DESPITE President Michel's promise of full transparency and zero tolerance of corruption, evidence is now emerging of a major over spending of public funds by the SPDF in 2007 without Legislative Assembly authority and accountability. The overspending amounted to R24.7 million.
What more, the Ministry of Finance under President Michel for 11 years since 1993 and continued under Danny Faure over the past three years have conspired to cover-up their illegal and unconstitutional acts. For example, the budget of the Ministry of Defence passed by the National Assembly for 2007 allocated R56.3 million to be spent. Of this amount, R40.5 million was earmarked for the SPDF. While the SPDF did spend exactly the amount provided for by the budget on salaries and wages, its spending on “other charges” suddenly increased to R39.5 million, an overspending of 167% or R24.7 million.
It is not a coincidence that 2007 happened to be an election year. According to our survey of government budget expenditures over the past ten years, overspending generally takes place just before an election year if the election is in the first half of the year. If the election is in the second half of the year, the spending occurs in the early part of that particular year.
Rather than account for the overspending, President Michel when he was Minister of Finance and Danny Faure today misled the National Assembly by covering-up their illegal acts from public scrutiny. First of all, while all the Ministries provided details of their so-called “specific costs” spending during presentation of the budget, those of State House and the Ministry of Defence were always conspicuously absent, and last December was no exception. Most disturbingly there wasn't even a whimper of protest from members of the National Assembly. They were all too preoccupied it seemed, with covering up their own embarrassing salary increases to notice.
Ever since the (Third) Constitution came into force on 18 June 1993, Michel as Minister of Finance, and the SPPF majority in the National Assembly have shown gross contempt of the Constitution when it comes to full disclosure concerning public finances and the spending of public funds. The lack of transparency in public finances not only shows the contempt President Michel has for the National Assembly and, therefore, the Constitution, but also dishonesty and hypocrisy in the light of his call for respect of the Constitution. And it does not stop there.
The Constitution devotes a whole chapter (Chapter XII) to public finances. All the provisions are set out to ensure full accountability when public money is spent. The first article, Article 152 says “There shall be a Consolidated Fund into which shall be paid all revenues or other moneys raised or received for the purposes or on behalf of the Republic, not being revenues or other moneys that are payable by or under an Act for some specific purpose or into some other fund established under an Act for a specific purpose.”
As can be seen from the text of the Constitution, which is very clear to anyone who can read English, every cent the government receives must be paid into the Consolidate Fund. There is no evidence that the proceeds of the US$230 million junk bonds for example, went into the Consolidated Fund. Instead they were kept in the account of the Central Bank.
When it comes to spending or withdrawal of money from the Consolidated Fund, the Constitution is even more elaborate. Article152 says “(1) No moneys shall be withdrawn from the Consolidated Fund except - (a) to meet expenditure that is charged on the Fund by this Constitution or by an Act; or (b) where the issue of those moneys has been authorised - (i) by an Appropriation Act; (ii) by a supplementary estimate approved pursuant to article 154(7) by resolution of the National Assembly passed in that behalf; (2) No moneys shall be withdrawn from any public fund, other than the Consolidated Fund, unless the issue of those moneys has been authorised by or under an Act.”
Despite the Constitution's clarity on accountability for the spending of public funds, the Ministry of Finance under Mr Michel and Danny Faure has never fulfilled the letter of the law.
In the budget presentation in December presented by Minister of Finance Danny Faure the figures show that actual expenditure on the so-called Appropriation items for 2004 exceeded the budgeted amount by nearly R100 million without any attempt to seek legislative authority. Yet Chapter XII of the Constitution is very clear on what the Government should do in this eventuality. Article 156 (6) provides that “Where, in respect of any financial year, it is found (a) that the amount appropriated by the Appropriation Act for any purpose is insufficient or that a need has arisen for expenditure for a purpose for which no amount has been appropriated by that Act; or (b) that any moneys have been expended for any purpose in excess of the amount appropriated for that purpose by that Act or for a purpose for which no amount has been appropriated by that Act, a supplementary estimate, showing the sum of money required or spent, shall be laid before the National Assembly.” Danny Faure, who under the Public Finances Act 1996, as Minister of Finance has sole and unambiguous responsibility for the “supervision, control and direction of the financial affairs of the Republic” failed miserably in his responsibility by not presenting a supplementary estimate to be approved by the National Assembly before the financial year ended on December 31.
Worse, under Mr. Frank Green, the Auditor General used to provide a full set of financial accounts showing the extent of the deficit as well as movement of funds by the Ministry of Finance together with his annual audit report. Mr. Green was not reappointed when his seven year term of office came to an end. Instead, Mr. Marc Benstrong, son of SPPF stalwart and former “Mayor” of Victoria, Mrs. Florence Benstrong, was appointed. He has not found it necessary to publish a full set of financial accounts with his audit reports. He has yet to investigate the payment by the previous Minister of Land Use and Habitat of US$4.5 million to a bogus contractor from Dubai.
At the time of writing, more evidence of contempt of the Constitution by President Michel and Danny Faure has come to light. According to Article 154 (8) of the Constitution, “The Minister shall, after approval by the Cabinet and within ninety one days after the end of the financial year, provide to the National Assembly in respect of that year - (a) full details of all accounts maintained in respect of the Consolidated Fund showing amounts actually received and spent in that year.” Ninety one days expired on 31st March. We have now reached the beginning of May. At the time of going to press, the Clerk to the National Assembly is still waiting for that document.
Will the SNP members of the National Assembly show their mettle and introduce a motion of impeachment of the Minister of Finance or perhaps the whole Cabinet?