21 January 2009

Statement by Spokesperson of the East Timor IV Constitutional Government on media reports of corruption



Dili, January 19, 2009

Statement by The Spokesperson of the IV Constitutional Government, The Secretary of State for the Council of Ministers

On January 16, 2009 The Australian newspaper published a story claiming Timor officials ‘took’ $13.3 million. The Government of Timor -Leste strongly rejects the claims outlined in the article.

No member of the Government or the Ministry of Finance was contacted by The Australian before the story was published.

The quoted reference was Mr. Jose Teixeira, spokesman for the Opposition party. The contents of the article were inaccurate. We are now seeking immediate rectification.

Regarding the specific claims:

1. There was not, and has never been $13.3 million dollars “lost” from Government accounts, nor has there been an “urgent search” for Government funds. All financial records are available on the public record.

2. There has not been any letter or documented exchange between The Minister of Finance, Ms. Emilia Pires or the Ministry for Finance to the Prime Minister which stated or inferred ‘corrupt Government officials had misappropriated Government funds’.

3. When questioned in Parliament by the Opposition regarding reporting from Ministries on advances made by Treasury, The Minister of Finance did not state that the Government was ‘trying to recover the funds but had been unsuccessful’. Details of all Parliamentary proceedings are available on the public record and can be reviewed via transcripts, audio tapes or filmed footage.

4. The recent ‘concerns’ by Transparency International on corruption quoted at the end of the article to support claims of Government corruption, were based on Timor-Leste’s decline in ranking on the 2008 Transparency International Corruption Perception Index. The index evaluated criteria based on information compiled during the time of the First Constitutional Government. Sources included The Asian Development Bank, Country Performance Assessment rating (compiled in 2007), The World Bank’s Country Policy and Institutional Assessment (compiled in 2007) and the World Economic Forum (compiled in 2007). All three sources used evidentiary and anecdotal findings from surveys conducted the previous two years (2005-2007) when the Fourth Constitutional Government was not in office.

The Facts:

1. The correspondence referred to in the article, was in fact, an initial draft advisory prepared by Treasury officials. It had yet to be reviewed or signed by The Minister of Finance and had not been forwarded to the Office of the Prime Minister.

2. Preparation of such draft correspondence is part of normal operating procedure for Treasury officials; to issue advisories during the accounts reconciliation process at year end.

3. The purpose of the Treasury officials in preparing draft correspondence, entitled “reform to outstanding advances” was to ensure all cash advances to various Ministries for Government approved activities in the 2008 State Budget, were accounted for as promptly as possible at year end.

4. The Ministry of Finance has implemented strict controls over the opening, closing and use of bank accounts involving Government funds. Many accounts now being consolidated or closed were established by the First Government, and are now being reviewed as a result of this reform process.

5. Under Timor-Leste Law and Regulation all public monies must be deposited in official bank accounts registered with the Ministry of Finance. Such accounts are closed as a matter when they are no longer needed.

6. The draft letter referred in no way reflects or infers concerns of corruption or misappropriations of funds by Government Ministers or line ministries as alleged in the article.

The article was not only disappointing to the Government of Timor-Leste but also to the community of international advisors and organizations including the World Bank, IMF and AusAid who have worked tirelessly with the Ministry of Finance to introduce and implement best practice fiscal management to the nation.

We hope in future when stories are passed to newspapers, that those newspapers seek comment to verify the facts.

We would like to say the Australian people have always demonstrated a sincere and enduring empathy to our cause, and given generously to ensure our struggle was not fought in vain. The history between Timor-Leste and Australia has nurtured and abiding relationship of confidence, and trust between the people of both nations. That trust and empathy has now been undermined, by the article.

In closing, when the IV Constitutional Government came to office some 16 months ago, we vowed we would heal the nation from ongoing political destruction. We decided we would not engage in baseless political attacks given the state of the nation we inherited was so highly politicized. Our people needed to regain faith in the dignity of our political systems. The IV Constitutional Government will continue to pursue all its priorities under this premise. ENDS

For More Information Please Contact: Agio Pereira +670 723 0011; E-mail: agiopereira@cdm.gov.tl

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