An official of the Ministry of Finance yesterday revealed that Obrien’s Car Sales Limited was in November 2017 granted a second moratorium for taxes on the controversial 66 vehicles being imported for the police, even while the company still owed $7.9 million on the first 30 vehicles which were imported last June.
The Public Administration and Appropriations Committee (PAAC) of Parliament was also yesterday told by Acting Financial Secretary Darlene Morrison that Obrien’s had gone directly to the finance minister in seeking the second waiver on the special consumption tax and general consumption tax, bypassing the Ministry of National Security with which it is contracted to deliver the vehicles.
The Ministry of Finance had initially rejected the request for a waiver from Obrien’s which was brought to its attention by the security ministry, and gave the company a deadline by which to deliver the vehicles, threatening consequences.
That second moratorium has now been nullified.
“This has been a messy affair. It has a bitter taste of ‘bandoolooism’…I’m hoping and praying that no other transaction goes on in this manner. This is where we are talking about the minister overstepping his boundary, and I will not take that back. Because if a request was made by the supplier straight to the minister and no communication made (to the ministry) and one was issued, and it was only because of public pressure why it was withdrawn, and the Ministry of National Security would have then accepted (liability),” Opposition Member of Parliament for Manchester North West Mikael Phillips stated.
Government Member of Parliament for St Catherine North East Leslie Campbell, however, cautioned that: “This is inflammatory; are we making a finding that there is corruption or that the minister has exceeded his authority? I think it is unfair (and) unwise to be going down that route.”
The $427-million car deal which the Government signed with Obrien’s last January has been mired in controversy since November when details of the souring of the contract came to public attention.
Morrison told the committee that she had not been able to locate any documents to justify the first moratorium, which was for one month, and totalled $9 million. Customs has so far only been paid $1.2 million of that sum.
“I cannot definitively tell you what the circumstances were because at the time I would not have been financial secretary…I have not been able to locate a document that outlines the basis (for the moratorium); it appears that there was something verbal. The moratorium having been issued, it was signed by the national security ministry,” she stated.
Commissioner of Customs Velma Rickets Walker informed the committee that there have been promises since July to pay the balance, but that to date that payment has not been made. She said the most recent undertaking came on December 8 from McIntosh. Rickets-Walker also informed that under the second moratorium, Customs now has import declarations for only 29 vehicles, which are in the system, but which have not been “finalised”.
The acting financial secretary further said also that she had not found evidence that the moratorium was requested by any “external source”, but explained that there were discussions between the ministry and Obrien’s in which the supplier had indicated that it was unaware that taxes should have been included in the contract amount.
“In the interest of getting the vehicles to the Jamaica Constabulary Force, the Ministry of Finance issued the moratoriums; I believe that has some bearing as to why, although they were already holding $213 million (deposit), it was not insisted (that they should pay),” she stated.
Up to Monday, Obrien’s still had not paid the performance bond of $42 million which the Government has called on. A third letter of demand has been written to the supplier, Morrison said.
The finance ministry said the moratorium of $34.5 million was based on information submitted by Obrien’s for the second batch of vehicles, but that it is not in possession of the import declarations for all of those units and was therefore “unable at this time to confirm the actual value of the GCT and SCT”.