This interview appears in the Business Express Newspaper on Wednesday, March 28, 2018.
LAST week, nearly six years after he first requested the data under the Freedom of Information Act (FOIA), the Ministry of Finance sent Afra Raymond a compact disc with information on all individuals and institutions who received payments from the State for their investments in CLICO, the insurance company that collapsed in January 2009. The matter went to the Court of Appeal before the parties agreed on an out-of-court settlement with the ministry agreeing to most of Raymond’s demands.
For Raymond, an Express Business columnist, property expert and transparency campaigner, it has been a long but ultimately rewarding road, which began with the May 8, 2012 filing with the ministry. As to cost, he will receive 70 per cent of the cost of the litigation in the High Court.
He answers questions on the issue below:
Q: What in broad terms is the importance to governance and government in T&T of last week’s release of information on the State’s payment to CLICO
A: The need for eternal vigilance is greater than before, with our reduced national resources and I should never have had to make that kind of effort to get these details. Three administrations, between 2009 and now, felt it was proper to hide this huge public spending. Good sense seems to have arrived – for the while anyway! How much Public Money was spent on lawyers’ fees in this sorry affair? Is that a secret too?
This bailout was done via the Central Bank and the CL Financial parent company which formally came under State control by virtue of the June 21, 2009 Shareholders’ Agreement. The State then created new laws to further inoculate the Central Bank from the oversight of the Courts via judicial review and so on. What is more, our Integrity Commission also seems to have lost its way in failing to recognise that CL Financial is a company under State control. As a result, the Commission has sought no Directors’ declarations from the largest of the State controlled companies. I tell you.
Contrast T&T with the Bajan approach to the related 2009 collapse of CLICO in Barbados – The High Court there appointed Deloitte as Judicial Manager in April 2011 and a far more transparent process is taking place – see clicolife.com for an example of how we could have done it better.
If one analyses the data, do you agree that the majority of holders of the investments were individuals who were looking to maximise the return on their investments?
Yes, there were several wealthy investors, but a great many of the accounts and most of the larger ones, were held by companies, including state enterprises! We all know that the EFPA was approved as an individual pension product, yet it was sold to companies, which were later able to obtain repayment.
What do you think accounts for the large number of institutional investors who were able to invest in investment vehicles that were first marketed as being for individuals?
The sheer size of the returns being offered by the EFPA eclipsed good sense and it was the ‘best deal in the country’, quite literally ‘Too Good to be True’, grew and grew until it was ‘Too Big to Fail’ and as we now know, everyone is so closely related that it is now a case of ‘Too Big to go to Jail!’
What, in your view, are the long-term lessons of your fight for information on this state expenditure?
What is sorely needed is for the media and the academy to take their proper role as wellsprings of enquiry, research and debate. The mainstream media (MSM) have not embarked on a sustained campaign to get this information released. The UWI has taken no formal position on this serious issue as far as I am aware. This is a huge expenditure of scarce public money to repay wealthy risk-takers at a time when basic needs are unfulfilled. Chronic shortages in our public health institutions, so how can we find money for this?!
The process by which this outrageous bailout request made its way to the Head Table, was approved by Cabinet, with the sitting Minister of Finance being a shareholder of the beneficiary company, with the public being the last to know. [CORRECTION: The ‘sitting Minister of Finance‘ referred to here is not the incumbent, Colm Imbert. That was an awkward and inaccurate choice of words on my part and I apologise for that error. The ‘sitting Minister of Finance‘ to whom I was referring was the holder of that office from November 2007 to May 2010, Mrs Karen Nunez-Tesheira, who was recorded as the owner of 10,410 shares in CL Financial Ltd, being the 289th of 325 shareholders listed in its filing with the Registrar General’s Department of 17th February 2009.] Well I tell you. Never again. It is like a recipe for a failed marriage in which the husband is the last to know…
What are the long-term lessons of the CLICO collapse and the length of time resolution has taken?
Publication of the Colman Report into CLF…The need for financial education…We need a Regional Financial Regulator as the late Norman Girvan proposed in the wake of this fiasco…most importantly, the key players must be arrested and face the courts on serious charges…The State locks up ‘suspects’ in various lockdowns to then go look for the evidence and pay damages, after! All that is to send a message, we are watching you, we know who you are. The question is why won’t the State take the same firm action against the financial criminals? Until we see the State being very serious with white collar criminals, as is now happening in so many other countries, we are going to have more of this ‘Corbeaux Capitalism.’