Failure to audit Exxon’s US$10B bill…Public servants lose 66 years of double pay

Nov 15, 2021 News

…stakeholders ramp up criticisms of government’s dereliction of duty

Kaieteur News – Amid mounting criticisms of the Government’s failure to audit the US$10B expenses by ExxonMobil for the Liza I & II projects, Kaieteur News Publisher, Glenn Lall has estimated that the money forfeited could have doubled public servants’ salaries at its current rate for the next 66 years.
This likely lost income is linked to a provision in the Production Sharing Agreement (PSA) which gives the government a chance, through periodic audits, to reclaim excessive spending by Exxon and its partners. This provision was to ensure that Guyana could get the maximum benefits out of its contract with Exxon. In other words, it was a safety valve for the financial protection of the people of Guyana. Government had a duty to use the safety valve when needed.

Kaieteur News Publisher, Glenn Lall

Lall, a businessman of several decades and who has been at the forefront of a campaign admonishing more robust monitoring of the oil and gas sector so that Guyana can get its fair share of the oil profits, was the first person to have flagged the issue regarding the unaudited spending, after Vice President Bharrat Jagdeo at a recent news conference admitted that his government dropped the ball. “We received almost 10BUSD in costs for the Liza I & II projects, this money should have been checked, double-checked and rechecked a million times within the two year time frame set out in the contract, and if it was not checked within that time frame Guyana will have to accept and pay every single cent, as is,” Lall said in a recent radio commentary on Kaieteur Radio.
Who will miss such a deadline?
“Now we are being told by the man himself, our VP, that the deadline has passed and we missed the boat so Guyana will have to foot that bill, that $10BUSD bill.” The newspaper published asked: “ Who on earth would miss a two year deadline to check a bill coming from people you know you can’t trust with one dollar, much less $10BUSD? You know of anyone…?”
Opining that at least half of the US$10B bill presented by Exxon was overstated, Lall said that US$5B is equivalent to two and a half years of Guyana’s Budget. “Let me break it down more simple for you, with that 5BUSD Guyana didn’t have to go prostituting itself to any bank to get $100B for the next 50 years, that’s the kinda money we get [cheated] on because we didn’t check, these clowns let the time run out.”
He mentioned that Guyana was spending $15B to pay public servants this year. “…had these clowns checked and managed to save half of that US$10B, public servants salaries could have been doubled now, to the next 66 years with that money alone, and if you lessen the years you can increase the salary more as the years go by, and that is also factual what I am saying here.”
Lall noted that every year the nurses, the teachers, the police, the soldiers, and public servants in general could have been benefiting from a double and triple increase in their salaries. “That’s the kinda money we lose out by not checking that US$10B and Jagdeo, Ashni Singh, Winston Jordan or any accountant can do the math to prove me wrong, Lall asserted. “Not checking those bills is what has left us in this situation where we would have to continue to borrow every year to give public servants a salary increase…”
During his latest press engagement Jagdeo told the nation that government is disappointed that it has not been able to push through with these critical post-2017 audits.
Expounding further, the Vice President said, “We have been very disappointed that we have not been able to select a group to do the audit of the post-2017 expenditure by Exxon. The reason is that we didn’t have strong local content. We had two groups, two local groups that came in but they were not strong enough. We want to build the capacity in Guyana to do this audit. We think that our people have enormous skills, forensic skills and auditing capacity.”
The former President added, “…we’re looking to see if we can’t have an arrangement where we have a consortium of our local people to come together to do part of this work while working alongside an international group…”

Vice President Bharrat Jagdeo

Jagdeo said he has since asked the Natural Resources Minister, Vickram Bharrat to examine the possibilities of getting together, all of the groups from Guyana which have an expressed interest in working with a foreign company on this front. He said this is the preferred option as the country desperately needs to increase its auditing capacity and competencies.
Casual and callous
Reacting to Jagdeo’s comments Lall said the VP was very casual and callous in addressing the issue. “Hear what he told the nation…listen to his excuses and how he presented it to us, as if this is candy money or snow cone money we give away.” He continued: “Not even a joker would allow a clown to spend money which has to come out of his pocket and that is what the VP Jagdeo telling us. This man run this country 12 years as President, now he is heading this trillion USD oil sector and telling this nation that he disappointed for not checking 10BUSD spending, knowing there is a time limit to do so.”
Mocking Jagdeo, Lall said: “But hear what this financial guru Bharrat Jagdeo telling us, he is disappointed that the time lapsed and he didn’t have people to verify $10BUSD, like I said if you were cheated US$5B , that money is 2 ½ years Budget gone down the drain, it means everything we are doing in Guyana could have been doubled for the next 2 ½ years, if you had to patch one road you could have patched two; if you had to fix one bridge, you could have fixed two… man everybody salaries could have been doubled too, with just that US$5B.”
Criminal dereliction
In addition, to Lall several other stakeholders have criticised the government’s handling of the matter. Canadian-based Guyanese, Dr Jerry Jailall in weighing on the matter said Guyana’s failure to audit Exxon’s US$9.5B spending is tantamount to the Government aiding and abetting the fleecing of Guyana’s resources. As such, he was adamant, “the sin of omission of failure to do audits is as bad as the sin of commission of wrongdoing,” and that “no excuse can absolve the Government of this grave sin against the nation.”
According to Dr. Jailall, “this is not Exxon doing it to us. This is our own Government doing it to us.” He suggested that Guyana, at the beginning of its oil journey is already manifesting the “resource curse” syndrome.
Dr. Jailall qualified his position by drawing reference to the fact that the ongoing Public Accounts Committee’s hearings “are all about how the country’s monies are being misspent and there is poor accountability, poor record keeping, missing receipts of transactions and payments running into hundreds of millions of dollars, and at the end of the hearings, nobody is going to jail for the unaccounted millions.”
He pointed also to “poorly equipped hospitals that kill our loved ones, dialysis treatment is unavailable in most of Guyana, most of our village roads are mud roads still, our schools are primitive, internet services are unavailable or poor in most of Guyana, and we have a long list of urgent needs.”
56 years of personal income tax

Opposition, MP, Roysdale Forde

For his part, Opposition Member of Parliament and Shadow Minister for Legal Affairs and Attorney General, Roysdale Forde described the situation as a massive financial failure that reflects a dereliction of duty. He said the money forfeited could have paid the personal income tax of all Guyanese for the next 56 years. Moreover, he is calling for “an independent investigation into this colossal act of incompetence.” Commenting further, Forde said that the incumbent People’s Progressive Party Civic (PPP/C) administration, “opted to let US$9.5 billion or G$1.8 trillion go, than to entrust a high-valued job to ‘not so strong’ local auditors.”
Forde added, “not only is this disclosure pathetic but it shows Jagdeo’s lack of confidence in the skilled persons of this country and the contempt that he and the PPP/C have for Guyanese as a whole.” As such, he posited, “local auditors must feel like peons (unimportant) knowing what Jagdeo and the installed PPP/C administration think of them.”
According to Forde, “it is stunning to see that it was better for him, who has no auditing skills, to let such a potentially large sum of money be forfeited with the added loss of an opportunity for local auditors to learn on the job.”
The situation, he observed, comes “in a time when the cost-of-living is rising and families are hurting” and lamented, “it is amazing that the country is willing to accept a reckless decision.” A decision he said, that would potentially let “G$1.8 trillion go down the drain; with such wanton disregard for the financial needs of the people, this installed government is showing its true colours of having no real interest in working in the best interest of this country.”
Chartered Accountant Christopher Ram commenting on the issue in the Stabroek News flayed what he described as government’s “nonchalant attitude.” He said the administration could have asked Canada for help, if indeed there was a problem sourcing competent local auditors. “And if the Government was so interested in auditing those costs, it could have called on the Audit Office, which has easy access to Canada and its wealth of experience in petroleum audits, to provide assistance, even as a short-term measure,” Ram was quoted as saying in the Stabroek News.