Concern over soft loan granted to MP

Former Associate Minister for Finance, Junior Maoate may see nothing wrong in $60,000 of soft loans being allocated to two of three companies in Aitutaki that he is connected with and a subsequent investigation may disclose no technical wrongdoing however, there are other serious implications which arise.
The background to the loans begins with government appropriating $3 million in the November 2008 budget for a stimulus package to stimulate the economy. In March 2009 the BTIB was brought into the picture. In May 2009, the BCI and the BTIB were brought together to consider a soft loan programme. Cabinet agreed to $550,000 being allocated for a soft loan programme.
The Times understands a small committee made up by BTIB and MFEM reps considered how to set up the funds. There were discussions with the two trading banks. BTIB preferred soft loans through the BCI which is understandable as BTIB is not a lending institution. The Times understands BTIB were comfortable with handling the funds in grant form but this was not accepted. Eventually the BTIB and BCI devised a criteria and the Times understands Sir Terepai was not involved in this process. However, Sir Terepai wanted the fund to be for outer islands development.
The Times understands the BTIB Board considered applications in November 2009 and again in December 2009. BTIB vetted and screened the applications. The full $550,000 was allocated. The Times understands Junior Maoate’s application was approved by the Board because it met the criteria.
The Times understands the bulk of the funds allocated was used to refinance existing loans and other Aitutaki businesses received assistance. It was essentially a hardship loan intended for medium sized businesses employing people and having a hard time. The effect of the allocations meant monthly repayments could be reduced significantly for example a person paying $1,200 a month in repayments would see this reduced to about $700 a month.
The Times is unable to verify if Sir Terepai is a shareholder in any of the companies but if he is, then it could be said he may have derived some benefit from the loan allocation. Technically, this may place him in an awkward position in light of the “Secret Commissions Act.”
All members of parliament are now required to declare their business interests. They must complete a form which is retained by the Clerk of the House. The question is, if Sir Terepai is a shareholder of any of the companies, has he declared that interest? No doubt the Audit Office Review would be taking this into consideration.
While it may transpire that nothing illegal took place, what does not look good in anyone’s book, is that the persons involved are both Members of Parliament, the Associate Minister for Finance who just happens to be the son of the Finance Minister at the time. They were the two people responsible for the country’s finances.
Junior Maoate will be seen as putting himself and his concerns ahead of those of his constituents. There are many struggling businesses and those on Rarotonga who initially applied for assistance before the stimulus package was changed to an outer island stimulus package, and who were turned down, must be angry to learn that the Aitutaki MP’s application was successful.
This matter is a concern because it shows just how great is our politician’s lack of understanding of some very fundamental conventions when it comes to public funds and duty to one’s constituents and parliament to promote behaviour and standards that are ethically and morally correct.
This situation raises an old concern that those in positions of oversight of the nation’s finances should not take advantage of that authority to obtain a benefit ahead of those whom they are appointed to serve.
It is reminiscent of some of the former Board members of the now defunct Cook Islands Development Bank who took out loans for themselves.
This situation also raises an old argument as to whether Members of Parliament should continue in their private professions (for example, Norman George- continuing to do legal work) or to operate their businesses (for example-Teina Bishop- Gas supplies).
In New Zealand for instance, MPs are to focus on being an MP and bring in others to manage or run their businesses.
MPs salaries are supposed to be such that MPs do not need to be actively involved in their private businesses or need to continue in their professions. The Times understands relatives are assisting Junior Maoate.
Presently, one has to sympathize with business operators in Aitutaki. Recent reports are that Aitutaki’s economy is failing and some businesses are near collapse However, band aid measures won’t save Aitutaki. When visitor numbers to Aitutaki plummet, what else is there to sustain the economy? This is the real issue government and Aitutaki’s three MPs must address.