An in depth probe of how the Liberian Maritime Fund is managed.

Monrovia, Liberia

Distributed by

The Perspective
Atlanta, Georgia

Posted August 2, 2006


The Liberian Maritime Fund, one of the principal revenue generating institutions for the Liberian Government, is still being beset by revolving fraud, even in these days of so-called “transparency” within public sector governance.

The management of the ‘FUND’ over the years has been open to flagrant abuse and misuse by successive administrations since its founding in 1948.

During the last sixteen years, some senior government operatives, including heads of past Interim Administrations have fraudulently squandered the funds liquid assets with impunity, during their short tenure.

As if this criminal handling of the Fund’s liquid assets by past Government Officials is not enough, reports are constantly emerging of how a large proportion of the revenue that should be given to the Government of Liberia, under the current contractual arrangement, is instead given to “ AN AGENT “ whose statutory powers seem buried in the fine print of the so-called “CONTRACT” that brought the LIBRIAN INTERNATIONAL SHIPPING COMPANY REGISTRY - LISCR into being.

The existing corporate structure of the LISCR and its statutory relationship with LIBERIAN MARITIME FUND, and the contractual terms under which LISCR collects revenue and the transmittal of the revenue to the Bureau of Maritime Affairs in Monrovia are at best convoluted.

Indeed, the LIBERIAN MARITIME FUND has been misused so badly that, the EUROPEAN COMMISSION was constrained to engage the services of European chartered Accountants, Moore Stephens, to conduct a systems and financial audit of The Bureau of Maritime Affairs.

The report of that audit, which was published last year, copy of which is in the possession of author of this article, contains damming reports of felonious corporate financial impropriety.

According to the Moore Stephens audit report, it is stated that the gross revenues managed by LISCR, which were derived from the Liberian Maritime and Corporate Registries were US$ 35.8 million whilst the gross revenues of the Bureau of Maritime Affairs ( BMA ) in Monrovia were only US$ 830,000.

The report noted from the auditor’s fact finding missions that, relationship between the BMA and LISCR was strained with the BMA officials seeking more access to the revenues and operation of the two registries and LISCR resisting it.

This administrative and fiscal schism between the BMA and its “AGENT’ LISCR which is said to be wholly owned by a Jewish American Yoram Cohen is well documented.

“The Agent (Mr. Cohen) is responsible for providing quarterly progress reports to the commissioner on the billing and collection of all tonnage taxes and fees. Additionally, it is responsible for delivering to the BMA, semi-annually, all records of Maritime ship registration and corporate registration by way of computer databases etc. as well as hard copies, to enable the government to verify, confirm and authenticate the reporting information. To our knowledge, however, this has not been done, nor has the government carried out any verification… auditor’s report.

According to Mr. Tarty Teh, former Senior Deputy Commissioner of Maritime Affairs, “The two agencies which have run the Liberian Maritime Program so far are the International Trust Company ITC and currently the LISCR”.

“The attitude of both ITC and LISCR is basically the same – they both think that Liberians are inept, lack the curiosity to find out how the AGENTS run the Maritime Program, and are corrupt enough to be compromised easily even if they get suspicious of the agent’s activities. The difference between ITC and LISCR however is that ITC probably thought it was morally wrong to disrespect and rob (the Liberian people) at the same time, whilst LISCR has managed to do both”.

Tarty Teh went on to state that “It is difficult to fault both agents in their assessment of our total capacities. After nearly 50 years of ceremonial involvement with the Maritime Program, Liberians have not yet developed the capacity to ask hard questions that might put any corrupt AGENT on guard about any scheme to deprive the Liberian Government of its fair share of the Maritime Fund”

It is worthy of note that the European Commission’s audit of the Bureau of Maritime Affairs has referred to LISCR”s share of the Corporate revenue from the Maritime Program as a “WINDFALL”

Mr. Teh goes on to state that “ Technically speaking, the Corporate Program Which is bundled with the Maritime Program, is not a contractual arrangement, and only LISCR is smart enough to exploit fully the weakness it has created for the government side”.

“For example, there is a formula for sharing the Maritime revenue between the Government of Liberia GOL and LISCR. The formula is 80% GOL and 20% LISCR. But there is no formula for sharing the corporate funds, so LISCR gets 100% in some categories and 60% in others”.

In the words of Mr. Teh “most Liberians involved in administering the Maritime Fund appear willing to settle for bribes which the AGENT appears willing to give because it is cheaper to bribe than to pay the Government of Liberia its fair share under the contract”.

It is an open industry secret that LISCR has taken over the Telecommunications function of the Bureau of Maritime affairs and made it into a separate company which Mr. Cohen runs privately, he calls this company SEADIGITAL as a matter of convenience.

The mobile phone company CELCOM currently operating as a private company in Liberia is a spin off SEADIGITAL.

The existing agreement between the GOL and LISCR which was drafted with considerable in put from Mr. Cohen during the Taylor administration, contains so much loopholes, it is considered worse than useless as a statutory document.

The Moore Stephens report states that ‘A number of provisions have, as a matter of practice, not been adhered to and it is arguable as to whether, in a strictly legal sense, there have been any breaches. Either way, no formal representations have been made by either party and, to our knowledge, no notices served: Both parties ( GOL & LISCR ) have sought to “make do” with the Agreement whilst recognizing that it serves neither particularly well”.

According to the Moore Stephens report, “It became apparent, during their discussions with LISCR that workable solutions were reached with former BMA Commissioners such that a periodic review was not required. Certain interpretations of the Agreement ensured, none of which were documented formally. During the recent hostilities, there was little overview of LISCR’s management of the Registries, and it is probably fair to say that a number of interpretations have been adopted – mainly by LISCR – which are to their benefit, arising more from the practical operation of the Registries than from any concerted discussion of the wordings of the agreement. BMA Commissioners have generally accepted a quid pro quo with favors returned…

The Moore Stephen’s report states that “It appears that LISCR claims tax deductions for the full amount o f lease paid by DCO as the US Internal Revenue Service recognizes LISCR (NOT DCO) as a business institution for tax purposes, without considering who ultimately bears the costs. We believe that this arrangement is irregular because LISCR benefits from tax deductions it is not entitled to”.

The Audit report also observed that under the heading of general and administrative salaries, payments of c. USD100,000 have been made to Ms. Linda Fawaz, who is not a LISCR employee or GOL official. “We understand that Ms. Fawaz’s father (Caseem Fawaz, a Lebanese businessman based in Monrovia) has business ties to Mr. Cohen.

The audit also uncovered flagrant invoice padding within the BMA. For instance, the lease agreement for the main BMA office in Monrovia is with a Mr. King and (two) sisters and is for a period of ten years without a break clause. The rental value of USD15,000. per annum according to the lease is high by local standards. However, the BMA accounts show that annual rent paid is even higher at USD35,000. per annum.

The probe continues.

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