Presidential Investigation Team Technical Committee Press Statement Thursday, February 28, 2019

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1.0 Introduction

The technical Committee of the presidential investigation Team (PIT-TC) informs the general public that it has completed its investigation into circumstances surrounding the printing and importation of currency banknotes from January 2016 to August 2018. The PIT-TC furthered that it has submitted its final report to the president of the Republic of Liberia through the Minister of Justice and Attorney general of the Republic of Liberia, and Chairman of the Steering Committee of the Presidential Investigating Team(PIT-SC).

1.2 The PIT-TC Hereby present excerpts of the final report rt5o the general Public. The full report can be found on the websites of the Liberia Anti-corruption commission (lacc.gov.lr) and financial intelligence unit of Liberia (fiuliberia.gov.lr)

2.0 Highlights of Findings

2.1 In 2016, the printing and importation of 5,000,000,000 Liberian dollar banknotes was authorized by the National Legislature through resolution issued by both Housed of Representatives and the House of Senate. However, the contract between the central bank of Liberia and Crane Currency AB (an American currency printing company with offices in Sweden) to print an initial 5,000,000,000billion new Liberian dollar banknotes was consummated prior to legislative authorization.

2.2 The Central Bank did not abide by international best practice for selecting and contracting Crane Currency to print the new Liberian dollar banknotes.

2.3 In 2017 the printing and importation of an additional 10,000,000,000 Liberian dollar banknotes was not authorized by the National Legislature.

2.4 The Central Bank of Liberia relied on a letter of July 19, 2017 from the National Legislature and a resolution of the Board of Governors of the Central bank of Liberia to print and import the additional 10, 000,000000 Liberian dollar banknotes.

2.5 The July 19, 2017 letter from the National legislature did not constitute an authorization and the Board of Governors does not have the mandate to approve and/or authorize the printing and importation of currency banknotes.

2.6 The Central Bank of Liberia also did not apprise HE Madam Ellen Johnson Sirleaf, former President of Liberia, of the final decision to print and import the additional 10,000,000,000 Liberian dollar banknotes as requested by her.

2.7 Meanwhile the contract between the Central bank of Liberia and CRANE Currency to print an additional 10,000,000,000Liberian dollar banknotes was consummated prior to the attempt to obtain legislative authorization and the resolution of the Board of Governor.

2.8 There were ten (10) shipments of printed materials (new Liberian dollar banknotes)in twenty-four (24) containers (20 foot) between September 7, 2016 and March 25, 2018. All the containers containing the new Liberian dollar banknotes printed and shipped by CRANE Currency were duly received by the Central Bank of Liberia.

2.9 In 2016, the total amount of 5,146,250,000 new Liberian dollar banknotes printed and shipped by CRANE Currency was received by the Central bank of Liberia.  The amount of 164,250,000 Liberian dollar banknotes was printed in excess of the 5,000,000,000 authorized by the National Legislature and contracted for by the Central bank of Liberia.

2.10 1n 2016, the contract between the Central bank of Liberia and Crane Currency to print the 5,000,000,000 Liberian dollar banknotes was value of US$5,210,000.  However the Central bank of Liberia paid CRANE Currency a total of US$5,611,469.58 instead of the contract amount of US$5,210, 000.00 resulting in over payment of US$401,469.58. This over payment was not authorized by the National Legislature and was paid outside the terms and conditions of the contact. The Central bank of Liberia did not provide any amendment to the contract or any document to justify the over payment.

 

2.11 In 2017 and 2018, the total amount of 10, 359,750,000 Liberian dollar banknotes printed and shipped by Crane Currency was received by the Central bank of Liberia. The amount of 359, 750, 000 Liberian dollar banknotes was printed in excess of the 10,000,000,000 Liberian dollar banknotes contracted for by the Central bank of Liberia.

2.12   In 2017, the Central bank of Liberia contracted Crane Currency to print 10,000,000,000 Liberian dollar banknotes at a contract value US$10,121,689.20. However, the Central bank of Liberia paid CRANE Currency a total of US$10,555,587.34 instead of the contract amount of US$10, 121, 689.20, resulting in over payment of US$433,898.14. This over payment was not authorized by the National Legislature and was paid outside the terms and conditions of the contract.  The Central bank of Liberia did not provide any amendment to the contract or any document to justify the over payment.

2.13 In 2017, the entire transaction involving the printing and shipment of the 10,000,000,000 Liberian dollar banknotes was not authorized by the National Legislature.   As such, the total cost of US$10,555,587.34 incurred by the Central bank of Liberia for the Printing of L$10,359,750,000 was also not authorized.

 

2.14 Though the CENTRAL BANK OF Liberia reported 15, 506,000,000 Liberian dollar banknotes as the total amount printed and shipped by CRANE Currency,and received by the Central bank of Liberia between July 2016 and April 2018, analysis of the Packing Lists submitted by the Central Bank of Liberia revealed that the amount of 18,151,000,000Liberian dollar banknoteswas printed and shipped by CRANE Currency.   This leads a variance of 2,645, 000,000 Liberian dollar banknotesthat is yet to be fully accounted for by the Central bank of Liberia.

 

2.15 As of October 16th, 2018, the Central Bank of Liberia sold a total of US$14 million in exchange for a total of L$2,151,363,898.00 between the periods of July 17, 2018 to September 18, 2018.  The technical team of the Economic Management Team (TEMT) did not have a clear strategy and the Central Bank of Liberia deviated from conventional best practice which calls for the use of legitimate banking institutions (commercial banks) and licensed foreign exchange bureau of SALE AUCTION.   Instead, the TEMT and the Central Bank of Liberia carried out the sale of US Dollarsdirectly to foreign exchange bureau and businesses in the marketplace. There were no standard criteria set for the participation of fiorei8gn exchange bureaus and businesses in terms of their legitimacy (e.g. duly registered and/or tax compliance, etc.) nor due diligence associated with the direct sale in the marketplace. The principle of Know Your Customer (KYC) was not observed throughout the mopped up exercise.

 

2.16The Central bank of Liberia did not provide evidence of performing a competitive bidding process for the selection of a company to print the Liberian dollar banknotes contracted for.Exempted fromPPCA Act of 2005 (Sect. 1(3) (B) for procurement related to the production of currency or coins, does not negate that fact that the Central bank of Liberia should observe international best practice in selecting a printer for the printing of Liberian dollar banknotes.

 

  • Highlights Of Recommendations

 

3.1 Given the many discrepancies as to the total and actual amount of new Liberian dollar Banknotes printed, shipped and received by the Central bank of Liberia, thereby creating doubts as to the total amount of Liberian dollar banknotes in circulation; as well as the negative impact said discrepancies are having on the economy, the investigation recommends the demonetization of the current Liberian dollar banknotes (new and legacy).

 

3.2 Former and current senior management executives of the central bank of Liberia were found in violation of various laws of the republic of Liberia in the discharged of their duties in the following:

 

  1. Endorsing the printing of 146,250,000.00 Liberian dollar banknotes above the approved amount of 5,000,000,000 Liberian dollar banknotes and thereby incurring an extra cost of US$401,469.58 without authorization from the Liberian Legislature.
  2. Endorsing the printing of 359,750,000 Liberian dollar banknotes above the contracted amount of 10,000,000,000 Liberian dollar banknotes and thereby incurring an extra cost of US$433,898.14 without authorization from the Liberian Legislature.
  3. Not obtaining the full authorization of the National Legislature for the printing of 10,000,000,000 Liberian dollar banknotes resulting to a total cost of US$10,555,587.34 for the printing of L$10, 359,750,000; and
  4. Failure to report and account for the amount of 2,645,000,000 Liberian dollar banknotes; which is the difference between the 18,151,000,000 Liberian dollar banknotes discovered from the Packing List as the total amount of Liberian dollars banknotes printed and shipped to Liberia, and that of the 15,506,000,000 Liberian dollar banknotes reported by the Central bank of Liberia as the total amount printed, shipped and received by the central bank of Liberia.

3.3   Several middle management executives of the central banks of Liberia were found in violation were found in violation of the laws of the republic of Liberia in the discharged of their duties in the following:

  1. Ensuring full receipt and accountability of the total and actual amount of Liberian dollars banknotes printed and received by the Central Bank of Liberia;
  2. Knowingly conspiring with the former senior management executives and the current senior management executives of the Central Bank of Liberia to conceal the true nature of the total and actual amount of Liberian dollar banknotes printed and received by the Central bank of Liberia; and
  3. Criminally doctoring/fixing reports understating the full and actual amount printed and received by the Central Bank of Liberia.

 

3.4 Crane Currency AB of Sweden contracted by the Central bank of Liberia in two separate contracts to print the total of L$15,000,000,000 (fifteen billion Liberian dollar banknotes) at the total cost of US$15,331, 689,20 violated the laws of the Republic of Liberia as follows:

  1. Knowingly and willfully conspire with officials of the Central Bank of Liberia to defraud the Government of Liberia;
  2. Ignored the terms and conditions of the contract by printing L$18,151,000,000 in complete breach of the contract;
  3. Caused the Government of Liberia to incur extra cost of US$835,367.72

3.5 Given the many discrepancies noted in the manner in which the mop-up exercise was conducted in relation to the infusion of the US$25 Million into the Liberian economy and the scope, time and financial resource limitations encountered by the PIT-TC, the investigation recommends that the TEMT and the central bank of Liberia put a halt to the exercise, and that a forensic investigation of the entire mop-up exercise be conducted without any delay.

3.6 Giving the many discrepancies observed throughout the investigation in relation to the operations of the Central Bank of Liberia in executing its statutory mandate, there is a need to review the standard operational procedure (SOP), banking supervision and internal controls of the Central Bank of Liberia to curb the possibility of abuse of the money supply of the nation; as well as enhancing efficiency and productivity.

3.7 To further protect currency banknotes in reserve, the Central Bank of Liberia should consider discontinuing the use of the vault at the erstwhile National Housing & Saving Bank

Signed:

Mr. Charles J. L. Gibson

Chairman/Technical Committee

   Presidential Investigation Team 

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