Supreme Court Chamber Justice Joseph Nagbe on Wednesday, August 14, 2019, ordered Margibi county’s authorities not to use their US$750,000 share of money the Chinese mining company, China Union, paid as royalty to the county.
Residents in Bong, Margibi and Montserrado counties greeted, with excitement, news about the company’s payment of US$4 million to the government, specifically during this period of extreme difficulty and economic challenges facing the country.
The money was part of the US$4 million that China Union agreed to pay in fulfillment of the company’s mineral development agreement with the Liberian government. The company’s 25-year agreement allows it to extract iron ore from the country by railroad to the Freeport of Monrovia.
Justice Nagbe, however, said that all matters relating to allocation and disbursement of the county development and social development funds for Margibi County be stopped, until he can look into a complaint the county’s senator, Oscar Cooper, filed against some members of the legislative caucus and the local authorities.
Senator Cooper claimed that the county’s authorities were in violation of the national budget law for fiscal year 2018/2019, when Margibi Superintendent Jerry Varnie and members of the County’s Legislative Caucus met in Monrovia on June 13, 2019, in ‘a special county sitting,’ presided over by members of the County’s Legislative Caucus and chaired by district #4 Representative Ben Fofana. It was during that ‘special county sitting’ that a resolution was passed to allot and disburse the US$750,000.
Justice Nagbe also acknowledged the need to further delve into whether the lawmakers followed the budget law and the county’s local leadership when they passed the resolution as Senator Cooper has claimed.
Justice Nagbe has now given superintendent Varnie and members of the County’s Legislative Caucus a week’s ultimatum to file affidavits responding to allegations that there was not a violation of the budget law when they passed the resolution.
Nagbe’s order was passed on the basis of an application by Senator Cooper’s lawyer, Cllr. Lavela Koboi Johnson, to declare null and void all decisions Superintendent Varnie and members of the County’s Legislative Caucus have taken of the resolution passed, and to order the parties to abide by the budget law for 2018/2019.
In his application, Cllr. Johnson argued that Supt. Varnie and members of the County’s Legislative Caucus met in Monrovia on June 13, in a ‘Special County Sitting’ over which Rep. Fofana presided as chair.
According to the resolution, the officials agreed that the US$750,000 should be spent on project overhead and development priority projects that would be identified by the five electoral districts after holding the district council sittings.
“Superintendent Varnie signed the resolution on behalf of the County Administration, while Rep. Fofana signed for his district and the leadership of the caucus,” the application said.
“The officials agreed on a special allocation of US$50,000 or five percent of the total amount to be made to communities most affected by the mining activities for projects that will enhance the recovery of lives and damages caused by the mining operations,” Johnson’s lawsuit alleged.
They also agreed to allocate US$108,000 to ‘project overhead.’ That, according to the resolution, includes a US$57,000 allocated for members of the Project Management Committee, and US$38,000 for the County Administration.
Other appropriations include a US$8,000 Special Allocation to Mboo Statutory District and US$5,000 for support to the local media. The officials further agreed to allocate US$168,400 of the remaining amount to each of the county’s five electoral districts.
“The said amount will be used on projects and program implementation of which 15 percent, constituting US$25,260, will go to [the] scholarship program, five percent constituting 8,420 will go to disaster management program, and the balance 85 percent constituting US$134,720,” the resolution read.
The superintendent, according to the resolution, was also authorized during the sitting to ensure that the Ministry of Finance and Development Planning (MFDP) transfers the amount to the county’s account.
“The action of the county’s officials violates the new budget law, which requires that the county’s superintendent, in consultation with the legislative caucus, convene in the county’s capital city after the passage of the annual budget,” the suit claimed.
It added, “The law also requires extensive publicity through all media platforms ahead of the county sitting to ensure transparency. The selection of delegates also violates the law.”
Section 9 (a ) of the law under the captioned Management of the County and Social Development Funds states, “For the purpose of managing and controlling the county development and social development funds, each county shall establish and manage, at a local bank, a county development account in the name of the county. Complementary to the terms and conditions of other agreements appertaining thereto, all funds allocated in this budget directly to a county as County Development Funds (CDF), and /or as Social Development Funds, and any other funds collected in the name and on behalf of the county, directly or indirectly, shall first be deposited into the county development fund account provided for in this budget.”
However, Cllr. Johnson claimed that Supt. Varnie and members of the County’s Legislative Caucus only passed a resolution by majority of the County Legislative Caucus, with Varnie attempting to act as the county’s council, which is quite contrary to the law.
Between 2015 and 2019, the company owed the three counties US$10.6 million in remittances. The counties had, however, agreed to waive US$6.5 million to compensate for the slowdown in China Union’s operations, which coincided with a global decrease in the price of commodities.
Recently, the company paid US$4 million to the central government, of which Margibi was entitled US$1 million. The amount was not included in the county’s annual council sitting held late last year, but the lawmakers said this happened, because the money had not yet been paid to the central government.