Just over nine months after it was commissioned by President Jagdeo, the report on the alleged collusion by customs officers with Fidelity Investments Inc./ Kong Inc. to defraud the Guyana Revenue Authority (GRA) has been made public.

A reading of this report would leave anyone aghast at the ease with which fraud was perpetrated against the state and the insidiousness of the conspiracy among representatives of the company, the broker and as many as 15 employees of the Customs and Trade Administration (CTA).

The revelations by the team headed by Auditor General (ag) Deodat Sharma have exposed how many departments of the CTA were compromised and how the all-important software running the revenue system had been undermined. Given the clear-cut information available it is expected that charges could be easily brought against those involved at Fidelity, the broker and customs employees.

The scam was multi-faceted. A quantity of beer was smuggled into the country and an elaborate conspiracy was then spun to cover it. This included the legal importation of shipments of beer which were declared at a value of US$2.15 per case when the more likely tariff would have been $4.50.

Many of the documents presented to clear the documents had been forged and, in what was perhaps a scam within a scam, there was an attempt to pass off some of the shipments as mixed aerated drinks, the latter naturally attracting a lower duty rate.

Much of this was facilitated by complicit customs employees who conducted what can best be described as glancing inspections of the containers so that they couldn’t say with certainty whether they had checked from the front to the back of the container to determine whether beer had been behind cases of soft drinks. The conspiracy ripened further in the Total Revenue Integrated Processing System (TRIPS) where through password abuse and overlapping duties, customs entries which should be immediately red-flagged and thoroughly checked were not.

As an aside, it should be noted that the government had installed a retired army officer, Colonel Chabilall Ramsarup as the head of the CTA in 2007, a move that had been widely criticized as it was felt that this position should be held by someone who was a career customs man or woman and who would then be expected to exercise more effective control over the CTA and close loopholes for scams like this one.

Most of the period under scrutiny in the task force’s report – January 1, 2007 to April 7, 2008 – encompassed Colonel Ramsarup’s tenure at the CTA and earlier this month he was parachuted back into his previous post at the Civil Defence Commission (CDC) while the head of that much maligned agency was promoted to a national security role within the Office of the President. It is a signal lesson for the government that it should not tamper with sensitive revenue agencies with hierarchical structures and established promotion streams.

Among the more stunning revelations in the report were:

*the invoices attached to 17 customs declarations were falsified through collusion between the broker and customs officers to falsely declare that beverages and soda water were imported instead of beer;

*the invoices presented to the task force by Fidelity were forged to declare that beer was brought in at US$2.15 per case when it really should have been US$4.50;

*four customs declarations were reconstructed after they were inputted into TRIPS at the GRA;

*security cameras which had been purchased at great cost were not working during the period when the 17 bogus customs declarations were tendered. They apparently interfered with TRIPS;

*TRIPS was tampered with so that certain categories of goods and importers were not correctly flagged for full examination and when they were flagged for examination by the valuation unit they were not examined.

Whether or not some of the recommendations have already been acted on by the GRA is beside the point. The extent and depth of the treachery that  GRA employees and the importer constructed and the compromising of TRIPS exposed an agency which didn’t appear to have quality internal controls. None of this mind-boggling fraud was picked up until a raid of January 15, 2008 on the Fidelity bond – a raid which itself became fodder for much speculation. The best reports available also suggest that another controversial importation of beer by Fidelity in March 2007 saw the intervention by a senior politician to fix a “compromise” valuation figure. All of this reeks of the deadening hand of interference, manipulation and the undermining of professionalism at the GRA.

When the GRA was formed by merging the Customs and Excise Department and the Inland Revenue Department, there had been great expectations that a lot of this jiggery-pokery would have been eliminated. It clearly was not and it is not a stretch to wonder how many companies have been able to trick the system and to get away with it. It is clear that the GRA needs immediate revamping at all levels and to be freed of political interference. But first, those who participated in this chicanery – in and out of the GRA – must face the full force of the law.