INSIGHT INTO STATE vs TIENSTEN, KAVO & POTAPE
Part 3.1 Comparison and Analysis of the three Cases
Paul Tiensten was convicted and sentenced to 9 years for the charge of misappropriation when he dishonestly applied K10m to Travel Air as seed capital when the funds were committed for rural airfreight subsidy. Tiensten filed an appeal in the Supreme Court which was eventually dismissed.
Tiensten's case was unique where his mere direction in his capacity as the Minister to the officers of Department of National Planning & Monitoring to facilitate the release of the K10m payment to Travel Air was sufficient to convict him.
Some readers believe the Courts erred in finding Tiensten guilty and raise a number of arguments in his defence such as:
1) It was never proven Tiensten benefited from the K10m proceeds.
2) The element of control of the property - in this case the K10m - was not with the Minister but with the Secretary who is the Section 32 Officer. A Section 32 Officer, as per the Finance Management Act, is the Head or Secretary of Department. They are under no legal obligation to comply with a Ministerial directive that is unlawful or is contrary to guidelines. Therefore, liability lies with the Acting Secretary of Department of National Planning & Monitoring and not Tiensten in his capacity as the Minister.
3) The decision to fund Travel Air has greatly assisted many people in the rural areas by providing cheaper airfares. Thus the end justifies the means.
The first issue is true, it was "not proven" Tiensten benefited from the K10m. But it doesn't mean he didn't. Until Travel Air is diligently audited we will not know for certain. Irrespective, if we allow people to go free on the grounds they didn't benefit from the proceeds of the crime, then in principle a bank teller could empty our personal savings by giving it to their wantoks or friends and argue that they did not personally benefit from it so they cannot be held accountable. This is why the law is clear that a person who dishonestly applies funds, whether to his own personal use or another, is still guilty of misappropriation.
An important point the Courts take into consideration, is that if people who seek to be elected into public office - benefiting from the perks and privileges that come with it - are found to abuse that office, they must expect to be punished more severely than an ordinary citizen. The Courts will always protect the public's interest to deter people in high positions of trust from abusing and manipulating the system to benefit themselves, their families or associates at the public's expense. Hence, the higher the office the greater the responsibility and accountability.
The second issue is also correct. Technically, Tiensten did not have lawful control over the funds which is a key element to establish a conviction of misappropriation. Section 32 of the Finance Management Act gives the power and lawful control over the Department funds to the Department officers, specifically the Secretary. The officers should have refused the directive from the Minister or at the least written to him to advise that the payment was improper. However, a key element in any criminal offence is "motive" or "criminal intent". Whose intent was it to facilitate the K10m payment to Travel Air, the officers or Tiensten? Was it his directive or theirs? The Court found there was evidence proving that the officers were put under duress from the Minister who used “political muscle” to facilitate the payment to Travel Air. Therefore it was his intent/directive not theirs. It's important to also note that the officers at the time were only ‘Acting’, and it can be argued they were concerned about being demoted or terminated had they refused to comply with the Minister's directive.
The third issue raises the question of whether the end justifies the means? Since the introduction of Travel Air, airfares are more affordable to many low income earners. However, Travel Air is a private company owned by Eremas Wartoto, so its primary objective is to make profits. It can be argued Wartoto was able to gain a competitive edge offering cheap airfares because he had already unlawfully secured a K10m windfall that belonged to the 7 million people of PNG. He should have applied for a commercial loan like other businesses instead of unlawfully benefiting from public money in the end making himself wealthier for it. A person saving K100 on an airline ticket does not justify the owner of the airline pocketing K10m of public funds in addition to the profits from his business.
Tiensten is also facing further charges for misappropriation as well as official corruption and stealing by false pretence. The charges relate to a K3.4 million grant to rehabilitate a Karlai copra plantation in his Electorate Pomio Open. It's alleged that a K3.4m cheque was made out to Nesu Investment Ltd, managers of the Karlai copra plantation, but was never paid to them. Between Nov 16 and 23, 2009, Tiensten allegedly issued directives to change the payee from Nesu Investment Ltd to his family company, of which he was a director. Around one-third of the money was then used to buy another plantation on the island. The case is awaiting trial in the National Court.
It’s alleged that Tiensten in his capacity as Minister of National Planning & Monitoring was also involved with awarding the Keravat High School Renovations (RESI) contract of K7.9 million to Wartoto's company in 2009. It's alleged the contract was awarded without calling for tenders and investigations revealed work was never completed to justify the government expenditure. Wartoto was charged by Task Force Sweep for misappropriation and is awaiting trial.
Task Force Sweep also arrested Wartoto on further charges that relate to over 7-million kina released from the Department of National Planning & Monitoring paid to company Metlik Plantation Ltd for the rehabilitation of the Metlik Plantation in Lombum in New Ireland province. It's alleged that no work was carried out. Another 6-million kina payout to Wilddog Plantations Ltd for the rehabilitation of the Lindenhafen coconut plantation in Gasmata in West New Britain province, failed to see any work done.
I will cover specific details and status of Wartoto's cases in forth coming articles.
Havilo Kavo, Governor of Gulf Province case
Kavo was charged and convicted for one count of misappropriation for dishonestly applying to his own use K131, 3338.00 of trust funds belonging to the State of PNG. Kavo claimed he had incurred K131, 338.00 as his outstanding entitlements from the Provincial Government. He moved and passed a resolution at the Gulf Provincial Assembly to approve that he be paid out from the Memorandum of Agreement (MOA) K10m funds drawn from the Kutubu Oil Pipeline Trust Funds intended for impact projects in the Gulf Province and Kikori Landowners.
The National Court applying the law relating to the use of trust money was satisfied beyond reasonable doubt that Kavo had dishonestly applied money in the amount of K131, 338 belonging to the State and the Gulf Provincial Government for the benefit of himself and others (wife). He was found guilty of misappropriation and sentenced to three years imprisonment. The judge then suspended or reduced the sentence by half (1.5 years or 18 months) taking into account he had repaid the funds.
Kavo then filed an appeal in the Supreme Court and an urgent bail application to be released until his appeal is determined. His lawyer argued that the Trial Judge made a error in convicting Kavo when it was not conclusive that Kavo had acted dishonestly or intended to defraud the state when he paid himself K131, 338 which he believed he was entitled to and was never disputed by the State. The second factor was the likely delay in hearing Kavo's appeal. An appeal process can take anywhere from 8 months to two years, example, Tiensten was sentenced in March 2014 and the ruling of his appeal was handed down in December 2014 some 9 months later.
Chief Justice Salamo Injia (CJ), sitting as a single Supreme Court, granted Kavo bail on consideration of the special circumstances of his case. The CJ ruled would it be against the interest of justice to imprison a person who has as high chance of success in his appeal against his conviction and the likely delay in determining his appeal.
Other factors also to consider in Kavo's case that helped his cause for being granted bail was that unlike in the Francis Potape and Tiensten cases, the amounts and sentence was significantly less.
1) Paul Tiensten convicted of misappropriating K10m, sentence 9 years, funds never repaid.
2) Francis Potape convicted misappropriating K270,000, sentence 2.5 years, funds repaid.
3) Havilo Kavo convicted misappropriating K131,338, sentence 1.5 years, funds repaid.
When granting bail the CJ issued strict conditions that Kavo's appeal be expedited without delay. Supreme Court directional be heard on 13 February 2015 where the Court will give directions to parties to file relevant documents to ensure the appeal is ready to be heard in last week of March 2015. A three man bench of the Supreme Court will then determine whether or not Kavo to uphold the decision of the Trial Judge Deputy Chief Justice Salika or over turn it. If Kavo's appeal is dismissed he will return back to prison to serve out his sentence of 1.5 years less the two weeks he already spent in prison before being granted bail.
The next article Part 3.2 will cover the process of appeal.
