Liberia: Central Bank Gives Conflicting Figures in US$25m Probe amid Calls for Tweah, Patray Arrest
MONROVIA – Be it as it may, the George Weah administration has received some commendations for taking decisive steps in acting upon the two investigative reports on the alleged missing containers full of Liberian dollar banknotes amounting to US$16 billion.
Report by Lennart Dodoo, [email protected]
Both reports, one sanctioned by the Government of Liberia through the Presidential Investigation Team (PIT) and the other by Kroll Associates Inc., a firm hired by USAID through the American Embassy in Liberia, established that there is no evidence to prove that a container full of local currency banknotes disappeared. However, both reports established discrepancies in the Central Bank of Liberia’s accounting and reporting system.
Both reports pointed to the unauthorized printing of L$10 billion. This is after the CBL had already printed an authorized amount of L$5 billion.
The sticky issue in the reports was, however, not the unauthorized printing of the L$10 billion, rather, the printing of excess over the authorized L$5 billion and the L$10 billion. The excess banknotes, which were not reported by the CBL amounted to over L$3.1 billion at the extra cost of US$835,367.78 at the expense of Liberian tax payers.
The Presidential Investigation Team, in its report, penned that officials of the bank acted criminally by conspiring to doctor and fix reports, which were contrary to the actual amounts printed and received by the CBL.
This alleged conspiracy has landed at least five persons behind bars awaiting court trial. These persons, Mr. Milton Weeks, former Executive Governor of the CBL, Mr. Charles Sirleaf, Deputy Governor for Operations and son of ex-President Ellen Johnson Sirleaf and Dorbor Hagba, Director for Banking, Richard Walker, Director for Operations and Joseph Dennis, Deputy Director for Internal Audit are being held for economic sabotage, fraud, criminal conspiracy among others.
The full weight of the law has descended on them.
Government Vindicated before Probe?
Upon his arrival from Israel over the weekend, President George Weah, speaking to journalists at the Roberts International Airport (RIA), said he sought the assistance of the U.S. Embassy in the investigation because he knew his government was going to be vindicated.
President Weah: “First of all we want to thank our international partners, most especially the U.S. Embassy and Madam Elder for first of all accepting when I called her to probe into this matter. I wanted Liberians to see that we’re transparent. And the only we could do that was to get an international group to probe into this alleged missing L$16 billion, which of course, we all knew that our government was going to be vindicated. So we brought in the U.S. Embassy to help us and today Kroll was able to give a determination of what happened.”
US$25 million Mop up Still Confusing
The arrests began just a couple of hours after the Kroll report was released to the public on February 28. This raised many eyebrows, with many asking how about the US$25 million intended to mop up excess liquidity.
The PIT, in its report, recommended that given the many discrepancies noted in the manner in which the mop-up exercise was conducted in relation to the infusion of the US$25 million into the Liberian economy, there was the need for a forensic investigation of the entire mop-up exercise to be conducted.
In the midst of calls for arrest of Finance and Economic Planning Minister Samuel Tweah, who chaired the Technical Economic Management Team (TEMT) to conduct the mop up exercise, a group of young Liberians, who perhaps have not laid eye on any of the reports since their release, carried banners to the RIA to welcome Min. Tweah from Israel.
The banner read: “Welcome Back Home Minister Samuel D. Tweah, Jr. Liberia’s finest financial expert from the holy land of Israel. We stand by you with great trust and confidence, as you continue to serve the people with dignity, diligence and integrity.”
It was easy to tell that these were a group of young, hungry Liberians being taken advantage of just to either maintain their jobs or continue getting handouts.
Surprisingly, the CBL also published an advertisement supplement in several dailies which attempts to prove that Minister Tweah, the CBL and the Technical Economic Management Team (TEMT), did a fine job in the mop-up exercise.
The TEMT included Central Bank Governor Nathaniel R. Patray, III, (co-chair), Minister of State for Presidential Affairs, Nathaniel McGill, Minister of Commerce, Minister of State without Portfolio, Chairman of the National Investment Commission, Commissioner General of the Revenue Authority of Liberia and the Economic Advisor to the President.
FrontPageAfrica’s analysis of the two investigative reports and the CBL statement shows that there is more confusion as to who is being real with the figures, or are Liberians being taken for a ride by this government.
The CBL Statement
According to the Central Bank, it was mandated by TEMT to use direct mopping strategy since over 90 percent of currency in the economy is outside the banking system. The statement also averred that CBL experience shows that convention foreign exchange auction through the commercial banks has had limited impact on the exchange rate.
For that matter, the CBL decided to infuse the U.S. dollars by auctioning it to major importers, licensed foreign exchange bureaus and small businesses.
The PIT puts it this way: “The TEMT chaired by Hon. Samuel D. Tweah, Jr. Minister of Finance and Development Planning, designed a process which involves DIRECT MOP-UP. This means that the implementation even would directly engage businesses and nonbanking institutions to directly exchange United States dollars with Liberian dollars.”
Accordingly, between July 2018 and October 2018, a total of US$17 million was infused into the economy. The remaining US$8 million is still with the CBL, according to the CBL’s statement.
Giving a breakdown, the CBL indicated US$15 million was mopped up from outside the banking system in exchange for L$2,303,363,898. In addition to that, US$2 million was given to a major petroleum importer in exchange for L$313,141,800.00 through regular banking transaction to facilitate import of petroleum products.
PIT Points to US$14 Million
FrontPageAfrica noticed discrepancies in the figures given by CBL, the PIT and Kroll.
While the CBL claims to have disbursed US$17 of the US$25 million promised by President Weah in the mop-up, the PIT investigative report stated that US$14 million was used instead over the period.
The PIT Report: Analysis of the implementation Report submitted by the TEMT/CBL, shows that Institutions/businesses participated and received from CBL, a total of US$14 million in exchange for a total of L$2,151,363,99.00 from July 17, 2018 to September 18, 2018.
The disbursements of the US$14 million are as follows:
a) A total of US$5.6 million was sold to institutions/businesses to the Major Importers category.
b) A total of US$1.4 million was sold to institutions/businesses in the Small Business Holders category.
c) A total of US$7 million was sold to institutions/businesses in the Major Foreign Exchange Bureaus category.
The PIT concluded that TEMT/CBL deviated from best practice, which calls for the use of legitimate banking institutions and licensed Foreign Exchange Bureaus or SAE AUCTION for said exercise. Instead, the TEMT/CBL carried out DIRECT MOP-UP by engaging Foreign Exchange Bureaus and local businesses other than the Commercial Banks.
The investigative team also established that some businesses/institutions received lesser amounts than what was reported by CBL. For example, the Union Local Forex Bureau located on Carey Street received a total of US$5,500.00 on two separate disbursements (US$3,000 on July 17, 2017 and US$2,300.00 on August 16, 22017). However, the CBL in its report stated that the total amount of US$161,900.00 (US$103,720.00 on July 17, 2018 and US$58,400.00 on August 16, 2018) was received by Union Local Forex Bureau.
The PIT also noted that principle of Know Your Customer (KYC) was not observed throughout the mopped-up exercise thereby creating the platform for illegal business dealers to clean their illegal money.
Kroll Says US$15 Million
Kroll’s report rather shows that on July 10, 2018 the CBL submitted a request to Travelex Global and Financial Services for a drawdown of US$20 million from a bank account held with the Federal Reserve Bank of New York. The request was made prior to the announcement by President Weah on July 16, 2018. The USD banknotes were dispatched by air freight on July 11, 2018.
According to Kroll, the CBL provided a spreadsheet titled ‘USD During Auction’ dated October 26, 2018 which set out the total purchases of legacy and new banknotes as part of the USD Mop-Up Exercise.
The spreadsheet stated that US$15 million of the initial US$20 million drawdown by the CBL had been used to purchase legacy and new banknotes. The Liberian dollar purchased was L$2,303,363,898.
Kroll acknowledged that the data in the spreadsheet titled ‘USD During Auction’ matched the values in the corresponding general ledger account (named ‘CBL Special MOP-UP Exercise Escrow’).
Kroll was informed by the CBL that the remaining US$5 million of the initial US$20 million drawdown was put into circulation as part of normal banking operations, and not retained for continuance of the USD Mop-Up Exercise.
According to Kroll, they were further informed by the CBL Banking Department that the remaining US$5 million of the U$25 million promised by President Weah had not been withdrawn from the Federal Reserve Bank of New York by the CBL.
Who Lied, Weah, CBL or Kroll?
FrontPageAfrica also noticed discrepancies in the date the so-called mop-up exercise ended. The CBL in its Tuesday’s statement indicated that between July 2018 and October 2018, a total of US$17 million was infused into the economy. The remaining US$8 million is still with the CBL.
However, the President Weah in his second Annual Message stated that the US$17 million mop-up exercise covered July 2018 to December 2018.
At the same time, the PIT investigative report says, a total of US$14 million was exchanged for a total of L$2,151,363,99.00 from July 17, 2018 to September 18, 2018.
Kroll, on the other hand, reports that it was advised by the CBL Banking that the USD Mop-Up Exercise involved CBL representatives in six small teams undertaking the physical purchase of legacy banknotes from local businesses and foreign exchange bureaus from August 2018, with the seller being reimbursed for the value of legacy banknotes purchased with new USD banknotes.
The CBL provided Kroll with a spreadsheet titled ‘USD During Auction’ dated October 26, 2018 which set out the total purchases of legacy and new banknotes as part of the USD Mop-Up Exercise. Kroll further indicated in its report that as at December 7, 2018, US$15 million had been expended on the mop-up exercise.