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Third Public Report on the USD100,000,000 Bank Guarantees [1996] VUOM 11; 1996.13 (28 November 1996)

REPUBLIC OF VANUATU

OFFICE OF THE OMBUDSMAN

THIRD PUBLIC REPORT

ON CONDUCT OF HON BARAK TAME SOPE CONCERNING A FURTHER REQUEST TO SCOTLAND YARD ON 18.10.96 TO RELEASE US$100, 000, 00 BANK GUARANTEES

This report contains the opinions, views, findings of fact and misconduct and
recommendations of the Ombudsman pursuant to the Constitution of the Republic of
Vanuatu and the Ombudsman Act No. 14 of 1995

28 NOVEMBER 1996

THIRD PUBLIC REPORT

ON THE

US$ 100,000,000 BANK GUARANTEES

TABLE OF CONTENTS

PREAMBLE

1. FINDINGS OF FACT

2. FINDINGS OF CONDUCT

3. RECOMMENDATIONS

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PREAMBLE

"...He that being often reproved hardeneth his neck shall suddenly be cut off and that without remedy. When the righteous are in authority, the people rejoice, but when the wicked beareth rule, the people mourn..."

Proverb 29 v.1"

This 3rd public report is a melancholy exposure of wilfulness and stubborn refusal to accept the discipline of ethical standards and honest procedures. It became clear that Mr Sope finds it impossible to work in conjunction with, and under the constraints of, those who are appointed to safeguard the country’s resources. He has insisted on acting impulsively and recklessly without the approval or even the consultation of his colleagues. There are apparently attractions on the dictatorship role which Mr Sope finds impossible to resist what the final result of this "hardening of the neck" will be is a matter of great concern.

1 FINDINGS OF FACT

1.1 Yet again, and very sadly, I must report to the nation that the Hon Barak Tame Sope, former Minister of Finance, former Minister of Trade and former deputy Prime Minister, has very recently attempted to have the Bank Guarantees released by Scotland Yard. Mr Sope did this on 18 October 1996 by two facsimiles to Scotland Yard saying that he had the "full governmental authority of the Republic of Vanuatu " to do so. Copies of the facsimiles are attached for all to read, marked as "A" and "B"

1.2 The position is that Mr Sope, in fact, did not have such authority. Before the issue of this report I asked Mr Sope to provide me with a reply to a preliminary report in which I made this very allegation. Mr Sope did not reply. As at the date of this Public Report he has not provided me with any documents. The Prime Minister, Hon Serge Vohor did not authorise Mr Sope to write to Scotland Yard authorising the release of the Bank Guarantees. Neither did the Council of Ministers authorise Mr Sope.

1.3 What Mr Sope said in his letters was therefore not true. Mr Sope deliberately acted to try and mislead Scotland Yard.

1.4 As will be seen from his facsimile Mr Sope also made a quite shameful suggestion that the Attorney General position was "expected to be reviewed as he is not supportive of the new Government ". The reason for this was that after the Attorney General learnt of Mr Sope’s previous attempt to obtain the Bank Guarantees from Scotland Yard on 30 September (see copy attached as "C") he correctly took steps to advise Scotland Yard not to follow Mr Sope’s unauthorised instruction (this was the subject of my Public Report called "Further Public Report on the US $ 100,000,000" dated 22 October 1996 "the Additional Report").

1.5 What makes Mr Sope’s conduct all the worse is that on 10 October 1996 he was provided with a copy of my preliminary report of the Additional Report (i.e. the report before this one). I had also advised him then of his constitutional right to reply and asked him to do so by 14 October. On 14 October I followed this up with a further facsimile reminding Mr Sope of his right to reply. Later on the same day (14 October) Mr Sope wrote to me requesting further time for his right to reply to be exercised. Included in Mr Sope’s letter was his statement as follows:

Please be advised that it is my intention to reply to your correspondence and to the Preliminary Report shortly. However due to the recent crises that our nation has undergone and the fact that I am acting as Prime Minister during the Prime Minister’s absence, I will be unable to return to you until the 21st October.

Annexed, marked "D", "E", and "F" are true copies of my two letters and Mr Sope’s reply of 10 and 14 October 1996, respectively.

1.6 On receipt of his facsimile on 15 October I, accordingly granted him an extension of time to reply to 21 October. Annexed as "G" is a true copy of my letter. However, Mr Sope never sent his reply to me as he said he would in his letter of 14 October. Unknown to me at the time (the period of the extension and some days after) Mr Sope was again attempting to secure release of the bank guarantees.

1.7 It was therefore on 17 and 18 October 1996 (i.e. during the extended time I granted him to reply to the preliminary Additional Report), that Mr Sope again tried to release the ten bank guarantees from the central crime authority in the United Kingdom, Scotland Yard. In his letters on these dates, Mr Sope, as the then Minister of Trade, represented to Scotland Yard as follows:

. . . due to a reshuffling of portfolios and ministries it has now been decided that I should write and request your immediate assistance in releasing the materials and guarantees . .

(letter of 17 October, "A")

With full authority of the Republic of Vanuatu, and by authority and instruction of the Prime Minister of the Republic of Vanuatu, you sir are requested to immediately release any and all properties seized by U.K. authorities belonging either Barton, Jamison & McMillan, Inc. (BJM) and/or property belonging to the Republic of Vanuatu to the custody of New Resources Group, Ltd. (NRG) Director Mr Robert H. Ptak. Mr Ptak is a U.S. citizen and NRG’s Director of Energy and Transportation.

(letter of 18 October, "B")

1.8 As I have found above these statements were lies.

2 FINDINGS OF CONDUCT

Finding No 1 - illegal request to release Bank Guarantees

Mr Sope failed to obtain the authority of both the Council of Ministers and the Parliament to request release of the Bank Guarantees which were not authorised under the Public Finance Act [Cap 117], the Government Borrowings and Guarantee Act [Cap 149] or the Reserve Bank Act (refer Public Report on Bank Guarantees dated 3 July 1996). Therefore the requests of 17 and 18, like that of 30 September 1996, were illegal and unauthorised.

Finding No 2 - breach of Leadership Code

Mr Sope has totally failed to behave as a leader and an honest person. He has again failed to comply with the laws of Vanuatu. This is totally inconsistent with him being or remaining a leader. Mr Sope has most seriously breached the Leadership Code (article 66(1) which says that a leader has a duty not to conduct himself so as to:

(b) demean his office or position

(c) allow his integrity to be called into question

(d) endanger or diminish respect for and confidence in the integrity of the Government of Vanuatu

3 RECOMMENDATIONS

3.1 Because he cannot be trusted, I repeat previous recommendations that Mr Sope not be considered for public or ministerial office. I note that the Prime Minister, Hon Serge Vohor, has recently removed Mr Sope from the Council of Ministers citing Mr Sope’s conduct in the Cybank and Bank Guarantees matters in accordance with my previous recommendations. In my opinion, Mr Vohor has demonstrated sound judgment and leadership. In the future it is important that Mr Sope not be reappointed to the Council of Ministers on any account.

3.2 Mr Sope should apologise to the Attorney General for seeking to undermine his authority internationally.

3.3 Mr Sope be specifically instructed by the Prime Minister to have nothing further to do with the Bank Guarantees or to make any contact with Scotland Yard or anyone else unless expressly authorised in writing by the Council of Ministers (acting in accordance with the law) to do so.

MARIE NOELLE FERRIEUX PATTERSON
OMBUDSMAN OF THE REPUBLIC OF VANUATU

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