UTE BID FOR LIBERIA'S LTC WILL FAIL, ACCORDING TO DAILY OBSERVER REPORT
A Daily Observer investigation reveals that the Universal Telephone Exchange President's proposal to revamp the Liberian Telecommunications Corporation was allegedly filled with plagiarized materials from another bidder's proposal. World Bank looking into the saga. Yarclay: Claims are untrue.
Universal Telephone Exchange president James Yarclay's bid to revamp the Liberia Telecommunications Corporation may not win the approval of Liberian National Transitional Government President Gyude Bryant, the Daily Observer has learned.
Months of investigation by the Observer revealed that Mr. Yarclay's proposal was filled with potholes from the start and plagiarized materials from a rival bidder's proposal.
The investigation found that the UTE's proposal had names of two employees of another bidder that UTE allegedly forgot to take out before it submitted its proposal to the NTGL. A highly placed source within the NTGL informed the Daily Observer on Saturday that an earlier proposal by Yarclay submitted in July 2004 had the markings of plagiarism written all over it.
On February 14, 2004 the LTC Bidding Committee declared the UTE winner of the bid, and the documents were passed on to the transitional chairman for his approval of the selection. Bryant, however, is yet to approve the selection. At the time, it was revealed that UTE was expected to infuse USD170 million into LTC.
It was also revealed that the Export-Import Bank of the United States (Ex-Im Bank) had already consented to grant an export credit to UTE to jump-start the project. The Standard Chartered Bank of Ghana also consented to provide the initial capital for funding the project, according to board members. Ex-Im Bank is the official export credit agency of the United States. It supports the purchases of U.S. goods and services by creditworthy international buyers that cannot obtain credit through traditional trade finance sources. The bank also offers trade-financing solutions to help turn business opportunities into real transactions.
However, when contacted by the Observer last year, a bank loan specialist said it was unlikely that a man of Yarclay's description would qualify for such a huge loan. Besides, Liberia, which Yarclay and UTE were supposedly representing, is listed as a high-risk country and is not among the countries that the bank does business with. The committee submitted its recommendations to board members on February 8, 2004 in the presence of members of the Contract and Monopoly Committee. The board met the following day to study the recommendations.
The board said that after carefully reviewing the document at LTC's head office on Lynch Street, it had decided to endorsed the committee's recommendations that the Universal Telephone Exchange Inc. based in Texas, United States of America, owned by Yarclay, a Liberian, be awarded the contract to rehabilitate, revitalize and modernize the telecommunications firm.
A trusted source told the Daily Observer, "I saw the proposal that Yarclay submitted in July 2004. It was plagiarism at its best. Except for the cover of the report, everything else was copied verbatim from an earlier proposal (March 2004) from a company called Engineering Professional Services (EPS)."
The names of EPS employees Reza Rezaie and Sean Gallagher were surprisingly found in Yarclay's proposal, which raised a red flag and prompted an inquiry into the dealings of the UTE boss. When the Observer contacted Mr. Yarclay on Sunday about the plagiarism allegations, he expressed denial: "What you are hearing has no truth to it; and don't rely on it before you miss the boat on the big one that will be coming, perhaps very soon. Bryant has a very serious problem, but I will not comment on it until he comes out with something," Mr. Yarclay said.
It is not clear how Mr. Yarclay got his hands on the documents, but another source informed the Observer on Monday that Yarclay may have obtained the proposal from Alfred Bargor, LTC's Deputy Managing Director for Technical Services. Bargor has made no secret that he supports Yarclay's bid over the other bidders and he and Yarclay are said to have a very close relationship. Bargor even told reporters in March this year, that he favors the UTE for the LTC operations because it has the capacity to operate the system.
According to one source, EPS was initially told by Bargor that Yarclay's initial plan was to start a GSM company in Monrovia. Yarclay reportedly also sought financing help from EPS for his proposal. EPS is an up standing company with its corporate headquarters in Tenton Falls N.J., that has been in business for over 20 years. The company provides specialized personnel, products and services to many United States government agencies. Sean Gallagher, one of the EPS engineers whose name was found in Yarclay's proposal, is no longer with EPS but is said to be willing to proceed with the contract since he and an Australian partner did the feasibility and wrote the proposal which Yarclay eventually submitted.
"Now if that proposal was good enough to accept from Yarclay then why was it not good enough to accept from EPS.," said our source. Francis Karpeh, LTC Board Chairman reportedly refused to look at the proposal which was presented to him. He emphatically exclaimed that it was "a non-starter," said our source.
Our NTGL source, who was present when Yarclay was quizzed on his proposal, said it was apparent that the UTE boss did not have a good grasp of what was contained in his own proposal, and was "unfamiliar with some of the key elements in it."
When Yarclay was asked to detail the major elements of his company's $170 million investment, the numbers he presented just didn't add up. Further, when investigators added up the money Yarclay claimed his partners would put into the venture, the amount totaled $50 million more than the required investment. Mr. Yarclay had no good explanation for the overage, our source said.
In his initial proposal, Mr. Yarclay bragged that he had 25 homes in Paris, Texas, that would be sold to fund the down payment on the purchase of the equipment that would be supplied to LTC. However, under intense scrutiny, Mr. Yarclay changed the number of homes he owned from 25 to three. What may have done Yarclay in, according to the Daily Observer investigation is the fact that Paris, Texas, is a very small town, which would make it very unlikely that one person would own 25 homes. The population estimate for the town as of July 1, 1998 was 25,513, an increase of 714 since 1990. To own that many houses, one would have to be the mayor or someone of renowned stature and credibility.
The Interim Government recently launched an investigation into Mr. Yarclay and his proposal to revamp Telecom. When the news broke that Yarclay had won the bid to revamp LTC last year, the Daily Observer launched its own investigation. It was discovered that Mr. Yarclay's proposal was not convincing enough to grant him such a gigantic proposal worth $170 million.
Investigators did a background check on Mr. Yarclay's Texas claim. They discovered that his office is a one-room office in a run-down area, and the company's name was not even posted on the door. Secondly, calls to Mr. Yarclay's company were never greeted by a live voice, but by voicemail. During one of those calls, the greeting was a King Cabs Company. To make matters worse, one of Mr. Yarclay's supposed partners had never heard of him; another admitted doing business with him but only on a small scale.
Bryant has been consistently criticized for not having made a decision about Yarclay's bid to revamp Telecom. The board of directors of the telecommunications agency announced Yarclay the winner. But Chairman Bryants delay in announcing a winner has led to numerous speculations. Some have suggested that one of the reasons why the chairman has not made an announcement is the fact that the NTGL leader may have already promised Mr. Yarclay the bid, long before the bidding process began. This suspicion stems from a meeting Chairman Bryant had with Mr. Yarclay, when the NTGL chair visited Texas two years ago to attend his son's graduation. It is believed that Mr. Yarclay was promised the LTC bid and may have bribed his way into winning it.
Chairman Bryant's delay to announce whether Yarclay won the bid or not has created tension among Telecom workers, who recently voiced their frustration by taking their plight to the streets in protest last Tuesday. Aggrieved LTC employees went on a rampage, blocking roads and stoning cars around their Broad/Lynch Street premises. The workers were also demanding six months' salary arrears. The workers contend that the chairman is taking sides in favor of another company with whom he has connections. They said it also demonstrates his insensitivity to the plight of the downtrodden. The aggrieved employees said they could not understand why Chairman Bryant is dragging his feet to sign the contract with UTE, failing to realize that the employees are already living below the poverty line.
When the news of Yarclay's bid first emerged, it raised eyebrows and surprised many, who could not believe that a literally unknown firm had won the LTC bid. It was later revealed that Yarclay had a history of deception, had been in jailed a few times and had even filed for bankruptcy, along with his wife, Teresa. Yarclay confirmed as much in an interview with the Daily Observer at the time: "It is true that I filed a Chapter 7 in 1999 because I had some problem with the IRS. I did so to protect my assets from them. The matter has long since been resolved. The filing was personal and had nothing to do with Universal Telephone Exchange, Inc., my current company."
The sealed bid was originally slated to open January 10, 2004, but was reportedly held back for one week at Chairman Bryant's request to allow the INFOTEL Italia, a European bidder, to participate in the exercise.
One of the companies participating in the bidding process was UTE, which was described by LTC board members as "a licensed telephone operator in the state of Texas. The board also upheld that "UTE holds a United States Federal Communications Commission's license to operate telecommunications services."
The Daily Observer verified that UTE did obtain an FCC license.
Also bidding for the LTC revamp were: Huawei Technologies Company Ltd., a leading telecommunication and information technology manufacturer with a global reach, and INFOTEL-Italia, an Italian based telecommunications outfit "that markets, distributes and supplies Ericsson products. After intense deliberations, UTE was awarded 89 points. Huawei Technologies received 79 points, while INFOTEL-Italia was awarded 66 points.
Representatives of the telecommunication group, INFOTEL-Italia, immediately suggested that the LTC Revitalization Bidding Committee had unfairly awarded the contract to a bidder that was ill prepared to handle it. The company's management representative later noted in a news release that instead of heeding Chairman Bryant's advice to ensure that whichever company won the bid offered the best opportunity for the Liberian people, the Chairman of the Bidding Committee, Mr. Francis Nyenpon and some members of the LTC board led by Chairman Francis Karpeh, had chosen to do otherwise.
"Against internationally accepted procedures, the points allotted to each of the three short-listed applicants were made public before the final decision was made," the release said.
This latest revelation in the Yarclay saga, coupled with Bryant's upright refusal to announce whether or not Yarclay has won the rights to revamp Telecom, is bound to further dampen the already corrupt atmosphere of the Bryant administration.
One would think that with international pressure mounting for transparency and a clampdown on corruption, the NTGL leader would step up to the challenge and take a major stand against corruption. But that hasn't materialized. Bryant has instead ignored pleas to be more vigilant against corruption. Mr. Bryant's delay in announcing a bid winner has also raised a lot of questions. Did money change hands between Bryant and Yarclay in Texas? If it did, is that why Bryant is reluctant to announce a winner for fear of angering Mr. Yarclay? What actually took place in what has become that fateful handshake in Texas?
The Daily Observer has also learned that Chairman Bryant has turned the Yarclay matter over to the World Bank for further investigation. A telecom mission from the world banking body visited Monrovia recently on a fact-finding tour. They had been working with the Special Presidential Telecommunications Committee on telecom issues. But, for now at least, these answers will continue to linger in the minds of Liberians craving for answers; but most importantly in the minds of LTC workers who haven't been paid for months. Their families, who rely on them for their livelihood in a typical hand-to-mouth economy, are languishing, while the fate of the nations' telecommunications system remains in limbo.