The CL Financial bailout and the Special Purpose Entity fiasco – Joining the dots

Here we are…In the Land of the Mimic-Men,
You run from the pain,
But the jokes pull you back again,
But home is home,
So you say ‘Hail la Trinity!’,
Then yuh talk about the Love of Liberty,
But then ‘Forge’ is the first word of we Anthem,
Yuh see we so damn corrupt,
That is the problem,
So now dey tief but you ignore,
So now you workin,
And for yuh Children sake, man yuh eh jokin…
–David Rudder – ‘Another Day in Paradise’.
Lyrics © 1996, Lypsoland Music. Used by permission. All Rights Reserved.

On 12th March 2009, the Business Guardian published ‘Sagacity and Veracity’ as my attempt to compare the aspects being revealed by the unfolding collapse of CL Financial and the Uff Enquiry into the public sector construction industry.  At the time, quite frankly, it felt like a bit of a stretch to compare the two….what do we know now?
CLICO vs UDeCOTT
No need to burden readers, the last few months have been crammed full of shocking details of these situations.  Time for me to try putting them into some perspective.

Some threads to start pulling together –

  • CLICO, the biggest part of the Caribbean’s largest and most successful conglomerate, had not reconciled its bank statements for 3 years or established an audit committee.
  • UDeCOTT, the exemplary Special Purpose Entity, ‘back-fits’ invoices and is unable to publish its accounts for three years.
  • The Housing Development Corporation knowingly and massively over-states the numbers of new homes they have built – they have no signed contracts for any of their projects.
  • We have an entire Integrity Commission resign; having ignored expert advice only to lose a damaging court case, yet to date there is not even an attempt to offer an explanation for their bizarre, unseemly actions.
  • To cap it all, we have the sitting President of our Republic appoint a slate of candidates to replace that Integrity Commission.  That slate was questionable, including an intellectual accused of flagrant plagiarism and a prohibited person (being Chief of a State-controlled Agency).  So much so in fact that it caused me to question seriously, for the first time, the mental capacity of that office-holder.  I could scarcely believe my ears, when the President, addressing the nation after his month-long holiday in some undisclosed location, told us all that he did not have to explain anything.

In addition to the absence of consequence, there exists a potent Code of Silence…Only whistleblowers are punished in our Republic…Is almost like gangster business, where witnesses need special protection. Gangster politics.

 

What is obvious to me is that the absence of consequences is proving inimical to our national development.

In addition to the absence of consequence, there exists a potent Code of Silence which prevents us from getting a reliable account of what really went on inside any of these many situations.  I am speaking here of attributed interviews which can form part of our understanding the problems.  Nobody on the CL Financial or UDeCOTT or HDC Boards has spoken openly.  No one in any of the previous Cabinets.  Is like we walking in de dark (Thanks, Brigo).

There is no point in citing Cabinet secrecy or commercial confidentiality as reasons for the silence.  That would involve an attachment to principle which is not part of our situation.  In other countries with far more at stake – USA in its ‘War on Terror’, for example – it is normal to see detailed, open accounts of what has taken place at Cabinet and other top-level commercial meetings.  Our Code of Silence is a different thing.

One thing, we all know for sure, even with the national absence of consequence, is that one type of person will definitely be punished.  Yes, that is the ‘whistleblower’, the seeker after truth.  Only whistleblowers are punished in our Republic.

Is almost like gangster business, where witnesses need special protection.  Gangster politics.

Can we escape our culture?  Can we escape our culture?  Can we eclipse ourselves?

Do we need a big Witness Protection program?  Who is to Guard those guards?

A good example is worth a thousand words’, so my teachers used to say.  What kind of example are we setting for our young people?

The people responsible for this mess are our Leadership Class.  These are the people – yes, I know that I am one of them – who had the best schooling and opportunities.  We are witnessing a lack of responsible behavior by our leadership class – the best and the brightest.

We are living with the consequences of an absence of consequence.

Careless Chiefs

Imagine a parent, becoming aware that something improper is happening between one of their children and a responsible adult, someone like a teacher or coach.  Someone whose job it is to nurture your child in a responsible fashion.

A responsible parent will take immediate steps to deal with the problem.  Try to imagine what kind of parent will deal with a coach behaving improperly with one child, but leave their other children in that class, with the said ‘interfering’ coach.

Yes, we have a ‘Father of the Nation’ who has done just such a thing.  The fact is that the dismissed UDeCOTT Directors have not been removed from their other positions at State-controlled organizations.

That is the scale of the problem.

For the Party People

Some readers might see these columns as being critical of the PNM government and to some extent they would be right, since that is the party in power during these various episodes.  It being election season, nobody should be surprised that this stream of damaging revelations – on UDeCOTT, HDC, CL Financial etc – is very useful to the Peoples’ Partnership in the campaign.

As bad as the revelations of corruption, I am not at all sure, given their recent and indisputable record on these questions, whether the UNC would have done differently had they been in power in the last 8 years or so.  I can clearly recall the rejection suffered by Maharaj, Sudama and Maraj when they spoke out against corruption in the last UNC government.  The dissolution of Parliament and the calling of fresh elections soon followed, just like in this rounds.

No, this is not a political column, just an attempt to set out some points of view on our situation.  To stay on point, I agree with Transparency’s Chairman, Victor Hart, that the non-publication of the Bernard Report into the Piarco Airport project was a pity.  Hart, who was a Commissioner on that Enquiry, has also said that, had it been published, we would have been unlikely to have had the UDeCOTT situation.  Interestingly enough, PM Manning promised to publish it, but over 6 years later it remains concealed, for whatever reason.

The Peoples’ Partnership seems to be forging ahead on the winds of public disgust with large-scale corruption, so I am now calling on the leader to make us a public pledge to publish the Bernard Report into the Piarco Airport project immediately upon taking office.

The outline from ‘Sagacity and Veracity

https://afraraymond.wordpress.com/2009/03/12/sagacity-and-veracity/

An easy guide to the CL Financial and UDeCOTT Fiascos

Six quick pointers for our readers –

  1. Ambitious Empire-building
  2. Other peoples’ money
  3. Excessive borrowings
  4. No cogent planning or feasibility checks
  5. Real Profits? – Is it possible for CL Financial to pay dividends at the same time as writing to seek the State’s urgent financial assistance?  How could UDeCOTT be declaring improving profits as a property-development company, if every one of their projects is not feasible?
  6. Strategic Agenda – The common agenda is to privatize the benefits and profits while being careful to nationalize the losses.  We reject that agenda.  Moral hazard has to be upheld as a reality if we are to develop a progressive nation.

VIDEO: First Up Interview – 17 March 2010

VIDEO: First Up Interview – 17 March 2010

Afra Raymond sits with Fazeer Mohammed and Jessie May Ventour to discuss, among other things, the “battle” between the Government & the construction industry in Trinidad and Tobago. Video courtesy CNMG

  • Programme Air Date: Wednesday, 17 March 2010
  • Programme Length: 0:38:03

M

VIDEO: First Up Interview – 09 March 2010

VIDEO: First Up Interview – 09 March 2010

Afra Raymond sits with Fitzgerald Hinds and Jessie May Ventour to discuss an updated in-depth look at UDeCOTT subsequent to the resignation of its Executive Chairman, Calder Hart. Video courtesy CNMG

  • Programme Air Date: Tuesday, 9 March 2010
  • Programme Length: 0:43:23

An Unhealthy Choice

Sen. Michael Annisette. Photo courtesy TTParliament.org
Sen. Michael Annisette

I was perturbed to read in the press that our President had selected Mr. Michael Annisette to serve as an Independent Senator in our next Parliament.

Apart from his well-known role as head of the SWWTU, Mr. Annisette also sits on the Boards of the Urban Development Corporation of Trinidad and Tobago Limited (UDeCoTT), the Trinidad and Tobago Mortgage Finance Company Limited (TTMF) and the Vehicle Maintenance Corporation of Trinidad & Tobago Limited (VEMCOTT).  These 3 Directorships are in significant State-owned enterprises and it is a widely-held view that such appointments, especially to those who are not experts in the relevant fields, are only offered to those in political favour.  To put it plainly, one would hardly expect to see UNC or COP members, however expert, on State Boards under a PNM administration.

Whatever its latent defects, one would have to agree that an important part of our Parliamentary health is derived from our Independent Senators.  At this time, with national concerns on constitutional reform looming large, it is vital that we have a vigorous, outspoken and articulate cadre of Independent Senators.

It raises serious questions as to process that our President was able to use his power to nominate Mr. Annisette.  Of course one expected that Mr. Annisette would have resigned his Directorships of those State enterprises before his swearing-in as an Independent Senator, but that is the central issue.  We were then being asked to accept that an individual who was loyal to the party in power, to the extent of gaining those sought-after appointments, would have, upon taking the oath of office, become an Independent Senator.  Even a tolerant nation such as ours has its limits.

I recently read a story in the Express of 29th December headlined ‘Independent Senator resigns as EBC commissioner’ and the first paragraph deserves repetition – “After accepting the President’s request to serve on the Independent Bench in the Senate, Independent Senator Corinne Baptiste-McKnight has resigned as a Commissioner on the Elections and Boundaries Commission.”  Imagine that.  The Chairman of the EBC, Dr. Norbert Masson, was quoted as saying “She did the right thing”.

We are witnessing the slow erosion of unwritten standards of public life in so many worrisome ways and here is yet another such.  We are now being asked to believe that it is possible for an individual to serve on the Board of 3 State-owned companies and also serve as an Independent Senator.  The Express story mentioned above states that Mr. Annisette was still a Director of those State-owned companies.  There has been no denial, retraction or correction to my knowledge.  This is an utterly unacceptable state of affairs in my view.

Consider the nature of the Independent Senators in our Parliament.  Andy Johnson wrote a column entitled ‘One of the President’s men’ in the Express of 20th December 2007 and it makes interesting reading since he mentions that a known CoP supporter is now amongst the ranks of our new Independent Senators.  Johnson did not name the person but said that the other 2 parties in the Parliament knew of his affiliation and hinted that this could become controversial.

Given the way in which distractions are used in our country, we need to reflect with the necessary degree of seriousness on all this to properly distinguish these 2 cases.  The lower House of our Parliament is made up of Members elected nationally.  The upper House is comprised of the Senators selected by the PM, the Leader of the Opposition and the President.  They are allowed to nominate sixteen, six and nine Senators, respectively.  The party in power and the opposition are represented in both Houses of the Parliament.  But our constitution implicitly recognizes that these 2 elements alone cannot be enough, hence the third group of Senators we have come to call Independents.

For our President to nominate a Senator who comes from within the ranks of PNM or UNC loyalists seems contrary to the spirit of the constitution.  In contrast, the ranks of our Independent Senators is an appropriate place for supporters of ‘third parties’ together with other matured, expert and committed citizens.  We expect our Parliament to be a place in which major policy issues are debated and settled, but the reality is much different.  The decisive issue here is whether we have the vision and will to stop practices which further dilute the authority of our Parliament.

To challenge or remove the so-far-unnamed CoP supporter in the ranks of Independent Senators in this 9th Parliament will do violence to the spirit of the Constitution.  To allow Mr. Annisette to continue as an Independent Senator while holding 3 Directorships in State-owned companies is to invite ridicule and disrespect.  Even if he were to resign those Directorships now, one is bound to ask, ‘What next?’

It would be wicked to repeat here the scandalous suggestions I received in discussing this question with various people.  Out of some latent regard for the little respectable that is left, I will just say that there are still ways to deal with this unpalatable situation.

The President’s selection of Mr. Annisette was questionable.  For an Independent Senator to continue in his roles as Board Director of 3 State companies is completely unacceptable.  Due to the constitutional immunity extended to that office, it is impossible to legally challenge any of the President’s decisions, so one is forced to take action in the Court of Public Opinion.  Our President should himself take the necessary corrective action now.  He has the power, under Section (43) (2) e of our constitution, to declare Mr. Annisette’s seat vacant.

The silence of the UNC-A and CoP on all this is damning.  It would be interesting to see what views are expressed by other concerned citizens.  The peril we face is Civil Obedience.  Public apathy and cowardice are as corrosive to the health of our Republic as the menace of crime.