The Yama Files Part V: The Tale of 10 Supreme Court Judges

Why Report?

Why report on Peter Yama? Why report on John Dege? Why report on Gudmundur Fridriksson? Why report on Peter O’Neill? Why report on Lachlan Leishman? Why report on Michael Somare?

The stories are not about Peter Yama, John Dege, Peter O’Neill, Gudmundur Fridriksson, or whoever you may want to name. These are interchangeable characters. Today it is Peter O’Neill tomorrow it will be someone else. Today it is Lachlan Leishman, tomorrow it will be some other foreign business person.

It is the system that is the problem.

By dissecting these stories, we can begin to better understand a system that allows certain types of politicians and business people to thrive, at the expense of the majority.

What do we learn then from the Yama Files?

Nothing can be stated definitively. However,  lets review the core allegations made against Peter Yama and the source of these allegations.

• As Minister for Works and Transport Peter Yama allegedly abused his position of power to apply K1,557,640 unlawfully, without any account for how the money was spent.
  • Source: Magistrates Manue and Monouluk

• It is claimed that Peter Yama convinces associates in senior positions in government to sign lavish contracts, with lop-sided clauses in his companies’ favour. When the contract is breached, Yama demands it is paid in full, and a large pay out is signed off.
  • Source: Rowan Callick

• Yama Security Services allegedly composed a contract with the NCDC to provide security services. Yama’s company omitted clauses that would allow the contract to be terminated for substandard service. The contract was rushed through by the NCDC Governor, after a late night signing. Payments were made to expedite the processing of the contract. An upfront payment was made in violation of the Public Finance Management Act (PFMA). Fraudulent invoices were issued.
  • Source: Carlyle de Silva (Director of Prosecutions, and Director of Criminal Investigations at the RPNGC between 1980-1992), Sisira Nanayakkara (Superintendent of Criminal Investigations), and George Pera (Forensic Consultant).

• When Yama sued the state for breach of the NCDC contract, demanding payment in full, Justice Kubulan Los sided with Yama. Los J’s decision was described by the Supreme Court as ‘rushed’ and ‘pre-maturely determined’, and based in ‘fundamental misconceptions and errors of procedure and law’.
  • Source: Injia, Davani, and Mogish JJ.

• In 2016 the NCDC claim again wound up in court. Sakora J claimed the PFMA did not apply; accepted as proof of damages Yama’s affidavit; and awarded K22 million to Yama, which included K5 million in costs. The Supreme Court slammed the decision, arguing as per their previous decision – the PFMA did apply. The contractual clause demanding full payout of the contract to Yama Security Services in the event of breach, was deemed illegal by the court, owing to its penal nature. It was concluded Mr Yama had failed to evidence any damage as a result of the breach, his payment went from K22 million to K1.
  • Source: Judges Kassman, Logan & Lindsay.

• In 2000, Yama won default judgement in his bid to claim K10.5 million in damages from Telikom Limited. The Supreme Court alleged that the original application for default judgment filed by Yama’s lawyers was ‘incompetent’ and should have been struck out. The trial judge was also accused of having overlooked an arbitrary and unfair deadline set for the defence by Yama’s lawyers.
  • Source: Justices Injia, Davani & Mogish

• When the Telikom claim went to trial, it ended up again in the Supreme Court on appeal. The Supreme Court rejected Yama’s claim, and accused the Yama team of having employed forgery to secure an unlawful claim against the state.
  • Source: Chief Justice Kapi and Justices Hinchliffe and Sawong.

• Peter Yama was referred to police alongside Zachary Gelu, after the latter was accused of having conspired to unlawfully payout damages to Peter Yama for a claim against the state that had no lawful basis.
  • Source: Justice Cathy Davani, Maurice Sheehan CMG (New Zealand Judge) and Don Manoa

The Accusers

_{Table: Experts and authorities who have found against Peter Yama.}

We cannot confirm whether these allegations made by National and Supreme Court Judges, Magistrates, and former senior police inspectors, are true. However, if this information is accurate it would suggest a number of things about the system:

• Government officials and business people conspire to draft contracts that are deeply unfavourable to the public. Sometimes this involves inflated prices, with bribes being solicited to those who sign off – but in the case of Yama, the goal allegedly was to secure state contracts that will potentially lead to large out of court settlements.
• More generally speaking the national government has overseen a racket, where deeply flawed damage claims (some being totally fraudulent) have been settled. Hundreds of millions in Kina have been paid out to those who have made damage claims without lawful grounds, with their legal team realising significant windfalls when they obtain costs.
• There is a risk that certain Judges are providing favourable decisions permitting large pay outs, without any lawful cause or quantum of damage being established. The Supreme Court appears to be intercepting some of these rulings, before the public finances are impacted. But it is open to speculation how many have not been successfully intercepted.
• Despite frequent concerns being raised by senior judges over white-collar crime, there is little capacity to actually prosecute. Thus there is negligible risk of any illicit activity being punished with a proportionate sanction that might deter offenders.

As this final story goes to press the blog PNG Attitude published a post on Thomas Kuman.

Mr Kuman did not sign midnight contracts, or pursue K10 million+ damage claims against the state, on shaky ground, using his wealth to secure clever lawyers and default judgements. He was a humble fruit loader, and suffered a life altering injury after being thrown off a tractor. Mr Kuman was left paralysed.  Four years later, his settlement has allegedly not been paid.

When a system is deeply flawed, while a small few may gorge, they do so at the expense of many victims. We should be as mad as hell that Peter Yama can secure out of court settlements in the tens of millions, while Thomas Kuman waits in misery for his modest claim to be processed.

But if the problem is the system, then the solution isnt tightening a screw here, adding a nail there. Tinkering on the edges has proven ineffective. Power must be redistributed into the hands of the people. This require a peaceful revolution, not gradual reform. It requires mass mobilisation, not high priced consultants.

Until power is redistributed the names will change, but the story will remain the same.

Postscript: Zachary Gelu and Peter Yama

Zachary Gelu and Peter Yama share a long and enduring relationship. In 2002 when Solicitor General, Gelu is accused by the Department of Finance Commission of Inquiry of unlawfully signing off on a K15.5 million settlement with Yama. This occurred after Yama claimed he had been denied access to develop land which he was awarded in 1989 through a 99 year state lease.

This Commission of Inquiry argues Gelu’s decision was ‘baseless and patently flawed’. The commission also suggests that Yama was not required by Gelu to prove the damages claimed. Even more problematically Gelu failed to defend against the action, despite having clear grounds for doing so. Finally, Gelu is said to have defied an National Executive Committee order requiring all settlements obtain its approval

If the Commission of Inquiry findings are accurate, this begs the question – as one of the country’s top legal officials and presumably legal minds, why did Mr Gelu fail on such a grand scale to protect taxypayers funds from this sizeable claim made by Mr Yama.

These questions have a new complexion thrown on them by subsequent events.

In 2012, on at least four occasions, two sons of Peter Yama were accused of discharging firearms in public around Madang and the Bundi area, allegedly spreading fear within the communities. In one incident, a shot was allegedly fired by one of Yama’s sons amidst passengers waiting to board a plane at Madang Airport. This followed an argument between Peter Yama and his arch political rival Anton Yagama.

These incidents led the police to launch investigations. The Provincial Police Commander, Supt Anthony Wagambie was forced to request that a Police Unit from Lae, and not Madang, be dispatched to search for weapons at Yama’s family home, due to Yama’s close relationships and influence locally.

“There were a number of complaints against one of Mr Yama’s sons who was alleged to have discharged a firearm in public and because Madang is a small town, local policemen, including myself cannot carry out this search because we have close ties with Mr Yama and his family, so I requested a Mobile squad from Lae,” he told local media.

Peter Yama was outraged by the proposed search and Wagambie’s actions and shifted the blame for the rise in crime to the Police Commander stating that he should be addressing the issues rather than concentrating on the discharging of firearms.

Yama’s anger led him to successfully obtain a court order preventing the Police from searching his home and other properties he owns in Madang. The lawyer acting on his behalf against the State was none other than the former Solicitor General, Zachary Gelu.

The case was not defended by the State, who did not appear at the hearing, but Gelu asserted that he had served the defendants through the Solicitor General Neville Devete. That prompted the judge the inquire why the State was reluctant to defend itself.

Zachary Gelu also represented Peter Yama as his private lawyer in an election dispute against Yagama in 2013; a civil dispute that led to criminal charges against Yama.

In September 2013,  further confrontations occurred between Peter Yama, Anton Yagama and their respective supporters outside a Madang courtroom where a ruling on a recount of votes cast in the last election had just been delivered. The fracas led to both Yama and Yagama being charged with contempt of court. They were sentenced respectively to 6 and 9 months in jail, while six of Yagama’s armed supporters were sentenced to 18 months behind bars.

At Peter Yama’s trial, several police officers alleged Yama had threatened to kill them. One of them testified that Peter Yama threatened the force saying “if anything goes wrong, you Ramu Police will be the first guys to be held responsible. I got some high-powered firearms, which I will use to shoot you”.  Yama did not deny the accusations.

At his sentencing hearing, Yama apologized for his conduct and relied on a long list of ‘glowing’ character references. Among them was one from Zachary Gelu. The references were considered by Judge Cannings as part of mitigating factors in Mr Yama’s favor.

“He also has an abundance of glowing character references, showing that he has a high standing in Madang Province,” the judge said, before considering the gravity of his actions and sentencing him to six months in jail. It seems the Supreme Court later overturned the decision and quashed the sentencing although the reasons for this remain unclear.

So after signing off on what the 2009 Commission of Inquiry claims was a patently flawed settlement with Peter Yama, Zachary Gelu acted as a personal lawyer for Yama, and a character reference.

This is not the only occasion PNGi has documented a senior state official delivering sizable benefits to a businessman while in office, only to enter into direct commercial relations with them once their tenure in government is over.

For example, back in 1997 Michael Nali was a principal actor in assuring the award of Paga Hill to the Paga Hill Development Company, a company led by Icelandic-Australian figure, Gudmundur Fridriksson. When he left Office, Nali acquired shares in the company.

Aces Ventures Limited received the loud backing of Gabriel Kapris when he was Commerce Minister and MP. Once Karpis left office he took up shares in the company and an executive position.

There is nothing technically illegal about this. But it does raise questions over whether these favourable decisions made in office, whether by Gelu, Nali or Kapris, were done at arms-length.