“They’ve got twelve Aces up their sleeve!
So who the Hell can we believe?”
—Rudder, David Michael. “Back to the Same Ole Same.” The Autobiography of The Now. Lypsoland, 2001. Used with permission
The CL Financial bailout seems to be entering its end-game, with repeated claims from the Minister of Finance that the recovery of the $25 Billion of Public Money spent is now on the cards. The consistent failure or refusal to publish any audited accounts and my ongoing research are telling. We are witness to yet another ‘Plot to Pervert Parliament’, this time it is the biggest project to ever hit this country. The CL Financial bailout.
Plots to Pervert Parliament
In January 2013, I identified the first of these, otherwise known as the ‘S.34 Fiasco’, which of course led me to the CLF Bailout Perversion, committed in January 2009 when our country was presented with its largest-ever public expenditure. The original bailout, presented to our Parliament, as a fait accompli, was the original Plot to Pervert Parliament.
I have come to the sobering conclusion, after much research and consideration, that the Colman Commission is not ever going to provide the details we were led to believe it would. I am now of the view that once again we have been misled and bamboozled by our Parliament. Yet another sick trick, a third ‘Plot to Pervert Parliament’.
The rationale stated for the Colman Commission of Enquiry is in serious conflict with the terms of reference for and consequently, the conduct of that Commission. This article will detail those assertions and show how the public interest is once again being subordinated to powerful private interests.
To understand this crime, one must take a stern view of dates and time.
- 30 January 2009 – The bailout is announced at a Press Conference on Friday 30 January 2009 at the Central Bank. At that time, we were told that the estimated cost was about TT$5 Billion.
- 12 June 2009 – Ministry of Finance signs the ‘CL Financial Shareholders’ Agreement’ which, for the first time, discloses that shareholders’ interests were to be specifically protected.
- 8 September 2010 – Winston Dookeran’s first budget statement as Minister of Finance, following the Peoples Partnership electoral victory in May 2010, was notable since Dookeran announced a dramatic policy shift. The entire CL Financial bailout was declared to be the first of the ‘great uncertainties’ to be resolved. Dookeran outlined the problem before reducing the rate at which Public Money would be paid for this bailout. A huge storm of protest erupted, with several ‘Depositors and Shareholders groups’ emerging to represent those interests. With Dookeran isolated and the government under mounting pressure from these new protest groups, laws were swiftly drafted to stifle the protestors’ legal options.
- 1st October 2010 – The PM’s historic address to Parliament on 1 October 2010 at which the Commission of Enquiry was announced. Most notable was the PM’s outrage at the mystery of the bailout – at pgs 25-26 –
“…The $5 Billion has been spent—we are advised—to repay matured EFPA policies in an ad hoc and unstructured manner where payment arrangements were entered into based on levels of funds invested. What criteria did you use to repay investors? Whom did you choose to pay? How were they chosen? These questions need to be answered. Because if it is today after the $7.3 Billion, all these EFPA people, the policy group and so on, they are out there, where is their money? Where is their money? Did you have a priority listing of who should be paid? Why did you go—and you are now crying crocodile tears about trade unions, credit unions, the poor man and the small man—why did you not pay them first? Why did you not pay them first? Where did that $7 Billion go? We need those answers, Mr. Speaker. We deserve those answers. The taxpayers need to know. Because when a parent has to buy school books and bags to send his/her children to school but they have to pay tax out of the little money, they need to know where that money has gone…Where, how and why; we need to know…”
The main argument made by the PM was that this was a case which needed serious investigation to establish what had caused this huge collapse and where had over TT$7 Billion of Public Money gone. I could not agree more.
- 17 November 2010 – The Colman Commission with its Terms of Reference published in the Trinidad and Tobago Gazette. Those were divided into two limbs, causes and consequences. The first to examine the causes of the crisis and the second to make recommendations for prosecutions or other policy changes to prevent a repetition of the crisis.
- In September 2011, the Parliament voted unanimously to pass two laws related to the CL Financial bailout. The first was to permit the Minister of Finance to borrow a further TT$10.7 Billion to fund the bailout and the second was to grant the Central Bank, which was administering the bailout on government’s behalf, immunity from any legal challenge. For those who consider these assertions of mine to be harsh, just look at Winston Dookeran’s closing words to the Senate on 16 September 2011 –
“…I just want to give you the assurance which I gave to the Lower House when we debated this, that already the Ministry, along with the Central Bank and Clico, have begun the preparation of a public document—many questions that are still to be answered—to provide the necessary information. In addition to that, we did present to the hon. Senators, for those who afforded us the opportunity to accept our invitation, a document that is in the vicinity of 57 pages as of now, outlining all the necessary information that led to the story that assess what is the current challenges and why the proposals to go forward have been put forward. This document, I assure you, along with the questions and answers, will be converted into a simple, easy to read, hopefully, document for the sake of establishing that this Parliament has mandated us to put this as an anchor document for the purposes of evaluating our performance in the future…”.
I requested that document via the Freedom of Information Act but it was not provided, which is why my litigation started.
In the course of recent research it became clear to me that the PM’s outraged demands for detailed information as to how the huge sums of Public Money spent in the bailout had been discarded, just like a flimsy Carnival Costume. At no point in its Terms of Reference was the Colman Commission required to examine the details of the actual Public Money spent on the bailout. A new species of lie is born here in T&T, once again…we used to have one called the ‘White Lie’ in those bad-old-days, now we have the ‘Bright Lie’. Right up in our face, as the Parliament is told one thing, with an entirely different thing being done. The Carnival was over, but the Ole Mas was now starting.
One can imagine the ebb and flow as these public promises were neutered in private discussions. Reasons are never given. I suspect that the influence of party financiers and voting blocks was a great element in this travesty. The public right to know how and why these vast sums of Public Money were spent is obviously of low priority for the highest public officials in this Republic.
Truth has a Power all of its own. At this point, in litigation against the Ministry of Finance for that information – the Ministry is represented by a five-member team headed by former AG, Russell Martineau SC and CL Financial is represented by three attorneys. Something resembling legal overkill to prevent publication of information which the PM told the Parliament it was her intention to unearth. Information which then Finance Minister Dookeran assured the Parliament he was compiling into a public document. Another writer has labelled the situation – ‘Afra, the Deviant‘. I tell you.
At every turn, the public interest has been subordinated to secretive private interests. The Courts are literally the last refuge to uphold the lawful rights of the public to obtain detailed information on these matters of the highest importance.
|Safeguard||Status of query|
|Audited accounts for CL Financial?||NONE|
|Details of Management accounts, Estimates, Drafts or any figures used by Ministry of Finance?||NONE|
|Details of official briefing to Independent Senators in September 2011?||CLAIMED TO BE EXEMPT|
|Details of Public Money paid out to people and institutions owed money by CL Financial?||NONE|
|CL Financial is now under State control, so do its Directors comply with the Integrity in Public Life Act?||NOT ACCORDING TO MY EXAMINATION OF INTEGRITY COMMISSION RECORDS.|
|Do we understand why the CL Financial group is enjoying this beneficial exemption from the lawful obligation to file declarations?||NO WORD YET FROM THE INTEGRITY COMMISSION.|
All of the usual integrity, accountability and transparency safeguards have been disconnected. All.
The Code of Silence rules.
5 thoughts on “CL Financial – Bait & Switch”
Reblogged this on Barbados Underground and commented:
The CL Financial saga continues to remind Caricom how inept our governance system is and our attempt at regional harmonization.
Well done, Afra. Great insight into this unbelievable fiasco. Thank you also for agreeing to my related commentary being posted here:
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In Part 1 of this mini-series I explained how bailouts are handled in every other country. I explained that in a bailout it is shareholders that have no rights, and who suffer the greatest loss financially. I referred to the statements of the Minister of Finance that shareholders over here will be handed back a company rescued with taxpayers and policyholder dollars worth billions.
It would be bad enough if that was the worst of it, but there’s more, some of which I shall cover today. Permit me to digress a little.
In October 2011, the Newsday newspaper reported as follows: ‘Saying he (Minister Dookeran) had converted letters of comfort into guarantees, he boasted, “The financial obligations of that (PNM) government were honoured by this Government.” ‘
By way of explanation, here is the definition of a letter of comfort at Investopedia: ‘A letter issued to a lending institution by a parent company acknowledging support of a subsidiary company’s attempt for financing. A letter of comfort does not imply that the parent company guarantees repayment of the loan being sought by the subsidiary company. It merely gives reassurance to the lending institution that the parent company is aware of the credit facility being sought by the subsidiary company, and supports its decision.’
So here we have some of the largest and richest companies in the country, the financial institutions, taking measured risk and lending money to state owned enterprises and utilities. There was no guarantee, no obligation on the part of the government, as the definition makes clear. Had there ever been an intention to guarantee the loans, then there would have been guarantees in place when the loans were negotiated.
When the borrowers were subsequently unable to pay their debts, as CLICO was also unable to pay its debts, the government certainly had no moral or legal obligation to bailout the wealthy financial institutions. These guys have entire departments of expensive experts whose job it is to assess risk. Yet bail them out is exactly what the Dookeran statement did. Our Treasury was raided to bailout the financial institutions.
This took place at the same time that the government claimed that the country could not afford to honour the contracts with octogenarian and other policyholders. They claimed that the economy could not afford the pay legally binding contracts to ordinary folks, yet they paid handsomely to the financial institutions to whom no contractual obligation existed.
It is clear therefore that the argument that the country could not afford the cost of full payment to policyholders was misleading. From hard won disclosures, we also now know that the value of assets was sufficient to cover the obligations to creditors including policyholders according to contract. Via the explanation above it is abundantly clear that the government indeed did bailout some lenders / depositors fully, but only if they were big and powerful.
More fraud to be seen , its not over ,