N2525

PAPUA NEW GUINEA

[In the Leadership Tribunal appointed under the Organic Law on the Duties and Responsibilities of Leadership]

In the matter of a Reference by the Public Prosecutor under s. 27(2) of the Organic Law on Duties and Responsibilities of Leadership

AND:

And in the matter of the HONOURABLE BERNARD HAGORIA,
Member for Yangoru Sausia (the Leader)

Waigani	:	Justice Salamo Injia (Chairman)
Senior Magistrate Lawrence Kangwia (Member)
Senior Magistrate David Maliku (Member)
2003		:	August 27

Leadership Code – Member of National Parliament – Nine (9) counts of misconduct in office – Improper and illegal payment and receipt of two cheques for District Support Grant totalling K1.21 million – Cheques raised in Member’s name and paid into member’s private bank account – Improper and unverifiable cash transactions conducted on account – Expenditures not properly acquitted – Leader found guilty on five (5) counts and not guilty on four (4) counts – Constitution, s. 27 (1) & (2); OLDRL, ss. 5(1), & 13 (a).	

Administrative law – Parts of Guidelines for District Support Grant approved by the National Executive Council in 1998 and 2000, and parts of Financial Instruction issued under s. 117 of the Public Finance Management Act by the Department of Finance and Treasury in 1998, to implement NEC Guidelines, which authorised payment of the "discretionary" component of the District Support Grant "direct" to members of Parliament, in their own name, are inconsistent with s. 95A of the Organic Law on Provincial Governments and Local-Level Governments, and therefore invalid.
	
Leadership Code – Member of National Parliament – Misconduct in office – Found guilty on five (5) counts of misconduct involving improperly obtaining and misusing K1.21million of District Support Grant – Serious culpability – Public good and public policy requires dismissal from office – Penalty of dismissal recommended.	

Counsel:
J. Pambel for the Prosecution
D. Steven for the Defence

27 August 2003

BY THE TRIBUNAL: By way of background information, the Honourable Bernard Hagoria (hereafter referred to as "the Leader"), is the member for Yangoru-Sausia (hereafter referred to as "the electorate") in the National Parliament. He first became the member on 17 March 2000 pursuant to a declaration made by the National Court in an election petition. On June 2002 he was re-elected to the National Parliament in the 2002 General Elections. But before the 2002 general election, the Ombudsman Commission (hereinafter referred as "the Commission") referred the leader to the Public Prosecutor for prosecution under s. 27(1) of the Organic Law on Duties and Responsibilities of Leadership (abbreviated OLDRL). On 20th February 2002, the Public Prosecutor requested the Chief Justice to appoint a Tribunal to determine nine(9) allegation of misconduct in office under s. 27(1) of the Constitution, of the OLDRL. The present Tribunal was not appointed until 17 February 2003. We commenced preliminary inquiries in February 2003. On 20th February 2003, when the Tribunal convened, the Public Prosecutor presented nine (9) allegations of misconduct in office against the leader: see Appendix 1. The allegations are brought for breaches of duties under s. 27 of the Constitution and s 5(1) and s. 13(a) of the Organic Law: see Appendix 2. The substantive hearing was delayed for various reasons until 22nd June 2003 when we commenced receiving evidence. The Prosecution called witnesses who gave oral evidence and their evidence was tested by the defence. Some of these were witnesses summoned by the Tribunal. The prosecution also tendered numerous documentary evidence and they where tested by the defence. The defence called witnesses who gave oral evidence. They also tendered numerous documentary evidence. The list of witnesses who gave evidence for the respective parties, the form and nature of the evidence given by each witnesses is set out in Appendix 3. The list of Court exhibits (documentary evidence) are set out in Appendix 4 hereto. After the evidence for both parties were completed, they presented oral and written arguments on the question of guilt. We deferred our decision to today which we now do. 

I. Summary of Allegations and Leader’s Response	

The 9 allegations relate to two government cheques paid to the leader upon the leader’s request comprising of outstanding District Support Grants ("DSG") totalling K1.21 million for community projects in the electorate, at a time when the people of that electorate were without a leader as a result of some protracted court proceedings against the then incumbent member of Parliament. 

The essence of the 9 allegations is that the leader breached the duties enumerated in s. 27(1) and (2) of the Constitution and s. 5(1) and s. 13(a) of the OLDRL in that he improperly paid the two cheques into his personal account, made unverified withdrawals from this account through cheques, ATM cash withdrawals and EFTPOS transactions; failed to apply the money to designated community projects, converted a substantial portion of these funds for his own benefit for the use of his associates and failed to acquit for the public funds.

The leader denied all the allegations. His response in essence is that he did receive the two cheques and deposited the two cheques into his personal account: - (1) because they were made payable to him in person and payable only through his personal bank account; (2) he honestly believed they were "discretionary" component of his electorate’s DSG; (3) there was no District Treasury in the Electorate to pay the cheques into; (4) the Provincial Treasury did not properly handle provisions funds for the electorate; (5) his efforts to open a trust account to pay the money into were frustrated by bureaucratic red-tape both in Waigani and in Wewak. The Leader then says he spent all the money for their designated community projects and neither he nor his associates personally benefited from those monies. He provided acquittals and other documentary evidence including photographs of school buildings which were contained in evidence to support his explanation. He also called witnesses to show the receipt of the funds and how they were expended in accordance with the relevant DSG Guidelines issued by the National Executive Council (NEC).

ÌI. Background Facts	

The background facts as to the request for those funds, receipt of them and their deposit into the leaders personnel both account are not in issue. On 29 May 2000 Mr Hagoria wrote to Prime Minister Sir Mekere Morauta requesting the release of "Electoral Development Funds" allocated to the Yangoru-Sausia electorate in the last three years. It seems there was no response to this letter. On 20 July 2000 Mr Hagoria wrote another follow up letter to the Prime Minister. Mr Hagoria said the money was urgently required for health, education and other basic infrastructure services in his electorate. On 25 October 2000 the Prime Minister replied confirming that the electorate was owed K1,150,000.00 for 1997 (K300,000), 1998 and 1999 (K500,000) DSG and social and rural development funds (S & RDP). The Prime Minister advised Mr Hagoria "that the funds would be released to his electorate through the Provincial Treasury when savings were identified". On 15 December 2000 Mr Hagoria received a "CHQ NOT NEGOTIABLE FOR DEPOSIT TO PAYEE ACCT. ONLY" cheque from the Department of Treasury and Finance in Port Moresby for K1.15 million payable to "Hon. Bernard Hagoria, Member for Yangoru-Sausia, c/- National Parliament House, Waigani". On 15 December 2000 Mr Hagoria deposited that cheque into his personal cheque account No. 306 6 222999, operated at the Wewak branch of Papua New Guinea Banking Corporation (PNGBC). At that time the account had a credit balance of K1,824.32. In January 2001 Mr Hagoria received a second "NOT NEGOTIABLE" cheque for DSG from the Office of Rural Development (RDO) for K60,000.0, payable to the "Hon. Bernard Hagoria, Member for Yangoru Sausia c/- National Parliament House, Waigani". On 22 January 2001 Mr Hagoria deposited that cheque into the same personal account at PNGBC Wewak. 

In the 3½ months period from 15 December 2000 to 7th May 2001, there were a total of 208 debit transactions totalling K1,239,192.04 against that account in the form of cheque withdrawals (77 cheques totalling K1,143,216.04); ATM cash withdrawals (76 cash withdrawals totalling K3,530.00), EFTPOS cash payments or withdrawals (55 transactions totalling K9,376.30) and other withdrawals to the tune of K4,029.10. 

Details of the cheques issued, ATM withdrawals, and EFTPOS payments and other miscellaneous debits are set out in Appendix 5.

In the period from 15 December to 15 May 2001 there were other credit entries totalling K34,009.49 which were for mostly Mr. Hagoria’s salary. The details are set out in Appendix 6. The leader produced four (4) volumes of Acquittal documentation, explaining how he used the money. They contain completed disbursement forms, photographs of buildings, receipts, letters, etc. A summary of these are reproduced in Appendix 7. 

III. General Principles	

The general principles applicable to leadership tribunals are adequately covered in this same tribunal’s decision in Re Kumbakor N2363 (8th May 2003) which we published and we simply adopt them: see Appendix 8. In summary, whilst this tribunal is inquiring into and investigating the matter referred to us, it is not bound by technical rules of evidence and procedure in resolving evidence and making findings of fact on the evidence; we must act in compliance with principles of natural justice and act judicially. The prosecution bears the onus of proving the allegations of misconduct in office to the required standard, which in the case of allegations of a criminal nature, is above the civil standard of proof which is on the balance of probabilities, but close to the criminal standard, which is proof beyond reasonable doubt. 

IV. Special Legal Issues	

At the outset we need to first settle three fundamental threshold legal issues which arises in this case, which affect DSG funds generally, and which we believe have not been adequately settled in previous leadership tribunal proceedings involving DSG funds. The first issue is on the Constitutional scheme for DSG under the Organic Law on Provincial Government and Local-Level Governments (OLPLLG). The second issue is the relevant National Executive Council (NEC) DSG Guidelines in existence and operation at the time the present DSG Funds, the subject of this inquiry were paid to the leader. The third relate to relevant Financial Instructions issued by the Department of Finance and Treasury or other relevant Departments affecting DSG. We also address on the legal status of the two cheques paid to the leader.

1.	Constitutional Scheme of DSG Funds – S.95 (A) OLPLLG. 	

It is agreed by both parties and the tribunal as to the Constitutional scheme for DSG. We are indebted to both counsel for the helpful submissions in this regard. We summarise these principles now.

In 1996 the Provincial Government system was reformed by Parliament to enable improved co-operation between the National Government on the one hand and the Provincial Governments and Local-Level Governments on the other, to improve delivery of social services to the people at the Provincial, District and Community level. As a result, there were separate committees set up at the Provincial and District level to co-ordinate, and implement financial and social policies and approve and distribute funds from the National Government for social projects. The two Committees were called Joint Provincial Budget Priorities Committed (JPC) chaired by the Governor of the Province, and Joint District Budget Priorities Committee (JDP) chaired by the Open Member. In this way, the member of Parliament representing the District or Province played a key role in the approval of projects. The funds were allocated under different names including the name "Electoral Development Fund". 

As a result of difficulties experienced in National Government funds reaching the people in the Districts and Communities in the Provinces, Parliament amended s. 95 of the Organic Law in 1998. These amendments enabled funds from the National Government targeted for social and rural development to directly flow into Provinces and Districts, which would then disburse payments direct to projects undertaken at the community level. A full text of this amendment is re-produced in Appendix 10. The concept of DSG and PSG funds were introduced by this amendment. Section 95 (A) covered DSG funds and s. 95 (B) covered PSG funds. It is important to note that the DSG and PSG are completely different funds with different committees and different treasuries. That is, District Treasuries to administer DSG and Provincial Treasuries to administer PSG. As the present inquiry relates to DSG, we will discuss those provisions which related to DSG.

The amount of DSG funds was fixed by OLPLLG. In relation to the DSG funds, s. 95 A (4) fixed the sum of K300,000.00 for 1998 and K500,000.00 per annum for subsequent years. One half of this amount was for the purpose of "rural action programme and urban rehabilitation programme" projects and was to be paid to the JDP for distribution (s. 95 A(i)(a), while the other half of the amount was to be paid to the member for distribution to projects undertaken in the District in accordance with DSG Guidelines made by the NEC (s.95 A(1)(b). 

It is worth noting that s. 95A(a)(I)(b) says the other half of the DSG grant should be made to the member representing the open electorate to be used in accordance with District Support Grant Guidelines issued under subsection (7). This is repeated in s. 95A(a) subsection (5).

However, subsection (6) expressly prescribes the manner and procedure to be followed in paying the DSG to the District. It provides. 

(6)	the monies referred to in Subsection (4) shall be:-
(a)	paid through the District Treasury; and 
(b)	in the case of:-
(i)	the Joint District Planning and Budget Priorities Committee, paid directly to that Committee by the District Treasury; and 
(ii)	the Member representing the open electorate; paid on his behalf in accordance with the District Support Grant Guideline issued under subsection (7)". 

Subsection (6) is in clear and mandatory terms. The whole of the DSG is paid "through the District Treasury". In other words the money is first paid into the District Treasury by the National Government through the department responsible for fiscal matters, which is the Department of Finance and Treasury. The District Treasury then pays one half of the money to the JDP. As for the other half it is "paid on his (the member’s) behalf" by the District Treasury in accordance with the DSG Guidelines. In other words, the member of Parliament has no part, directly or indirectly, in the physical handling of any part of or the whole of the DSG funds. It is intended by this provision that no cash or cheque payment is to be made to the leader in his name, directly or indirectly. Therefore, it is of paramount importance that the National Finance and Treasury Department establish a fully operational District Treasury to receive the DSG funds from the National Government, which has the ability to process payments to the JDP and the projects identified by and approved by the leader under the DSG Guidelines. It is intended that the DSG funds from the National Government should go "direct" to the Districts, for the benefit of the people at the District, Local and village level. It is not intended that DSG funds are channelled through middle-man or third-party institutions, be it individuals or groups, which might complicate, frustrate or obstruct the DSG money reaching the Districts and village or community level. It is intended that the District Treasury, being the proper and lawful finance authority in the District representing the National Government’s Department of Finance and Treasury, should co-ordinate and ensure that before the funds are paid out, the projects are actually implemented and the funds properly applied for these projects and actual expenditures properly and fully acquitted and accounted for.

The DSG Guidelines referred to in subsection (1)(b) and subsection (6)(b)(ii) is distinct from any other NEC Guidelines provided for by or under any other law in relation to any other types of grants made by the National Government to Districts for social and rural development. The parameters of the DSG Guideline is expressly prescribed in subsection (7). The authority for the NEC to issue DSG Guidelines and the specific matters that the Guidelines should contain are expressly enumerated in subsection (7). That is:- (a) purpose for which the portion of the DSG funds payable to the member maybe used; (b) the manner in which it should be disbursed and accounted for; and (c) other administrative arrangements pertaining to it. The method of payment of DSG money from the National Government to the Districts which is prescribed by subsection (6)(a) is not one of the specific matters enumerated in subsection (7); for the reason that it is already prescribed in subsection (6) in mandatory terms. The OLPLLG is a Constitutional Law and any sub-ordinate legislation, regulations NEC Guidelines and administrative Guidelines or instructions must be read subject to these provisions.

It is the uncontested evidence that Instructions issued by relevant government following NEC Guidelines must be consistent with the Guidelines. And the NEC Guidelines in turn must be consistent with OLDRL. Therefore, the NEC or the Secretary of the Department of Finance and Treasury responsible for DSG, or any other relevant Government Department or officers concerned with DSG Funds such as the RDO has no legal authority to issue any Guidelines or Financial Instructions authorising the issue of DSG cash or cheques in the name of the member of Parliament, directly or indirectly, under the member’s name. No DSG funds for Districts should be paid to Provincial Treasuries because they are established under S.95(B) of the OLPLLG and they are meant to administer PSG funds. If is no District Treasury in place to receive and pay out the DSG funds, then no DSG cheques should be released to that District by the Department of Finance in Port Moresby until a District Treasury is first set up.

2. The Status of the two cheques paid to the leader	

In the allegations, the Public Prosecutor alleges that the two cheques were "public money allocated for development" of the Yangoru-Sausia electorate or district, but does not specify what kind of public funds they were. A distinction must be made between different grants made to the District from the National Government because the evidence shows that there were different grants under different records coming from the National Government for social and rural development in the district. For instance, on 21/3/00, the same year in which the leader was paid the first cheque, NEC documents show that the sum of K143.5 million was budgeted by the National Government under its "District Development Programme for the fiscal year 2000" which comprised of three grants namely, DSG; PSG; and Social and Rural Development Grant (S&RDG): see Exhibit "C.5.4." These three funds have distinct legal basis and distinct NEC Guidelines and Departmental Financial instructions. 

Prior to 1998, the funds for District Development, the equivalent of DSG, were known as the Electoral Development Fund (EDP). Members of Parliament had complete discretionary control over this grant. That changed in 1998 as a result of the amendment to s. 95 of the OLPLLG. As from 1998 onwards, the entire funds previously known as EDP became DSG, by operation of law. Under the new Amendment, DSG was divided into two parts – one half payable to the JDP and the other half payable to the member. There is no mention in the OLPLLG about "discretionary" or "non-discretionary" components of DSG.

There is nothing in the amendments to s. 95 A of the OLPLLG which made this law applicable retrospectively. And so, when the leader requested for the funds in his two letters to the Prime Minister in 2000, he made reference to outstanding "EDF" for the electorate, which we take it to mean, the members wholly discretionary funds under the old EDP regime, but equivalent to the one half of the DSG "payable to the leader." His reference to EDF is correct in terms of the outstanding 1997 funds but for 1998 and 1999; it was wrong because the EDF had by then been abolished and replaced with DSG. 

The Prime Minister Sir Morauta in his reply letter partly correctly described the leader’s queries as regarding "outstanding" DSG and S & RDP for the District for the year 1997-1999 financial year, but when he confirmed the amounts owing of a total of K1,150,000.00 for the period K300,000.00 for 1997, K350,000 for 1998 and K500,000.00 for 1999, the Prime Minister did not specify which amounts were for DSG and which amounts were for S & RDF. Indeed, the evidence before us shows that there was a separate amount of some K1 million for S & RDF paid to the same electorate in the same period. That S & RDF payment is not the subject of the present inquiry. 

The leader says he understood the K1.15 million together with the second cheque for K60,000 to be outstanding DSG funds. He says he understood the funds to be the discretionary component of DSG. The prosecution concedes that the funds were DSG funds and dispute the leaders knowledge of "discretionary" funds. We are of the view that the two cheques were for outstanding DSG payments. In any event, at the time these two cheques were paid, the status of the funds had changed by operation of law from EDF to DSG and that the total funds were subject to s. 95 A of the OLPLLG and the relevant DSG Guideline issued under subsection (7). As to the question of whether the funds were wholly or partly "discretionary" component of the DSG, we will determine this issue later.

3. Payments of two DSG Cheques by National Government to the Electorate.	

The Prime Minister Sir Morauta’s letter to the leader dated 25/10/00 in no uncertain terms, correctly advised the leader on how these funds would be paid out, in these words; 

"I wish to advise that these funds will be released to your electorate through the Provincial Treasury when savings are identified". (our emphasis). 

The only problem with this instruction though, is that the Provincial Treasury is not the correct Treasury to channel DSG funds under the OLPLLG . There is no evidence as to why the Prime Minister chose the Provincial Treasury, but the evidence before us explain this – that at that time there was no District Treasury established in the Yangoru-Sausia electorate, as required by the OLPLLG, s. 95 A (6)(a) and (b). The important point though is that the Prime Minister did not authorise the DSG money to be paid directly to the leader in person, or in his name; or released to the electorate through the leader. The same would apply to the second cheque of K60,000.00. The question then is: How come these two cheques were issued to the leader in his own name? We will address this issue later when we consider the propriety or legality of these two payments.

But we need to first settle issue on the relevant or applicable DSG Guidelines. 

4.	Applicable NEC Guideline on DSG	

Mr Steven forcefully submitted on the evidence, that because the evidence on the relevant and applicable DSG Guidelines is vague or unclear, we should find that there was no valid DSG Guidelines in operation when the funds were received and even up to this day. Mr Pambel submits that there was a Guideline approved by the NEC in 2000, which is valid and applicable. A copy of this Guideline which is annexed to the Affidavit of the Mr. Ila’s affidavit (Exhibit "A"). The same Guideline was tendered by Ms W. Kiap (Exh. "E"). Mr. Pambel quotes that Guideline in full in his submissions. 

This point was vigorously contested by the leader, and the tribunal required the attendance of all available top officials of the Finance Department, the office of the Rural Development, the Provincial Treasury and the present and former District Administrators of the electorate, to given evidence, in order to ascertain the correct Guidelines. At no stage was the tribunal’s attention drawn by any party, and the Tribunal never did, focus on the issue of whether or not there were any NEC Guidelines in place, at all. The assumption was that there was a NEC Guideline approved under subsection (7), and the tribunal’s inquiry was focussed on identifying the correct guideline. Therefore, it is unacceptable of the leader to now ask the tribunal to find that there was no relevant DSG Guidelines, instead of assisting the tribunal to find the relevant Guideline. 

The untenability mischief in this submission is apparent from para. 46-77 of the written submission made on behalf of the leader, which we reproduce in full in Appendix 10. 

We deal with some of the important submissions to demonstrate this finding: 

(a)	The existence of the relevant NEC DSG Guidelines is not dependant on the knowledge of its existence by concerned bureaucrats and politicians involved in administration of public funds. When there is evidence that the NEC, the highest executive government authority in the land, promulgated such Guidelines, then that is all that matters. It is then incumbent on bureaucrats and politicians to make it their business to access those Guidelines, familiarise themselves with them and correctly apply them. It is unbecoming of bureaucrats and politicians in particular, to be overly pre-occupied with receiving public funds and paying them out, and not address their minds diligently to the relevant NEC Guidelines in which the purpose, payment, use, and accountability of public funds are set out. The same goes for any relevant changes in the OLPLLG or any other law, which affect DSG funds. Ignorance of the law through lack of education, experience, practical difficulty or for a host of other reasons, is not a valid excuse.

In the present case, the leader is a professional accountant having a Degree in Accounting from the University of Technology in Lae, with international exposure in accounting, and an experienced former public finance manager, at one stage occupying the position of Deputy Administrator (Finance Division) in the East Sepik Province in which the Yangoru-Sausia electorate is situated. As he (himself) said in his evidence, he was or had reason to be fully aware of the relevant NEC Guidelines and the Constitutional framework for NEC Guideline. His knowledge in this area was further enhanced by legal advice from private lawyer Mr. Phillip Ame to whom he paid a fee of K5,000 from the same DSG funds. Mr Ame’s advice covered the Constitutional framework for DSG and NEC Guideline. The leader’s explanation that he does not know of any valid Guideline in existence, and that he was given a different set of Guidelines by the RDO when he collected the second DSG cheque in 2001, is unacceptable. 

(b)	We appreciate that our task of locating the relevant NEC Guideline has been difficult because the witnesses who gave evidence were vague, conflicting and inconsistent at times, which in turn complicated our efforts to locate the correct Guidelines. Even the top Administrator of these funds Mr. Ila, who is the present Acting Deputy Secretary for RDO, who annexed copies of Guidelines, did not give us the complete set. The two Guidelines he supplied comprise of pages from different documents and we could not make any sense of them. The Ombudsman Commission’s efforts in this area was also wanting in precision. We openly commented about the largely "clerical work" that the tribunal was doing sorting out just what were the correct Guidelines in place. Subsequently, much of our decision-deliberation time have been used up on finding the relevant Guideline, Notwithstanding all these difficulties however, we have shifted through the mass of evidence in order to locate the relevant Guideline in use, because we are certain that given all the activities in the NEC in approving the DSG Guidelines that took place in 1998 and 2000, which NEC Secretary Ms Winnie Kiap has given evidence of, there must be a guideline in existing under which these two payments were made to the leader.

(c)	Ms Kiap said the NEC approved some guidelines which were incomplete on 22/3/00. These were contained in NEC Policy Guideline No. 31 of 2000. (Exhibit (5.2). She later supplied the missing pages set (Exhibit "D"). But we find that these problematic Guidelines relate to "S & RDP Grant Guideline’s for the Fiscal Year 2001" which is a different fund. They do not relate to DSG funds, which is a separate fund for which there legal scheme under s. 95A. Therefore, the error by NEC in approving only one half of the S & RD Guideline is of no consequence to DSG funds which we are dealing with here in this inquiry.

(d)	In relation to Mr. Steven’s submissions on the prosecution’s failure to discharge its onus and standard of proof as to the existence of the relevant DSG Guidelines, we say that the onus and standard of proof the prosecution carries relates principally to matters of fact; not matters of law. The existence of OLPLLG s. 95 (A) and the relevant Guidelines; if any, made by NEC under subsection (7) or any Financial Institutions issued under any NEC Guideline, are matters of law, which the prosecution is not required to establish in accordance with any standard of proof. The onus is on both parties to assist the tribunal to locate the relevant legal provisions and executive and administrative Guidelines. It is then for the prosecution to establish the necessary facts and bring them within those provisions, to the required standard. 

This brings us to our final point. On the evidence, given all the NEC deliberation that occurred between 1998 – 2000 which we heard of from Ms Kiap, and acknowledged by all concerned including the leader, that there were some Guidelines in place governing DSG, we find that the NEC did promulgate DSG Guideline in 1998 which were varied in 2000. The question is as to which is the correct DSG Guideline in operation when the leader received the DSG funds. 

It is clear to us from the evidence that in NEC decision No. 291 of 1998, (Exhibit "C.6"), the 1998 DSG Guidelines were approved. A copy of this Guideline is in (Exhibit "C.7") It is entitled "Guideline for the District Support Grants and the Provincial Support Grants budgeted as the Rural Action Program Fund (RAPF)" which is part of Policy Submission No. 335/98. These DSG Guidelines were in use until they were reviewed and replaced by new Guideline in 2000, (Exhibit C.2) in NEC Decision No. 44/00 

In NEC decision No. 44/00, there were a number matters covered which where contained in policy submission No. 31/00 (Exhibit C.5). Included in that policy submission was Appendix 2 entitled "Guideline for District Support Grant and Provincial Support Grant" (Exhibit C.5.2.). This DSG Guidelines heading is the same as the 1998 DSG Guidelines. A complete set of this new Guideline was later provided by Ms Kiap (Ex. "E"). Ms Kiap also provided a full copy of the 1998 Guideline which was part of the policy submission No. 31/00 which was approved.

We have checked this 1998 DSG Guideline with the 2000 DSG Guideline and find that except for the entitling of the Guidelines, the contents are word-for-word the same. On this basis, we find that the relevant Guideline in use as at 22/3/00 (NEC Decision 44/00 dated 22/3/00) is Exhibit "E" which is the same in content as Ex. C.7. (1998 DSG Guideline). This is the same Guideline reproduced by Mr. Pambel in his submission. This then is the relevant Guideline which we now intend to use in determining the allegation against the leader. The other Guidelines approved in 2000 NEC meeting such as for S & RDF are not relevant to the present inquiry.

5. Are the 2000 DSG Guidelines Inconsistent with Organic Law 2. 95 A?	

We raise this issue because of our earlier conclusions on the legislative scheme of DSG. The main body of the Guidelines are set out in clauses 1 – 9. We find a number of important anomalies in the body of those Guideline which are inconsistent with the OLPLLG. In particular, we note Guideline No. 7 which provides:

"MANAGEMENT AND DISBURSEMENT OF PSG AND DSG FUNDS

Funds appropriated for the Rural Action Programme will be administered by the office of Rural Development. At the beginning of each quarter the office of rural Development will prepare and submit cash flow estimate to the Department of Treasury and Planning which will then issue Warrant of Authorities. 

On receipt of the projects, the Office of Rural Development will issue CFCs cheques made payable to the Provincial or District Treasurers. Provincial or District Treasurer will then issue cheque, which should then be presented by the Member to the recipients". (our emphasis). 

There are three(3) anomalies, in the above clause which are inconsistent with the OLPLLG, s. 95 A. The first is that the Department of Finance is required by this clause to pay the money to RDO, which then issues CFCs to the District Treasurer. In our view, that is not the intention of s. 95 A(6), which clearly says the funds are paid direct to the District Treasury; not through a middle or third party agency such as RDO. The second is that the OLPLLG speaks of a "District Treasury", not District Treasurer. The CFC cheque should be paid by the Department of Finance and Treasury to the District Treasury; not the "District Treasurer". The third is that under subsection 6 (b)(ii), the amount payable to the leader is paid out to recipients by the District Treasury "on behalf of the leader"; not "presented by the member to the recipients". To the extent that the provisions are inconsistent with S.95(6) OLPLLG, they are rendered invalid. 

Except for the three (3) anomalies mentioned above, the body of the DSG Guidelines are consistent with s. 95 A; in that they ensure that the member does not receive any DSG payments, in cash or cheque – be it discretionary or non-discretionary funds. He also physically does not handle any of that money up to its final disposition to the recipients. Even for the discretionary component, the cheque is paid to recipients by the District Treasury on behalf of the member. The member should not present any DSG cheques or cash to recipients for projects.

The question then arises as to under what authority the present two cheques were issued in the leader’s name. We are unable to find in the main body of the DSG Guidelines (Clauses 1-9), any reference to direct payment of DSG funds to the member. But interestingly enough, we have come across a form which is attached to these Guideline which is called "PSG/DSG – 02 Form" entitled "Members RDP Acquittal Form" which is one of two forms the leader says he received from RDO when he received the second cheque. This form makes reference to the authority to make DSG payments "direct to members". It is clear to us that these forms were devised by RDO and they were approved by the NEC in 1998 and 2000 as being part of the DSG Guidelines. But before we look at this form, we need to understand how the RDO featured in this scheme.

We have already said that Clause 7 of the DSG Guideline empowers the RDO Guideline to administer the funds under RAP which includes DSG funds. According to these Guidelines, the National Government does not pay the DSG directly to the District Treasury but through the RDO. A warrant is issued to the RDO who then issues "CSCS cheques" payable to the District Treasurer "then issues cheques which are presented by the member to recipient". We have already said that this procedure is inconsistent with the OLPLLG, s. 95 A. 

According to the evidence of Mr. Yer, the RDO in Port Moresby operated a bank account with the Central Bank to received warrants from the Finance Department. The RDO would then issue cheques to recipients or members of Parliament directly; or issue who then issue CFCs to Provincial and District Treasurers who then issue cheques to recipients for project. The practice it seems to us, as demonstrated in the present case, is that the Department of Finance and Treasury and RDO issued DSG cheques in the leader’s name. The first cheque for K1.15 million was issued by someone in the Finance Department and second cheque for K60,000.00 was issued by the RDO. In our view this finance scheme is contrary to s. 95 A (6) of the OLPLLG. The RDO is not a government financial institution or agency; it is ill-equipped to effectively administer financial transactions including raising DSG cheque payment and acquittal on expenditure. That is the proper and lawful function of the Department of Finance and Treasury under the OLPLLG.

It seems to us that the RDO in an effort to ensure accountability for receipts and expenditure or DSG public funds drew up the DSG Guidelines, in 1998 and 2000, which it was ill-equipped to do. At the same time the Secretary for Finance in 1998 drew up its own financial guidelines under s. 117 of the Public Finance Management Act to address DSG funds. The result is a miss-mash of executive and administrative Guidelines and Instructions, which is confusing not only to the two department themselves, but perhaps also to the NEC, and certainly to the members of Parliament, to us, and the public at large.

The DSG form which permits payment of DSG money direct to members of Parliament is the second of three (3) or four forms attached to NEC policy submission No. 335/98, compiled by RDO, which were approved by NEC in decision No. 291/98 (see Ex. C.7). They were also approved by the NEC in 2000. These forms are:-

1.	PSG-DSG-01 "Project Proposal Forms" – to be completed by applicant for funds.
2.	Part of this DSG-01 form requires the JDP to check on quotes got projects submitted, requirement for public tender, development priority addressed by project, etc. 
3.	PSG/DSG-02 Form "Members RDP Acquittal Form" – This is the same form used by the leader entitled "PSG/DSG-02". Under part "A" of this form, the leader certifies that he has presented the DSG cheque to the recipients (name and address provided), and it is witnessed by surname. Part B of this form is important because it provides for payments of DSG funds "direct" to member of Parliament. We deal with this form in detail below.
4.	Form PSG-DSG 03 – "Member Disbursement Forms". This is the other form the leader has submitted to us. In this form, the recipient of the funds certify receiving the cheques of a specified amount for a specified project. The recipient (name and address produced) signs the form witnessed by someone. 

At this juncture we simply say that DSG funds cannot be fully accounted for unless all of the 4 forms above are fully complied with by the appropriate person.

Returning to form DSG-02, Part "B" of this form states:-

"PART B

Discretionary Funding of DSG to National Parliament Member: as allowed under Section 95A of the Organic Law on Provincial and Local Government as amended. 

A portion of the District Support Grant, to be allocated to Members of Parliament annually and will be treated as a discretionary component. This discretionary fund will be made direct to each Member for use on DSG projects, activities and or programmes of his choice, outside the JDP & BPC committee’s deliberations. 

Furnishing of expenditure reports to the Office of Rural Development, immediately after expenditure details of the items procured, scope of project work carried out and the Bank Statement showing the actual expenditure payments or transactions made. 

Members may chose to pay their Discretionary Funds into the Treasury Operating Accounts for the provisions of goods and services or open a new account under the name of the electorate in order to implement the DSG Programme. 

If however, there exist an Account, the details of these accounts should be furnished to the Office of Rural Development for monitoring and evaluation purposes." (our emphasis)

We make two important observations on Part "B". First, this form introduces the notion of "discretionary" component of DSG which is paid "directly" to members of Parliament. It does not say the payment is t be made in cheque or cash and if it is to be paid in cheque, whether the cheque is to be issued in the name of the member. But the language is so loosely worded that it is capable of being read that way and in practice read that way by interested bureaucrats and politicians. The second observation is that Part B, again in loose language requires the leader to open a "Trust Account" in the name of the "Electorate" if he chose not to pay the cheque into the District Treasury. It does not authorise the leader to deposit the DSG cheque, even if it is made out to him in his name, into his private bank account.

The source of Clause B is unclear. The leader has provided us with two forms – DSG 01 and DSG 02. He says this forms were given to him by RDO when he collected the second cheque. It is clear to us that RDO is the author of these two forms. But we are not sure if the NEC was aware of Part B of DSG 02 which authorised direct payment to member of Parliament of the discretionary component of DSG funds. 

In our investigations we have been able to trace the origin of Part B of Form DSG 02 to a particular Department of Finance Financial Instruction issued in 1998 which we discuss below.

6. Are Finance Department Instruction consistent with OLPLLG, S.96A	

Financial management matters including management of DSG funds are the proper function of the Department of Finance and Treasury. 

In our investigations, we have traced the authority for issuing DSG cheques in the name of the leader to a Financial Instruction No. 3 of 1998 (Exhibit "K") issued by the then Secretary for Finance, Mr. Brown Bai. Mr. Yer (Deputy Secretary for Finance & Treasury); confirmed the existence of this financial instruction. The instruction was issued under s. 117 of the Public Finance Management Act 1995, following the instruction of DSG under OLPLLG, S.95(A). It is these Instructions which divides the DSG Funds into "discretionary" and "non-discretionary" components. 

In relation to the "non-discretionary" component payable to JDP under s. 95 A (1)(a) s.95 A ss. (1)(b), Clause 6.4. of the instructions says "all pending plans of DSG Programme funds to JDP & BPC which are "non-discretionary (sic)" must be approved by the appropriate Joint District Planning and Budget Priorities Committee in its meeting". The actual approval and release of funds is done by "District Treasurers in consultation with the District Administrator with the approval of scope from Rural Development Office". (Clause 6-5). We have no difficulty in understanding the meaning of the clause. 

In relation to the "discretionary" component of DSG, Clause 5 of the Instruction provides:

"(5)	Distribution of district Support Programme Funds

5.1.	DSG to National Parliament Member as allowed under Section 95A of the New Organic Law on Provincial and Local Government as amended. 

A portion of the District Supports Grant, to be allocated to Members of Parliament annually and will be treated as a discretionary component. This discretionary fund will be made direct to each Member by signing the treasury and Planning form DS02. Payments obtained will be for the use of DSG projects, activities and or programme of his or her choice, outside the JDP & BPC committee’s deliberations. 

Furnishing of expenditure reports to the Department of Treasury and Planning, Department of Rural Development and department of Prime Minister and NEC immediately after expenditure details of the items procured, scope of project work carried out and the Bank Statement shows the actual expenditure payments of transaction made. 

Members may choose to pay their Discretionary Funds into the Treasury Operating Accounts for the provisions of goods and services or open a new account under the name of the Electorate in order to implement the DSG Programme. 

If however, there exist an Account. the details of these accounts should be furnished to the Department of Treasury and Planning for monitoring and evaluation purpose". (our emphasis)

This clause is almost identical with Part B of form DSG – 02.

This Clause permits the payment of the "discretionary" component of DSG under Subsection (1)(b), (5) and (6) (b)(ii) to be "made direct to each member". This Clause seems to be the authority for the practice adopted by Finance and Treasury Department and RDO, in issuing "discretionary" DSG fund cheques in the name of the member. It is this Financial Instruction, it seems to us, which has been the principal source of authority for issuing DSG cheques to members in their own name, both provincial or open members. And that appears to be the explanation as to how the present leader had the two DSG cheques issued in his name. Such an instruction however is not authorised by the 1998 or 2000 NEC DSG Guideline nor by the OLPLLG and therefore invalid. 

We do not think there is any harm in categorising the two component of DSG as "discretionary" and "non-discretionary". "Discretionary" in the sense that the member has the discretion to approve projects and funds within his allocation; and "non-discretionary" in the sense that the JDP has the authority, to approve project and funds. We do not consider "Discretionary funds" to mean the leader is entitled to receive "DSG" cheques in his name, deposit them into his personal account and pay them out in any form and for any purposes of his choosing. The member has no role in the physical handling of the hard cash or cheque – and effecting payments to recipients. In other words, he does not see the "colour" of the DSG money. 

Mr Steven submits that Finance Instruction No. 3 of 1998 was issued under NEC decision No. 291/98. When NEC decision No. 291/98 was rescinded by NEC decision No. 97/2000, these Financial Instructions became redundant. Therefore, a new NEC decision and DSG Guidelines were required to promulgate new Financial Instruction, but there were none at the time the leader received the funds. 

We find this submission untenable. It is clear that the NEC decision No. 29/98 authorised Finance Instruction under s. 117 of the Public Finance Manager Act, and this was by Financial Instructions No. 3/98. These Financial Instruction are independently issued by the Finance Department Secretary under s. 117 to govern disbursement of DSG funds which are public funds. There is no evidence before us of any other new Financial Instructions issued by the Department of Finance between 1998-2000 which rescinded the 1998 Instructions. The other Financial Instruction in evidence, which is No. 2/2000 dated 19/3/01 (Exhibit "G") is for District Development Grant and not for DSG and therefore not applicable. The very fact that the leader was issued with two DSG cheques, which he now says he believed them to be his outstanding discretionary component of the DSG, is testimony to the fact that Finance Instruction No. 3 of 1998 was still operational at the time he received them and perhaps even up to the present time. Mr. Yer referred to this Guideline as the basis under which the leader was paid the first cheque and possibly the second cheque.

It is mischievous for the leader to now reject Financial Instruction No. 3 of 1998 under which he was paid outstanding DSG for 1997-1999, when it suits him now, and deny its very existence. If we were to accept his argument, then the notion of "discretionary" DSG funds introduced by these Financial Instruction, the whole notion of disbursement under from DSG-02 which he used to acquit for the funds, the whole motion of cheques issued in his name, and so on, should not have featured in his defence at all. If that line of defence were accepted, then his receipt of the DSG funds, payment into his personal account, and payments to recipient out of his personal account are clearly contrary to s. 95A of the OLPLLG and his defence is therefore doomed to fail from the start. But that is not the scheme of his defence. It is founded on Financial Instruction No. 3 of 1998; which is endorsed on Part B of DSG – 02 which he cannot deny its existence now. 

Having settled the threshold fundamental legal issues, we now proceed to determine the individual allegations of misconduct. 

V. ALLEGATION ONE(1)	

The first part of allegation 1 relates to breach of duties enumerated in s. 27(1) and (2) of the Constitution. The second part of the allegations sets out the factual circumstances constituting the breach of these duties. These are itemised in (i) – (iv). The proper approach is to first determine if the factual allegations have been proved and then determine if these proven facts constitute a breach of the enumerated duties. 

1.: 	
"Allegations 1(i): the leader having been allocated K1,210,000.00 of public funds. It is alleged that improperly deposited those two cheques into his personal bank account No. 306 6 222 999 held at the Wewak branch of the Papua New Guinea Banking Corporation". 	

This allegation is broad enough to embrace the impropriety of the whole manner in which the funds were first paid out to the leader, received by him and paid into his personal account. It is accepted by the tribunal that there is no dispute as to the "outstanding" DSG funds payable to the electorate for the relevant period. Several issues arise here for determination. (1): whether the funds were entirely "discretionary funds"; (2): whether the leader had a genuine belief that the funds were entirely "discretionary funds" (3): whether the payment of the "DSG" funds in his name was improper. (4): whether the payment of the two cheques into his personal account was improper. 

Based on our earlier conclusions on the constitutional scheme and DSG Guidelines, we find that someone in the Department of Finance and Treasury in Waigani using the Finance Instruction No. 3/98, improperly and illegally raised a cheque for K1.15 million in the leaders name in the first place. The cheque for K1.15 million should have been made payable to the "Yangoru-Sausia District Treasury". The evidence is that there was no District Treasury for the District established in 2000. Then, that meant no cheques should have been issued to anyone until the Department of Finance and Treasury set up the District Treasury to receive and administer these funds. 

It is submitted by Mr. Steven that the leader’s conduct is excusable because he had a genuine belief that the funds were for his discretionary DSG funds for several reasons. There reasons are:

(a)	The existing practice at that time was that DSG "discretionary" funds cheques were paid out to members of Parliament by the Department of Finance and Treasury in the member’s name; 

(b)	 the two cheques were "Not Negotiable Payee Account Only" cheques. As such they could only be paid into his personal account. 
(c)	 he believed that "non-discretionary" DSG cheques were already paid out to the JDP between 1997-1999 and expended through the Provincial Treasury in questionable circumstances. The only outstanding cheques were for discretionary component. 
(d)	No one in the Finance Department or RDO informed him that the funds also covered non-discretionary component until a stop-payment was issued on his account by the Ombudsman Commission. 
(e)	An earlier payment of K250,000 in DSG discretionary funds for the year 2000 was paid into the same personal account and the Ombudsman Commission was informed of this and they raised no objection. 
(f)	There was no Trust Account in the District to pay the cheques into. (vii) Difficulty in opening a Trust Account because the Finance Department, RDO and Provincial Treasury did not assist him. 

Mr Pambel submits the cheques even if issued in the leaders name, should never have been deposited into his personal account. Even if the DSG Guideline were silent on this the leader was not advise of this, commonsense dictated that this was an unacceptable practice.

Applying the requirements enumerated in OLPLLG, s. 95 A (6); we have already said that the two cheques should not have been issued in the leader’s name. But to respond to the leader’s arguments for argument’s sake, we find that in relation to the first cheque for K1.15 million; the leader was only "entitled to be paid" one half of the total amount for 1997, 1998, and 1999, being the "discretionary" component of the DSG; the other half being "non-discretionary" component of DSG. In other words, someone in the Department of Finance and Treasury in Port Moresby improperly and illegally paid to him, and he should not have received, the sum of K150,00 for 1997; K175,00 for 1998 and K250,00 for 1999. In relation to the second cheque for K60,000, the same can be said. Someone in RDO improperly and illegally paid the leader K30,000. The total amount in "non-discretionary" funds he improperly and illegally received, for which JDP had no say in its pay-out, is K305,000.00.

In our view, fraudulent intention on the part of the person receiving cheque for public funds, made out to him improperly and illegally, who then deposits the money into his personal account is beyond question. In any event, such practices are not allowed by the OLPLLG and the DSG Guideline under any circumstances. Ignorance of Constitutional requirements and the 2000 NEC Guideline is not a valid excuse. We are satisfied on the evidence that the leader acted improperly and illegally in receiving these two cheques, which were improperly and illegally issued in his name, and deposited into his personal account.

In any case, as we have already said, he is an accountant by profession, having a Degree in Accounting from UNITECH, and has vast experience in the public services. At one time, he occupied the position of Deputy Administrator ESP in charge of the Finance and Treasury, and also had work experienced with the Auditor General’s office. As he said, he was familiar with the proper procedure for receiving public funds and acquittal for them and the NEC DSG Guideline. On top of that, at the time he received the two cheques, he was receiving legal advice from private lawyer Mr. Philip Ame on the Constitutional scheme for DSG, under the new Provincial Government Reform Law, for which he paid Mr. Ame K5,000.00 in legal fees out of the same DSG funds. We are satisfied that he ought to have known or knew that the cheques comprised of both discretionary and non-discretionary DSG funds, that they were improperly and illegally raised in his name, and that he should either return the cheque to the Finance Department or RDO for new DSG cheque to be drawn up payable to the "Yangoru-Sausia District Treasury". Further, as we have already said, the DSG is "member" – targeted. Access to DSG funds is a privilege which goes with the job as the member of the electorate. In this leader’s case, he was not a member of Parliament for the period for which the funds were paid. Therefore, he had no such privilege to receive DSG funds for a period in which he was not a member representing the electorate. As the Prime Minister correctly stated in his letter to him, the whole of the funds should have been paid direct to the electorate through the District Treasury, to be administered by the JDP as "non-discretionary" funds.

Mr. Steven submits that there was no District Treasury in existence at that time; and the Provincial Treasury in Wewak which received other District Development Funds, were not properly managed. Therefore, these funds could not be paid into the Provincial Treasury. Then there was the additional problem of complications with operating a new Trust Account for the District because the RDO, or Finance and Treasury and the Provincial Treasury did not assist him in his efforts to open a Trust Account. 

During the course of the proceedings and during submissions, we did indicate that we would accept the position that there were problems with the Provincial Treasury in Wewak, and even RDO and Finance Department in Port Moresby, in the management of DSG funds as evident from the issue of those two cheque in the name of the leader. 

We also heard evidence from Mr. Yer that his office, after paying out the first cheque, realised that the leader was over-paid and they unsuccessfully tried to get him to return the cheque. 

But the more compelling evidence comes from the leader himself. He told the tribunal in his oral evidence that after his account was frozen and the sum of K132,241.44 was transferred out on directions from the Ombudsman Commission, he had discussions with the Minister for Finance Mr. Kumbakor to set up a Trust Account. That was after 6 March 2000. He used a letter written by Mr. Kumbakor to open a Trust Account. Later the bank refunded the K132,241.44 and credited his personal account. This was in April. It took only one(1) week for him to open this Trust Account. This Trust Account is the same one he was trying to open earlier when he first received the two cheques which he had difficulty with. He could not have done the same when he was paid the two DSG cheques because the two cheques were issued in his name and because they were crossed cheques, they could only be paid into his personal account. 

We find the leader’s explanation as to his inability to open a trust account then, to be unacceptable given the speed with which he opened the Trust Account after a substantial part of the DSG funds had been depleted. We find that he was able to open the Trust Account when he was forced to do so. We find that he was fully familiar with the proper procedure for raising cheques and opening Trust Account for public funds, and that he deliberately chose not to do so, in order to avail himself of the opportunity to have a free hand in spending the money at his pleasure. 

A personal bank account is not the proper account to conduct transactions involving public funds. A member cannot mix up personal funds with public funds in his private account for whatever reasons. Monies deposited into a personal account remains the private property of the customer. The customer has unimpeded access to the funds in his private bank account. Any artificial distinction between personal monies and public monies in a "personal account" is unheard of in banking practice and no one is in better position to understand this principle than an accountant and experienced public finance officer, of which the leader is one. 

In the present case, we are satisfied that the raising of the two DSG cheques in the name of the leader; and payment into his personal account are both improper and illegal as being unconstitutional. We are satisfied that the factual allegation in (i), (ii) has been established. We also say that the establishment of these basic facts must necessarily raise questions about the withdrawal and application or use of these funds; such that every item of withdrawal from this account must undergo a test of strict scrutiny to see if the funds were in fact spent for its designated purpose. In some cases, the method of withdrawals or payment, the locality where the transactions were conducted, the velocity of transactions in any given period, the nature of the requests submitted to the leader, reports of actual expenditure and so on, may be sufficient to draw the conclusion that the funds were used for the personal benefit of the leader or his associates; without further proof of the funds actual application.

2.	Allegation 1(ii) & (iii) – Misappropriation of DSG funds 	

a)	Allegation 1 (ii)

Factual allegation 1(ii) is that the leader failed to ensure that public money was properly applied to the rural infrastructure project for which it had been allocated. 

The leader denies this allegation and contends that the money was properly applied for as intended. He maintains that the funds were his discretionary component of the DSG which can be used at his discretion outside the JDP deliberations. He further stated that as all the funds were acquitted it supports the contention that they were applied properly. 

He further states that the funds were used for projects in Education, Health, Transport, Roads and Bridges, Economic and Social Development, Ward Improvement and Administration Costs. (see Appendix "K" of Exhibit "HH1"). 

The funds were public funds and as such, it’s disbursements were subject to relevant laws, Guidelines or Finance Instruction prevailing at that time. 

The OLPLLG as the enabling legislation for the allocation of DSG funds makes no provision for the purpose to which the one half payable to the leader is to be applied. It further however makes provision under s. 7 for the NEC to issue guidelines relating to the DSG, specifying amongst others, the purpose the money may be used (s. 7 (a)), the manner of disbursement and accountability (s. 7 (b)) and the administrative arrangements (s. 7 (c)).

The office of Rural Development (RDO) as the implementing agency of the DSG funds also issued guidelines. (see exhibit "C.5.2., C.5.3, C.5.4", and Exhibit "E"). 

Finance Instruction No. 3/98 generally provided similar guidelines which coupled with the ORD guidelines collectively show that the DSG funds were allocated for infrastructure projects.

Some guidelines (see Exhibit "E" and "C.5.3.") described in further detail the scope of projects to be funded and placed restrictions on other areas which did not come within the objectives of the guidelines.

The scope of projects for DSG funding in the 1999 guidelines included Social and Administration Infrastructure which covered projects such as maintenance of Aid Posts, Schools, Office buildings etc. It also included Land and other Physical Infrastructure Development which included projects relating to maintenance and construction of roads, bridges, water supply, food storage units and related projects. 

Restriction under these guidelines are for payment of bride price, personal expenses which included furniture, travel fares, entertainment, member’s personal or family business and related matters. 

In order to determine whether the leader failed to ensure that the public money was properly applied to the infrastructure projects for which it was allocated, various considerations have to be satisfied. Firstly, the type and scope of projects must meet the requirements under the Organic Law, relevant Guidelines and Finance Instructions. 

Secondly, the projects which are funded with the DSG, must be of a public nature with maximum public benefit. They cannot be for individual or family enrichment. Thirdly, the amount of money expended must reflect projects of equal value to prevent doubts arising as to the authenticity of such projects and their relative funding. Finally, the method of funding projects and disbursement must be easily verifiable for acquittal purposes. The recipients of DSG funding must also be able to provide evidence of completed project also. Although not exhaustive, the above considerations must form the basis when DSG funds are disbursed, to maintain transparency and for acquittal purposes. 

The undisputed fact are that the leader disbursed funds out of the K1.210, 000 million to various groups and individuals from his electorate in the form of cheques and cash. The leaders bank records which are not disputed show that withdrawals were made through ATMs, EFTPOS and cheque payments. The leader tendered by consent four volumes containing documents he said were his acquittals. (Exhibits "HH.1", HH 2, HH 3, HH 4"). The leaders evidence was that the four volumes contained acquittals representing; 

1.	Education – K504, 304.00
2.	Health - K33, 100.00.
3.	Transport, Road and Bridges – K164, 500.00
4.	Social and Economic Service K179,002.80.
5.	Ward Improvement – K140, 200.00
6.	Administration – K55,344.30.

The leader has provided a list of community projects and photographs of buildings, etc to show where some of the funds were spent which he says are for authorized purposes. e.g. classrooms, health centres, etc. In view of other DSG funds received by the member in 2000 and 2001, we are unable to confirm if those projects were funded exclusively from within the K1.21 million. In our view, this whole K1.21 million is tainted by the improper and illegal payment made to him from the start and the conduct of unverifiable transactions on his private account. Also, there are no properly approved project proposal form (DSG 01) and proper acquittals of these funds in accordance with DSG 02 Part B.

Having said that however, we have checked the leaders cheque butts and identified eighteen (18) payments for which we can assume are for community projects. There are:

1.	Tawa Community School	K 7,000.00	
2.	Tama Community School	 20,000.00	
3.	Sepik Mission Education Services	50,000.00	
4.	Mongung Community School 	30,000.00	
5.	Sassoya Elementary School 	5,000.00	
6.	Warasaua Community School 	30,000.00	
7.	Marinumbo Community School 	30,000.00	
8.	Sassayo Health Centre	20,000.00	
9.	Parapom Community School 	30,000.00	
10	Munji Community School 	30,000.00	
11.	Hadora Community School 	30,000.00	
12.	Kuikom Community School 	10,000.00	
13.	Sembo Community School 	30,000.00	
14.	Bempaning Clan Youth (Catholic) 	30,000.00	
15.	Wamka Women’s Council 	3,000.00	
16.	NBC Wewak.	20,000.00	
17.	Sepik Mission, SDA Education	50,000.00	
18.	Yarapos Community School 	10,000.00	
	TOTAL:	 K 433,000.00	

Notwithstanding the illegal and improper manner in which the leader was paid the two cheques and the deposit of the cheques into his private bank account, we can safely conclude that these funds were properly applied to eligible community projects. Also there is no evidence from the prosecution to counter this evidence. On top of this amount, we add the K132,000 which was frozen and later paid out to the Trust Account. We find that the total sum of K565,000 out of K1.21 million were spent by the leader either for authorized projects or not applied by the leader improperly. This is a finding we make in favour of the leader.

A perusal of the leaders acquittals show the following details which did not come within the objectives of the DSG.

NO.	PROJECT 	Amount 	
1.	Airfares/Travel	K6,000.	
2.	School fees	K89,125.00	
3.	Personal House 	K77,000.00	
4.	Medical expenses 	K8,358.50	
5.	Funeral 	K1,079.00	
6.	Wages for Casuals 	K2,000.00	
7.	Consultancy 	K13,000	
8	Motor Vehicle hire 	K53,000.00	
9.	Spiritual Development 	K20,000	
10.	Purchase of Computer and Video Camera 	K35,000.	
11.	Youth/Church gathering.	K8,000.00.	
12.	Land Registration 	K2,000.	

These are purported projects which the leader had funded although they do not fall into the category of projects eligible for funding with money from the DSG. The leader allocated purported projects into various objective headings of the DSG as shown in the examples below.

1.	School fees under Education project. 
2.	Spiritual Development under Economic and Social Development Projects. 
3.	Purchase of Computer under Administration. 
4.	Medical expenses under Health Project. 

All the purported projects were acquitted in the same manner. This is contrary to the objective of the DSG under the guidelines mentioned above. The leader chose and funded various categories of purported projects which tend to be of a private nature with little benefit to the public. Although these categories of projects attract a lot of interest from electors, they are not for purposes of rural infrastructure for which the funds were allocated.

As a passing note, payment to purported project with "Cash" or "Pay Cash" cheques would not in our view, be prudent business practice when it involves public funds. Although it has been suggested and submitted by the Prosecution that cash payments were wrong, the enabling legislation or guidelines have not been referred to, to show that cash payments are prohibited.

The evidence also shows that amounts ranging from K100 – K500 were given to individuals by the leader. It is difficult to comprehend the type of projects one would get involved in, from which the public would benefit. Small cash payments under the auspices of project names could not be properly or easily verified, traced or least of all acquitted. This kind of action on the part of the leader in our view borders on mere squandering of public funds for personal benefit of a few. 

Evidence also shows instances where the leader wrote cheques for large sums of money and then distributed them to various groups or individuals in cash for named projects. However, in the acquittals the same cheque number and date are recorded for all payments made which amounts to gross negligence and abuse of public funds by a leader. 

On 28 December 2000 the leader wrote a cheque for K10,000.00 and cashed it. According to his acquittal documents it shows that he paid K4,000.00 for building houses, K500 as Travel allowance and K500.00 for Medical expenses. He acquitted these payments leader the heading of Economic and Social Development projects. The balance was distributed to nine individuals for school fees with eight receiving K500.00 each and one receiving K1,000.00. These were acquitted under Education Projects. There are no records to substantiate the spending on school fees, Housing, Travel, allowance and Medical expenses. All that is in the acquittal are the member’s acquittal and disbursement forms.

The above activity shows the leader negligence in the disbursement and acquittal of public funds. The prosecution submitted that, cash payments were wrong and should not have been paid in such manner. However, prosecution has not referred to the enabling legislation or guidelines which prohibit cash payments. Although cash payments are not prohibited, we are of the view that cash payments using public funds in the manner the leader did is devoid of prudent business practice. 

There are other practices of the leader which shows the leader did fail to ensure that public funds were applied to the intended projects. 

Various payments made by the leader for projects were deposited into accounts of the recipients. Some of the bank accounts of the recipients show that withdrawals at various intervals were made through ATMs indicating that funds were being used or spent as personal money and not on projects.

The leader had by indulging in the above activities failed to ensure that the public funds were properly applied to the rural infrastructure projects for which the funds were allocated.

We also accept the sum of K132,000.00 which the Bank froze and later returned to the leader is not covered in the present allegations because the cut-off point covered by these allegation is 7/3/01.

For the foregoing reasons we find this factual allegation proved. 

b)	Allegation 1 (iii)

Allegation 1 (iii) is that the leader converted a substantial part of that public money to his personal use and the use of his associates. 

The word "associate" is defined by S.1 of DLDRL as a member of the leader’s "family or a relative, or a person (including an unincorporated profit-seeking organization) associated with him or with a member of his family or a relative".

As to the conversion of a substantial part of the public money to his use, there is evidence of the leader benefiting directly out of public funds. There is also evidence of his associates benefiting from the funds. 

At the outset the leader converted K1,21 million of public funds as his, when he deposited two cheques into his personal account. He then entered into cash withdrawal transactions through cheque, ATM and EFTPOS machines. The "pay cash" cheque transactions were payments either to himself, or to anyone of his choice to whom he gave the cheques to be cashed. The total amount of "pay cash cheques" is in excess of K300,000. ATM cash transaction account for K3,530 and EFTPOS cash payments account for K4,029.10. The total amount of cash transactions is therefore in excess of K307,000. This figure alone is far in excess of his own credits going through his account in the relevant period, which is K34,009.49. Many of these cash payments are not accounted for. Some of the cheques were cashed by his wife, his daughter, and other people associated with them. Some payments were made to people in the public service and even to his own electoral staff.

The projects eligible for funding by DSG are ones in which the community as a whole will benefit. These are set out in clause 8 of the Guideline: 

•	Construction, upgrading and maintenance of roads and hiring and purchase of equipment. 
•	Improvement of maritime and assisting infrastructure. 
•	Construction, upgrading and maintenance of education and health facilities. 
•	Utilities 	- 	water supply and sewerage 
-	rural electrification 
-	rural telephone
•	Economic activities - Agriculture infrastructure 
-	Self-employment and income generation.
•	Funding of National Independence Day related activities.

Clause 3 provides restriction against use of DSG funds for immoral or illegal activities and other activities in which an individual will benefit. These are: 

•	Illegal and immoral activities 
•	Payment of bride prices.
•	Personal expenses which include household and equipment, travel fares, entertainment and related. 
•	Any business fully or part owned by the leader; and 
•	Buying shares in brokers for individual members. 

In appendix 2 of Mr. Pambel’s submission (yellow pages), he sets out 41 items of cash transactions which cannot be properly verified and the purpose for which the money was used cannot be verified or confirmed. The defence has called some of these witnesses to explain receipt of the money for designated purposes. We find that many of these expenditures did not come within the eligible projects, but for the benefit of the individuals who received the payment or which in turn benefited the leader. We give only a few examples. 

1.	Education. 

A total of some K504,304.00. out of this K89,125.00 was spent on school fees alone for people he knew or was associated with. Some sixty people benefited. Figures range from K100 – K3,000. Some of the beneficiaries are:

a)	Pay cash cheques for K10,000 cashed by his wife Regina Hagoria, who paid school fees for 7 people including Nellie Hagoria (K1,000) who is a relative of the leader. 

b)	Julie Hagoria had K1,000.00 paid into her account to pay to Julie Warifi’s school fees. Julie is the leader’s daughter. 

c)	Michael Wapi received K3,000.00 for school fee. He is a cousin of the leader. (from his mothers’ side).

d)	Alice Ifangu received K1,500.00 for school fees.

e)	Julie Warifi received K1,000.00 for school fees. 

f)	Wesley Wiho received K725.00 for school fees. 

g)	Ben Manai received K1,500.00 through George Kuari from the leader; for school fees.

h)	George Kuari received K2,800.00 for school fees for himself, Ben Manai and Wesley Wiho. 

i)	Adrian Lohip received K1,000 for school fees.

j)	Carol Ifungu received K1,500 for school fees for her 3 children. 

k)	Nellie Humintaha received K1,000 for school fees. 

l)	Carmel Yedelai received K1,000 for her school fees. 

m)	Philisa Phau received K2,000 for school fees. 

No school receipt for any of these payment have been provided. School fees is a personal expense which should not be paid out of discretionary DSG funds. It is unfair to other school-going children and their parents in the electorate for a select number of student’s school fees to be met by a member’s discretionary fund at the expense of others. School fees for selected individuals is not eligible for funding under discretionary funds. If payment of school fee were a proper community project to be funded by the members discretionary funds, then he should paid school fees for every school-going children in the Yangoru-Sausia electorate. 

2.	Ward Improvement.

Under this item, the leader in over 40 instances spent K140,000.00 of amounts ranging from K500 – K4,000. Out of this amount, the leader spent K77,000 to build private houses for people he knew or was associated with. Construction of private house is not illegible for funding under DSG. Examples are: 

a)	Benjamin Pori, the leader’s electoral officer and a key witness for the leader in this case, received K3,000 to complete his private house, even thought he was on the payroll and was not entitled to housing allowance from the leader. 

b)	Mathew Raikau, policeman, received K3,000.00 to build his private house in his village.

c)	Part Tango received K 2,000 to re-build his house which was burnt down by someone known to the leader.

3.	Medical Expenses.

Medical fee expenses for his associates totalled K8,358.00. Examples are K100 for medical fee for George Kuari; K1,000.00 to Mr. W. Wrondimi, K500 to Ms Bertha Ikusea, and K500 to Mark Mahe. 

4.	Air Fares.

Paid K380 for George Kuari’s private trip from Wewak to Port Moresby. Paid K2,000.00 to Rauio Aivo and family for their plane ticket from Port Moresby to Wewak of K2,000 paid.

5.	Consultancy.

Nathan Kavi, a Technical Officer with the Dept of Works received K5,000.00 to fix road which is not part of his prescribed duties. Tande Tamano, a Southern Highlander, received K2,000 to produce a newsletter for Yangoru-Sausia. Such project is not included in the eligible project list. Private Lawyer Philip Ame was paid K5,000 for verbal legal advice given to the leader on DSG funds. Mr. Ame was also the lawyer for his election petition case. For these payments there is no project proposal form submitted to the leader nor is there any receipts or fee notes issued by any of the consultants. . 

6.	Spiritual Development.

Paid (two)2 priests K10,000 each. One of them is the leaders’ relative. It is not clear if the cheques went to private accounts or Parish bank account. Bank statements show that the money was paid into accounts operated in the priests names. 

7.	Funeral Expenses: For the late Elwin Wahamin of K2,000.00 was paid. 

8.	Mobile Phones: Julie Sengi had a mobile phone and accession of K1,000 paid. 

9.	Land Registration Fees: Gabriel Sengi had his land registration fee of K2,000 paid. 

10.	Video Camera: Greg Gulam was paid K10,000 for a video camera set for Dugusu Youth Group. 

11.	Coffee Pulp Machines: White Corner Investment P/L of Lae was paid K46,2000 for 100 coffee pulp machines to be given to individuals of the leaders choice. Members discretionary funds should not be used to enrich individual members of the electorate at the expenses of others. If the expenditure is of community benefit, then every person in the electorate who grows coffee should be supplied one coffee machine. 

12.	Private Road Works: Mr Wong Tin Chai received two payments totalling K50,000 for road works without rendering his invoices and receipts and the job being put for public tender. The money went to his private bank account, not company bank account. 

13.	Purchase of Vehicle: Paid K15,000 to Avis-Rent-A-Car in Port Moresby for a general hired vehicle to be used in Port Moresby, offices, associates and etc. Discretionary funds are for the use and benefit of the people in the member’s electorate only; not for the use of people associated with the member outside of the electorate.

In addition to the above, we infer that all cheques pay cash transactions, ATM cash withdrawals and EFTPOS payments of over K645,000.00 are unverifiable and not properly accounted for.

From the numerous withdrawals the leader did apply some of it for his own use which included loan repayments and cash withdrawals. (see Exhibit "Y").

The leader contends that he did not apply the public funds to his own use. His loan repayment of K301.00 was also debited from his account every pay day. It is hard to comprehend how his salary could have been isolated for personal use from the public funds when they were all in the same account. When the public funds were deposited into his personal account the funds became his personal money to be used at his pleasure which he did.

The leader’s acquittals show that money he used for himself balanced out well with the Credits which came out of his salary. He says because of this it already shows that he had not used for himself any of the public funds.

However the prosecution witness Mr. Olley’s affidavit and spread sheet (see Exhibit "Y") shows that based on the withdrawals by the leader, there was a credit of K16,231.09 and a debit of K31,344.12. This would have left the leader in a debit balance of K14,391.16 by 7/3/01. He shows this to be what the leader’s financial situation was without the public funds.

It is our view that Mr. Olley’s proposition should be believed and accepted. We find that the leader has done some mathematical manoeuvring to even up the numbers when in fact it was a different scenario altogether.

We are of the view that the leader had used the public funds as a cushion or buffer to prop up his personal account when in fact he was in debit balance a lot of the times. We are of the firm view that he did apply to his own use public funds he had earlier converted through the deposit.

Misuse or misappropriation of public funds require an element of dishonesty on the part of the leader in the manner in which he receives the funds and applies them. We are satisfied that the leader’s conduct in this case was tantamount to dishonesty in the way he received those funds to which he was not entitled to be paid in person and applied a substantial part of it, of around K645,000, to his own use and the use of his associates.

For the foregoing reasons, we find this factual allegation proved.

(3): 	Allegation 1(iv) (v) and (vi): The leader acted improperly in making approximately 77 cheques "pay cash" transactions; approximately 76 ATM debit ATM transaction to obtain cash; and approximately 55 EFTPOS debit transaction; which were unidentifiable and/or improper debit transactions.	

Mr. Pambel submits that it was improper of the leader to deposit the two cheques into his personal account and make cash withdrawals or payments from the personal account, either through "pay cash" cheques, ATM cash withdrawal or EFTPOS cash payments because they cannot be verified as being for the purpose of DSG related projects, such as by reference to proper documentation in the form of requests for funds to support such cash withdrawals or payments; Mr. Steven submits that the leader’s explanation in Appendix "K" of Mr. Canning’s affidavit (Exhibit 2.1. and 2.2) together with the four(4) volumes of Acquittals and the details of the earlier summary of expenditure submitted in the supplementary Response to the Ombudsman Commission (Ex. "FF") sufficiently explains the receipt of expenditure of these funds.

In our view, following our findings in Allegation 1(i), we have no difficulty in accepting Mr. Pambel’s submissions. Any pay cash transactions withdrawals, or payments of public funds out of personal account, is for a start, improper and illegal. Further, such transactions cannot be verified by reference to any written requests for the release of those funds as required by the DSG Guideline. Cash payment to recipients are not permitted by the DSG Guidelines which requires a written request to accompany payment or receipts of expenditure.

In relation to these payments, there were a total of 79 "pay cash" cheques totalling K257,450.00. Then there were 76 ATM cash withdrawals worth K32,530.00. Only 13 ATM transactions worth K8,950.00 were made in Wewak whereas the rest were conducted in Port Moresby). Then there were 55 EFTPOS cash payment transaction worth K5,025.59, were made. Only 2 of 18 EFTPOS transactions worth K831.80 were conducted in Wewak and the rest was in Port Moresby. It is intention of the OLPLLG and DSG Guidelines that the DSG is to be paid into the District Treasury at Yangoru-Sausia and used in transaction conducted in the Yangoru–Sausia District, through the District Treasury it is improper and illegal to conduct cash transactions outside of Yangoru-Sausia area.

The DSG Guidelines, and Financial Instructions No. 3/98 require Project Proposal Forms to be submitted by each applicant for Public funds before payments are made, then proper disbursement forms to be signed by each recipient of public funds including the leader, and receipts of expenditure provided. No proper project proposal applications were submitted by the recipients for any of these payments. The disbursement form contain the acquittal folders signed by the leader, etc are lacking in verification and reliability. 

For these reasons, we are satisfied that allegation 1. (iv), (v) and (vi) have also been proved.

(4). Allegation 1 – Clause VII – Failure to Properly Acquit – 
 the K1.21 million in DSG public funds	

The allegations here is that he failed to properly acquit the K1.21 million.

The prosecution relies on the facts set out in Part C and appendix 2 of its Submission. The submission is two-fold. First the prosecution submits that there was in fact no acquittals by the leader at all made of the K1.21 million DSG money. Secondly, the prosecution submits that, the documents that were submitted to the Tribunal and which purport to be an acquittal of K1.21 million of public money are of recent fabrication and unreliable records of the disbursement of that money.

The defence on the other hand denies the allegations and submits:

(a)	that the prosecution’s evidence is not clear as to the details of the acquittal requirements such as to which authority, the frequency, procedure for acquittal including preparation and furnishing of forms to Ombudsman Commission, Finance and Treasury and Office of Rural Development or all of them.

(b)	the leader was only aware of the requirement to acquit to the Office of Rural Development (ORD) at the end of the financial year after the projects were completed. As the year were still current when the Ombudsman Commission conducted its investigation he could not complete the acquittal. 

(c)	the leader has given his reasons for being unable to do so in this case. He has also stated in his evidence that Minister Kumbakor had relieved him from acquitting earlier but before he could fulfil the requirement, the investigations by the Ombudsman Commission commenced under suspicious circumstances.

Given the leader’s own evidence about his qualification and work experience as an accountant and senior manager of public finance, we cannot accept his explanation. Acquittal of public funds by recipients is designed for recipients to satisfy the owner of the public funds that the funds have actually been expended on the designated purposes. It is the last and the most important step in a series of steps designed to ensure that public funds are properly paid out to approved recipients for targeted community projects. These steps are evident in four (4) forms attached to DSG Guidelines which we summarized earlier (see ante, pages 18 - 19). Acquittals pre-suppose that those 3 earlier steps have been properly complied with. That is, the recipients submit proper project Proposal Form (DSG-01), the JDP checks project quotes and development priority (DSG-01); the member certified that he has presented the cheque to the recipient (DSG-02) and the recipients confirm receiving the funds from the member for designated project (DSG-03). 

But that is not all. Under Part B of the DSG-02, the member is required to furnish "expenditure reports to the Office of Rural Development, immediately, after details of the items procured, scope of project work carried out, and the Bank Statement showing the actual expenditure payments or transactions made". Financial Instruction No. 3/98 is in similar terms but extends the acquitting authority to the Department of Treasury and Planning, Department of Rural Development, and the Department of the Prime Minister. This final phase of the acquittal process is the most important part of the process because it reports on the actual expenditure of the funds for their designated purposes. No acquittal is complete without this last phase. It is in the nature of public funds to acquit or account for the actual expenditure of allocated funds to designated purposes. Even if there are no proper guidelines in place, requiring receipts of public funds to account on actual expenditure, practical common sense dictates that the member and recipients of public funds, should as a matter of common duty, explain the actual expenditure with receipts of expenditure, etc. 

Forms DSG 2 and DSG 3 unfortunately as they are drafted do not clearly and sufficiently emphasized this phase enough. Form DSG 02 merely contains a statement to that effect under Part B, and DSG 03 makes no provision for it. But that does not excuse the leader from fully acquitting for the funds by providing receipts, etc. of expenditures.

Acquittal of public funds in the form of "discretionary" DSG funds is a collective process which involves the Finance Department, the District Treasury, the JDP, the member and the recipients, all of whom have different functions in administering DSG. 

But it seems to us, the way the discretionary funds have been administered in this case and perhaps in all other cases too, is that the member of Parliament has become, quite improperly, the chief and perhaps the sole critical administrator of this fund. He has improperly assumed the role of the chief planner, the sponsor or designer of projects, the approving authority, the accountant, the project supervisor and the paymaster. 

These are functions he is ill-equipped to sufficiently discharge. They should not feature in his duty statement as a leader. His proper function as a leader of Parliament is to represent the people of his electorate, a "voice for the people", for which he gets remunerated, not a technocrat or manager of public funds.

Having said all that however, we need to determine if the leader acquitted the K1.21 million. If there is any areas of increased activity by the member in the administration of DSG funds, it is in fully acquitting or accounting for how the discretionary funds were expended on the projects. With "discretion" comes responsibility - the greater the discretion, the greater the onus to fully acquit.

There is no doubt in our mind that the leader had vast knowledge and experience in dealing with Public Finances in the Public Service which includes proper acquittal of public funds. His claims over lack of knowledge of when, how and to whom to acquit for public funds is unacceptable. 

Now going back to the prosecution’s submission that no acquittals for the K1.21 million submitted to the RDO. We accept Mr Yambi Simbak’s evidence that on 8th May 2003 when he conducted a search of his office following receipt of the Tribunal’s summons, he was unable to find any of the acquittal documentation contained in the Four(4) volumes of Acquittal documents supplied by the leader to the Tribunal. There is evidence that the leader did supply a summary of the acquittals to the Ombudsman commission in his supplementary reply letter. But the Ombudsman Commission is not the acquittal authority for funds. We also have evidence from Mr. Wasori that the leader did circulate a thick folder in one of the JDP Minutes which contained acquittal documents but we have no firm evidence on this.

As to whether the acquittal documents in he four volumes are concocted, the evidence is not strong enough to support any such finding.

(a) 	Requirement for Acquittal

Clause 9 provides that recipients DSG Funds will be required to acquit any allocated funds using the Standard acquisition forms. This is a requirement to acquit for public monies, and the leader must acquit. The Financial Instruction No. 3 of 1998 – Exhibit "K" tendered by Mr Yer is also applicable. It was in operation at the time the leader received the K1.21 million from the Department of Finance and Treasury. Paragraph 6.6.2 of the Instruction provides for maintenance of proper financial records which in the Tribunal’s view includes proper acquittal records after the completion of projects.

(b)	To whom should the Leader Acquit

Clause 7 of DSG Guideline, says the RDO is the responsible authority for paying out DSG funds. The RDO is the initiating authority and therefore is a legitimate authority to which acquittals of the District Support Grants are to be made to. In this case, the leader was to acquit to the RDO. In the alternative, the District treasury in the administrative authority for receiving and pays out DSG cheques should be the proper authority to request for funds. The District Treasury should be well positioned not only to receive the DSG payments and pay them out to recipients, but should also be able to supervise, monitor and certify projects before making payments and receive acquittals form recipients. Furthermore, paragraph 3 of Part B of Form DSG 2 requires "furnishing of expenditure reports to Department of Treasury and Planning, Department of Rural Development and Department of Prime Minister and the National Executive Council (NEC)." Acquittals submitted to any of these offices would have sufficed. There is no evidence to show the leader did so. Indeed, the evidence shows he failed to do so. The leader failed to do so at the time the funds were paid out or soon after. 

(c) 	The documents required for acquittals. 

The Tribunal does not have any difficulties with the forms required by the Office of Rural Development for acquittals. It accepts the forms, (i.e. acquittal forms and the Disbursement form contained in the 4 volumes of arch lever files (see Exhibit "B". para 7, page 3 of Mr Yambi Simbak’s affidavit) as the Standard Forms. There are the same forms accompany the 1998 DSG Guidelines forming part of Policy submission No. 339/98 which were literally the same as appeared in 2000. Copies of the same forms were given to the leader by RDO when he collected the second DSG cheque. 

(i)	The date
(ii)	Cheque No. 79425
(iii)	Amount: K10,000.00
(iv)	The Project: For education
(v)	Supporting documents: No. 7-4.36

The defence to a large extent relied on Appendix "K" prepared by the leader contained in volume one (1), in which the leader had attempted to show how he had expended K1.21 million. The Appendix "K" is an explanation of what is contained in Volumes 1, 2, 3 and 4 which the leader claims to be sufficient as showing how the K1.21 million has been properly acquitted.

For example: The Kuiakom Elementary School Project. The leader has the following explanation on Appendix "K".

When consulting the reference 7-4.36, the Tribunal finds the following documents attached:

(i)	Members Acquittal Form (DSG.02 Form) with necessary details filled in and witnessed by Mr B. Pori

(ii)	Members Disbursement Form (DSG. 03) with details filled in and witnessed by Mr B. Pori.

(iii)	A photograph of a building which appears to be incomplete with the following notations:

Ref: 31 – Cheque No. 79424 – K10,000.00
Double Classroom (upstairs & downstairs)
Kuiakom Feeder School under construction.

Ref: 7 – Paul Weki - Timber
Cheque No. 369654 – K10,000.00
Kuiakom Feeder School

The Standard Forms the leader filed to show that he had acquitted the public money are: Member’s Acquittal Form and the Member’s Disbursement Form on Kuiakom Elementary School Project. The question is: Does this comply with the requirements of the Guidelines for District Support Grants (Exhibit "E") and the Finance Instruction No: 3/1988 (Exhibit "K")? We conclude in the negative. There are other documents that the leader should have filed beside the two forms we have referred to above and the photo attached. One of these forms is Project Proposal form DSG Form 1. The leader did not compile this form for this project and any of the projects he says he funded. Then there are no quotations for building materials, receipts from suppliers, sketch plan of building, bank statements, etc for this or any other projects he says he funded. In some cases, there are photographs of the buildings but there is no independent confirmation from District Treasury or RDO officers. We say this is important because in the period between December 2000 – March 2001, when these projects were said to have been carried out, the leader was also receiving other DSG payments fro 2000 and 2001 which he could have used to fund projects in the same electorate and it is necessary to delineate the projects funded under the K1.21 million.

In respect to the monies expended by the leader on school fees, receipts from the schools concerned should have been attached to the Member’s Acquittal form and the Member’s Disbursement Form.

We find that these vital information were not in the four volumes of arch lever folders compiled by the leader (see Exhibit "HH.1 – HH.4").

(d)	When should the Leader Acquit?

The Guideline and the Finance Instruction that were in operation at the time the leader obtained the money – Exhibit "E" and the Finance Instruction No. 3 of 1998 – Exhibit "K" may be said to be silent on when or the time the leader should acquit to the authorities.

The prosecutor argues that the leader should have acquitted after the completion of each project. The defence however argues that the leader was to acquit after all the projects were completed and suggested a period of twelve (12) months or at the end of the financial year after projects were completed.

To answer this issue there is a need to spell out the type of projects the leader had the K1.21 million expended on and the period required for completion. This would put the issue of when the leader was required to acquit in a clear view. The Exhibits "HH" – Mr Hagoria’s four (4) volumes of acquittal: Exhibits "HH.1" - Vol 1, "HH.2" Vol 2, "HH.3" – Vol 3, "HH.4" – Vol 4 contain the projects which the K1.21 million was expended on by the leader. "HH.1" - Vol. 1 – Education Infrastructure & Development. These projects required longer period to complete. HH.2 Vol. 2 – contains projects noted as Education Infrastructure and Development, but in real term were for school fees. The payments made for these "projects" required were mostly immediate shorter period for completion. E.g. payment of school fees, medical expenses, funeral expenses etc as follows: "HH.3" – Vol. 3 – contains projects. 

(i)	Funeral Expenses – Mr David Bandi for K1,000.00. This project required a short period to complete

(ii)	Hua and Nianguma Brothers Trading Business Registration for K2,000.00. This project required short period to complete.

(iii)	Medical Expenses for Mr William Wrondimi for K1,000.00. This project required short period to complete.

(iv)	Medical Expenses for Bertha Moses for K500.00. This project required short period to complete.

(v)	Medical Expenses for Mr George Kuari for K100.00. This project required short period to complete.

(vi)	Medical Expenses for Mr Mark Mahe for K500.00. This project required short period to complete.

There are other projects contained in Volume No. 3 that required short and long period to complete. "HH.4" – Vol. 4 – This volumes contains Wards Improvements Projects which consists mainly of financial assistance for construction of the applicant’s houses. These projects required both long or short periods to complete as it depended on the scope of works. It is clear from the above that some projects contained in the four (4) volumes required long and short period to complete.

It was said earlier that the Guidelines – Exhibit "E" is silent on when the leader is required to acquit to the authorities concerned. However, on the Treasury and Planning Form, DSG. 2, attached to the Instruction at the back, which we have already mentioned above at paragraph 3, the following can be read: "Furnishing of Expenditure reports to the Department of Treasury and Planning, Department of Rural Development, Department of Prime Minister and the National Executive Council (NEC), immediately after expenditure details of the items procured" etc. The striking words here are "immediately after expenditure details of the items…" These words mean that as soon as a project is completed, acquittal must be submitted immediately on the actual expenditure which should include details of the items procured, scope of works carried out, and the Bank Statement showing the actual expenditure payments or transactions, and receipts, quotations, Project Proposal Form, Acquittal Forms, Members Disbursement Form, and any other documents on actual expenditure payments or transactions made on the projects identified both by the leader, and the Joint District Planning and Budget Priority Committee. Therefore, where projects are completed in a short period, the leader must acquit and where a project requires long period to complete, the leader must also acquit immediately after its completion. Acquitting the short period projects quickly would allow the leader to concentrate on the long period projects when it comes to acquitting for them after their completion.

We are satisfied that the leader had failed to properly and fully acquit for the K1.21 million either to the RDO, Department of Treasury and Planning, Department of Prime Minister or the NEC.

As we have already said, we reached this conclusion after accepting the affidavit of Mr Yambi Simbak (Exhibit "B") Annexure "A" of the Mr Simbak’s affidavit which contain the only acquittal document received from the Yangoru-Sausia District are not the same as the documents contained in the four volumes of arch lever folders. We are also satisfied that the acquittal documents submitted by the leader during the course of the Tribunal’s inquiry as contained in the leader’s 4 volumes of arch lever folders are not proper and full records of the disbursement of that money, and they are unreliable.

There is some evidence from District Administrator Mr. Wasori who said in one of the JDP meetings in early 2001, the leader circulated a third folder containing acquittal documents for project funded under the K1.21 million DSG funds. But there is no firm evidence on this.

For these reasons, we find the factual allegations in allegation (vii) proved. 

6.	Determination of breaches of duties enumerated in s. 27 (I) and (2) of the Constitution.	

(i)	Preliminary objections:

In para 85-106 of his submissions, Mr. Steven submits that the allegations made under s. 27(I), (2) and (5), are lumped together in the same allegation. In the case of s. 27(1), the different duties are listed conjunctively and not disjunctively as provided for in s. 27(I). Therefore, this allegations are fundamentally flawed because they are vague, uncertain and bad for duplicity and should be struck out. 

In our view this submission in itself is flawed because firstly the leader has forgotten the fact that upon application of the prosecution, the tribunal granted leave to the Public Prosecutor to amend the different duties enumerated in allegation 1 to substitute the word or for the word "and". The application was contested by the defence and we granted the application. Secondly, the issue of duplicity were not raised at the commencement of the inquiry when ample opportunity was given to the leader to do so. 

Thirdly, in any case, we do not consider issues of duplicity are open to be argued under these provisions. For these reasons, we reject this submission. 

The other issue raised by para. 185-197 of Mr. Steven’s submissions is an important one. Mr. Steven submits the leader; s failure to open a trust account to which the K1.21 million would be paid into, was frustrated by the lack of assistance from the RDO, the Finance Department, the Provincial Treasury and the fact that he was not provided a copy of the DSG Guidelines and Financial Instruction at the relevant time. He submits the leaders actions was not motivated by improper or criminal intention, but rather "has a valid reasons for not doing so".

However, we have already rejected similar arguments as being unacceptable under para. V.1 hereof.

(b)	Breaches of duties

Mr. Pambel submits that the leader’s actions breached all the duties enumerated in s.29(1) and (2) of the Constitution. He submits the prosecution has discharged its onus of proving the breach of all these duties to the required standard.

Mr. Steven submits that the prosecution has failed to produce evidence to show the leader’s integrity is doubtful and that he is unworthy of continuing as a leader because he has breached the duties. The mistakes, if any, that he committed is not deliberate, but caused, or prompted or contributed to by the difficult circumstances he was placed in and that he has provided valid reasons for so doing; and provided substantial evidence to explain where the funds were expended for authorised projects. These have not been contradicted or rebutted by evidence from the prosecution. In those circumstances, the prosecution has failed to discharge its onus to the required standard and the leader should be found not guilty of these duties. 

In our view we have no hesitation in concluding that either the individual allegations of factual particulars pleaded in (i) - (vi) (inclusive) on their own and/or the totality of those factual particulars which we have found to be proven before us, clearly constitute a breach of all of the duties enumerated in s. 27 (1) and (2) individually and/or collectively. We are satisfied that the prosecution have proved to the required standard of proof, the following:

1.	Mr. Hagoria placed himself in a position of conflict of interest when he improperly and unlawfully received the two DSG cheques totalling K1.21 million which were improperly and unlawfully issued in his name, and hand it paid into his personal bank account; failed to follow proper procedures for requesting and approving such funds; and failed to properly and fully acquit for expenditure of all the funds; and used some K645,000 of the funds to benefit himself or his associates. 
2.	In so doing, he demeaned or lowered the standing of his office as the member for Yangoru-Sausia in the National Parliament and the East Sepik Provincial Assembly; 
 3.	Allowed his official integrity as a National leader and personal integrity to be called into question. 
4.	His actions endangered respect for and diminished the integrity of the good government of Papua New Guinea and the District Administration of the Yangoru-Sausia electorate, and the people of that electorate. 
5.	His actions gave rise to serious doubt in the mind of the people in his electorate, the people of ESP and the people of PNG generally as to whether he was carrying out the duties imposed by s. 27(1) or carrying out a scheme to personally benefit himself and his associates and his political supporters.

For these reasons, we find the leader guilty of misconduct in office under allegation 1. 

VI. Allegation 2: using his official position to accept benefit for himself by accepting two cheques for K1.21 million and depositing them into his private bank account contrary to s. 5(1) of the OLDRL. 

Mr Pambel submits that these two DSG cheques were not authorized by law to be paid to him in person and by receiving these two cheques and paying them into his personal account, he breached his duty under S.5(1) of OLDRL. Mr Steven submits that the elements of this duty not been proved in that there is no evidence that the leader asked for the monies for himself and that the leader personally benefited himself. The leader, has shown acquittal documents that he did not use the funds for himself. The DSG grants were rightfully payable to the electorate and the leader was entitled to request for and receive them. During argument we referred to and interpretation of s. 5(1) of the Organic law in the Kumbakor, decision, in which we said "we do not think s. 5(1) of the OLDRL applies to this type of situation where a leader accepts payment of his own entitlements. This provision applies to leaders who receive additional side benefits as reward for portraying his official duties as a leader for which he is receiving a salary and allowance from the State (p.15)." We still maintain this view.

In the present case we are satisfied that the DSG payments were due to the electorate through the District Treasury. The leader had no right to receive the cheques improperly and illegally made out to him in the first place. A personal bank account is under the exclusive control of the customer’s. Monies paid into the account are for the personal control, use and benefit of the customer. The customer has unlimited access to funds in his private bank. We are therefore satisfied that he accepted a benefit for himself by using his official position as member for Yangoru-Sausia electorate, by paying the two cheques which were improperly and illegally issued to him under his name, into his personal account. We find him guilty on this count.

VII. Allegation 3: Intentional application of money under the control of the State to unauthorised purposes contrary to s. 13(a) ORDRL. 

The elements of this duty are accurately set out by Mr Steven. The prosecution must prove that the leader must intentionally apply public funds which is under the control of the State, to purposes other than their designated purpose. 

Mr Pambel submits that the State that when the leader intentionally deposited the two cheques into his personal account breached S.13(a). The prosecution relied on the mere deposit of the two DSG cheques into his personal account as constituting the breach of S.13(a) and not any purported application. He submitted the act of depositing the two cheques into his private account amounted to "an application" of the funds. Mr Steven submits the prosecution has not proven that the leader had a criminal intention to apply the funds, that the funds were not under the control of the State anymore when the cheques were drawn up in his name and paid into his account; and that funds were "discretionary".

In our view, OLDRL, s. 13 entitled "Misappropriation of funds of Papua New Guïnea" relates to the actual application of public funds belonging to the State, to purposes other its designated purpose. The mere act of depositing a cheque into one’s private bank account does not fall into the definition of "application" under S.13(a). Therefore on the facts advanced before us, we conclude that this count is misconceived. We find the leader not guilty on this count. 

VIII. Allegation 4: Improperly accepting two DSG cheques, paying them into his personal account and issuing 77 pay cash cheques contrary to s. 5(1) OLDRL 

Mr Pambel submits the evidence shows that 77 pay cash cheques were issued for the benefits of himself and his associates; that he used his position to claim those DSG funds and used them to benefit himself and his associates. 

Mr Steven submits there is no evidence from the State to prove the leader or his associates benefited from those cash withdrawals. The evidence from the leader shows he applied the funds for their designated purposes. 

In our view, cash withdrawals of public funds improperly and illegally issued to the leader, and deposited into his personal is improper because they cannot be verified and properly accounted for and should not be allowed. As we observed in the Kumbakor’s case:

"Money they say is the "root of all evil. No one seems to trust anyone when it comes to "hard cash". People tend to spend cash belonging to themselves or held in trust on behalf of others lavishly and quickly and when required to account, go to extreme lengths to give excuses of all kinds". (p.11). 

We find that the issue of pay cash cheques in many instances, issued by the leader, to be cashed by all manner of people, including his wife, is certainly of benefit to himself and his associate. We find the leader guilty on this count. 

IX. Allegation 5: Having accepted and paid the K1.21 million into his personal account, he improperly issued 77 "pay cash" transaction contrary to s. 13(a) of the OLDRL. 

This allegation is a repeat of Count 3. The same submission are advanced. Although this Count is worded differently to Count 3, to include issue of 77 pay cash cheque transactions, the same submission made in Count 3 are repeated here by the prosecution. It seems they are relying on the mere issue of pay cash cheques as constituting "application". For similar reasons we gave in Count 3, we conclude this Count is misused. We find the leader not guilty on this count.

X. Allegation 6: Having accepted K1.21. million in public funds, and deposited into his personal account he improperly made 76 ATM withdrawals" contrary to s. 5 (1) of the OLDRL. 

The Count is similar to Count 4. Similar submission in relation to Count 4 are made. For the same reasons we gave in Count 4, we find the leader guilty on this count. 

XI. Allegation 7: Having accepted K1.21. million in public funds and paid into his personal account, he made 77 ATM cash withdrawals contrary to s. 13(a) of the OLDRL. 

This Count is similar to Count 3 and 5. The same submission are advanced. For the same reasons we gave in Count 3 and 5, we find the leader not guilty on this count. 

XII. Allegation 8: Having accepted K1.21. million in public founds he improperly made 55 ETPOS cash payments to obtain personal goods that services for his benefit of himself and his associates, contrary to s. 5.(1) of OLDRL 

This Count is similar to Count 2 and 4. Similar submission are made in respect of this Count. We note that most of the transaction were conducted in Port Moresby and not in Wewak. We conclude from this that the payment would not have benefited the people of Yangoru-Sausia. For the same reasons we gave in Count 2 and 4, we find the leader guilty on this count.

XIII. Allegation 9: Having accepted K1.21 public funds and deposited them into his personal account, he made 55 unverifiable /or improper EFTPOS cash payments for goods and services to benefit himself contrary to s. 13(a) of the OLDRL.

This allegation is similar to Counts 3, 5 and 7. Similar submissions were made. We note that most of the transactions took place outside Wewak. We note from this that these payments in no way benefited the people of Yangoru-Sausia, but only the leader. We find the leader and guilty on this count. 

IXX. Conclusions, Directions and/or Recommendations to Administering Authorities For Future Administration of DSG Funds.

The nature of the allegations of misconduct made against the leader has been centred around the receipt of two DSG cheques for K1.21 million, the payment of the two cheques into his private bank account, the conducting of improper and unverifiable cash withdrawals or cash payment transactions out of this account, improper and unverifiable payments to improper purposes including payments to himself and his associates, and failing to fully acquit the expenditure of these funds to appropriate authorities. This amount K1.21 million is a large amount of money. Of this amount, K132,241.44 was frozen on 7/3/01. In the period between 15 December 2000 – 7 March 2001, a period of 2 months 3 weeks, the leader had conducted numerous transactions on his private account, of which there are 208 cash withdrawals or cash payments. In that short period some K1,077,758.56 was used up. The frequency or velocity of the transactions was so high or far too frequent for anyone to keep pace with. and accurate accounting for these payments becomes impractical. For instance, on 24/1/01 alone, we find the leader’s cheque butts show a total of 17 cheques issued for amounts ranging from K1,000.00 to K50,000.00, to the total tune of K81,000.00. Notable ones include 14 "Pay Cash" cheques totalling K28,000.00. One can only imagine the sudden explosion of project activities in the electorate with the PNGBC being kept busy with people cashing cheques. This kind of transactions in a short period of time makes it difficult for anyone to properly account for or explain every toea or kina against every project. We too have found it difficult. Hence, our discussions and findings have largely focused on the totality of the whole transactions, rather than any specific project or figure. We have approached the factual allegations and duties alleged to have been breached so in that way.

We take the first count to be the main one. The other 8 counts are a repeat of parts of the first count and the charges appear to be a duplication of charges of breaches of duties under s. 27 of the Constitution. And so much of our deliberations have been focused on the first count. In the end we have no hesitation in concluding that the totality of the proven allegation constitute gross abuse of DSG funds and likewise amounts to serious breach of the duties set out in S.27(1) and (2) of the Constitution and S.5(1) of OLDRL.

Having reached this conclusion, we feel our task of investigating these allegation would not be complete without making practical recommendations or issuing directions which are consistent with our finding on Constitutional scheme of the DSG, the guidelines and financial instructions As a quasi - judicial body constituted by the judicial officers, we believed it is part of out duty to investigate and inquire into alleged breaches of leadership duties stipulated by constitutional laws, to interpreter and apply those laws, point out anomalies in statutes, executive guidelines or administrative instructions which are inconsistent with those constitutional laws, and make recommendations in imperative terms. For that reason, we prepare to use the word directions in the alternative to the word recommendations. In making these recommendations or directions, we endorse the concept of DSG going directly to the people at the District, community or village level. Given the vast diversity and remote geographical location of the people in this country, the members of Parliament are necessary link between the people at the village level and the National Government, for channelling public funds, but we say that it is equally important that this must be done properly and lawfully, to ensure that the people benefit from the DSG and not abused by individual members of Parliament and bureaucrats.

Our recommendations or directions are:

1.	Department of Finance and Treasury is the proper/lawful authority for administering DSG fund money; and not the Office of Rural Development (RD0). The RDO’s function is to divide policy for rural development and co-ordinate or oversee the implementation of those policies. All financial transactions including raising of payments or cheques for projects approved by the JDP or by the Member of Parliament, should be processed by the Department of Finance and Treasury. The RDO should cease its bank account and cheque raising facilities. The RDO and JDP and Member should be only involved in receiving application for project funding and approving projects, and overseeing implementation of projects and accounting for project expenditures by recipients.

2.	The Department of Finance should set up District Treasuries to receive DSG funds and process payments. It should have in place Trust Accounts which have the ability and equipments to process cheque payments to recipients of projects. No DSG payment should be made to Districts by the Finance Department until District Treasuries; are set up.

3.	The National Department of Finance and Treasury should issue DSG cheques, warrants or CFS, to "District Treasuries", not "District Treasurers" or any individual person, including the leader. No member of Parliament should be issued with DSG cheques, either in their own name or under any other name. The payment should be made direct to the District Treasury; and not through the Provincial Treasury. No member of Parliament should be permitted to collect DSG cheques destined for "District Treasuries". Normal procedure for transferring funds from the National Department of Finance and Treasury should be followed in effecting payments to District Treasuries.

4.	District Treasuries are the sole authority for administering DSG in the Districts. Cheques should not be processed for payment until the District Treasury is satisfied that there is a proper and fully completed Project Proposal ‘form 9DSG1) duly approved by the JDP or the member. The payment in cheque in respect of discretionary funds should be made to recipients by the District Treasurer "on behalf of the member"; not presented by the member. Before releasing any payment for projects, the District Treasurer and the member and JDP should check and verify the project’s commencement and up to completion.

5.	Acquittal of funds should be made by the leader and the recipients directly to the District Treasurer and to the JDP. Full acquittal is required including "furnishing of expenditure reports, details of items procured, scope of project work carried out, Bank Statements showing actual expenditure payments or transactions made." Acquittal should be made "immediately after" the project is completed and payment received.

6.	Effective communication and dialogue be established between Office of Rural Development, JDP, District Treasuries and Department of Finance to ensure that Government policies for bringing social and rural development to the people is achieved.

7.	The NEC, Finance Department and Office of Rural Development and Department of Finance and Treasury immediately take appropriate steps to review and amend the respective DSG guidelines and Financial Instructions issued in 1998 and 2000 to render them consistent with s. 95A of OL PGLLG, in accordance with these findings and recommendations/directions.

8.	The Ombudsman Commission as part of its duty to enforce breaches of the Leadership Code should assist the Office of the Rural Development and the Department of Finance and Treasury to publicise these finding and recommendation/directions for the benefit of members of Parliament and the general public.

PUNISHMENT
(3rd September 2003)

BY THE TRIBUNAL: The tribunal found the leader, Mr. Bernard Hagoria, guilty on Counts 1, 2, 4, 6, and 8. The tribunal is required by s. 28 (1)(g), (1A) of the Constitution, s. 27 (5) of the OLDRL, and s. 2 of the Leadership Code (Alternative Penalties Act Ch. No. 1A)) to make its recommendation on the appropriate penalty, to the Head of State.

Penalty provisions

Section 28(1)(g) and (1A) of the Constitution provides:

"For the purpose of this Division, an Organic Law –

(g)	shall establish independent tribunals that:- 

(i)	shall investigate and determine any cases of alleged or suspected misconduct in office referred to them in accordance with the Organic Law; and 
(ii)	are required subject to subsection (1A) to recommend to the appropriate authority that a person found guilty of misconduct in office be dismissed from office or position; 

(1A) the Organic Law may provide that where the independent tribunal referred to in subsection (1)(g) funds that:-

(a)	there are no serious culpability on the part of a person found guilty of misconduct in office; and 
(b)	public policy and public good do not require dismissal it may recommend to the appropriate authority that some other penalty provided for by law be imposed". 

Section 27 (5) of the OLDRL provides:- 

"If the tribunal finds that a person to whom this law applies is guilty of misconduct in office, it shall recommend to the appropriate authority that:- 

(a)	he be dismissed from office or position; or 
(b)	as permitted by s. 28(1A) (further provision related to the Leadership Code) of the Constitution and in the circumstances set out in that subsection – some other provided for by an Act of the Parliament be improved." 

Leadership Code (Alternative Penalties) Act 1976, s. 2 provides: 

"2.	Alternative penalties. 

The penalties that may be recommended and imposed under and for the purposes of s. 28(1A) of the Constitution and s. 27(5)(b) of the Organic Law are that the person found guilty of misconduct in office:- 

(a)	be fined an amount fixed by the tribunal, not exceeding K1,000; or 
(b)	be ordered by the appropriate authority to enter into his own recognizance in a reasonable amount, not exceeding K500.00, fixed by the tribunal that he will comply with Division III.2 (Leadership Code) of the Constitution and with the Organic Law during a period fixed by the tribunal, not exceeding 12 months from the date of the announcement, under s. 27(6) of the Organic Law, of the decision of the tribunal; or
(c)	be suspended, without pay, from office or position for a period not exceeding three months from the date of commencement of the suspension; or 
(d)	be reprimanded,

or if he is a public office-holder as that expression is defined in Section Sch. 1.2(I) of the Constitution, that, as determined by the tribunal—

(e)	he be reduced in salary; or 
(f)	if his conditions of employment are such as to allow of demotion – he be demoted.

Types of Penalties

There are two types of penalties in these provisions. The first is dismissal from office or position. The second is alternatives to dismissal, which range from a fine not exceeding K1,000; to reprimand or demotion. As to which penalty of the two penalties is to be recommended is in the tribunal’s discretion. Whilst the maximum penalty of dismissal is of course reserved for serious cases of misconduct, the alternative penalties may be recommended where the tribunal finds that "there was no serious culpability on the part of a person found guilty of misconduct in office and public policy and the public good do not require dismissal": Constitution s. 28(1A); OLDRL, s. 27(5).

We approach the determination of penalty in this way. It is different from determination of an appropriate penalty in a criminal case by a Court of law following conviction. Unlike the courts, it is a two-phase process in which the tribunal should first determine whether the maximum penalty of dismissal is warranted applying the two criteria prescribed by the Constitution, s. 28(1A) and OLDRL, s. 27(5). If the tribunal finds from its earlier findings of misconduct, facts that there was serious culpability on the part of the leader, coupled with considerations of public policy and public good require dismissal, then the tribunal should so recommend. If the tribunal finds that dismissal is not warranted, then the tribunal must proceed to the second phase, which is to consider the alternative penalties prescribed by the Leadership Code (Alternative Penalties) Act. Under the first phase, the scope and extent of the deliberations is largely focussed on issues of culpability already determined by the tribunal, which mostly relate to the factual circumstances of the misconduct, the nature of the position or office held, and the nature of the breach of the public duty imposed on the leader. Personal factors which mitigate or aggravate the misconduct such as the leader’s personal and family background, his educational and work background, his standing in the community, his lack of previous criminal or disciplinary conviction against him name and so on are also relevant considerations under the first phase but they are not the main focus. Many of those factors are more relevant in determining the appropriate penalty within the range of alternative penalties provided in the Leadership Code (Alternative Penalties) Act. In a criminal case the court considers all relevant factors in a single phase process, including the degree of culpability and then determines the appropriate punishment from a variety of alternatives which fall within a range of penalties under a single maximum penalty. 

This same approach is advanced before us by Mr. Pambel for the prosecution. In our view, this is the correct approach. A similar approach was adopted by other tribunals including re Ted Diro [1991] and in re James Eki Mopio [1981]. 

Submission on penalty. 

After we found the leader guilty on counts 1, 2, 4, 6 and 8, we gave the leader opportunity to address us on penalty before his counsel’s address. He said he came into office in a difficult situation and it was not his intention to misuse the funds. He had done his best to carry out his responsibilities as a leader. He was never told about the wrong regarding the two cheques. He cannot be held responsible for that he did as it was done to the best of his ability. He fully disclosed what he did to the Ombudsman Commission. He said he was a victim of an inefficient bureaucratic system and procedure. 

Mr Steven submits that the tribunal consider imposing an alternative penalty to dismissal. On the issue of serious culpability, Mr Steven submits as follows: 

1.	Payment of cheques in the name of the leader was wrong in law but that was the prevailing practice. 
2.	Despite that, he was prompted by the apparent abuse and failure by the provincial treasury to acquit for District funds, to take preventive measures as follows: 
(a)	He leader was involved the JDP and BPC in deciding the priority areas of funding and informing it when the funds were received and how the funds were expended. 
(b)	Efforts were made by the leader to have earlier funds acquitted. 
(c)	The leader attempted to set up District Treasury. 
3.	The leader’s education and qualification as an accountant featured predominantly in the tribunal rejecting his evidence. However "even if he was not an accountant the situation in which he found himself would have led to the same event now found to be erroneous." (para. 32 of Mr. Steven’s submission on penalty). 
4.	That the law in respect to the District Support Grant was radically charged. Despite these changes, the leader did take steps which were testimony of his intention to fulfil his role as a leader with his general appreciation of the system under the Public Finance (Management) Act. 
5.	That the leader’s efforts from the beginning to establish a trust account was frustrated by bureaucrats, both at Wewak and Waigani. This was further complicated by the fact that he was not given the relevant Guidelines and Financial Instruction. 
6.	Going by the strict legal interpretation that has been followed, even if the cheques were returned by the leader, it would have been legally impossible for the electorate to have received the funds because only the District Treasury would have lawfully received such fund and there was no District Treasury in place then. 
7.	In respect to allegation 1 Clause Vii (failure to acquit), the leader submits that he made a mistake but that the mistake was sincere. He submits that as the period between the end of December and early January was school period, most expenditure was school-related, either for school fees or for school projects. This was to ensure that education as a major priority area was not ignored. This was reflected in the velocity of the spending. 
8.	That neither he nor his family members personally benefit from the K1.21 million. As to the submission of personal enrichment, the leader relies on the decision of the Supreme Court in Nikare [1998] PNGLR 473 and the recent tribunal decision of Mao Zemming and Peter Peipul.

Mr Steven submits that in the above circumstances, it cannot be said that there was serious culpability on the part of the leader. He also submits that the public policy and public good requires that the leader continue to serve his electorate as their member because to dismiss him from office would mean that the electorate would suffer, in that the projects which have been initiated by him would not continue and the people would have once again be without a leader for a long time, as it was in the past.

Mr Steven urged us not to dismiss the leader but to consider imposing an alternative penalty under s. 2 of the Leadership Code (Alternative Penalties) Act of 1976. He said the leader should be given a fine in a sum fixed by the tribunal for each proven allegation. In the alternative pursuant to s. 2(a) and (c), the leader should be suspended from duty without pay for three months during which time he pays the fine. 

In response, on the issue of serious culpability, Mr Pambel submits that the tribunal has already found serious culpability on the part of the leader, based on the totality of the proven allegations. On the issue of public policy and public good, he submits the leader’s misconduct is the most serious case of misconduct in the history of Leadership Tribunals in PNG, considering the amount of money involved and the improper and illegal manner in which the money was obtained, paid into his personal bank account, conducted unverifiable and improper cash transactions, misused a substantial part of the money, some K645,00.00 to benefit himself and his associate; and failed to acquit those funds. He submits public policy and public good requires that such a person should not continue to hold public office but that he should be dismissed from office. 

Determination on penalty 

The tribunal’s determinations on the guilty findings show instances of serious culpability on the part of the leader. We clearly stated the seriousness of the misconduct by the leader in our conclusion at page 55 of our Judgement when we said: "In the end we have no hesitation in concluding the totality of the proven allegations constitute gross abuse of DSG funds and likewise amounts to serious breaches of the duties set out in s. 27(1) and s. 27 (2) of the Constitution and s. 5 of the OLDRL". Having heard Mr. Steven’s extensive arguments and the leader himself on the issue of serious culpability, which in our view are essentially a re-run of his submissions on guilt, with respect, we see no reason to deviate from our earlier conclusions. 

In determining what "public policy and public good" requires, we adopt what the Supreme Court said in the S.C.R. 2 of 1992 where it was held that the entire thrust and primary purpose of the Leadership Code is "to preserve the people of PNG from misconduct by it’s leaders". Public policy and public good militates against members of Parliament continuing to hold public office in cases such as the present, where the member uses his position and good standing as a leader and his qualification and experience as an accountant and manager of public funds, to flout and grossly abuse proper and lawful financial accounting and acquittal procedures, to benefit himself and his associates substantially, to the detriment of the very people of his electorate, who relied on his good standing, accounting qualification and experience in managing public funds to vote him into office.

The other question is whether we should determine the penalty separately on each or of the five counts or on totality of the first count. The cases cited to us show that the approach seems to vary from case to case, but we prefer the Supreme Court’s approach in Peipul’s case in which the totality of misconduct principle was adopted. This principle accords with our earlier finding that the first count was the main one and the other four counts are a repeat of parts of the first count. Also our findings on serious culpability were based on the "totality of the proven allegations" in counts 1, 2, 4, 6 and 8. 

In the final analysis we are of the view that the conduct of the leader amounts to serious culpability and that public policy and public good require this tribunal to recommend that the leader be dismissed from office.

Recommendation on penalty. 

For these reasons, pursuant to s. 28(2) and (3) of the Constitution, we will recommend to the appropriate authority, which in this case is the Head of State, that the leader be dismissed from office as the member for Yangoru-Sausia Open electorate in the National Parliament, forthwith. 

Further, in accordance with s. 27(6) of the OLDRL, a copy of the decisions in this matter will be sent to the Parliament and the National Executive Council.
________________________________________________________________

APPENDIX ONE

REFERENCE BY THE PUBLIC PROSECUTOR 
UNDER SECTION 27(2) OF THE ORGANIC LAW

WHEREAS on 7 May 2002 the Ombudsman Commission referred to me, under section 29(1) of the Constitution and Section 17(d), 20(4) and 27(1) of the Organic Law on the Duties and responsibilities of Leadership, a matter in respect of which it was satisfied that there was a prime facie case that the Honourable Bernard Hagoria MP, member for Yagoru-Sausia Open and member of the East Sepik Provincial Assembly (hereafter referred to a "the Leader") was guilty of misconduct in office, and 

WHEREAS the Leader is and has been at all relevant times a person to whom Division III.2 of the Constitution and the Organic Law on the Duties and Responsibilities of Leadership apply; and

WHEREAS I consider, pursuant to Section 29(1) and 177(1)(b) of the Constitution and Section 27(2) of the Organic Law on the duties and Responsibilities of Leadership, that the matter should be proceeded with; 

I HEREBY REFER TO THE APPROPRIATE TRIBUNAL appointed for the purpose by the Honourable Sir Arnold Amet Kt. CBE LLD. Chief Justice of Papua New Guinea. THE FOLLOWING MATTER OF ALLEGED MISCONDUCT IN OFFICE, further particulars of which are contained in the statement of reasons referred to me by the Ombudsman Commission for the opinion that there is a prima facie case that the Leader has been guilty of misconduct in office, NAMELY: 

DISTRIBUTION OF ELECTORAL FUNDS 

ALLEGATION 1: 	THAT from December 2000 to May 2001 the Leader failed to carry out the obligations imposed by Section 27(1) of the Constitution; 

BY conducting himself in his public life and in his associations with such a way that he: 

(a)	placed himself in a position in which he had a conflict of interests; and 
(b)	demeaned his offices as member of the Parliament for Yagoru-Sausia Open and member of the East Sepik Province Assembly; and 
(c)	allowed his official integrity and his personal integrity to be called into question; and 
(d)	endangered respect for and confidence in the integrity of government in Papua New Guinea; 

AND FURTHERMORE, the Leader failed to carry out the obligation imposed by Section 27(2) of the Constitution; 

BY using his office for personal gain and entering into transactions and engaging in an activity that might be expected to give rise to doubt in the public mind as to whether he was carrying out the duty imposed by Section 27(1) of the Constitution. 

IN THAT having been allocated K1,210,000.00 from the National Government, being public money allocated for the development of the Yangoru-Sausia Open electorate in respect of the years 1997, 1998, and 1999, he- 

(i)	deposited those cheques into his personal bank account No. 306 6 222999 held at the Wewak branch of the Papua New Guinea Banking Corporation; and 
(ii)	failed to ensure that that public money was properly applied to the rural infrastructure projects for which it had been allocated; and 
(iii)	converted a substantial part of that public money to his personal use and the use of his associates; and 
(iv)	made approximately 77 unverifiable and/or improper debit transactions by writing out cheques to pay cash; and 
(v)	made approximately 76 unverifiable and/or improper debit transactions through automatic teller machine (ATM) withdrawals to obtain cash; and 
(vi)	made approximately 55 unverifiable and/or improper debit transactions through electronic-fund-transfer-at-point-of-sale (EFTPOS) transactions for personal goods and services; and 
(vii)	failed to properly acquit that public money; 

THEREBY being guilty of misconduct in office under Section 27(5)(b) of the Constitution. 

ALLEGATION 2:	THAT from December 2000 to May 2001 the Leader except as specifically authorised by law, directly accepted on behalf of himself a benefit by reason of his official position; 

AND FURTHERMORE, except in the course of and for the purpose of his official duties or his official position; used his official position for the benefit of himself. 

IN THAT having accepted K1,210,000.00 of public money from the National Government in the form of two cheques from the Department of Finance and Treasury, he deposited those cheques into his personal; bank account NO. 306 6 222999 held at the Wewak branch of the Papua New Guinea Banking Corporation; 

THEREBY being guilty of misconduct in office under Section 5(1) of the Organic Law on the Duties and Responsibilities of Leadership.

ALLEGATION 3: 	THAT from December 2000 to May 2001 the Leader intentionally applied money forming part of funds under the control of Papua New Guinea to purposes to which it could not lawfully be applied. 

IN THAT having accepted K1,210,000.00 of public money from the National Government in the form of two cheques from the Department of Finance and Treasury, he deposited those cheques into his personal; bank account NO. 306 6 222999 held at the Wewak branch of the Papua New Guinea Banking Corporation contrary to:

(ii)	the requirements of the Public Finance (Management) Act; and
(iii)	the express and implied conditions subject to which that money had been allocated; 

THEREBY being guilty of misconduct in office under Section 13(a) of the Organic Law on the Duties and Responsibilities of Leadership. 

ALLEGATION 4: 	THAT from December 2000 to May 2001 the Leader, except as specifically authorised by law, directly accepted on behalf of himself and his associates benefits by reason of his official position; 

AND FURTHERMORE except in the course of and for the purpose of his official duties or his official position, used his official position for the benefit of himself and other person; 

IN THAT having accepted K1,210,000.00 of public money from the National Government in the form of two cheques from the Department of Finance and Treasury, he deposited those cheques into his personal; bank account NO. 306 6 222999 held at the Wewak branch of the Papua New Guinea Banking Corporation he made approximately 77 debit transactions by writing out cheques to pay cash; 

THEREBY being guilty of misconduct in office under Section 5(1) of the Organic Law on the Duties and Responsibilities of Leadership. 

ALLEGATIONS 5: THAT from December 2000 to May 2001 the Leader intentionally applied money forming part of funds under the control of Papua New Guinea to purposes to which it could not lawfully be applied. 

IN THAT having accepted K1,210,000.00 of public money from the National Government in the form of two cheques from the Department of Finance and Treasury, he deposited those cheques into his personal; bank account NO. 306 6 222999 held at the Wewak branch of the Papua New Guinea Banking Corporation; he on or on about 77 occasions made debit transactions by writing out cheques to pay cash, contrary to:

(iv)	the requirements of the Public Finance (Management) Act; and 

(v)	the express and implied conditions subject to which that money had been allocated; 

THEREBY being guilty of misconduct in office under Section 13(a) of the Organic Law on the Duties and responsibilities of Leadership.; 

ALLEGATION 6:	THAT from December 2000 to May 2001 the Leader, except as specifically authorised by law, directly accepted on behalf of himself and his associates benefits by reason of his official position;

AND FURTHERMORE except in the course of and for the purpose of his official duties or his official position; used his official position for the benefit of himself and other persons; 

IN THAT having accepted K1,210,000.00 of public money from the National Government in the form of two cheques from the Department of Finance and Treasury, he deposited those cheques into his personal; bank account NO. 306 6 222999 held at the Wewak branch of the Papua New Guinea Banking Corporation; he made approximately 76 debit transactions through automatic teller machine (ATM) withdrawals to obtain cash;

THEREBY being guilty of misconduct in office under Section 5(1) of the Organic Law on the Duties and Responsibilities of Leadership. 

ALLEGATION 7:	THAT from December 2000 to May 2001 the Leader, intentionally applied money forming part of a fund under the control of Papua New Guinea to purposes to which it could not lawfully be applied; 

IN THAT having accepted K1,210,000.00 of public money from the National Government in the form of two cheques from the Department of Finance and Treasury, he deposited those cheques into his personal; bank account NO. 306 6 222999 held at the Wewak branch of the Papua New Guinea Banking Corporation; he on or on about 76 occasions made debit transactions through automatic teller machine (ATM) withdrawals to obtain cash, contrary to 

(i)	the requirements of the Public Finance (Management) Act; and 
(ii)	the express and implied conditions subject to which that money had been allocated; 

THEREBY being guilty and misconduct in office under Section 13(a) of the Organic Law on the Duties and Responsibilities of Leadership. 

ALLEGATION 8:	THAT from December 2000 to May 2001 the Leader, except as specifically authorised by law, directly accepted on behalf of himself and his associates benefits by reason of his official position; 

AND FURTHERMORE, except the course of and for the purpose of his official duties or his official position, used his official position for the benefit of himself and other persons; 

IN THAT having accepted K1,210,000.00 of public money from the National Government in the form of two cheques from the Department of Finance and Treasury, he deposited those cheques into his personal; bank account NO. 306 6 222999 held at the Wewak branch of the Papua New Guinea Banking Corporation; he made approximately 55 debit transactions through electronic-funds-transfer-at-point-of-sale. (EFTPOS) transactions for personal goods and services; 

THEREBY being guilty of misconduct in office under section 5(1) of the Organic Law on the Duties and Responsibilities of Leadership. 

ALLEGATIONS 9: THAT from December 2000 to May 2001 the Leader intentionally applied money forming part of a fund under the control of Papua New Guinea to purposes to which it could not lawfully be applied; 

IN THAT having accepted K1,210,000.00 of public money from the National Government in the form of two cheques from the Department of Finance and Treasury, he deposited those cheques into his personal; bank account 
NO. 306 6 222999 held at the Wewak branch of the Papua New Guinea Banking Corporation; he on or on about 55 occasions made unverified and/or improper debit transactions through electronic-funds-transfer-at-point-of-sale (EFTPOS) transactions for personal goods and services, contrary to; 

(i)	the requirements of the Public Finances (Management) Act; and 
(ii)	the express and implied conditions subject to which that money had been allocated; 

THEREBY being guilty of misconduct in office under Section 13(a) of the Organic Law on the Duties and Responsibilities of Leadership. 

APPENDIX TWO

1.	Section 27 of the Constitution states:

(1)	A person to whom this Division applies has a duty to conduct himself in such a way, both in his public or official life and his private life, and in his associations with other persons, as not-

(a)	to place himself in a position in which he has or could have as conflict of interest or might be compromised when discharging his public or official duties; or
(b)	to demean his office or position; or
(c)	to allow his public or official integrity, or his personal integrity, to be called into question; or
(d)	to endanger or diminish respect of an confidence in the integrity of government in Papua New Guinea.

(2)	In particular, a person to whom this Division applies shall not use his office for personal gain or enter into any transaction or engage in any enterprise or activity that might be expected to give rise to doubt in the public mind as to whether he is carrying out or has carried out the duty imposed by Subsection (1).

(3)	It is the further duty of a person to whom this Division applies –

(a)	to endure, as far as is within his lawful power, that his spouse and children and any other persons for whom he is responsible (whether morally, legally or by usage), including nominees, trustees and agents, do not conduct themselves in a way that might be expected to give rise to doubt in the public mind as to his complying with his duties under his section; and
(b)	if necessary, to publicly disassociate himself from any activity or enterprise of any of his associates, or of a person referred to in paragraph (a), that might be expected to give rise to such a doubt.

(4)	The Ombudsman commission or other authority prescribed for the purpose under Section 28 (further provisions) may, subject to this Division and to any Organic Law made for the purposes of this Division, give directions, either generally or in a particular case, to ensure the attainment of the objects of this section.

(5)	A person to whom this Division applies who –

(a)	Is convicted of an offence in respect of his office or position or in relation to the performance of his functions or duties; or
(b)	Fails to comply with a direction under Subsection (4) or otherwise fails to carry out the obligations imposed by Subsections (1), (2) and (3),
Is guilty of misconduct in office.

Section 5 of the Organic Law on the Duties and Responsibilities of Leadership states:

(1)	A person to whom this Law applies who, except as specifically authorized by law, directly or indirectly asks for or accepts, on behalf of himself or an associate, any benefit in relation to any action (past, present or future) in the course of his duties, or in the course of or by reason of his official position, is guilty of misconduct in office.

(2)	Subsection (1) extends to the case of a person to whom this Law applies who, except in the course of and for the purpose of his official duties or his official position, uses or allows his name or his official position to be used for the benefit of himself or any other person.

Section 13 of the Organic Law on the Duties and Responsibilities of Leadership states;

A person to whom this Law applies who –

(a)	intentionally applies any money forming part of any fund under the control of Papua New Guinea to any purpose to which it cannot be lawfully be applied; or

(b)	intentionally agrees to any such application of any such moneys, is guilty of misconduct in office.

APPENDIX THREE

LIST OF WITNESSES

1. PROSECUTION WITNESSES
NO. 	NAME	POSITION	COPIES OF FORM OF EVIDENCE	EXHIBIT REFER-ENCE	NATURE OF EVIDENCE	
1	Mr. Iamo Ila 	Acting Deputy Secretary, Rural Development Office (RDO)	Oral & Affidavit 	Exhibit "A"	Administration of DSG Funds – DSG Guidelines at National Level. 	
2	Mr. Yambi Simbak	Momase Regional Manager, RDO.	Oral & Affidavit 	Exhibit "A"	Administration of DSG Funds and Guidelines at Regional level.	
3.	Ms Winnie Kiap 	Secretary, National Executive Council (NEC), Waigani	Oral & Affidavit	Exhibits C, D, E, F. 	NEC decision on DSG, DSG Guidelines, Financial Instructions, Process for paying out DSG, and setting up of RDO.	

NO. 	NAME	POSITION	COPIES OF FORM OF EVIDENCE	EXHIBIT REFER-ENCE	NATURE OF EVIDENCE	
4	Mr Gabriel Yer 	Deputy Secretary Dept. of Finance and Treasury, Waigani	Oral, Affidavit and Documents 	Exhibits "G", H. I., J, K, L, M.	NEC decision on DSG, DSG Guidelines, Financial Instructions, Process for paying out DSG cheques by Finance Dept. and RDO; Acquittal forms. 	
5	Mr Ben Mussau 	Branch Manager, PNGBC, Wewak.	Oral, Affidavit and Documents.	Exhibits N-P & X.	Banking transactions on Mr. Hagoria’s personal cheque account in the relevant period including copies of cheques, bank statements, etc. 	
6	Mr Godfrey Rashen 	Acting District Administrator, Yangoru-Sausia Electorate from 1998-20-00.	Oral, Affidavit & Documents.	Exhibit P-Q-R.	Administration of DSG funds by leader – both discretionary and Non-discretionary JDP meetings, difficulties with Provincial Treasury in accessing DSG funds, acquittal of DSG funds, etc. 	
7	Mr. Fatson Yaninen	Current Administrator, ESP. Former Provincial Treasurer for 6 years from 1996-2002, Wewak.	Oral & Affidavit	Exhibit "S"	Administrator of Provincial Treasury, Receipt of DSG funds, payment of DSG and PSG funds, acquittals, etc.	
8	Mr. John Wasori 	Former District, Manager, Yangoru-Sausia from 1st October 2000 – January 2003. Currently, Human Resource Division, ESP; Wewak. 	Oral, Affidavit and Documents.	Exhibit "T, U, V".	Administration of DSG funds at Yangoru-Sausia District; DSG Guideline, Acquittals, JDP meetings, Project funded by DSG by leader, etc. 	
9	Mr. Francis Kofeno 	Momase Regional Finance Inspector, Dept. of Finance, based at Lae.	Oral & Affidavit.	Exhibit W.	Investigation report into administration of DSG & PSG in Wewak Provincial Treasury. 	
10	Mr. D.W. Olley	Accountant with Ombudsman Commission, Port Moresby 	Oral & Affidavit. 	Exhibit Y 	Investigation into financial transaction on Mr. Hagoria’s personal account. 	
11	Mr. David Cannings	Legal Counsel, Ombudsman Commission, Port Moresby 	Affidavit.	Exhibit Z.1 & Z.2.	Ombudsman Commission Investigation in the mater and compilation of Statement of Reasons. 	

1. DEFENCE Witnesses
NO. 	NAME	POSITION	COPIES OF FORM OF EVIDENCE	EXHIBIT REFER-ENCE	NATURE OF EVIDENCE	
1	The Hon. Bernard Hagoria	Member for Yangoru-Sausia 	Oral, Affidavit & Documents	Exhibit "GG", HH, II.	On all aspects of the case against him from propriety of payment to acquittals.	
2	Mrs. Regina Hagoria 	Wife of Mr. Hagoria, former payroll clerk of Pacific Helicopers, from 1988-1992.	Oral & Affidavit	Exhibit JJ.	Receipt of cheque for K10,800 from leader and payments made out to several people and payments made to Julie Hagoria by the leader. 	
3	Mr. Carl Wavik	Kubalia High School Teacher ESP.	Affidavit	Exhibit KK.	Receipt of K500.00 cheque from leader for PMV hire to go to school. 	

NO. 	NAME	POSITION	COPIES OF FORM OF EVIDENCE	EXHIBIT REFER-ENCE	NATURE OF EVIDENCE	
4	Fr. Otto Sepray 	Catholic Priest, Kandi Parish, Wewak.	Affidavits.	Exhibit LL & FF	Receipt and expenditure of K10,000 from leader for youth and church activities.	
5	Fr. Andrew Huafilong	Catholic Priest, St. John’s Parish Dagua, ESP. 	Affidavit 	Exhibit "EEE"	Receipts and expenditure of K10,000 from leader for religious and youth activities.	
6.	Ms Julia Hagoria	Mr. Hagoria’s daughter; Medical Officer based in Goroka.	Affidavit 	Exhibit NN	Received K4,000 from leader through her mother for her medical school fee and learnt of K1,000 paid by leader through her mother for school fees for Julia Warifi.	
7	Michael Wapi 	UPNG Student, Waigani. From Yangoru-Sausia. Leader cousin.	Affidavit 	Exhibit "PP" 	Paid K3,000 for 2001 tuition fees. 	
8.	Mr. Nathan Kavi 	Technical Office, Works Department, Wewak.	Affidavit	Exhibit "QQ"	Received K5,000 from leader to fix Kusang to Timbukai Road.	
9.	Mr. Raymond Waribri 	Youth leader Tapuaka Village Yangoru-Sausia 	Affidavit 	Exhibit "RR"	Received K5,00 to repair bridge. 	
10	Ms Julie Warifi 	Student from Tagori Village Yangoru-Sausia 	Affidavit 	Exhibit "SS"	Received K1,000.00 from leader through Julie Hagoria for school fees for Commercial Training College, Port Moresby. 	
11	Mr Wesly Wiho 	Student from the Iamung Village, Yangoru-Sausia 	Affidavit 	Exhibit "TT"	Received K725 and K1,200 from leader for school fee to do Diploma in Computing.	
12	Mr Ben James Manai	Self-employed and Student Yangoru Village 	Affidavit 	Exhibit "UU"	Received K1,000 and K500 paid by leader through George Kuari, for Don Bosco Technical College, Port Moresby, School fee. 	
13	Mr George Kuari 	Student, Wanikaikam Village 	Oral, Affidavit & Documents.	Exhibits "VV, WW, XX, YY.	Received K2,800 and K200 from leader for school fees to attend Don Bosco Tech. College, plus medical fees and airline ticket. 	
14	Mr Adrian Lohip 	Student – Pompiram Village 	Oral & Affidavit 	Exhibit ZZ	Received K1,000 for school fees for matriculation studies at UPNG.	
15	Mr. Tande Tomane 	Journalist - Southern Highlands Province.	Oral & Affidavit	Exhibit "AAA"	Received K2,000 for publishing "Yangoru-Sausia Electoral News"	
16 	Ms Camel Yedelin	UPNG Student from Urigambi Village.	Oral & Affidavit	Exhibit "BBB"	Received K1,000 for school fees.	
17	Ms Carol Wasimang	Housewife Sassoya Village	Oral & Affidavit 	Exhibit "CCC"	Received K1,500.00 for her 3 children attending various schools – Alice Ifangu, Bernedette Ifangu, Cletus Ifangu.	

NO. 	NAME	POSITION	COPIES OF FORM OF EVIDENCE	EXHIBIT REFER-ENCE	NATURE OF EVIDENCE	
18.	Mr. Benjamin Pori	The leader Electoral Officer, Former Community School Teacher, Tangori village.	Oral & Affidavit	Exhibit "DDD"	Assisted people process project fund applications, processed without cheque receipts and processed Acquittal forms for leader.	
19.	Ms Nelline Homuintaha	Student Tangori Village 	Affidavit	Exhibit "GGG"	Received K1,000 from the leader through her mother for school fee at Commercial Training College, Port Moresby.	
20 	Mr. Mathew Raikau	Policeman, Paparom Village	Affidavit 	Exhibit "III"	Received K3,000 from leader to build house in his village. 	
21	Mrs Regina Raikau 	Housewife Mr Mathew Raikau’s wife.	Affidavit 	Exhibit "JJJ"	Continues receiving K3,000 given to her husband. 	
22	Mr Thomas Joduo 	Education Official, based in EHP., from Ungambui Village 	Affidavit 	Exhibit "KKK"	Received K 2,000 for preparing 5 Year Education Plan for Yangoru-Sausia.	
23.	Mr Davis Steven 	Counsel for the leader	Affidavit 	Exhibit "LLL" 	Explained difficulty in locating lawyer Philip Ame to come to give evidence. 	
24.	Mr Philip Ame	Private Lawyer – Consultant to Mr Hagoria; Port Moresby	Oral	Exhibvit "MMM"	Provision of legal advice to leader on OLPLLG.	

APPENDIX FOUR

EXHIBIT LIST

No.	Exhibit Letters	Documents	Party Tendering Document	Witness Document Tendered	
1 	"A"	Affidavit of Iamo Ila sworn 23/5/03	Pros 	I. Ila	
2 	"B"	Affidavit of Yambi Simbok sworn 25/03	Pros.	Y. Simbok 	
3	‘C	NEC Policy submissions, NEC Decision and NE Guidelines on DSG.			
	C.1.	W. Kiap letter to Ombudsman Commission dated 20/4/03.	Pros.	W. Kiap	
	C.2.	NEC decision No. 124/on dated 29/6/00.	Pros. 	W. Kiap	
	C.3. 	NEC Policy submission No. 112/00 dated 22/3/00	Pros.	W. Kiap	
	C. 4.	NEC Decision No. 77/00 dated 22/3/00.	Pros. 	W. Kiap	
	C.5	NEC Policy Submission No. 31/00 dated 21/3/00	Pros. 	W. Kiap	
		C.5.1. Appendix 1 – Revised Organisation Structure and Management Structure for ORD, 2000 submitted by ORD June 2000. 			
		C.5.2. Appendix 2 – New Guidelines – District Development Program and Guidelines – S & RDF Grant Guidelines – Fiscal Year 2001 submitted by ORD. 			
		C.5.3. Appendix 3 – "OLD Guidelines"- ORD – Guidelines for the District Support Grant and the Provincial Support Grants budgeted as the Rural Action Programme (RAPF). 			
		C.5.4. (New) Appendix 4 – district Development Programme Social and rural Development Grant Guidelines – Fiscal Year 2000 – ORD. 			

No.	Exhibit Letters	Documents	Party Tendering Document	Witness Document Tendered	
		C.5.5.			
		C.5.6.1. NEC Decision No. 28/99 dated 25/8/99	 		
		C.5.6.2. NEC Policy submission No. 110/99 dated 17/8/99.			
	C.6.	NEC Decision No. 241/98 dated 3/12/98.			
	C. 7. 	NEC Policy submission No. 335/98 dated 30/11/98			
	C. 8. 	NEC Decision No. 91/98 dated 7/5/98 Proposed legislation to amend Organic Law to provide for DSG and PSG Grants. 			
	C. 9. 	NEC Policy Submission No. 98/98 dated 5/5/98.			
	C. 10. 	NEC Decision No. 89/98 dated 22/4/98			
4. 	"D"	District Development Program – S & RDP Grant Guidelines – Fiscal year 2001 – ORD. 	Pros. 	W. Kiap	
5.	"E" 	Guidelines for District Support Grant and Provincial Support grant – ORD Guidelines for the District Support Grant and Provincial Support Grants budgeted as "Rural Action Program (RAPF). 			
6.	"F"	Legislation No. 29 of 1998 – Organic Law on Provincial and Local Level-Government (Amendment No. 7) Law. 			
7.	"G"	Finance Instruction No. 2 of 2001 dated 19/7/01.		G. Yer	
8.	"H"	Finance Dept. "CFC" form (Sample only)	Pros.	G. Yer	
9.	"I"	ORD Cheque No. 2071 dated 12/1/01 for K60,000.00 in favour of B. Hagoria.	 Pros. 	G. Yer	
10	"J"	Mr. Yer’s letter to Ombudsman Commission dated 4/3/99.	Pros.	G. Yer	
11	"K"	Finance Instruction No. 3/98 dated 1/10/98 – Administration of District Support Grant Programme (Hon. S. Distribution of District Support Programme Funds).	Pros.	G. Yer	
12	"L "	Mr. G. Yer’s Letter to Ombudsman Commission dated 28/12/000.	Pros. 	G. Yer	
13.	"M "	Mr. G. Yer’s affidavit sworn 22/5/03.	Pros. 	G. Yer	
14.	"N"	PNGBC cheque Acc. No:- 6392313 Nellie Hagoria – Bank Statement Printout – 21/02/01.	Pros. 	B. Murau	
15	"O "	PNGBC Wewak Acc. No. 6392312 – Julia Hagoria – Bank Statement Printout dated 12/3/03.	 Pros.	B. Murau	
16.	"P"	Mr. B. Murau’s affidavit sworn 16/5/03 together with Statement of Reasons, pages 9-314 (copies of cheques and transactions details and on cheques issued by Mr. Hagoria).	Pros.	B. Murau	
17	"Q"	Mr. Godfried Rashen’s District Situation brief to Mr. Hagoria dated 28/4/00	Pros.	G. Ransten	
18	"R"	Mr. Godfried Rashen’s sworn statement dated 2/7/03.	Pros. 	G. Ransten	
19	"S"	Mr. Fantson Yaninen’s sworn statement dated 6/7/03	Pros 	F. Yaninen	
20 	"T"	Mr. John Wasori’s sworn statement dated 6/7/03.	Pros.	J. Wasori 	
21	"U"	Minutes of JDP meeting No. 1 of 2001 dated 25/1/01.			
22	"V"	Minutes of JDP meeting No. 2 of 2001 dated 11/4/01.	Def. 	J. Wasori	
23	"W"	Mr. Francis Kofeno sworn statement dated 6/7/03.	Pros.	F. Kofani	
24	"X"	Further affidavit of B. Mursam sworn 4/7/03.	Pros. 		
25	"Y"	D.W.W. Olley’s affidavit sworn on 30/06/03.	Pros. 	D. Olley 	
26	"Z"	Affidavit of David Cannings sworn on 6/5/03 "Z" Statement of Reasons referred to in Mr. Canning;s affidavit.			
27	"AA"	Mr. Hagoria’s letter to Prime Minister Marauta dated 29/8/00.	Pros. 		
28 	"BB"	Mr. Hagoria’s letter to Prime Minister Morauta dated 20/7/00.	Pros.		
29	"CC"	Prime Minister Moraut’s letter to Mr. Hagoria dated 15/10/00.	Pros. 		
30 	"DD"	Ombudsman Committee letter to Mr. Hagoria dated 12/10/01	Pros.		

No.	Exhibit Letters	Documents	Party Tendering Document	Witness Document Tendered	
31	"EE"	Mr. Hagoria’s letter to Ombudsman Commission dated 27/11/01.	Pros. 		
32	"FF"	Mr. Hagoria’s supplementary letter to ombudsman Commission dated 3/12/01.	Pros. 		
33	"GG"	Affidavit of Mr. Hagoria sworn on 20/7/03.	Def. 		
34	"HH"	Mr. Hagoria’s four (4) volumes of acquittals	Def.		
		"HH.1" – vol. 1			
		"HH.2" – vol 2.			
		"HH. 3 – vol. 3			
		"HH. 4 - vol. 4			
35.	"II"	Four (4) cheque butts on Mr Hagoria’s PNGBC, Wewak Acc: No. 306 6 222 999	Def. 	B. Hagoria 	
		"II.1" - Book No.1 (Chq. No. 206881 – 206 910 dated 21/10/00 – 28/12/00)			
		"II.2" - Book No. 2 (Chq. No.007940 – 0079450 dated 29/12/00 – 9/1/01 			
		"II.3" - Book No 3 (Chq. No. 0079801 – 0079850 dated 22/1/01 – 31/1/01.			
		"II.3" - Book No. 4 (Chq. No. 0080101 – 0080149 dated 13/2/01 – 20/5/02.			
36	"JJ"	Sworn statement of Regina Hagoria sworn 12/7/03.	Def. 	R. Hagoria 	
37	"KK"	Sworn statement of Carl Wavik sworn 21/7/03	Def. 	C. Wavik 	
38.	"LL"	Sworn statement of Fr. Otto Sepray sworn 21/7/03.	Def. 		
39 	"MM"	Sworn statement of Fr. Andrew Huaflong sworn 21/7/03.	Def.		
40	"NN"	Sworn statement of Julia Hagoria sworn 21/7/03.	Def. 		
41.	"OO"	Sworn statement of Michael Wapi sworn 12/7/03.	Def. 		
42	"PP"	Sworn statement of Alice Iffangu sworn 12/7/03.	Def. 		
43	"QQ"	Sworn statement of Nathan Kavi sworn 21/7/03.	Def. 		
44.	"RR"	Sworn statement of Raymond Warimbari sworn 21/7/03.	Def. 		
45	"SS"	Sworn statement of Julie Warifi sworn 21/7/0/3.	Def. 		
46	"TT"	Sworn statement of Wesley Wako sworn 12/7/03.	Def		
47	"UU"	Sworn statement of Ben James Manai sworn 12/7/03.	Def. 		
48	"VV"	Medical Death Certificate of James Kwalhal dated 23/7/03.	Def. 		
49.	"WW"	Air Niugini plane ticket – Mr. G. Kuari – ticket no. 656-44691 29336	Def. 	G. Kuari	
50.	"XX"	Original Bank statement dated 23/02/03.			
		PNGBC, Wewak Acc. No. 6391044 0 George Kuari 	Def. 	G. Kuari 	
51.	"YY"	Sworn statement of George Kuari sworn 12/7/03.	Def. 	G. Kuari	
52	"ZZ"	Sworn statement of Adrian Hofandowi Lohup sworn 12/7/03.	Def. 	A. Lokhup	
53.	"AAA"	Sworn statement of Tande Tamane sworn 17/7/03.	Def. 	T. Tamane	
54.	"BBB"	Sworn statement of Carmel Yadeli sworn 12/7/03.	Def. 	c. Yedekai	
55	"CCC"	Sworn statement of Carol Wasimong sworn 12/7/03.	Def. 	C. Wasimong	
56.	"DDD"	Sworn statement of Benjamin Pori	Def. 	B. Pori 	
57. 	"EEE"	Supplementary sworn statement of Fr. Huafilong sworn 28/7/03	Def 		
58.	"FFF"	Supplementary sworn statement of Fr. Separy sworn 28/7/07.	Def. 		
59. 	"GGG"	Sworn statement of Nelline Homuintaha sworn 24/7/03.			
60.	"HHH"	Sworn statement of Phylisa Pahu sworn 25/7/03.	Def.		
61.	"III"	Sworn statement of Mathew Raikau sworn 29/7/03.	Def. 		
62.	"JJJ"	Sworn statement of Regina Raikau sworn 28/7/03.	Def. 		
63.	"KKK"	Sworn statement of Thomas Tomdino (undated)	Def. 		
64 	"LLL"	Sworn statement of Davis Steven sworn 30/7/03.	Def. 		
65.	"MMM"	National Court Order in EP 3/97 dated 17/3/00.			

APPENDIX FIVE

Table 1

Cheque withdrawals from PNGBC Wewak Account No. 306 6 222999 from 15-12-00 to 15-05-01	
Date 	Cheque No.	Payee	Amount	
15.12.00	0369604	Cash	5,000.00	
18.12.00	0196829	Cash 	2,000.00	
19.12.00	0369608	Unknown 	20000.00	
28.12.00	0206896	Andrew Saviromo	4,000.00	
28.12.00	0206898	Paul Weki 	20,000.00	
28.12.00	0206902	Cash	500.00	
28.12.00	0206906	Cash 	10,000.00	
28.12.00	0206901	Jawia Community School	20,000.00	
28.12.00	0206903	Jonas Saru	3,000.00	
28.12.00	0206904	Dominic Sapui	3,000.00	
29.12.00	0079402	Cash 	1,500.00	
29.12.00	0206905	Benjamin Porin	3,000.00	
02.01.01	0206910	Fr. Andrew Hilafiron	10,000.00	
02.01.01	0206907	Sepik Mission Education Services 	50,000.00	
03.01.01	0079407	Cash 	2,000.00	
03.01.01	0079415	Cash 	2,000.00	
03.01.01	0079417	Cash 	3,000.00	
03.01.01	0206900	Cash 	2,000.00	
03.01.01	0079403	Cash 	6,000.00	
03.01.01	0079404	Gabriel Mek	15,000.00	
03.01.01	0079405	Cash	1,000.00	
03.01.01	0079408	Cash 	2,000.00	
03.01.01	0206899	Benjiamin Porin 	10,000.00	
03.01.01	0206909	Fr. Otto Separy 	10,000.00	
04.01.01	0079413	Cash 	5,000.00	
04.01.01	0079422	Cash 	3,500.00	
04.01.01	0079424	Cash 	10,850.00	
04.01.01	0079414	Cash 	10,000.00	
04.01.01	0079425	Kuiakom Elementary School 	10,000.00	
04.01.01	0079427	Kesimba Transport Services Ltd	20,000.00	
05.01.01	0079419	Cash 	2,000.00	
05.01.01	0079433	Cash 	1,000.00	
05.01.01	0079435	Cash 	1,000.00	
05.01.01	0079409	Warasawa Community School	30,000.00	
05.01.01	0079416	Cash	2,000.00	
05.01.01	0079421	Cash	3,000.00	
05.01.01	0079429	Benno Sengi	15,000.00	
05.01.01	0079431	Nathan Kavi 	5,000.00	
08.01.01	0079428	Cash 	3,000.00	
08.01.01	0079436	Cash 	5,500.00	
08.01.01	0079437	Cash 	2,000.00	
08.01.01	0079438	Cash 	3,000.00	
08.01.01	0079443	Cash 	2,000.00	
08.01.01	0079420	Handara Community School	30,000.00	
08.01.01	0079434	Cash 	5,000.00	
08.01.01	0079439	Cash 	3,000.00	
08.01.01	0079440	Cash 	3,000.00	
08.01.01	0079442	Bempanions Clan Youth	30,000.00	
09.01.01	0079446	Cash 	3,000.00	
09.01.01	0079448	Cash 	2,000.00	
09.01.01	0079450	Cash 	3,000.00	
09.01.01	0079411	Sassoya Health Centre	20,000.00	
09.01.01	0079432	Unknown	16,000.00	

Cheque withdrawals from PNGBC Wewak Account No. 306 6 222999 from 15-12-00 to 15-05-01	
Date 	Cheque No.	Payee	Amount	
09.01.01	0079444	Wong Ting Chai	30,000.00	
09.01.01	0079449	Cash 	2,000.00	
10.01.01	0079406	Cash	3,000.00	
10.01.01	0079447	Cash 	10,000.00	
10.01.01	0369628	Unknown	5,000.00	
10.01.01	0079410	Marinumbo Community School	30,000.00	
10.01.01	0079412	Paparom Community School	30,000.00	
10.01.01	0206897	Tawa Elementary School	5,000.00	
12.01.01	0079441	Cash 	2,000.00	
15.01.01	0079418	Munji Community School	30,000.00	
17.01.01	0191591	Unknown 	2,500.00	
17.01.01	0079423	Cash 	10,000.00	
19.01.01	0369654	Unknown	3,000.00	
22.01.01	0079801	Cash	5,000.00	
23.01.01	0079802	Cash	3,000.00	
24.01.01	0079804	Cash 	600.00	
24.01.01	0079807	Cash 	2,000.00	
24.01.01	0079808	Cash 	2,000.00	
24.01.01	0079809	Cash	2,000.00	
24.01.01	0079810	Cash 	2,000.00	
24.01.01	0079814	Cash 	3,000.00	
24.01.01	0079815	Cash 	1,000.00	
24.01.01	0079819	Cash 	2,000.00	
24.01.01	0079445	Joachim Niang 	10,000.00	
24.01.01	0079805	NBC Wewak	20,000.00	
24.01.01	0206908	Mongen 	30,000.00	
25.01.01	0079820	Cash 	2,000.00	
25.01.01	0079822	Cash 	1,000.00	
25.01.01	00799823	Cash 	2,000.00	
25.01.01	0079825	Cash 	1,000.00	
25.01.01	0079826	Cash 	1,000.00	
25.01.01	0079827	Cash 	2,000.00	
25.01.01	0079828	Cash 	2,000.00	
25.01.01	0079830	Cash 	5,000.00	
25.01.01	0079806	Cash 	20,000.00	
20.01.01	0079824	Wong Tin	20,000.00	
26.01.01	0079813	Cash	1,000.00	
26.01.01	0079817	Cash 	3,000.00	
26.01.01	0079831	Cash 	1,000.00	
26.01.01	0079430	Sembo Community School	30,000.00	
29.01.01	0079811	Cash 	3,000.00	
29.01.01	0079821	Sepik Mission SDA Education	50,000.00	
29.01.01	0079812	Cash 	3,000.00	
29.01.01	0079818	Cash 	1,000.00	
29.01.01	0079833	Cash 	3,500.00	
29.01.01	0079834	Cash 	1,500.00	
29.01.01	0079835	Cash 	1,000.00	
29.01.01	0079837	Cash 	2,000.00	
29.01.01	0079838	Cash 	1,000.00	
29.01.01	0079843	Cash 	1,000.00	
29.01.01	0079846	Cash 	1,000.00	
29.01.01	0079816	Unknown 	1,000.00	
29.01.01	0079832	Julia Hagoria 	2,000.00	
29.01.01	0079848	Unknown 	25,552.00	
30.01.01	0079842	Cash 	500.00	

Cheque withdrawals from PNGBC Wewak Account No. 306 6 222999 from 15-12-00 to 15-05-01	
Date 	Cheque No.	Payee	Amount	
30.01.01	0079844	Cash 	1,500.00	
30.01.01	0079847	Cash	30,000.00	
30.01.01	0079836	Cash 	2,000.00	
30.01.01	0079839	Yarapos Community School 	10,000.00	
31.01.01	0079840	Cash 	1,500.00	
31.01.01	0079845	Cash 	1,500.00	
31.01.01	0079849	Unknown 	3,000.00	
01.02.01	0079841	Cash 	500.00	
01.02.01	0079803	Unknown 	3,000.00	
01.02.01	0079850	Unknown 	46,200.00	
05.01.01	0202200	Unknown 	118.40	
05.01.01	0202201	Unknown 	69.20	
14.02.01	0080101	Unknown 	2,500.00	
14.02.01	0080102	Avis Rent A Car	15,000.00	
16.02.01	0080106	Unknown 	8,200.00	
19.02.01	0080104	Cash 	2,000.00	
19.02.01	0080107	Unknown 	3,000.00	
19.02.01	0080103	International Training Institution 	725.00	
19.02.01	0080105	Unknown 	5,000.00	
21.02.01	0080108	Unknown 	1,000.00	
21.02.01	0079401	Sassoya Elementary School	5,000.00	
22.02.01	0080111	Unknown 	2,000.00	
22.02.01	0080110	Unknown 	2,500.00	
23.02.01	0080109	Unknown 	2,500.00	
26.02.01	0080112	Unknown 	1,800.00	
27.02.01	0080114	Cash 		
28.02.01	0080116	Unknown 		
01.03.01	0080115	Unknown 		
02.03.01	0080113	Unknown 		
02.03.01	0080119	Unknown 		
20.03.01	0080117	Unknown 		
06.03.01	0080120	Unknown 		
06.03.01	0002328	Unknown 		
06.03.01	0050301	Unknown 		
06.03.01	1339501	Unknown 		
06.03.01	2329501	Unknown 		
09.03.01	0080123	Unknown 		
10.04.01	0080122	Eagle Home Loans Ltd 		
23.04.01	0080125	Cash 		
23.04.01	0080124	Eagle Home Loans Ltd 		
07.05.01	0080126	Eagle Home Loans Ltd		
Total: 			K1,193,236.14	

Table 2 
ATM withdrawals from PNGBC Wewak account No. 306 6 222999 from 15-12-00 to 15-05-01	
DATE 	LOCATION	 AMOUNT	
10.01.01	Wewak	500.00	
10.01.01	Wewak 	500.00	
12.01.01	Wewak 	500.00	
12.01.01	Wewak 	500.00	
16.01.01	Wewak 	500.00	
16.01.01	Wewak 	500.00	
19.01.01	Wewak 	200.00	
29.01.01	Wewak 	500.00	

ATM withdrawals from PNGBC Wewak account No. 306 6 222999 from 15-12-00 to 15-05-01	
DATE 	LOCATION	 AMOUNT	
29.01.01	Wewak 	500.00	
29.01.01	Wewak 	500.00	
29.01.01	Wewak 	500.00	
30.01.01	Wewak 	500.00	
01.02.01	Wewak 	250.00	
13.02.01	Garden City 	500.00	
13.02.01	Garden City 	500.00	
13.02.01	Garden City 	500.00	
13.02.01.	Garden City 	500.00	
13.02.01	Gerehu	500.00	
14.02.01	Jackson’s Airport	500.00	
14.02.01	Jackson’s Airport	500.00	
15.02.01	Jackson’s Airport	500.00	
15.02.01	Jackson’s Airport	500.00	
19.02.01	Jackson’s Airport	500.00	
19.02.01	Jackson’s Airport	500.00	
19.02.01	Gerehu 	500.00	
19.02.01	Gerehu 	500.00	
19.02.01	Waigani	500.00	
19.02.01	Waigani	500.00	
21.02.01	Waigani	500.00	
21.02.01	Waigani	500.00	
21.02.01	Waigani	500.00	
22.02.01	Waigani	500.00	
22.02.01	Waigani	500.00	
23.02.01	Jackson’s Airport	500.00	
23.02.01	Jackson’s Airport	500.00	
23.02.01	Jackson’s Airport	500.00	
23.02.01	Jackson’s Airport	500.00	
26.02.01	Gerehu 	500.00	
26.02.01	Jackson’s Airport	500.00	
26.02.01	Jackson’s Airport	500.00	
26.02.01	Jackson’s Airport	500.00	
26.02.01	Jackson’s Airport	500.00	
26.02.01	Jackson’s Airport	500.00	
26.02.01	Jackson’s Airport	500.00	
26.02.01	Jackson’s Airport	500.00	
28.02.01	Gerehu 	500.00	
01.03.01	Jackson’s Airport	500.00	
01.03.01	Jackson’s Airport	500.00	
01.03.01	Jackson’s Airport	500.00	
19.03.01	Gerehu 	250.00	
21.03.01	Waigani 	500.00	
21.03.01 	Waigani 	500.00	
23.03.01	Gerehu 	500.00	
26.03.01	Gerehu 	300.00	
26.03.01	Jackson’s Airport	500.00	
28.03.01	Waigani Branch	500.00	
30.03.01	Ori Lavi Boroko	300.00	
30.03.01	Waigani Branch	300.00	
03.04.01	Waigani Branch	100.00	
09.04.01	Gerehu 	150.00	
09.04.01	Gerehu 	500.00	
10.04.01	Jackson’s Airport	500.00	

ATM withdrawals from PNGBC Wewak account No. 306 6 222999 from 15-12-00 to 15-05-01	
DATE 	LOCATION	 AMOUNT	
12.04.01	Gerehu 	250.00	
17.04.01	Gerehu 	150.00	
20.04.01	Gerehu 	90.00	
24.04.01	Jackson’s Airport	500.00	
25.04.01	Gerehu 	250.00	
27.04.01	Jackson’s Airport	250.00	
04.05.01	Jackson’s Airport	500.00	
07.05.01	Jackson’s Airport	500.00	
07.05.01	Jackson’s Airport	500.00	
10.05.01	University 	150.00	
10.05.01	Gerehu 	150.00	
11.05.01	Gerehu	150.00	
14.05.01	Gerehu 	150.00	
14.05.01	Gerehu 	90.00	
Total:		K32,530.00	

Table 3

EFTPOS withdrawals from PNGBC Wewak Account No:- 306 6 222999 from 15-12-00 to 15-05-01	
Date	Details	Amount	
27.12.00	Prch Tan Mow	149.37	
22.01.01	Prch Tang Mow P/L	90.46	
22.01.01	Prch Papindo Wewak	142.30	
22.01.01	Cash PNGBC Wewak Branch	500.00	
19.02.01	Prch Super Value Pom	331.80	
19.02.01	Airways Hotel & Apartments	200.00	
19.02.01	Airways Hotel & Apartments	50.00	
19.02.01	Airways Hotel & Apartments 	100.00	
19.02.01	Papindo Dept. Store Gerehu	179.30	
20.02.01	Super Value Mart - Pom	88.60	
20.01.01	Pro-ma Systems (PNG)	65.78	
22.02.01	Air Niugini – Waigani	1,259.50	
22.02.01	Chin H Meen & Sons Tabari 	495.00	
22.02.01	Airways Hotel & Apartments	200.00	
22.02.01	Airways Hotel & Apartments	200.00	
01.03.01	Chin H Meen & Sons Tabari	615.50	
02.03.01	Stop N Shop Waigani	257.96	
21.03.01	Cash Ela Beach Hotel Port Moresby	100.00	
21.03.01	Cash Ela Beach Hotel Port Moresby	100.00	
21.03.01	Airways Hotel & Apartments	200.00	
26.03.01	Airways Hotel & Apartments	200.00	
26.03.01	Airways Hotel & Apartments	200.00	
26.03.01	Airways Hotel & Apartments	200.00	
26.03.01	Airways Hotel & Apartments	200.00	
26.03.01	Airways Hotel & Apartments	200.00	
26.03.01	Stop N Shop Gerehu	109.69	
26.03.01	Pro-ma Systems (PNG) Ltd	61.38	
26.03.01	Papindo Dept. Store Gerehu	249.60	
27.03.01	Airways Hotel & Apartments	200.00	
28.03.01	Airways Hotel & Apartments	200.00	
28.03.01	Airways Hotel & Apartments	150.00	
29.03.01	Post PNG Boroko 	308.00	
28.03.01	Stop N Shop – Gerehu 	93.88	

EFTPOS withdrawals from PNGBC Wewak Account No:- 306 6 222999 from 15-12-00 to 15-05-01	
Date	Details	 Amount	
02.04.01	Malaoro Supermarket P/L	99.84	
04.04.01	Stop N Shop Boroko	24.87	
05.04.01	Arrow Club – Waigani	15.00	
09.04.01	Post PNG – Boroko	315.00	
17.04.01	Waigani Entertainment Centre	20.00	
17.04.01			
18.04.01			
19.04.01			
26.04.01			
26.04.01			
27.04.01			
27.04.01			
30.04.01			
07.05.01			
07.05.01			
08.05.01			
09.05.01			
10.05.01			
11.05.01			
11.05.01			
14.05.01			
15.05.01			
Total: 		K 9,396.90	

Table 4

Miscellaneous debits against from PNGBC Wewak Account No. 306 6 222999 from 15-12-00 to 15-05-01	
15.12.00	P/Loan Repayment	301.00	
15.12.00	Fee	2.20	
29.12.00	Fee	2.20	
29.12.00	P/Loan Repayment	301.00	
29.12.00	Debit Interest 	2.00	
29.12.00	Loan Service Fees	12.00	
17.01.01	Fee 	2.20	
19.01.01	Counter cheque fee	2.20	
26.01.01	P/Loan Repayment	301.00	
30.01.01	Cheque book fee	10.00	
23.02.01	P/Loan Repayment	301.00	
23.02.01	Pacific International Hospital	100.00	
07.03.01	Dishonour fee	20.00	
08.03.01	Dish Item Input NOC	2,000.00	
23.03.01	P/Loan Repayment	301.00	
30.03.01	Account Keeping Fee	47.20	
30.03.01	Withdrawal fee	2.50	
30.03.01	Withdrawal fee	5.00	
04.05.01	P/Loan Repayment	301.00	
Total: 		K 4,029.10	

APPENDIX SIX

Credits to PNGBC Wewak Account No. 306 6 222999 from 15-12-00 to 15-05-01. 	
Date 	Details	Amount	
19.12.01	Salary	1,602.45	
12.01.01	Salary	1,847.68	
26.01.01	Salary	3,476.17	
07.02.01	Salary	3,476.17	
23.02.01	Salary	3,476.17	
05.03.01	Cheque 	3,476.17	
09.03.01	Salary	3,476.17	
22.03.01	Salary	3,476.17	
06.04.01	Salary	3,476.17	
19.04.01	Salary	3,476.17	
03.05.01	Salary	3,476.17	
Total:		K34,009.49	
[Document 10]

APPENDIX SEVEN

LEADERS RESPONSE SUMMARY

Leaders Book 1

SUMMARY OF STATEMENT "K"
(As provided to the Ombudsman Commission dated 27th November 2001)

A.	RECEIPTS (From 14/12/00 to 21/03/01)

Date	Chq. No.		Amount			Total 

•	DSG 13/12/00	635758	 (Sch.1)	K1,150,000.00
 12/01/01	 2071 (Sch.2)	 60,000.00		K1,210,000.00
•	Salary Allowances 		 (Sch.3) 	 19,707.26
•	Cash Balance Bank 14/12/00 (Sch.4)	 721.87	 	 20,429.13
•	Total funds held in the account:					K1,230,429.13
LESS ADJUSTMENTS: 

1.	Deductions made by Finance, OC & BSP

05/02/01	Chq. 202200 - Bank fees (Sch.5) 	K 118.40 
05/02/01	Chq. 202201	 Bank fees (Sch. 5)	 69.20 
05/03/01	Chq. 50301	 DSG	 (Sch. 6)	 132,241.44
06/03/01	Chq. 2328	 Bank fees (Sch. 5)	 500.00
06/03/01	Chq. 1339501 Bank fees (Sch. 5)	 315.00
06/03/01	Chq. 2329501 Bank fees (Sch. 5) 	 300.00	 K133,544.04

Total funds in the account (after adjustment) 			 K1.096,885.09

B.	PAYMENTS TO PROJECTS: 

•	Salary and Allowances		 (Sch.3)	 K 18,337.82
•	Education Projects			 (Sch.7)	 K 504,309.00
•	Health Projects			 (Sch.8)	 K 33,100.00
•	Transport, Roads/Bridge Projects (Sch.9)	 K 164,500.00
•	Economic/Social Development Projects (Sch.10) K 179,002.80
•	Ward Improvements Projects	 (Sch.11)	 K 140,200.00
•	Administration 			 (Sch.12)	 K 55,344.30

Total Expenditure 		K1,094,793.92

C.	Balance of funds Available (A-B)					 K 2,091.17

D. 	Cash Balance Per Bank Statement-at 21/03/01 (Sch.13).		 K 2,091.17

E.	Note: The K2091.17 fund balance represented balance of salaries and allowances in the personal account at 21/03.01.

LEADERS BOOK 2

EDUCATION INFRASTRUCTURE AND DEVELOPMENT PROJECTS. (Sch. 7)	
	
Date 	Chq. No.	Recipients
(Payee)	Payee
No.	Stment "K"
Ref. No.	Amount	Index No.	
28.12.00	206901	Jawia Comm. School	1	10	K 20,000.00	7 – 1-10	
02.01.01	206907	SDA Kubalia High School	2	16	50,000.00	7 – 2-16	
04.01.01	79425	Kuiakom Elementary School	3	31	10,000.00	7 – 3-31	
05.01.01	79409	Warasawa Comm School	4	36	30,000.00	7 – 4-36	
08.01.01	79420	Handara Comm. School	5	46	30,000.00	7 – 5-46	
10.01.01	79410	Marinumbo Comm. School	6	61	30,000.00	7 6-61	
10.01.01	79412	Paparom Comm. School 	7	62	30,000.00	7 7-62	
10.01.01	206897	Tawa Elementary School	8	63	5,000.00	7 8-63	
15.01.01	79418	Munji Community School	9	67	30,000.00	7 9-67	
24.01.01	206908	Mongen Comm. School	10	85	30,000.00	7 10-85	
26.01.01	79430	Sembo Comm. School	11	99	30,000.00	7 11-99	
26.01.01	79821	SDA Kubalia High School	12	101	50,000.00	7 12-101	
30.01.01	79839	Yarapos Comm. School	13	120	10,000.00	7 13-120	
21.02.01	79401	Sassoya Elementary School	14	150	5,000.00	7 14-150	
28.12.01	206898	Paul Weiki-Kuiakom Comm.	15	07	10,000.00	7 15-07	
25.01.01	79806	H/Master – Kubalia High Sch.	16	94	20,000.00	7 16-94	
29.01.01	79848	Sartec – Computers Kub H/S	17	113	8,184.00	7 17-113	
19.12.00	369608	Buima Wandiha	18	05	5,000.00	7 18-05	
19.12.00	369608	Benedict Harpmiong	19	05	2,000.00	7 19-05	
19.12.00	369608	Ivo Monkosause	20	05	1,500.00	7 20-50	
19.12.00	369608	Clement Huangu	21	05	1,500.00	7 21-05	
12.01.01	79441	Elementary Teachers	22	66	2,000.00	7 22-66	
17.01.01	191591	Kubalia H/S – Proposal	23	70	2,500.00	7 23-70	
19.01.01	369654	Educ. Sector Proposal	24	72	3,000.00	7 24-72	
08.01.01	79443	Kubalia H/C – Hire	25	45	2,000.00	7 25-45	
28.12.00	206902	Transport of Teachers	26	08	500.00	7 26-08	
19.02.01	80107	Kubalia High School Books	27	141	2,500.00	7 27-141	
	
TOTAL INFRASTRUCTURE - K420,684.00	

NB: Definition of "Index No."
	1st Number is Sch. No. 
	2nd Number is Payee No.
	3rd Number is Statement "K" Ref. No.

LEADERS BOOK 3

EDUCATION INFRASTRUCTURE AND DEVELOPMENT PROJECTS (SCH. 7).	
Date 	Chq. No.	Recipients
(Payee)	Payee
No.	Stment "K"
Ref. No.	Amount	Index No.	
		Balance b/f from – page 3 			K420,684.00		
28.12.00	206906	Elizabeth Namberi	28	9	500.00	7 28-09	
28.12.00	206906	Mark Mahe	29	9	500.00	7 29-09	
28.12.00	206906	Michael Wapi 	30	9	500.00	7 30-09	
28.12.00	206906	John Simbuk	31	9	500.00	7 31-09	
28.12.00	206906	Paul Warimbari	32	9	500.00	7 32-09	
28.12.00	206906	Donald Fluwanka	33	9	500.00	7 33-09	
28.12.00	206906	Jerry Fluwanka	34	9	500.00	7 34-09	
28.12.00	206906	Gabriel Hofango	35	9	1,000.00	7 35-09	
29.12.00	79402	Videlie Paniengi	36	9	500.00	7 36-09	
29.12.00	79402	Josephine Hanjiho	37	13	1,500.00	7 37-13	
04.01.01	79424	Adrian Hofadowi	38	29	1,000.00	7 38-29	
04.01.01	79424	Phylisa Pahau	39	29	2,000.00	7 39-29	
04.01.01	79424	George Kuari	40	29	1,000.00	7 40-29	
04.01.01	79424	Julie Watifi	41	29	1,000.00	7 41-29	
04.01.01	79424	Nelline Homuitaha 	42	29	1,000.00	7 42-29	
04.01.01	79424	Ben Manai 	43	29	1,000.00	7 43-29	
04.01.01	79424	Wesley Wiho	44	29	1,000.00	7 44-29	
10.01.01	ATM	Julie Warifi	45	64	500.00	7 45-64	
10.01.01	ATM 	George Kuari	46	65	500.00	7 46-65	
23.01.01	79802	Michael Wapi	47	74	3,000.00	7 47-74	
24.01.01	79804	Kubalia High School	48	75	600.00	7 48-75	
24.01.01	79807	Nick Sapui	49	76	2,000.00	7 49-76	
24.01.01	79806	Lawrence Wama	50	77	2,000.00	7 50-77	
24.01.01	79814	Robin Sarowari	51	80	3,000.00	7 51-80	
24.01.01	79815	Tony Handaihua	52	81	1,000.00	7 52-81	
24.01.01	79819	Augustine Wogi	53	82	2,000.00	7 53-82	
25.01.01	79825	Rita John	54	89	1,000.00	7 54-89	
29.01.01	79833	CODE centre Wewak	55	104	3,500.00	7 56-107	
29.01.01	79837	Sabina Kuari 	56	107	1,000.00	7 57-112	
29.01.01	79832	Carmel Yedelai 	57	112	1,000.00	7 57-112	
30.01.01	79844	Anna Sapui	58	117	1,500.00	7 58-117	
30.01.01	79847	Nelson Yambuhe	59	118	300.00	7 59-118	
30.01.01	79847	Henson Jambasua 	60	118	300.00	7 60-118	
30.01.01	79847	Fredrick Wariwama 	61	118	300.00	7 61-118	
30.01.01	79847	Delma Sariwa 	62	118	300.00	7 62-118	
30.01.01	79847	Augustine Hagoria	63	118	300.00	7 63-118	

LEADERS BOOK 4

HEALTH INFRASTRUCTURE AND DEVELOPMENT PROJECTS SCH. 8	
	
Date 	Chq. No.	Recipients
(Payee)	Payee
No.	Stment "K"
Ref. No.	Amount	Index No.	
05.01.01	79433	David Bandi 	141	34	1,000.00	B 141-34	
09.01.01	79433	Sassoya Health Centre	142	54	20,000.00	B 142-54	
24.01.01	79411	J. Nianguma	143	83	10,000.00	B 143-83	
19.01.01	79445	W. Wrondimi	144	146	500.00	B 144-146	

HEALTH INFRASTRUCTURE AND DEVELOPMENT PROJECTS SCH. 8	
	
Date 	Chq. No.	Recipients
(Payee)	Payee
No.	Stment "K"
Ref. No.	Amount	Index No.	
19.02.01	ATM	W. Wrondimi	144	147	500.00	B 144-147	
23.02.01	ATM	Bertha Moses 	145	157	500.00	B 145-157	
23.02.01	ATM	George Kuari	36	160	100.00	B 36-160	
26.02.01	ATM	Mark Mahe	25	165	500.00	B 25-165	

		TOTAL PER STATEMENT "K"			K33,100.00		

LEADERS BOOK 5 

WARD IMPROVEMENT PROJECTS - SCH. 11	
Date 	Chq. No.	Recipients
(Payee)	Payee
No.	Stment "K"
Ref. No.	Amount	Index No.	
15.12.00	369604	Norbert Rahuahowi 	206	3	K 1,500.00.	11 – 206-3	
15.12.00	369604	Tony Lohuip	207	3	1,500.00	11 – 207-3	
15.12.00	369604	Pius Konangu	208	3	2,000.00	11 – 208-3	
19.12.00	369608	Lohuip Warisaiho	209	5			
19.12.00	369608	Mathew Regau	210	5			
19.12.00	369608	Warwama Gregory	211	5			
19.12.00	369608	Michael Nanguiawi	212	5			
19.12.00	369608	Michael Jombu	213	5	300.00		
19.12.00	369608	Gregory Warang	214	5	1,000.00		
19.12.00	369608	Maria Huaiefi	215	5	1,000.00		
19.12.00	369608	Thomas Huria	216	5	500.00		
19.12.00	369608	Michael Pondangu	217	5	1,500.00		
19.12.00	369608	Aloisia Krasause	218	5	500.00		
28.12.00	206896	Andrew Safiromo	219	6	4,000.00		
28.12.00	206898	Paul Weiki	15	7	10,000.00		
29.12.00	206905	Benjamin Pori	220	14	3,000.00		
03.01.01	79407	Anna Fehi	221	17	2,000.00	11 – 221-17	
03.01.01	79417	Mathew Wafi	222	19	3,000.00	11 – 222-19	
03.01.01	79404	Gabriel Mek	223	22	15,000.00	11 – 223-22	
03.01.01	79405	Philip Hausahi 	224	23	1,000.00	11 –224-23	
03.01.01	79408	Aponingi Jumaiah	225	24	2,000.00	11 – 225-24	
04.01.01	79414	Michael Niaganaro	226	30	10,000.00	11 – 226-30	
05.01.01	79419	Francis Misari 	227	33	2,000.00	11 – 227-33	
05.01.01	79416	Dominic Sapmangua	228	37	2,000.00	11 – 228-37	
05.01.01	79421	Philip Rofunduo	229	38	3,000.00	11 – 229-38	
05.01.01	79429	Bruno Sengi	230	39	5,000.00	11 – 230-39	
05.01.01	79428	Moses Hosiulu	231	41	3,000.00	11 – 231-41	
08.01.01	79436	Albert Mombiniong	232	42	5,500.00	11 – 232-42	
08.01.01	79437	Bart Harosik 	233	43	2,000.00	11 – 233-43	
08.01.01	79438	John Kriniam	234	44	3,000.00	11 – 234-44	
09.01.01	79448	Simon Firahi	235	52	2,000.00	11 – 235-52	
09.01.01	79449	Jerry Wamaian 	236	57	2,000.00	11 – 236-57	
10.01.01	79406	Willy Malinduo	237	58	3,000.00	11 – 237-58	
17.01.01	79423	Paul Hembine	238	71	10,000.00	11 – 238-71	
24.01.01	79809	George Yenderihu	239	78	2,000.00	11 – 239-78	

HEALTH INFRASTRUCTURE AND DEVELOPMENT PROJECTS SCH. 8	
	
Date 	Chq. No.	Recipients
(Payee)	Payee
No.	Stment "K"
Ref. No.	Amount	Index No.	
24.01.01	79810	Ruben Yekimbole	240	79	2,000.00	11 – 240-79	
25.01.01	79820	David Huasihuria 	241	86	2,000.00	11 – 241-86	
25.01.01	79822	Anton Weima	242	87	1,000.00	11 – 242-87	
25.01.01	79827	John Warakavi 	243	91	2,000.00	11 – 243-91	
25.01.01	79828	Jacob Yekimbole 	244	92	2,000.00	11 – 244-92	
26.01.01	79811	Michael Kualawe	245	100	3,000.00	11–245-100	
29.01.01	79812	Mathew Jimbu	246	102	3,000.00	11-246-102	
29.01.01	79834	Clement Huangu	247	105	1,500.00	11-247-105	
29.01.01	79835	Rowe Huarpma 	248	108	1,000.00	11-248-108	
29.01.01	79846	Simon Yekimbole	249	110	1,000.00	11-249-110	
29.01.01	79816	Albert Warakue 	250	111	1,000.00	11-250-111	
31.01.01	79849	Alex Sivranduo 	251	124	3,000.00	11-251-124	
16.02.01	80106	Francis Rakuaferi	252	139	8,200.00	11-252-139	
							
TOTAL PER STATEMENT "K"		 K140,200.00	

APPENDIX EIGHT
N2363
PAPUA NEW GUINEA

[In the Leadership Tribunal appointed under Section 27(2)(a) of the Organic Law on the Duties and Responsibilities of Leadership0

And in the matter of a Reference by the Public Prosecutor under s. 27(2)() of the Organic Law on Duties and Responsibilities of Leadership

AND:

And in the matter of the HONOURABLE ANDREW KUMBAKOR, Member for Nuku (the Leader)

Waigani	:	Justice Salamo Injia (Chairman)
Senior Magistrate Lawrence Kangwia (Member)
Senior Magistrate David Maliku (Member)
2003		:	May 8th

DECISION

Leadership Tribunal - Member of National Parliament - Sixteen (16) counts of misconduct in office –– Misuse of Motor Vehicle entitlements and Gaming Board funds – Onus and Standard of Proof – Proper role of the Tribunal – Insufficient evidence to sustain charges – Leader found not guilty on all 16 counts – Constitution ss. 27 and 29; Organic Law on Duties and 

Responsibility of Leaderships, ss. 5 (1), 6 (1) - (2), 13(a), 27 (4); Gaming Machine Act 1993, ss. 67 and 68. 

Cases cited in the judgement:
Re: James Eki Mupio [1981] PNGLR 416 
Bonga v Sheehan [1997] PNGLR 452. 

Counsel:
Mr Kaluwin for the Public Prosecutor 
Mr Pato for Mr. A. Kumbakor

Principles Applicable

We begin by re-stating some general basic principles governing the manner in which this tribunal should determine the matters before us.

The duties of this tribunal are prescribed by s. 28((1)(2) of the Constitution and s. 27(4) of the Organic Law on Duties and Responsibilities of Leadership (hereinafter abbreviated OLDRL). The tribunal does not sit as a court of law to hear and determine criminal offences in accordance with strict and technical formal rules of evidence and procedure which are designed to safeguard the liberty of persons charged with criminal offence enshrined in the Constitution, such as the presumption of innocence of an accused person until proven guilty. The tribunal’s duty is to "investigate and determine cases of alleged misconduct in office referred" to it (s. 28(I)(9)). It must make due inquiry into the matter referred to it, without regard to legal formalities or the rules of evidence, and may inform itself in such manner as it thinks proper" (s.27(4)).

 But it is a quasi - judicial tribunal and as such, it must act judicially and in compliance with the principles of natural justice, see s. 59 of the Constitution s. 27(4) of OLDRL. Also see in re James Eki Mopio [1981] PNGLR 416. It is not clear from the Constitution and OLDRL as to who bears the onus of proof but in relation to the standard of proof, it was decided by the Supreme Court in Re James Eki Mopio that the standard of proof is above the civil standard of proof which is on the balance of probabilities, but close to the criminal standard of proof, which is proof beyond reasonable doubt. The Supreme Court said at p. 121:

"In our view there is no absolute degree or standard of proof to be applied by the Leadership Tribunal. The Tribunal must be reasonably satisfied of the truth of the allegations or denials. In reaching such a conclusion it must give full weight to the gravity of a charge of misconduct in office by a person subject to the Leadership Code, the adverse consequences which follow and of the duty to act judicially and in compliance with the principles of natural justice. In practical terms the standard is not as high as the criminal proof beyond reasonable doubt but in our opinion, the very nature of the offence of misconduct in office created by the Constitution and the Organic Law on the Duties and Responsibilities of Leadership, will require a higher standard of proof than that ordinarily applicable in civil cases, namely proof on a balance of preponderance of probabilities. In matters involving accusations amounting to criminal conduct, the standard must be close to that applicable in a criminal trial. 

In relation to the duty to act judicially in terms of proof of facts, the Supreme Court adopted principles enunciated in various common law cases, which state that the tribunal’s decision must be based on reliable, clear and convincing evidence or material, from which findings of fact and reasonable inferences can be drawn therefrom, and not based on mere suspicion or speculations. 

As to the onus of proof, In Re James Eki Mopio and other reported cases are silent on which party carries the burden of proof. There is no express provision in the Constitution or the OLDRL on this point. But it can be inferred from s. 29 of the Constitution that the Public Prosecutor is charged with the duty to prosecute the leader before the tribunal and it carries the onus of proof on behalf of the State. The tribunal’s duty to "inquire" or "investigate and determine" the matter referred to it is not intended to confer on the tribunal the traditional prosecutorial function of the Public Prosecutor: Bonga v Sheehan [1997] PNGLR 452. The tribunal’s function is to simply inquire into and determine the truth or otherwise of there allegations, without resort to technical rules of procedure and evidence. Its powers include summoning relevant documents and witnesses to give evidence and/or relevant documents which may be over-looked by the parties. That is the basis upon which we participated actively throughout the proceedings in asking questions of witnesses called by the two parties and summoned four(4) other witnesses of our own motion. 

There is one other important jurisdictional point to make. The scheme of provisions of the Leadership Code and the OLDRL is that the tribunal’s jurisdiction to inquire into the matter before it is defined by reference to the matter "referred" to it by the Public Prosecutor. In the past as in the present case, the Public Prosecutor developed the practice of presenting formal charges of misconduct in office, which made reference to the relevant duty in the Constitution and OLDRL and the relevant factual particulars. These charges are accompanied by the Statement of Reasons prepared by the Commission as required by OLDRL, s. 27(2). It is our view that the tribunal’s inquiry is restricted to those allegations of misconduct in office as pleaded in the referral documents. The tribunal itself has no power to alter or re-draw those allegations or charges as it pleases.

As to the scrutiny of the evidence, the evidence must support the wording of those charges in order to sustain the charge. And because the "consequences of the most serious kind" flow from the allegations, the standard is indeed a high one: In re James Eki Mopio, ante. For it would constitute a denial of natural justice for a leader to be called upon or expected to answer an allegation which does not form part of the charges "preferred" against him. 

APPENDIX NINE

No. 29 of 1998

Organic Law on Provincial Governments and Local-level Governments
(Amendment No: 7) Law.

Certified on: 22.10.98

INDEPENDENT STATE OF PAPUA NEW GUINEA

ORGANIC LAW ON PROVINCIAL GOVERNMENTS AND LOCAL-LEVEL GOVERNMENTS (AMENDMENT NO. 7) LAW

ARRANGEMENT OF SECTIONS.

1.	Joint District Planning and Budget Priorities Committee (Amendment of Section 33A).

2.	District Support Grants (Amendment of Section 95A).

3.	New Section 95B.

"95B. PROVINCIAL SUPPORT GRANTS.

4.	Transitional provision.

INDEPENDENT STATE OF PAPUA NEW GUINEA

No. of 1998

Organic Law on Provincial Governments and Local-Level Governments Amendment No. 7) Law

Being a Law to amend the Organic Law on Provincial Governments and Local-Level Governments,

MADE by the National Parliament to be deemed to have come into operation on 1 January 1998.

1.	JOINT DISTRICT PLANNING AND BUDGET PRIORITIES COMMITTEE (AMENDMENT OF SECTION 33A).
Section 33A of the Organic Law on Provincial governments and Local-level Governments is amended –

(a)	by inserting after Subsection (2) the following new subsection:-
"(2A) The Member of the Parliament representing the open electorate shall appoint one of the other members of the Committee to act as Chairman of the Committee in the event of the absence of the Member representing the open electorate from a meeting of the Committee." And

(b)	by repealing Subsection (5);

(c)	by repealing Subsection (6).

2.	DISTRICT SUPPORT GRANTS (AMENDMENT OF SECTION 95A).
Section 95A of the Organic Law on Provincial Governments and Local-Level Governments is amended –

(a)	by repealing Subsection 91) and replacing it with the following:-

"(1) For each year the National Government shall out of monies lawfully available for the purpose, make a District Support Grant in respect of each open electorate –

(a)	one half of which shall be made to the Joint District Planning and Budget Priorities Committee in the open electorate, for the purpose of funding –
(i)	the rural action programme; and
(ii)	the urban rehabilitation programme; and
(iii)	

(b) one half of which shall be made to the Member representing the open electorate to be used in accordance with District Support Grant Guidelines issued under Subsection (7)"; and

(c) by adding the following new subsections:-

"(4) The minimum amount of the District Support Grant for each year for each open electorate shall be determined by the National Executive council but shall be not less than:-
(a)	K3000,000 for the fiscal year coming 1 January 1998; and
(b)	K5000,000 for each succeeding fiscal year, for each open electorate.
"(5) The National Government shall, within the first month of each quarter of each fiscal year, make a payment of all monies due for the purposes of the District Support Grant for that quarter to the Joint District Planning and Budget Priorities Committee and to the Member representing the open electorate respectively.

"(6) The monies referred to in subsection (4) shall be –

(a)	paid through the District Treasury; and
(b)	in the case of –
(iv)	the Joint District Planning and Budget Priorities Committee, paid directly to that Committee by the District Treasury; and
(v)	the Member representing the open electorate, paid on his behalf in accordance with the District Support Grant Guidelines issued under Subsection (7).

"(7) The National Executive Council shall, from time to time, issue District Support Grant Guideline relating to the District Support Grant specifying –

(a)	the purposes for which the portion of it payable under subsection (3)(b) may be used; and
(b)	the manner in which it shall be disbursed and accounted for; and
(c)	other administrative arrangements pertaining to it."

3.	NEW SECTION 95B.

The Organic Law on Provincial Governments and Local-level Governments is amended by inserting after Section 95A the following new section:-

"95B PROVINCIAL SUPPORT GRANTS.

(1)	For each fiscal year the National Government shall out of the monies lawfully available for the purpose, make a Provincial Support Grant in respect of each provincial electorate –

(a)	one half of which shall be made to the Joint provincial planning and Budget Priorities Committee in the provincial electorate; and
(b)	one half of which shall be made to the Member representing the provincial electorate

to be used in accordance with the provincial Support Grant Guidelines issued under Subsection (5).

"(2)	The minimum amount of the Provincial Support Grant for each year for each provincial electorate shall be determined by the National Executive Council but shall be not less than –

(a)	K3000,000.00 for the fiscal year commencing 1 January 1998; and
(b)	K500,000.00 for each succeeding fiscal year for each provincial electorate.

"(3) The National government shall, within the first month of each quarter in each fiscal year make a payment of all the monies available for the purposes of the Provincial Support Grant under Subsection (1) for that quarter to the Joint Provincial Planning and Budget Priorities Committee and to the Member representing the provincial electorate respectively.

"(4) The monies referred to in Subsection (4) shall be –
(a)	paid through the provincial Treasury; and
(b)	in the case of –
(i)	the Joint Provincial Planning and Budget Priorities Committee, paid directly to that Committee by the Provincial Treasury; and

(ii)	the Member representing the provincial electorate, paid on his behalf in accordance with the Provincial Support Grant Guidelines issued under Subsection (5).

"(5) The National Executive Council shall, from time to time, issue Provincial Support Grant Guidelines specifying –
(a)	the purposes for which a Provincial Support Grant may be used; and
(b)	the manner in which it shall be disbursed and accounted for; and
(c)	other administrative arrangements pertaining to it."

4.	TRANSITIONAL PROVISION

Notwithstanding the provision of this Law, the District Support Grants and Provincial Support Grants for the fiscal year commencing on 1 January 1998 shall be appropriated, distributed, administered and accounted for in accordance with the policy and practice applying to the distribution of grants immediately before the coming into operation of this Law, except that, where practicable, the provisions of the Organic Law on provincial Governments and Local-level Governments, as amended by this Law, shall apply.

I hereby certify that the above is a fair print of the Organic Law on Provincial Governments and Local-level Governments (Amendments No. 7) Law which has been made by the National Parliament.

Clerk of the National Parliament.

Constitution
CERTIFICATE UNDER SECTION 14

I, JOHN PUNDARI, Speaker of the National Parliament, hereby certify that the requirements of Section 14(1), (2) and (3) of the Constitution were complied with in respect of the Organic Law on Provincial Governments and Local-Level governments (Amendment No. 7) Law and that the law was made by the National Parliament as follows:-

(a)	the first vote was taken on 9 July 1998 when the number of seats in the National Parliament was 109 and those voting for the proposal were 76 and those voted against the proposal were 5; and
(b)	the second vote was taken on 9 September 1998 when the number of seats in the National Parliament was 109 and those voting for the proposal were 75 and none voted against the proposal.

Speaker of National Parliament.

APPENDIX TEN

(Mr Steven’s written submission – para 46 – 77

46. Section 95A(7) is as follows:

"The National Executive Council shall, from time to time, issue District Support Grant Guidelines relating to the District Support Grant specifying –

(a)	the purpose for which the portion of it payable under Subsection (3) (b) may be used; and
(b)	the manner in which it shall be disbursed and accounted for; and
(c)	other administratively arrangements pertaining to it."

47.	Is there a Guidelines? It is submitted that the evidence on this issued is unclear and in certain respects serious omissions have been identified that weaken if not answer the allegations made against the Leader.

Part 6	 GUIDELINES:

A. OFFICE OF RURAL DEVELOPMENT (ORD)

48.	 Mr Iamo Ila the acting Deputy secretary, Office of Rural Development (ORD) was positive that the copy of the Guidelines attached to his affidavit filed 23 May 2003 was the applicable Guideline for the relevant period. Please refer to EXHIBIT "A".

49.	 That is the Guideline issued in 1999 and according to Mr Ila it is the only Guideline he was aware of and enforced by the ORD in 2000.

50.	Mr Iamo Ila said in his evidence that he was not aware of:

(i)	any specific Guidelines for the disbursement of the Discretionary Component of DSG or
(ii)	of the existence of relevant Financial Instructions or
(iii)	the National Executive Council decision approving the Guidelines.

51.	Mr Y Simbak, ORD’s Momase Regional Manager said the Guidelines referred to by Mr Ila were for DDP and not much emphasis on DSG Funds.

52.	Mr Simbak also highlighted the confusion as to whether acquittals were to be given to the ORD or Ombudsman or Finance.

C.	NATIONAL EXECUTIVE COUNCIL (NEC)

53.	The evidence of Ms Winnie Kiap, the Secretary for the NEC is relevant in this regard. Relevant NEC decisions are set out below in a chronological order to facilitate subsequent analysis.

Relevant NEC Decision on DSG Funds

54.	The Guidelines for DSG and related funds for Districts were app[roved by NEC Decision No. 291 of 1998. EXHIBIT C6.

55.	This is clear from the wording of NEC Policy Submission No. 335 of 1998 dated 30 November 1998 9EXH C7) submitted by Mr Jimson Sauk, then Minister for Rural Development.

56.	Be Decision No. 28/99 dated 25 August 1999, the NEC directed inter alia, that the Guidelines be reviewed. EXHIBIT C5.1

57.	This is confirmed by the opening paragraph of Policy Submission No. 31 of 2000 dated 21 March 2000 which was prompted by the above said decision. EXHIBIT C5.

58.	Policy Submission No. 31 of 2000 dated 21 March 2000 led to NEC Decision No. 44 of 2000. EXHIBIT C4.

59.	Significantly, NEC Decision No. 44 of 2000;

(a)	Rescinded decision No. 291 of 1998
(b)	Purported to adopt new Guidelines.
(i)	No Guideline for DSG for period 1 December 2000 and 19 March 2001.

60.	From the above evidence, it is clear that the first Guidelines touching DSG Funds were approved by NEC in 1998. these Guidelines were rescinded by NEC Decision No. 44 of 2000 made on 22 March 2000.

61.	In our submission, that means that the Guidelines on DSG Funds which ORD was enforcing according to Mr Iamo Ila’s evidence was rescinded in 22 March 2000.

62.	The NEC was misled into thinking that it had approved new Guidelines for DSG as required under Section 95A(7) OLDRL in the same Decision No. 44 of 2000 made on 22 March 2000.

63.	However, as the evidence of Ms Kiap clearly shows, Policy Submission No. 31 of 2000 did not contain complete copies of the Guidelines submitted for approval including the Guidelines for DSG.

64.	It is now clear from the " complete forms" tendered by Winnie Kiap that what the NEC approved on 22 March 2000 was a two page document that was intended to be a 5 page guideline on DSG.

65.	With respect, in its present incomplete form, the approved document is an absolute nonsense and useless.

66.	Only the NEC could correct the error. The Ombudsman Commission could have noted this and drawn it to the attention of the NEC had it done its investigations competently.

67.	The NEC never corrected this error. In fact the NEC has been unaware of this significant error and has not corrected it according to Ms Winnie Kiap.

(ii)	Ms Kiap’s evidence on authenticity of "complete guidelines" insufficient.

68.	The copies of Guidelines for DSG (EXH "E") now before the Tribunal were bought in by Ms Winnie Kiap from ORD, according to her.

69.	It is submitted that these documents are not the approved Guidelines under Section 95A(7) OLDRL they are not official DSG Guidelines and cannot be relied on by the Tribunal in determining the charges against the leader.

70.	Ms Kiap’s evidence about the correctness or otherwise of this document cannot be accepted:

(a)	First, she is not the author of the documents,
(b)	Ms Kiap confessed to the fact of not having checked the documents before adducing the policy submission with incomplete documents to the NEC, how can she be sure about the original documents?
(c)	If this documents is from ORD then an officer from ORD ought to have been called to identify it and explain the original and etc of the document.
(d)	It is not the same DSG Guidelines that Mr Iamo Ila and ORD were enforcing which was approved by the NEC in 1998.

71.	Another point of contention arises from the following extract from page 4(4th para.) of EXHIBIT C5.2

"Please note these guidelines only address the arrangements for the management and control of the S&RDP. The guidelines for the DSG and PSG components are still submit (sic) to the 1999 guidelines issued by the ORD. The guidelines for DSG and PSG disbursements are currently under review and will be released later in FY 2000." Emphasis added.

72.	It is submitted therefore that it was not the intention of ORD, he author of the Policy Submission 31 of 2000 to disturb the Guidelines for DSG which were issued in 1999 (pursuant to NEC Decision 291/98 EXH C6).

73.	 In spite of that intention, clearly the NEC Decision 44/2000 did rescind its decision No,. 291/98 which enabled the DSG Guidelines issued in 1999.

74.	There is also no evidence that a Guideline for DSG was approved by NEC in 2000.

75.	With the greatest respect, the Prosecution and the Ombudsman Commission have simply failed to establish the relevant Guidelines for the period of question.

76.	A competent investigation by the Ombudsman Commission would have identified this significant pitfall in the system and recommended redress instead it pursued the leader with zeal that may be misplaced.

77.	The leadership tribunal cannot correct the legal error or anomaly. It is for the Prosecution to establish the offence and the accompanying evidence of breach by the Leader in order to sustain the charges.

-------------------------------------------