Samuels mum on NPL audit findings
... says decision to retain him on scandal-scarred board was minister’s to make
Published:Saturday | October 9, 2021 | 12:12 AM
Donovan Samuels, who is among five persons brought over from the board at the centre of the scandal gripping a government company that feeds poor children, says his retention was due to Education Minister Fayval Williams exercising her judgement.
It is the first time any of the five is commenting publicly since the release of the auditor general’s report that covered the period 2015-2021, the major findings of which relate to 2017-2020, when Ewart Gilzean chaired the board of Nutrition Products Limited (NPL).
A new board was appointed last December.
Along with Samuels, who is the Jamaica Labour Party (JLP)-aligned councillor for the Tivoli Gardens Division, that new board includes the Bustamante Industrial Trade Union’s Alden Brown, who headed the human resources committee; entrepreneur Dorothy Finlayson, who led the internal audit committee; health coach Natalie Murray; and researcher Vicki Hanson.
Noting the failures of the Gilzean board, the auditor general revealed that over $143 million of taxpayers’ money was paid out to companies and individuals connected to board members and management staff to provide transportation, repairs, maintenance, and other services.
Samuels declined to comment on the audit findings, joining colleagues who served with him – including Robert Miller, now a government member of parliament – who have declined to speak on the specific issues.
“I don’t think at this time it is appropriate to respond,” he said, noting that that NPL CEO Andrew Nairne is preparing to go before a parliamentary committee to “explain a couple of things”.
Quizzed on his current board status given the findings, Samuels pointed to the education minister.
“The minister had a judgement to make and she exercised it in the way she sees fit. Based on her knowledge of the thing – whatever it is – she made a judgement,” he said of Williams, who took over the education portfolio in September 2020 and would have recommended the proposed members to Cabinet for approval.
On what Williams may have said to the Dr Aundre Franklin-chaired board since the audit’s release, Samuels said those discussions are not for “public consumption right now”.
Franklin is the deputy chairman of the ruling JLP.
Williams on Wednesday shied away from saying whether the current board still enjoyed the confidence of the Government, given that the five members who had oversight of the scandal unearthed in a recent auditor general’s report remain as directors.
“As you know, the auditor general’s report was tabled in Parliament. It has been sent to the company to the board of directors for consideration and any further responses that they can give to it, and so we will have to allow that process to take its place,” he said.
But on September 22, a day after the findings of the audit were published, Williams was clear in saying of the Andrew Holness-led administration that “we support the findings of the auditor general’s report”.
“Let the chips fall where they may,” she added then.
Gilzean, against whom there are several adverse findings, has declined to address any of the issues, a stance he said was in accordance with advice from his lawyers.
“Sometimes you’re not in control of your emotions and I don’t want to say or do anything against the wishes of the lawyers,” said the businessman and chartered accountant, who did his first stint with NPL from 2007-2013, a period covering Holness’ tenure as education minister.
OTHER BOARD APPOINTMENTS
Gilzean is currently chairman of the National Works Agency Advisory Board that falls under the prime minister-headed Ministry of Economic Growth and Job Creation.
He is also on the board of the Rural Water Supply Limited and the Jamaica Social Investment Fund, agencies that report to Rural Development Minister Desmond McKenzie and Prime Minister Andrew Holness, respectively.
Neither the prime minister nor McKenzie has commented on Gilzean’s status.
The issue highlights the need for the immediate passage in Parliament of proposed reforms for board appointments, argued Carol Narcisse, the acting chairperson of the Jamaica Accountability Meter Portal (JAMP), an anti-corruption lobby.
JAMP, the Private Sector Organisation of Jamaica (PSOJ) and the National Integrity Action are among the main advocacy groups pushing the Government on the reforms to the process, which some parliamentarians, including Cabinet ministers, are uneasy with.
“The Government cannot need any more indication that it must have the regulations that tighten and raise the bar with respect to boards, board members, the standard of conduct that is expected of board members, the standard with respect of conflicts of interest [and] the consequences for board members who contravene the Act,” Narcisse said of the proposed regulations for the Public Bodies Management and Accountability Act (PBMAA).
The PBMAA is overseen by the Dr Nigel Clarke-headed Ministry of Public Service. He has been facing internal resistance over the changes which some of his colleagues feel will strip them of political power and influence.
Twice Clarke proposed the regulations for approval in the House of Representatives, and on both occasions, there was no quorum to allow approval. It subsequently fell off the agenda and has not been brought back.
Commenting on the Airports Authority of Jamaica’s unlawful investment of public funds in a start-up company following Sunday Gleaner reports earlier this year, Holness admitted that there was need to fast-track the regulations to improve board governance.
Narcisse said the regulations are critical to depoliticising boards while widening the pool of potential members.
“This business of political representatives being members of public boards is highly conflictual. Why do we have political representatives on public boards? And not just political representatives, but persons who are closely aligned to political parties and, for all intents and purposes, that is their main qualifications for sitting on a board and this happens across administrations?” she asked.
Key NPL audit findings
• NPL paid a distribution company $69.6 million, between November 2010 and January 2021, to provide transportation and haulage services.
• The registered owner of three trucks used was an investment company, of which Gilzean is a director and shareholder.
• Payments to the distribution company stopped in 2013 when Gilzean’s first tenure (2007-2013) ended; restarted in 2017.
• The distribution company received delivery routes with the highest rates and was the only haulage contractor assigned to perform shuttle services, resulting from the decision to centralise the distribution of meals to schools from the Kingston plant.
• Risk of conflict of interest increased as Gilzean was involved in the decision to centralise, which ended up being more costly … “demonstrating that the former chairman ignored the principles of fiduciary responsibility and duty of care”.
• Former chairman’s private business had the same address as the supplier of repairs and maintenance services that received $48 million between August 2018 and November 2020.
• Gilzean noted as employer of an individual who was paid $7.3 million to record minutes of board meetings between April 2017 and February 2021.
• Gilzean employed an individual who was engaged to record minutes of board, subcommittee meetings. Paid $7.3 million for April 2017-February 2021.
• A former chief executive officer is the director and shareholder of the printing and office supplies company that received $4.2 million (August 2010-November 2020).
• Gilzean is a director/shareholder in at least three investment-related companies, according to Companies Office of Jamaica records: Money Traders & Investment Limited; Bramking Investments Limited and Tuscany Investments Limited.
• A current board member is the spouse of a shareholder and director of a company that was paid $13.8 million for janitorial services (Aug 2019-Apr 2021).