Holness cited for possible conflict of interest, breaches of Corruption Act

Prime Minister Andrew Holness has been implicated in a potential conflict of interest regarding the award of Government contracts to Westcon Construction Limited during the period 2006-2009.

Also implicated are state agencies National Works Agency (NWA) and the Social Development Commission (SDC). The NWA has been accused of contempt.

Holness, who is also the longstanding Member of Parliament for St Andrew West Central, would have been the Minister of Education from 2007-2009 in the then Bruce Golding-led Jamaica Labour Party Government.

He has been referred to the Director of Corruption Prosecution of the Integrity Commission for consideration with respect to breaches of the Contractor General Act, the Public Sector Procurement Regulations 2008, the Corruption (Prevention) Act and/or any other applicable law.

The investigation was started by the then Office of the Contractor General (OCG) which has since been subsumed by the Integrity Commission.

The Commission, in its 107-page report which was tabled in the Parliament on Tuesday, noted that the investigation by its Director of Investigation concerns the allegations that contracts were awarded to Weston Construction and that there is a “connection and/or relationship between the proprietors of the named entity and … Andrew Holness, Prime Minister of Jamaica and then Minister of Education Youth and Information”.

The investigation sought to ascertain, inter alia, (a) the nature and particulars of Government of Jamaica (GoJ) contracts that were awarded to Westcon Construction Limited during the relevant period; (b) the nature and extent of the relationship between …Holness and the directors/principals of Westcon Construction (c) the extent of the involvement, if any, of …Holness in the award of GoJ contracts to Westcon Construction (d) whether the circumstances surrounding the award of contracts and/or the process(es) utilised by (i) the Ministry of Education, Youth and Information (MOEYI) (ii) the NWA(iii) the SDC was devoid of irregularity and impropriety and was fair and transparent”.

Among the key findings of the investigation are:

-A total of 10 contracts were awarded by the MOEYI to Westcon Construction during the period February 14, 2007 and November 10, 2009.

-Of the 10 contracts, only five were reported to the OCG by way of the MOEYI’s Quarterly Contract Award (QCA) Reports for the period.

-The direct contracting procurement methodology was utilised in one instance and it was disclosed by the MOEYI that the criteria for the “Lowest Responsive Tender” was utilised in the remaining nine instances.

-The 10 contracts awarded by the MOEYI were valued between $1,413,439.00 and $3,360,650.00 and had a cumulative value of $21,882,491.00.

The investigation also found the following in respect of the NWA:

-A total of 34 contracts were awarded to Westcon Construction by the NWA during the period July 16, 2009 and June 6, 2016.

-Of the 34 contracts awarded by the NWA to Westcon Construction, 26 fell within the value threshold which required the NWA to submit particulars of the contracts to the then Contractor General by way of its QCA Reports.

-Only six of the 26 contracts were reported to the OCG by way of the NWA’s QCA Reports for the period.

-Of the six instances in which the NWA reported the award of contracts by way of its QCA Reports for the referenced period, the Sole Source procurement methodology was utilised on four occasions and the Limited Tender procurement methodology utilised for the remaining three.

-Chief Executive Officer at the NWA, Everton Hunter, advised the OCG that “…there are no records to indicate the method of procurement that was utilised for the award of the referenced contracts”. Hunter also advised that “… the procurement records do not show where any of the referenced awards listed went before the Committee for approval”.

Additionally, the 34 contracts which were awarded by the NWA to Westcon Construction Limited were valued between $60,000 and just under $12 million and had a cumulative value of $33.78 million. The Commission said it was disclosed by Hunter that no records were found “…that outlined the selection process that was undertaken for the award of these contracts”.

As it relates to the SDC, the investigation found the following:

-A total of two contracts were awarded by the SDC to Westcon Construction during the period December 20, 2007 and September 10, 2009.

-Both contracts were reported to the OCG by way of the SDC’s QCA submission, where it was indicated that the Limited Tender procurement methodology was utilised for the award of contract in the amount of $375,000.00 and the Sole Source procurement methodology for the award of a contract in the amount of $1,450,000.00.

The Integrity Commission said it was subsequently disclosed by the SDC’s executive director, Dr Dwayne Vernon, that “there is no evidence of the SDC utilising formal tender procedures for the procurement for the works and services executed by Westcon Construction Limited”.

The OCG was also advised by Dr Vernon that the records indicated that “…Westcon Construction was introduced to the SDC by way of letter from the MP”.

Also, the OCG was advised by Dr Vernon that “…there is no evidence available to the SDC detailing how Westcon Construction was selected to provide services as the SDC did not procure such services. This was done at the level of the constituency”.

According to the Commission’s report, Westcon Construction Limited was incorporated on October 11, 2004 and was registered by the Companies Office of Jamaica with the following directors and shareholders:

Robert Garvin, director/shareholder; Donavan Simpson, director/shareholder; and Jerome Green, secretary. The company held registration with the National Contracts Commission (NCC) during the following periods: i. July 11, 2008 – July 10, 2009; ii. May 21, 2007 – May 20, 2008; and iii. April 11, 2006 – April 10, 2007.

The investigation also details the nature and extent of the relationship between Holness and the directors and/or principals of Westcon Construction. It said both Garvin and Simpson are known to Holness for over 20 years.

“Based upon the disclosure which was made by …Holness, Mr Robert Garvin is personally known to him and had been employed both in the Prime Minister’s (St Andrew) West Central constituency and his personal business. It was also disclosed by the Prime Minister that Mr Donovan Simpson is known to him ‘casually’ and was introduced to him by Mr Garvin and that Mr Simpson was engaged by him ‘privately’ to undertake land surveying work,” the report said.

Among other things, the Director of Investigation (DI) at the Integrity Commission concluded that the then accounting and accountable officers of the then MOEYI breached sections 29(a) and (b)(ii) of the Contractor General Act as a result of their failure to submit the requisite QCA Reports to the OCG, advising of the award of five contracts to Westcon Construction during the subject period:

The DI also concluded that the then accounting and accountable officers of the NWA breached sections 29(a) and (b)(ii) of the Contractor General Act as a result of their failure to submit the requisite QCA Reports to the OCG, advising of the award of 20 contracts to Westcon Construction Limited during the subject period and which fell within the contract value threshold for reporting.

The DI further concluded that the NWA failed to prepare and/or preserve documentation for 34 contracts which were awarded to Westcon Construction during the subject period.

“This failure, on the part of the NWA, amounts to a breach of section 2.10.1 and subsection 2150 of the then applicable GOJ Handbook of Public Sector Procurement Procedures, which stipulates the mandatory minimum period for the retention of public procurement records.

“This has had the effect of impairing the OCG’s efforts in determining (a) whether all the contracts were awarded transparently and on merit, and (b) the basis upon which certain contractors were selected to undertake a multiplicity of works and (c) whether value for money was obtained by the GOJ,” the report said.

The report added: “Having regard to the foregoing, the DI has reasonable grounds to conclude that the NWA displayed scant regard for established standards of accountability and transparency stipulated by the GOJ Handbook of Public Sector Procurement Procedures.

“The DI concludes that the failure of the NWA to retain and furnish the procurement records relevant to the subject award of contracts is probative of its contempt for transparency and accountability and brings into question the Agency’s commitment to principles of good governance and prudent financial management”.

The DI concluded that a discrepancy exists between (a) the representations made by the SDC in its QCA Reports that the Sole Source procurement methodology was utilised in the award of contracts to Westcon Construction and (b) the disclosure by Dr Dwayne Vernon on June 22, 2016, that “no formal procurement procedures were utilised” in the same contract awards.

“Having regard to the dichotomy which subsists, given the absence of documentation to the contrary and the sworn testimony of Dr Dwayne Vernon, the DI accepts the testimony that “no formal procurement procedures were utilised” and therefore concludes that the SDC breached section 29 of the then applicable Contractor General Act, by its representation in its QCA Reports concerning the procurement methodology utilised in the award of contracts to the referenced contractor”.

According to the report, “the Director of Investigation has found evidence which provides grounds for forming the view that the SDC acted upon the instructions which were conveyed by the Most Hon. Andrew Holness, by way of letters dated December 20, 2007 and September 23, 2009, and made payments to Westcon Construction Limited in the amounts of $375,000.00 and $1,450,000.00, without the utilisation of the mandatory formal GOJ procurement procedures. The payments were made by the SDC in respect of works which were stated to have been executed in the constituency of West Central St Andrew”.

The report said that by his own admission, the Prime Minister disclosed that Garvin was personally known to him for approximately 20 years.

“Notwithstanding the fact that the SDC was the implementing agency entrusted with the authority to effect the administration of GOJ contracts and thereby enforce the stipulated formal procurement procedures, the Director of Investigation concludes that the Most Hon. Andrew Holness, by his admitted recommendation of Westcon Construction Limited, may have influenced the award of the contracts to the mentioned contractor,” the report said.

It argued that the issue is further compounded by the nature of the relationship between Garvin and Holness.

It said “In this regard, the Director of Investigation has reasonable grounds to believe that the apparent influence of the Most Hon. Andrew Holness, which was brought to bear upon the contracts which were awarded by the SDC to Westcon Construction Limited, prima facie, gave rise to a conflict of interest, on the part of the Most Hon. Andrew Holness”.

Based on the findings of its DI, the Commission has referred a copy of its Investigation Report to the Director of Corruption Prosecution for such actions as the Director may deem to be appropriate.

It said the matter concerning the potential conflict of interest which arose in relation to the recommendation which was made by Holness is being referred to the Director of Corruption Prosecution for consideration with respect to breaches of the Contractor General Act, the Public Sector Procurement Regulations 2008, the Corruption (Prevention) Act and/or any other applicable law.

Both the NWA and the accountable officers at the SDC have also been referred to the Director of Corruption Prosecution.