Thursday, August 04, 2005

Paul Denis Commission (CEA) - Factoid #2

Investigation of the Rice Scandal

Two major figures - Dieuseul Tchakounté Joseph and Lesly Lavelanet - figure in the alleged rice scandal that the CEA uncovered.

Background
Typically, a staples importer must deposit with the Customs agency a guaranty check which will be cashed if the importer does not pay his customs duties on the merchandise. In the case of Joseph and Lavelanet, they were using guaranty checks drawn on Banque Populaire Haitienne (BPH) which were subsequently returned to the bank (directly to its Director General - see our previous factoid for more details). The kicker is that a) the checks were deposited back into the importer's account and b) the importer did NOT pay customs duties. Better yet, the Customs agency never placed the importer on their black list despite their failure to honor their duties .

Dieuseul Tchakounté Joseph
  • Gave the Customs agency (AGD) more than 10 guaranty checks drawn on BPH for the import of rice from March to October 2003
  • Total amount of these checks: 184.3 million Gourdes (over US$ 4 million)
  • A few days later, the checks are returned to BPH and redeposited on the importer's account, on specific instructions from the Director General of the bank. The importer has paid NO customs duties and is not placed on any black list.
  • At the same time that the checks were issued, BPH would lend to the importer the equivalent sum which was repaid with the checks "returned" from the Customs agency
  • Customs agency personnel testified that they were under enormous pressure to accommodate this bizarre arrangement and received orders directly from the Minister of Finance or the secretary of former president Jean-Bertrand Aristide
  • Net results:
    • BPH earns interest on the loans and on the float
    • The importer doesn't need to have funds for the guaranty as he gets a loan from BPH; only pays interest
    • The Customs agency - and by extension the Treasury - is the big loser as they are robbed of the revenues from duties: about US$ 4 million
    • The Director General of BPH receives from Dieuseul Joseph a number of unexplained payments (US$ 200,000 to US$300,000); kickback money?
Lesly Lavelanet (brother-in-law of Jean-Bertrand Aristide)
  • From August 2002 to January 2004, Lesly Lavelanet aka Global Spectrum imported 286,658 50-kg and 255,802 25-kg bags of rice.
  • BPH issued letters of guaranty for Global Spectrum - signed only by the Director General, Rodnée Deschineau - even though Global Spectrum did not have the necessary funds to obtain the letter of guaranty
  • Lesly Lavelanet never paid customs duties, and the letters of guaranty were returned to BPH
  • The director of Customs and his colleagues testified that they received direct orders from the Minister of Finance or the secretary of Jean-Bertrand Aristide to let the rice through, even though the duties had not been paid
  • Net result:
    • Loss to the Customs agency of 56,696,353 Gourdes (about US 1.42 million)
Previous Factoids:
#1 - Banque Populaire Haitienne (BPH)