Subject: Ministry of Finance and World Bank Spending Donors' Money

Posted by TEMPO SEMANAL at <>04:47

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<>Translation of Edition 136, Tempo Semanal Thursday, 30 April 2009

Ministry of Finance and World Bank Spending Donors' Money to Make Corruption, Collusion and Nepotism Worse in Timor-Leste

Emilia: I never interfered

The recent public disclosure of details regarding the Public Finance Management Capacity Building Project (PFMCBP) in the ministry of finance has become a scandal. According to the Australian Embassy, the PFMCBP, a Project worth USD$26 million over four years, administered by the World Bank, towards which the Australian government and taxpayers have contributed a total of Aust$13 million. The PFMCBP was designed to build capacity in the ministry of finance to enable it to manage Timor-Leste's public finances efficiently and transparently, and make it corruption free.

However, corruption is increasing and the PFMCBP and the ministry of finance have the responsibility to prevent this from happening, but some people are saying that it is being helped along instead. "The contrary has emerged instead. In my view some people are currently promoting corruption with their silence, when they themselves see wrongful conduct within the ministry, and the same in other ministries but they do not speak up, because they are scared of losing their huge salaries," said Augusto X. DC Costa, a youth from Díli University (on 24/4/09). "As a new nation in this millenium Timor-Leste has obtained support from many friendly nations including Australia."

"Australia wants to eradicate corruption, collusion and nepotism but on the other hand Australian taxpayers' money is empowering Corruption, Collusion and Nepotism in this country."

The Ministry of Finance has the responsibility to put in place the national budget and ensure that the moneys are spent properly. International advisors from the PFMCBP have the responsibility to lead the efforts for this objective, as advisors as well as functionaries. The Ministry of Finance is also the institution that oversees the sound and ethical expenditure of public moneys.

The Minister of Finance Emilia Pires says that, "Our advisors are also shared amongst line ministries. When line ministries have problems and need some advice or if they have complex matters they need help with, I lend them an advisor to work with them or they can come here to consult with them." According to Emilia, these advisors "can help contribute to economic growth of up to 12.3%. If you look at the IMF report it clearly says that the major contributor to this economic growth came from public spending."

In the last nine months, this newspaper has made a number of revelations regarding corruption in the ministry of health, agriculture, security and defence, education, public works and the private sector etc. Until today we have not seen with any certainty any evidence of any serious investigations having been initiated, of one minister accepting responsibility and resigning, nor has there been one formal indictment issued to date. However, this newspaper has instead been formally accused of criminal defamation because of corruption allegations it made against the Minister of Justice.

An Australian citizen, John Michael Peachey, is an advisor on procurement service reform with a total salary of USD$215,153.00 for one year's work from 27/10/08 – 27/10/09, but in reality many allegations have emerged regarding the tender process in central procurement, as well as in the procurement which has been decentralised to other ministries. "The Australian Government, the World Bank and international community know a lot regarding corruption because their advisors are in fact facilitating its occurrence, but the same people remain. What do Australian taxpayers and those of other nations think of this sort of conduct?" Augusto X. DC Costa asked. The PFMCBP is supposed to have an important role in preventing, uncovering and eradicating corruption. Apparently from the corruption allegations that have emerged it is constantly increasing and its prevalence is not diminishing in Timor-Leste.

This Project has not achieved good results. But the Minister of Finance defends it saying that, "This is from the past, I can accept that. Because I also asked the advisors this question when I came in." Emilia told the advisors after being sworn in, "When you people do not denounce that which comes into your knowledge then you are part of the problem."

"I have made many reforms to this Project we are speaking of, PFMCNP from the donors. I made big reforms in 2008, I changed many advisors."

"The advisors who are here now have come into the ministry in my time, that I can guarantee you there is not,……there is not the opportunity not to speak out. Because I have changed the system. Like, there are no longer advisors for the Timorese. They are advisors for this whole place."

"I am happy with their work because they have shown that there have been results."

The Minister stated that these very large salaries are needed to obtain good advisers. But the issue is what results have these advisors given to date to this nation? If you look carefully the international advisors that Timor-Leste has been able to get, they are in fact ones who are heavily compromised. Commenting on who recommended the high salaries the Minister denied knowledge of them, "Regarding their salaries, that involves individual negotiations and they compete with the international market." "I only know that if we do not pay them, another government will pay. Other countries will pay because my advisors, some came from Iraq, some from India, some from Australia and some from all over the place, America itself."

The Australian government, the World Bank and the Ministry of Finance has also said that the high salaries are necessary to obtain quality advisors to come work for the PFMCBP so as to build sound capacity in public finance management. With the very big contracts that the PFMCBP gives out, starting from USD$150,000 – USD$500,000 per annum, Timor-Leste has the right to expect that they have made strong efforts in the fight against corruption. However, their inaction in the ministries in which they currently work, and that of the government that asked for their assistance, is making people think that they are indeed compromised because they have to get the minister's sign off to be able to continue working and keep receiving their high salaries.

Rodney Lewis, is a senior legal advisor, with a contract to work 414 days and receiving USD$588,373.00. The Minister says she has no knowledge of a letter sent by the World Bank to the Minister for Finance with a message regarding to Mr. Lewis. "I do not remember that. But I only know that Mr. Rodney Lewis came with a very high recommendation."

"If the World Bank did in fact send this letter, I do not recall but they are still paying him now so they must agree. So they must acknowledge his skills. Because of this they have approved his recruitment."

These advisors "can help to contribute to economic growth of up to 12.3%. If you look at the IMF report it says clearly there that the major contribution to this economic growth comes from public spending."

Minister Emilia Pires rejects that she made recommendations regarding the salaries of international salaries. "That's a lie. Sometimes these advisors go to poor countries and just write reports." She said she never suggested a high salary for the international advisors. "My responsibility is to lower the salaries but I also have to be realistic that Timor cannot dictate to the rest of the world."

Michael Francino, is an advisor for Financial Management Planning, with a contract to work for 260 pays (of which he is required to be present in Timor-Leste for 60 days) with a salary of USD$589,449. Michael had worked in Díli before during UNTAET times. According to this newspapers sources he is also a good friend of the Minister's and in the past the two of them presented a paper together at New York University.

Francis Sekandi, is a senior legal advisor with a contract to work 272 days for a salary of USD$424,427.00. What have they done to combat corruption? What advice have this whole bunch of consultants given the Ministry of Finance for the millions and millions that has been paid out for their very high salaries.

The salaries of the three advisors mentioned above can give work for 1400 youth to dig road drainage for one whole year. Australian, Graham Daniel has worked 180 days in one year in 2008-2009, earning USD$296,361.00 which can perhaps provide work for 260 rural workers in one year. According to The Australian newspaper (25/04/09) when asked if he thinks Timorese would be shocked at how much he earned if they were aware of it, Mr. Daniel said "They shouldn't be made aware of it. I wouldn't be the most highly paid person in Timor. Its consistent with what I've been paid in other countries. My contract is certainly fairly high, but others are getting a lot more."

There are allegations that the PFMCBP is a Project that the Minister of Finance is using to give work to her friends – who do not have relevant qualifications – and have more interest in hiding the truth than to perform their designated role. Allegations of nepotism and corruption have also arisen regarding the procedures that were used to hire advisors. On the 7th of February 2008 the World Bank sent a letter to the Office of the Minister for Finance noting that the recruitment process for Mr. Lewis did not comply with World Bank procedures and rules, stating "the criteria used in the evaluation are not in accordance with paragraph 5.2 of the Consultant Guidelines, which states that the selection shall be based on the consultants qualifications."

But nobody knows why the World Bank gave this consultant a contract. Perhaps it is because the Bank is worried about losing their presence in Timor-Leste that they do not know how to say no to wrongful conduct, which they have uncovered themselves.

FRETILIN alleges, "Perhaps it is because they have been friends from a long time ago?"

More so, PFMCBP gave a one year contract with a salary of USD$219,765.00 to Ines Almeida as Special Parliamentary Liaison Advisor to the Minister.

FRETILIN alleges that Ms. Almeida is a friend of the Minister's from a long time ago. They also question one thing that many people do not even know, that Ms. Almeida never finished her university studies but the Minister and the World Bank still considered that she had the capacity to give world-class advice to the Minister. Five PFMCBP staff that are also friends with Ines Almeida were the ones who evaluated the four competing candidates on 26/06/08. In their recommendations the commission praised Ines Almeida's strength to bring golden advice to the Ministry although her CV says that Ms. Almeida never completed her studies.

"The panel believed that Ms. Almeida has the right combination of qualifications, skills and work experience to allow her to deliver the expected tasks and functions of the position," wrote the persons who now work together with Ines Almeida and who were also members of the panel for the recruitment process. "Prior to competing for the position in question Ines was a media monitor advisor where she provided concise news summaries to the Minister from local and international media. Her involvement and familiarity of the workings of the Ministry of Finance gave her the advantage over the rest of the candidates for the position." They explain further that, "Ms. Ines is currently performing the role of Media Monitoring Advisor where she provides concise news summaries to the Minister.

On the 28/06/08 Santina Cardoso gave a briefing to the Minister regarding Ines' selection seeking the Minister's approval. On the 02/07/08 Minister Emilia signed the approval for the position of a PLA for her media advisor.

PFMCBP also gave a contract with a salary of USD$24,000.00 for 90 days work to Maria Gloria do Castro Hall as an administrative services specialist, and afterwards was hired as a Property and Assets Advisor for 18 months with a salary of USD$204,986.00.

The Terms of Reference for this position demanded that Castro Hall be able to give "policy and technical advice to the Minister of Finance on matters relating to the Ministry's assets and properties." What is very strange is that according to Castro's CV, she never finished her university studies and in fact, her experience is only as a translator, laboratory technician and solidarity activist.

Once again the opposition bench alleged that she has also been a long time friend of the Minister's, just like Ms. Almeida. In a press release of 2 April 2009, the FRETILIN opposition wrote that they were "concerned that especially some multilateral development partners have conducted themselves with questionable transparency and appear to have been too willing and malleable in acceding to the engagement of "advisors" and "consultants" with doubtful, inappropriate, inadequate and even non-existent technical expertise or relevant work experience, simply because of personal or political connections to the de facto government." Opposition Leader in the Parliament, Aniceto Guterres, said that he is very concerned with the recruitment process for international advisors to the Ministry of Finance. "There are clearly signs of nepotism and corruption," he alleges.

"Are these people really qualified to do these Jobs in order to have been hired or was it just that politicians did everything they could to make sure they got the jobs despite not being qualified?"

"We cannot agree either with the high salaries which the Minister herself has recommended for them when you compare it with their very limited qualifications and work experience."

Timor-Leste Republican Party President, Joao Mariano Saldanha as a Portuguese citizen who lives in California Street, Culuhun, Dili. Timor-Leste, currently is a senior advisor on economic management to the Ministry of Finance and earned USD$154,525.00 salary from the World Bank for 12 months work.

However, the World Bank declined to give a NOL/No Objection Letter because the Ministry of Finance proposed a salary that was sky high for this Portuguese person as it wrote in a letter from the World Bank written on 06/08/09 responding to the request for an NOL from the PFMCBP implementing officer in the Ministry of Finance on the 29/07/08/.

"The World Bank is unable to provide a no objection to the MOF's proposal to sign the contract with Dr. João Saldanha for a total contract value of USD$210,525.00," wrote Doug Porter, Team Manager for the World Bank.

These negotiations were stretched out for another two months and because of this on 27/08/09 the Ministry of Finance on behalf of the Minister demanded an immediate response on the NOL from the Bank. "The Minister of Finance would appreciate your soonest possible non-objection to the recruitment of Mr. João Saldanha. Ph.D. as Senior Management Advisor (to the Minister) on Policy Analysis of the Ministry of Finance," begged this letter from the Ministry of Finance to the World Bank.

Because that source from which the Money was to be extracted remained silent then on the 11/08/08 a letter came flying out of the ministers realm, jumping over the Government Palace and Parliament House to Lecidere knocking on the door of the World Bank. "Mr. Saldanha has accepted what we regard as a reasonable accommodation on the terms of his employment," was written on this letter that was signed by Michael Francino, a PFMCBP advisor to the Minister.

Timorese businessman Rui Castro Said that he feels ashamed for these Timorese who have only one body, but three or four souls. "There are some Timorese who during Indonesian time used Indonesian passports, and denied their country and now are advisors to the Minister of Finance but using instead a Portuguese passport in order to receive the salary of a Foreigner, just like those who previously whilst in other countries made out that they were in fact the true Timorese but now they turn themselves into foreigners in their own countries. They shame us they do," he said.

He also commented on the World Bank which screams against corruption on the face of it, but behind the scenes they let these things happen because corruption will become a project for them in the future, and so they are happy to use the Timorese with two travel passes. "It is unjust for the World Bank to support Timorese who want to use foreign passports to receive foreign salaries. This shows that the World Bank is also partaking in the process of strengthening and nurturing corruption," said Rui Castro in Díli.

Timorese citizens recognise nepotism when they see it being practiced.

Australian taxpayers will also recognise it when they see their Money is being wasted and corruptly used.

In truth the World Bank has an obligation to speak out now, according to their espoused transparency and good governance values. But the World Bank Manager in Timor-Leste, Antonio Franco prefers to remain silent. Though he prefers to remain silent, Timor-Leste's Minister for Finance Emilia Pires speaks out over the recruitment of international advisors including some Timorese. "I have never interfered with the recruitment process." Bravely Emilia challenged others to present proof. "To those who say I have engaged in KKN, I ask where is your evidence?" She explained, "I don't like people just accusing me because I know what I have done, and when I took over this Ministry I received a heavy burden because the AMP wanted to undertake reform."

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