Part 2: An Insight into the the State vs Tiensten, Kavo, Potape

By Brian Kramer

Part 2 – STATE VS FRANCIS POTAPE (extracts from National Court Judgement)

Francis Potape is the Member for the Komo Magarima Open Electorate in the Hela Province. He is a second term member, first elected at 2007 National Elections and re-elected again in 2012. By virtue of being the Member of Komo Magarima Open Electorate he is also appointed Chairman of the Electorate Joint District Planning and Budget Priority Committee (JDP Committee). This is in accordance section 33A of the Organic Law on Provincial and Local Level Government.

In contrast a Regional member who automatically assumes the Provincial Governor’s position also chairs Joint Provincial Planning and Budget Priorities Committee.

Every Electorate (Open Seat) JDP Committee consists of the Member of the Parliament representing the open electorate who is the Chairman of the Committee; Presidents of Local-level Governments (LLG) in the District; and any three other members appointed by the Member of the Parliament representing the open electorate in consultation with the Presidents LLG in the District.

JDP Committee function or role and responsibilities include –

(a) to oversee, co-ordinate and make recommendations as to the overall
district planning, including budget priorities, for consideration by the Provincial Government and the National Government;

(b) to determine and control the budget allocation priorities for the Local-level Governments in the district;

(c) to approve the Local-level Government budgets for presentation to the
Local-level Government and make recommendations concerning them;

(d) to draw up a rolling five-year development plan and annual estimates for the district;

(e) to conduct annual reviews of the rolling five-year development plan.

The District Administrator is the Chief Executive Officer (CEO) or Administrative Officer of the Committee who carries out or implements its directives or resolutions.

On Saturday 20 November 2010 the Komo Magarima JDP Committee met in Tari and passed a resolution to pay themselves sitting allowances of K5,000.00 per day to the chairman and K2,500 per day to all the other members of the committee.

In total the committee resolved to pay K60,000 to the Chairman (Potape) and K30,000 to the other members of the committee as as outstanding sitting, transport and accommodation allowances.

Apart from paying allowances to the members of the committee, resolutions were also made to pay K30,000 to the District Treasurer, the District Administrator, the Governor’s representative, and a Kevin Solomon (advisor) whose status is not known.

Task Force Sweep investigated a complaint laid against Potape and
in November 2011 he was charged on three counts (criminal offences). One count of conspiracy to defraud and two counts of misappropriation.

1st Count: The State (Public Prosecutor) alleged in November 2010 Potape had conspired with the other members of the Komo Magarima JDP Committee passing a resolution to pay themselves inflated sitting allowances which they were not lawfully entitled to.

2nd Count: In the same period Potape had allegedly dishonestly applied or misappropriated to himself K60,000 which belonged to the State of PNG.

3rd Count: Potape had alleged dishonestly applied or misappropriated to another, being the other nine members of the JDP Committee K30,000 each (total of K270,000) which belonged to the State of PNG.

The State argued that JDP Committee did not have the authority to set their own rates for various allowances to pay themselves. The District Treasurer and the District Administrator were public servants and were not entitled to be paid any allowances. Further the resolutions of the committee did not take into account whether the members attended the meeting or not, because all the members received K30,000.00 including those that were absent.

At the trial Potape’s lawyers and Public Prosecutor tended evidence to support their respective cases.

After considering all the evidence and hearing arguments from both parties the Trial Judge being Deputy Chief Justice Salika findings included the following;

Undisputed Facts or Facts Parties Agreed;

On Saturday 20th November 2010 at 7:30am Komo Magarima JDP Committee did convene a meeting.

The minutes of the where the members passed a resolution was expressed in the following terms:

“Acknowledgement”

“The chairman thanked everyone for their attendance to JDP&BPC for year 2010 and also budget and elaborate on the Seven Hundred Thousand (K700,000.00) allocated to Komo Magarima JDP/BPC by the Southern Highlands Provincial Government.”

“The Chairman highlighted that the other part of the funds will be allocated towards the end of the year and expend as per the budget by this committee when the funds are available.”

“Proposed Budget for the Seven Hundred Thousand Kina JDP/BPC Allowances.”

Hon Francis Potape MP O/S JDP/BPC Allowance/Fuel/Vehicle K60,000
Hon Eric Yawas O/S JDP/BPC Allowance/Fuel/Vehicle K30,000
Hon Nelson Hiwi O/S JDP/BPC Allowance/Fuel/Vehicle K30.000
Hon Hape Merele O/S JDP/BPC Allowance/Fuel/Vehicle K30.000
Hon Francis Keara O/S JDP/BPC Allowance/Fuel/Vehicle K30.000
Hon Thomas Potape O/S JDP/BPC Allowance/Fuel/Vehicle K30.000
Mr Tumbi Yari O/S JDP/BPC Allowance/Fuel/Vehicle K30.000
Mr Doriga Pole O/S JDP/BPC Allowance/Fuel/Vehicle K30.000
Mr Denis Libe O/S JDP/BPC Allowance/Fuel/Vehicle K30.000
Mr Francis Ank O/S JDP/BPC Allowance/Fuel/Vehicle K30.000
Mr Kevin Solomon O/S JDP/BPC Allowance/Fuel/Vehicle K30.000
Total K360,000

“Proposed Budget for accommodation JDP/BPC Committee Members Total K150,000”

“Proposed Budget for Hire Vehicle K140,000”

“District Treasury Stationeries (Computer Papers) K10,000.00”

“Unpaid officers – Officers appointed not paid Komo Magarima positions K40,000.00”

“G/Total K700,000.00”

In closing, the minutes recorded that:

“Resolution was passed and accepted by every committee to expend the funds accordingly. The chairman also wish the JDP/BPC members a merry Christmas and prosperous happy New Year.”

“Meeting official closed by the Chairman at 10.00 am with a pray.”

Following the meeting the District and Administrator & Treasurer facilitated the following payments in accordance with JDP Committee resolution:

Francis Potape received K60,000
Thomas Potape received K30,000
Eric Yawas received K30,000
Hape Merale received K30,000
Dennis Libe received K30,000
Francis Keara received K30,000
Dorica Pole received K30,000
Kevin Solomon received K30,000
Francis Ank received K30,000
Tumbi Yari received K30,000

All the payments were deposited into their personal bank accounts and applied to their own personal use.

No receipts or invoices were produced by Potape to prove he had paid for any actual goods or service for his claim for reimbursement. Nor did any of the other 9 recipients.

In his defence against the charges Potape did not dispute the payment but argued they were not sitting allowances but reimbursements incurred for the two (2) year period such as for travel, vehicle hire, accommodation, fuel, food, security etc, which they had incurred and paid themselves.

He gave evidence that the committee had arrived at the K5,000 per meeting allowances for the Chairman and the K2,500 per meeting for the other members on the basis of the ratio the Salaries Remuneration Committee (SRC) had used in determining “sitting” allowances for the JDP members at K500, in other words whatever the amount decided for the Chairman the other members would receive half of the Chairman’s allowance.

His lawyers also argued for protection under Section 23(2) of the Criminal Code. The provision is in the following terms:

“A person is not criminally responsible, as for an offence relating to property, for an act done or omitted to be done by him with respect to any property in the exercise of an honest claim of right and without intention to defraud.”

Thus his lawyers contended that on the basis Potape honestly believed he was entitled to a refunded moneys he had spent from his own pocket and there was no intention to defraud therefore he can not be held criminally responsible.

In the end the Court ruled:

Although Potape argued the JDP Committee were entitled to budget and expend payments relating to Committee meetings under Section 33A(3) of the Organic Law, the committee is not given any powers to make any determination to award allowance for accommodation, food, vehicle hire, etc. The powers under that provision of the Organic Law are quite specific and do not extend to the power to make determination as to how much allowance of the members should get.

“When claiming reimbursement one should usually attach receipts of ones spending so that the spending and reimbursement can be verified. In some cases where no receipts are not readily or easily available, the person claiming reimbursement can make a statutory declaration declaring the spending and declaring on oath that the declaration is true.”

There was no evidence from any service provider that Potape paid for such services. Furthermore Potape did not provide any sworn statutory declaration that he had expended K60,000 for such services in the years 2009 and 2010.”

The other members also estimated their claims to be K2,500 per sitting. They too could not produce their payment receipts so as to claim refunds. The Trial Judge believed this it was absurd to make a claim for refund when one cannot produce the payment receipts.”

District Administrators should have been responsible for making such payments for goods and services provided to the committee. The service providers should have the necessary Finance Forms filled to claim payments for providing services (FF3s and FF4s) to the members and advisers of the committee.”

The District Administrators and the District Treasurer ought to have given such advice. They failed to give that advise especially when they were themselves paid K30,000.

“Without the benefit of any receipts for goods and services provided which payments had been made from the beneficiaries own pockets, this reimbursements were pure guesstimates or guesses.”

“The manner in which the reimbursements were sought and paid were improper and amounted to conspiracy to defraud the State.”

“Proper procedures must be in place for the guidance of everyone relating to reimbursement for goods and services supplied and paid for by individuals.”

“The Salaries & Remuneration Committee (SRC) is the only body that has the authority to make determination relating to allowances to be paid to Members of Parliament including Members of Provincial and Local Level Government.”

The Trial Judge Deputy Chief Justice Saliaka found that Potape with his level of education, experience ought to have known that the JDP Committee had no authority to determine the rate of allowances to pay himself and the other members of the committee. Again with his level of education, intelligence and experience he ought to have known that one cannot properly claim a refund without payment receipts. Proper financial processes needed to be adhered to. Potape being the Chairman of the Komo Magarima JDP Committee together with other members of the committee not only made a determination and decision to pay themselves K60,000 and K30,000 respectively but they all received it and used it. The Court held the firm view that the K60,000.00 was dishonestly received and used by the Potape.

From all the evidence, he found that the members of the Komo Magarima JDP Committee conspired to unlawfully award themselves the K60,000 payment to the chairman and K30,000 to the other members and advisors. They could not claim accommodation, vehicle hire and fuel costs as those were separately budgeted for as shown in the minutes.

on 16th October 2014 Potape was convicted on all three counts. Following the conviction Potape repaid the money. This is referred to as restitution (act of restoring) The practice of repaying stolen property or money does not mean a person will not be found guilty of a crime. It only helps his cause when the court decides on the sentencing or appropriate penalty. A convicted person knows if he repays the stolen money then the judge will likely give him a reduced sentence.

On 1st December 2014 the Court held sentencing hearing were parties return to Court argue on the appropriate penalty.

Potape’s lawyer urged the judge to be lenient by imposing a non-custodial penalty to serve his sentence outside of prison.

Potape told the court that he had fully repaid the K330,000…adding his jailing would cause hardship for his family and his people at the district where his leadership was required for service delivery. He also informed the court that he and his family had suffered alot in shame as a result of media publicity…

…”I was raised in a Christian home and had never done anything wrong like this before. I want a second chance. I will not do anything like this again”…

On 19th January 2014 the Court handed down its ruling on sentencing with regard to the three convictions against Potape. On the first two counts he was sentenced to three years and five years for the third. The judge then suspended, reduced the sentences by half as he had repaid the funds in full.

He will now serve all three sentences concurrently (all the same time). So the maximum term he will serve in prison will only be 2.5 years and possibly let out on parole after serving half of it. (1.25 years).

I understand Potape has filed an appeal in the Supreme Court and an urgent bail application hoping to be released on bail until his appeal is determined. Given the circumstances and strong case against him in my opinion Potape will be refused bail.

The next article will cover all three cases, the process of appeal and likely success or failure.

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