To Fire or not to Fire: Presidents’ Dilemma

Inn

Today, this democracy is 25 years old. We need to appreciate the leadership we’ve had so far. This means we need to celebrate our presidents (including those who had the opportunity but couldn’t make 2 consecutive terms). A moment of celebration, I think, should also be a moment of empathy. Let’s empathise with our presidents, past, present and even future. Let’s consider their fears, worries and, even most importantly, their  challenges. Trust me, their challenges are innumerable (and, I’m not saying I’ve been a president before). Just trust me.

Perhaps, the greatest challenge in political leadership is how to get the ‘right’ persons to work with (and, here, I’m speaking within the context of presidents and their ministers). Getting the right people entails combining competence with loyalty in the right proportions. But that’s not all, a leader has to do this within certain legal, time, sociocultural and economic frameworks. So, first of all, its not easy to get the men and women for the job.

The second great challenge, I think, is the ability to, having appointed some persons to work with, instil discipline into such appointees. Of course, if political appointees were kids, a leader could use disciplinary tools like, reprimand, corporal punishment, ‘silent corner’, etc. to achieve some discipline. But when you are dealing with grown ass men and women with greys in all manner of places, then, you know it’s a different ball game. In such circumstances, dismissal becomes the only (if not the most) viable way to ensuring discipline.

So you’ll probably be wondering why dismissal isn’t used a lot of the times. Well, thing is dismissal, too, isn’t without serious questions. The first question is political clout – can you just dismiss the woman you have rewarded with a ministry for her enormous contribution to your journey to office? Of course, if her contribution was merely pecuniary, you could still venture a wager and hope to find other ways of settling your pecuniary debts with her. How about if she represents a major voting constituency?

The second question is replacement. It is true that one man’s misfortune is another’s blessing – sacking an appointee presents a job opportunity for another party member. So, the replacement question is not really about nominal intra-party equations. Rather, the replacement question takes us back to the beginning of the dilemma – getting the ‘right’ person to work with. Only that the question turns into how may I get a better (or even similar) replacement. A leader would still have to face the same legal, time, sociocultural and economic framework and above all loyalty-competence mix; this time round afresh and with even more rigour.

The third question (which is inseparably-linked with replacement) is assurance. Political situation is probably one of the most unpredictable on earth. Even the weather has a say in it. Even army-worms may have a say. Persons with impeccable professional acumen have been drowned in exceptional failures in political situations. CVs are helpful but certainly not very reliable anymore. The assurance question here is: what’s the guarantee that the new appointee won’t commit even more grave blunders? There’s a conventional answer to this question. It has something to do with known devils and unknown angels.

But there’s also a fourth question – the ‘gang-up’ situation. No one understands allegiance better than politicians. A president who shows signs, no matter how faint, of freely plucking off ministers for wrongdoing also exposes herself to the ‘gang-up’ situation. Soon, the ministers would realise that none of them is beyond wrongdoing. Soon, they would realise that none of them is safe. Soon, they would agree among themselves that all should be for one and one for all. They would gang up and pit up against the President. And, if the President is to rely on them for advice in ensuring discipline (which he’s bound to), what would be the direction of such advice? No one wants that. Certainly, not when the opposition is warning up on the touchline.

Often, dismissal for wrongdoing is considered a strong sign of good governance. It shows that a president has a good sense of judgement. It also shows that she’s in “control”. In fact, governments lose elections simply because they failed to sack some appointees. But often, too, dismissal may be seen as admission of incompetence; and if it happens often (as principle-based dismissal is bound to), then, the opposition (rather than the government) becomes the ultimate beneficiary. This is the fifth question – confidence. How do you run your government in such a way as to not lose the confidence of the electorates?

What I’m trying to say is that the next time you ask a president to fire an appointee, do  not just focus on one side of the equation. Do well to consider all these questions and more. Happy 25th birthday to this democracy that the events of 31st December, 1981, gave us.

The Bond Saga, CHRAJ and the Rules on Conflict of Interest (Part 4)

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In the previous part of this note, I concluded that CHRAJ could only clear the Minister of the allegations of conflict of interest violations if it finds the following: (1) That the Minister did not breach the BoG rules on issuing such bonds; (2) That the alleged crony-relationship did not exist; or (3) that even if the alleged crony-relationships existed, the Minister has taken refuge at the safe harbour under Article 78(3).

In this concluding Part of my note, I’ll outline the findings of CHRAJ in respect of each of these 3 issues. I’ll do this by simply reproducing the relevant parts of the report.

(1) Did the Minister Breach the BoG Rules?

In respect of the allegation that the Minister breached the BoG rules for issuing such bonds, CHRAJ found that the Minister did breach the rule. Here are some of the findings in this respect at pages 109 and 117 respectively:

“In terms of the 7-year and 15-year bonds, the BOG should have notified the market at least two (2) weeks in advance of their issue since they were “new products” in accordance with the Bank of Ghana Guidelines. But as the evidence shows, the market was notified only one (1) day on the availability of the 7-year and 15-year bonds prior to the commencement of trading. This period is shorter than the 2-3 days period that the previous issues provided.”

“The publication by BOG on the availability of the financial instrument (5-year and 10-year bonds) was not done “two weeks prior to the commencement of the Calendar period which was state as 30 March 2017 as required by Rule 2.0.(a) of the BOG Guidelines. The publication was done on same day trading was to commence.”

(2) Did a Crony-relationship Exist?  

In respect of the allegation that the Minister has interest in Batabank and Enterprise, CHRAJ found such interest to be significantly present. It says on page … of the report:

“The evidence before the Commission shows that before assuming or on the assumption of duty, the Respondent had and still has personal interests, some pecuniary and other non-pecuniary. The Assets Declaration Form which the Respondent completed and submitted to the Auditor-General in compliance with Article 286(6) of the Constitution and dated 12 March 2017 discloses that the Respondent has employment or business interests listed as unspecified shares in Databank, Ventures and Acquisition and Enterprise Group Ltd.”

CHRAJ found that Trafgarne, too, has interests in both Templeton AND Enterprise. It says on page 120 of the report that:

“FT [Franklin Templeton] unaudited report 2017indicates that the “Honourable Trevor G. Trefgarne was appointed to the Board of Franklin Templeton Investment Funds on November 29, 2002. He is the Chairman of Enterprise Group Limited, Ghana, and has been Diretor of a number of U.K. Listed investment funds including Templeton Emerging Markets Investment Trust, Recovery Trust (Chairman) and Gartmore High Income Trust. He has extensive experience of the management of listed companies in the UK and Africa”

(3) Did the Minister Dock at the Safe Harbour?

The Ministers did not allege and CHRAJ did not find any evidence that the Minister made a disclosure to Parliament on the material facts of his relationship with Templeton (to which 95% of bond of the US$ 2.25 billion bonds was sold in breach of the BOG rules). As a matter of fact, CHRAJ found that the Minister concealed some of his assets in breach of the asset declaration laws. It stated at page 120 as follow:

“It is observed that the Respondent [Minister] had other assets which he did not disclose in his Asset Declaration Form. They include his interest in Databank Financial Services Limited and Databank Brokerage Limited.”

In the teeth of all this, CHRAJ was still able to conclude that:

“[T]he allegations by the Complainant that the Respondent has contravened Article 284 of the 1992 Constitution by putting himself in a conflict of interest situation in relation to the issuance of the 5-year, 7-year, 10-year and 15-year bonds, have not been substantiated.” (Underlining mine)

How CHRAJ Erred

But, hey, how did CHRAJ arrive at this conclusion? We may get the answer to this question from the reasoning at page 133 of the report:

“There was also no evidence before the Commission at this stage that there was a personal benefit to the Respondent or his business and other relations. On the basis of the foregoing, it is reasonable to conclude that though there was the significant potential that the Respondent’s personal interest could have been in conflict with the vast personal interest in the securities sector, it was not the case in this specific bond issue.” (Underlining is mine)

It may be obvious from this reasoning that CHRAJ got to this rather lonely conclusion by relying on a rule in the Okudzeto Ablakwa (No. 2) case. The rule in that case is that a person cannot be guilty of a breach of Articles 23, 35(8) and 296 (NOT Article 284) unless she is found to have actually derived a “personal benefit” from the transaction. But as I’ve disclosed in the previous part of this note, this rule has absolutely nothing to do with Article 248 conflict of interest claims; and shouldn’t have come in here at all.

Way Forward

CHRAJ’s decision may be reviewed by the courts. This allows for 3 things to happen. First, the Minister may seek a review of the decision if he honestly believes that CHRAJ’s findings do not reflect the facts. Second, the complainant, too, may seek a review from the courts if he believes (as I do) that CHRAJ’s decision is at war with the facts it found. The final option is for a citizen to seek a review.

Happy new year!

The Bond Saga, CHRAJ and the Rules on Conflict of Interest (Part 3)

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We know that CHRAJ has cleared the Minister of the allegation of breach of conflict of interest rules. My claim is that the evidence on record could not allow CHRAJ to come to that conclusion. I’ve been writing this note to show this. In Part 1 of this note, I disclosed some of the challenges that the Deputy A-G faced in defending the Minister at CHRAJ. In Part 2, I attempted a simplified explanation of the concept of conflict of interest. In this Part 3 of the note, I’ll begin to dissect the CHRAJ report. Particularly, I’ll outline the circumstances under which CHRAJ could clear the Minister of the allegations.

The Allegations

The Complainant’s allegations are that the Minister cooked the US$ 2.25 billion bond deal for his cronies. According to him, the Minister did this by side-stepping the Bank of Ghana (BoG) rules on how such bonds are to be issued.

The Complainant outlines the alleged crony-relationship between the Minister and the persons who took the bond. He says that: (1) the Minister has interests in certain companies, particularly, Enterprise Group Limited (Enterprise). Enterprise owns Databank, a company in which the Minister has significant interest; (2) one Trevor G Trefgarne is a director at Franklin Templeton Investment Limited (Templeton). Templeton is the entity which acquired as much as 95% of the bonds; (3) the same Trefgarne is the chairman or director at Enterprise. By these facts, the Complainant alleges that the Minister, a “public officer”, is found in “the position where his personal interest conflicts or is likely to conflict with the performance of the functions of his office” contrary to Article 284 of the Constitution.

Clearing the Minister

CHRAJ could only clear the Minister of the allegations if it makes the following 3 major findings. First, CHRAJ has to find that the Minister did not breach the BOG rules in issuing the bonds in question. Ordinarily, one needs not show a breach of these rules in order to prove the existence of conflict of interests. However, such breaches, when proven, go a long way to lend substantial credit to the allegation of conflict of interest violations.

Second, CHRAJ has to find that the alleged crony-relationships don’t exist. This second finding may be arrived at by any 1 of 2 sub-findings: either that (a) Trefgarne was not a director at Templeton and also not a director or chairman at Enterprise; or that (b) the Minister does not have any interest in Enterprise or the other related persons or entities. If the Commission finds that the crony-relationship is non-existent, the Complainants case collapses; in which case there would be no need to make the third finding.  For the Commission to move to the third finding, therefore, it should have found that the alleged crony-relationships existed.

Nonetheless, a finding that the crony-relationships exist would still not be enough to conclude that the Minister is guilty of a breach of the conflict of interest rules. This is because of the ‘safe harbour’ opportunity offered by our Constitution. On the other hand, if the Commission finds that the alleged crony-relationships exist, it needs to go further to make the third finding. The third finding should be that the Minister, though cough in a crony-relationship, has docked himself at the ‘safe harbour.’ To benefit from the safe harbour, however, two things must happen: (a) the Minister should have disclosed the material facts of such crony-relationships to Parliament prior to the transaction; and (b) Parliament should have independently approved that the Minister continue to oversee the transaction notwithstanding the crony-relationships.

For this proposition (of disclosure to Parliament and prior Parliamentary approval), I rely on Article 78(3) of the Constitution. The Article provides that:

“A Minister of State shall not hold any other office of profit or emolument whether private or public and whether directly or indirectly unless otherwise permitted by the Speaker acting on the recommendations of a committee of Parliament on the ground (a) that holding that office will not prejudice the work of a Minister; and (b) that no conflict of interest arises or would arise as a result of the Minister holding that office.”

In order to not constitute myself into an oracle, I would make a brief detour to demonstrate accountability in respect of my reliance on the provision. A careful reading of the Article 78(3) would reveal that its essence (which I believe has sadly been ignored over the years) is to provide a safe harbour for Ministers who may be caught up in Article 284 conflict of interest situations.

Would shareholding or directorship amount to “office” within the intendment of Article 78(3)? Of course! This is why: directorship of a company is an office for “emolument”. Shareholding in a company, too, is a profit-making venture. Both shareholding and directorship are examples of direct interest. It’s worth stressing however that the provision is not limited to direct interests. It also talks of indirect interests. Why? Because, a person may not be a shareholder or a director personally. She may, however, be closely related to or associated with a shareholder, director or even the company itself in such a way as to put her in a situation where her interest (though impersonal) may clash with her duties to protect the interest of the public. Conflict of interests rules reins in such indirect situations, too. For example, I may not be a shareholder or director of a company; but my spouse may. Such situations may fall within the “indirectly” component of the Article.

By way of summary, CHRAJ could only clear the Minister if it finds the following: (1) That the Minister did not breach the BoG rules on issuing bonds; (2) That the alleged crony-relationship did not exist; and (3) that even if the alleged crony-relationships existed, the Minister has taken refuge in a safe harbour under Article 78(3). In all this, you would observe (and in line with the explanation of the conflict of interest in Part 2 of this note) that there is no requirement that the persons in question should have actually intended or caused an injury to the principal or made a gain out of the transaction. In other words, there is no requirement that the Minister should have actually “cooked” the deal for Templeton or actually made a profit.

The Fatal Misunderstanding

One of the cases that the Deputy A-G cited to the Commission is the Okudzeto Ablakwa (No.2) case (2012). In that case the Supreme Court gave a check-list for determining a claim against public officials. The Supreme Court (per Justice Brobbey) stated that one has to answer the additional question – “did the decision-maker profit by the decision or action (to provide the basis for conflict of interest or economic gain)?” This question, when put within this context, would imply that an adjudicator cannot find a violation of conflict of interest rules unless he also finds that the public officer actually made a profit from the transaction.

The question, however, is whether this understanding of the Supreme Court decision is accurate. A more committed reading of the Okudzeto Ablakwa line of cases would reveal that this understanding of the decision is morbid. This is why:

In Okudzeto Ablakwa (No. 1), the Respondent Attorney-General, by way of preliminary objection, prayed the Supreme Court to dismiss the writ on the basis that CHRAJ (rather than the Supreme Court) has exclusive original jurisdiction over the enforcement of Article 284 conflict of interest claims. The Supreme Court, however, overruled the A-G’s objection on the basis that the Plaintiffs’ case turned more on other constitutional provisions than Article 284.  These other provisions included Article 23, Article 35(8) and Article 296. As a result, Okudzeto Ablakwa (No. 2) was decided not on Article 284.

As a matter of fact, the checklist which the Deputy A-G cited to the Commission was never in respect of Article 284. It was rather in respect of Articles 23, 35(8) and 296 only. This is what the very learned Justice Brobbey said before laying out the checklist:

“For a complainant to succeed in an action brought under Articles 23, 35(8) or 296 based on these conditions, it is essential to establish the following …”

Justice Brobbey, then, went on to list the 7-item checklist which the Deputy A-G cited to CHRAJ. In fact, he went on to state further that:

“Since specific remedy has been provided for investigating complaints of conflict of interest [at CHRAJ], the plaintiffs were clearly in the wrong forum when they applied to this Court to investigate complaints relating to conflict of interest involving those public officers.”

Quite clearly, therefore, the Supreme Court did not consider Article 284 at all in the case. Accordingly, it did not (and could not) possibly have added a criterion which requires evidence of actual gain or injury for a breach conflict of interest rules to be proven. Therefore, I submit, respectfully, that the Deputy A-G’s understanding finds no place within the hallowed principles of conflict of interest, the jurisprudence of the Supreme Court or anywhere for that matter.

Up Next

Should I find time to continue this note, I would digest CHRAJ’s findings and humbly inform you on the following: (1) whether the Commission relied on the Deputy A-G’s misunderstanding of the decision in Okudzeto Ablakwa (No. 2); and (2) the extent to which such reliance (if any) affected CHRAJ’s final decision to clear the Minister of the allegation of conflict of interest.

Before I go, however, this is what the Commission said:

“There was also no evidence before the Commission at this stage that there was a personal benefit to the Respondent or his business and other relations. On the basis of the foregoing, it is reasonable to conclude that though there was the significant potential that the Respondent’s personal interest could have been in conflict with the vast personal interest in the securities sector, it was not the case in this specific bond issue.” (I did the underlining)