Corruption News



The Piarco Airport corruption cases have been dubbed as the biggest in this country’s history. And the longest on trial.

Allegations of corruption, bid-rigging, kickbacks, bid inflation, political interference and fraud plagued the $1.6 billion airport project since its inception from 1996.

Following a police investigation, four separate preliminary enquiries remain ongoing as a result of corruption charges being slapped against former national security minister Russell Huggins; former Nipdec chairman Edward Bayley (now deceased); Maritime General executive John Smith (now deceased), Steve Ferguson, Barbara Gomes; Northern Construction Ltd (NCL) chairman Ishwar Galbaransingh, financial director Amrith Maharaj, former government minister Brian Kuei Tung and his then-companion Renee Pierre, former Airports Authority chairmen Tyrone Gopee and Ameer Edoo.

In this three-part series, the ‘Sunday Express’ revisits the genesis of the cases and how they have progressed, or not, throughout the years.

On September 12, 1996, the United National Congress (UNC) Cabinet appointed a task force to expedite the Piarco Airport Development Project.

Businessman and UNC financier Ishwar Galbaransingh was chairman of the Tourism and Industrial Development Co (Tidco) at the time, and a member of the task force which also included Ameer Edoo, Winston Millette, Maurice Clement of the Ministry of Finance and Sonia Francis of the Ministry of Works. On October 9, 1996, the Joint Consultative Council of the construction industry (JCC) held a meeting with representatives of the Airports Authority of Trinidad and Tobago (AATT) in relation to a Scott Associates design for the airport. The following day, the task force again invited Scott and Birk Hillman to make presentations on their design concepts for the project.

On October 24, 1996, AATT general manager Richard Saunders wrote to the JCC, outlining its intention to use Scott’s design since “it is a bankable proposal” and Scott’s design was more advanced than Hillman’s.

On November 5, 1996, the task force submitted an Interim Report to Cabinet recommending the appointment of Hillman as lead consultant for the project, and that implementation of such be fast-tracked as recommended by Hillman. Galbaransingh was a participant in this process of selection.

On Boxing Day that year, prior to Hillman’s appointment, a Pre-Qualification Notice appeared in the media, “inviting suitably qualified and experienced consultant to submit applications for Pre-Qualification no later than 4 p.m. on the afternoon of the 24th of January, 1997”.

Cabinet on January 2, 1997, formally agreed and appointed Hillman as lead consultant and to government funding of the entire project.

Six days later, the Ministry of Works and Transport authorised the AATT to award Hillman the contract with the fees proposed at an upper cost of US$105 million as approved by Cabinet.

JCC steps in

In light of the billion-dollar price tag for the project, the JCC on January 9, 1997, wrote to the AATT recommending that safeguards be put into the contract documents with Hillman to ensure maximum local participation at all levels.

On January 22, 1997, the AATT withdrew the invitation for pre-qualification which was issued on December 26, 1996, advising that this change had become necessary in order to expedite the fast-track process for the project.

Six days later, the AATT issued Requests For Proposals (RFP) for the nine construction packages of the project with a deadline date of February 7, 1997, an increase from TT$6 million to $75 million on construction package six.

Galbaransingh scores big

On February 6, 1997, NYC Consortium—comprising Northern Construction Ltd (NCL), Yorke Structures Ltd and Coosal’s Quarry Ltd—came into existence to tender for construction packages four, five and six.

NCL, which is owned and controlled by Galbaransingh, was the lead member of Consortium. The deadline for the RFP for the nine construction packages was February 7, 1997.

By February 10, Hillman ranks NYC Consortium as the top prospect for packages four, five and six.

Justice Lennox Deyalsingh enquiry

A commission of enquiry was established based on the allegations of corruption in the project. The committee was chaired by former justice Lennox Deyalsingh and comprised members Hilton Charles, Rampersad Harduar and Denyse Rajkumar.

At the end of the enquiry, the committee ruled that Galbaransingh was guilty of unethical conduct and called for an end to the contracts that had been awarded.

Following the Deyalsingh report, Galbaransingh filed for judicial review.

Deyalsingh won his case in 1997 before Justice Margot Warner who, while not commenting on Deyalsingh’s finding, ruled that Galbaransingh was not given the opportunity to defend himself.

The Linquist report

Canadian forensic financial expert Robert Linquist, via an interim report into the award of contracts for the $1.426 billion Piarco airport development project, uncovered that the project which began with six contracts was expanded to 13 contracts.

Linquist found that the project was a fraud on the public of T&T, and a clear abuse of public funds.

The report findings, he stated, were consistent with a conspiracy to corrupt the contract selection process beginning in 1996 and carried on throughout the contracting period.

Lindquist stated that NCL—owned by Galbaransingh—as well as the selection of NCL following the bid process on two other contracts were all the result of an original conspiracy to corrupt the contract-selection process for the benefit of Northern.

The Lindquist report also stated there was a conspiracy to “corrupt the contract selection process for the unjust enrichment of the ‘players’ and of defrauding the various state agencies of considerable sums”.

The report added: “From all information received and from the examination of available records and documents, we have reasonable grounds to believe that fraudulent schemes were developed and promoted by the various parties throughout the entire contracting period.”

It listed 11 schemes which were uncovered as:

(1) price fixing and bid rigging;

(2) duplicate contract payments;

(3) false invoicing;

(4) defective pricing;

(5) co-mingling of contracts;

(6) conflict of interest;

(7) false representation;

(8) improper release of confidential information;

(9) product substitutes;

(10) tailored specifications;

(11) time limitations.

It stated that a group of individuals and companies conspired together to control the award of contracts on the airport project, and in one instance, two days before a contract was to be awarded the requirements were changed and only two companies, of which Northern Construction was one, could meet the requirements on time.

Linquist: Flawed process

The bid process that resulted in an award of a contract worth TT$183 million to a company named Calmaquip for the supply of specialty equipment for the Piarco project was described as “flawed” by Lindquist.

Lindquist had recommended further investigation of the matter and raised questions about a deposit account held by the AATT in the Cayman Islands.

The $183 million, the report said, was almost 100 per cent higher than the budget.

Although the financial proposal of Calmaquip was scored 20 out of 20 by the Ministry of Finance, the CP-13 was financed not by Calmaquip, but instead by the Dresdner Bank Lateinamerika AG, Miami, whose client was the AATT.

Their loan was backed by guarantees from both the EXIM Bank and the Republic of T&T.

The report quoted a Cabinet Note of January 24, 2000, which stated that “the original cost of the project was TT$740,878,700 while the total final cost was estimated at TT$919,664,130 which sum includes all proposed construction, the accelerated programme, all Birk Hillman fees and NIPDEC’s fees”.

Lindquist stated: “In the course of our review we found a complete lack of control over the disbursement of funds from the AATT to Calmaquip.”

Foreign fraudsters plead guilty

A slew of foreign businessmen pleaded guilty in 2006 to defrauding the government of T&T of millions in the Piarco project.

They all entered plea agreements before Justice Paul Huck in the United States District Court in the Southern District of Florida They were:

• Armando Paz, former chief financial officer of the American company Calmaquip, pleaded guilty to 12 counts of bank fraud;

• Rene Diaz de Villegas, former vice-president of finance, pleaded guilty to wire fraud and transporting money obtained by fraud;

• Richard Lacle of Aruba pleaded guilty to structuring the transaction to evade reporting;

• Leonardo Arturo Mora-Rodriguez of Miami pleaded guilty of conspiracy to transport money taken by fraud.

The US government agreed to reduce prison terms for the men, but only if they agreed to cooperate fully in ongoing investigations and prosecutions involving the Piarco airport case.

Additionally, US court documents revealed that Calmaquip Inc, one of the major suppliers to the Piarco airport project, conspired with others to fix the 1996 bid process to secure construction contracts.

As part of the conspiracy, Hillman rewrote the bid requirements to eliminate competitors.

Those involved in the scheme even arranged for a shadow company to submit an exaggerated bid so that the Calmaquip bid would appear more competitive.

Calmaquip executives and others then used a series of offshore accounts to launder millions of dollars they pocketed themselves, or paid as bribes and kickbacks, the indictment had stated.

On November 6, 2006, Raul J Gutierrez, along with his Miami-based company, Calmaquip Engineering Corp, and Eduardo Hillman-Waller, co-owner of Birk Hillman Consultants Inc, were convicted after pleading guilty as part of a plea agreement.

Gutierrez was convicted of conspiracy to commit wire fraud and bank fraud. Hillman-Waller was convicted of conspiracy to commit wire fraud and to transport money obtained by fraud.

Calmaquip also pleaded guilty to conspiracy to commit wire fraud and bank fraud, and agreed to forfeit $22,556,100 to the US government.

Gutierrez had to forfeit roughly US$22 million in property and assets, and had to pay restitution to T&T not exceeding US$4 million. He also had to pay restitution to several banks, including $3.6 million to Colonial Bank; $3.2 million to Wachovia Bank; and $2.9 million to the International Bank of Miami.

—Part 2 next week: The great escape

Source link

Leave A Reply

Your email address will not be published.