The Criminal Code Article 179(a) as amended by the NDC dominated Parliament and signed into law by ex-President Jerry John Rawlings in 1993, classifies acts of negligence leading to the loss of funds to the state as a...">
General News Mon, 30 Apr 2001

Rawlings & Co. Trapped By Criminal Code

The Criminal Code Article 179(a) as amended by the NDC dominated Parliament and signed into law by ex-President Jerry John Rawlings in 1993, classifies acts of negligence leading to the loss of funds to the state as a "special offence".

"Any person through whose wilful, malicious or fraudulent action or omission - the State incurs a financial loss; or the security of the State is endangered, commits an offence," the law unambiguously states.

Ironically it is this very law that seems to have caught up with the former President, his Vice President, Prof. John Evans Atta-Mills and some of their Ministers over their role in the loss of c140 billion ($20 million) to the State through the Quality Grain project.

A famous trial currently taking place in Accra has the above stated law as its basis. This is the trial involving Gavor and co. of the Bank of Ghana over the alleged fraudulent withdrawal of $1.5 million from the Bank by Hajia Baby Ocansey.

The acting Executive Director of the Serious Fraud Office (SFO), Brian Sapati, whose outfit did the investigation into the circumstances surrounding the Quality Grain Scandal told Public Agenda on Thursday that a docket for the Attorney General's fiat on the case is being finalised.

SFO's report holds Nana Ato Dadzie, Rawlings' Chief of Staff, Kwame Peprah, former Finance Minister, Alhaji Ibrahim Adam, ex-Agriculture Minister, the Agriculture Ministry's Chief Director, Samuel Dapaah and Dr. George Sikpah-Yankey legal advisor of the Finance Ministry directly responsible for the loss of the money.

Rawlings and Prof. Mills were not mentioned in the report but their role in "this extra-ordinary tale of negligence and recklessness" raise significant and questions, Nana Akufo-Addo, Attorney General Justice Minister (A-G) said at a press conference on Wednesday.

Akufo-Addo said Prof. Mills entered the saga in its later stages, but he failed to stop the rot or initiate measures to recover the money given to Quality Grain. "On the contrary, he (Prof. Mills) contributed to even greater losses to the State."

Rawlings personally supported Juliet Cotton with state machinery at his disposal. "President Rawlings' personal interest in the success of her project was proverbial," the Justice Minister said.

What are the penalties if found guilty?

"Any person convicted of an offence under any of the offences specified in this Chapter (4) is liable on conviction to a fine of not less than five million cedis or imprisonment not exceeding ten years or both," according to the subsection (D) of Article 179 of the code.

So can they be prosecuted? The answer is yes, because their actions, which border on negligence and recklessness, are punishable by law, the Secretary of the Ghana bar Association, J. Ayikoi Otoo, said in an interview with Public Agenda.


"Issues of negligence and betrayal of the public trust go hand in hand with potentially criminal issues as well. I shall not pronounce on any of these until I am ready, but they are all being examined," Akufo-Addo said at the press confab.

However the decision whether to rope in the former President or not will not be a simple legal decision, according to some political observers that Public Agenda spoke with.

"This is not just purely a legal case, public perception is very crucial. The government must make sure the environment is appropriate for such an action. Otherwise it might win the battle and lose the war," Kwasi Prempeh of the Centre for Democracy and Development told Public Agenda.

Rawlings' network built over the period, especially in the military makes it crucial for the Kufuor government to proceed carefully, Dr. Emmanuel Anin of the Institute of Economic Affairs (IEA) also warned.

Despite their cautious stance, Anin and Prempeh both said however that those who made the nation lose so much money should not go scot-free.

"Such horrible incompetence should be punished," Prempeh said.

Anin pointed out if President Kufuor could be impeached if he breaches the Constitution then those found to have helped Juliet Cotton to loot Ghana could and should be punished.

The NPP rose to power promising to ensure strict compliance by the rule of law including recovering all assets of the country looted by individuals.

The government has come under fire in recent weeks for what is perceived as slow pace to unravel the corrupt practices of the past regime and prosecute people found to have contributed to the wasting the country's resources during the 20-year rule of the P (NDC).

Article 57 (5) of the 1992 constitution states, " the President shall not, while in office as President be personally liable to any civil or criminal proceeding in court," but Art. 57 (6) says that, " civil or criminal proceedings may be instituted against a person within three years after ceasing to be President in respect of anything done or omitted to be done by him in his personal capacity before or during his term of office."

Akufo-Addo's statement on the issue pointed out that the feasibility report on which the whole Quality Grain project was based was defective and inadequate.


"It did not contain a detailed plan and design, including full cost and the responsibilities of government under the financing arrangement proposed," the A-G said.

Quality Grain gave an impression in its feasibility report that it had done its homework properly including acquisition of a suitable land for the project. It did not refer to any problems related to land acquisition and squatters and yet, the company spent two years resettling these squatters.

Akufo-Addo hinted that the company did that "only to induce the granting of the loan facility."

Woodard used this report to seduce the government to finance the company she said she owned; he said.

The first loan of $6.1 million was endorsed by 1992 Parliament but the remaining $14 million went through without parliamentary approval, directly violating Art. 181 of the Constitution.


It all started in 1996 when an American, Renee Woodard, who later became Juliet Cotton incorporated Quality Grain Company (GH) Limited to produce rice for local and international markets.

This was after she had met ex-President Rawlings on an investment promotion in Atlanta Georgia, USA, in 1995.

The mother company owned all of its shares in the company of which Woodard was the director along with two others, an American, James McGarrh and a Ghanaian, Bismark Nettey.

But Juliet Cotton and her Tennessee-based mother company have no international record in rice production. The company's attempts to register with the Ghana Investment Promotion Council (GIPC), failed in 1998 because it could not prove claims that it had brought foreign capital to Ghana, a key condition of the GIPC.

The A-G said even when it became clear at the beginning of 1999 that the company could not deliver any rice, the Ministry of Finance, Prof. Atta Mills' Office and Chief of Staff Ato Dadzie granted more money for the project.


Through their support the Ministry of Finance started paying the salaries of Quality Grain employees in January 2000 and rent of the company's offices. The ministry also spent 241 million cedis to get electricity to the site of the project.

The MOF also paid 346 million cedis for fuel supplied to the company by Elf (GH.) Limited in May. Peprah's ministry also paid $34,400 to Wienco being the cost of fertiliser supplied to the company.

The Ministry picked up water, telephone and electricity bills totaling 32.7 million cedis for the company. Two months to last year's general elections, the government again contracted a $ 60, 000 loan from Ecobank, all to enable the company to harvest in December 2000.

Already, the NPP government has initiated moves to take over the assets of company.

"The legal take-over of the assets by Government will in infact only regularise what was always the fact, the assets were at all times financed and owned by Government. The company was in reality only the middleman or woman in the purchase by the government of the machinery and equipment. A middleman or woman was permitted to hold the title, instead of its principal in defiance of the normal rules of agency," the Attorney General said.

The government is yet to find out the value of the assets of the company that it is taking over. The assets include tractors, buldozers, silos, self-propelled wheel combine harvesters, escalators, millers and trucks.

Financial arrangements:

External loans

Government guaranteed various sums of money to the company in violation of Constitutional provisions. Parliamentary approval was not sought apart from the loan given the company in November 1996.

November 1996 - Government guaranteed $6,196,330 (six million, one hundred and ninety-six thousand, three hundred and thirty dollars) to finance the supply of farm materials.

July 1997 - A total of $12 million to purchase capital equipment and engineering services.

July 22/97 - Government granted $1.274 million.

Internal loans:

February 1999 - Kwame Peprah authorised the Controller and Accountant General to release $2million to the company. One million, four hundred and fifty thousand dollars was transferred to the First Tennessee Bank (in Tennessee, USA) account of Quality Grain Company Incorporated on the orders of Peprah.

November 1999 - The Company received a loan of 150 million cedis from ECOBANK under the Trade and Investment Programme Gateway Project to Quality Grain.

October 2000 - Dr. George Yankey arranged a 259million cedi loan from ECOBANK.

May 2000 - Finance Ministry (MOF) guaranteed a 346 million cedi facility being the cost of fuel purchased on credit from Elf by Quality Grain.

We got a better a better deal - Wereko-Brobby

In the same month, the MOF approved another loan of $34,500 for fertiliser bought from Wienco Ghana Limited.

Source: Public Agenda