What Lies Beneath

The public is being told that the CL Financial bailout is being resolved, while at the same time the Minister of Finance & the Economy is withholding the fundamental information which any prudent person would need to make a decision.  So, what is the secret?

Apart from the details I have been asking for, there are other questions which occur to me –

  1. Directors’ Fees – What is the comparative level of Directors’ fees before and after the bailout on 30 January 2009?  In particular, what are the fees & expenses payable to CL Financial Directors?  Have those increased?  If so, to what level and on what rationale?
  2. Related Party dealings – We were told that one of the main causes of the CL Financial collapse was excessive related-party transactions.  Has that pattern of dealings has really changed? What are the contracts between the group and companies in which Directors hold an interest?  Does the group, or the Minister of Finance, keep a record of these connected contracts?  Does the group have a robust procurement procedure which would ensure value for money in all its significant transactions?
  3. Asset disposals – Which of the group’s assets have been disposed-of since the bailout and on what terms?  Were proper valuations obtained before these disposals?

The original complaint is here –


———- Forwarded message ———-
From: Afra Raymond <afraraymond@gmail.com>
Date: Mon, Sep 10, 2012 at 11:12 PM
Subject: Compliance of CL Financial Directors with the Integrity in Public Life Act
To: registrar@integritycommission.org.tt
To – Mr. Martin Farrell, Registrar of the Integrity CommissionDear Sir,
The Integrity in Public Life Act requires that “Members of the Boards of all Statutory Bodies and State Enterprises including those bodies in which the State has a controlling interest” are required to file returns and declare interests with the Integrity Commission.

Clause 3.1. of the CL Financial Shareholders’ Agreement of 12th June 2009 – see https://afraraymond.files.wordpress.com/2010/03/mou21.pdf – specifies that the Board of Directors of CLF shall consist of seven Directors, four of which shall be nominated by the Government. The GORTT has a controlling interest and it is public knowledge that the GORTT has exercised those rights, amounting to strong influence evidencing control.

It seems clear that the directors of CL Financial Ltd are therefore persons who should file declarations, and therefore also the directors of subsidiaries under their influence and control, but having visited your offices earlier today to examine the Register of Interests it seems that these Directors have not been filing returns with you.

For your information, your staff confirmed to me today that none of these people have filed declarations or been required to file such for 2009, 2010 or 2011 –

  • Gerald Yet Ming (CLF’s current Chairman)
  • Hayden Charles (CLICO Director)
  • Ronald Harford (Republic Bank’s Chairman)
  • Dr Euric Bobb (former CLF Chairman)
  • Rampersad Motilal (Managing Director of Methanol Holdings Limited)

I am therefore requesting, in the public interest, your confirmation that Directors of CL Financial and the companies within its control are required to file declarations or your confirmation that those Directors are not required to file or such other informative response that will satisfy this complaint of apparent non-compliance.

I await your early reply.
Yours faithfully,

Afra Raymond
B.Sc. FRICS

http://www.afraraymond.com


IC-response2013-full
Click image to enlarge

SIDEBAR: Integrity and the CL Financial bailout – the nexus as noted by Afra Raymond on 28 May 2009

There is an interesting nexus between the Integrity in Public Life Act (2000) and the CLF bailout.

The Act obliges that public officials make a declaration of their income, assets, liabilities and interests to the Integrity Commission on or before 31 May of each year.  There are penalties for non-compliance.  We have seen high-profile investigations and prosecutions with the proposed amendments to the Act now being debated in the Senate.

The Integrity Commission website lists ten classes of persons in public life who must file declarations with them.  That list can be found at http://www.integritycommission.org.tt/whofile.html.  The ninth class of person is “Members of the Boards of all Statutory Bodies and State Enterprises including those bodies in which the State has a controlling interest.”

CL Financial has already signed over its shareholdings in Republic Bank Ltd. (55%) and Methanol Holdings Trinidad Ltd (56%) to the State under the MoU, and the State has taken complete control of CLICO.  Will CLICO, MHTL and Republic Bank Directors be filing returns on or before 31 May?

From: Afra Raymond [mailto:afraraymond@gmail.com]
Sent: Thursday, 20 March 2014 09:56 PM
To: Registrar, Integrity Commission
Subject: Fwd: Compliance of CL Financial Directors with the Integrity in Public Life Act

Dear Mr. Farrell,

I am seeking an update from you on your progress in relation to this formal report made to the Integrity Commission on 10th September 2012.

Apart from a brief telephone conversation we had a few days after its submission, I have had neither acknowledgment or reply to this report.

I await your early reply.

Regards

Afra Raymond

http://www.afraraymond.wordpress.com

pointing-finger-md

On Fri, Mar 21, 2014 at 4:54 PM, Registrar, Integrity Commission <Registrar@integritycommission.org.tt> wrote:

Dear Mr Raymond

Our recollection in the office is that a response was sent to you and we are examining our records.

In any case, a response will be sent to you.

Registrar

pointing-finger-md

On Fri, Mar 21, 2014 Afra Raymond <afraraymond@gmail.com> wrote:Hello Mr. Farrell,

I appreciate your early attention to my query.

Regards

Afra Raymond

pointing-finger-md

From: Afra Raymond <afraraymond@gmail.com>

Date: Thu, May 22, 2014 at 11:44 AM
Subject: Re: Compliance of CL Financial Directors with the Integrity in Public Life Act
To: “Registrar, Integrity Commission” <Registrar@integritycommission.org.tt>

 

Hello Mr. Farrell,

I wrote to you on 20th March 2014 seeking an update to my formal report of 10th September 2012 to the Integrity Commission on this matter. You replied the next day indicating that you thought that a reply had already been sent but that in any case a reply would be sent to me.

To date I have had no response to my formal complaint or the request for an update as to its status. In the interim, I have carefully examined the Commission’s 2012 and 2013 Annual Reports and found no mention of my complaint in the sections which provide an outline of the various investigations being undertaken. According to those Reports, the status of those investigations seem to fall into three categories – ‘Closed’ – denoting those matters which have been effectively dismissed, due to lack of evidence or irrelevance; ‘Completed’ – denoting those matters which have been investigated or ‘Continuing’ for those matters which are still under investigation. I am starting to wonder if my formal complaint has been relegated to some new, as yet undisclosed, category.

I am also going to point out that, according to the Integrity Commission’s Public Notice at pg 49 of the Sunday Express of 6th October 2013, the Integrity in Public Life Act applies to State Enterprises. At the fourth para of that Public Notice, which was intended to clarify published concerns as to the implications of the Appeal Court ruling in #30 of 2008, you state that State Enterprises are companies which are controlled by the State, so I would again invite your attention to the particulars of my original complaint in this matter. As you would appreciate from my published analysis, the position taken by the Commission in that Public Notice is one with which I strongly disagree, nonetheless, that position is the Integrity Commission’s formal statement on the matter.

For ease of reference, that Public Notice is here –
https://afraraymond.files.wordpress.com/2013/10/ic-response2013.pdf – since I was unable to locate it on the Commission’s website.

I am closing by pointing out that this is a matter of the gravest possible public concern, since CL Financial has been the recipient of over $25 Billion TTD in Public Money and its affairs remain shrouded in an intentional obscurity which does violence to the modern notions of Transparency, Accountability and Good Governance. That obscurity includes the channelling of those huge sums of Public Money via the Central Bank which is exempt from the Freedom of Information Act; new laws to approve the exemption of the Central Bank from any judicial review of its actions in this matter (that has now been ruled as unconstitutional by the High Court in #4383 of 2012, of course the State has appealed that, so the fight is on); the failure/refusal of CL Financial to publish audited accounts and the failure/refusal of CL Financial’s Directors to comply with the Integrity in Public Life Act.

That is the factual background against which I lodged my formal complaint. The delay and ambiguity with which the Integrity Commission appears to be treating my complaint on this most serious matter is sobering, to say the least.

I trust that you can give this matter your early attention, in the meantime, I will be publishing this as a record of these developments.

Afra Raymond

http://www.afraraymond.wordpress.com

pointing-finger-md

Registrar, Integrity Commission

May 22
to me

Dear Mr. Raymond

 

On behalf of Mr. Farrell I do apologize for  not responding to your query.   Please note that your query was not classified as a compliant so you would not find it in the complaints section of the 2012 or 2013  Annual Report.   With respect to  your query we have sought and obtained legal advice.  However the Commission is not properly constituted ( a Commissioner having resigned and not yet replaced by his Excellency the President) at this time and therefore cannot make decisions.  As soon as the Commission becomes properly constituted the matter will be placed before the Commission for a decision.

 

In the interim I would appreciate if you can provide us with a copy of the CL Financial Shareholders Agreement.

Yours respectfully

Lisa Phillips

Acting Registrar

Integrity Commission

pointing-finger-md

From: Afra Raymond [mailto:afraraymond@gmail.com]

Sent: Thursday, 22 May 2014 05:12 PM
To: Registrar, Integrity Commission
Subject: Re: Compliance of CL Financial Directors with the Integrity inPublicLife Act

Hello Ms. Phillips,

I thank you for your swift reply and trust that this matter can now receive proper attention.

The Ministry of Finance made a Press Release on 12th June 2009 -http://www.afraraymond.files.wordpress.com/2011/03/minoffin_pr_12jun2009.pdf – which I received prior to the actual Shareholders Agreement being released to me pursuant to my Freedom of Information request. As requested, the actual CL Financial Shareholders Agreement of 12th June 2009 is here – https://afraraymond.files.wordpress.com/2010/03/mou21.pdf – for your consideration.
I await your reply.

Afra Raymond

http://www.afraraymond.wordpress.com

pointing-finger-md

On Friday, May 23, 2014, Registrar, Integrity Commission <Registrar@integritycommission.org.tt> wrote:

Dear Mr. Raymond

Thanks for your understanding. However used the link provided but most of the pages of the Agreement are blank.

Regards

Lisa Phillips

Acting Registrar

pointing-finger-md

From: Afra Raymond [mailto:afraraymond@gmail.com]

Sent: Friday, 23 May 2014 09:06 AM
To: Registrar, Integrity Commission
Subject: Re: Compliance of CL Financial Directors with the Integrity in PublicLife Act

Hello Ms. Phillips,

The Shareholders’ Agreement is showing ok at my end, the scanned copy I was sent seemed a little faded, that was all.

The link I sent you yesterday was included in my original email of 10th September 2012, so it’s not clear whether that actually received proper attention.

I suppose that the Finance Ministry would provide a copy if you asked, seeing that they sent it to me.

Thank You

Afra Raymond

http://www.afraraymond.wordpress.com

pointing-finger-md

Registrar, Integrity Commission      May 23

to me

Mr. Raymond

Noted. Thanks

Lisa

Everything but the Truth

On 1st June 2014, my former colleague and Business Guardian Editor, Anthony Wilson,  made a call for a ‘national debate’ on the proposed disposal of CLICO’s traditional portfolio of insurance business.  This is the first of my responses.

We are now entering the chaotic endgame of this epic CL Financial bailout fiasco. Some of the recent official statements are –

  • CL Financial’s other assets, including majority shareholdings in Republic Bank Limited and Methanol Holdings to be sold;
  • Full repayment of Public Money advanced in this bailout is expected.
  • CLICO’s traditional insurance policy portfolio is being professionally valued prior to its intended disposal;
  • Atrius Ltd., set up in 2013 as an alternative vehicle for CLICO’s continuing business, is to be effectively abandoned;
  • All of CLICO’s sales agents are to be terminated by the end of this month, June 2014;

jwala-howaiThe recent statements of both the Minister of Finance, Larry Howai, and the Governor of the Central Bank, Jwala Rambarran, could give the public an impression that this financial disaster has now been mostly resolved and we are on some kind of smooth track to a complete solution.

I remain sceptical as to the extent to which these problems have been resolved. The complete lack of detailed information, despite many requests by myself and others, leaves one to wonder just what is the basis for these serious decisions.

So, why am I saying this?

The money being used in the CL Financial bailout is ‘Public Money’, which we sometimes call tax-payers’ dollars. The leading learning from which we have to draw serious lessons is Lord Sharman’s 2001 Report to the British Parliament ‘Holding to Account‘, which was a thorough examination of the definition, role and need for control of ‘Public Money’. In the Public Procurement campaign we expanded on Sharman’s definition of ‘Public Money’ so as to capture the full range of possibilities, but we have accepted his key finding as to the requirement that ‘Public Money’ is to be managed to a higher standard of Accountability and transparency than Private Money – see 2.23 on pg 15.

The contemporary, best-practice position in respect of the management of and accountability for Public Money being that the private sector rules are the bare minimum.

CL Financial Ltd. is a holding company for the Duprey empire, comprising major companies such as Republic Bank Ltd.; the Angostura Group; Methanol Holdings Trinidad Ltd; Home Construction Group of Companies; British-American Insurance Company Ltd; Lascelles-Mercado Ltd. (the Jamaican owners of Appleton and Wray & Nephew rums).

The last audited accounts for the CL Financial group were published on 18 November 2008, for the financial year ending 31 December 2007. The function of consolidated audited accounts is to give investors and management the necessary information with which to make decisions as to the future of the company.

Since 2009 I have been making requests under the Freedom of Information Act for these items of information –

  • Audited Accounts for the CL Financial group, or the basis of the various statements by successive Ministers of Finance;
  • Senate Briefing – details of the high-level briefing given to Independent Senators in September 2011 prior to the vote on the two new laws – one to allow the State to borrow an additional $10.7 Billion to settle the bailout and the Act to shield the Central Bank from the supervision of the Courts;
  • Payments – details of the payments to the various claimants under the terms of the bailout, in particular EFPA-holders;
  • Integrity Commission – confirmation of whether the Minister of Finance was requiring the CL Financial Directors to file declarations as required by law.

I have effectively withdrawn the last of those requests and am now in litigation against the Minister of Finance & the Economy for the first three items. The State has resisted those claims and the litigation continues. I have continued my quest on the compliance of CL Financial’s Directors with the Integrity in Public Life Act with the Integrity Commission, despite the serial delays and unresponsiveness which have beset those requests.

The question before us now is, “How can the State and our government be making these serious, long-term decisions in the absence of the basic information?” Put another way, “How can we continue to allow these serious decisions to be made in our name on our behalf and supposedly, for our benefit, while the State continues to withhold the basic information?

We have now entered the unimaginable territory of unexamined State power being exercised on an unprecedented scale in the pursuit of an unknown agenda.

This is the big picture and it is an ugly one.

Try to imagine the Board of a major, privately-owned, holding company proposing to its Shareholders that its major assets be disposed-of without the basic information, such as audited accounts or details of meetings with major stakeholders. Such an action would be seen as a gross violation of elementary norms of corporate governance and quite likely be rejected with swift, high-level dismissals. Yet, here we have our government (the Board of Directors) proposing these actions while refusing the reasonable requests of shareholders (citizens such as myself and others) for the rationale for and basic information underlying this process.

The fundamental, best-practice principle that Public Money is to be managed to and accounted for to a higher standard than Private Money has seemingly been rejected. Rejected by the Minister of Finance & the Economy and the Governor of the Central Bank.

That is the scale of this ‘thing without a name’. I tell you.

We, the citizens and taxpayers of this Republic, are being told that this unprecedented expenditure of Public Money of $25 Billion is to be resolved by a questionable process. The long-time saying is buzzing through my head – ‘What eh meet yuh, eh pass yuh‘.

Some points to remember in thinking about this issue –

  • CL Financial Shareholders’ Agreement expires at the end of June 2014;
  • Asset Sales have continued with the unadvertised sales of Valpark and Atlantic Plazas;
  • No Interest was charged on the huge sums of Public Money spent to settle the indebtedness of the CL Financial group. The Board of Inland Revenue is a Division of the Ministry of Finance & the Economy and annual interest of 20% is charged to taxpayers who are late in their payments.
  • ‘Fit & Proper’ regulations have never been applied to this CL Financial collapse, as mandated by Central Bank’s regulations, despite my continuing calls. One has to wonder if the stage is being set for a return of Lawrence Duprey & his cohorts to our country’s high-level corporate lifestyle.

On 28 May 2014, the Business Express ‘Opinion‘ was entitled ‘Bringing closure to the CLICO debacle‘ and one of the statements in that editorial was stunning –

“…Thus far, Rambarran and Finance Minister Larry Howai have been forthcoming in their handling of the CLICO issue…”

I could not agree less. The taxpayers and citizens of Trinidad & Tobago are being abused in this entire process.

Compliance of CL Financial Directors with the Integrity in Public Life Act – a correspondence

From: Afra Raymond [mailto:afraraymond@gmail.com]
Sent: Thursday, 20 March 2014 09:56 PM
To: Registrar, Integrity Commission
Subject: Fwd: Compliance of CL Financial Directors with the Integrity inPublic Life Act

Dear Mr. Farrell,

I am seeking an update from you on your progress in relation to this formal report made to the Integrity Commission on 10th September 2012.

Apart from a brief telephone conversation we had a few days after its submission, I have had neither acknowledgment or reply to this report.

I await your early reply.

Regards

Afra Raymond

http://www.afraraymond.wordpress.com

==================================================================================

 

On Fri, Mar 21, 2014 at 4:54 PM, Registrar, Integrity Commission <Registrar@integritycommission.org.tt> wrote:

Dear Mr Raymond

Our recollection in the office is that a response was sent to you and we are examining our records.

In any case, a response will be sent to you.

Registrar

===================================================================================

On Fri, Mar 21, 2014 Afra Raymond <afraraymond@gmail.com> wrote:

Hello Mr. Farrell,

I appreciate your early attention to my query.

Regards

Afra Raymond

===================================================================================

From: Afra Raymond <afraraymond@gmail.com>

Date: Thu, May 22, 2014 at 11:44 AM
Subject: Re: Compliance of CL Financial Directors with the Integrity in Public Life Act
To: “Registrar, Integrity Commission” <Registrar@integritycommission.org.tt>

 

Hello Mr. Farrell,

I wrote to you on 20th March 2014 seeking an update to my formal report of 10th September 2012 to the Integrity Commission on this matter. You replied the next day indicating that you thought that a reply had already been sent but that in any case a reply would be sent to me.

To date I have had no response to my formal complaint or the request for an update as to its status. In the interim, I have carefully examined the Commission’s 2012 and 2013 Annual Reports and found no mention of my complaint in the sections which provide an outline of the various investigations being undertaken. According to those Reports, the status of those investigations seem to fall into three categories – ‘Closed’ – denoting those matters which have been effectively dismissed, due to lack of evidence or irrelevance; ‘Completed’ – denoting those matters which have been investigated or ‘Continuing’ for those matters which are still under investigation. I am starting to wonder if my formal complaint has been relegated to some new, as yet undisclosed, category.

I am also going to point out that, according to the Integrity Commission’s Public Notice at pg 49 of the Sunday Express of 6th October 2013, the Integrity in Public Life Act applies to State Enterprises. At the fourth para of that Public Notice, which was intended to clarify published concerns as to the implications of the Appeal Court ruling in #30 of 2008, you state that State Enterprises are companies which are controlled by the State, so I would again invite your attention to the particulars of my original complaint in this matter. As you would appreciate from my published analysis, the position taken by the Commission in that Public Notice is one with which I strongly disagree, nonetheless, that position is the Integrity Commission’s formal statement on the matter.

For ease of reference, that Public Notice is here –
https://afraraymond.files.wordpress.com/2013/10/ic-response2013.pdf – since I was unable to locate it on the Commission’s website.

I am closing by pointing out that this is a matter of the gravest possible public concern, since CL Financial has been the recipient of over $25 Billion TTD in Public Money and its affairs remain shrouded in an intentional obscurity which does violence to the modern notions of Transparency, Accountability and Good Governance. That obscurity includes the channelling of those huge sums of Public Money via the Central Bank which is exempt from the Freedom of Information Act; new laws to approve the exemption of the Central Bank from any judicial review of its actions in this matter (that has now been ruled as unconstitutional by the High Court in #4383 of 2012, of course the State has appealed that, so the fight is on); the failure/refusal of CL Financial to publish audited accounts and the failure/refusal of CL Financial’s Directors to comply with the Integrity in Public Life Act.

That is the factual background against which I lodged my formal complaint. The delay and ambiguity with which the Integrity Commission appears to be treating my complaint on this most serious matter is sobering, to say the least.

I trust that you can give this matter your early attention, in the meantime, I will be publishing this as a record of these developments.

Afra Raymond

http://www.afraraymond.wordpress.com

===================================================================================

Registrar, Integrity Commission

May 22
to me

Dear Mr. Raymond

 

On behalf of Mr. Farrell I do apologize for  not responding to your query.   Please note that your query was not classified as a compliant so you would not find it in the complaints section of the 2012 or 2013  Annual Report.   With respect to  your query we have sought and obtained legal advice.  However the Commission is not properly constituted ( a Commissioner having resigned and not yet replaced by his Excellency the President) at this time and therefore cannot make decisions.  As soon as the Commission becomes properly constituted the matter will be placed before the Commission for a decision.

 

In the interim I would appreciate if you can provide us with a copy of the CL Financial Shareholders Agreement.

Yours respectfully

Lisa Phillips

Acting Registrar

Integrity Commission

===================================================================================

From: Afra Raymond [mailto:afraraymond@gmail.com]

Sent: Thursday, 22 May 2014 05:12 PM
To: Registrar, Integrity Commission
Subject: Re: Compliance of CL Financial Directors with the Integrity inPublicLife Act

Hello Ms. Phillips,

I thank you for your swift reply and trust that this matter can now receive proper attention.

The Ministry of Finance made a Press Release on 12th June 2009 -http://www.afraraymond.files.wordpress.com/2011/03/minoffin_pr_12jun2009.pdf – which I received prior to the actual Shareholders Agreement being released to me pursuant to my Freedom of Information request. As requested, the actual CL Financial Shareholders Agreement of 12th June 2009 is here – https://afraraymond.files.wordpress.com/2010/03/mou21.pdf – for your consideration.
I await your reply.

Afra Raymond

http://www.afraraymond.wordpress.com

===================================================================================

On Friday, May 23, 2014, Registrar, Integrity Commission <Registrar@integritycommission.org.tt> wrote:

Dear Mr. Raymond

Thanks for your understanding. However used the link provided but most of the pages of the Agreement are blank.

Regards

Lisa Phillips

Acting Registrar

===================================================================================

From: Afra Raymond [mailto:afraraymond@gmail.com]

Sent: Friday, 23 May 2014 09:06 AM
To: Registrar, Integrity Commission
Subject: Re: Compliance of CL Financial Directors with the Integrity in PublicLife Act

Hello Ms. Phillips,

The Shareholders’ Agreement is showing ok at my end, the scanned copy I was sent seemed a little faded, that was all.

The link I sent you yesterday was included in my original email of 10th September 2012, so it’s not clear whether that actually received proper attention.

I suppose that the Finance Ministry would provide a copy if you asked, seeing that they sent it to me.

Thank You

Afra Raymond

http://www.afraraymond.wordpress.com

===================================================================================

Registrar, Integrity Commission      May 23

to me

Mr. Raymond

Noted. Thanks

Lisa

 


The original complaint is here –


———- Forwarded message ———-
From: Afra Raymond <afraraymond@gmail.com>
Date: Mon, Sep 10, 2012 at 11:12 PM
Subject: Compliance of CL Financial Directors with the Integrity in Public Life Act
To: registrar@integritycommission.org.tt

To – Mr. Martin Farrell, Registrar of the Integrity Commission

Dear Sir,

The Integrity in Public Life Act requires that “Members of the Boards of all Statutory Bodies and State Enterprises including those bodies in which the State has a controlling interest” are required to file returns and declare interests with the Integrity Commission.

Clause 3.1. of the CL Financial Shareholders’ Agreement of 12th June 2009 – see https://afraraymond.files.wordpress.com/2010/03/mou21.pdf – specifies that the Board of Directors of CLF shall consist of seven Directors, four of which shall be nominated by the Government. The GORTT has a controlling interest and it is public knowledge that the GORTT has exercised those rights, amounting to strong influence evidencing control.

It seems clear that the directors of CL Financial Ltd are therefore persons who should file declarations, and therefore also the directors of subsidiaries under their influence and control, but having visited your offices earlier today to examine the Register of Interests it seems that these Directors have not been filing returns with you.

For your information, your staff confirmed to me today that none of these people have filed declarations or been required to file such for 2009, 2010 or 2011 –
Gerald Yet Ming (CLF’s current Chairman)
Hayden Charles (CLICO Director)
Ronald Harford (Republic Bank’s Chairman)
Dr Euric Bobb (former CLF Chairman)
Rampersad Motilal (Managing Director of Methanol Holdings Limited)

I am therefore requesting, in the public interest, your confirmation that Directors of CL Financial and the companies within its control are required to file declarations or your confirmation that those Directors are not required to file or such other informative response that will satisfy this complaint of apparent non-compliance.

I await your early reply.

Yours faithfully,

Afra Raymond
B.Sc. FRICS

http://www.afraraymond.com

TSTT Inquiry

The Trinidad & Tobago Parliament is now conducting an Inquiry into TSTT and this article is an edited version of my submission to that Inquiry.

The Joint Select Committee’s (JSC) ‘Invitation for Written Submissions‘ was published on the TT Parliament website on Wednesday 23 April 2014, with the deadline for submissions set at 4:00 pm on Friday 2 May 2014. Only ten (10) days.

When one considers the far-reaching scope of the Inquiry as specified in its ten (10) objectives; the size and role of TSTT and the recent published reports as to the proposals for the State to relinquish a critical 2% of its share in TSTT, it is clear that these matters are of the utmost, long-term public importance. Placed in that context, the JSC decision to Inquire into these matters is commendable, but the time-frame is so short as to raise serious doubts as to the quantity and quality of submissions which could comply.

The deadline for submissions to this JSC Inquiry should be extended to allow a greater degree of public and stakeholder participation.

This submission is focused on the third of the Inquiry’s ten objectives –

  1. “ To determine the adequacy and effectiveness of the Company’s policies and procedures as it pertains to ensuring accountability, transparency and sound Corporate Governance in its operations and to determine whether these are being adhered to…“

It is my considered view that TSTT has engaged in a series of determined and long-range legal manoeuvres to place itself outside two of our Republic’s principal accountability and transparency laws. Those two laws are the Integrity in Public Life Act and the Freedom of Information Act.

The Integrity in Public Life Act

ictt-vs-tsttThe Integrity in Public Life Act established the Integrity Commission, which states its role to be “…to promote integrity, particularly among “persons in public life” – from the level of Ministers of Government and Members of Parliament to Permanent Secretaries, Chief Technical Officers and members of the Boards of Statutory Bodies and State Enterprises…

In 2005, the Integrity Commission applied to the High Court for an interpretation of its remit, the particular aspect of that matter which has a bearing on this Inquiry was specified at para 1. (2) of the Court’s ruling in that case –

“(2) What is the meaning of the expression ― “Members of the Boards of all Statutory Bodies and State Enterprises including those bodies in which the State has a controlling interest” in paragraph 9 of the Schedule to the Integrity in Public Life Act as amended?”

TSTT was granted leave to be heard on the application, according to paras 3 & 4 of that ruling.

In 2007, the High Court ruled, in relation to that aspect that the IPLA applied to Directors of State Enterprises and bodies in which the State had a controlling interest. The plain meaning of which was that TSTT’s Directors were required to comply with the provisions of the IPLA.

TSTT appealed that ruling, once again seeking to place its Directors outside the remit of the IPLA. That appeal was part of the deliberate, long-term series of legal actions by TSTT to challenge the stated intent of the Integrity Commission in relation to its Directors. The fact that the legal action proceeded that far is ample testimony to the support extended by the government (the Executive) to TSTT in this endeavour.

On 27 June 2013, the Appeal Court ruled that –

CONCLUSION

  1. TSTT is not a State Enterprise. The members of its Board are not subject to the Integrity Provisions.”

That ruling marked the successful completion of the TSTT campaign to remove itself from oversight by the Integrity Commission.

One could view these events as being the lawful exercise of various parties’ rights to seek the Courts’ interpretation of the law and the result as being the product of due deliberation.

That view is too limited, since the wider constitutional question is begged as to the true intent of Parliament in creating the IPLA. This situation represents nothing less than an open dismantling of the clear intentions of Parliament by the concerted actions of the Executive and its agents, together with the independent Integrity Commission.

On 6 October 2000, the Parliament passed the IPLA, but on 13 October 2000, the Parliament passed an amendment to the Schedule of the IPLA. The clear intention of the Parliament in approving that amendment was to include members of the Boards of State Enterprises and those bodies in which the State has a controlling interest.

The intended result of this TSTT litigation was to remove its Directors from Integrity Commission oversight and that was achieved. The intended will of the Parliament was effectively frustrated by these legal manouevres.

The Freedom of Information Act

The Freedom of Information Act 1999 is intended to give the public the right to obtain information about Public Authorities. The Freedom of Information Unit (within the Office of the Prime Minister) provides a list of Public Authorities which are subject to the provisions of the FoIA. TSTT is listed as the 145th on that list of 199 No. Public Authorities.

On 17 January 2006, Magdalene Samaroo filed suit against TSTT under the Freedom of Information Act to obtain publication of a copy of “…the letter from the Integrity Commission to the Directors of the Board of TSTT informing them that they are not required to give annual declarations…in accordance with the IPLA as amended…”.

The requested letter is itself astounding, given that it would appear to be a formal undertaking from the Integrity Commission intended to subvert the law requiring that Directors of State Enterprises submit declarations to the said Commission. As far as I know, the existence of that letter has never been officially denied.

On 19 July 2010, the High Court ruled that TSTT is a Public Authority (para 18) and further, that it was required to provide the requested documents (para 25).

TSTT filed an appeal against that ruling, which ended in a final hearing before the Appeal Court on 28 October 2013.

The appeal was compromised by consent, meaning that the parties agreed to end the litigation, so costs were not awarded by the Appeal Court. The Court, having accepted that the matter was at a close, went on to set aside the 2010 ruling by the late Justice Carlton Best. To cite the transcript of that final hearing

“…we can say that the appeal is compromised, we can set aside the decision of Justice Best and enter the Order that there be no Order to costs which does three things, or two things, at least: it meets your agreement; it removes the precedent that is creating some difficulty for you…” (emphasis mine)

The action of the Appeal Court in removing the difficult precedent facilitated TSTT in achieving its desired outcome of no transparency or accountability in relation to these issues.

Here again, we are witness to another determined effort by TSTT to seek the assistance of the Courts to frustrate the proper intentions of the Parliament.

I asked the Inquiry to recommend to Parliament that it –

  • Rectify the contradiction arising from the Appeal Court judgment in #30 of 2008 with respect to TSTT’s obligations under the IPLA. The Parliament must ensure that TSTT is formally and conclusively brought within Integrity Commission oversight, as is the case for all State Enterprises.
  • Ensure prompt publication of the Integrity Commission’s letters to the TSTT Directors exempting them from compliance with their obligations under the IPLA.
  • Ensure TSTT’s compliance with the provisions of the Freedom of Information Act, as lawfully required for all Public Authorities.

There is now the unacceptable contradiction of a JSC of our Parliament convening this Inquiry into TSTT’s operations, in the proper exercise of its supervisory responsibility for that State Enterprise, while the Appeal Court has ruled that TSTT is not a State Enterprise for the purposes of the IPLA. As I complete this column, TSTT officials are live on the Parliament channel giving evidence to this Inquiry on Friday 9 May.

To add to the brew, Cable & Wireless, the 49% shareholder in TSTT, is proposing that the State relinquish 2% of its shareholding into an arrangement which would effectively end State control of this important national asset.

How can we find out what is the true position of TSTT in our nation’s affairs if our lawful rights to accountability and transparency into its operations are being eroded in this fashion?

This unacceptable situation is a challenge to the Parliament to reassert its proper authority in this matter.

Submission to Joint Select Committee Inquiry into the administration and operations of TSTT

In response to an invitation for written submissions to the Joint Select Committee of Parliament on Ministries, Statutory Authorities and State Enterprises (Group 2) Inquiry into the administration and operations of the Telecommunications Services of Trinidad and Tobago, I delivered the following:

From: jscgroup2 <jscgroup2@ttparliament.org>
Date: Mon, May 5, 2014 at 9:32 AM
Subject: RE: Public Enquiry into TSTT
To: Afra Raymond <afraraymond@gmail.com>
Cc: Candice Skerrette <cskerrette@ttparliament.org>Dear Mr. Raymond,

On behalf of the Committee, I extend sincere gratitude for your response to the Committee’s request for submissions regarding its inquiry into the operations of TSTT. The Committee will consider your comments and if necessary, may seek to engage with you further.

In addition, the Committee is expected to convene a Public Hearing with officials of TSTT on Friday May 09, 2014 at 10:00am. This hearing will be aired LIVE on the Parliament Channel.

Best regards,

Julien Ogilvie
Secretary to the Committee

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Guarding the Guards

Our country continues its perpetual grappling with the question of conduct in public office, but at this time we are faced with particular threats and opportunities in respect of the Public Interest.

Before getting to the present particulars, some critical facts and concepts must be stated. Trinidad & Tobago is a leading nation in the Caribbean region, so progress made here will be to the wider benefit of the region. That said, the particular shape of our economy is such that the State is easily the dominant player in the country’s commercial affairs. Given that reality, the question of illegal or improper conduct by the State and its Agencies, goes far beyond principled assertions. The State must be exemplary in its conduct, not just because that is a principled position, but because its regular misconduct and illegality will continue to distort the behaviour of non-State players.comics-elephantthere-big

The size and wealth of the State makes its control and oversight a continuing and seemingly-insurmountable task. Like the old proverb – ”…Where does an Elephant sit? Wherever it wants to…” It is essential that the State be subject to ongoing and timely oversight, so as to preserve the society’s stability and progressive development.

The State’s power emanates from its unique legal powers and the fact that it has more money than any other element of the society.

These two streams of power work together in a special relationship to which we must be most alert. We rely on the State to seek our collective interests, so we have a special duty to be most vigilant as to its operations.

That is the background against which the current threats and challenges must be viewed.

The main element driving the episodes of State misconduct and illegality is the ability to transact in Public Money, which is money due to or payable by the State, to include any money for which the State will be ultimately liable in the event of a default. Public Officials transact in Public Money, on our behalf. Those Officials are defined in the Schedule to the Integrity in Public Life Act (IPLA) – that list includes politicians, Permanent Secretaries and Board members of State Enterprises, Statutory Bodies performing a public function and bodies in which the State has a controlling interest.

Public Money must be managed to a higher standard of accountability and transparency than Private Money, because it is raised by coercion (taxation) and mostly spent in a manner which does not allow for real competition. Residents and companies are therefore obliged to pay taxes and consume public services with no real choice, hence our entitlement to that higher standard of accountability from the State in the delivery of public services.

Our country’s Integrity Framework is outlined in the sidebar.

SIDEBAR: The Integrity Framework

Our Republic’s Public Bodies and their officials act on our collective behalf, so it is fundamental that those operations are under the oversight of a series of legal requirements to ensure their proper functioning. I have called that series of arrangements and legal requirements, The Integrity Framework.

Our country’s Integrity Framework comprises these basic elements –

  • The Integrity Commission (IC), which is responsible for monitoring the integrity of Public Officials;
  • The Freedom of Information Act (FoIA), which gives the right to obtain unpublished information;
  • The Auditor General, the Independent body monitoring the financial reporting of Public Bodies;
  • The Investments Division of the Ministry of Finance, monitoring the operations of State Enterprises;
  • The two Parliamentary Accounts Enterprises Committees, providing Parliamentary oversight of Public Bodies
  • The Judiciary – The courts exercise a supervisory jurisdiction over the rest of the society to ensure that illegal acts do not prevail.

Obviously, those bodies which are part of the Integrity Framework are performing important public functions, so it is ironic that those bodies are not always accountable in the same way that the others are. For instance, the members of the Integrity Commission do not have to declare their assets, income & liabilities as do other Public Officials. Also, as a result of a 2007 High Court ruling the Judiciary do not have to provide declarations to the Integrity Commission.

The triple threat we face at this time is –

  1. The NHIC 2006 case – This is a disturbing Appeal Court ruling that UDECOTT, which is a State-owned company registered under the Companies Act 1995, in executing a large-scale project on State lands with State funds is not under the higher level of supervision which obtains in Public Law. UDECOTT was therefore able to proceed with that public project without the offended tenderer having the opportunity to obtain a Judicial Review of its actions in assessing those tenders. Of course, courts and boards have procedures to allow the recording of dissenting views in cases where unanimity is not achieved, but what is truly remarkable about this matter is that the dissenting judgment came from the then Chief Justice, Sat Sharma JA. This is an obvious loophole in that the ruling allows State Enterprises to function without the necessary high level of judicial supervision. That ruling attracted adverse comment from the late Karl Hudson-Phillips QC in 2008 and the 2010 Uff Report at its 55th recommendation “…There should be a review of the decision in NH International (Caribbean) v UDeCOTT and measures, if necessary legislative, put in place to ensure that bodies making decisions involving public money are open to challenge by Judicial Review…”. Despite the several promises, the Uff Report recommendations remain unimplemented, for whatever reason.
  2. TSTT’s exemption from the IPLAThe Appeal Court ruled in 2013 that TSTT was not a State Enterprise, with its Directors therefore exempted from the obligation to file declarations with the Integrity Commission. Quite apart from the damaging decision which appeared to exempt all Directors of State Enterprises, which I have covered extensively in this space, the Appeal Court made the ruling that indirect control of a State Enterprise amounted to an effective avenue for exemption. The fact that a State Enterprise is held via a holding company, such as National Enterprises Limited (NEL) was held to be good grounds for that exemption. This limb of that Appeal Court ruling jeopardises the public interest, since virtually all the profitable State Enterprises are held in NEL.
  3. TSTT exemption from the Freedom of Information Act – In 2010, the High Court ruled that TSTT was a ‘Public Authority’ and therefore subject to the FoIA. In 2013, the Appeal Court, in its final hearing on that matter – having agreed that the matter was compromised, since the parties were no longer proceeding – set aside the 2010 High Court ruling. The effect of that, it seems to me, is to further innoculate TSTT from public scrutiny.

All three of these positions effectively undermine the country’s Integrity Framework and all three are endorsed by our Appeal Court. The three, taken together, taste terrible.

The impending and long-awaited Public Procurement & Disposal of Public Property Bill, the continuing convulsions at the Integrity Commission and the deep hostility to the truth at the highest levels of our country’s rulers are the main elements which require our utmost vigilance at this time.

The Public needs to be on alert to the detrimental effect of these rulings. The Judiciary is now challenged to act in the Public Interest in these testing times.

The thing must not only be done, it must be seen to be done.

Secret Society

foiaThe State is the dominant agent in our national economy, which is the most vibrant in the Caribbean. It is therefore essential for us to understand how the State works so that we can better understand, or even plan, our interaction with that dominant party. Given the role T&T plays in the wider Caribbean, those concerns extend beyond our country to our region.

In order for us to understand how the State works, we must get quality information in the required quantities. We must also have the right to request further information from public bodies so that we can examine particular matters more closely – see Sidebar below.

This country’s Integrity Framework comprises elements such as –

  • The Integrity Commission (IC), which is responsible for monitoring the integrity of Public Officials;
  • The Freedom of Information Act (FoIA), which gives the right to ask for unpublished information;
  • The Auditor General, the Independent body monitoring the financial reporting of Public Bodies;
  • The Investments Division of the Ministry of Finance, monitoring the operations of State Enterprises;
  • The two Parliamentary Accounts Enterprises Committees, providing Parliamentary oversight of Public Bodies

This sustained examination of our country’s Integrity Framework is directed towards an enhanced level of information on how our nation’s Public Bodies are functioning. Continue reading “Secret Society”