neill’s must have:
- Been in part included in the K420,000 paid out to Carter Newell Lawyers, and/or;
- Been in whole or in part included in the K61,000 taken in cash; and/or; and
- Been in whole or in part included in the K100,000 invested in IBD with Nambawan Finance Limited.
On the state of the evidence obtained by the commission, we are unable to determine what was occurring, though it seems that Carter Newell’s cheque # 79628 for K50,000 was “laundered” through PMFNRE and then paid out on the same day by two cheques for K30,000 and K20,000.
It is possible that Mr Maladina was seeking K400,000 for the purchase through Perimist of a property at 5 Atherton St, Whitfield (Cairns), but there is insufficient evidence for a positive finding.
Findings
(a) In the absence of evidence, the commission was unable to conclude what was intended and occurred with respect to these “off- book” transactions;
(b) Whoever was managing these “off-book” transactions – Mr Barker and/or Maurice Sullivan must have known exactly what was involved and where Mr O’Neill’s money went but both are now “safely” out of Papua New Guinea as is Mr Maladina;
(c) Clearly, PMFNRE must have kept records of these “off-book” transactions but we are told there are none beyond those produced. Equally clearly Carter Newell Lawyers must have had financial records of the transactions involving them but again we are told there are none available beyond those produced;
(d) Finally, it is also not credible that when Mr O’Neill provided his ANZ cheque for the precise and odd sum of K22,269.07 banked on March 10, 1999, he did not know exactly what that sum was required for and where his money had either been spent or invested.
In paragraph 12.3.8.7, the commission reported upon the surviving investment of Tower fraud moneys.
At paragraph 12.3.8.7.1, it examined the Nambawan Finance IBD’s.
The large funds involved did not concern the commission, being outside the terms of reference but indicate that huge funds were being laundered by Carter Newell through PMFNRE.
It seems the funds were coming from the funds of another statutory corporation.
The commission examined these movements of large amounts of money in 1998 and 1999 through the same CN and PMFNRE accounts through which the NPF Tower fraud moneys were also laundered.
We followed the payment in and out of the accounts of these large flows of funds in order to:
- demonstrate that a similar laundering operation was occurring; and
- confirm that it did not leave any additional “innocent” funds in Mr O’Neill’s account which might disprove the provisional finding that some expenditures for Mr O’Neill’s benefit must have come from the Tower fraud.
Subsequent cover up of the money trail
Other difficulties have been caused by the activities of the conspirators, their associates and, in some instances, their lawyers after the commission was established.
Mr Maladina, Mr Sullivan and Mr Barker, having given false statements or evidence, have departed PNG and taken up residence in Australia, outside the commission’s jurisdiction. In some cases, they seem to have taken vital documents with them.
- Ken Yapane, on Mr Maladina’s instructions, was party to the production and disclosure to the commission of back-dated false documents designed to hide Mr Maladina’s involvement in the fraud;
- Barbara Perks and David Lightfoot were involved also in disclosing false documents to the commission, which were designed to distract it from discovering Mr Maladina’s involvement in the fraud.
Mr Maladina’s crimes are listed at paragraph 5.7.1. These matters are set out in detail in paragraph 5.5.1 – 5.5.4 and referrals to the Commissioner of Police are dealt with at paragraph 5.8.
Findings
With regard to Mr Maladina, the commission has found at paragraph 5.7:
There is clear evidence that Mr Maladina committed a multiplicity of serious crimes which include:
(i) Demanding money (K150,000) from Kumagai with threats to stop work on the Tower and reject payment claims if the demand was not met (Criminal Code Act, Section 389);
(ii) Conspiring with Shuichi Taniguchi and Kazu Kobayashi and probably with Herman Leahy to defraud the National Provident Fund Board of Trustees of K2.505 million (Criminal Code Act, Section 407);
(iii) Forging or causing to be forged a writing (being the signature of Ken Yapane & Associates) on the subcontract (Criminal Code Act, Section 462(1));
(iv) Knowingly and fraudulently uttering a false writing (being the signature of Ken Yapane & Associates on the sub contract) to Kumagai (Criminal Code Act, Section 463(2));
(v) Fabricating evidence with intent to mislead a tribunal in judicial proceedings (the two false retyped letters produced to this commission by Mr Yapane) (Criminal Code Act, Section 122);
(vi) Attempting to induce a person called as a witness in judicial proceedings (Mr Yapane as called before this commission) to give false testimony or withhold true testimony (Criminal Code Act, Section 123); and
(vii) Possibly attempting in his telephone conversation with Mr Taniguchi (Transcript p.2977) to induce a person to be called as a witness in judicial proceedings (Mr Taniguchi before this commission) to withhold true testimony (Criminal Code Act, Section 123).
The commission has also found that there is sufficient evidence against several other participants to warrant referring them to the Commissioner for Police and to other authorities.
At paragraph 5.8, the commission recommends to the constituting authority as follows:
Referrals
A – To the Commissioner for Police
(a) Mr Maladina: For investigation into whether he should be charged with criminal offences including those specified above. (Paragraphs 5.3 and related sub paragraphs – 5.3.1.1-5.3.1.4 and 5.3.1.6-5.3.1.7);
(b) Mr Leahy: For being party to all or some of the above mentioned offences and/or of criminal conspiracy with Mr Maladina in relation to any or all of such offences. (Paragraphs 5.3.6.1 and 5.3.6.7);
(c) (Transcript pp. 3280-3332) Henry Fabila: For being party to all or some of the above mentioned offences and/ or of criminal conspiracy with Mr Maladina in relation to any or all of such offences. (Paragraphs 5.3.6.4 and 5.3.6.7);
(d) Mr Taniguchi: For being party to all or some of the above mentioned offences and/or of criminal conspiracy with Mr Maladina in relation to any or all of such offences. (Paragraph 5.6 and related sub- paragraphs);
(e) Mr Kobayashi: For being party to all or some of the above mentioned offences and/or of criminal conspiracy with Mr Maladina in relation to any or all of such offences. (Paragraph 5.6 and related sub- paragraphs);
(f) Mr Yapane: For being party to all or some of the above mentioned offences and/or of criminal conspiracy with Mr Maladina in relation to any or all of such offences. (Paragraphs 5.5.3.1 and 5.5.4);
(g) Mr Lightfoot: To consider whether there is criminal culpability in relation to the fraud against the NPF such as to warrant charging him with an offence against the Criminal Code. (Paragraph 5.5.3, 5.5.3.1 & 5.5.4); and
(h) MS Perks: To consider whether there is criminal culpability in relation to the fraud against the NPF such as to warrant charging her with an offence against the Criminal Code.
B – To the Ombudsman Commission
(a) MR Maladina: To consider breaches of the Leadership Code in relation to his activities concerning the fraud against the NPF and related activities. (Paragraph 5.3 and related sub-paragraphs);
(b) Mr Fabila: To consider breaches of the Leadership Code in relation to his activities concerning the fraud against the NPF and related activities. (Paragraphs 5.3.6.4 and and 5.3.6.7).
Examination Of Funds Transferred Between No.1 And No.2 PMFNRE Trust Accounts – Assessing Mr O’Neill’s Explanation.
Mr O’Neill’s explanation
In his initial statement and evidence to the commission, Mr O’Neill stated that it was not appropriate to treat the PMFNRE No.1 Trust Account and the PMFNRE No.2 Trust Account in isolation from each of the other and in so doing to conclude that payments made on his account or behalf could only have been funded by funds banked to the credit of the PMFNRE No.1 Trust Account and some of which were sourced from the NPF Tower fraud.
Mr O’Neill was in effect saying that such payments were made by funds held to his credit in the PMFNRE No. 2 Trust Account.
Mr O’Neill’s funds In IBD’s at March 16, 1999
It was in consequence necessary to examine in detail transfers of funds from PMFNRE No.1 Trust Account (into which Mr O’Neill’s money had been banked) to the PMFNRE No.2 Trust Account in order to test this explanation.
This is reported item by item in paragraphs 12.3.8.2 to 12.3.8.7.10.
The “investments” which subsisted after the transfer of funds between these two accounts were the IBD which PMFNRE had with PNGBC of K600,000.00 and the further IBD which PMFNRE had with Nambawan Finance Limited which was at March 16, 1999, in the sum of K914,616.
Findings
At paragraph 12.3.8.7.11, the commission examined the IBD with the PNGBC of K600,000 established on March 12, 1999, and found at paragraph 12.3.8.7.11 that:
(a) Having completed this analysis and tracing it is totally clear that all the moneys contained in the initial IBD with PNGBC were funds that were deposited into the PMFNRE No.1 Trust Account and for which receipts were duplicated in the PMFNRE No.2 Trust Account computerised cashbook. It is also totally clear that the renewed IBD was an extension of the same process;
(b) None of Mr O’Neill’s funds which were banked into PMFNRE No.1 Trust Account were shown as included in the receipts duplicated in the PMFNRE No.2 Trust Account computerised cashbook up to March 31, 1999, and it can in consequence be said with total certainty that none of Mr O’Neill’s funds were included in these two IBD’s with PNGBC.
(c) The only ongoing repository of funds in which Mr. O’Neill’s funds could have been invested and which was in existence after March 25, 1999, was the funds invested by PMFNRE on IBD with Nambawan Finance Limited in the deposits of:
(i) K500,000 which subsisted after January 18, 1999 (if part of the Carter Newell “share” was transferred to Mr. O’Neill) as to which see paragraph 12.3.8.6.9; and
(ii) K100,000 which was established on February 25, 1999 – as to which see paragraph 12.3.8.6.10.
TO BE CONTINUED
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