Impunity gives green light for new offenders

Corruption has many causes, but one of the factors fuelling its endemic rise in Papua New Guinea could be the apparent impunity enjoyed by many leaders and the encouragement it gives to others to then copy their crimes.

Papua New Guinea’s many Commission of Inquiry reports are littered with detailed accounts of the numerous and varied schemes used by prominent leaders to allegedly defraud the State and steal public money. However, the recommendations for police investigations and prosecutions urged by the Commissions have, in most cases, been ignored. To make matters worse, many of the leaders accused of wrongdoing have not only escaped justice, their careers have continued to flourish.

Such impunity must surely encourage others to engage in their own unlawful schemes? After all, if one person can get away with it why shouldn’t others be tempted to do the same?

The fact inquiry recommendations are so rarely implemented can also reinforce the erroneous view that white-collar crime is not really wrong at all.

The government’s Chief Secretary, Isaac Lupari and Konebada Petroleum Park CEO, Donald Valu might provide an example of the phenomena of impunity fuelling further corruption, if the allegations relating to their behaviour are true. Documents appear to show that Valu has recently obtained over K450,000 in an adaptation of an unlawful scam first, allegedly, used by Lupari in 2003 and which he, according to a Commission of Inquiry, used to defraud the State of over K1 million.[1]


[1] All the information in this article relating to Isaac Lupari is taken from the findings of the Commission of Inquiry into the Department of Finance and can be found in the Final Report published on 29 October 2009.

The original scam

Isaac Lupari is a career public servant who started working for the government in 1988. After nine years he reached the highest levels of the civil service, being appointed Secretary of Finance by the government of William Skate in 1997.

From Finance, Lupari moved rapidly through a series of positions, including Secretary for Defence, Secretary for Personnel Management and Secretary for Transport and Civil Aviation. He then continued working for the government in various consultant roles before being appointed Ambassador to the European Union in 2003 and, finally, in 2007, Chief Secretary.

Despite the fact Lupari was, effectively, continuously employed by the government throughout, in 2003 he submitted legal claims totalling K3.7 million for alleged unlawful termination of four of his employment contracts. Basically, Lupari was claiming that each time he was moved from one position to another, he was entitled to be paid out on the unexpired term of his previous contract.

This, says the Department of Personnel Management, was clearly fraudulent:

“The real life period covered by the contracts on which Mr. Lupari was engaged is a 6 year 9 month period from start of first contract 17/ 09/ 97 through to the end of last contract 28/06/04. Compared to the 6 year 9 months period he is in fact making claims for a total 14 year period, by placing the contract periods end to end, when in fact they overlap. Apart from being contrary to public polity [sic] and the contractual provisions, the claims are clearly improper because they result in triple and sometimes quadruple payments for the same period of time. Mr. Lupari has received salaries, allowances and benefits continuously from 17/09/97 to the present day. He has lost no remuneration and has been paid a total K1,294,133 for the year period 17/09/97 to 17/04/02”

Despite the fact Lupari’s claims were unlawful, contrary to instructions, they were not defended by the Solicitor and Attorney Generals. Lupari received at least K1 million in out of court settlements, as the Commission of Inquiry into the Department of Finance revealed in 2009.

Lupari was assisted in making his claims by Paraka lawyers, who the Commission of Inquiry said ’deliberately and knowingly misled the court right from the start’ in a ‘serious breach of duty’. Despite this ‘culpable conduct’ they received a hefty benefit, K800,000 in uncontested legal fees ‘for doing a minimal amount of work’ in a process the Commission of Inquiry described as ‘a charade to legimise excessive costs’.

The Commission of Inquiry recommended Lupari be ‘referred to the Fraud Squad for investigations with view to laying criminal charges for fraud’ and to the ‘Ombudsman Commission for investigations on whether he breached [the] leadership code’.

The Commission also recommended Guguna Garo of Paraka Lawyers and Zachary Gelu as Solicitor General be referred to the police for their part in facilitating a fraudulent claim.

Eight years on and Isaac Lupari is again the Chief Secretary to the government and no fraud changes have ever been laid against him, or against Garo or Gelu. It is perhaps not surprising then that other public servants might have tried the same alleged scam; and documents obtained by PNGi suggest Donald Valu may be among them.

History repeats?

Donald Valu has been Chief Executive Officer of the Konebada Petroleum Park Authority (KPPA) since January 2012 when he was promoted from ‘KPP working group project manager’ to acting CEO by the National Executive Council [NEC]. Valu was endorsed to continue in his CEO role by the NEC in August 2015.

Just nine months later, in May 2016, the NEC decided to revoke Valu’s ‘acting’ status and award him a four year, fixed-term contract. NEC made the decision based on the advice of the Ministerial Executive Appointments Committee.

The NEC decision was published in the National Gazette on 14 June 2016.

However, the awarding of a four-year contract, on a generous K370,000 a year package, appears not to have been sufficient to satisfy Donald Valu. It is alleged that he decided, just like Lupari before him, that as well as receiving his new contract, assuring him of four years further employment as CEO, he should be paid ‘compensation’ for the termination of previous contract.

In Valu’s case, the compensation claimed was K479,258. Documents appear to show the claim was duly paid. A cheque, number 4373 was allegedly issued by the KPPA on 7 July 2016, in the sum of K479,258.54, and processed by the ANZ bank on 11 July.

The whole alleged ‘scam’ bears a remarkable similarity to the one allegedly executed by Isaac Lupari in 2003. How many more times might it have been repeated in the interim by other public servants, is not known; but the lesson seems clear, for as long as we allow one leader to escape justice others will be tempted to follow their path.