Sunday, 25 September 2016

A post-analysis of Singapore deal: Papua New Guinea Community College Trust Scandal - Part 1

by BRYAN KRAMER

ON 1st September 2016 Singapore Supreme Court sentenced former Chairman of PNG Community College Trust American Thomas Doehrman (Doorman) and his Singapore wife Lim Ai Wah to prison for 5 years 10 months and 5 years respectively after finding them guilty of conspiring with Chinese national Li Weiming to defraud US$3.6 million (K11.6 million) from the ZTE corporation - a Chinese company that is a global supplier of information, technology and telecommunications equipment that was awarded $35 million contract by the PNG Community College Trust.

Doehrman and his wife were also found guilty of five counts of aiding and abetting (assisting) in the conspiracy (secret plan) to launder criminal proceeds portions of the $3.6 million - two payments totaling $950,000 to Li Weiming's wife and three payments totaling US$784,000 to Grand Chief Sir Michael Somare's personal Singapore bank accounts.

Weinming was ZTE's company representative for the South Pacific Region based out of their Singapore office.

US$3.6 million was paid as a secret commission to a offshore company owned by Doehrman's wife following the awarding of US$35 million contract to ZTE Corporation in June 2010.

When news of the Court ruling went viral a keen supporter of Peter O'Neill made the following cynical comment on a social media post on the Supreme Court ruling.

"Will Kramer write one of his long winded, 7-part series sub-thesis in light of the most recent decision of the Supreme Court of Singapore re money laundering and blatant theft of public monies intended for community colleges in Papua New Guinea?"

To which I replied:

"Sure send me the judgement. I note your poor attempt of humour to ridicule my articles, I'm sure you being a student of law it would have dawned on you the audience of my long winded articles are ordinary PNGeans with limited academic background. Funny how its the lawyers including yourself who seem to be reading and learning from them."

"All matters and parties involved in corruption will always remain on the table with me, there will be no exceptions to the truth."

Now I understand the earlier comment was forthcoming on account I personally know the Somare family. Betha Somare and I attended same university, I also recruited Dulciana Somare-Brash to join Pangu Party as a strategic adviser on policy.

Thus I believe it is implied that my close association to the Somare's would somehow detract from my cause to expose and depose corruption.

Well without the benefit of the full judgement on the conviction I was able to piece together sufficient material in the public domain to provide a post analysis on the issue.

Before I delve into the issues surrounding the criminal convictions and allegations leveled against Grand Chief Sir Michael Somare I believe it's important to first cover some background information to the whole issue and bring to light some of the parties involved that seem to be left out of the picture.

So what is the PNG Community College Trust?

In November 2008 Somare Government passed an Act of Parliament called "Inclusive Education for National Development for Community Education Act 2008.

While it is a mouthful to pronounce it simply means a community based education system that is inclusive to all in the interest of National Development. An education system universally referred to as the Community College.

The concept (idea) was modeled on the community college system established in India and North America. Fr. Dr. Xavier Alphonse, PhD in English Literature was the architect behind the Community College education system in India he was engaged by Somare Government as a consultant to assist with establishing a similar system in PNG.

So what is Community College Education System?

It is an alternative education pathway intended for disadvantaged students who may have dropped out or been pushed out of ordinary schools by offering them training in practical life and work skills that would lead to gainful employment or becoming productive members of their communities. Unlike Vocational Technical Colleges the community college system is focused on competency and practical skills in up to 28 trades designed to the communities they operate in.

Example community colleges set up in urban centres would focus on providing skills based focused on employment while rural areas would be on skills appropriate to the needs of living in rural communities (agriculture, farming etc).

The Act or legislation was established by Somare Government to create a Trust that will work with the National Education guidelines to govern the community education system throughout PNG.

A Trust is a legal entity established by law where a second party(s) referred to as trustee(s) are given legal right to manage the assets or property of the Trust. Under the Act the Trust is "Inclusive Education for National Development for Community Education."

The Act (law) states the Trust in consultation with the National Education Board and Secretariat shall be the executive body of the community college education system in PNG. It shall consist of not less than three and not more than five members (trustees). They shall hold office for three years and eligible for reappointment.

Trustee(s) act like a Board of Directors who would normally be entrusted to act and make executive decisions in the interest of the shareholders. In this case the shareholder is the Trust created by an Act of Parliament and not a company thus there are no directors but trustee(s), there is no CEO but a secretariat charged with administrative or management role.

The Act (section 16) states that Department of Education shall fill the roles of Secretariat made up of the following positions: Director, Deputy Director, Research & Development Officer , Curriculum, Education and Standards Officer and Support Staff.

Section 18 of the Act (Fund of Trust) provides all moneys received by the Trust shall be paid into a fund and applied by the Trust to the performance of its functions.

Moneys of the Trust that are not immediately required by the Trust may be lodged on deposit with the Minister of Treasury or invested in any other manner approved of by the Minister.

The capital infrastructure cost to set up the colleges was to be funded partly by grants from PNG Government through annual budget allocations and partly from a loan from China tied to the purchase of pre-fabricated units (buildings etc) and installation of information and telecommunications equipment.

In 2009 Fr./Dr. Xavier Alphonse together with a eight member team from India conducted a number of workshops to lay the ground work for the establishment of the community college system in PNG.

Somare Government appointed three persons to be members of the Trust. Its Chairman American Thomas Doehrman (Doorman), Deputy Chairman, Michael Somare Jnr and lawyer Greg Sheppard. Sheppard's law firm Young & Williams was engaged to provide legal services to the trust and parked funds in his firms trust account account held under the name "Inclusive Education for National Development for Community Trust"

The members of the trust also registered a company ITE Ventures Ltd as a commercial entity to carryout the Trust's functions. All three members of trust are listed as its Directors and the Trust being the sole shareholder.

In the same year Somare Government committed K50 million from Annual National Budget with the plan to secure further funding from from Exim Bank of China to roll out first batch of 13 community colleges with the plan to eventually opening one in each of the 89 districts.

Exim Bank is an acronym or abbreviation for Export-Import Bank. They are Government owned banks or financial institutions which serve to promote exports of their country's goods and services by providing insurance cover or concessional loans. In other words in order to stimulate their economy creating jobs and bringing in foreign trade (currency) they will offer loans to foreign countries or multi-national corporations under special conditions being that the loaned funds be spent to purchase goods and services from companies in their country. US$19 Billion PNG LNG Project was funded by two Exim Banks of US and China .

This explains why Chinese company ZTE corporation was considered as the main contractor for the project and no other company outside of China.

So in June 2010 members of Community College Trust entered into negotiations with ZTE Corporation officials namely Li Weiming which led to awarding of US$35 million contract to the company to be the main contractor to establish a virtual university network encompassing 13 schools that would become part of an online educational programme connected to 89 community colleges across the country.

According to police statements obtained from Doehrman his wife was also included in these negotiations.

Following the awarding of the contract to a ZTE Somare Government entered into discussions with the Exim Bank of China to secure a concessional loan to fund the US$35 million project. In March 2011 Peter O'Neill who was then the Minister of Finance and Treasury led a government delegation which included the then Minister of Education James Marape to Beijing, China where the first commercial loan with the EXIM bank of China was signed.

US$35 million loan for the community college project for the Education Department and US$53 million loan for an Integrated Government Information System (IGIS) under the care of the Department of Information and Communication.

Part 2 of this article will discuss the findings of police investigations surrounding payment of the secret commission of $3.6 million that led to formal charges being laid against Doehrman, his wife and Li Weiming, their failed efforts to have the charges dismissed on technical grounds as well as the culpability (criminal liability) if any against Grand Chief Sir Michael Somare and his son Michael Somare Jnr.

Photo: Doehrman and Sheppard meeting with Fr./Dr. Xavier Alphonse and ZTE officials in Singapore in 2012.
Note: There are seven (7) parts to this articles: 
Part One: Singapore Supreme Court sentenced former Chairman of PNG Community College Trust American Thomas Doehrman (Doorman) and his Singapore wife Lim Ai Wah to prison for 5 years 10 months and 5 years respectively after finding them guilty of conspiring with Chinese national Li Weiming to defraud US$3.6 million (K11.6 million) from the ZTE corporation - a Chinese company that is a global supplier of information, technology and telecommunications equipment that was awarded $35 million contract by the PNG Community College Trust.
It explains what is PNG Community College????   

  Part Two: Provides insights into the decision by Singapore Supreme Court to convict (find guilty) and imprison former Chairman of PNG Community College Trust Thomas Doehrman and his Singapore wife Lim Ai Wah over fraud and money laundering offences.
It reveals how the deal was done to award the contract.?????? 

Part Three: A discussion on the extracts from the statements submitted by Doehrman and his wife, Lim during the course of the first police interviews which the Prosecution relied during the trial to secure their conviction's.
It shows what was actually done behind the closed doors????


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