‘Misuse’ of USF: Disgruntled board members seek NAB investigation

IT ministry accused of unauthorised spending of Rs120m on advertisement.

KARACHI:

In a rare show of courage, some members of the Universal Service Fund (USF) have requested the country’s top accountability body to investigate alleged illegal spending of USF money by its own umbrella organisation – the Ministry of Information Technology and Telecom, The Express Tribune has learnt.

The Internet Service Providers Association of Pakistan (Ispak), on the insistence of its members who are also on the board of USF, has asked the National Accountability Bureau (NAB) to launch a probe into expenditures made by the IT ministry on a media advertisement campaign, which was not approved by the USF, revealed sources.

USF is an autonomous government body whose money can be used only for expanding the telecommunications network to un-served and under-served areas of Pakistan and is managing its own operations. Telecommunications and IT firms, which contribute 1.5% of their gross annual income to the USF, are its sole sponsors.

Ispak, in its May 24 letter to the NAB chairman, alleged that the IT ministry has violated Public Procurement Regulatory Authority (PPRA) Ordinance, 2002 by bypassing the USF board and directing Midas – an ad agency not approved by the USF – to run a media campaign whose cost of Rs120 million might be paid from the money of USF contributors.

Earlier on May 17, it was reported that the IT ministry was pressurising the USF board to approve the ad agency and pay for the bills of the recent media campaign, which, sources say, was more about the achievements of the ruling political party than achievements of the telecoms industry and violated the competitive bidding procedure and PPRA rules in selection of the ad agency.

Sources close to the matter confirmed that a majority of USF board members gave in to the pressure from the ministry and, in a meeting on June 7, approved the expenditure of Rs120 million on the media campaign.

What made the matter controversial and prompted Ispak to approach NAB was the difference of opinion among board members on payment for the ad campaign.

The board’s decision was split, sources said, as two independent directors in a note of dissent said the board did not have powers to accord approval to an expenditure that had already been made, which too was in violation of PPRA rules. “This power lies only with the prime minister or PPRA itself, which, too, must be used in sensitive circumstances and approving an ad agency is not a sensitive matter,” sources quoted the board members as saying.

In its letter, Ispak has asked NAB to find out how a contract was awarded to an ad agency not selected and approved by the USF. It has sought investigation into whether USF has made any payments to Midas. It has also requested NAB to find out if the IT ministry and USF are trying to enlist Midas as their approved ad agency to make the payment of Rs120 million.

When the IT ministry was contacted for comments, it did not respond to the queries sent to the official email addresses listed on its website. Also, no one from the ministry answered up calls on official numbers despite repeated attempts to approach them. The USF CEO also did not respond when contacted on his mobile phone.

Despite the split in the board’s decision, the USF, in a letter to Ispak, said “the board of directors of USF had unanimously decided to launch the ‘subject media campaign’ and duly authorised the CEO to award the contract with the prescribed procedure.”

Not only that, the USF served a legal notice on Wahajus Siraj of Ispak, asking him to withdraw the allegations against the USF and tender an unconditional apology. It also said it would commence legal proceedings to force him to pay damages worth Rs2 billion for defaming the USF and its board.

“The legal notice by the USF is illegal because it supports corruption,” Siraj, convener of Ispak, told The Express Tribune.

Published in The Express Tribune, June 16^th, 2012.