Scandal Plagues U of South Pacific

A new vice chancellor -- with backing of faculty, students and alumni -- charges millions have been misspent.

July 17, 2020

A leadership crisis at the University of the South Pacific (USP) shows no signs of ending quickly, as one of the world’s most distinctive institutions finds itself enmeshed in payment scandals, governance disputes and diplomatic tensions.

Last month, the vice chancellor, Pal Ahluwalia, a Kenyan-born social scientist who took the helm at USP in late 2018, was suspended by the university council’s executive committee over allegations of misconduct.

Ahluwalia, a former pro vice chancellor of the Universities of South Australia and Portsmouth, said the accusations against him were a “byproduct” of a report he had presented to the USP council in May last year. It alleged mismanagement and abuse of office by the former vice chancellor, Rajesh Chandra, and the current pro chancellor, Winston Thompson, who reportedly heads the executive committee that ousted Ahluwalia.

“I have had to endure about 10 investigations since I wrote that paper,” the vice chancellor told Radio New Zealand. “In most places … including Australia and the U.K., whistle-blowers are protected. Here I have been thrown under the bus.”

Ahluwalia’s suspension triggered protests from regional leaders, and Australia -- the second-biggest financial contributor to the university after Fiji -- called for a special meeting of the full USP council.

When the council convened, it reinstated Ahluwalia. Far from ending the matter, however, his restoration signaled a new phase of a saga that pits the reformist vice chancellor -- who has the support of staff, students and alumni -- against the leadership of Thompson, a veteran Fijian public servant and diplomat who chairs the USP council.

This is occurring against the geopolitical backdrop of Australia’s “Pacific pivot” -- an escalation of Australian aid for the region, partly to counter China’s growing influence -- and resentment of Fiji among its smaller neighbors.

With campuses in all 12 Pacific member nations that own it, USP is one of only two pan-national universities of its type in the world.

Its complex structure is reflected in the council, which includes the education ministers of all 12 member states, senior Fijian and Samoan public servants, and representatives of the governments of Australia and New Zealand.

In January last year, Australia’s prime minister, Scott Morrison, announced 84 million Australian dollars ($57 million) in new funding for the institution over six years, during a visit to the university.

But Ahluwalia has alleged that millions of dollars of USP revenue, including Australian money, have improperly lined university administrators’ pockets.

A July 2019 investigation by New Zealand accounting firm BDO was unable to make a judgment about 13 of his allegations concerning appointments and promotions during a two-month transition period at the end of 2018.

But of the other 14 allegations, BDO fully substantiated six and partially substantiated another four. Many concerned questionable back pay, bonuses, allowances and consultancy fees.

The report tallies inducement allowances, bonuses and “responsibility allowances” -- paid to employees taking on extra duties -- over a three-year period.

Inducement allowances, intended as one-off incentives to lure foreign staff, were sometimes paid for more than a decade. And some staff collected up to six responsibility allowances simultaneously, prompting questions about how they managed multiple full-time jobs.

More millions had been paid in “consultancy fees” for staff who were in essence subcontracting work to themselves.

Last November, it emerged that Australia had withheld A$10.5 million ($7.2 million) of USP funding. The ABC reported that the university and Australia’s Department of Foreign Affairs and Trade (DFAT) had “jointly agreed to modify the schedule of payments to support reform actions by the university.”

It said DFAT had released an initial tranche of A$3.5 million ($2.4 million) after the university appointed an independent commission to implement BDO’s recommendations, and expected funding to “return to normal” in the first half of 2020.

Times Higher Education understands that the outstanding Australian funding has not yet been released. Inquiries to DFAT went unanswered.

Former Australian National University researcher Jonathan Pryke said the government’s silence on the issue was not unexpected.

“In the past, we have been seen as a bit overbearing or patronizing,” said Pryke, who now directs the Pacific Islands Program at the Lowy Institute think tank. “People in the Pacific have such strong and passionate opinions about the university. Australia has to work in the background to help guide this to a better outcome, but getting on the pulpit is not going to help.”

Pryke said it was “upsetting” to see a governance scandal envelop an institution that had “traditionally been one of the beacons of regionalism in the Pacific,” but resolving it would take time. “There are so many stakeholders in this university. It’s a challenging governance situation.”

But Ahluwalia’s re-endorsement by the council had helped shore up his “moral authority,” Pryke said. While the pro chancellor had the support of the Fijian government, a subcommittee was working through the findings of the audit. “They are going to have to carry through on these reforms, and if the pro chancellor continues to try and block them, he’s going to be in a bit of trouble.”

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