The proposal for a hangar for money smuggler pilot and accused drug trafficker Khamraj Lall at the Cheddi Jagan International Airport (CJIA), Timehri was never brought to the attention of the CJIA board but was taken directly to Cabinet by the then Minister of Public Works Robeson Benn.
In a matter of days of the proposal being seen by Benn, Cabinet granted its no-objection to the project, a forensic audit of the Cheddi Jagan International Airport Corporation (CJIAC) has found. The proposal was prepared by the CJIAC on behalf of Lall’s company, Exec Jet Club LLC, the audit revealed.
The issue of the hangar came under the spotlight in 2014 following the arrest of Lall in Puerto Rico. US authorities charged him with cash smuggling of over half a million US dollars and on Tuesday, he was sentenced to a year in prison. His private jet and the money amounting to US$620 000 was forfeited.
Following investigations, Lall is also facing two charges of drug trafficking and, further, has been accused of structuring bank deposits to avoid financial reporting requirements. US authorities are seeking the forfeiture of his two jets, three houses, a vehicle and over US$7.5 million.
Lall’s case had highlighted his close links to the former PPP/C government. He had been granted permission to construct a private hangar at the CJIA and had flown then President Donald Ramotar on official trips on several occasions. These reports triggered consternation and questions as to what due diligence had been carried out on him before the decision was made to assign him a private hangar. It has been revealed that the pilot flew frequently to Guyana.
The forensic audit revealed a number of irregularities in the management of Guyana’s main international airport. In a scathing report, which highlighted conflicts of interests as well as the bypassing of the Board in relation to the hangar, the auditor chided management a number of times for what appeared to be willful attempts to provide inaccurate and incomplete information.
The report said that no Standard Operating Procedures were in place for the granting of a lease to build a hangar on the CJIAC premises and a perusal of the CJIAC Board Minutes during the period August 2010 and November 2014 did not indicate any discussion of an application by Exec Jet Club for land to construct a hangar on the airport premises.
It revealed that a proposal dated 1st September 2012 and titled ‘Application for Land to Construct Hangar at CJIAC’ was prepared by the CJIAC on behalf of Exec Jet Club and submitted to Benn. A few days later, on September 11, 2012, Cabinet gave its no objection.
The report said that the former Chairman of the CJIAC Board confirmed that the granting of the lease for the Exec Jet Club was never discussed at Board level.
In response, the CJIAC management said in relation to the procedure for the granting of a lease, it is the practice for various individual/businesses to submit proposals to operate a service at the airport. “These proposals are usually forwarded to the Board of Directors or the minister for further approval,” according to management. It added that Exec Jet Club submitted a proposal which was taken to Cabinet by Benn and this was subsequently approved by Cabinet.
However, the report asserted that granting of a lease to build a multimillion dollar hangar/executive office/apartment cannot be compared with businesses submitting proposals to operate a service at the airport. It pointed out that the Chief Executive Officer reports to the CJIAC Board but the proposal for the ‘Application for Land to Construct Hangar at CJIAC’ on behalf of Exec Jet Club was not discussed with the former CJIAC Board instead it was submitted to Benn.
Explain
It was recommended that the CEO explain why the former CJIAC Board was not informed of the proposal and also of the Cabinet decision. “This is considered withholding information from the Board,” the report said.
In addition, it highlighted that an adequate paper trail was not kept for the granting of the lease to build the hangar. “The file for the Exec Jet Club which was kept by the Commercial Department did not contain significant necessary information such as copies of the registration of Exec Jet Club, Financial statements and Tax returns. As a result it is not known if due diligence was followed,” the report said.
The audit report pointed out that no copy of any acknowledgement or response to Lall’s letters from CJIAC was seen. In this regard it is not known what form of communication existed between the CJIAC and Lall, the report said. It also highlighted that the Commercial and Administrative Manager handed over documents which were required to be kept in the file in a “piecemeal” manner. Such documents included three letters and a limited power of attorney.
It was on the basis of the three letters that a proposal dated 1st September 2012 ‘Application for Land to Construct Hangar at CJIAC’ was prepared by the CJIAC on behalf of Exec Jet Club and submitted to Benn, the report noted.
In response, CJIAC management said that copies of documents are usually kept by more than one office. “In this instance, the documents were not all located in the same file, however all relevant documents were eventually presented to the auditor. Management is now moving to have a centralised filing room implemented,” it said.
However, the auditors said that no proper explanation was given for copies of document relating to a particular business or event kept in several files. The Commercial Department was responsible to maintain a file with all documentation relating to the Exec Jet Club, it pointed.
It was also highlighted that all relevant documents were not received by the Auditor. “The auditor did not verify a single correspondence from management of CJIAC to the Exec Jet Club. Copies of the registration of Exec Jet Club, Financial statements and Tax returns were not made available for the audit,” the report said.
It recommended that the Commercial Department should maintain proper files for all businesses operating on the premises of the CJIAC and the Exec Jet Club to be properly updated with all correspondences for information purposes and future reference.
Conflict of interest
The report also highlighted the glaring conflict of interest in the deal. It said that a named accounts clerk of the CJIAC’s Finance Department held the power of attorney for Exec Jet Club and management was aware that the clerk was doing part time work for Kaylees Gas Station, which is owned by Lall. The report pointed out that the lease for the hangar was signed between the Manager – Commercial and Administration, representing CJIAC and the accounts clerk representing Exec Jet Club on 15th October 2012.
“This is considered a serious act of Conflict of Interest,” the report said. It further pointed out that the clerk did the Brokerage and Aircraft Verification for the Accounts Department and this gave him access to the airside. Further, it highlighted that a letter dated January 13th, 2013 from the Exec Jet Club to the Manager, Commercial and Administration requesting a waiver in fees since their operations had not commenced as yet was signed by the clerk with designation of General Manager.
It was also noted that all invoices billed to Exec Jet Club for handling fees for flights made by Lall during the period 2011 to 2014 were received by the clerk. It is not known whether the clerk being a CJIAC staff member was given any preferential treatment to visit the Hangar while it was under construction, the report said.
In response, CJIAC management said that they were aware that the clerk was employed at Kaylees on a part time basis but “at no time did we feel there was a conflict of interest since we are aware of several other staff performing such functions (book keeping, electrical, plumbing) outside of our official working hours.”
According to management, the clerk was a junior member of staff and had no influence on management and government’s decision to award the lease to Exec Jet Club. However, it added that following Lall’s arrest, and in reviewing the matter in hindsight it was determined that the dual function performed by the clerk was indeed an area of concern and as such a decision was made to terminate his services. The man subsequently submitted his resignation. It denied that he was granted any preferential treatment to visit the hangar while it was under construction.
The report had revealed that the clerk was promoted to Accounts Supervisor in 2014. Subsequently, after it became public knowledge that he held the power of attorney for Exec Jet Club in November 2014 after Lall was arrested, Benn recommended that he be fired for conflict of interest, the report said.
The report emphasised that the Manager, Commercial and Administration, who has responsibility for Human Resources should have known it was a conflict of interest to be signing a legal document with one of her junior staff who was the representative for another company.
It further said that the Minutes of the CJIAC Board Meeting dated 5th December 2014 indicated that the clerk had some privileges since he was able to access the Arrival/Customs Area.
The report recommended that management should make efforts to have a qualified an experienced Human Resources Manager who will be able to make proper assessment and decisions in Human Resources matters. It said that the Manager, Commercial and Administration, should give an explanation about signing of the lease with a junior staff under her supervision.
Meantime, the CJIAC obtained fuel from Kaylees Service station and paid over $14 million over three years but the corporation has no records of credit facilities for fuel with the company during the period January 2010 to May 2015. However, payments were made for fuel via charge bills from the service Station periodically prior to 2012. In the absence of a credit approval document, it is not known who were the authorised persons and vehicles to uplift fuel from this gas station, the report said.
It stated that records showed that approximately $14.5 million was paid to Kaylees Service Station for fuel during the period January 2012 to May 2015.
In response, management said that a credit facility was established after the company wrote the Corporation on January 14th 2012, offering the service. “The proposal was evaluated and it was decided that establishing the facility would have been beneficial to the Corporation since the Corporation has vehicles which travel along the East Bank Road,” according to the CJIAC management.
However, the audit report dubbed management’s response as inaccurate and said during the course of the audit, a request was made for the Kaylees Service Station File to verify the Credit Facility arrangement. However, no file was in place.
Unsigned
An unsigned copy of a letter dated August 7, 2008 which was intended for Kaylees Service Station was received from the Finance Department. No letter from the Company dated January 14, 2012 was verified. However, it was verified that the CJIAC has been benefiting from a credit facility with Kaylees Service Station prior to 2010.
The report provided a copy of the unsigned letter submitted to the Auditor and pointed out that it now bore a signature.
The report urged management to give accurate responses and said that the CJIAC should be using the services of the RUBIS Service Station which is located on the premises of the Airport and sells diesel. Most vehicles belonging to the CJIAC use diesel, in addition the CJIAC has a credit facility with RUBIS, it pointed out.
Among a number of other irregularities, the report said that flights by Exec Jet Club were not properly recorded in the CJIAC system. As an example, it highlighted that the Control Tower of the Guyana Civil Aviation Authority (GCAA) could not immediately verify that Lall made his inaugural flight to Guyana on 18th August 2010. However, after sharing the date that was recorded in the Finance Department of the CJIAC, they subsequently agreed that the date of 18th August 2010 was correct.
The report pointed out that the Manager, Commercial and Administrative who had responsibility for the CJIAC Finance Department had initially provided the Forensic Auditor with a printout of a Statement of Account as at 31st October 2014 together with a Schedule of all Exec Jet Club Landings.
These printouts showed that the first flight by Lall was on 31st August 2011 at 1.56 hours and departed on the same date at 18.29 hours while a Schedule prepared by an official from the GCAA recorded a departure date of 8th November 2010 but did not indicate the date the flight arrived in Guyana.
The report said that a letter dated 29th August 2010 written by the clerk representing Lall indicated that the Exec Jet owner was in Guyana during the month of August 2010. The Forensic Auditor subsequently visited the Control Tower to obtain information with regards to the arrival date of the flight that departed on 8th November 2010. The information was not readily available but a Supervisor promised to provide the information as soon as it became available.
During the waiting time for a feedback from the Control Tower with regards to the arrival date, the matter was brought to the attention of the Chief Executive Officer who agreed that there must be an arrival date to complement the departure date recorded by the Control Tower of the GCAA. He had promised to liaise with the Finance Department on the matter.
The report said that the Forensic Auditor was not able to locate the Printout and Statement of Account as at October 31, 2014 and related the misplacement to the Accountant. A new printout for a Statement of Accounts as at October 31, 2014 together with a Schedule of all Exec Jet Club Landings was requested from the Accountant. “While scrutinizing the new print out it was observed that there were some changes on the new printout which indicated that the first flight by the Aircraft Registration N335VB arrived in Guyana on 18th August 2010 and departed on 8th November 2010,” the report said.
It noted that after not receiving any further communication from the Control Tower to submit the first arrival date for the aircraft, a request was sent to the Director General (ag) of the GCCA to assist. The Director General (ag) made a telephone call to the Forensic Auditor to find out how she could assist and then assigned a staff member to deal with the matter. The staffer was requested to confirm the date of 18th August 2010 which was reflected in the new printout from the Finance Department. The date of 18th August 2010 was confirmed via telephone, the report said.
Itinerant
In response, management said that regarding the flight on 18th August 2010, during the year 2010, there was a change in the personnel assigned to the receivables desk as well as the Senior Accountant. “As mentioned the first flight was in August 2010, this would have been recorded as an itinerant flight. The flight did not depart until November 2010; it appears as if there was an oversight to connect the departing flight to the arriving flight. Management acknowledges this shortcoming and wishes to assure that corrective action was taken over the years in review of the system,” it said.
Among other things, the report recommended that the Manager, Commercial and Finance Department be asked to explain why she facilitated the Forensic Auditor with incorrect information on the printouts.
Meantime, the report highlighted that no documentation was seen granting Lall permission to park his aircraft on the premises of the CJIA and by extension in the GA2000 Hangar. He parked for 81 days and there is no record of parking fees or any other fees paid by him for that period, the report said.
Management’s response was that “no official permission was granted to park in the hangar.” The audit report commented that the response implied that Lall was parking illegally in a hangar that was in receivership.
A letter written on behalf of Lall thanked the CEO of CJIAC for allowing him temporary parking in the Old GAC Hangar and the report said that there was no evidence that the CJIAC Board was aware that the CEO granted permission to the Exec Jet Club aircraft to park in the GA2000 Hangar for 81 days.
Among other things, the report said that several inconsistencies were observed during a scrutiny of the three letters signed by the accounts clerk on behalf of Lall. It said that the letters could not be considered valid since they were signed by a clerk who had no legal authority at that time to sign such letters. In addition, the name used, Kem Lall, was not the correct name of the owner of Exec Jet Club.
The report said that scrutiny of the contents of the letters highlighted interesting information which was not supported by any form of evidence. Among other things, one of the letters claimed that Lall had approval from GCCA and Former Minister Manniram Prashad to operate his business. GCCA denied giving Lall any such approval since all his flights have to be approved before he could land in Guyana and no approval was seen from Prashad. The letters also claimed that Lall met with former President Bharrat Jagdeo and showed him his proposal but there was no documentation to support this claim, the report said.
