FEATHERS OF BRIBERY FLOCK TOGETHER IN PNG - HOW PNG MINISTERS AND TOP PUBLIC SERVANTS ARE CASHING IN ON THE RAMU 2 DEAL
by PNGBLOGS STAFF WRITERS
AI YI YI YI! CHINESE AGENTS SLEEPING WITH PNG POLLIES, BRIBE-PAYING
CHINESE GOVERNMENT OWNED COMPANIES WELCOMED TO PNG, NPF SCANDAL TAINTED AGENTS
IN LINE FOR THEIR PAYOUTS, PAUL PARAKA AND MORE: UNPRECEDENTED SYSTEMATIC AND SYSTEMIC GOVERNMENT
CORRUPTION IN PAPUA NEW GUINEA NOW CENTRES AROUND POWER GENERATION SCAMS
This story has been long in the making. PNG BLOGS rarely witnesses events that we
report. We serve instead as a reporting
body that does the job that the Post Courier, The National, and other PNG
traditional media should be doing, but run away from, even though they operate
with far greater resources than we will ever have. We do the best we can with very little so as
to break open the secrets surrounding government corruption. Contact
us on Facebook or e-mail us on pngblogs@gmail.com if you can provide evidence,
firsthand detailed accounts and the like to expand the peoples knowledge on
this and other government corruptions.
As you know from our 8 years of existence, we protect our sources even
when we are threatened. You can always set up a fake e-mail account
and interact with us through that.
INTRODUCTION
We stitched the story of what is
going on behind Ramu 2 Hydro from many sources, each of whom fed us pieces of
information. Only as we put the pieces together
was an overall picture revealed that is distressing, ugly, and profoundly
suggests how corrupt Papua New Guinea has become under the current government. All
indications are that Peter O’Neill’s ministers are out of control in a way that
has occurred before Every time a
government has been able to stay in power a full 5 year term, it has provided
time enough for government ministers and other parliamentarians to conceptuale
and implement scams that end up costing PNG dearly. The implications of the Ramu 2 Hydro
expansion project for Papua New Guinea’s financial health are major. The particular activities of our Ministers
and departmental heads makes our claim that PNG is a Christian nation, led by
those who practice the morals that they preach, into a laughingstock.
DORA LU AND THE CHINESE INFILTRATION OF THE PNG GOVERNMENT
We previously reported (http://www.pngblogs.com/2016/12/hosting-peoples-rights-to-reliable.html) that Minister William Duma is demanding
a US $10 million upfront payment, plus a provided long-term mistress, from the
Chinese government business arm company known as SinoHydro, before he will carry
out what should be his normal duty as Minister of State-Owned Enterprises. Without the money and the mistress he is
demanding, Duma says he will not bring to NEC for approval the proposal that
gives the massive contract for expansion of the Yonki Dam hydro capacity to
SinoHydro Corporation.
A Chinese agent by the name of Dora
Lu (also known as Dora Ru) is the go between person linking SinoHydro
representatives with William Duma and other PNG government officials. The disturbing track record of SinoHydro in
overseas projects appeared on Niugini Outlook this weekend (https://web.facebook.com/niuginioutlook/photos/a.155100324834490.1073741828.154029881608201/376289306048923/?type=3&theater).
They have been implicated in massive cost overruns, in bribes/kickbacks,
and in delivering finished products that were not up to the expected
specifications, which resulted in the projects being a failure.
Niugini Outlook has also come up
with an interesting observation that the amount of bribe money that Duma is
demanding now from SinoHydro is exactly what SinoHydro provided to a corrupt politician
in Botswana (Africa) for facilitating
SinoHydro getting a contract in Zimbabwe, home of the famously corrupt dictator
Robert Mugabe.
Very disturbing are the overall number
of contracts Dora Lu has been the negotiator for to get the jobs for Chinese companies
(http://www.pngblogs.com/2016/12/who-is-dora-lu-chinese-mistress.html).
She seems to go all the way to the top in the PNG government to do her
lobbying (note the official photo of her with Prime Minister Peter O’Neill). Text messages from her own hand confirm sexual
relationships with Minister Nixon Duban and Treasury Secretary Dairi Vele (http://www.pngblogs.com/2016/12/chinese-mistress-takes-on-2-state.html). It goes beyond stupidity that these government
officials would be so careless to sleep with a foreigner who clearly represents
the interests of a foreign government. Dora Lu clearly represents Chinese government
interests. Nixon Duban and Diari Vele
were nothing short of fools when they thought having sex with Dora Lu could not
lead at some point to blackmail attempts against them.
GOVERNMENT IMBECILES JUST BEGGING TO BE BLACKMAILED
The people of PNG should bless God
right now that PNG Blogs is exposing their adulterous relationships with Dorah
Lu before these corrupt PNG government officials found their pockets drained
through blackmail. We pray that the Prime Minister has not been
secretly sleeping with Dora Lu in a mistress style relationship he has long
been rumoured to enjoy with Luciano Cragnolini’s wife, Ni Cragnolini. Lu would never divulge such a relationship to
lower ranking government officials as she appears to be much too smart for
that. But the Prime Minister has been
reported on the internet for years to have a track record of extramarital
affairs, a Cragnolini love affair first being reported on Anthony Smare’s PNG
Scape forums and later elaborated on in the anonymous PNG Exposed Blog. Even if an alleged relationship between
Peter O’Neill and Dorah Lu never became public, that still makes for perfect
blackmail material. All the Port Moresby
hotels that have been used by Lu (including the Rimbunan Hijau-owned Stanley
Hotel, as well as the Airways and Lamana hotels, both owned by the Constantinou
family, of which Sir Kostas is a long time Peter O’Neill crony) could include a
room set up with a hidden camera put up by any one of the possible candidates
who would see the blackmail opportunity, including Chinese government owned
business arms eager to get more lucrative contracts from Papua New Guinea. The point is that only idiots take such
risks.
RAMU 2 JOINS THE LIST OF PNG POWER ODDITIES OCCURRING SINCE
PETER O’NEILL TOOK POWER
Within PNG Power, trained planners
and electrical engineers who make decisions based on information and not
politics, previously concluded that the proposed Ramu 2 hydro expansion project
delivers far more additional power capacity than what PNG needs in the medium
term, especially at this time in our country’s history when the country’s
collapsing government budget can ill afford any more foreign currency loans or
hefty infrastructure expenditures. Since
Peter O’Neill took office, there has been a fixation on delivering foreign
built or procured power supplies that are never fully explained to the public,
until pulled out through leaks and whistleblowers.
The love affair between PNG
government officials and power generation projects started with the Prime
Minister’s interactions with the Israeli retired military officer owned LR
Group, whose expertise is agriculture but who offered to procure 2 General
Electric generators. Procurement was
achieved by bypassing tenders. It has resulted today in the highly priced
generators arriving in PNG, but being mainly offline, thus close to useless in
contributing to the nation’s power availability.
Then there is the oddity that occurred
2 years ago when then State Owned Enterprises Minister Ben Micah declared a
state of emergency, ostensibly to get debtors to PNG Power to pay up what they
owed on their power bills. Anyone
within the system knew without thinking that declaring a state of emergency for
such a purpose was ludicrous. In fact,
the bigger purpose was to suspend the rules involved in giving out power
generation contracts. At the time,
Micah was intent on fast tracking approval (getting around tendering processes
but all deviously legal, thanks to his state of emergency declaration) to get
the South Korean Daewoo Corporation permission to build a power generation
plant outside of Lae to serve the power needs of that city. Very odd, being that there is already a
large Oil Search investment project called PNG Biomass near Nadzab Airport that
is on target for its own power generation plant to serve Lae’s needs. There was no room for both PNG Biomass and
Daewoo to serve the Lae market.
Suspicion arose immediately that Ben
Micah’s real motivation for declaring the state of emergency was that he was in
line to get a handsome kickback prize from Daewoo if they were granted
permission to build another exorbitantly priced electricity generating power
plant in Lae. Daewoo E&C already
runs the privately owned generators in Port Moresby (operating as Hanjung Power
Pty). Because the government allows it
to sell the power it generates at high prices, the company wants to invest more
in PNG. To quote their own company
statements: “Daewoo PNG Power Plant,
built by Daewoo Corporation in the tough times of the financial crisis in the
late 1990s, has grown to become an important ‘cash cow,’ accounting for over 40
percent of the total electricity of the capital area of Papua New Guinea. Now in its eighth year of operation, the
power plant already retrieved its investment in 2003 and has recently been
earning about $5 million (4.6 billion won) in net profits annually.
There are more stories. The Israeli LR Group attempted to expand its
initial success getting Peter O’Neill to by the two GE generators. LR Group’s long standing and close
relationship with the corrupt government of Angola (Africa) and its generals is
well documented on the internet, as well as its interests in other countries
that are resource rich (thus money rich) and have authoritarian governments
that are easy to work with, and are especially receptive to bribes. PNG is little different than Angola in these
features.
LR Group knew the big money that
could be made in providing privately
owned electricity to uneducated consumers who have no idea how excessive an
amount of money they end up paying for their electricity. LR has next to no corporate capacity to take
on mammoth hydro projects in PNG, even
though danced around Latin America trying to take over the national power
grids. In PNG, LR Group’s strategy was to
recruit short term contractors to provide all the expertise needed to build the
large hydro generation operation in Hela Province. That strategy is an almost certain pathway to
disaster. Late Hela Governor Anderson
Agiru, who long had his hands into government funds pilfering in order to
develop personally owned businesses to supply the needs of the LNG project,
pushed hard for the hydro project hard before he died. Why so motivated?
HYDRO PROJECT PRONE TO CORRUPTION IN DEVELOPING COUNTRIES
It turns out that hydro projects in
developing countries are particularly prone to corruption, because they have
such high price tags, which can result in high affordable bribes, kickbacks,
agent fees, and contract arrangement fees (http://www.u4.no/publications/corruption-in-the-hydropower-sector/downloadasset/352).
It is through “contract arrangement” fees that Dora Lu can make her big
money. Hydro power is the latest gold
mine that Papua New Guinea’s politicians and departmental heads can tap into to
make themselves filthy rich off the wealth of the citizens of Papua New
Guinea.
Dora Lu is at the centre of the
negotiations for Ramu 2 Hydro. While
apparently warding off the sexual advances made towards her by William Duma,
Duma knows about Duban’s and Vele’s success with Dora Lu in bed and jealousy
has reigned. He wants his own mistress,
with SinoHydro footing the bill.
THE OLD NPF CORRUPTION SAGA REARS ITS UGLY HEAD
Negotiations over the schedule for
the Ramu 2 hydro project has been between Dora Lu and Ken Yapane. Ken Yapane is an alumnus of the infamous NPF
scandal of the late 1990’s, as are Peter O’Neill, Jimmy Maladina, Minister Rimbink
Pato, Minister Fabian Pok, and MP Mao Zeming.
The NPF scams involved much less
money than is ‘normal’ today for stealing or demanding bribes in PNG. However, the tricks today were perfected back
then. Through the NPF scandal network, a
number of white collar criminals began to develop and partner to continue scams
up to the present.
In regard
to NPF, Ken Yapane’s role was to come up with a registered company that was
employed by NPF to refurbish an office at NPF’s head office. Not only was the contract not tendered as the
law demanded, but Yapane was paid K40,000 in advance without doing any work. He
immediately paid K20,000 of this amount to Jimmy Maladina in a classic kickback
scheme.
Ken
Yapane was also involved in the NPF Tower fraud, a separate scam. In that, Jimmy Maladina utilised Mr Yapane as
a national contractor and laundered money through his bank account to transfer
money from Kumagai Gumi first into Yapane’s account, who then paid it into into
Carter Newell’s John Losuia account, from which the money was transferred into
the account of Maladina’s company Kuntila No. 35 Pty Ltd. Mr Maladina paid Mr Yapane a generous
commission for the money laundering service.
Like nearly all those implicated in
the NPF scandal, Ken Yapane was never prosecuted, never penalized, never
sufficiently shamed, and continues to find lucrative work. Small wonder that he would be involved in negotiations
between William Duma and SinoHydro, with Chinese agent Dora Lu as intermediary,
and negotiations taking place both in “out of sight” Singapore as well as Port
Moresby.
Ken Yapane was Jimmy Maladina’s
puppet in the late 1990s. We are told
that the relationship remains secure. It
would not be surprising to learn that Jimmy Maladina is involved in the Ramu 2
hydro expansion scam in one way or another.
ROLE OF TREASURY SECRETARY DIARI VELE
Diari Vele is Patrick Pruaitch’s Secretary
of the Treasury Department. Mr Vele first
became involved with Dora Lu as an agent of the government, before irretrievably
compromising himself as an Agent of the State by sleeping with the Chinese
Agent. Vele’s government role was to
negotiate a Sovereign Guarantee between HydroSino and the PNG government.
A sovereign guarantee is a government
legally binding promise that is provided when an undertaking such as Ramu 2
hydro expansion is directly linked to an underlying loan. The sovereign guarantee commits the
government to honour the payment obligations of the borrower (the beneficiary)
in the event that the beneficiary goes into default.
Sovereign guarantees put all the
ultimately obligation to pay off loans that a private business fails to pay off
straight into the hands of the citizens of a country. Because sovereign guarantees represent
contingent obligations, they do not need to be placed on the government’s
balance sheet. In plain English this
means that the PNG government can hide money that it is, in effect, borrowing, so
that the citizens do not see what is going on.
While useful under the right
circumstances, sovereign guarantees are another legal mechanism that can be
easily corrupted (https://openknowledge.worldbank.org/bitstream/handle/10986/7451/wps4271.pdf?sequence=1)
(http://guardian.ng/infrastructure/sovereign-guarantees-in-infrastructure-finance/).
SinoHydro was delighted that Vele
did his part for the Chinese and provided the sovereign guarantee to SinoHydro. This allows them to obtain a loan that the
PNG government can hide from its financial accounting statements, but which
SinoHydro in the end doesn’t even have to pay back, dumping the obligation onto
the laps of PNG taxpayers. So delighted
was SinoHydro that a few weeks ago they gifted Vele, who prides himself on
sharp dress and fine living, with a USD $3,000 Mont Blanc pen with Vele’s name
engraved on it. Vele is in high style while
the majority of the people he supposedly serves, have been screwed over once
more.
It is hardly surprising to find that
Vele would do this. Only last year he was
in line to be arrested for his role in allegedly illegal procurement of the 2
generators by the LR Group that the Prime Minister commissioned. Controversy seems to be the name of his new
game. Unfortunately, those who earn this
reputation are too frequently found later to be habitually engaged in shady
deals.
ROLE OF GARRY HERSEY?
Garry Hersey is the Managing
Director of Kumul Consolidated Holdings.
Kumul Consolidated is the government legal entity that the O’Neill
government established to hide the individual accountings of all the State
Owned Enterprises. Before the people of
PNG could see which company’s accounts were up to date in their audits and
which were not, or which entities made money and which did not. All this information is now hidden from the
people of Papua New Guinea, who are then subjected to public relations
displays, such as the recent K20 million payment of Air Niugini to Kumul
Consolidated to cover up all the hidden details. The people can no longer see if money is
being drained out of the profit earning companies and if so, where that profit is
going. Kumul Consolidated is the
ultimate cloak of secrecy that allows corruption to flower and spread. Private deals can all be worked out without
the public ever finding out.
Hersey, in his capacity overseeing PNG
Power as one of PNG’s State Owned Enterprises, has been mentioned by more than
one source as having been involved in the negotiations of a payment
schedule. He is also storied to be
responsible for pushing John Mangoes out at PNG Power.
Because all the relevant financial
information is now hidden from the eyes of the public, we can only guess what
the size of the loan involved is, but certainly over K1 billion. Because a sovereign guarantee is needed,
this is clearly not a government to government concessionary loan, but more likely
to be a loan carrying a high commercial bank rate of interest.
BOND BROTHERS WILLIAM DUMA AND PAUL PARAKA
William Duma and Paul Paraka are
bond brothers, going back to high school days or before. Paul Paraka wants to get into parliament and
join the scammers who are already there, including Duma. But Paraka is in serious financial trouble,
being that he has been unable to scam the government for money to subsidise his
money losing operations. Last week
Nambawan Super, claiming that Paraka owed over K5 million in back rent, locked
Paraka employees out of the Paraka Port Moresby office at Mogoru Moto building.
Obviously if Paraka can’t even pay
the rent on his offices, he won’t be able to fund his upcoming campaign to
enter Parliament and tap into the really big money. It wouldn’t be much of a stretch to
speculate that a good chunk of William Duma’s USD $10 million bribe money from
SinoHydro could end up in Paul Paraka’s hands to fund his campaign for parliament.
IS A PRIVATISATION OF RAMU 2 HYDRO BEING PLANNED?
It is a common scam to privatise
government service providers solely with the objective to get the enterprises
in the hands of corrupt cronies or government officials themselves. The government sells off government assets at
a very cheap price in the process. This
is what is suspected to be the medium term plan with Air Niugini as it
currently pumps up its plane stock at government taxpayers expense. There is suspicion that the Ramu 2 Hydro,
once completed by SinoHydro, will also be privatized, with corrupt PNG
government officials becoming the new owners.
When the privatized entities and government sign agreements allowing the
privatized entities to make whatever profit they want, it is the people of PNG
who suffer. This is exactly what is
happening today in Port Moresby, where power outages are common, yet Daewoo of
South Korea crows about how much profit they’re making off their Moresby
generators.
It would be a remarkable business
setup if taxpayers money were used to build a large infrastructure, which is
then sold by the government below cost to a group of corrupt government
business partners, who then proceed to charge outrageous prices for the power
they generate.
EXPRESS YOUR OUTRAGE IF ALL INSIDE PNG ARE BLOCKED FROM
BEING ABLE TO ACCESS PNG BLOGS
The ugliest battles between good and
evil always occur when those serving the devil feel that their power is being threatened
and fight back. When the Ramu 2 stories
first came out last week, the government reaction at high levels was like an
explosion. Peter O’Neill and his cronies
badly want to see PNG Blogs off line or out of business so that corruption secrets
within the government will remain secure.
Too many politicians and other government officials are seeing their
chances at making massive amounts of money through corrupt deals vanishing into
thin air. They are fighting mad and want
to see PNG Blogs shut down. Think about
how easy it is for them to issue detailed rebuttals to any information they say
is wrong that PNG Blogs reports on, explaining why exactly we are in error in
our reporting. They have never done
this. Instead they issue no public
statements on what is reported in PNG Blogs, they issue only generalized and
meaningless statements or they work behind the scenes to try to find ways to
shut us down so that the information will never reach the people of PNG.
Earlier this year nearly all the
people of PNG watched the university students fight for truth and justice and
did nothing to help support what the students were fighting for. Please don’t continue to do nothing to
support the fight against corruption.
Your inaction is what allows evil to prevail. The specific ways you can help is to spread
our stories via e-mail, which keeps the government from snooping on
content. You can also place links to our
articles on all the PNG social media news sites. You can raise holy hell the moment the
government mentions any intent to further restrict free speech on the internet. Most importantly, if you witnessed corruption
it is your duty as a citizen to report it.
Reporting it to the police or ombudsman achieves nothing anymore if you
haven’t noticed that already for yourself.
Report it to PNG Blogs so that if nothing else, the information can
reach the world. It is time we stop
tolerating our country being disrobed of its wealth for the benefit of a few
greedy pockets.