DPP rules on NHDC scandal

Observer Reporter

Saturday, October 11, 2003

DIRECTOR of Public Prosecutions Kent Pantry yesterday declined to say what direction he has given to the police over claims of corruption on Operation PRIDE projects, but there were suggestions last night that Pantry has recommended that the construction firm, Danwill Ltd, be charged with fraud involving more than $340 million.

Yesterday's ruling by Pantry -- whatever the outcome -- would have been the latest episode in a long-running scandal whose casualties have included former housing and water minister, Dr Karl Blythe, who was forced to quit his job in April last year.

Up to last night Lucius Thomas, the deputy police commissioner in charge of crime, said he had not yet received the DPP's ruling although a spokesperson for Pantry had said that it was "being sent to the police".

"Since it hasn't arrived yet, I expect it will get to me early next week," Thomas told the Observer.

Pantry's ruling, Thomas said, will be examined by himself and the head of the Criminal Investigation Bureau (CIB), Assistant Commissioner Reggie Grant.

"If the DPP rules that someone is to be charged, we will proceed with his recommendations -- whether we are to issue summons, make arrests or whatever," Thomas said.

But some sources said that Pantry held that Danwill, owned by People's National Party activist, Danhai Williams, be charged for allegedly submitting fraudulent payment certificates for work that was not done on three Operation PRIDE projects -- St Benedicts Heights, Melbrook, and Riverton Heights in Kingston.

Operation PRIDE is a government shelter project in which prospective beneficiaries form themselves into provident societies and contribute to their housing development with cash, savings and sweat equity. However, the government, through the National Housing Development Corporation (NHDC), advances money for infrastructure and other work.

Since it started in the mid-1990s, Operation PRIDE has been dogged by controversy and claims of corruption. But it found itself in its deepest crisis early last year when an internal audit by the NHDC, under which PRIDE was brought, in an effort to ensure discipline, pointed to big overruns on projects and fraudulent payments to contractors.

The police Fraud Squad was subsequently called in to probe the projects and, among other things, concluded that the NHDC had paid $341.14 million to Danwill on the basis of fraudulent certificates. That report was leaked to the press.

In the face of the allegations, Prime Minister P J Patterson asked retired civil servant Erwin Angus to head a probe into Operation PRIDE.

The Angus commission found overruns on projects of about $1 billion and concluded that Blythe was an interventionist minister who ran Operation PRIDE as a "brotherhood" with a close crowd.

The Angus report also chided Blythe for over-rapid expansion of the schemes. It also pointed to widespread cronyism, poor management and possible fraud in the projects. However, a review of the Angus findings, by former solicitor-general, Dr Ken Rattray, sought to exonerate Blythe, claiming that Angus had come to conclusions based on insufficient facts and inadequate research. Rattray's review also claimed that on several counts, Angus was wrong in law in his approach to the probe and had denied Blythe natural justice.