Taking from the poor to feed the rich: NHC and John Dege (Part II)

Make way for the Minister

In a three part series (see part I here), PNGi exposes the numerous abuses attributed to the former NHC chief, John Dege, and the courageous people who fought back to protect their family home from an outlaw organisation – the National Housing Corporation.  



Surveyor Vaki Vailala made a career as a humble public servant. He worked for the Department of Lands and Physical Planning.

In 2013 Vaki’s life was turned upside down. At the behest of its Managing Director John Dege, the National Housing Corporation (NHC) attempted to repossess Vaki’s family property. The  Vailala’s home was to be sold off to Defence Minister, Fabian Pok. This transaction was later deemed fraudulent by Justice Canning.

Video: Fabian Pok is perhaps better known for another property deal gone awry at Manumanu.

In his decision Justice Canning paints a portrait of Mr Vailala. It is one which would be familiar to many Port Moresby residents. Vailala is a hard working, honest man, trying to make ends meet under difficult circumstances. Canning observes:

He appears to the Court to be a decent man, a long-serving public servant, caught in a difficult situation. He has given evidence of the members of his immediate and extended family living in the house. They are not small in number. His evidence is not difficult to believe. This is Port Moresby. Life is hard. This is the norm. He is not living in luxury. He is not a cheat. He is not a young man. He is not a Big Man. He is the sort of person who should be given a chance.

In part two, of a three part series, PNGi examines how an outlaw organisation attempted to throw Vaki and his extended family onto the streets, to curry favour with a scandal rocked Minister. This fraud was executed through the NHC’s ‘Outright Cash Sales Scheme’. PNGi is calling for an immediate investigation into this scheme. It has left a trail of devastation and destruction in its wake.

The Fraud

Since 1994 Vaki and his family lived on Hanu Place, Boroko, in a modest property. He was a legal tenant, who had paid his rent.

In 2006 and 2008 , the NHC offered to sell Vaki the family home. On both occasions Vaki accepted. The NHC failed to execute the agreement.

As the ageing civil servant approach retirement in 2012, Vaki asked the NHC to follow up on the agreements reached in 2006 and 2008, so his family had the security of their own home.

The Vailala family home on Hunu Place.

In 2013 the NHC and John Dege sprang into action with a speedy determination Vaki had never witnessed before. There was one problem. They wanted to sell the Hanu Place property to Defense Minister Fabian Pok.

Pok is perhaps most famously known for his  role in a series of alleged illicit land deals that made headlines in 2017, and have subsequently been investigated through the Manumanu administrative inquiry. Transparent International has demanded the inquiry report, recently table in parliament, be made public. While we don’t know its full contents, one quote featured in The National raises concerns:

The fact that the Lands Department files disappeared strongly supports the proposition that there was corruption involved and there is circumstantial evidence which supports the notion that there was a wide-ranging conspiracy, such as the lengths some personnel in the Lands Department have gone through in removing all the files containing evidence relating to the transaction.

Pok’s role in the Hunu Place affair came about after he wrote to the NHC’s Managing Director John Dege using Ministerial letterhead. Pok requested ‘any property that is available for sale by your organisation’ on 10 May 2013.

Several months later on 30 October 2013, Dege wrote a letter of offer to Vaki Vailala under the NHC’s controversial Outright Cash Sales Scheme. Vaki was informed he could purchase the family home for a sum of K529,590.60.

When Vaki originally attempted to purchase his home a decade earlier, the Office of the Valuer-General put its value at K70,000.00. Vaki was now being asked to pay for NHC inaction, to the tune of 8 x the original ticket price.

He was given 14 days to accept the offer, and pay a 10% deposit i.e. K53,000. As this extraordinary sum was not lying about in Vaki’s  sock drawer, he appealed for an extension. Dege refused. On 18 November, the NHC’s Managing Director told Vaki the offer was cancelled.

The public servant now in his 60s, faced the prospect of having his home repossessed and then sold to one of the country’s most powerful men, while his family would be thrown onto the streets.

When Dege deposed evidence to the Court, he justified this decision arguing that Vaki was an illegal tenant,  a rent defaulter, and had refused previous offers to purchase the property. This is one of many occasions when Dege has accused NHC residents of wrongdoing. Justice Canning slammed the NHC head, arguing he was wrong on all three counts.

Without any legal grounds, Dege offered the Boroko home to Defence Minister Fabian Pok, three weeks after the cancellation letter was sent to Vaki. The proposed sale occurred under the NHC’s Outright Cash Sales Scheme. The price set was K525,525. There was no attempt to tender the property on an open market.

A delighted Pok accepted on 25 November 2013. A deposit was paid three days later for the  sum of K195,617. The sale was executed on 28 January 2014, Pok paid the remainder owing to the NHC in February 2014.

There was one slight problem. The NHC did not actually own the Boroko property. Oops!

It was, in fact, the property of the Government of Papua New Guinea. Senior managers scrambled. On 27 February 2014, the NHC managed to acquire a 99-year State Lease over the Hanu Place property. It was backdated to 11 February 2014. The following day the State Lease was registered in the name of Fabian Pok.

On 11 July 2014, Vaki was given seven days to vacate the property which had been the family home for two decades. The letter was signed by the NHC’s Principal Legal Officer, Mr Gabriel Gore.

Rather than bow down to the so called ‘big men’, Vaki took on the NHC, John Dege, and Fabian Pok.

Litigation was launched and an interim injunction obtained.

Against all odds, Vaki won.

Under the National Housing Corporation Act, the NHC may sell a dwelling to an ‘eligible person’, an ‘approved applicant’, or someone accepting a s38(1) option. The latter two scenarios did not apply in this case.

Justice Canning then asked whether Pok was an ‘eligible person’ under the Act. To be so defined Pok must be able demonstrate ‘limited means’, ‘present unsuitable housing’, or ‘any other circumstances considered relevant by the corporation’.

He had failed in all three respects. All Pok had done was send a general letter requesting a property in 2013. Despite this, Dege went ahead and offered Dr Pok the Boroko home. According to Justice Canning this was in clear violation of the governing legislation.

Canning J observed, ‘such arrangements smack of favors being done to “big men” such as the second defendant, a member of the Parliament and a Minister’.

Justice Canning also argued Dege’s 14 day ultimatum delivered to Vaki was quite unreasonable.

On account then of the following factors:

  • Pok did not fit into section 38 of the National Housing Corporation Act;
  • The unreasonable treatment of Vaki; and
  • The NHC did not actually own the property

Justice Canning concluded that ‘the transfer of title to the second defendant [Fabian Pok] was unlawful and so unsatisfactory and irregular, as to be tantamount to fraud’.

Canning J reserved condemnation for the Defence Minister, and NHC chief. With respect to the former, Justice Canning observed:

He has acted naively, appearing to believe that purchasing a property from the National Housing Corporation would be as simple as writing a letter to see if they have any properties available and then receiving a letter six months later that says yes, and then purchasing it without further ado – without even inspecting it (as the second defendant stated in his oral testimony).

Justice Canning continues:

The second defendant [Fabian Pok] appears not to have considered the possibility that it might be unlawful or improper for the Corporation to be selling its houses, not to people who have been occupying the houses for many years or to people of limited means, but to members of Parliament – leaders – elites – those who are well-off, those who are required under the Leadership Code (Constitution, Section 27) to conduct themselves in such a way, both in their public lives and their private lives, so as not to allow their integrity to be called into question.

Turning to John Dege, Canning J was just as damning:

Mr Dege and Mr Gore [NHC Principal Legal Officer] in particular, reasonably form the view that it would proper and lawful to sell this property to someone – let alone a Member of Parliament – a Minister – who was not qualified to purchase the property? Why was the second defendant cherry-picked to be the purchaser? Was this a pure and lucky co-incidence? It is difficult for a reasonable observer of this peculiar state of affairs not to be suspicious that something more sinister than simple naiveté, or the perceived need to sell the Corporation’s assets at market value, was afoot. But was it really market value? That is not known as the property was never put on the market.

As a result of the fact the sale was executed through fraud, the state lease to Pok was quashed by the National Court. The home was instead offered for purchase to the Vailala family.

But is this the tip of a much larger fraud iceberg within the NHC? In Part III of this series PNGi will dig deeper into the Outright Cash Scheme, through which Dege and the NHC organised numerous frauds.