THE CAIRNS CONSERVATORY CORRUPTION - case dropped by Mekere Morauta -- PNG People Tok Discussion Forum

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Date Posted: 04:17:47 09/21/02 Sat
Author: No name
Subject: THE CAIRNS CONSERVATORY CORRUPTION - case dropped by Mekere Morauta

REX PAKI, FORMER MEMBER, PNG RESERVE BANK BOARD: The Cairns Conservatory is one case where it's a clear case where all the evidence is there, all the legal/financial investigative work has been done.

ANDREW FOWLER: In 1994, then prime minister Sir Julius Chan had appointed a new consul to Cairns.

The consul, a political mate, was told to find a building in Cairns where he could house the consulate and other PNG government offices.

The consul arrived to carry out Chan's instructions and met with West Australian property developer Warren Anderson.

Here at the Pacific International Hotel, Anderson and his business colleagues offered help to find a building.

They settled on the Cairns Conservatory, which Anderson's company offered to sell them.

According to a highly critical Ombudsman's report, the building was bought for $18 million with PNG public money.

The Ombudsman noted that independent assessors valued it at just $7 million.

The report, tabled in the PNG Parliament, found that "associates of Sir Julius, including his own political party, stood to make a considerable financial gain" from this and an associated deal.

The report also found that "Sir Julius acted improperly".

The Ombudsman recommended the institution of civil proceedings "with a view to recovering money lost as a result of the purchase of the Conservatory".

There was wide support for legal action.

DR JOHN NONGGORR, FORMER PNG GOVERNMENT LAWYER: Firstly, it would have been a sort of a test case to demonstrate to not only the legal system but also the people in Papua New Guinea that, ah, public officials who abuse trust, abuse their offices, are liable to, um, that sort of action.

And, secondly, to send a message to public officials, leaders, political as well as civil service leaders, that, um, they are not beyond the law.

ANDREW FOWLER: The legal action over the Cairns Conservatory case had begun in 1997.

Then-prime minister Bill Skate convened a meeting in Cairns to discuss a strategy to prosecute the case.

Australian legal firm Holding Redlich was advising, along with the PNG Attorney-General and Dr John Nonggorr.

DR JOHN NONGGORR: We had a meeting in which the, ah, prime minister Bill Skate and his ministers were briefed on what the investigations were and what our tentative views were on whether the material that had been uncovered could form a basis of legal action.

ANDREW FOWLER: For three hours they discussed the strategy.

Four Corners has been told the Australian lawyers produced a detailed brief, recommending court action to recover the funds.

When Morauta replaced Skate as PM in 1999, the case developed added impetus.

SIR MEKERE MORAUTA: We are responsible, and I am determined, to make sure that our own house is in order before we get out to seek assistance from friends.

ANDREW FOWLER: In October 2000, Morauta's government lodged a court claim in Cairns and Port Moresby for $30 million damages against Chan, Anderson and the former finance minister Chris Haiveta, among others.

DR JOHN NONGGORR: I understand that the government of prime minister Mekere Morauta approved for the writ to be filed in court, and I received instructions from the lawyers in Melbourne to file the writ in Port Moresby, which I did.

ANDREW FOWLER: A few weeks later, the National Executive Council -- PNG's Cabinet -- reviewed the case after seeking a second legal opinion.

DR JOHN NONGGORR: The National Executive Council had decided that, ah, this matter should not be pursued.

That's the conclusion I've reached.

ANDREW FOWLER: Why do you think they decided that?

DR JOHN NONGGORR: Um, I don't know because, um, I cannot say what went on through the minds of the people in the National Executive Council.

But, of course, ah, people can draw their own conclusions from what has happened.

Um, a number of people who were named in the writ are members of the National Executive Council.

ANDREW FOWLER: In the shifting sands of PNG politics, Sir Mekere's prime ministership was dependent on powerbrokers within his party, the People's Democratic Movement.

There's speculation that PDM members and financial backers were re-establishing connections with Sir Julius Chan.

Morauta denies any political motive in dropping the case.

SIR MEKERE MORAUTA: We came to an end because it was my view, based on advice by lawyers, that this was getting hideously expensive and that we weren't getting anywhere.

ANDREW FOWLER: And no political pressure?

SIR MEKERE MORAUTA: If you know of any, you let me know.

ANDREW FOWLER: Well, Sir Julius Chan's very powerful. So, too, is Chris Haiveta.

SIR MEKERE MORAUTA: Well, I'm very powerful too -- and I'm Prime Minister.

DR JOHN NONGGORR: We haven't been given instructions to serve the writ and we don't see any legal reasons why we should not. And so, um, the reasons why the writ has been upheld has to be political and not legal.

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