By Dylan Sogie-Thomas, London, United Kingdom.
My last article covered management issues affecting Anti-Corruption Sierra Leone and the need for prosecuting powers. I have tailored Part 2 to cover my comments on the ACC Act and Strategic Plan which I received from Mr. Abdul Tejan-Cole, Commissioner, ACC.
The ACC Commissioner’s position should not be limited to lawyers only but both commissioner and deputy commissioner positions should be chosen by the president from among persons with proven knowledge and background in accounting, auditing, lawyers, certified fraud examiners and police investigators. However if the Commissioner is from a financial background, the deputy should be from the legal profession or vice versa.
The new ACC Act should empower the ACC to investigate and prosecute any suspected offence which they believe has reasonable grounds to involve serious or complex fraud. The ACC Act should give the commission wide ranging investigative and prosecuting powers. The commission can require any citizen or foreigner residing in Sierra Leone to answer questions and to produce documentation.
The ACC Act and Strategic Plan, if accepted by parliament without considering some of my comments mentioned below will make or have little effect in the fight against corruption. The ACC Act 2000 failed to cover key or principal types of fraud. The new ACC Act should introduce a number of new offences in addition to the criminal offences pursued by the police.
The principal types of fraud that should be covered by the ACC because of the level of corrupt activities in Sierra Leone are:
Bribery and corruption
Breach of fiduciary duty
Money laundering
Concealment and misrepresentation of material fact
Bribery and Corruption may include cheating the public revenue or procurement fraud or theft by politicians or public officer. Bribery may include the corruption of a public official as well as commercial bribery, which refers to the corruption of a private individual to gain a commercial or business advantage.
Bribery can be committed by a public official, by receiving or giving a thing of value in order to influence an official or illegal act. A thing of value is not only limited to cash or money; it will include such things as lavish gifts and entertainment, payment of travel and lodging expenses, loans, promises of future interest.
A bribe might be paid to induce an official to perform an act that otherwise would be legal or an act that the official might have performed without a bribe. For example, Mr. Bashon, a Lebanese business man giving ministers or the IG gifts such as cars or building materials so that he can be protected or to apprehend a thief will be classified as a bribe.
Procurement Fraud Bribery and corrupt behaviour is common when it comes to procurement for government departments. It will involve the offering of anything of value to influence the action of another. There are two basic reasons why bribes occur:
(a) Organisational or departmental interest or legal act (Passport application)
Although the person receiving the bribe may be acting in the best interest of his organisation or for the state by agreeing or approving the transaction he may refuse to act until he has received the bribe.
(b) Non organisational or non departmental and illegal act (smuggled goods)
This transaction is not in the interest of the organisation or the state for which the person being bribed acts. Therefore if the other party wants the transactions to be effected, it is necessary to bribe that person.
Bribery and secret commission schemes generally fall into two broad categories: Kick backs and bid rigging.
Kick Backs-are undisclosed payment made by vendors or contractors to employees or public servants or government workers. This kick back will be paid by contractors or service providers or vendors simply to get extra business from the government and these kick backs will arise due to excess charges from vendors that will not be questioned by the receiver.
Bid rigging occurs when an employee or government official fraudulently assists a contractor or service provider or vendor in winning a contract through the competitive bidding process. The competitive bidding process can be a very cut throat environment and tailor made for bribery.
The benefit of ‘insider influence’ can ensure the vendor or contractor wins. Many vendors are willing to pay for this influence.
Breach of fiduciary duty or abuse of position: This fraud covers those in position of trust such as department heads, ministers and the president, whereby the position is abused dishonestly to obtain a gain for himself or another.
A person who is in a position of trust may be able to commit the offence of fraud more readily than otherwise. Abuse may be by way of giving negative instructions or omissions as well as positive acts. For example, the Minister of Transport should be charged if it is found that he gave landing rights to the cocaine plane. IG should be dismissed and charged if it is found that he prejudiced an investigation.
Money Laundering may include forgery, counterfeiting and drug trafficking. Money laundering is a process by which the proceeds of crime are converted into assets which appear to have a legitimate origin so that they can be retained permanently or recycled into further criminal enterprises. The process is commonly used by drug traffickers, senior government officials including ministers and presidents, fraudsters and organised syndicates.
The ACC Act should provide criminal sanctions for forgery and counterfeiting. Forgery: A person is guilty of forgery if he makes a false instrument, with the intention that he or another shall use it to induce somebody to accept it as genuine and by reason of so accepting it to do or not to do some act on his own. For example, a manager uses her subordinate’s signature to induce the public or government body to accept that her subordinate is in support of a plan or strategy is a criminal act.
Counterfeiting: It is an offence for a person to make a counterfeit of a currency note or of a protected coin, intending that he or another shall pass or tender it as genuine. For example, a Nigerian found in possession of money making materials or counterfeit notes should be charged under the new ACC Act.
Drug trafficking: The ACC Act should include drug trafficking offences. Any individual involved in the cultivation, manufacture, distribution and sale of illegal drugs should be charged under the ACC Act. For example, if Mr X is arrested for drugs the ACC should be in a position to apply for confiscation order or recover assets acquired from illegal transactions.
Concealment and misrepresentation of facts: tH This may include false accounting, fraud by NGOs and obtaining services dishonestly. A person commits fraud if he dishonestly makes a false representation intending that by so doing he will make a gain for himself or another or to cause loss to another or to expose another to a risk of loss. For example, NGOs or human rights groups should be charged under the new Act if they received funds from donors and fail to perform their obligations. NGO fraud causes loss of reputation to the country.
Under the new ACC act a person should be charged if he fails to disclose to government information which he is duty bound by operation of law to disclose. For example, a businessman should be charged if he fails to disclose to NRA his true revenue or income.
Obtaining services dishonestly: The ACC act should make it an offence if a person obtains services dishonestly. This offence is made out where a person, who by dishonest acts obtains a service, which they know should be paid for.
False accounting (principal accountant): This is where a person dishonestly, with a view to gain for himself or another with intent causes loss to the state. He or she commits an offence if they:
-deface, destroy, conceal or falsify any account or any record or documents made or required for any accounting purpose, or in furnishing information for any accounting purpose or
make use of any account, or any such record or document as aforesaid which to their knowledge is or may be misleading, false or deceptive. For example, making false entries on an account payment sheet required for an accounting purpose and falsifying withdrawal slips from company funds to which a person is not entitled.
Anti -corruption strategy
I was disappointed to see the much talked about ACC strategy. I wonder if the working group that prepared that document had a clear idea of what the strategy should achieve.
The ACC strategy should be a document used to communicate the commission’s ambition or approach to fraud or corruption. It should cover or make references as to how the commission hopes to:
Prevent, detect, prosecute and punish offenders
Develop and maintain the necessary mechanisms to deter fraud
Detail how investigations will be carried out in all cases of suspected fraud
How citizens, employees should report all cases of suspected fraud to the appropriate authorities.
How ACC will assist or be assisted by the police in their investigation and prosecution of cases.
How ACC will recover the proceeds from fraudsters.
Encourage employees or the public to report all cases of suspected fraud.
The strategy fails to mention how ‘’whistle blowing’’ will be used to fight corruption.
It fails to show the linkage between ACC, Auditor General’s Departmment and the office of Attorney General.
The strategy failed to cover the private sector
The strategy failed to apportion its operational efforts. I will recommend the strategy be apportioned broadly as follows:
Government ministries and Commissions -35%
Bribery, systems and controls -35%
Individual and private sector: -10%
Other organised crimes -20%
Prevention and Detection: The responsibility for the prevention of fraud lies with management or department heads. However, ACC is expected to actively pursue and recommend appropriate policies and procedures to prevent fraud. ACC should assist government departments in the investigation of fraud allegations and also help department heads with designing and implementing internal control systems so that fraud schemes will be less common and not go undetected.
Preventive methods are:
Education and training: All senior department heads that are responsible for authorisation of contracts , storing , receipt and payments for goods and services should be trained in ethical situations and there should be adequate segregation of duties in order to get department heads to be accountable for their behaviour. Junior officials should be trained in identifying red flags of fraud and the channel of reporting.
Salaries and compensation: ACC should advocate for salary review. People responsible for the above duties should be paid well enough to reduce the motive to commit fraud.
Hotlines and whistle blowing: ACC should maintain and install more hotlines to provide a forum for complaints by employees and outsiders.
Competitive bidding: ACC should ensure that they monitor bidding procedures for goods or services over $20,000. After the bidding process has been completed a questionnaire can be sent to successful and unsuccessful bidders.
Internal Control: ACC should work with the Auditors General department to ensure that there is proper documentation in all government departments for authorisation, storage, receipt and payment of goods and services.
The ACC strategy should include policies clearly defining what constitutes a conflict of interest and should prohibit such entanglement by officers, directors and employees. For example, ACC should be in a position to investigate when the media raises concerns on the award of contracts. For example ACC should investigate when the media questioned the award of contracts to President Koroma’s sister in order to prove that she met the terms and conditions of the contracts and was not favoured by the selection committee.
Punishment
Disqualifying a public servant or department heads or ministers: A significant penalty should be inflicted on those public servants convicted of involvement in fraud. The ACC Act should makes a provision to disqualify such a person from acting as a director for a minimum of ten (10) years and a fine of Le, 5 million after recovering the full amount misappropriated.
I am looking forward to receive any comments or feedback via email: sogiethomas@yahoo.com
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