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

NHC: Outlaw Organisation

In a three part series (see part I here) (see part II 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.  

#3daysofDege

#thepeoplefightback

The National Housing Corporation (NHC) operates and acts like an outlaw organisation.

A large stock of real-property was entrusted into its hands, for the benefit of the Papua New Guinea people. A syndicate of public officials and politicians have abused this property to operate a racket, illegally selling off homes, never accounting for the proceeds of sale, and abusing other revenue streams accruing to the NHC.

The NHC was not intended to be an outlaw organisation.

The NHC conducts business with violence and brutality, like any outlaw organisation.

Under the leadership of its Managing Director, John Dege, the NHC violently evicted legal tenants resident in its North Waigani apartment complex. The government released K30,000 for the task. Armed gangs and police were used.

The North Waigani Residents Committee recorded what happened next:

Between the hours of 12-1pm on the 23rd of February, more than ten vehicles convoyed into the North Waigani Hostel’s car park. The first four vehicles were Toyota Land cruisers, 10 seaters loaded with armed men in civilian clothes. As soon as the vehicles drove into the car park, men got out of the vehicles and ran and shouting wielding weapons towards the tenant’s living quarters. The Acting Managing Director of the National Housing Corporation, John Dege came out of the 1st Toyota Land Cruiser (dark blue five door BDS 814) with a loud hailer announcing … ‘I am the MD; no-one is above the law. We are all Melanesians, we have our wantoks [extended family], don’t pretend and stay here, you go and look for your wantoks’ … With Police presence and John Dege’s supervision, control, physical presence and encouragement the gangsters then went from door to door of the tenants breaking down with iron bars and axes and throwing tenants belongings out of the rooms onto the corridors … weapons used includes; high powered firearms, long knives, axes, iron bars, sharp metal rods, baseball bats, coffee sticks, bottles, bricks, rocks, chains, police dogs, tear gas … About 300 people are now on the streets, they lost a lot of valuables, money, laptops, computers, fridge, washing machine, personal files, clothes etc._[1]

This vicious attack on law abiding citizens by an outlaw organisation was conducted in order to complete the property’s sale to Malaysian business people.

The sale price was reported to be K11.1 million. When residents had a professional valuation of the North Waigani apartment block done, the compound was said to be worth K37 million.

NHC chief John Dege informed the media: ‘The initial cost of the money to erect the hostel in 1997 was K7 million so we made about K4.1 million profit’. No account is made here for the significant increase in property prices over the fifteen year period between 1997 and 2012/13.

Prime Minister O’Neill promised those responsible for this renegade eviction at North Waigani would be dealt with. This never publicly transpired. Instead the man at the centre of this violent attack on residents, John Dege, ran on a People’s National Congress ticket in the last national elections.

Later in 2013, it was Civil Aviation Authority workers who endured the NHC’s bite. Living in houses on 1.5 hectares of land at Konedobu, like their North Waigani contemporaries they faced eviction so the NHC could execute a sale. Some had lived there for 30 years.

The ticket price for this prime location in Konedobu was reportedly K1.9 million. When residents had an independent valuation done, the property was said to be worth in the realms of K25 million.

These apparent cut-price sales were completed under the leadership of the NHC’s then Managing Director John Dege, a man which the national courts claim is a fraudster and a liar. They were executed through the so called Outright Cash Sales Scheme.

When Dege was asked by the National Court to explain this scheme, he refused. It has been cloaked in secrecy.

So the multi-million question is – what has happened to the proceeds of this racket, which has seen NHC properties illegally sold off?

_{Footnote
[1] Letter from Rex Wellin, North Waigani Hostel Working Committee, to The Chairman, Investigation Task Force Sweep, P O Box 391, Waigani, National Capital District, 12 March 2013.}

The multi-million dollar question

The answer to this question is – we at PNGi don’t know.

Arguably of greater concern, the Auditor General doesn’t know either because the NHC is an outlaw organisation who fails to follow the Public Finance Management Act, or the associated Financial Instructions.

We only know more broadly speaking that the NHC misuses the money which does come into its institutional hands.

A 2009 Public Accounts Committee report warned: ‘Political patronage and appointment on grounds other than merit has characterized the appointment of Senior Managers to the Corporation for many years’.

The 2009 report also disclosed one of the prime rackets operated by an organisation wracked by cronyism. The committee observed: ‘controls and systems for the sale of properties have been abused [by NHC personnel] for personal gain in collaboration with outside interested parties’. It adds, ‘there is no valuation report [for NHC properties] prepared or presented to the Auditor. In the absence of such a Register, properties can be undervalued and sold out cheaply thereby causing a loss of revenue’.

Since 2009 little has changed.

The Auditor General’s Office continues to warn the government about this rogue organisation taking from the public and menacing its resident. Nothing is done.

When the Auditor General reviewed the NHC accounts from 2013, a period during which Dege and the corporation he led, are accused of illegally selling off properties far below value, he delivered the following warning:

Included in Note 11 of the financial statements was an amount of K11,283,770 stated as Proceed from Disposal of Properties. This figure could not be confirmed as documents and records in respect of the sale of the properties were not made available for my review.

In short, the NHC is operating entirely beyond the radar of public scrutiny.

The Auditor General notes so many nefarious practices within the NHC, they are impossible to list here. One example should suffice to illuminate the broader operating environment within the organisation:

The Corporation issued many cashable cheques in 2013 to its staff members and other service providers. From the sample of 111 payments vouched, 86 payments totalled K743,130 were issued in “Pay Cash” cheques. Issuing cashable cheque promotes fraud, abuse and corruption and was not an acceptable business practice.

In other words, the Auditor General from a sample of cheques – the actual size would be much larger – found that 77% were made out for cash. In effect, creating a license to steal, as there is no way of confirming whether these are valid payments, or simple misappropriation.

All the evidence witnessed by PNGi indicates that the NHC is operating as an outlaw organisation, and one of its key racket is the Outright Cash Sales Scheme.

We will now campaign for the national government and anti-fraud squad to investigate allegations of abuse with this scheme. We will also ask that police investigate John Dege, as was recommended by the national court.