This first article for 2018 is my summary of the key issues emerging from the ongoing CL Financial bailout. Yes, the bailout started on Friday 30th January 2009 and nine years later we are still at it. We have spent at least five times more than the original estimated cost, yet the situation remains essentially unresolved.

One of the most alarming aspects of this bailout has been the staggering increase in the amount of Public Money spent. The original cost was estimated to be $5.0Bn and we were told by the Minister of Finance in his Mid-Term Budget Review on 10th May 2017 that – “…the Government may be owed up to $27.7 billion by the CLF Group…”.

Despite that huge increase in expense, about 15,000 policyholders are still to be paid, so who got that $27.7 Billion in Public Money? I sued since 2012, under the Freedom of Information Act to get details of those payments and the audited accounts of the CLF group. Despite the change of government in September 2015, after my High Court win in July of that year, the State has continued its appeal against that High Court ruling. The Appeal Court hearing of my case is set for 24th January 2018, so we will be seeing more of this issue of State secrecy in huge expenditure.

It seems that whatever the government in office, those persons who have benefitted from the secrecy remain in power. It all reminds me of Cheddi Jagan’s bitter quip about his first turbid term as the Guyanese Premier – ‘We were in Office, but not in Power‘. I tell you.

On 7 June 2011, the Central Bank started a serious lawsuit against Lawrence Duprey, Andre Monteil and other elements previously in control of the CLF group. The Central Bank press release is sobering as it states some of the alleged actions of these persons –

• “subordination of the interests of CLICO, its policyholders and mutual-fund investors to the private interests of Mr Duprey, Mr Monteil and their companies;“
• “the lack of proper governance and serial mismanagement;“
• “improper dealings with CLICO’s assets and the funds of policyholders and mutual fund unitholders.“

So what is the update on this Central Bank lawsuit? Have the parties negotiated settlement as part of the Code of Silence? Is the matter over?

Another important outstanding matter is the Colman Report of the official enquiry into CLF which was submitted on 22nd June 2016. Just consider Dr Keith Rowley’s scathing remarks to Parliament on 1 July 2016 about the conduct of the responsible parties at CLF, referring to the Colman Report – “…a number of adverse findings of criminal misconduct of a kleptocratic nature were found…” (pg 42). The Colman Report was suppressed as it was sent to the Director of Public Prosecutions (DPP) for further action. It is now 18 months later and the silence around this Colman Report into CLF is almost as bad as the echo around the earlier (July 2014) Colman Report on the collapsed Hindu Credit Union (HCU). The DPP owes the public a proper explanation for his apparent inaction on these matters.

By my estimates, the interest charged by the State on this loan to the wealthiest individual in the Caribbean was less than 1%. Yes, that is right, so it really pays to know the right people. Despite this huge gift, the CLF shareholders still failed to repay.

Ergo, the bailout was an epic failure – we spent five times more than originally estimated; 15,000 policyholders remain unpaid; those monies were advanced at next-to-nothing interest; the CL Financial Shareholders’ Agreement was extended/renewed seventeen times, yet those companies did not recover sufficiently to repay; hence the recent appointment of Liquidators.

The original justification given to the public for this massive bailout was that the stability of the financial system had to be safeguarded and that pensioners must be protected. After this sorry track-record, many of those pensioners remain unpaid. There are also serious issues in relation to CARICOM claims, as explained in the sidebar.

I do manage to squeeze a smile when reflecting on Duprey’s doubtful claims. Lawrence Duprey claimed to have put finances in place to permit him to repay the Public Monies owed, yet it was reported that his attorneys stopped work for lack of payment. You literally cannot make it up. I tell you.

Finally, we get to the Integrity Commission, yet another of our important, independent Public Institutions. Their failure or refusal to act in this matter has always been a matter of serious concern to me, at one point I even asked whether that Institution had adopted a position of willful blindness. I will return to that aspect next week.