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Why Wayome-gate stinks
- explains Ace Ankomah
There are a lot of things flying all around and above us
about a man whose name has over the past few months become a
noun, a verb, an adjective and any other literary device you
may want to attribute it to.
I had frankly never heard the name Woyome until the
Chronicle blew the lid over some gargantuan amount (with all
due respect and the succinct permission of a certain Martin
Amidu) to the whole nation.
All kinds of people, most of whom have absolutely no
background in law nor finance to investigate or the
journalism skill to piece together all of the numbers and
laws for us all to understand, have been on air, on TV, on
social media all seeking to exonerate government or make
government look like a bunch of criminals out to dupe Ghana.
friend of mine on Facebook posed the question below to ace
lawyer Ace Ankomah (AKA Kojo Anan Ankomah) on his Facebook
page (I have done a bit of grammatical edits but the
contents remain same).
The question was:
My good friend Kojo Anan Ankomah, what does the constitution
say about payment of judgment debts? Is it prudent for a
government to ignore a court ruling? What are the
consequences for such an action? I'm aware of Busia's “No
Court” declaration and President Kufuor's refusal to comply
with the court order to re-instate Hodare Okai who was
illegally dismissed from the public service but are these
cases credible precedence for us all to follow?
Why are we trying to paint the picture as if money was just
doled out to an individual for no cause? Did the court order
for payment to be made to Alfred Woyome or not? If yes, why
not focus the discussion on the judiciary rather than the
executive? Where does the complicity of the President come
in? I just don’t get it!!!
With the kind permission of these gentlemen, I will want to
piece together Ace Ankomah’s response which I think
simplifies the mis/understanding behind Woyome-gate. Here we
go.
Around 2005, the government engaged with an Austrian company
called Vamed to undertake some construction works in Ghana.
But it turned out that they were really talking at cross
purposes.
While the government was talking about building stadia,
Vamed was only interested in building hospitals.
Vamed lost interest in the deal and therefore purported to
assign its "rights and obligations" to another company
called Waterville.
Woyome claims that he led a consortium of Vamed, Waterville
and M. Power Pak to win a bid to construct 5 new stadia and
rehabilitate 3.
However note the following:
1. Vamed left the scene
2. The actual contract was between Ghana and Waterville
alone, no Woyome, no M. Power Pak.
3. The contract I have seen was limited to the
rehabilitation of Accra, Kumasi and El-Wak stadia, nothing
about building 5 new stadia.
Let's pause and do a little law here.
Section 20 of the State Property and Contracts Act limits
the "power to contract" on behalf of the state to the
relevant sector minister or a person duly authorized by him.
Thus unless a person can produce any such contract, the
person has absolutely no contractual relationship with the
state. There is nothing to enforce if you don't have a
contract. You might have heard Woyome admit many times on
air that he did not have a contract with the government.
That is true.
But we will return to this later.
The contract with Waterville was signed on behalf of the
state by Osafo Maafo and witnessed by a Principal State
Attorney, and Agyeman-Manu and witnessed by the Legal
Director at the MoF. Under that contract, Waterville was to
procure funds for the rehabilitation projects.
Subsequently, Agyeman-Manu wrote a letter of introduction
for Waterville, Woyome and one other to 3 banks, but stated
clearly that there was no power in them to enter into any
contract and that if they agreed on something; the term
sheet should be brought to Ghana for approval. Why Woyome?
Clearly, he was a part of this deal, but officially as
originally the local agent of Vamed, and now, almost by
default, the agent of Waterville.
But the letter was clear that none of the persons mentioned
in it had the power to enter into any contract. Note that it
is this letter that the [FORMER] AG subsequently discovered
and rushed to court to say that on the strength of this
letter, she made a "mistake" when she thought and argued
that we had a contract with Woyome.
But I will return to this later.
Notwithstanding the above, Woyome claims in his statement of
claim that he "arranged" €1bn with a bank, and that he had
an agreement with the state that he would be paid 2% of "the
project cost".
Once again he is unable to produce a contract under which he
was to be paid any such monies.
Note that he says he "arranged" the funds. But the
introduction letter was emphatic that whatever they did was
not binding on the State until the State had directly
contracted with the bank.
In any event, according to Woyome, this amount was to cover
the construction of 5 new stadia, rehabilitation of 3 stadia,
the construction of 6 hospitals, a cobalt plant and a tissue
plant.
Please let's go back. The only contract in existence was for
the rehabilitation of 3 existing stadia. Even if we were to
assume that Woyome had the power to "arrange" funding for
that contract (which is denied), who gave him the power to
extend that to cover all the other projects and then claim a
2% fee for all of that. If you send me to go and hire a taxi
for you for a fee, can I hire a taxi, a trotro, a yutong bus
and a bicycle and say you should pay me a fee covering all
of that?
As things turned out, Waterville ran into difficulties in
raising funds for the stadium rehabilitation, and time was
running out. So the government terminated the contract.
Waterville wrote to accept the termination and made a claim
for a specific sum. The government disagreed and asked the
project consultant to do the relevant measurements of work
done, materials on site, and already purchased but yet to be
delivered materials. This was done and the Waterville was
paid through its local subcontractors, Michelleti and Consar.
It is obvious that Waterville was not happy with how much it
was paid, but this was certified by the project consultant.
Then there was a change in power. Waterville then surfaced
again to make claims, way in excess of even what they had
originally made in their letter to the previous government
when it wrote to accept the termination.
Somehow, Woyome heard about this and wrote an angry letter
saying that Waterville was lying and that in his view,
Waterville was owed about €5m and he Woyome was owed €6m.
This brought a quick reaction from Waterville's lawyers, who
reminded the AG that there was no contract with Woyome, and
stated that Waterville had already paid Woyome off for his
work and services and signed a termination agreement with
him. I have seen the termination agreement. I will look for
it and post it on my page.
Soon after this, Waterville's lawyers were fired, and
Waterville and Woyome became one. Waterville then put in a
claim for construction and financial engineering of €32m.
We are told that this went for "arbitration" and that we
were made to pay Waterville some huge monies. Government
guys have said it was €25m. Arbitration? Where? Who was the
arbitrator? How was he appointed? Where is the Notice of
Arbitration?
Under the contract it was supposed to be under ICSID rules
and held in London. Where are the pleadings?
Where are the records of proceedings of the hearing? Where
is the award? Woyome however gives the game away in his
pleadings when he says that it was rather an "interim
agreement" between Waterville and the government and that we
paid €21.5m. But then he says that that payment only covered
construction and not his financial engineering.
Remember that Waterville had accepted the termination, in
writing, and had been paid, leaving a rather small claim
that we were refusing to pay because the projects consultant
did not certify it.
Remember that Woyome had claimed, on whatever basis that we
did not owe Waterville more than €6m. But we ended up paying
over €20m to Waterville.
Back to the story.
According to Woyome, he negotiated with the AG who agreed
that he was owed the cedi equivalent of €22m, i.e. GH41m,
which is 2% of the €1b he allegedly "arranged".
Note, the government never got this money. The AG then wrote
to the MoF to pay Woyome. On 6th April 2011, the MoF
approved the payment and asked the Accountant-General to
pay.
On 7th April, the Accountant-general issued a 'Bank transfer
advice' to the Bank of Ghana. Then the plot hit a snag.
Apparently someone in Bank of Ghana asked to see a contract.
THERE WAS NONE. 12 days later, Woyome sued to say that he
had waited too long for payment!
Things began to get bizarre. According to Woyome, he entered
into negotiations with the AG who agreed that we owed him
the cedi equivalent of €22m i.e. GH41m being 2% of the €1b
Woyome allegedly "arranged".
How was this possible? Where did they conjure this up from?
Remember that the AG now says that this was a 'mistake' and
that she now knows that we did not have a contract with
Woyome. But she wrote to MoF to "recommend" or "authorize"
payment to Woyome. These are Woyome's words. One should ask,
where was the supporting documentation?
Strangely, on 6th April, the MoF wrote to the
Accountant-General to pay. On the very next day the
Accountant-General issued a 'bank transfer advice' to the
Bank of Ghana. This deal might have slipped through at that
stage but for the apparent vigilance of someone at Bank of
Ghana who demanded a contract. THERE WAS NONE!
There was therefore the need to produce a document. What
better than an unopposed judgment?
That is why Woyome sued within 12 days of the 'bank transfer
advice', claiming that he was tired of waiting.
The AG was served on 21 April and entered appearance on 23
April. Remarkable.
Let's do a little civil procedure class here.
When you are served with a writ and statement of claim, you
have 8 days within which to enter appearance and 22 days to
file a statement of defence. That meant that our defence was
not due until 13 May.
If you do not file a defence, the other party is entitled to
apply for 'judgment in default of defence'.
Simply, when your claim is for a debt, all that the party
has to show is that you have been served and you have failed
to file a defence. Then the judge will grant the judgment.
Period. The judge is not required to inquire whether the
case is true or genuine. Once you are served, you are the
one to come to court and say that the case is stupid. If you
fail, refuse, or neglect to do so, the court will not do
that for you, whether you are the government or a private
person.
But on 4th May, Woyome suddenly changed his lawyers who
filed an amendment to his writ. More civil procedure.
You are not allowed to amend your writ alone. If you amend
your writ without amending your statement of claim, the
court will set the amendment aside, especially where the new
writ conflicts with the statement of claim.
In this case, Woyome amended to claim €44m and failed to
amend the statement of claim to explain how he came by this
figure. Remember that he had claimed that he was entitled to
2% of €1b, which was €22m i.e. GH41m. He amends to increase
his claim to 4% and the AG says nothing!!
I have not said that the president is complicit. Indeed my
posts have said exactly that. I have said that
unfortunately, if he knew, wahala, and if he didn't know,
wahala. But let's follow the story.
It is a tad murkier here.
The records show that the AG was served with this amendment
on 4th May, the very day it was filed. However the bank
stamp on the docket copy of the amended writ, which
indicates the date the filing fee was paid, is dated 7 May!
Further the amended writ, although it bears the name of
Woyome's new lawyers, does not have the lawyer's signature
or stamp.
And do you remember that by this time, Woyome and Waterville
are best friends? Well, Waterville is owned by Taricone of
Trasacco. He also owns Micheletti. Woyome's new lawyers are
Taricone's long standing lawyers!
But over and above all of that, our AG did NOTHING about
this amendment. Even if [she] were to admit this obviously
flawed amendment as proper, the rule is that the filing of
the amendment automatically extends the time for filing your
next process by 14 days from the day you were served with
the amendment. This means that worst case scenario, we had
until 18th May to file a defence. But, curiously Woyome
amended again! This time on 6th May to expand his claim for
interest on the new amount claimed. Same problem with
amending the writ without the statement of claim. What is
worse, the amendment is also in breach of the rule that you
can only amend once as of right. Any other or subsequent
amendment requires the leave of the court before it is made
or filed. No [such] leave was obtained. The 2nd amendment
was therefore invalid.
The AG was served on 7th May. SHE DID NOTHING. But even if
we admitted this wrong procedure as right, that extended the
time for filing a defence to 21st May. And, there was no way
that amendment could stand because essentially you had a
statement of claim that asked for GHc41m and provided
grounds for it, and a new writ that asked for €44m with
absolutely no explanation. And our AG did nothing about the
fact that the court would have to resolve the contradiction
before we filed anything. {Again,} She did NOTHING!
So, although we now had up to 21st May to file a defence,
even if we did not want to challenge the obviously invalid
amendments, Woyome filed for default judgment [on] 14th May.
The time had not run [out].
[But] Our AG did nothing, although she was served. So on
24th May the court granted the default judgment.
By 28th May, the AG had woken up and had sprung into action,
writing a strongly worded letter to the MoF to demand
payment for Woyome. She now says she was working under a
'mistake'. Do you believe her?
This letter [from the AG] was copied to the chief of staff
at the presidency. So we are entitled to ask what the
President knew and when he knew it.
In the letter, she 'blasts' the Ministry of Finance for not
paying earlier as she had advised, before Woyome sued. She
said as a result, Woyome had obtained a judgment for GH105m,
which was the cedi equivalent of the €44m plus interest and
costs of GH25,000 awarded by the court. She said that she
had managed to negotiate again with Woyome and his lawyers
and they had accepted to take the Gh41m, plus GH9m as
interest and the costs of GH25,000 a total of Gh51m. But
according the Auditor General's 2010 Report, we paid Woyome
the GH41 on 4th June 2010, in record time!
Having gotten the MoF to agree to pay, on 3rd June, the AG
entered into a document styled "Terms of Settlement" with
Woyome, reciting the history of the case in court, including
the invalid amendments (without any objections) and stating
that we had agreed to pay the GH51m in 3 installments of
GH17m each. If this is the case, why on earth did we pay
GH41m to Woyome the very next day, as the Auditor-General
says?
Seven days after the Auditor-General claims we paid Woyome
GH41m, the AG's Department has a Damascus moment. They [AG's
Dept] filed an application to the court to set aside the
Terms of Settlement, saying that they had now seen Agyeman-Manu's
letter, which showed that we made a 'mistake' when we didn't
file a defence, thinking that we didn't have a defence. The
application was signed by a Chief State Attorney, who also
deposed to the affidavit in support. It was this same guy
who was the Principal State Attorney who witnessed
Osafo-Maafo's signing of the Waterville Agreement. So at
least he had known all the time that the agreement was with
Waterville and not Woyome. Yet he had also witnessed the
AG's signature on the Terms of Settlement that agreed to pay
Woyome GH51m!
And, what is even more criminal, the application did not
state that they had paid Woyome the Gh41m, as we now know
from the Auditor-General's Report, to the extent that that
Report is true.
The begging question is whether the president knew about
this payment.
At least we know that the AG's blasting PAY WOYOME letter
went to the Presidency. According to the opposition, the MoF
also notified the Presidency of the pending payment. But to
be fair, I have not seen any documents to back the
opposition's claims.
Back to the story.
Woyome opposed the application on numerous grounds. The one
that sticks with me is that on the strength of a letter from
the MoF dated 3rd June (I haven't seen this, but I reckon
this is what the opposition is referring to), he had gone to
borrow GH4m from NDK.
But if he had received GH41m, why would he go and borrow?
And why didn't the AG's rep in court inform the court of the
payment? So, either the Auditor-General's Report is untrue
or both Woyome and the AG misled the court. The court
dismissed the application, and rightly so. It was riddled
with substantive and procedural errors. The judge advised us
that our best bet to set aside the Terms of settlement was
by issuing another writ and not by a motion.
We took a cue and so filed a fresh writ on the grounds that
we made a mistake! On the back of the fresh writ, we applied
back to the court to stay the execution of any payments
to(sic) that the fresh case commenced by the fresh writ is
determined. Once again, neither we nor Woyome disclosed to
the court that we had [ALREADY] paid GH41m.
The judge reasoned that since we had agreed to pay in 3
tranches of 17m each, and the time for the payment of the
first GH17m was due, we should pay that and then he stayed
the payment of the remaining 2 tranches.
Hold your breath now.
On 22nd September, we paid Woyome Gh17m, THEREBY PAYING HIM
A TOTAL OF GH58M, AN OVERPAYMENT OF GH7m! At a time when we
were fighting [against] paying anything at all, and the
court had stayed execution of the Gh34 balance, we overpaid
the man!
Woyome took our money, including the extra 7m for Christmas,
we continued with our new case and then in late 2011 EOCO
freezes his accounts?
Is this not insulting and laughable?
But back to your question whether we can blame the
president.
I don't envy him. It appears that at least 2 letters hit his
office. Were they shown to him? We might never know.
But heads or tails he gets wahala. If he says he knew, we
will say he has complicity. If he says he didn't know, we
will say he is weak.
We say we made a mistake and have sued Woyome. We told the
court to stay execution because Woyome doesn't have the
means to refund the money if we paid him. The court agrees
in part and says we should pay only GH17. Then we overpay
what we allegedly owe him by GH7m.
Then our Deputy AG says we never had a defence and that we
had a bad case, meanwhile we are still in court saying we
had a good case. Is the house divided against itself? Are we
serious?
Let us assess all of these with the following words ordered
(sic) [uttered] by the President:
“When this case first broke, I was in the US and I ordered
the two ministries involved, at the Attorney General’s
Department and the Finance Ministry, to give me a report, a
report which I wanted to be published so that the world
would know what happened. But upon further thought, I
thought that the issue is not whether the amount was paid,
who paid it…. First of all, who incurred the liability?...I
would want to tell the beneficiaries that I am not out to
embarrass them –
NO…We have to find out who incurred the liability because if
the court awarded the judgment or awarded the cost, whatever
it is, it’s a way of saying that the beneficiary is entitled
to it…
Now, who made it possible for that beneficiary to be
entitled to that amount?"
I think this should be enough for even that dude who always
trailed in all his classes all his life.
Woyome stinks and as I have said elsewhere before, Woyome
may just propel Mills into our history books as the first
President to miss out on a second term. Woyome-gate is huge
(or rather gargantuan) and it stinks worse than the head of
a dead fish.
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