Judgement Debts: Severely punish public officials who cause losses to the state – Experts advise

Despite recommendations of a commission of inquiry instituted in 2012 to look into judgment debts since 1992, the government continues to incur huge debts.

Experts say government has failed to implement recommendations in the Justice Appau commission report. They are demanding harsh sanctions to deter public officials from causing huge losses to the state in judgment debts.

The Commission

The Justice Appau Commission of Inquiry was to among others, ascertain the causes of inordinate payments from public funds and financial losses arising from arbitration awards, negotiated settlements.

It was also to make recommendations to the Government for ensuring that, as far as practicable the instances where public funds are utilized to make payments in satisfaction of judgment debts and public debts arising from akin processes are limited or avoided.

Government required of the commission to ensure the state does not incur undue financial losses when it does business with private persons or institutions.

Key appearances

For more than a year the commission heard testimonies from public officials and MMDA staff. Among them, was MP for Adansi Asokwa K.T. Hammond, who was former deputy energy minister under whose watch a drill ship belonging to the Ghana National Petroleum Corporation (GNPC) was sold.

A government white paper directed the Economic and Organized Crimes Office (EOCO) to investigate K.T Hammond on the disbursement of $900,000 from the sale of the drill ship.

The Adansi Asokwa MP subsequently sued the government for directing the Economic and Organized Crime Unit (EOCO) to probe his involvement in the drill ship saga.

Another famous case which resulted in some judgment debts, involves the Margins Group, which supplied one million calendars to the Ghana@50 secretariat in 2007 at 2.7 million cedis.

The commission’s report revealed in part, delays in payment amid other contestations, resulted in the state coughing out 6.2 million cedis as payment.

And then the widely publicized one! The Woyome Gate!

The businessman in 2010 was paid GHC51 million after he claimed that he helped Ghana raise funds to construct stadia for purposes of hosting the 2008 Africa Cup of Nations. But the Supreme Court in 2014 ordered him to pay back the amount after former Attorney General Martin Amidu, challenged the legality of the judgement debt paid the businessman, Waterville and Isofoton.

The Apex Court unanimously granted the Attorney-General clearance to execute its judgment ordering Woyome to refund the money to the state.

Government White Paper on Judgment debt

The Justice Apau commission submitted a report to government on their findings. Government accepted the following recommendations with modifications:

a. Parliament should pass a ‘Political Campaign Funding Bill’ to prevent the situation in which the funding of political activities and election campaigns have become a major source of corruption in public office.

b. A specialized Alternative Dispute Resolution (ADR) Centre should be established within the Attorney-General’s Department to assist in the management of national debts. Government did not wholly accept the recommendation. And was of the view a more workable alternative is to establish a team of attorneys and non-attorneys at the AG’s, properly trained in dispute resolution.

c. The frequent changes in the nomenclature of ministerial portfolios any time government changes hands must also cease as these carry with them unreasonable financial burdens as a result of movement of departments and units and even staff.

Government did not accept the following recommendations:

a. A legal instrument should be put in place to ensure the procurement law is religiously followed in the award of contracts. Government was of the opinion that there are enough sanctions in the existing Public Procurement Act 2003 (Act 663).

b. A legal regime should be developed to ensure continuity of contracts that transcend out-going and in-coming governments.

c. The role of the Audit Service should be broadened to minimize financial malfeasance in the execution and abrogation of contracts.

d. A legal instrument should be put in place to oblige all MMDAs and RCC attorneys to respond to queries and other requests for information from the Attorney-General’s office within strict timelines. Government further did not accept the recommendations of the Commission that:

i. There should be established a permanent institution to play oversight role in the handling judgment debt cases.

ii. It will investigate all default judgments, consent judgments and judgments on admission entered against State institutions Government is of the view that there are existing institutions of state that are responsible for different aspects of these matters. These institutions should be empowered to do their work efficiently and effectively.

iii. The Commission recommends the separation of the roles of Minister of Justice and Attorney-General to protect the prosecutor’s office from undue political interference. The commission recommended some sanctions to include

i. Holding Heads of Departments and other government officials accountable for their actions and/or inactions that lead to payment of judgment debts;

ii. Deadlines for responding to administrative requests for advice and clearance should be accompanied by sanctions for failure to respond on time, especially where it leads to financial loss to the State;

iii. In situations where the actions and/or inactions of public officials lead to unwarranted debts to the State, the officials must be made to refund the debts paid to the state failing which the assets of the main offenders, collaborators, accomplices and beneficiaries should be confiscated to the State to recover the losses to the State.

iv. Government also noted the existence of the Public Property Protection Decree, (SMCD 140) under which such persons may be prosecuted

What’s happened since then?

In 2018, the under fire businessman begun making payments to the state; ¢4.6 million at the time. Even though he denies any wrongdoing. Alfred Woyome says he is prepared to pay back the monies to state.

“I have shown willingness to pay the monies. I even proposed a payment plan, to make it quarterly,” Woyome told Accra based Citi VT in July 2020.

He said, “I even filed this plan at the supreme court, because I have not worked since all this started. Government has closed down all my businesses illegally and caused the bank of Ghana to blacklist me.”

The embattled businessman revealed the state “argued in the court that it would not accept my payment plan and the court accepted, because their hands were tied.”

He has challenged the state to go after all those who benefitted from the monies paid his businesses in judgment debt.

Any lessons learnt?

Six years since government issued a white paper on the commission’s report, what has changed? Co-chair of the Citizen’s Movement Against Corruption, Edem Senanu, is disappointed not much has been done to prevent recurrent judgment debts.

“Ministers who hold certain portfolios must be made to sign an undertaken that says for example any minister who cancels contracts without any clear justification, would be held to account for every pesewa lost.”

He believes, “that would have been a step to make it a high-risk enterprise so the state officials do not just abrogate contracts.”

Senior lecturer at the University of Ghana business school, Dr Lord Mensah agrees.

“It tells you that those at the helm are not paying the price for their irresponsibility. I am looking forward to some recommendations which would prescribe say a 10 year jail term for ministers who cause the state huge sums in judgment debts.”

Dr. Mensah told 3news, “another way to deal with is it to freeze the assets of such ministers and prevent them from having access to them even after they have served their time in jail.”

He says these could “scare the politicains.”

The state says it is pursuing some of the cases, specifically the Woyome matter to ensure the funds are recovered. But Alfred Woyome alleges what he calls some inside trading in the auction and sale of his assets.

He said, “I have ensured all the right things are done in this matter; it should be lawful. But we discovered there was inside trading, people among them want the properties for themselves.”

Mr. Woyome said, “that is why I have gone to the human rights court under Article 33.”