Friday, April 10, 2015
The public would be aware that this Administration departed from the practice and culture of legal fee secrecy when it took the unprecedented step of informing Parliament of the quantum paid to individual attorneys and firms for the period June 1, 2010 to October 31, 2014.
Parts of this written report to Parliament were published media with on the names of a select group of Attorneys which prompted a series of questions and objections.
Some Attorneys objected to their names being published out of concern for their personal and family safety as well as over questions as to the accuracy of the figures stated. The media reports questioned whether the quantum paid was in line with industry practice and raised specific queries to the payment of $408,000.00 for the preparation of a pre-action protocol letter and the sum of $1,750,000.00 being paid to Tiger Capital.
As a result of these concerns being raised, I asked the Permanent Secretary to verify the figures supplied by the Accounts Department. I have now received this report which brings clarification.
Based on this report, errors were made in compilation of the initial report to Cabinet and Parliament. The concerns raised by local attorneys that fees were overstated are correct in that some $30.5 million in duplicated entries to local attorneys have been identified.
In the interest of transparency, it must also be noted that some $80 million in foreign payments had been omitted from the initial report of which $45.3 million was paid to Deloitte and Touche and $7.7 million to Trinidad and Tobago’s long-standing Privy Council agents, Charles Russell. This brings the total paid out during the period to $408,260,340.48.
These errors arose as a result of using two recording systems for Attorneys’ fees – an official “fees register”, and an “excel spreadsheet” which is meant to be updated on a regular basis. I am assured that no over payments have actually been made.
Consistent with the normal accounting process in the public service, these payments are reconciled with the records of the Treasury Division and also audited by the Auditor General’s Department to eliminate any room for doubt.
Further, there has been no payment of $408,000.00 for the preparation of a pre-action protocol letter. That sum was paid for a number of matters which included trial fees as well as the pre-action protocol letter.
The fees paid to Tiger Capital total $1,750,000 were for services rendered in conjunction with senior counsel for the extensive analysis of many complex financial documents in the exercise of mutual assistance obligations with the United States of America and the Central Authority.
I am further advised that:
Forensic audits and probes accounts for approximately $95 million;
Inherited legal fees from the PNM administration and Privy Council fees accounts for approximately $80.7 million;
Fees paid for the DPP’s Office accounts for approximately $ 67.4 million.
It is to be noted that the sum of $95 million paid for the probes is not comprised solely of legal fees since $51 million was paid to auditing/accounting firms. Further, the sum of $67.4 million paid as fees for the DPP’s Office includes payment to Deloitte and Touche in relation to the ongoing investigation into the CLICO fiasco. So far the sum of $54 million has been paid to this firm. This investigation is ongoing and the Ministry will have to continue to budget for fees in this regard.
By way of example, a further sum of $7.4 million has been submitted by the Office of the DPP to cover fees incurred up to November 2014 for Deloitte and Touche.
If one were to subtract this total of $243.1 million from the $408.2 million, the balance is $165.1 million, and spread over 4 ½ years it represents approximately $36.7 million per annum, which is in line and in some cases less than previous administrations spent on legal fees.
It is to be borne in mind that the litigation portfolio of the State has grown tremendously in recent years and the country has faced an onslaught of international litigation and commercial arbitrations.
Fortunately, the State has been extremely successful in the last 5 years. I am advised that it has won over 95% of the cases for which external counsel was retained. Costs would usually be awarded in favour of the State in these matters.
Preliminary checks at the Ministry indicate that legal fees paid by the Ministry during the period 2002 to 2010 amounted to $372,000,000. This represents an average of $41 million per year.
The Ministry, in accordance with the directive of Cabinet, retained lawyers and other non-legal professionals, such as accountants, to conducted sixteen forensic probes. Probes were conducted for:
TTEC Street Lighting Implementation Unit;
eTeck (6 separate investigations: Medical Transcription Services and Training Project;
UniBio A/S Protein Production Plant in TT Project; Tamana Intech Park; Alutech Research and Development Facility; Bamboo Networks Limited; and Reynald Associates Limited (RAL) Consortia);
PETROTRIN (3 separate investigations: World GTL Ltd; Ultra Low Sulphur Diesel Project; and Gasoline Optimisation Programme);
Estate Management Business Development Company;
Sports Company of Trinidad and Tobago;
University of Trinidad and Tobago;
UDeCOTT (Brian Lara Cricket Academy);
Scarborough General Hospital;
The purchase of the ill-fated MV Su.
As a result of these probes, the Attorney General has commenced numerous unprecedented cases for civil fraud, negligence and breach of fiduciary duties against top officials to recover over $2 billion in compensation.
The defendants have resisted these claims and made various applications to have these claims dismissed. Thus far, the State has been successful in all these matters as all such applications have been dismissed.
It is to be noted that during the subject period, the State has enjoyed historic success in the management of the country’s overall litigation portfolio, as evidenced by its success in a number of complex multi-million dollar international arbitrations, which the former Attorney General managed. These include the OPV arbitration, the World GTL Arbitrations in London and Canada and the Hyatt arbitration.
The country’s risk exposure in the matters was substantial. In the claims filed by the Hiway Re-route Movement to stop the Point Fortin to Mayaro highway, the Hyatt, OPV and GTL arbitrations alone, the exposure is over $5 billion.
This Government has recovered $1.4 billion in the OPV arbitration and successfully defended these arbitration claims against the best international lawyers. Indeed, as I speak, we await the judgment in the second Sural arbitration (at which my predecessor gave evidence on behalf of the state). In that matter, Sural Barbados had sued the State for over $700 million.
Fees were also paid in extradition matters, which involved very high profile persons wanted for serious crimes including murder and drug trafficking and it was important to provide senior attorneys to defend the position of the State.
This was in fulfilment of our international obligations. In light of the gravity of the arbitration and extradition matters, senior attorneys were retained and were successful in advancing the case of the State.
Pursuant to the requests from the Commissioner of Police, the Ministry of the Attorney General also bears the costs of providing counsel to represent police officers who are before a Coroner’s Court.
Despite some haste to provide the information, which resulted in clerical errors, it must be noted that the information provided goes far beyond the question asked. This is in keeping with this Government’s unwavering commitment to transparency and accountability to the people of Trinidad and Tobago.
Senator the Hon. Garvin Nicholas