Liberia: U.S. Report on Missing Billion Local Banknotes Out – Points to Discrepancies in CBL System

MONROVIA – The U.S. Embassy in Monrovia has released its Independent Review Report on the alleged disappearance of L$16 billion in banknotes.

The report, prepared by Kroll Associates Inc., was released today on the Embassy’s website.

Summary of Key Findings

On May 17, 2016 the Legislature granted approval for the CBL to print new banknotes totaling LRD 5.0 billion. The Legislature approval was provided in a document titled ‘Senate Resolution #002’.

Senate Resolution #002 sets out the denominations, quantities and amounts of the new banknotes to be printed, and states that the printing of new banknotes was to “…address the acute shortage of Liberian Banknotes on the market and the corresponding financial crisis associated with it that could border on the national security of the country.”

However, Kroll has established that the CBL entered into a contract with Crane AB on May 6, 2016 to print new banknotes totaling LRD 5.0 billion: eleven days prior to the CBL receiving full Legislature approval to print new banknotes.

Following on from the May 2016 Legislature approval to print new banknotes totaling LRD 5.0 billion, the CBL requested in May 2017 that the Legislature approve a second request to print new banknotes totaling LRD 10.0 billion.

The Legislature did not grant approval for the CBL to print new banknotes totaling LRD 10.0 billion.

Instead, a letter dated July 19, 2017 from Honorable Mildred Sayon, Chief Clerk of the House of Representatives, and Nanborlor Singbeh Sr., Secretary of the Senate, provided an instruction to the CBL to “…replace the legacy notes completely with newly printed banknotes” but with a clear caveat that the CBL provide the Legislature with details of the quantity and denominations of the new banknotes “…prior to the printing” of the new banknotes. The CBL did not provide the Legislature with details of the quantity and denominations of the new banknotes prior to the printing and shipping of new banknotes. Notwithstanding the lack of Legislature approval, the CBL proceeded to enter into a contract with Crane AB on June 12, 2017 to print new banknotes totaling LRD 10.0 billion: four weeks prior to the letter dated July 19, 2017 from the Legislature.

Kroll was not provided with adequate supporting documentation to demonstrate that the CBL adhered to its internal tendering policies in the procurement of the external banknote manufacturer Crane AB. Despite CBL Management stating in Board of Governors meeting minutes that two other vendors also submitted proposals to print and supply new banknotes, Kroll has only been provided with limited email correspondence that does not demonstrate that either company had an opportunity to submit a formal proposal for services, and it appears that a competitive procurement process did not take place.

CBL Management subsequently explained to Kroll that due to the urgency for new banknotes, the CBL did not follow its own internal tendering policies for the procurement of Crane AB. The explanation of urgency for new banknotes provided by CBL Management was inconsistent with letters sent several months prior to the initial procurement of Crane AB. A letter dated December 2015, sent by the then Executive Governor Joseph Mills Jones, and a letter dated February 2016, sent by the then Acting Executive Governor Charles Sirleaf, to the then President of Liberia, Ellen Johnson Sirleaf, set out that new banknotes were urgently required. Therefore, it is possible that the CBL could have commenced preparations to complete a competitive procurement process several months before Crane AB was Private and contracted to print new banknotes in May 2016.

More Details to Follow Soon