Current Affairs

Current Affairs

BLYTHE...Angus commission relied on hearsay to come to its conclusions

FORMER Water and Housing Minister Dr Karl Blythe yesterday demanded a public apology from the Erwin Angus-led commission after it emerged that an assessment of the commissioners' report, that forced him out of the Cabinet in April, found it to be defective.

"I am hoping that the chairman and the members will see the need for a retraction and a public apology," Blythe said in response to former solicitor-general Dr Kenneth Rattray's damning assessment of the Angus report, a copy of which has been obtained by the Observer.

RATTRAY...commissioners adopted a flawed definition

Dr Rattray, a respected international aviation lawyer and now a special adviser to the Cabinet, literally blasted the Angus commission that inquired into the National Housing Development Corporation (NHDC) scandal for:

* failing to carry out a rigorous and in-depth examination of the facts, including documents, before arriving at its conclusions;

* basing its conclusions on assertions which amounted to hearsay;

* arriving at conclusions without providing Blythe with an opportunity to challenge those conclusions;

* failing to adequately identify and separate the periods during which alleged deficiencies existed, particularly in arriving at findings and conclusions relating to Blythe;

* failing to recognise the special position of the minister responsible for housing under the Housing Act as a Corporation Sole in relation to Operation Pride;

* basing its conclusions in relation to undue ministerial influence on factual inaccuracies, false premises and a failure to appreciate the nature of Operation Pride; and

* basing its conclusions in relation to over-expenditure on a flawed definition.

"He has proven what I have been saying all along," said Blythe yesterday. "The Angus commission relied on hearsay to come to its conclusions. The members did not carefully examine the facts and this led to hasty conclusions which have brought the integrity of the Operation Pride programme into disrepute."

A week after he resigned, Blythe blasted the commissioners, saying that their report reflected their opinions rather than facts.

He also said that the commissioners had told "vicious" and "wicked lies" about his involvement in Operation Pride, the Government's shelter programme that has been mired in controversy since its launch in 1995.

"... I shall not accept this report," Blythe told People's National Party supporters at a Face to Face meeting in his Central Westmoreland constituency on April 18.

"I frankly say tonight, the report is a report put together by many persons of good intention, but... who put this report together from an uninformed position and did not apparently take the time to inform themselves, because the material was right before them; they could have asked for it."

Noel Levy, Carlton DePass and Robert Martin sat with Angus on the commission which, in its report, pointed to ministerial interference, cronyism, poor management and possibly corruption in Operation Pride.

The report indicated overruns of $928.25 million in respect of 21 sample projects and another $113.7 million on five schemes that have been abandoned. This was substantially less than the $5-billion overrun suggested by consultants for the NHDC in an internal audit completed late last year.

In a number of other projects, the cost of the development pushed them far out of the league of the people for whom Operation Pride was originally designed.

The commission also said that Blythe, when he took over as housing minister in February 2000, went on an expansion spree -- overturning a policy that was put in place because of previous difficulties -- and told bureaucrats to allow paperwork to catch up with expansion.

But in his assessment of the report, Rattray suggested that the Angus panel, though faced with a tight deadline, did not conduct a full and rigorous examination of the facts. He said, too, that the commission failed to observe the rules of natural justice by neglecting to hear from persons against whom assertions were made before arriving at its conclusions.

Rattray also said that the commissioners adopted a "flawed definition" of over-expenditure by reference to the excess of the amounts expended on projects over amounts recoverable from beneficiaries.

"Over-expenditure," he explained, "is essentially concerned with whether a contractor has incurred expenditure above contracted sums and approved variations and fluctuations."

Added Rattray: "The failure of the commission also to recognise the nature of Operation Pride and the subsidy element intrinsic thereto, contributed to its adoption of a definition of over-expenditure unrelated to the realities of Operation Pride and the true nature of over-expenditure as generally recognised in the construction industry and among contractors."

Rattray also took the commissioners to task for making "adverse comments" about Blythe's instruction to the NHDC to pay invoices to Caribbean Engineering Corporation Ltd on Relocation 2000, a state-run squatter settlement programme.

The commissioners, in their report, had said that Blythe ordered the payments despite the NHDC's advice that Relocation 2000 was not a part of Operation Pride and that any such payment may be subject to an audit query.

But, said Rattray, the evidence suggests that the matter was discussed between the NHDC and Blythe and all seemed to have understood that the invoices related to expenses which rightfully should be paid by the NHDC.

"The minister's instructions did not seek to direct the NHDC in any unlawful act," said Rattray. "It expressly stated: 'I am asking you to find a way to meet them in such a manner which will not bring an audit query.'"

However, he said the commission's report speaks in terms of: 'to structure the payment in such a way as to avoid such a query'.

"The innuendo that the minister's instruction was to do something improper is clearly unjustified," Rattray said.