Mon | Sep 28, 2020

Silenced - $200m in contracts executed in eight months with no council meetings; Members instructed to sign agreement guaranteeing silence after

Published:Sunday | January 26, 2020 | 12:00 AMLivern Barrett | Senior Staff Reporter -
Dr Grace McLean
Marjory Kennedy: “We all were required to [sign a non-disclosure agreement].”

Members of the Caribbean Maritime University (CMU) Council, who resigned in recent weeks, had signed a non-disclosure agreement (NDA) after the oversight body went eight months without a meeting, a whistle-blower has revealed.

At the same time, examination of activities at the university during that period shows that the institution executed contracts totalling more than $200 million.

The NDA bars members from speaking publicly about information gleaned during their tenure and is valid for five years from the date it was signed, according to the whistle-blower.

The council is the body authorised in law to manage the affairs of the scandal-scarred university.

The whistle-blower revealed, too, that months after The Gleaner first reported that the CMU doled out more than $600,000 for a yacht party for since-discarded education minister Ruel Reid, the east Kingston-based university and the Ministry of Education turned their backs on a proposal by local shipping interests to straighten out the financial affairs of the institution.

Former chairman of the council, Hyacinth Bennett, was painted as a weak leader, who, along with other members, reportedly resisted repeated demands for greater accountability and failed to rein in senior CMU executives accused of breaching government guidelines.

“The chairman was a little more than comatose ... she was a waste of time. She did a terrible job. Sometimes there wasn’t even a proper agenda for meetings,” the whistle-blower asserted.

Business executive Marjory Kennedy, who joined the council in April 2018, acknowledged that CMU expanded under the leadership of its president, Professor Fritz Pinnock, but said the “business and the governance side was where things broke down”.

“We were never given the opportunity to put in the proper governance structure. When I was there we made repeated attempts to try and straighten out the HR [human resource] things and the accounting things that we were not happy with,” Kennedy told The Sunday Gleaner.

“We were very unhappy with how the accounting side of things was,” she said, adding that this was raised repeatedly at meetings, but would constantly end in “arguments”.

The whistle-blower disclosed that, between November 2017 and June of the following year, there was no meeting of the 23-member council to discuss the affairs of CMU.

The whistle-blower disclosed that there was an attempt by some members to convene a meeting in January 2018, shortly after the university was upgraded from an institute, but claimed this was aborted at Reid’s insistence.

According to the whistle-blower, Reid contended that the members were not properly appointed because the Caribbean Maritime Institute Act had been repealed and replaced by the Caribbean Maritime University Act.

The Auditor’s General Department (AuGD), in a special audit of the CMU, found that the council met three times during the 2017-18 financial year and five times during the following financial year.

The audit report revealed that during the eight-month period referenced by the whistle-blower, CMU engaged contractors and consultants for works valued at $205.2 million.

Among them was a firm identified by the AuGD as “logistics company 2”, which was paid a total of $45.2 million to ship materials that were purchased for a $701-million construction project at CMU’s main campus near Port Royal.

Of the $45.2 million paid to the entity, $33 million represented demurrage charge – the penalty for keeping the shipping containers longer than the agreed time.

“We noted that in addition to losing the benefit of the use of having its own containers, the absorption of demurrage charge of $33 million may have been avoided with proper monitoring and oversight of the shipping process,” the report said.

Another company engaged by the CMU during the eight-month period, according to the auditors, was logistics company 1, which The Gleaner has identified as Business Supply Source (BSS) based in Florida, in the United States.

BSS was registered in February 2018, according to records in Florida, and got the nod on April 11 that same year to procure the materials for the CMU project.

Two days later, the report said, BSS was paid US$621,132 – the full amount quoted in its bid document – despite the absence of a formal contract ... .

BSS was paid a further US$368,303 on June 6, 2018 to procure building materials that were not included in the original order.

Over the eight-month period, the CMU also inked a three-year, $15-million deal with former Jamaica Labour Party Member of Parliament Othneil Lawrence to serve as an adviser, and a two-year, US$155,000 or J$19.4 million consultancy contract with Gail Campbell Dunwell, a Jamaican residing in the US.

The whistle-blower charged that none of these contracts were presented to the CMU Council and the AuGD appears to agree with that assertion.

The AuGD said it found that Pinnock “approved” Campbell Dunwell’s contract before indicating that “we found no evidence that the input of the council was sought to determine the need for the consultant”.

“Further, the engagement of the consultant was not factored in the corporate planning process, as a review of the budget for the period showed no projection for donor funding.”

The whistle-blower said regular council meetings resumed in June 2018 and that’s when members were first asked to sign an NDA.

“The way it was written, it was very tight. Some people were uncomfortable signing, but they signed anyway.”

Kennedy confirmed that she signed a non-disclosure agreement.

“We all were required to do so,” she told The Sunday Gleaner

Other former council members, who requested anonymity, confirmed signing NDAs.

Dr Grace McLean, permanent secretary in the Ministry of Education, explained that the NDA is “a part of the governance framework”.

“The ministry introduced a governance framework checklist in May this year (presumably referencing the 2019-2020 legislative year). And as a part of that checklist, they have to sign a declaration of interest form, they have to sign the non-disclosure agreements, plus there are some others documents that are in keeping with the corporate governance framework of the Government,” McLean explained.

The whistle-blower said amid the furore over media reports last year that the CMU spent $674,930 for a party for Reid, the Shipping Association of Jamaica (SAJ) and a leading company in the industry crafted a proposal that was sent to CMU and the education ministry.

Under the proposal, the group offered to implement, at its own expense, a system that would strengthen the management of the university and “improve the financial affairs”.

“They were never interested in that,” the whistle-blower told The Sunday Gleaner.

Charles Johnston, president of the SAJ, which appointed two members of the old council, would not comment on the proposal, but acknowledged that his organisation was trying “to help them clean up the place”.

“What I am saying to you is that they were not listening to some of the directors [council members], that’s why they resigned,” he said in reference to the decision by businessman Roger Hinds and another member to step down days before Karl Samuda, the minister with responsibility for education, announced that all but one council member had resigned.

Samuda and McLean insisted that a formal proposal did not come to the ministry.

Speaking with The Sunday Gleaner, Samuda, however, acknowledged that he heard discussions about the proposal and said, from his understanding, the groups that made the proposal wanted to “play a very prominent role in guiding the way forward” for the CMU.

“And you can’t go, because a professional grouping want to take over and manage the place on the guise that they can do it better... . Government nuh work dah way deh, enuh,” Samuda said.

“Government has a responsibility to maintain structures that are established and this is not ‘a likkle fly-by-night, ketchy-shubby’ business, enuh. This is a university.”