BLAME GAME

A line of demarcation has been drawn between the former Managing Director of the Liberia Petroleum Refinery Corporation Harry A. Greaves and the current Managing Director T. Nelson Williams with Williams distancing himself from the findings of the General Auditing Commission suggesting serious issues of improprieties at LPRC.

Williams' clarification comes in the wake of assertions attributed to Greaves in Wednesday's edition of the Concord Times, in which Greaves suggested that he left over $US9 million as profit when he inherited over US$2M as debt. Greaves said during his tenure he liquidated debt and added value to the corporation by an annual profit of US$5M.

Greaves further explained, according to the Concord, that under his administration, he undertook a massive restructuring program and spent US$1.5M on retired workers. More importantly, Mr. Greaves pointed fingers at the current administration headed by T. Nelson Williams whom he called on to tell the Liberian people, what happened to the money he left at the corporation. Greaves went on to say that his successor is under obligation to explain what led to the reduction of the over US$9M to less than $3M.

Greaves further explained that it is interesting that in just over 18 months of the new administration of the LPRC, US$6M has been used without explanation, going as far as to suggest that during his administration, he made quarterly financial reports to the employees of the corporation under the tree and that employees are living witnesses and can testify to that. Greaves is quoted as saying that the current management halted the transparency process.

William Draws line

In contrast, Williams explains that under his watch, LPRC has been able to reduce losses by 45 percent and conducts not only quarterly but also monthly financial statements and the statements are shared regularly with the board of directors, the executive management team and the workforce leadership.

Reacting to Greaves, in a FrontPageAfrica interview Wednesday, Williams said he was baffled that his former boss, under whom he served as Deputy for Administration, was taking cheap shots at him in the aftermath of an audit covering the period he(Greaves) served as managing director.

Said Williams: “He was dismissed on the fourth of September 2009. Three days later, the president instructed me to act until I was finally appointed. Nelson says he did not arrive at LPRC until September 8, 2007 almost at the end of the 2nd auditing period. 

The report of Former Auditor General John Morlu suggests that financial management at LPRC for the period under audit was marred by irregularities. Williams, in an interview with FrontPageAfrica explained that he was not Managing Director during the period covered in the audit report. I wasn't here. This was something that was negotiated by the former AG and he responded to it, referring to the Addax-Nigeria deal which was the subject of controversy during the Greaves tenure. Williams said the contract was negotiated by Greaves on behalf of the Liberian government. A similar contract was negotiated by Williams II on behalf of the Liberian government between NNPC and Sahara Energy Limited. To date, the Sahara deal has not been audited.

Williams explained that at the time of Greaves dismissal, LPRC had in its coffers US$ 8.5 million and today has has 10.4 million, debunking Greaves suggestions that the company had less than $3 million today.

Contrasts from Greaves

Williams further explained that LPRC has paid a total of $1.3 million to Motherwell Bridge in connection to the Rehabilitation project and paid $US5.0 million to the Liberian government in 2009/2010 for dividend and taxes. LPRC, Williams said, has also paid over $600,000.00 for expenses related to major tank farm repairs in 2009/2010.

In statements attributed to Greaves in the Concord Times Wednesday, declared that he paid over US$7.8M in taxes to government during his tenure.

Besides Williams, the former LPRC boss also took jibes at Winsley Nanka, a former financial officer, now serving as Deputy Auditor General. Greaves noted that if the GAC audit claims he mismanaged US$13M, then Nanka should help to explain where the money went since he was the chief financial officer at the LPRC. “If they said that amount of money was missing, Winsley Nanka must have known about it.”

The GAC audit among other things reported that the LPRC management failed to provide General Ledger for the financial year ended 31 December 2006 to enable the auditor general validate the total withdrawal from its LBDI account in the amount of US$9,474,543.00 during the period ended 31 December 2006.

The GAC findings also said the LPRC management also failed to provide details on accounts payable for the periods ended 31 December 2006 and 2007, and thus the basis on which US$832,538.00 of the account payables were liquidated. “Recordings of cash transactions in the tune of US$1,669,606.00 were missing from the General Ledger presented to me for the period ended 31 December 2007, thus again impacting on the truth and fairness of the financial statements,” the report stated.

The report also said the cash flow statement of LPRC has significant omissions (e.g. presumptive corporate tax of US$220,239.00) which indicate that both the income statement and the balance sheets are in error and there were a large number of undocumented and unsubstantiated financial transactions made possible by the severely weak internal controls over financial management. This further cast doubts on the integrity of the financial figures presented in the LPRC financial statements.

The report also said Greaves expending the corporation's funds on activities indicated as Confidential Public Relations Services without full documentation and not substantiating the expenditure indicated a weak control environment and a bad tone set at the top of the Corporation, further casting doubts on the accounts presented for audit.

The LRPC management under Greaves, according to the report, also did not produce financial accounts on the basis of IFRS or other generally accepted accounting principles. This resulted in large inconsistencies in the income statements and balance sheets presented for audit, thus creating a significant material impact on the cash flow statement presented.

The audit also said Greaves and his comptroller Kamau Lizwelicha contravened the law when management destroyed documents and records and when they purportedly stored all its documents in electronic form without any evidence of an approval from the Minister.

“Management further contended that its external auditor Monbo & Company authenticated the obligation. This alone is not sufficient appropriate evidence. I am the principal external auditor of the Government of Liberia, as per Section 53.3 of the Executive Law of 1972.

Nigerian oil deal vague

After a review of the document representing the contract between the Nigerian National Petroleum Corporation (NNPC) and the LPRC for the purchase of specified barrels of crude oil per day to the Government of Liberia (GOL), and also the contract signed between LPRC and Addax Limited for the sale of the said crude oil to Addax Limited, the Auditor General said, he made a determination that the  entire Nigeria Oil Deal was covered with vagueness, meaning it was executed in a manner that lacks transparency and accountability. Managing Director Harry Greaves single handedly managed the contractual arrangement without much involvement of the Board of Directors. “I therefore could not assure whether the deal met the desired benefit for which it was intended,” the Auditor General reported.

The report said the Nigerian Government agreed to the Government of Liberia's (GOL) request to provide 30,000 barrels of crude oil per day. However, the bilateral agreement was given to LPRC because the Nigerian National Petroleum Corporation (NNPC) indicated that it does not deal with governments or any sovereign authorities, but with public companies. Even though the NNPC did not sign the prepared agreement with LPRC for the supply of the agreed 10,000 barrels of crude oil per day, the former went ahead and supplied the oil, a situation unexpected in business dealings. “

The Auditor General said he sent a team to Nigeria to interview NNPC but the Nigerian firm could not indicate the substantive basis for consummating a contractual agreement in the absence of a valid contract that was duly signed and notarized. “The oil was lifted by Addax, a Company contracted by Managing Director Harry Greaves, which was effectuated without applying the provisions of the PPC Act, 2005. The Board's approval was also not evidenced prior to awarding the contract to Addax, and it was therefore a unilateral decision.”

The AG disagreed with Greaves' assertions that he(Greaves) considered the transaction as a sale contract and not procurement, since the Procurement Act ''mentioned disposal of assets only''.

The Auditor General said Greaves tried to confuse the issue when he argued that “LPRC's contract with NNPC was a procurement contract,” but “LPRC's contract with Addax was a sales contract.” First, the agreement with NNPC was a bilateral agreement. This is evidenced by the Minister of Finance, Antoinette Sayeh's letter dated 31 July 2006 indicating to NNPC that LPRC will represent the Government of Liberia in this transaction, as NNPC indicated that it could only do business with a commercial entity. Second, Managing Director Greaves did not provide evidence that the contract with NNPC was competitively bidded since he claimed it was a procurement contract, thus falling under the provisions of the PPC Act,

2005.

Greaves, according to the audit, failed to provide evidence of competitive bidding for either Addax or NNPC. “Either way, he contravened the PPC Act, 2005. Granted that the contracts among LPRC, NNPC and Addax, were even without blemish, the non-adherence to provisions of the PPC Act, 2005 in the selection of Addax, constitutes a major risk, as the fee declared as receivable for the oil lifting may not have reflected a fair deal for the LPRC, and thus GOL.

As indicated, NNPC did not sign the oil supply agreement with LPRC and yet permitted the oil to be lifted by Addax on behalf of LPRC. There was therefore no legal basis for Addax to lift the crude oil in the absence of a valid contract that was duly signed and notarized, although NNPC consummated the agreement when it allowed Addax to lift the crude oil,” the Auditor General report stated.

Snowe not in the clear

In his recommendation, the Auditor General recommended that the Managing Director should always ensure due compliance with Section 905 (e) of the Revenue Code of 2000; that is, Management should withhold taxes on all payments that meet the criterion and remit same into Government's revenue account within the stipulated period.

The GAC also demanded that US$50,469.07 withholding tax should be refunded by LPRC and paid into GOL account and the department of Internal Revenue of the Ministry of Finance should exert the penalties prescribed in Section 905(h) against the LPRC for its non-compliance. LPRC's Management should pay the cumulative bank charges amounting to US$2,644.60 and close the Project Account held with Ecobank.

The report said that Managing Director Greaves and Comptroller Kamau Lizwelicha should be held accountable and made to properly justify the difference of US$339,833.77 discovered between the General Ledger cash balance and the balance per cash book in the year-end bank reconciliation report;ensure timely and proper recording of transactions in the general ledger and moreover ensure that monthly bank reconciliations are done properly.

The report also said that former Managing Directors, Edwin M. Snowe and Harry A. Greaves, Comptrollers, Siaka Sheriff, John Linberg and Rajan Labote should be made to properly account for the total amount of US$ US$8,527,337.00 withdrawn from the entity's account (held with LBDI) for the financial year ended 31 December 2006. Former Managing Director Edwin M. Snowe and former Comptroller Siaka Sheriff are being held to account for US$56,138.00 for withdrawals made from LPRC's Account held with LBDI between January 1-14, 2006 for which they failed to account. Former Managing Director Harry A. Greaves, former Comptrollers, Siaka Sheriff, John Linberg, and Rajan Labote are being held to account for US$ US$8,471,199.00 for withdrawals made from LPRC's Account held with LBDI between January 20 to December 31, 2006, for which they failed to account.

The report also said Greaves, former Comptrollers, Rajan Labonte and Kamau Lizwelicha should be made to also adequately account for the unrecorded withdrawals amounting to US$1,669,569.65,

The release of the GAC findings covering the Greaves era sheds some light on the controversy which dogged Greaves at the time he served as head of the lucrative corporation. While much remains to be answered, the play of the blame game raises more questions than answers with some accusing Greaves of trying to shift the frailties of his era on the current administration. The key, observers say could lie in how the audit of LPRC, like the scores of others put out by the GAC will play out over the coming months. Will those cited be prosecuted? For now, the game of he-said; he said has raised the stakes for the enigmatic Greaves and the legacy he left behind at LPRC, still clouded in controversy, eclipsed in a sea of unanswered questions.