Auditor General ordered to seek ‘independent’ legal advice on controversial Lotto Funds

Jul 28, 2014 News

Carl Greenidge , Chairman of the PAC

Though Attorney General, Anil Nandlall, said that the court had ruled that Government had not acted unconstitutionally by not placing the proceeds from the Lotto Fund into the Consolidated Fund, Chairman of the Public Accounts Committee has ordered the Auditor General to seek “independent” legal advice with regard to the controversial fund.

Chairman of the Committee, Carl Greenidge, made this explicitly clear during an interview with this publication last week.

Greenidge said that as it relates to the Lotto and the Cricket funds, the Auditor General, Deodat Sharma, was asked to get legal opinion as to whether it should go into the Consolidated Fund.

The legal advice, the Committee Chairman said, should be outside of those given by the Attorney General. Greenidge said that the Committee was of course divided on the matter as those who represent the interest of the government communicated that the matter was already dealt with at the level of the court and as such they were not in agreement with the Auditor General being told to seek independent legal advice.

“He (Sharma) was told to get independent advice, because the advice given before was by the Attorney General and it was not appropriate because the AG advises the Cabinet not the Auditor General…”

Though the Committee may be divided on the issue, its Chairman is of the firm belief that the Lotto Funds and others should be paid into the Consolidated Fund, “because these aren’t bodies established under the Fiscal Management and Accountability Act which allow establishment of extra budgetary agencies and it is not established as such for them to keep the money out of the fund and as such I maintain my position on the issue.”

Sharma is expected to return to the Committee with a report on his findings in a month’s time. The PAC will make a decision on the way forward after perusing the report.

Trevor Williams, the Alliance For Change (AFC) Member of Parliament who sits in the Committee, told this publication yesterday that his party has always been clear on the procedure to be taken with all state assets.

Williams opined that he is in agreement with the decision taken by the Chairman as the law is clear about the destination of state funds.

Christopher Ram, in a letter back in January 13, 2013 had said that Nandlall gave his own interpretation on the decision handed down by Justice Diane Insanally in the case of Desmond Trotman versus Attorney General, popularly known as the Lotto Funds case.
Nandlall claimed that Justice Insanally decided the case on its merit, finding that “the deposit of the monies in the Development Fund of Guyana (Lotto Fund) is in accordance with Article 216 of the Constitution, the provisions of the Fiscal Management and Accountability Act and the Lotteries Act, thereby vindicating the Government’s position.” The truth cannot be more different, Ram contended in his letter.
The action, he reminded, was initiated in April 2010 by Desmond Trotman, a political activist and now Member of Parliament for A Partnership for National Unity (APNU). Essentially, Trotman asked the Court through his Attorneys, Miles Fitzpatrick, S.C and Christopher Ram, whether the share of the revenue received by the Government from the Guyana Lottery Company Limited, a private company incorporated under the Companies Act 1991, is required to be paid into the Consolidated Fund in accordance with Article 216 of the Constitution and Sections 21 and 38 of the Fiscal Management and Accountability Act 2003.

He also asked whether as a consequence, the expenditure by the Government of the money without the authority of Parliament, is unconstitutional and illegal.
On June 2, 2010, Ashton Chase S.C. and Pauline Chase, on behalf of the Attorney General did not respond to the issues raised but instead asked the Court to strike out the plaintiff’s action on the following grounds: a) that the action failed to comply with the rules of the High Court; b) that Trotman had shown no right, legal or equitable, to seek any order by the Court; and c) that Trotman used the wrong procedure.
On December 28, 2012, Justice Insanally, in a brief hearing in Chambers, delivered her decision on the arguments, ruling against Trotman on the procedural points, but not on the merits of the case.

Subsequent efforts by Counsel, Ram said, to obtain a copy of the decision were unsuccessful, prompting Miles Fitzpatrick SC, to write the Judge requesting a written decision.
Through his Attorneys, Trotman has appealed the decision of the Court.
Greenidge had subsequently written a lengthy statement in 2013 saying that he has no view to offer on the decision of the judge in the absence of a written explanation of the logic of the decision. “I am little surprised by it however,” the politician stated.

He had said that the National Assembly’s difficulty is not with the acceptability of the fund under the Constitution or the Fiscal Management and Accountability Act, but with its administration.

In the case of the Lotto fund, over the decade 1996 to 2006 alone, Greenidge said that some $3B of revenues has still to be accounted for.

He said that the National Assembly is still awaiting the reports and audited accounts from the government for the use of the millions of dollars of funds associated with the2005 floods, the Cricket World Cup, the hosting of Carifesta X and the ICC Twenty/20 tournament.

AFC Chairman, Nigel Hughes, had also spoken on the issue stating that the Lotto Fund case was dismissed on a procedural point. But that “the principal issue of whether or not the Lotto Fund should go into the Consolidated Fund was never determined; it was never heard…arguments on that matter were never heard in the court.”

“The Court dismissed the case on a preliminary point…the issue on whether or not the Lotto Funds should go into the Consolidated Fund is still unanswered and undetermined.”