Fuel scam and GHH 7538

On December 16, businessman Gangadeo Sridat, 48, and two former ranks of the Guyana Defence Force (GDF) Terry Milling, 35, and Delon Wilson, 34, appeared before the court in relation to a huge fuel theft.

They were charged with conspiring with persons unknown to commit a felony, by stealing $745,559,430 worth of fuel, property of the GDF. They appeared before Magistrate Judy Latchman at the Grove/Diamond Magistrate’s Court and were placed on $300,000 bail each. They denied that between January 1, 2015, and June 30, 2020, at Guyoil Terminal, Providence, East Bank Demerara, they conspired together with persons unknown to commit a felony, by stealing $745,559,430 worth of fuel, property of the GDF.

The magistrate’s reasons for the low and identical amount of bail for all three accused would make interesting and disconcerting reading.

Whether by coincidence or not, the trio appeared in court on the same day that Stabroek News reported on the findings in the Auditor General’s Report of 2020 on the fuel scam. That report said that even though a police investigation was ongoing and a forensic audit had been completed, an unauthorised vehicle continued to receive millions of dollars in fuel from the GDF. How could that be possible? What were the GDF and the police doing? They clearly had not been taking the reports of the Auditor General seriously.

In 2019, the Auditor General’s report said that motor vehicle GHH 7538 was flagged as receiving $181.567 million in fuel from the GDF. The report said that the vehicle is not in the Force’s or its supplier, the Guyana Oil Company’s register.

Yet, the 2020 report again flagged the vehicle for receiving a total of $67,455,000 in fuel. The report pointed out that the GDF purchases fuel in bulk and retail quantities. As it relates to bulk fuel, the Force makes prepayments to Guyoil based on its estimated consumption and whenever the need arises, it would request the company to deliver it to camps Ayanganna and Stephenson and Coast Guard Headquarters at Ruimveldt, Georgetown.

The Auditor General said that 10 payment vouchers, valued at $188.589 million, were presented for auditing. The vouchers represented 99% of the GDF’s bulk purchases and an analysis of them showed that GHH 7538 uplifted 285,200 litres of gasoline and 184,000 litres of diesel with a value of $38.806 million and $28.649 million, respectively.

“Audit enquiries revealed that the said vehicle was neither owned by the Guyana Defence Force nor Guyoil. In addition, there was no contractual agreement for this vehicle to uplift fuel on behalf of the Force. Further, we were unable to verify whether the fuel was received by the Force. Moreover, it was reported that the Goods

Received Book for Camp Ayanganna was misplaced; whilst, the records for Camp Stephenson – Timehri, and Coast Guard – Ruimveldt were under scrutiny by special investigators,” the report stated.

The report added that stock ledgers were submitted for Army Headquarters, Camp Ayanganna, but the receipts of fuel from the said vehicle were not recorded in these ledgers. Additional attempts to verify receipt of the fuel were futile since the gate book, which tracks ingress and egress of vehicles, was not submitted for audit.

Auditor General Deodat Sharma pointed to his 2019 findings which had revealed that the analysis of 25 payment vouchers totalling $471.738 million showed that the sums of $238.204 million and $233.534 million were expended on the acquisition of gasoline and diesel, respectively.

“It was evident on 103 invoices that vehicle bearing registration number GHH 7538 uplifted 887,800 litres of fuel valued $181.567M. As reported earlier, the said vehicle was not owned by the Guyana Defence Force or Guyoil. In addition, there was no contractual agreement for this vehicle to uplift fuel on behalf of the Force. Included in the 103 invoices were seventy-five invoices with sums amounting to $130.861M, purporting that gasolene was uplifted and delivered to the Force.

“However, the signatures of the driver and the customer receiving goods appeared to be identical, indicating that the same person may have uplifted the fuel from Guyoil, as well as received it at the Force’s locations. Similarly, for the purchase of diesel, there were twenty-three invoices for sums totalling $41.487M where the signatures of the driver and the ‘customer receiving the goods’ appeared to be identical,” the Auditor General stated.

He also reminded that there were 26 instances where approximately 2,000 gallons of gasolene were delivered to the Coast Guard Headquarters when the storage capacity there is 1,000 gallons, a likely sign of more pilfering.

In relation to fuel purchases, the GDF was also cited for breaching procurement laws since it engaged in sole sourcing. The Auditor General identified three instances of breaches in relation to Guyoil, Rubis Guyana Inc and Massy Gas Products.

The findings of the Auditor General’s reports point to egregious breaches of procurement and control systems in the GDF and corruption on a grand scale. Not only are the figures mind-boggling but this theft appeared to have been conducted systematically over a number of years. The audit, inexplicably only covered 2015 to 2020 when in all likelihood the scam had been transpiring even earlier. As Commander-in-Chief of the Armed Forces, President Ali should order an immediate inquiry into army procurement practices over the last decade and a review of the checks and balances that should be in place to prevent theft along the patterns of what has been alleged in court.

There should also be further investigations to determine whether personnel at Guyoil were also complicit in this scam and urgent measures should be taken to ensure that purchases by state agencies from Guyoil are reconciled with the Stores Departments of each agency. This is a salutary lesson that the findings of the Auditor General’s reports must be taken seriously and acted upon immediately. Had that been done, some of the acts of malfeasance might have been arrested. The alleged grand corruption at the GDF underlines the importance of watchdog bodies such as the Integrity Commission and the Public Procurement Commission and its tribunal. No more time should be wasted in fully constituting these bodies.