Friday, December 15, 2017

Old SporTT board must account


Mark Fraser

With the board of directors of the Sport Company of Trinidad and Tobago (SporTT) dismissed, on reflection, even VS Naipaul could not think up this story. 

This is likely the gold standard for State slackness, a signed contract and $34 million payout within the knowledge of the Cabinet, Ministers of Sport and Finance and their respective permanent secretaries, the SporTT board and CEO, and in-house and gilt-edged external lawyers. 

The cheapest form of due diligence—an Internet search for the name “EBeam Interact Ltd” —provides no information on the company, its track record in education, its location and corporate information. What gave the board of SporTT the confidence that it could part with $17 million of taxpayers’ money without a sweat, and another $17 million months later? Did the board not consider it silly to pay in full for something not even partially received?

For $34 million, EBeam Interact Ltd contracted to train LifeSport participants using “integrated interactive technology”, but EBeam does not even have a website. In six words SporTT’s CEO at the time justified a contract after sole select tender: “the sensitive nature of the programme”. Nothing more said. And, despite selection on the basis of “having demonstrated the capability for the prompt implementation of the LifeSport programme”, EBeam does nothing. Even Naipaul is outwitted. 

The SporTT board is now gone and a new board is on the way. But this is not a case for letting bygones be bygones. The Constitutional (Amendment) Bill 2014 may grab the headlines now, but over the long-term none of the proposed amendments fixes the systemic slackness and cavalier attitudes towards taxpayers’ money. 

As new information flowed on the beleaguered LifeSport programme, the board of directors of SporTT made no comment. It opted for the cover of “legal advice being sought”. The board was fired, legal advice still pending. Now, as “former board members”, the ex-directors must individually and collectively account for their handling of the business of the country’s taxpayers, two issues in particular. 

First, there were 13 days between the date of the “Justification for Sole Select” document and the December 6, 2012 contract signed by SporTT’s then CEO John Mollenthiel. Was the board aware at the time of this signed contract? Did the board review the financial proposal made by EBeam? Was the board satisfied? Was the $34 million within the financial authority of the CEO and, if it was not, why did the CEO sign on behalf of SporTT?

Second, the July 25, 2014 audit report from the Central Audit Committee of the Ministry of Finance refers to a March 2013 ratification of the award to EBeam. Why? Was the contract a fait accompli that the was board pressured to ratify? With SporTT paying in full long before completion of the contract, what financial safeguards and guarantees did SporTT extract from EBeam to support a $17 million payment even before anything was done under the contract? What recovery protections did SporTT put in place for the $34 million paid before full value was received? 

A child knows that paying in full without receiving value is an aberration. Did the board consider the force majeure provisions at clause 16.1 of the contract and the “time of the essence” provision at clause 5? Quite likely the contract provided avenues for exit since the services were not being delivered at the time the second payment was made.

The SporTT board and CEO cannot simply be replaced. They must account. This is slackness and the $34 million loss is not VS Naipaul’s fiction.

The author is a lawyer and possible PNM candidate for the next general election