The Germination and Spread of Corruption in Papua New Guinea: An Unfortunate Combination of Three Prime Ministers
Three Prime
Ministers including the Father of PNG, Sir Michael Somare, have, over the past
40 years, effectively congealed to destroy what could have been a bright future
and equal opportunity for the people of Papua New Guinea following
independence. As such, the noble ideals
articulated by Somare and other members of the legendary Bully Beef Club during
their many gatherings prior to Independence, and articulated in the
Constitution's Six Directives, were never fulfilled and today are essentially
abandoned. PNG's sad progression downwards has produced its
current state of rampant corruption.
Like Nigeria, like Mexico, like Indonesia, all fabulously wealthy
nations in terms of natural resources, the wealth has gone nowhere useful in
PNG. PNG drags the bottom in global
rankings today in terms of how little meaningful integral human development has
occurred for the majority of its population. Thus far, the advent of cell
phones and other modern technology that has reached deep into remote areas has
not reversed this sad trend despite their potential.
The destruction of
national dreams and hopes can be traced to the combined leadership and
interactions between 3 Prime Ministers:
Somare, Chan and Peter O'Neill. Together
they have combined, never formally and certainly not purposely, to create a
recipe for national development disaster that today affects the country. The rampant state of corruption in the
country today doubtfully would have occurred had any one of these 3 links been
missing. The reason why Somare and Chan -- and also
former PM Paias Wingti -- remain in, and continue to support the most corrupt
government, by far, in the history of Papua New Guinea, reflects their passive
support and general lack of principles.
If you want allies in the fight against corruption, the last people you
select would be PNG's past Prime Ministers, with the exception of Rabbie
Namaliu and to a lesser extent, Mekere Morauta.
The
Loose Knit "Waigani Club" Assemblage of Thieves
The combined negative
influences of Somare, Chan, and O'Neill reflects an intriguing, loose knit
informal grouping of PNG's most successfully corrupt public figures popularly termed
by political observers as the "Waigani Club". It's not a Club in any real sense, but is
more accurately a network of alliances, nearly always informal and often short
lived. What binds its 'members' together
most strongly is a shared vision of using the public trust to pursue private
interests. Each member has their own
favourite tricks and ways to enrichen themselves. They can be ranked at different levels in
terms of their success in terms of how much stealing, how sophisticated their
techniques, and how well they've been able to avoid prosecution and
conviction. All together, the collective
bag of tricks used by Waigani Club members today rivals what the most legendary
organised crime members elsewhere in the world utilise in their respective pursuits
of wealth. The tricks used today in PNG
were rarely self developed. Most
arrived from Asia with the encouragement of Chan and to some extent, Pais
Wingti. Adding to this was a scattering
of conartists and carpetbaggers from Greece, Italy, Australia, and other parts
of the world adding their expertise to the mix and now wealthy businessmen,
sometimes bordering on tycoons, operating in PNG.
Julius
Chan Was First To Amass Personal Wealth While On Public Servant Pay
Indisputably, Julius
Chan was the original high level PNG politician crook. He has always prided
himself as an astute businessman but is obviously not so astute that his businesses
didn't often tip towards financial trouble.
From the start, he has always been keen at identifying ways to gain
wealth through unfortunate loopholes in the law. He inherited certain
connections with Chinese businessmen and traded favours with them even before
he became PM for the first time. Wingti may have conspicuously declared a Look
North policy, but Chan schooled Wingti in the lucrative opportunities that
would come to him, Wingti, and other high ranking officials if they started
opening the doors for Asians to come pillage customary land and their
resources, with a gatekeepers fee always payable to Chan, Wingti or whoever was
manning the gate high in the halls of Waigani.
Chan was never so
dumb as to outright steal money from the government. Instead, his focus has always been to use his
privileged position and access to information as Prime Minister or Deputy Prime
Minister, to forge personal business networks and exploit loopholes in the
law. One example during the 1990s was
his secret selling of Islands Aviation to a Chinese business associate for a
very large price, which no more than a few years later was followed by Chan
buying back his own airline at a very low price. This is the kind of technique that Greg
Sheppard was caught on videotape promoting in the recent SBS Dateline report,
where he advised that any corrupt movement of money be disguised as a
commercial transaction. Obviously Chan
gave the business associate something very valuable as payment for his large
profit on Islands Aviation, and the suspicion is that he facilitated a logging
deal. During the 1980's and 1990's the
tremendous wealth of PNG's timber, all obtainable using simple technology and
relatively little capital investment, was becoming known. The Chinese Malaysian Company Rimbunan Hijau
eventually pushed aside other corrupt Asian companies to take control of the
PNG logging industry, a position it still holds today
Now and then Chan
came very close to overstepping his bounds.
When Highlands Pacific had claim over the incredibly rich Pogera gold
reserves and was preparing to go public with a sale of shares, Chan strongarmed
the Highlands Pacific Executives at the time into granting Chan a large,
interest-free loan that he then used to buy millions of shares in the
company. After the shares went up
considerably in value, as was the widespread speculation, Chan quietly sold his
shares, returned the loan money, and pocketed a hefty profit. The public share offering to Papua New
Guineans generally was pushed by Chan as a coverup to his own private deal
making, much like Peter O'Neill pushed a "restriction on the number of
pokies" to Christian churches as a public cover for taking behind the
scenes personal control of the pokies industry, of which he is one of the 3
most dominant players.
Another of Chan's
most famous and cunning means of making money on the basis of secret knowledge
that he was entrusted with as a public servant related to the weakening status
of the kina during the mid-1990s. Chan
was aware that a non-floating kina was no longer possible because of the
pressure the growing domestic devouring of imports. The principled thing to do would simply have
been to devalue the kina without any personal involvement. Instead, Chan and Wingti colluded to ship a
large amount of their wealth out of PNG just prior to the kina being
devalued. While most of the rest of PNG
essentially lost 10% of their wealth instantly with the kina's devaluation,
Chan and Wingti profitted. Probably
under PNG law, there was nothing illegal with what they did. In terms of ethics, the action was extremely
unethical and clearly corrupt.
Michael
Somare: Respected Leader Who Abandoned
His Principles
Michael Somare can
be considered to have achieved high status in the Waigani Club in a very
different way from Chan. Early in his
career, he actually had principles, mostly gained in Bully Beef Club
discussions and strengthened through interactions with certain leaders of the global
non-aligned movement, which included a number of newly independent
nations. Long criticised by people back in East Sepik
for not delivering enough development to people back home, this result actually
reflected the most appropriate, modernday role of either a Prime Minister or
Minister: To serve the nation first and
worry about local constituents second.
From the
beginning, Somare intensely disliked Chan's personal business wheeling dealing,
partly out of principle but mainly out of jealousy. Unfortunately, Somare's principles were never
that strong, nor was he able to ideologically justify his initial pursuit of
'go slow' development that emphasised rural cottage industries that would put
as much money as possible into the hands of the rural people. In that sense, he was always an ideological
lightweight compared to his counterpart leaders of independence in Africa and
elsewhere during the 1960's and 1970's.
He greatly admired Fidel Castro but never possessed the motivation nor
the heart for people of the village that would have allowed him to have created
a PNG that emphasised health and education with the intensity that Castro
pursued. This lack of strongly held principles was the first aspect of Somare's
personality that would prove his undoing as a successful national leader once
independence was attained.
By the mid 1980s
Somare and his family had developed unscrupulous dealings with local logging
back in East Sepik Province and was actively trying to develop a logging empire
there by the early 1990s. His clear
violations of the Leadership Code were detailed in the Barnett Inquiry on
Forestry that PM Wingti commissioned in the late 1980s.
By 1990, Somare
had already abandoned his conviction to promote democratic leadership, being quoted
in a Pacific Islands Monthly interview article that he would happily serve as
PNG's benevolent dictator. This change
in attitude reflected a combination of Somare experiences. In NEC he observed all around him Ministers
who were following the lead of Chan and mostly concerned with personal wealth
grabbing. Certain of these Ministers
were already actively dismantling the bureaucratic, non-political
decision-making of government departments by politically appointing
departmental secretaries and otherwise re-directing departmental resources into
their own pockets.
Also influencing Somare's
growing attraction to an authoritarian style of leadership for PNGN was his
observation of what certain leaders of independence were doing elsewhere in the
world. Personally, he was developing an
elitist attitude of looking down on the very people he was elected to serve,
sometimes screaming at his own staff as being incompetent and as 'lazy Papua
New Guineans'.
By the late 1990's
Somare had abandoned any pretense of standing apart from Chan's self serving
attitude. He freely admitted in
discussions with friends and acquaintances alike that his biggest mistake
during his earlier terms as Prime Minister was not having followed Chan's lead
by not paying more attention to amassing his own personal wealth. He began to adopt his own self serving belief
system that so long as he followed the Chan strategy of not stealing directly
from the government, but rather, using his position of power to develop
personal business networks and finding legal loopholes to amass power, it was
okay. In fact, by embracing this
philosophy, Somare joined the league of corruption and bad ethics.
One side weakness
of Somare that eventually contributed to his becoming more of a stimulus for
national corruption than for national development was his poor management
abilities. He repeatedly failed to
establish authority over his ministers and even his family over the years. With
respect to the latter, he was unusual amongst PNG husbands in being largely
dominated by his wife. During the 1980s,
it was common for Lady Veronica to go at Sir Michael with a beating stick after
he returned from overseas trips, perpetually paranoid that Somare was having
overseas affairs. In fact, the champion
of overseas affairs amongst Prime Ministers has always been Julius Chan and
Paias Wingti. On another front, Lady
Veronica has always expected to be treated like royalty. Her years of constant pressure on the Grand
Chief eventually resulted in his total capitulation. The Somare family traveled and accommodated
in style wherever they went, with Somare now using his entrusted public
position to serve his family before he served the nation. He deluded
himself into not confronting this new aspect to his personal corruption, by
continuing to serve the public interest before that of his people back in
Sepik.
Somare's son
Arthur, daughter Bertha, and to some extent son Sana, also eventually gained
control over their weak-willed father.
.Somare's long-standing jealousy of Chan's financial success drove him
to expand his personal business deals. So many of PNG's political leaders have
demonstrated over time that they actually are not very good businessmen and
either must keep their businesses afloat through subsidies that they obtain
corruptly through other means or allow their businesses to collapse
altogether. To his credit, the virtually
abandoned Somare Haus at Waigani reflects that Somare at least occasionally
follows the tactic of letting his personal businesses collapse. Somare Haus was originally a
revenue-generating initiative to financially support Somare's Pangu Party. When Chris Haiveta yanked control of Pangu
away from Somare, Somare's revenge was to yank Somare Haus away from Pangu's
control and make it a personal family possession.
Michael Somare has
other weaknesses that continued to erode his principles and essentially make
him corrupt. His own deals with shady
Asian businessmen came from a personal soft spot for the Japanese (as a small
boy, he interacted with local Japanese teachers in occupied PNG during World
War II Japanese occupation).
During Somare's
last, nearly 10 years in office, he basically let his family run wild, like
monkeys in a bakery. Out of control, they stuffed their mouths with public
wealth, Arthur being the main culprit. Arthur isn't nearly as dumb as his
father and, in fact, generally took good care to cover the trail of evidence
that would document his stealing. Both he and his rather stupid father were
never caught for big crimes but honest people in the judiciary and in the
ombudsmans office were well aware by mid-point in Somare's last administration
that his corruption was rampant. In the
end, they had to be satisfied to prosecute him for almost inconsequential
violations of the leadership code.
Perhaps the
greatest corruption of Michael Somare was to fully exploit foreigners to buy
PNG elections. Being in the logging business himself, and also
having a natural affinity for Asians, Somare developed a growing alliance with
the Chinese-Malaysian family who owned Rimbunan Hijau. RH has a worldwide reputation of pillaging
forests from PNG to Brazil to Siberia, and leaving as little behind as possible,
and essentially impoverishing nearby forest residents. Somare saw RH as his way to get revenge
against a growing number of political opponents, real and imagined. This points to yet another weakness of
Michael Somare: a petty tendency towards
revenge. He has most childishly
demonstrated this against communities back home who failed to majority vote for
him in national elections. On a grander
scale was his determination for payback against Chris Haiveta after Haiveta
took control of Pangu. This led Somare
to start up the National Alliance.
Obviously, to trounce Pangu, National Alliance needed money, and Somare
kept the Somare Haus asset under his own family rather than use it to generate
revenue for NA. Instead, Somare ended a
long courtship and got completely into bed with Rimbunan Hijau by his second
term. RH already was beginning to
financially dominate PNG. Today, RH is
the owner of The National newspaper, Vision City, Kina Securities, Maybank and
many many other businesses, while still controlling more than 3/4 of all PNG's
existing logging concessions, using different names for each local operation to
hide that ownership.
In 2007, Somare
stayed in power not only through the usual RH donations to the National
Alliance but by getting a single, K40 million RH contribution that was deposited
into an ANZ PNG bank account. Before he started his final move to form the
government, he instructed ANZ to not allow cash the cheques of any competing
political leaders seeking to pay off their own supporters. While in seclusion to form the new government
after the 2007 elections, Somare gave out a cool K1 million to each one of 40
MPs to buy their loyalty and thus remain in power.
Nearly 10 years of
Michael Somare in power proved beyond a doubt that government stability in PNG
doesn't provide the same rewards as in other countries. Instead, it allows the
development and improvement of sophisticated ways of stealing public monies. It
was Michael Somare's complete abuse of power and allowance of rampant
corruption under his long administration that opened the door to Peter O'Neill
becoming PM.
Peter
O'Neill: The Most Cunning of Prime
Ministerial Crooks
Peter O'Neill is
the latest Waigani Club member to reach platinum status. O'Neill is more
cunning than Chan, far more mature than Somare, and develops a network that is
not wantok in nature, but based upon finding fellow thieves with like
interests. His connections to Luciano Cragnolini, Greg Melides, and Jimmy
Maladina have been strong and lasted for years. He pats their backs and they
are his willing briefcase carriers who carry out his instructions far and wide.
Like Chan and Somare, the other two highest ranking members of the Waigani
Club, Peter O'Neill isn't so stupid as to directly steal money from the
government. He is far smarter and more
cunning than Somare. O'Neill works like
Chan but on a grander scale. Like Chan,
he uses the privileged information he gets as PM to find ways to funnel money
his directions. He's into kickbacks, but is also accomplished at having brought
the PNG Pokies industry completely under the control of himself, Cragnolini and
Melides. Nii Cragnolini, who he and Luciano Cragnolini share in sex, is in
charge of the Gaming Board's substantial profits, which are distributed to
allies.
Where Peter
O'Neill has gone well beyond Chan and Somare in public corruption is in
developing a large series of ways to develop a body of supporters through
carrots and sticks. The biggest stick he uses is to perpetually delay the
disbursement of public funds to MPs who do not support him. This has coerced an
unprecedented number of MPs to join his ranks. The carrot approach he uses are side
payments of monies that are supposed to be used for local government services,
such as DSIP. With the District Support
Initiative grants, he esssentially places the money on a big plate, and sets
the plate on the table where one of his MP allies sits. He then turns his eyes so he won't see what
they do with that money. That way, O'Neill remains untouchable for the thievery
of those in his large alliance.
Elegantly, it doesn't matter whether DSIP monies go into the pockets of
MPs or district officials. The bottom
line is that is develops prostitute-like political allies who are more than
willing to promote Peter O'Neill come election time.
With respect to
his ministers, O'Neill turns his head the other way again. He gives them freedom to find their own ways
and means to make their own corrupt deals and otherwise deplete PNG of its
resources and its wealth. O'Neill is renowned for his constant lying and
deceptions, but the lying never comes in the absence of a purposeful
strategy. Thus, he lies about his
commitment to corruption to cover up his personal tolerance of corrupt
activities by his ministers. He tried
to secure the support of NGOs and other groups angry about the massive SABL
land grab that started taking place during the last years of the Somare regime,
while actually allowing SABLs to continue as a means for fellow Ministers like
Maru (Sepik Plains oil palm), Temu (in an aborted rice growing attempt in
Central Province) to get super-rich. His
tolerance of SABLs even allowed his arch-enemy, Belden Namah, to remain
financially viable to fight O'Neill another day, although O'Neill views Namah
with contempt and not an opponent worth worrying about.
The
March Towards Authoritarianism in Papua New Guinea
As already noted,
Michael Somare had decided that PNG needed a benevolent dictator many years
ago, not realising that him serving the role, in the context of his many
personal weaknesses, was the perfect recipe for widespread abuse of power. Somare may envision Singapore's own
benevolent dictator Lee as the model for PNG, but unlike Somare, Lee had and
always maintained fairly consistent ethical principles.
From the moment he
assumed power (using the dictatorial gesture of ignoring a Supreme Court ruling
that Michael Somare was still Prime Minister), Peter O'Neill bought into the
benevolent dictatorship idea and sees it going further than what Somare was
able to do. From all reports, O'Neill doesn't
intend to be the kind of high profile violent dictator that we see in North
Korea. The rumours that O'Neill intends
to be another Kim Jung Un, leader of North Korea, undoubtedly comes from
O'Neill's personal promotion of him and his ministers wearing Mao Suits in
government. Today, Mao Suits are only
rarely worn by the Chinese authoritarian regime, but is the only dress of North
Korean dictator Kim.
In actuality,
O'Neill trends towards becoming a Robert Mugabe dictator. Mugabe, one of the principle the independence
fighters for black rule in Zimbabwe, subsequently became President for Life,
mostly exploiting a 'Founding Father' style loyalty amongst Zimbabweans. O'Neill
envisions a Prime Minister for Life future for himself. While he is as
personally ruthless as any dictator trying to stay in power, Peter O'Neill
relies more on threats and economic punishment, rather than physical mechanisms
to get his way (in contrast to long time ally, Paul Paraka, who built his legal
firm from its humble beginnings by having thugs under his hire beat up
opposition witnesses and carry out other forms of intimidation).
The
Waigani Club Comes Full Circle
Papua New Guinea
is at a critical crossroads. The Waigani Club has was never an idea of anyone.
It came about due to circumstances as well as to the existence of disreputable
personalities who had no concern for integrity but were intent to increase
personal wealth.
Over Somare's last
term in power and continuing under O'Neill's leadership, the Waigani Club grew
so large that it has become largely resistant to efforts by the ombudsman and
public prosecutor to send its members to prison or at least boot them out of
office. One of Peter O'Neill's most
successful strategies since assuming office has been to continue the economic
stranglehold on the judiciary so that it cannot investigate effectively, can
only handle a small fraction of the wave of corruption cases that head its way,
and have developed a virtually insurmountable backlog that insures that court
cases can linger on for more than a decade.
The beauty of the judicial backlog is that it takes advantage of the
public's tendency to quickly lose interest and outrage over corruption cases,
while also giving the corrupt many quiet opportunities to buy off judges,
public prosecutors, police, and witnesses, as well as other avenues for
ensuring that critical evidence is destroyed.
Waigani Club
members today, while still not organised in any formal way, actively trade specific
secrets, contacts, and thievery strategies with other trusted Club members.
When they feel the sense of threat, as they do right now with the Greg Sheppard
and Harvey Maladina revelations, they informally but strongly close close to
each other in defence. Their best defence is to say nothing, to remain silent,
to only talk amongst themselves but never share any of the inner workings of
Waigani Club members with the PNG public who has trusted them and voted them
into power.
Waigani Club
members have never felt threatened as a whole by Transparency International,
Noah Anjo, ACT NOW NGO or any of the other individuals and groups who have
sometimes noisily protested against corruption and corrupt governments. Unlike
Chan, who worried enough about NGOs to actually once send police to raid their
offices, was also fearful for his life from the Sandline demonstrators and
stepped down from office, Peter O'Neill has no such fear. He has come to conclude that PNG civil society
is ineffective at keeping the PNG democracy functional. He has learnt from
careful observation and a bit of experimentation that he can mostly ignore
Facebook, the social media, and the corruption fighting NGOs. This is because he has become convinced that
all these entities are unskilled and unable to organise themselves to present a
serious threat to O'Neill's power, either at the ballot box or through people
power revolutions. O'Neill doesn't for
a moment think that an Arab Spring type uprising will occur in PNG. Each new 'project' to rake in the money into
the pockets of him and his cronies solidify this feeling as he sees that the
public makes very little response. He has effectively and proudly destroyed an
effective political opposition and even when they come up with real dirt on
him, he can brush it aside. The most recent example was the revelation that he
had paid Ialibu grassroots K50,000 out of public funds to lie under oath that
Chief Justice Injia was corrupt and playing Somare's side when, in fact, that evidence
was fabricated by these Ialibus.
O'Neill sees every
challenge as part of a game. He doesn't for a moment think he will ever see
jail time, with his NPF court trial success being his main evidence. At worse,
he reckons he might be kicked out of office. But that isn't such a bad outcome
because if it happens at all, he and his cronies will easily have more than
enough money to live the rest of their lives in luxurious comfort.
PNG thus seems
firmly dominated by the Waigani Club mafia and the likelihood of a very few
people getting super rich while the majority of Papua New Guineans find
themselves working harder for less and having less wealth overall, is the most
likely future for the country.