Payment of Compensation to Hon Korman, Hon Jimmy and Hon Sope in Breach of the Leadership Code [1997] VUOM 10; 1997.7 (3 July 1997)

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PAYMENT OF "COMPENSATION" TO HON. MAXIME CARLOT KORMAN,
HON. WILLIE JIMMY, AND HON. BARAK SOPE IN BREACH OF THE
LEADERSHIP CODE AND COMPENSATION ACT 1994

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

- 1988/1989 – attempted dissolution of Parliament and subsequent events
- 1994

- Introductory
- Findings – Messrs Carlot Korman and Jimmy – use of Ministerial Office for personal gain
- Mr. Sope – voting in favour of an Act in which he obtained a personal gain

No. 1 Return of the money by Messrs Korman, Jimmy and Sope
No. 2 Hon. W. Jimmy to resign or be dismissed from Council of Ministers and not reappoint again in the future
No.3. Hon. Maxime Carlot Korman not to be considered for Ministerial post or other position involving public money
No. 4. Mr. Sope - Confirmation of previous recommendations
No. 5. Council of Ministers to follow the law and the advice of the Attorney General
No.6. Leadership Code Bill to be passed and voted on as a conscience vote

"But there is a people robbed and spoiled, they are all of them snared in holes, they are for a prey, and none delivereth; they are for a spoil and none saith "Restore"

This report shows a pattern of behaviour which is becoming very familiar as leaders pursue more and more money by unethical and often illegal means. Rulings and advice by the Government’s own legal authorities are treated with contempt, as the leaders single-mindedly pursue the acquisitions of ill-gotten gains by whatever means it may take.

We use terms like "misappropriation" and "misuse" when it would be often more straight-forward to describe actions as "theft" - plain stealing of public funds to finance private ambitions.

My Office is now battling with a backlog of complaints and investigation and many complaints simply ask when the offenders will be tried and punished. The Public Prosecutor’s Office is also battling with a backlog of cases and deserves some sympathy, but none the less, if the public do not see any realistic attempts to bring appropriate charges before the Courts the result will be an increasing disillusionment, helpless anger and a complete loss of faith not only in the leaders, but in the very process of law and justice itself.

The public may have to think hard about the quality of leaders whom they wish to safeguard their interests, and become vigilant in ensuring that their representatives are acting in conformity with honest and legal principles.

1.1 This report is about "compensation" payments of VT 5,000,000 made in 1994 to the former Prime Minister, Maxime Carlot Korman, the current Finance Minister, Hon Willie Jimmy and the current deputy Prime Minister, Mr Barak Sope.

1.2 In this case I investigated three leaders of this country who had appeared to have used their high positions for their own and their associates’ personal gain.

1.3 These payments were made to compensate the alleged "political injustice" of their imprisonment under order of the Supreme Court during trial and after conviction by Chief Justice Ward on various criminal charges. These charges related to their part in attempting to form an (illegal) interim government on 18.12.88 after the then President’s (Mr George Sokomanu) unconstitutional attempt to dissolve Parliament.

1.4 In 1994 when Mr Korman was Prime Minister and Mr Jimmy was Finance Minister, they were told that they could not legally "compensate" themselves. There was nothing in the Budget authorising it. They therefore promoted a general bill for compensation for people affected by the 1980 Santo rebellion and the 1988 Vila riot in the Council of Ministers. They had it passed by Parliament with the support of Mr Sope. This, they thought would allow them to legally compensate themselves. As the evidence in this report shows the payments made to them were illegal. This was principally because:

(a) Mr Jimmy, Mr Korman and Mr Sope did not meet the criteria of the s3 (1) (e) of the Compensation Act; namely imprisonment without a Court Order. Messrs Jimmy, Korman and Sope were imprisoned with a Court Order; and

(b) They were approved the payments before the Compensation Act was a law of Vanuatu.

1.5 My investigation was prompted by a number of complaints (people who had applied for compensation and had not received any monies) and also concerns raised in the 1993 Audit Report (see page 13) over the increase in ex-gratia payments being made. Due to the seriousness of the matter I decided to enquire into all these compensation payments on my own initiative.

1.6 One of the most glaring facts that forced me to enquire was that the family of Sethy Pango who died in the Vila riot of 16/05/88 received compensation of VT 1 million. The plain message to me was that the 3 months’ imprisonment of a leader is worth 5 lives of a non leader.

1.7 My investigation also led me to uncover other cases of "compensation" payments of up to VT 1,000,000 to so-called "political victims" and a "compensation" payment of VT 5,000,000 to New Caledonian lawyers and VT 1,000,000 to an Australian lawyer who represented the men in the trials after Mr Sokomanu's attempted dissolution of Parliament. Again the amount of these payments appeared to be most unfair when compared to payments being made to Ni-Vanuatu injured in the 1980 Santo Rebellion and 1988 Civil Unrest. For example, a VMF officer who was seriously shot in 1980 on Santo received VT 700,000. This is quite low compared to what the leaders received. However, a civil servant driving a truck ambushed by rebels, the truck overturned and with a broken arm he got only VT 20,000. Others who were imprisoned and battled received nothing as did some members of the New Hebrides Defence Force.

1.8 For the reasons that follow in this report, my opinion is that by receiving VT 5,000,000 compensation payments for themselves and their colleagues Mr Korman, and Mr Jimmy and Mr Sope very seriously breached the leadership code set out in art 66 of the Constitution. In summary, the main reasons are:

(a) The leaders could have sued the Republic of Vanuatu for compensation under existing law without the need to pass the Compensation Act;

(b) The leaders and other UMP supporters were approved compensation payments in June 1994 before the Compensation Act was passed (see 1.10 below);

(c) Messrs Jimmy and Korman, as Minister of Finance and Prime Minister respectively, actively promoted the passage of the Compensation Act into law knowing full well that they stood to personally gain from it;

(d) Messrs Korman, Jimmy and Sope, as Members of Parliament, voted in favour of the passage of the Compensation Act;

(e) On 26 October 1994 the then Attorney General Mr Patrick Ellum told Mr Korman that the compensation payments were illegal but Mr Korman decided to ignore this advice and directed Mr Jimmy to pay the compensation payments;

(f) Messrs Korman and Jimmy did not follow the Compensation Act because the Compensation Board to be appointed under the Act to decide on how much compensation people applying should get did not make the decision, rather the Council of Ministers did;

(g) On 09.12.94 the Director General of Finance, Mr Jeffrey Wilfred, warned Mr Jimmy that Mr Jimmy was not following the Compensation Act (i.e. acting illegally);

(h) The Compensation Board, when appointed later, were UMP political appointments[1] very close to the leaders concerned; and

(i) As noted above at 1.4(a), Messrs Jimmy, Korman and Sope who received VT 5,000,000 did not qualify under the Compensation Act anyway because they were jailed under order of the Supreme Court.

1.9 Because of these factors Messrs Korman and Jimmy directly placed themselves in positions of serious conflict of interest. They obtained money from the Reserve Bank of Vanuatu to approve themselves compensation before the Compensation Act was passed. I consider that these men have acted in breach of the Constitution and illegally. Their conduct shows that they consider themselves above the law and against democratic principles, such as equal treatment for all under the law.

1.10 Those who received large amounts of "compensation" are set out below in the following table which is an exact copy of a document signed by Mr Willie Jimmy. (Refer Appendix "1")

1. Deaths	Alexis YOULU	VT 5,000,000
	Sethy PANGO	VT 1,000,000
	Garae AMBAE (Nag)	VT 2,000,000

2. Injured	Tari BULUK	VT 1,500,000
	J.M. LEYE	VT 500,000
	Albert RAVUTIA	VT 1,000,000
	Alfred MALIU	VT 1,000,000
	Sam YAOUKO	VT 700,000
	Touk NOAU	VT 500,000

3. Political Victims:	Aimé MALÉRÉ	VT 1,000,000
	Charley NAKO	VT 200,000
	Amos ANDENG	VT 700,000
	Harry KOREARU	VT 1,000,000
	Thomas TUNGU	VT 700,000
	Wohor NALAN	VT 1,000,000

4. Loss of Properties:	Amos ANDENG	VT 1,500,000
	Jack KALOTITI	VT 1,500,000

5. Political Prisoners:	John KALOTITI	VT 5,000,000
	Maxime Carlot KORMAN	VT 3,000,000
		(O/S 2 Million)[2]
	Willie JIMMY	VT 3,000,000
		(O/S 2 Million)
	Lawyers fee (UMP)	VT 5,000,000
	Ifira Trust (Lawyers fee)	VT 1,000,000
	Barak T. SOPE	VT 2,500,000
		(O/S 2,500,000)

6. NHDF:	220 Members	VT16,500,000
National:	21 Members	VT 4,200,000
		-------------------
		VT61,000,000

1.11 What should have happened so that the Compensation Act was put into effect is as follows:

(b) The Compensation Board to be appointed by the Prime Minister (comprised of three non political, neutral and independent persons);

(iii) the information and evidence that should be provided by persons applying for compensation;

(d) After receiving all applications by the closing date the Compensation Board was to:

(i) meet and consider all the claims and prepare a report for the Council of Ministers recommending payments (and amounts) of compensation;

(ii) in determining all the claims like this - similar amounts for similar loss or injury are awarded;

(e) The Compensation Board’s report to be submitted to the Council of Ministers for final decision.

(a) All applicants would have had a fair and equal chance to receive their fair share of the VT 200,000,000. As this public report reveals (see 6.21 below), 6000 claims were submitted and 40% of the claims accepted by the Council of Ministers were not paid because of lack of funds.

(b) Applicants by persons not falling within the criteria in s3 of the Compensation Report (see 5.8 below), including those of Messrs Jimmy, Korman and Sope, would have been rejected and no compensation money paid to them, leaving more for those claims that were within the legal criteria (including those who missed out completely).

2.1 Pursuant to art 62 of the Constitution and s14 of the Ombudsman Act No. 14 of 1995 ("Act") I have jurisdiction to enquire into the conduct of certain public bodies or persons on receiving a complaint or on my own initiative. The three persons enquired into were or are leaders and their conduct to whom my jurisdiction applies.

3.1 On or about 17 October 1997 I issued and circulated a confidential and secret preliminary version of this public report. The preliminary report was sent to:

3.2 When Mr Jimmy replied he said that the matter involved an executive decision of the Council of Ministers of the time. Accordingly, on 13 December 1996 I sent copies of the preliminary report to the following who were on the Council of Ministers:

Those persons marked with an * exercised their constitutional right to reply to the preliminary report. The other people did not and must be assumed to agree with the report where it concerns them. Copies of the replies are annexed to this report. They are discussed further in section 7 below.

3.3 The purpose of the preliminary report is to seek comments and submissions from those whose conduct is enquired into or those otherwise criticised. By circulating this report the Office of the Ombudsman’s discharges its constitutional obligation of granting "the person or body complained of an opportunity to reply to the complaints made against them" (art 62(4) of the Constitution), and of the legal obligation as outlined in s 16(4) of Act.

(a) how the six former or present leaders and their New Caledonian lawyers each received VT 5m compensation;

(b) whether there was any lawful basis for receiving the money under the Compensation Act;

5.1 The law relevant to this enquiry is the Constitution and the Compensation Act (which came into force on 17/10/94).

(1) The Republic of Vanuatu recognises, that, subject to any restrictions imposed by law on non-citizens, all persons are entitled to the following fundamental rights and freedoms of the individual without discrimination on the grounds of race, place of origin, religious or traditional beliefs, political opinions, language or sex but subject to respect for the rights and freedoms of others and to the legitimate public interest in defence, safety, public order, welfare and health.

5.3 Art 5(1)(k) is relevant in this case because it would appear that giving compensation of VT 1m for the death of one Ni-Vanuatu citizen and VT 5m for several months’ imprisonment of another is not equal.

(1) Any person defined as a leader in Article 67 has a duty to conduct himself in such a way, both in his public and private life, so as not to:

(a) place himself in a position in which he has or could have a conflict of interests or in which the fair exercise of his public or official duties might be compromised;

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

(2) In particular, a leader shall not use his office for personal gain or enter into any transaction or engage in any enterprise or activity that might be expected to give rise to doubt in the public mind as to whether he is carrying out or has carried out the duty imposed by sub article (1)."

5.5 Art 66 is relevant in this case because leaders include the Prime Minister and other Ministers. Because Mr Korman Carlot was the Prime Minister and Mr Jimmy was Minister, and Mr Sope an MP at the time and because they received VT 5m each, art 66 of the Constitution applies to them.

(b) art 4 - political parties must respect the Constitution and the principles of democracy;

An Act to authorise the borrowing of a sum of money not exceeding 200,000,000 vatu for the purpose of enabling the government to assess and pay unsatisfied claims for compensation relating to injuries or loss of life, damage or loss of property suffered during the civil disturbances in 1980 and in certain other circumstances.

5.8 S3 of the Compensation Act provides which people were able to apply for compensation. It says:

(b) whose property was damaged, requisitioned or acquired during the civil disturbances in 1980;

(f) who is a former member of the National Council of Chiefs whose term of office ended on 16th December, 1992.

5.9 S5 & 6 of the Compensation Act established a Compensation Board ("Board") to have jurisdiction to look at all applications for compensation by people who fell into the categories described in s3. All claims had to be made by midnight 30/11/94. As the Act came into force on 17/10/94 all applications had to be made between 17/10/94 - 30/11/94.

In considering claims for compensation the Board shall act fairly and judicially, attempting insofar as possible to award similar sums for similar degrees of loss, pain or suffering in similar circumstances and to award lesser or greater sums according to the degree of loss, pain or suffering involved.

5.11 In other words a man on Santo who lost his house in the Santo Rebellion should get about the same as a woman who lost her house on Tanna during the same time. The family of someone killed would expect more than a person who was injured or imprisoned without court order.

6.1 To understand how the leaders came to be in a position to receive VT 5m each it is necessary to look back in time.

6.2 On 16/05/88 there was a demonstration in Vila. Order was lost as a result. One man, Sethy Pango, was killed and millions of vatu of property damage occurred. After this, Vanuatu entered an unstable political situation. Twenty-three MPs, half of Parliament at that time, were expelled.

6.3 In October 1988 the then Prime Minister, Father Walter Lini said he would hold by-elections to fill the empty places in Parliament. Mr Sokomanu, the then President, disagreed. Mr Sokomanu publicly said that there should be a general election. The by-elections went ahead.

6.4 On 16/12/88, the President was scheduled, as usual, to open Vanuatu’s Parliament. The opening was broadcast live on Radio Vanuatu. At this time Mr Sokomanu then declared as follows:

6.5 On Sunday 18/12/88 Mr Sokomanu swore in his interim government of Mr Sope (as Prime Minister), Mr Carlot Korman (as Deputy) and Messrs Jimmy and Naupa and Dr Spooner as Ministers. On 19/12/88 all the men were arrested and put in jail. Applications for bail were refused by the Supreme Court. On 30/01/89 Mr Sokomanu was removed as President.

6.6 On 20/02/89 the men faced a number of charges relating to the attempt to dissolve Parliament and swear in an interim government. On 07/03/89 Messrs Sokomanu, Korman, Sope and Jimmy were convicted and sentenced to imprisonment of varying periods by Chief Justice Ward. They immediately appealed. The others, Mr Naupa and Dr Spooner were acquitted and set free. Messrs Sokomanu, Korman, Sope and Jimmy appealed against their conviction.

6.7 On 14/04/89 the Vanuatu Court of Appeal granted the appeals[3]. The convictions were quashed and the men released from prison. It is important for me to mention here that the leaders, when imprisoned pending trial, during trial and pending appeal were imprisoned under Court order. For that reason it would appear clear that Messrs Carlot Korman, Sope and Jimmy could not have qualified for compensation under s3(e) of the Compensation Act even if they had decided to apply to the Compensation Board between 17/10/94 - 30/11/94. S3(e) only applies to people who were imprisoned without Court order.

6.8 By 1994, as we know, things had changed. Mr Korman was the Prime Minister, leading the government. Mr Jimmy was the Minister of Finance and Mr Sope was a member of Parliament. Mr Sokomanu had become the head of the South Pacific Commission. Dr Spooner was in medical practice. Mr Naupa was now deceased.

6.9 Sometime during this year it appears that the Council of Ministers believed those who had been badly affected by the 1980 Santo Rebellion and the 16/05/88 Vila riot should be compensated. Accordingly, a bill was prepared by the then Attorney General, Mr P Ellum and presented for consideration to the Council of Ministers.

6.10 A bill is a document that contains a future law. Its purpose is to allow MPs to consider its contents, argue and debate, until a final wording is agreed. When this is done, Parliament votes. If the majority of MPs agree it should become the law, the bill becomes official law once the President signs it and it is published in the official gazette.

6.11 However, sometime before the Compensation Act became law (on 17/10/94), in June 1994, Mr Jimmy had prepared a list of people who should be paid compensation. This list included VT 5m for Mr Jimmy himself, Mr Korman and Mr Sope. There was also to be VT 5m payments to Mr Naupa, Dr Spooner, Mr John Kalotiti, (Mr Sokomanu’s private secretary in 1988) and somewhat remarkably payments of VT 5,000,000 to lawyers who represented the men at trial and VT 1,000,000 for the appeal lawyers. A copy of the document signed by Mr Jimmy appears as appendix 1. This also appears in the text of this report at 1.9 above. The Council of Ministers which approved the compensation payments included Messrs Korman and Jimmy. It should be noted that because the men owed their lawyer's money the compensation payment to the lawyers was a further benefit to the men as it extinguished their debts owed to their lawyers.

6.12 On 25/08/94 the Council of Ministers approved the Compensation Bill and it came into force as law on 17/10/94.

6.13 On 26/10/94 Mr Korman met with Mr Ellum and the then acting director of Finance. Mr Ellum advised Mr Korman that the Compensation Act did not allow the government to pay compensation in the way it proposed. According to the record of the meeting it appears that Mr Korman "understood and accepted what P Ellum said but on this occasion he would not follow his advice and the Minister of Finance would pay the advances". A copy of the record appears as appendix 2. A copy of Mr Ellum’s advice in writing on 26/10/94 is appendix 3.

6.14 On 27/10/94 Mrs Naupa (on behalf of Mr Naupa, deceased) Mr Sokomanu and Dr Spooner were paid VT 5m each. Appendix 4 exhibits copies of the Government payment vouchers signed by Mr Jimmy directing the payment of compensation.

6.15 On 22/11/94 Mr Naupa lodged a claim for compensation of VT 30,000,000. He lodged this almost a month after having already been paid.

6.16 On 24/11/94 Mr Sokomanu and Dr Spooner lodged claims for VT 30,000,000 each. Again this was almost a month after they had been paid VT 5,000,000 each. Mr Sope lodged a claim for VT 30,000,000 on the same day. All claims were made on the basis of unlawful imprisonment. No application has been seen by me for Mr Jimmy or Mr Korman.

6.17 On 12/12/94 vouchers for Messrs Korman, Jimmy and Sope to receive VT 5,000,000 each were signed together with those of the lawyers. Appendix 5 exhibits copies of the Government payment vouchers signed by Mr Jimmy directing the payment of compensation.

6.18 As at 12/12/94 the Compensation Board had yet to be appointed. This did not occur till 17/01/95. The members of the Board were:

(a) Mrs Sam Yvette (UMP) as Chairman, the then Prime Minister’s (Mr Korman) first secretary;

(b) Mr Waniel Emile (UMP) private secretary to Hon John Sethy Regenvanu deputy Prime Minister; and

Their appointment was published in the official gazette on 22/02/95. A copy of this notice is appendix 6.

6.19 However, back on 12/12/94 compensation, payments ranging between VT 700,000 and VT 5,000,000 were paid to various UMP leaders and supporters involved in the 1980 Santo Rebellion. This cannot have been approved by the Compensation Board as it was only appointed on that day. A copy of a Finance Department computer print out confirming payment of this money is appendix 7. Vouchers for these payments were signed for these payments by Mr Jimmy on the same day that he signed the vouchers for himself and Messrs Korman and Sope.

6.20 Subsequently throughout 1995 further compensation payments were made. According to Mrs Sam there were about 6000 claims. The great majority were for much smaller sums than what the leaders received.

6.21 Finally, despite the Compensation Act putting a limit of VT 200 million to meet all claims it appears that 2400 claims (40%) could not be paid because all the money was gone. I refer to Mrs Sam’s letter dated 13.06.96 which is appendix 8.

7.1 I received replies from the following men who had been given a copy of the report on or about 17 October 1996; their replies are annexed as appendices 9, 11 and 12:

7.2 I also received a reply from Mr Nako who received the preliminary report as a Minister in the Council of Ministers responsible for the promotion of the Compensation Act. His reply (and transcript of reply) is annexed as appendix 12.

7.3 I do not comment on the replies of Mr Sokomanu and Dr Spooner as they are not within my jurisdiction. Dr Spooner corrected my earlier mistake whereby I had thought he was a former MP. These men were however sent a copy of the preliminary report because they were mentioned in the report. I now deal with the replies.

7.4 In his reply Mr Nako stressed that the importance of the Compensation Act was to compensate those persons who had suffered in the 1980 Santo rebellion and the Vila riot on 16/05/88. In principle there is nothing wrong with this. However, it is very important to note that Mr Nako himself gained personally. He received a payment of VT 200,000 on 13.12.94 (see Appendix 12a). This was before the Compensation Board was even appointed.

7.5 Mr Nako therefore allowed the Bill to be promoted knowing that he was on Mr Jimmy’s list (see paragraph 1.9 above at page 4). He did not have the courage to stand up to Mr Korman and Mr Jimmy and remind them of their leadership responsibilities - such as not gaining personally from public office. Rather he followed their bad example and voted in a situation to gain personally.

7.6 Mr Jimmy’s reply was basically to accept the truth of the contents of the report. In other words he agrees with the facts as stated now. What he simply says is that because Parliament voted on it everything is legal. Mr Jimmy says only a Court can decide. I set out his reply in full:

In response to your findings about the procedure in which Compensation fund was paid to those mentioned in your report, it seems true that most of your findings seemed to be quiet true and correct in many ways.

However, only a competent court can decide on the legality of the action taken by those involved and the procedure adopted to implement the Council of Ministers decision, and the legality of the Compensation Act which was passed by parliament to give effect to the payment to those mentioned in your preliminary report.

I view that the preliminary report is too outrageous on matters which involved a collective decision of the Council of Minister as being the Executive decisions under the Constitution and the Compensation Act approved by parliament.

7.7 Mr Jimmy misses the point of my enquiry. I am not saying that the Compensation Act is a bad thing or illegal. What I am doing is informing the public of my opinion that Mr Jimmy (and Mr Korman) abused and misused their positions as Ministers to get money illegally and in breach of the leadership code in the Constitution, and of the Compensation Act.

7.8 The jurisdiction over conduct of leaders is not with the Court but with the Ombudsman. That is what the Ombudsman Act says in accordance with the Constitution. The Court cannot commence an enquiry into Mr Jimmy and Mr Korman’s conduct over allegations that they used their offices for personal gain. It was Parliament that passed the Ombudsman Act and Parliament’s intention was that the Ombudsman look at the conduct of leaders of which Mr Jimmy is one. So Mr Jimmy is wrong that only the Court can look into this matter. The Court cannot. Only the Ombudsman can start an enquiry.

7.9 Furthermore, the enquiry has shown (and accepted by Mr Jimmy) that Mr Jimmy and Mr Korman did not follow the Compensation Act. It must be remembered that Mr Jimmy had worked out how much money he, Mr Korman, Mr Sope and others were going to get even before the Act was passed. And finally, they (the seven who were in prison following the setting up of the illegal "interim government", did not qualify under the Act to get any money at all because they were imprisoned under Court order; s3(1)(e) of the Act required the imprisonment to be without Court order.

7.10 What is more shocking is that the Acting Director of Finance on 09.12.94 sent Mr Jimmy a memo pointing out that payment was illegal. An extract from this memo (Appendix 13) is set out below:

"I am concerned about the legality of payments listed in your memo to me dated 28.11.94 due to the fact that they were approved by the Council of Ministers in August 1994, some two months before the Act was passed in Parliament. Clearly, the provisions of the bill have not been complied with, therefore it is my duty to remind you that as the Minister responsible for paying out the compensation you are also responsible for ensuring that all provisions of the bill are complied with before any payments are made".

7.10 In Korman’s reply (with English translation) he makes the following main points:

(a) The Government was going to be sued by various claimants including the seven who were jailed for involvement in forming the illegal interim government and who were either not convicted or had their convictions quashed by the Court of Appeal;

(b) The Council of Ministers decided to settle these possible claims without going to Court by paying out the seven claimants VT 5,000,000 each;

(c) VT 5,000,000 was a fair amount for them and Sethy Pango, who died, got VT 1,000,000 (five times less than those who were imprisoned under Court order) because he was supposed to be paid some more money from the villages of Pango, Ifira and Erakor out of the money those villages received from the Vanuatu Government for Port Vila urban land compensation;

(d) Mr Korman considered that he fell within s3(1)(e) of the Compensation Act and thus was able to claim; and

(a) I wrote and asked Mr Korman to provide me some evidence of letters from lawyers saying that they were going to sue the Government;

(b) I also wrote to the Attorney General’s Office and Prime Minister’s Office seeking some proof that lawyers had written making claims;

(c) I also contacted the former acting Director General of Finance and the former Attorney General, Mr Patrick Ellum who had been advising Mr Korman at the time in relation to the Compensation Act; and

(d) One of officers interviewed the three chiefs of Pango, Ifira and Erakor to find out if there was a special arrangement for those villages to pay the family of Sethy Pango extra money on top of his payment of VT 1 million.

7.12 As a result of (a) above, Mr Korman wrote back and said that he did consult the then Attorney General and that his advice was that it would be better to pay a reasonable amount than fight a Court case. Mr Korman, despite my request, was unable to provide copies of any documents that backed up what he told me. He asked me to try the Prime Minister’s Office where he stated that the documents would be archived. The Prime Minister’s Office was unable to provide me with any of these documents that Mr Korman suggested had existed. The position was the same with Attorney General’s Office.

7.13 Mr Ellum did not remember any discussion with Mr Korman about any claim that had been made by lawyers acting on behalf of anyone. They referred me back to the meeting that they had had with Mr Korman on 26 October 1994 when they informed that the payments were illegal (refer paragraph 6.13 above and appendix 3).

7.14 The only claims made where a lawyer was involved were claims made for VT 30,000,000 by Messrs Naupa, Sokomanu and Dr Spooner. But these were made in late November 1995 AFTER these men had already been paid VT 5,000,000 each on 27/10/94 (refer 6.14 and 6.15 above). The claims made by the lawyer therefore had nothing to do with the payments made a month earlier. Rather the only explanation for the claims was presumably to try and give some basis to later defend the amounts paid to these men if they were later questioned.

7.15 Finally, I can inform the public that the three chiefs of Pango, Ifira and Erakor, Chiefs Andy Riman and Mantoi Kalsakau III and Tenene Wayane all swore on the Bible and denied the arrangement that Mr Korman said that he had made with them. They said that they had met with Mr Korman but that he never mentioned to them that some of the compensation each village had received for claims on urban land in Port Vila was to be paid to the family of Sethy Pango.

7.16 I conclude that the information Mr Korman gave me in his reply is not correct.

8.1 I wish to make it clear that the men who were imprisoned following Sokomanu’s attempt to dissolve Parliament may well have had valid grounds for feeling that they were treated unfairly. It is clear from the Court of Appeal’s judgment that, whilst Mr Sokomanu had no Constitutional right to dissolve Parliament, neither Mr Sokomanu nor the other men convicted were guilty of any criminal act so that on that ground their personal feeling that they were unfairly treated is understandable. However, they were lawfully imprisoned under Court order. They therefore never had any legal basis to make a claim under the Compensation Act or under the common law for that matter, unless Chief Justice Ward acted in bad faith (and no-one has ever suggested that).

8.2 However, the point of my enquiry is not to comment on their treatment. The point of my enquiry was to find out if the leaders had, by awarding themselves "compensation", fallen below the standards demanded by the leadership code in the Constitution.

Findings - Messrs Carlot Korman and Jimmy - use of Ministerial Office for personal gain

8.3 My opinion is that Messrs Carlot Korman and Jimmy have fallen well short of the standard of conduct required by leaders. This is because not only were the provisions of Compensation Act not followed but they had an obvious and clear conflict of interest in both the passage of the Compensation Act and its application to their own claims. The Constitution is very clear. It says (art 66) that:

a leader .... has a duty to conduct himself in such a way both in his public and private life, so as not to -

(a) place himself in a position in which he has or could have a conflict of interests or in which the fair exercise of his public or official duties might be compromised.

8.4 I would therefore have expected that Messrs Korman and Jimmy not to have had any input on the matter of compensation. I consider that they should have disqualified themselves from:

(a) any involvement in the drafting or passage of the Compensation Act into law;

8.5 The reverse occurred. Mr Jimmy signed the voucher authorising his own VT 5 million compensation payment.

(b) made contrary to the Attorney General’s advice (refer 6.13 above) and the Finance Director’s warning (refer 7.10 above);

(d) not payable because Messrs Jimmy, Korman and Sope were imprisoned under Court order and thus did not fall into s 3(1)(e) of the Compensation Act which required them to have been imprisoned without a Court order.

8.7 I conclude that Messrs Korman and Jimmy have used their high offices for personal gain. Such conduct in my opinion will result in a loss of confidence in the integrity of these office holders. I consider these men to be corrupt and unfit to hold Ministerial office.

8.8 Mr Sope’s conduct in this instance is not as serious as that as that of Messrs Korman and Jimmy. He, however, did receive money that under the law he was not entitled to. He did not qualify under s3(1)(e) under the Act. He too was allotted and approved a certain figure (VT 5,000,000) before the Compensation Act was passed into law and before the Compensation Board had even been appointed let alone met. Mr Sope did not reply to the preliminary report so again, like Mr Jimmy, he can be taken as not having any dispute with the facts.

9.1 There was no legal basis for the payments of the amounts of VT 5,000,000 to the seven imprisoned. These three MPs fall within my jurisdiction and I recommend therefore that since the payments have no basis in law that they should return it to the Government which effectively holds the money for the benefit of the people of the Republic of Vanuatu (refer art 39(1) of the Constitution[4]). I am requesting that they advise me within 14 days whether or not they intend returning the money. If Messrs Korman, Jimmy and Sope are prepared to return it I recommend that it be returned within 3 months of the date of this report together with interest at 5% per annum for the period that the money has been out of the Public Revenue.

9.2 It could well be used to pay some of the claimants who made claims under the Compensation Act but could not get paid because the money had been all used up as explained by Mrs Yvette Sam (refer 1.12(b) and 6.21) above.

9.3 If I do not receive advice within the 14 day period that they will return the money, then I recommend that legal proceedings be issued against these three men to recover the money.

Hon W Jimmy to resign or be dismissed from Council of Ministers and not reappointed again in the future to any position involving public money

9.4 Mr Jimmy directly breached the leadership code in the Constitution because he gained personally from public office. Fortunately he has had the sense not to argue against the findings of this report when his illegal conduct was discovered.

9.5 I therefore recommend Mr Jimmy do what I consider to be the honourable thing. That is having admitted his misconduct, pay back the money and resign from the Council of Ministers and apologise to the people of Vanuatu. Failing this I repeat my recommendation in the Illegal Ex-Gratia payment report (04.06.97) that the Council of Ministers dismiss Mr Jimmy as a Minister. Mr Jimmy should not be considered for reappointment to the Council of Ministers in this term of Government or to any other position where he has anything to do with public money ever again.

Hon Maxime Carlot Korman not to be considered for Ministerial post or other position involving public money

9.6 Mr Korman’s misconduct was similar to that of Mr Jimmy but perhaps slightly worse. Mr Korman was the Prime Minister of the time. He was the leader of the Council of Ministers. He demonstrated an arrogant disregard for the legal advice of the then Attorney General, Mr Patrick Ellum (refer appendix 3 and para 6.13 above). Unlike Mr Jimmy however, Mr Korman is not prepared to admit the facts.

9.7 Greed got the better of Mr Korman. As Prime Minister he must along with the Finance Minister take the higher responsibility for the misappropriation of the people’s money. He too used his high position to obtain personal gain in direct breach of the Leadership Code of the Constitution. I therefore recommend that Mr Korman never be considered for a Ministerial post again nor should he be appointed to any position that involves public money.

9.8 As noted earlier Mr Sope’s role in this illegal behaviour was not as serious as MP Carlot Korman and Minister Willie Jimmy. The public are well aware now of Mr Sope’s past activities and my opinions of those activities as a result.

9.9 Suffice to say that Mr Sope’s receipt of money in this incident is again further evidence of his moral bankruptcy and his lack of conscience or regard for the people of Vanuatu.

9.10 Accordingly, I confirm the most recent recommendation on Mr Sope in the Multiple Breaches of the Leadership Code (10 December 1996) that he be excluded from appointment to any position of public responsibility ever again. Obviously his recent reappointment as Deputy Prime Minister is of very serious concern because of his repeated illegal behaviour in the past. As Prime Minister when he dismissed Mr Sope from his post of Deputy Prime Minister, Mr Vohor is reported to have stated in October 1996[5] following the Bank Guarantees, Multiple Breaches and Cybank reports: "I don’t want to work with leaders that threaten the security of this Nation and its people".

Council of Ministers to follow the law and the advice of the Attorney General

9.11 Time and again the Ombudsman’s Office is faced with instances where the Council of Ministers see themselves above the law. They are not. If they do not like the current law they can change it or make new law through Parliament.

9.12 Furthermore once a new law has been passed it must be applied in accordance with its terms and equally and fairly to all people. The Compensation Act is a classic case of Ministers treating themselves better or higher than the people. That is in breach of the Constitution which says at art 5(1)(k) that the law must be applied equally to all.

9.13 This situation was even worse because the Ministers and their colleagues (the group of 7) did not even fall within the Compensation Act. The former Attorney General told Mr Korman of this but Mr Korman ignored the advice and thus ignored the law. I therefore recommend that the Council of Ministers must follow the advice of the Attorney General. If they strongly disagree on very good legal grounds then perhaps they may consider having the Supreme Court determine such an issue; but this would only be in very rare cases. However, the Council of Ministers must not simply ignore the law when they do not like the advice of the Attorney General.

9.14 This Bill was before Parliament at the December 1996 session. It was withdrawn from Parliament in December 1996 because I understand some MPs wished to have a closer look at it. It was again before Parliament in the May/June 1997 session and not tabled with other bills.

9.15 In my opinion this Bill if passed into law will discourage leaders in the future from breaking the law and the Leadership Code (in the Constitution) because a special court called a Leadership Tribunal (i.e. not the Ombudsman) will be able to judge leaders who break the law and the Leadership Code. I recommend that all political parties agree to allow the Bill to be voted on as a conscience vote. A conscience vote is where MPs do not vote according to what their party tells them to vote but rather on their own conscience. Sometimes in conscience votes MPs find it helpful to talk to their people in their electorate to find out what the people’s view is on their conscience vote.

9.16 I should finally note that I have made no formal recommendation concerning Mr Charlie Nako, current Minister of Health (refer paragraphs 1.9, 3.2 and 7.4 - 7.5 above). This was after much thought. If Mr Nako’s conduct is the subject of my Office’s scrutiny and adverse finding in the future it is possible that I will have regard to his conduct in this matter in any future recommendation that I may make.

In accordance with s23 of the Ombudsman Act No. 14 of 1995 and s63(4) of the Constitution, I am forwarding a copy of this report to the President, the Prime Minister, and the relevant public authorities. According to art 63(4) of the Constitution their duty is to "decide upon the findings of the Ombudsman within a reasonable time and the decisions, with reasons, shall be given to the complainant forthwith".

2. Record of meeting PM Korman, former Attorney General, acting director of Finance - 26.10.94.

4. GPVs for Mrs Naupa (on behalf of Mr Naupa), Mr Sokomanu and Dr Spooner - 27.10.94.

7. Finance Department computer print out showing payments prior to appointment of Compensation Board on 22.02.95.

(b) Mr Waniel Emile (UMP) private secretary to Hon John Sethy Regenvanu deputy Prime Minister; and

^[2] “O/S” stands for outstanding. Messrs Korman, Jimmy and Sope at some earlier point in time had received money from the Finance Department previously. They therefore received a total of VT 5 million each when their existing debts to the Government and the payments they received are added together.
^[3] The Court of Appeal did however confirm that Mr Sokomanu as President had acted illegally and against the Constitution in attempting to dissolve Parliament and trying to set up an interim government.
^[4] “The executive power of the people of the Republic of Vanuatu is vested in the Prime Minister and Council of Ministers and shall be exercised as provided by the Constitution or a law”.
^[5] Vanuatu Weekly Hebdomadaire issue no. 618, dated 26 October 1996

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Vanuatu Ombudsman's Reports

Payment of Compensation to Hon Korman, Hon Jimmy and Hon Sope in Breach of the Leadership Code [1997] VUOM 10; 1997.7 (3 July 1997)