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Daly Bread: Reverse money laundering; how the government dirties clean taxpayer funds

Probably for the first time, the government and the Opposition paid official attention in Parliament to the non-governmental organisations and non-profit entities (NGOs) that play a significant and life-saving role in the socio-economic and cultural life of our country, even though they may have dished out funds to them on an arbitrary basis.

This attention came late last month in the hurried introduction of legislation relating to NGOs. It was attention forced upon our politicians by the pressure on our country to control the use of such organisations as vehicles for money laundering—all part of trying to satisfy the demands of powerful countries and multilateral bodies.

Photo: Attorney General Faris Al-Rawi (right) shares his views at the Transparency Institute anti-corruption conference on 8 March 2016.
(Copyright Shaun Rambaran/forge.co.tt)

As we know, money laundering is the activity whereby persons who profit from illegal activity take their profits and transfer them into legitimate organisations as a means of ‘washing’ dirty money and giving it an apparently legitimate origin when it is used again.

Under the new legislation, the controller of an NGO ‘must ensure that proper financial accounts and records are kept, inclusive of all sums of cash received and expended and in matters relating to which such receipts and expenditures relate’.

There are other obligations, including accounting for all sums of cash raised through fundraising, and ensuring that the accounts are ‘able to accurately disclose at any time the financial position of the non-profit organization’.

I found irony in the government being forced to make the keeping of accounts a statutory requirement for NGOs, since our governments frequently indulge in what I will call reverse money laundering.

Our governments routinely take the clean revenues going into the Consolidated Fund (the national cash register) as a result of taxation, royalties, dividends and other inflows and then dirty those revenues by using them to fund groups whose merits and track records are not subject to due diligence, but who are loudly self praising of themselves—for example as promoters of culture, religious tradition or keepers of heritage.

Photo: Prime Minister Dr Keith Rowley (centre) is introduced to former Brazil World Cup captain Cafu (second from left) and Jamaica World Cup player Ricardo Gardner (left) before an exhibition match at Soogrim Trace Grounds, Laventille on 31 July 2017.
At right is TTFA president David John-Williams.
(Courtesy Matthew Lee Kong/CA-images/Wired868)

In stark contrast to the requirements of the new legislation mentioned above, our governments are carefree about accountability and in particular ‘the provision of proper financial accounts and records including expenditures’ on the part of fund recipients. Consequently, clean taxpayer money goes into dirty organisations in several cases.

What is required of the organisations that receive governments funds—in priority to accounts and accountability—is that, when they have events, they receive and feast government officials and allow themselves to be used in public relations photo-ops and paid advertisements. Mobilising their members politically in support of the party that provides the largesse is also expected.

Several of the bodies which govern sporting activities, commonly referred to as National Sporting Organisations (NSOs) and National Governing Bodies (NGBs), also conduct themselves in ways that abuse our clean taxpayer funds as demonstrated by the findings of the High Court against the Gymnastic Federation in the Thema Williams case. But our governments look the other way and in many cases plough on, providing clean taxpayer funds regardless of the toxic governance practices of the sporting bodies.

These bodies will be the subject of a separate column soon; but let me now put the concept of reverse money laundering further into context, consistent with recurring themes in these columns.

I have repeatedly asserted that the fundamental and unchanging practice of our politics is the persistent electoral battle to gain access to and control of the national cash register and the state enterprise sector.

Photo: Then Prime Minister Kamla Persad-Bissessar (left) shakes hands with her successor, Dr Keith Rowley, en route to Nelson Mandela’s funeral in South Africa.
(Courtesy News.Gov.TT)

Insightful commentator, Noble Philip, recently identified this practice in similar terms: “The state’s leading role in distributing scarce economic resources leads to fierce battles. Power brokers induce and finance their co-ethnics to believe that salvation only comes from ‘their’ being in power.”

Once the electoral battle is won, the winner takes care of its party financiers, faithful supporters, sycophants and those trading on tribal affiliation.

This practice will continue whether we put the PNM or the UNC in power. The sanctimonious tone with which the government and Opposition are both claiming credit for the current trio of Bills dealing with unexplained wealth, NGO’s finances and asset recovery, is at complete variance with the sleaze of the politics, collusive and campaign finance that puts them into the Parliament.

About Martin Daly

Martin Daly
Martin G Daly SC is a prominent attorney-at-law. He is a former Independent Senator and past president of the Law Association of Trinidad and Tobago. He is chairman of the Pat Bishop Foundation and a steelpan music enthusiast.

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16 comments

  1. Sorry i agree with what Daly wrote but knowing some of things he defended I think the author speaks with a forked tongue.

  2. Absolutely correct. I’ve noticed that each government but mainly the PNM, has always taken full credit for these bills when they are in fact pushed as requirements to align with EU standards and laws in light of MUTUAL RECOGNITION AND TRADE and for getting off it’s blacklist of money laundering countries.

    In fact if I’m not mistaken, a few bills and laws that were passed were done so with EU funding and include the OHSA bill, the driving safety seat belt requirement and more.

    So it amounts to if the EU did not apply pressure for all these things to be implemented and to fund the necessary support institutions to achieve all of this, such as the TTCSI (you will also see the EU logo on their brochures etc), the fact that none of our governments care much about us and we would still be left behind if it were left solely up to them.

    Not only this, I suspect that the ruling parties also put their best friends in the highest administrative roles in these bodies – there’s a term fog that.

    Just as in UWI, many of these people just pull salaries, not just wasting government time but wasting EU TIME AND RESOURCES AND MONEY. Taking forever to put things in place.

    The carrot at the end of the stick is the visa free entry to the shengener states (the EU) and MUTUAL RECOGNITION for OUR INDUSTRIES so that we can CROSS BORDERS!!!!!

    People haven’t yet realised that the EU has been trying all these years to give us equal recognition to fight those bully super power which doesn’t want to do anything for anyone and they are less likely to use the lending tricks of the Chinese to take over your industries if you’re not able to repay. Sure the EU is also no angel but if you had a choice you need to trade with the EU and disregard the rest.

    Do we see any rapid rail in the USA? China is overtaking the US by the hour but the EU has its rapid rail and we are nowhere near. At least we can bloody well try to trade with the EU, the US is only interested in taking away resources and trade and destroyed the prospects of the Caribbean islands trading agriculture with the EU by suing them via the WTO.

  3. The thing is, even the Treasurer of a PTA Association knows that she/he needs to keep proper financial records and properly account for the inflows and outflows of cash. Legislation shouldn’t have to be passed to make Controllers of organizations do their jobs.

    I say withhold government funding from these organizations until they produce audited accounting records each year,

  4. This is in the Procurement Legislation. Sports clubs should acquaint themselves of the Act as sometimes they do get government funding.

  5. So government financing crime? Ironically enough when GG said it, we chastised the police service for not doing their jobs. What are we as a people really doing?

    • Christian Pallai-Hernandez stsrt back from the days when GG was Min, and raised issue of alleged ‘criminals’ being given contracts.
      Is it still so?
      There was even a Vice report that covered the issue.

  6. The State is not an ATM at the service of inefficient and corrupted organizations. Government ministries could and should demand a lot more transparency and accountability from ANY organization they fund in the name of sport and culture.

  7. Stop giving money for the celebration of any religious holiday. Let the followers go and pray.

  8. “What is required of the organisations that receive governments funds—in priority to accounts and accountability—is that, when they have events, they receive and feast government officials and allow themselves to be used in public relations photo-ops and paid advertisements. Mobilising their members politically in support of the party that provides the largesse is also expected.”

  9. “Several of the bodies which govern sporting activities, commonly referred to as National Sporting Organisations (NSOs) and National Governing Bodies (NGBs), also conduct themselves in ways that abuse our clean taxpayer funds as demonstrated by the findings of the High Court against the Gymnastic Federation in the Thema Williams case. But our governments look the other way and in many cases plough on, providing clean taxpayer funds regardless of the toxic governance practices of the sporting bodies.”

    NEVER TRUER WORDS SPOKEN.