THE controversial $427-million used car deal between the Government and Obrien’s International Car Sales Limited is now before the Fraud Squad and Major Organised Crime Anti-Corruption Agency (MOCA), following a falling out between the Government and the dealer over a breakdown in the contract.

The contract was partially terminated and the Government and Obrien’s became embroiled in a dispute over the deal that seemed headed for court. However, it was announced yesterday at a meeting of the Public Administration and Appropriations Committee (PAAC) of Parliament that the Ministry of National Security (MNS) had on March 26, turned the matter over to the police fraud squad to launch an investigation. Following a meeting with the MNS on April 11, a report was also made to MOCA.

What was not apparent from the letter written to the PAAC by the MNS is who or what is the subject of those investigations. After some deliberation yesterday, the decision was taken to ask the MNS to return to answer additional questions.

The committee is contemplating whether those discussions should be held in camera so as not to prejudice the police investigations.

“Owing to the very sensitive stage at which this matter has reached, the ministry does not wish to prejudice any legal action which may be pursued,” Chairman Dr Wkyeham McNeill read from the letter, which was dated April 10, and signed by Permanent Secretary Diane McIntosh. The permanent secretary and her team have appeared before the committee on several occasions to answer questions about the deal.

McNeill, meanwhile, said he was taken aback by the new developments. “My understanding all along was that there were questions about the mechanism of procurement, questions about the approval process, questions about who was liable for taxes and there was a feeling that some of the duties were excessive and that some were to be paid by Obrien’s or the ministry. However, this letter indicates to us that the matter has been turned over to the JCF Fraud Squad to launch an investigation, which opens up a whole new arena. I would be interested to know when it moved from an issue of dispute to an issue of fraud, and who the alleged fraudster would be.”

He noted, however, that the committee was mindful of the caution indicated by the ministry against prejudicing any future legal action, but stressed that the public should know what accounted for the turn of events.

In support of arguments to have the ministry questioned by the committee again, Member of Parliament for North West Manchester Mikael Phillips reminded that there were still a number of outstanding responses to questions which the committee had submitted prior to the start of the police investigation.

He pointed out that these include the status of a variation of an additional $42 million on the contract sum, which Obrien’s had requested, and which the Government had agreed to pay. Phillips argued that there is also a major issue of who will take responsibility for the demurrage for the more than 62 vehicles which have been tied up at customs over the past several months, while the security ministry, the Ministry of Finance and the contractor haggle over who was responsible for the duties on those.

Since the last meeting of the PAAC meeting, which was told that Obrien’s was disputing how much of the Government’s $213 million deposit on the contract sum the company should repay, two more vehicles have been released to the security ministry.

“What issue would have brought it to be a fraud when we were told they were in negotiations with the bankers (and) the supplier himself. There are also blank spaces that need to be filled in. I’m not happy with this letter itself because there is a lot more out there that needs to be answered by the ministry itself,” he insisted.

MP for Clarendon South Eastern Rudyard Spencer agreed that the security ministry should be invited back to meet with the committee, stressing that the only issue in question was whether the session should be held in private.