Former defence minister Palo Conteh grabbed by overwhelming evidence of corruption

Sierra Leone Telegraph: 29 December 2018:

Sierra Leone’s former minister of defence in the Koroma led APC government – Alfred Palo Conteh and the director general of the ministry – Sana Marah, were yesterday arrested by police and detained, following investigations by the Anti-Corruption Commission. They were both refused bail by the ACC as investigations continue.

The former Minister of Defence and the director general are alleged to have been involved in the misappropriation of tens of millions of dollars in various military supply and procurement contracts under their watch.

Alfred Palo Conteh (Photo: Left) is a retired Major in the Sierra Leone Armed Forces. He was appointed as minister of defence in October 2007, after helping Ernest Bai Koroma win the general and presidential elections.

But after several controversies and allegations of corruption, Conteh was removed from defence by Koroma and appointed director of the country’s National Ebola Response Centre (NERC) in 2014.

At the end of the Ebola war, Conteh found himself out of a job, and was later brought back into the Koroma government in a cabinet reshuffle, He was  appointed as Minister of Internal Affairs.

But his arrest – at least for now – speaks to his record at the ministry of defence, rather than his involvement in the misappropriation and mismanagement of millions of dollars meant for those dying from the Ebola virus, which left over 5,000 people dead in 2014 and 2015.

So who were those involved in the running of  the ministry of defence, along with minister Palo Conteh?

There are four senior civil servants at the ministry of defence – the Director-General; the Deputy Secretary of Finance and Administration; the Deputy Secretary of Policy and Procurement; and the Director of Defence Budget.

How much money does the ministry of defence receive from the national budget and how is the money spent?

In 2017 the ministry of defence’s total budget was Le 90.4 billion and in 2016 it was Le 85.8 billion.

In 2017, this is how much was spent by the ministry: Personnel costs Le 126.7 billion; other charges Le 106.7 billion; domestic costs Le 2.7 billion, bringing the total spending to Le 236 billion, with a budget of Le 90.4 billion.

Spending exceeded budget by a whopping Le 146 billion. And as the Report of the Governance Transition Team (GTT) concluded: “An astonishing level of fiscal indiscipline and rampant corruption by the former APC Government of President Ernest Koroma had led to the near-collapse of Sierra Leone’s economy by the time the Government of President Julius Maada Bio was sworn into office.

“The economy was left burdened with external debt amounting to US $1.6 billion, domestic debt amounting to Le 4.99 trillion or US$658 million, and an exploded payroll (salaries and other compensation for government employees) of Le.2 trillion (US $263 million) or 14.4% of the GDP.

“The national currency became moribund, trading at Le.7600 to a dollar. In addition, the Government owes vendors (for goods and services) an extremely large amount of US $1.4 billion. The State’s liabilities as at 30 March 2018 amounted to US $3.7 billion. Inflation as at March 2018 was 17.2.

“Overall, economic growth plummeted from 6% in 2016 to 3.7% in 2017. Consequent of the APC government’s inability to close the fiscal gap and adhere to agreed actions under the Extended Credit Facility, the IMF suspended disbursement of both budgetary and balance of payment support to Sierra Leone in 2017. Other budgetary support agencies including World Bank, EU, and African Development Bank withheld their budgetary support from the second half of 2017 to date.

“Servicing these debts alone amounts to US $262 million per year. Against this huge financial burden, the domestic revenue for 2018 was projected to be a paltry US $539 million. This is barely adequate to cover the Government’s recurrent expenditure, not to mention its commitment to poverty reduction programmes and investing in social  services.”

Discussing the massive evidence of corruption discovered at the ministry of defence, the GTT Report recommended that all procurement contracts be reviewed urgently, including: equipment procurement of $39m of which only $3.9 was paid; the construction of Kambia barracks with a budget of $44.2m of which zero dollar has been paid, and work commenced; supply of Lab Reagent/X-Ray equipment with budget of $4m of which zero dollar has been paid – ongoing; supply of medicines – budget of $4.4m and zero dollar paid  – ongoing; supply of general sustainable items (for soldiers serving in South Sudan – budget of  $13.3m  but zero dollar paid) – pending South Sudan deployment; supply of military transport spares with a budget of $4.0m but only S$1.2m paid  –  60% supplied; supply of military kits/uniforms costing $33.5m but only $3.4 paid, and $6.7m still at the Bank of Sierra Leone, with only 40% of items supplied; supply of G1098 stores costing $10m and $2m still at Bank of Sierra Leone) – 100% items supplied; supply of Common Users and Specialist Vehicles costing $5.2m but only $0.9m paid – 100% supplied; supply of Common Users and Specialist Vehicles costing $10.7m, but only $4.5m paid – 100% supplied; medical supplies for PSO (South Sudan) –  costing $4.6m but zero dollar paid – pending South Sudan deployment.

What is even more alarming about the financial management of the ministry of defence by the previous APC government, are the findings of the country’s Auditor General Reports for 2015 and 2016 respectively.

In 2015 the Auditor General’s Report said: “Controls, including basic records keeping for distribution and usage of fuel have been a recurring problem in 2011, 2012, 2013 and 2014. There have been problems with missing payroll records. In 2011, there were 111 instances of unverifiable staff which increased to 147 in 2013 and 171 in 2015.

Cash controls, including non-retirement of huge imprest accounts had been a recurring theme up to 2014. 109 Significant, indeed major, deficiencies in non-presentation of documents supporting procurement transactions as well as failure to comply with procurement procedures and related reporting matters have been noted repeatedly.

Of the entities selected for review the Ministry of Defence has consistently not been responsive. The procurement matters noted were especially egregious and highlighted in our recent special report to parliament. There is much to be done in dealing with matters raised in that institution.”

Procurement Procedures Not Followed

Procurement documents such as signed contract agreements, bid register, bids of unsuccessful bidders, and adverts, etc. for various procurement carried out by the Ministry amounting to Le1,573,542,789 were not provided for audit inspection.

There was also no evidence to suggest that the ministry sought technical/expert advice on specialised procurements.

It was recommended that the Deputy Secretary, Procurement, should ensure that the Procurement Officer submits the procurement documents for inspection within 15 days of receipt of the report. He must also ensure that expert advice is sought on specialised procurements.”

Procurement not in the Approved Procurement

Plan Procurement for the construction of 20 billets and dump and cargo trucks costing Le6,675,914,795 and US$160,000 respectively, were not in the approved procurement plan of the Ministry.

It was recommended that the Deputy Secretary, Procurement, should ensure that the approved revised procurement plan was submitted to ASSL within 15 days of receipt of the report.”

Construction of 20 Billets at the Peace Mission Training Centre Hastings

Physical verification of the construction of billets at the Peace Mission Training Centre at Hastings carried out on 5th August, 2016 revealed the following: the number of billets was reduced from 20 to 12 without an addendum to the contract; even though it was stated in the contract agreement that the work should be completed by 31st May2016, as at the time of writing the report (August 2016), work was still incomplete; 90% of the contract price had been paid to the supplier even though the construction work was still incomplete; and no independence certificate of work done was submitted to the audit team for inspection.

Procurement of Vehicles -Dump Truck and Cargo Truck

Examination of the procurement documents and records disclosed that the sum of US$160,000 was paid for the procurement of a dump and a cargo truck. However, the invoice to confirm the unit cost of each truck was not submitted for audit inspection.

Article 7.2 of the contract agreement stipulated that “The goods supplied should be new, defect free, of merchantable quality and fit for the purpose”. It was observed that the two trucks delivered were used trucks and no reserved price or market survey was done by the procurement unit before the procurement.

It was recommended that the Deputy Secretary, in charge of procurement should submit the invoice for the trucks within 15 days of receipt of the report. He should also ensure that the trucks were returned to the supplier and the amount of US$160,000 recovered from the supplier and paid into the Ministry’s account within 15 days of receipt of the report.

The Procurement Officer should also explain in writing, supported by documentary evidence why a market survey was not carried out before the award of the contract.

Withdrawals without Supporting Documents

Review of the bank statements submitted revealed that withdrawals from the RSLMF No. 2 Other Expenditure account and 4th Infantry Battalion account held at the Rokel Commercial Bank amounting to Le117,240,000 and Le14,050,000 respectively were without supporting documents to justify their utilisation.

It was recommended that the Principal Accountant should ensure that all payments from initiation to completion were supported by the relevant documents; and those should be properly recorded and filed so that any document that was misfiled or missing could be promptly identified as such.

The Principal Accountant should also submit the supporting documents within 15 days upon receipt of the report; otherwise, the amount of Le136,040,000 should be refunded into the CRF.”

Documents in relation to the withdrawals from the RSLMF No. 2 Other Expenditure account and the 4th Infantry Battalion account amounting to Le117,240,000 and Le14,050,000 respectively were not submitted for verification. Therefore, the issues remain unresolved.”

Outstanding Issues from Previous Audit Report

The following issues were still outstanding: In November 2013, the former Minister of Defence acting on behalf of the Government of Sierra Leone entered into agreements for the procurement and supply of 126 common user and specialised vehicles in two lots of 69 and 57 with Mr. Alimamy Kamara representing West Star General Supplies and Mr. David Conteh representing Davida Enterprise involving the sums of US$10,654,168 and US$5,058,368 respectively.

A number of issues were identified with this procurement: o Ambiguity of specification in bid documents Three of the vehicles supplied were automatic transmission, in contravention of the specification of manual transmission specified in the agreement.

Some of the vehicles delivered did not match or were contrary to the specification in the contract agreement. Two Toyota Hiace ambulances were supplied instead of Toyota Hiace mini buses. The vehicle tonnage of the 20 Atego Mercedes Benz vehicles delivered differs.

Ten had four tyres at the rear and the other ten have two tyres at the rear yet the same prices were invoiced for the different specifications. Two of the Atego Mercedes Benz vehicles received were delivered defective and immediately returned to the supplier in October 2014.

The two defective vehicles were not disclosed in the pre-inspection report and up to the time of writing the report (September 2015), these two vehicles totalled US$620,000 had not been replaced or fixed by the contractor, West Star.

Out of the 126 vehicles, delivery notes were received for 49 vehicles leaving a balance of 77 outstanding. A comparison of the invoice prices, the NPPA price norm, current market prices and prices of similar vehicles procured by other government agencies, disclosed that the vehicles were overpriced by Le22 billion (US$4,455,125 @ Le4,958) and Le8 billion(US$1,623,600@Le4,958) by West Star General Supplies and Davida Enterprise respectively.

This was a clear manifestation of total disregard for the principle of economy in the use of public funds by those acting on behalf of the government in the contract agreements. Although clause 15.0 of the contract agreement requires that “all taxes, levies and other expenses in Sierra Leone relating to this agreement shall be borne by the supplier”, there was no evidence that duties payable on the 69 and 57 vehicles to the tune of Le6.5 billion and Le3.2 billion respectively had been discharged by the suppliers – West Star General Supplies and Davida Enterprises.

Even though the contract agreement stipulates that “the suppliers shall provide servicing parts for a period of one-year”, there was no documentary evidence to confirm that the suppliers had complied or that these spares were ever provided by the suppliers to MOD.

The contract agreement also requested for a pre-inspection report on all 126 vehicles whereas the inspection report only reported on 116. A copy of the pre-inspection report on the remaining ten vehicles was not produced for inspection in order to authenticate conformity with requirements.

The Manufacturer’s Authorisation Certificate (MAC) was not produced for inspection in spite of repeated requests by the audit team.

Procurement documents such as signed contract agreements, Technical Evaluation Committee reports, Procurement Committee meeting minutes, bid register, copies of bid receipts, and proceeds from the sale of bids, bid documents etc. for the various contracts in respect of the Ministry’s procurement amounting to US$7,496,088 and Le44,835,668,926 respectively, were not provided for audit inspection.

Procurement documents such as signed contract agreements, Technical Evaluation Committee Reports, Procurement Committee meeting minutes, bid register, copies of bid receipts, and proceeds from the sale of bids etc. for the various contracts in respect of Peace Support Operations which amounted to $150,887 were not provided for audit inspection.

In April 2014, payment of Le8,645,000,000 was made directly to the former Joint Force Commander to meet the construction of a New Military Barracks in Kambia. There was no evidence that this job was ever done by the Ministry, nor were there supporting documents to justify the utilisation of the said amount.

Examination of the expense analysis revealed that 15 payments which amounted to Le72.4 billion were paid directly to the former Joint Force Commander for which analysis to justify the utilisation of the said amount was not made available for audit inspection.

Out of 23 accounts maintained by the Ministry, bank statements for 18 accounts were not submitted for audit inspection. Furthermore, evidence of bank reconciliation was only submitted for the Ministry’s main account leaving a balance of 22 accounts for which evidence of bank reconciliation was not submitted.

Withholding taxes of Le69,756,590 were deducted but not paid to the NRA in respect of disbursements made by the Ministry. As required by section 117, sub- sections 3 and 4 of the Income Tax Act 2000, withholding taxes which totalled Le4,785,850 were not deducted and paid to NRA in respect of amounts utilised out of imprest by the JMU.

Out of the 633 staff of the Ministry attached in Freetown, 171 civilian personnel were unverified (that is they failed to make themselves available for physical verification). No evidence was submitted to the audit team to prove that the various units within the Ministry were consulted in putting together the Ministry’s budget.

Furthermore, the Ministry’s budget and minutes of Budgetary Committee meetings were not made available for inspection. The Performance Contract Agreement signed between the Ministry and His Excellency the President was not submitted to the audit team.

Although equipment at the Engineering unit was reported to be obsolete, Le40,320,000 was paid monthly to the engineering staff, despite the fact that their work had been outsourced. Examination of the expense analysis revealed that an amount of Le6.1 billion was spent on repairs and rehabilitation work that should have been carried out by the Engineering unit.

Not effectively utilising the Engineering unit and wasting public money on unnecessary procurement will result in rendering the staff redundant.  The general condition at the Ministry headquarters was poor and unsuitable for staff. The toilets and some of their fittings were unworkable. There were also leaks on the roof of the building.

Examination of the list of vehicles provided by the Transport Officer revealed that 67 vehicles were beyond economic repair and due for disposal, however the Engineer’s inspection report was not made available.

On 25th August 2015, the team was denied access to physically verify the comments made on the list of vehicles that were beyond economic repair at the Electrical and Mechanical Engineering (EME) Forces Workshop by the Commanding Officer.

As stipulated in the MOD fuel policy, 180 litres per week for 52 weeks totalling 9360 litres per annum was issued to the former Minister by the MOD. We discovered that 12,990 litres of additional fuel valued at Le58,455,000 was issued to the former Minister by the Commander Joint Force, for the same period without justification.

The policy is silent on limits to healthcare for retirees at the 34 Military Hospital. As a result, it is likely that drugs will always be insufficient as there are more retirees than active RSLAF personnel.  The Physiotherapy unit is not fully equipped as there are insufficient equipment such as tens machine, stimulation machine, neuron plinth, etc.

The number of fans in the male and female surgical wards was inadequate. Only six ceiling fans were available to serve wards with 24 patients. Furthermore, of the six fans, only one is actually working. The number of functional fluorescent lights was also inadequate to serve the 24 beds.

The facility at the unit for the storage of drugs and other medical items was inadequate as the size of the store room was too small to accommodate all the medical equipment. Some medical equipment was kept in the general toilet of the hospital, which was not conducive for safe keeping

The 2016 Auditor General’s Report is even more incriminating for the former minister of defence and the Director General.

This is what the Auditor General’s 2016 Report said the failure to provide evidence for audit inspection:

Section 36 (1a) of the Audit Service Act 2014 states that: “Any person who fails to produce for inspection by the Auditor-General or to otherwise give to him any book, record, or return relating to any accounts being audited by the Auditor-General when he so requests; commits an offence…”

Despite persistent requests made by the auditing team for classified information and records, the Ministry could still not make them available for audit inspection.

It was therefore recommended that the Director General should ensure that these procurement documents were submitted within 15days upon receipt of the report; otherwise, the issue will be forwarded to the relevant authority for action.

Proceeds from sale of bidding documents not accounted for

Review of procurement documents such as newspaper advertisements, bid opening minutes and sale of bids register revealed that the Ministry generated Le52million from the sale of bidding documents for various procurement.

Evidence of receipts issued to bidders and banking of the revenue generated were not submitted for audit inspection. It was recommended therefore that the Senior Procurement Officer should ensure that receipts and evidence of banking were submitted for audit inspection within 15 days upon receipt of the report.

Cash withdrawals with no supporting documents Funds amounting to Le762,750,000 were deposited into the Republic of Sierra Leone Armed Forces Benefit Fund account on 26th July, 2016 by the Office of National Security for implementation of counter-terrorism operations.

It was observed that cash withdrawals of Le132,250,000 was made by the officer-in-charge of Forces Intelligent and Security Unit on 2nd August, 2016 for implementation of counter-terrorism operations.

Supporting documents were submitted for payments totalling Le112,550,000, leaving out an outstanding balance of Le19,700,000.

It was therefore recommended that the responsible officer should submit the supporting documents for the outstanding balance of Le19,700,000 for audit inspection within 15 days upon receipt of the report; otherwise, the full amount should be refunded and this officer will be surcharged according to section 93(4) of the PFM Act, 2016.

Payments without adequate supporting documents

A review of payment vouchers and other documents revealed that payments were made to the tune of Le2,905,506,557 that were not backed by adequate supporting documents such as end users’ request, reports, and signed lists of beneficiaries for goods, works and services, engineer’s reports of defects for retention fees, etc.

It was recommended that the Senior Accountant should ensure that the required supporting documents are provided for audit inspection within 15 days upon receipt of the report.

In future, the Senior Accountant should ensure that payments are only made when all relevant documents are attached to the payment request.

Withholding tax not deducted at source from payments to suppliers

Upon review of the payment vouchers, we observed that payments were made for various activities for which withholding taxes were neither deducted nor paid over to NRA. This amounted to Le501,699,879.

It was recommended that the Senior Accountant should ensure that the outstanding taxes are recouped from the concerned suppliers and paid to the NRA. In future, the Senior Accountant should ensure that withholding taxes are deducted and paid to NRA.

Withholding tax deducted but not paid to the NRA

Review of payment vouchers revealed that withholding taxes totalling Le344,550,000 were deducted at source from payments to various suppliers, vendors and contractors for the year under audit. Evidence of payments to the NRA and receipts from NRA indicating receipt of payment of withholding taxes were however not submitted for audit inspection.

It was recommended therefore that the Senior Accountant should ensure that payment is made to the NRA and evidence submitted for audit inspection within 15 days upon receipt of the report.

Payments made in the name of military personnel instead of the service providers

Financial management best practice requires payments for works, goods and services to be made in the name of suppliers, contractors and service providers. However, review of the payment vouchers revealed that payments were made in the name of various military personnel as payee instead of the service providers.

This amounted to Le508,921,825. In addition, returns such as invoices, receipts, etc. were not submitted for audit inspection.

It was recommended therefore that the Senior Accountant should ensure that the personnel concerned submit the required supporting documents for audit inspection within 15 days upon receipt of the report. In future, the Senior Accountant should make payments to suppliers, contractors or service providers directly rather than paying in the names of military personnel.

Of a total of Le508,921,825, supporting documents to the tune of Le229,603,000 were submitted and verified leaving a balance of Le279,318,825 yet to be submitted. Hence the issue was partly unresolved.

Cashbooks, bank statements and bank reconciliation statements not submitted

From the list of bank accounts submitted by the incoming Senior Accountant, it was observed that the Ministry has 24 bank accounts with six different banks.

However, the following were observed: With the exception of the two Peace Support Mission bank accounts, cashbooks were not submitted for the other 22 bank accounts. Bank statements were not submitted for 18 bank accounts. Bank reconciliation statements were not submitted for 22 bank accounts maintained by the Ministry.

It was therefore recommended that the Senior Accountant should submit the bank statements, cash books and bank reconciliation statements in respect of these accounts within 15 days upon receipt of the report.

Why has the Anti-Corruption Commission arrested and detained the former minister of defence – Mr Palo Conteh and his director general?

Anyone doubting or questioning the rationale and reasons for their arrest must look at the evidence presented in the GTT report, as well as the litany of overwhelming and incriminating evidence contained in the country’s Auditor General’s Report of 2015 and 2016.

The preponderance of evidence  found in the Auditor General’s reports, is sufficient for the Anti-Corruption Commission to indict and convict those bearing the greatest responsibility, and are accountable for the management of the ministry’s affairs.

The majority of Sierra Leoneans will sadly not live to see their 50th birthday, because of poverty and poor health; 27% of pregnant women will die during pregnancy or childbirth due to lack of proper medical care and poverty; 30% of children may die before their fifth birthday, because of poverty; 70% of adults are unemployed; and less than 40% of people can read and write.

Sierra Leone has an abundance of natural resources that have the potential to transform the country into one of the richest and most developed in Africa. But corruption in high places and poor governance have crippled the country.

All hopes are now turned on to president Julius Maada Bio for a new and better start, after 57 years years of independence from British colonial rule.

7 Comments

  1. In my president’s words “APC NOR GOOD FOR DEM SEF, DEN NOR GOOD FOR D CONTRY”. All those that have stolen our monies will surely pay them back fully….

  2. Thanks for giving us a thorough lecture on the corruption practices of the EBK government. It’s devastating and heartbreaking. We hope that the new administration will take the necessary steps to ensure that this thieving of our future will stop; and that at last we will join other progressive African countries in bringing sustainable development to Salone.

    Thanks to all involved in bringing this information to light. Witch hunting and intimidation….. no where to be seen……only a bunch of rogues and thieves. Shame on you EBK for leading our country in this manner!!

    Wishing us all a better 2019. Happy New Year!

  3. One after the other they fall, with Kaifala’s ACC standing over them.Those that are still at large are wondering when there will be the knock on the door signalling their turn to be taken in.

    The question uppermost on the minds of former APC ministers and others is whether they will go back home after their first encounter with ACC ;the omens are not goog. They must be gazing at the door through which Palo Conteh walked into the Criminal Investigation Department [CID]and disappeared into the clutches of some grim looking men and women who do not know how to smile.

    Sierra Leone is going through a rebirth, thanks to President Bio.The most unfortunate thing for the likes of Palo Conteh is the deadly silence of the President.In other words,unlike his predecessor,Earnest Koroma,President Bio quite simply gave Ben Kaifala a job to do and quickly disappeared into the shadows with his executive powers – no favouritism,no sacred cow.

    Unconfirmed rumours have it that it won’t be too long till the former president himself is invited by ACC to give evidence,a prospect which is keeping him and his supporters unable to breath.The latter are already making a lot noise about a showdown.

    “Den dae pull closs wae de fet nor begin yait’.

  4. The Ernest Bai Koroma’s government of kleptomaniacs took corruption to a new level, one that is high up in the stratosphere. A parachute will be needed to bring it down to earth!

  5. Mr. Kaifala, I want to wish you my kindest compliments and sentiments for your stance in combating the cancerous corruption that has gripped Sierra Leone. Sierra Leone is a very rich country but for these so called white collar thieves occupying state offices. They have destroyed the entire fabric of human existence and state enterprise of the country.

    Sierra Leone politics is to milk the economy dry and eventually the masses themselves will stand their ground to fight to reduce rampant corruption. All former APC government ministers, director generals, members of parliament down to office cleaners are all super thieves. They must pay back the monies that they have stolen from the country. Known properties, mansions must be confiscated to recoup the spoils of their loot.

    There are some big thieves siphoning the loot into their relatives’ bank accounts abroad, including their children and parents. These accounts should be traced and investigated thoroughly; and return the loot back to the country. I want to name names and their properties but I will hold up for now.

  6. What is Wrong if Palo Conteh, former Defence Minister is called for questioning by the Anti-Corruption Commission? I see nothing wrong with that. In both the 2014 and 2015 Audit Reports under the APC, Palo Conteh together with West Star General and David Enterprise owned by both Alimamy Kamara and David Conteh respectively, were accused of misappropriating over $15 Million in Army Vehicles Contract.

    What is the fuss about someone being asked questions about allegations? If there is any injustice, some of us will be the first that will shout. But Palo should explain about such huge money.

    #StopPoliticizingCorruption #PutSaloneFos

    ©Thomas Dixon

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