Lindquist Report on WASA exonerates everybody

The Lindquist Report has exonerated everybody, except Opposition MP Ganga Singh whose charges led to the investigation.

The Government, WASA and all the personalities involved have been cleared by the Bob Lindquist report which was tabled in the Senate yesterday. The Report which investigated a $51 million ‘out of court’ settlement between WASA and Water Farms Limited found “no basis for the allegations of impropriety” made in the Parliament by UNC’s Ganga Singh. Attorney General Glenda Morean said the Report showed that Singh’s allegations were irresponsible. Public Utilities Minister said he was grateful and  happy. But Singh’s colleague, Senator Wade Mark dismissed the Report as a “cover-up”, saying that Linquist “was singing for his supper”.

The Report refuted Singh’s allegations made in Parliament on May 21 that money was deposited into the accounts of PNM functionaries. The Report said “we” determined that all funds paid by WASA to Water Farms Trinidad Limited (WFTL) have been deposited to, or invested in time deposit certificates in the name of Water Farms Trinidad Limited”. It added that apart from the payment of $16 million to the four shareholders in equal amounts and a few small disbursements, the remaining sum of $32 million continues to be in the name of ‘Water Farms Trinidad Limited’ at two financial institutions. Opposition suspicion about the Water Farms issue first began when it was disclosed in Parliament earlier this year that while Ernest and Young had recommended to WASA that it pay Water Farm $11 million for the premature termination of a contract, WASA settled out of court with Water Farms for $51 million. But the Report stated that WASA engaged E&Y in May 2000 to compute amounts owed to WFTL under the belief that the contracts which were terminated were not enforceable in the courts.

 However, the Report noted, that “outside legal counsel” for WASA in July 2002 opined that the contracts between WASA and WFTL would be enforceable in the courts, “consequently, the Ernst and Young report became non applicable as to the settlement amount due from WASA to WFTL”. WASA’s legal counsel in this matter included Montano and Co. which received the lion share of legal fees- $350,000. The other law firms involved were Pollanais, Blanc, De La Bastide and Jacelon which received $30,000 and Reginald Armour who received $50,000. The Report said that the E&Y Report also did not address the amounts owing for the operation of the wells, and focussed only on expenditures that WFTL incurred for the rehabilitation of the wells and the drilling of new wells. “Consequently, in reference to the E&Y report for the amounts which WASA owed as damages to WFTL is not applicable,” it stated.

However one interesting fact in the Report was that Citigate’s assessment of settlement calculation and damage calculation  differed widely from that arrived at by WASA. Citigate total assessement of damages was $47 million while WASA’s figure was $54 million, a substantial difference of $7 million.  The main area of difference was in the calculations for the amount for loss of opportunity for remainder of contract which Citigate estimated at a conservative figure of TT $8.8 million while WASA generously placed it at $36 million.  Citigate stated that the settlement computation prepared by WASA did not consider the costs and expenses which WTFL would have incurred during the period attributable to the loss of opportunity.  In short, WASA calculated on the basis of gross revenue rather than on revenue minus expenses. Citigate noted for example that WFTL had to provide at its sole expense all services, personnel, tools, equipment, materials and designated machinery and engineering facilities for execution of the works under the contract. It also had to pay the costs associated with the delivery to the delivery point of water produced. There were many other expenses it would have had to incur under the arrangement. These expenses appeared not to have been factored into WASA estimation. Nevertheless Citigate found the settlement amount of $51 million was “reasonable”.

The Report which was prepared by Citigate Investigative and Forensic Accounting stated: “We are satisfied with the integrity of the process of negotiation engaged in by WASA and its legal representatives that led to the ‘Out of Court’ settlement with WFTL”. The Report noted that all the persons involved — Dr Joe Laquis, Mark Laquis and Rawlinson Agard — denied Singh’s allegations. It said Stephanie Daly of Pollanais and Blanc stated that Mark Laquis had nothing to do with the WASA settlement matter and that there was no trust account at Pollonais and Blanc, De La Bastide and Jacelon for the settlement proceeds. She also stated that the firm had no involvement in the determination of the amount of the settlement and had no knowlege of what Water Farms did with the settlement proceeds. Gordon Gatt, Account Manager for Executive Banking at Scotiabank advised that Mark Laquis had no trustee bank account and that there had been no unusual transaction activity in his bank accounts. Trevor Clarence, Operations Manager at Republic Bank stated the same thing about Laquis — that he had no trustee bank account and no unusual transaction activity.

Singh’s allegations were that a member of the PNM’s General Council who was also on WASA’s Board teamed up with a former Member of Parliament and approached the contractor at Water Farms for a contribution. Singh said the agreement was that the contractor would get $22 million and everything above that figure would be given to the two men. Singh said that the two men conspired with a partner in a law firm, and that the attorney was the trustee of the loot. He had claimed that $17 million had been paid into a particular bank in Port-of-Spain.