Mismanagement to blame for $17m fees

PUBLISHED : Saturday, 08 July, 1995, 12:00am
UPDATED : Saturday, 08 July, 1995, 12:00am

MISMANAGEMENT at the highest levels of the Legal Department led to the excessive payments made to junior counsel Graham Grant, a Legislative Council panel has concluded.

A report by the administration of justice and legal services panel said former director of public prosecutions John Wood was allowed to disregard the principles governing the use of public money because of inadequate controls.

It said Mr Wood should be held largely responsible for the controversy which led to Mr Grant being paid $17.1 million for his work on the Bumiputra Malaysia Finance Ltd case.

As head of the Legal Department, Attorney-General Jeremy Mathews also had to share the blame, said the report, released yesterday.

The panel decided to look into the case last November after the South China Morning Post disclosed the fees paid to Mr Grant, who dealt with the case when he worked for the department.

It was briefed out to him when he left.

Mr Grant was paid up to $708,000 a month for as much as 171/2 hours' work a day.

The panel came to the unanimous view that the controversy revealed mismanagement in the Legal Department.

It said the 'inadequate and irregular' management might have damaged the operations and morale of the 900-strong department.

Briefing out Mr Grant was 'not the only option available to the department, neither in July 1991 when Mr Grant notified the department of his departure nor during the 33-month period of briefing out', the report said.

The department should not have allowed Mr Grant to become indispensable to the case.

Mr Grant had given seven months' notice he was leaving the department and there should have been ample opportunity to train one or more in-house counsel on the BMFL case.

'No effort was made to look for other outside counsel,' the report said. 'The former DPP had not explored other alternatives, but had taken the easy way out by briefing Mr Grant.' The Attorney-General has said Mr Grant had to be briefed because there was a serious staff shortage in the Commercial Crimes Unit.

But the panel argued: 'The wisdom of transferring staff out of the [unit] and making no succession plans for the judicial appointments, thereby creating a vacuum of one-third strength, was highly questionable.' That there was a manpower planning failure and a serious manpower shortage in the crimes unit was of 'the department's own making'.

The panel also considered Mr Wood was at fault in failing to provide an estimate of how much the briefing out would cost.

Legislators were seriously concerned that a briefing fee of $379,500 paid to Mr Grant on top of the hourly rates could not be explained by the department.

That was 'totally unacceptable as regards the department's public accountability'.

The Attorney-General said there was no information within his department on the rationale, terms of agreement, and calculation of the brief fee.

Panel chairman Simon Ip Sik-on said the Government must decide how to ensure the department was placed under effective and competent management.

Despite the panel's unanimous view there should be stronger leadership in the department, it fell short of calling for Mr Mathews' resignation.

Mr Ip said it was the Government's responsibility to come up with concrete steps to be taken.

Governor Chris Patten said the Government would study the report.

'We've already implemented a number of measures to improve the management of the department. The Attorney-General has my complete confidence. I think he does a first-class job,' he said.

'We all have lessons to learn from this case. I can assure you that we will learn them. But he's been a first-class public servant in Hong Kong,' he said.

A spokesman for the department said the panel's report would be referred to a working party which would give careful consideration to the recommendations in it.

'We are determined to have a system that is cost-effective and accountable to the public,' he said.

Mr Wood said last night: 'I haven't seen the report. I will not comment until I've read it.'