CL Financial bailout – the consent order

CL Financial bailout – the consent order

On Wednesday 24th January 2018 we settled the Consent Order in the Appeal Court, in this long-running legal battle between the Ministry of Finance & The Economy and I. That Consent Order will allow the public much better insight into the CL Financial bailout. The Ministry of Finance & The Economy has now agreed to provide two of the three items I requested in 2012 under the Freedom of Information Act –

  1. Any unaudited financial statements of CL Financial Limited for the years 2008-2011 in the possession of the Ministry of Finance which were relied upon to prepare the affidavits of Minister Winston Dookeran filed on 3 April, 2012 in High Court proceedings CV 2011-01234, Percy Farrell and Others v Clico and others.
  2. Any list of the creditors of CL Financial existing at the date of the request in the possession of the Ministry of Finance, the names of the EFPA holders of Clico, the dates of the repayment of EFPA holders of Clico and the identities of those whose investments have been repaid.

We agreed to delete Paragraph 2 of the Order of Justice Boodoosingh, which referred to the presentation made to Independent Senators in September 2011.

The Ministry is to pay Seventy Percent (70%) of my High Court costs to be assessed in default of agreement and it was also agreed that there would be no order as to costs in respect of the appeal.

The Appeal Court panel comprised Justices of Appeal Mendonca, Jamadar and Rajkumar.

I am thanking my attorneys, Gilbert Peterson SC and Kingsley Walesby, for their diligence and skill in seeking the Public Interest in this important matter. I am also thanking my friends and media colleagues who supported this campaign for proper standards of accountability, transparency and good governance in our country.

We could not have come this far without the assistance of other campaigners such as the T&T Transparency Institute, Disclosure Today, the Constitution Reform Forum and of course, TedX POS and The Big Black Box…Special appreciation goes to those organisations…

Finally, of course, I thank the Minister of Finance & The Economy and his Cabinet colleagues who decided to support this long-standing call for those details to be published. It is a case of better late than never, so my thanks are sincere ones. We now need to maintain our vigilance as we advance the standards of accountability, transparency and good governance in our country.
Thank You.
Afra Raymond

That was the Press Release I made at the end of these protracted legal proceedings.

Timeline of this legal action

  • 8 May 2012 — Request made under the Freedom of Information Act (FoIA) to the Ministry of Finance & The Economy;
  • 29 March 2013 — Lawsuit filed to challenge the refusal of the Ministry to provide the requested information. The Ministry’s reason for refusing was that CL Financial is a private company and not a ‘public authority‘, to which the FoIA is limited;
  • 22 July 2015 — High Court ruled in favour of my original Request for Information and ordered publication of the requested details;
  • 10 August 2015 — The Ministry appealed the High Court ruling, citing new reasons not advanced in the earlier case;
  • 24 January 2018 — At our first hearing, the Ministry resiled from its previous positions and only objected to one of the three items I requested. We agreed the terms of a Consent Order and the legal matter ended.

The bailout started in January 2009 — that is the official date at least — so it is almost nine years in progress. It is impossible to say just what caused the Ministry of Finance & The Economy to reverse its position, but at last there will be a long-overdue publication of the details of just who got paid.

Certainly, with the effluxion of those 8+ years, certain legal limitations would have accrued, such that it may well be impossible to proceed against certain persons.

On 8th August 2017, the Appeal Court ruled in favour of the State’s application to appoint Provisional Liquidators to CL Financial. As required by that ruling, the first 3-monthly Report of the Liquidator is due to be filed in the High Court at the end of January 2018. That Liquidator’s Report would comprise detailed accounts of the sort which would have negated the Ministry’s earlier objections to publishing the accounts for the CL Financial group.

It will be fascinating to examine the details when they are submitted, which I expect within the next fortnight. We will be able to see who were the real beneficiaries of this immense payout of Public Money.

Of course, the terms of the Consent Order do allow a certain latitude, so it is important to remain vigilant in this endgame. Apart from the two parties to this concluded legal battle, the fact is that most of the beneficiaries I interacted with never wanted their identities disclosed. I would be surprised if those wealthy and influential persons did not attempt to thwart the impending publication.

The final point is that the item for which I withdrew my request was the presentation made to Independent Senators in September 2011 by the then Minister of Finance & The Economy, Winston Dookeran. The fight for that item would have raised certain fascinating issues between the Freedom of Information Act and the Constitution, which at S.55 protects Parliamentarians and their proceedings from intrusion by the Courts. Those issues are sure to arise again, but both sides left them aside in reaching this agreement.
Continue reading “CL Financial bailout – the consent order” →

Property Matters – State land acquisition

Property Matters – State land acquisition

Recent concerns over the State’s land acquisition process, especially in relation to the Curepe Interchange project, have virtually coincided with the appointment on 12th January 2018 of the first Board for the Office of Procurement Regulation (OPR).

The $222M contract for this project was awarded in August 2017 to China Railway Construction Corporation (CRCC) by National infrastructure Development Co. (NIDCO). NIDCO is one of the implementing agencies for the Ministry of Works and Transport, which is headed by Senator Rohan Sinanan. Twenty-Two parcels of private land have to be acquired to build this interchange between the Churchill-Roosevelt Highway and the Southern Main Road. That includes a part of the disused Kay-Donna Drive-Inn Cinema, which is at the south-western corner of that intersection.

rohan sinanan
Sen. Rohan Sinanan

Minister Sinanan has confirmed his part-ownership of the Kay-Donna property, which, together with the long-standing problems within the State’s land acquisition process, have given ground to the sceptics. In my view Minister Sinanan’s position is a direct conflict of interest, if ever I saw one. That said, it is not an irremediable conflict, indeed it must be remedied, since we ought not to either halt this project or delude ourselves to think that recusal is some kind of cure for this Executive Proximity.

This situation is a learning opportunity to re-establish some proper standards of transparency and accountability in the land acquisition process and for the OPR to issue strong regulations to assure best practices for the future. This article will outline the key issues in State land acquisitions and propose a best practice approach which could ease some of the legitimate concerns arising in relation to the conflicted situation of Minister Sinanan. Continue reading “Property Matters – State land acquisition” →

CL Financial bailout – 2017 summary

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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.
Continue reading “CL Financial bailout – 2017 summary” →

VIDEO: The CL Financial Bailout meeting – The Caribbean Connection 23 July 2017

This is our meeting at St Mary’s College’s Centenary Hall in Port of Spain, Trinidad on Sunday 23 July 2017 to discuss the CL Financial bailout

The session was Chaired by Gregory McGuire and the speakers were

  • Ramesh Lawrence Maharaj SC, former Attorney General and then attorney for Lawrence Duprey
  • Afra Raymond
  • Dr Patrick Antoine
  • David Walker

Due to a series of technical issues we were only able to get recordings of myself and the two subsequent speakers.

Programme Length: 00:23:39
Programme Date: 23 July 2017

Property Matters – The Procurement Gap

Property Matters – The Procurement Gap

There is now a significant and unacceptable delay in implementing the new Public Procurement system. The Public Procurement & Disposal of Public Property law was Act No 1 of 2015, so come January 2018, it will have been passed by Parliament three years ago. When the current administration took office in September 2015, several amendments were made and those were passed by Parliament in June 2016 as Act No 5 of 2016.

Although I am convinced that this implementation is taking too long, it is noteworthy that the Central Tenders Board Act of 1961, was only activated by the swearing-in of the first Central Tenders’ Board in 1966. It took five years to implement that important Act with all the necessary arrangements in place such as offices, staff, stationery and so on.

So what is causing these delays with this critical new law? Apart from the law itself, which is now in place, there are three pre-conditions to the new system being started –

  1. Training – Given that the new Act imposes strict penalties all of which are custodial, there is a serious need for proper training. Every organ of the State which transacts in Public Money must have a named Procurement Officer, who will bear responsibility for those transactions under the new Act. The training started since 2014, with most of the Ministries and State Agencies having been prepared by now;
  2. Budget – The new Act will be operated by the Office of Procurement Regulation (OPR) and funding for that new Institution was approved in 2017;
  3. Appointment of Board – The OPR will be controlled by a Board which is appointed by the President of the Republic, after consultation with the Prime Minister and the Leader of the Opposition (S10 of the Act refers). That is the significant delay with which we are faced at this stage. There have been two invitations to apply for the full-time positions of Chairman and Deputy Chairman of the OPR Board. In both cases all the submissions have not been acknowledged, so there is an apparent gap at that level.

The Private Sector Civil Society (PSCS) Group is a lobby formed to push for this critical new law, operating under the Chairmanship of my erstwhile colleague, former JCC President and Chaconia Medal (Gold) holder, Winston Riley. The members of that group are the JCC; the T&T Manufacturers’ Association; T&T Chamber of Industry and Commerce; the American Chamber of Commerce; the T&T Transparency Institute; the T&T Coalition of Service Industries; Local Content Chamber and the Federation of Independent Trade Unions and NGOs (FITUN).

The PSCS Group pointed out in its 30th November 2017 letter to President Carmona –

“…The PSCSG has privately indicated to you on May 1st, 2017 its objection to the involvement of the Office of the President and of the Ministry of Finance as both bodies are listed under section 5 of the ACT as a public body and thus subject to the Act…”

That objection to the involvement of the Office of the President in the process for recruitment of the OPR Board is fundamentally untenable, for two reasons. Firstly, the proposal for that approach emanated from the said PSCS group and was accepted by Parliament, which leads to the second point, that the appointment procedure is the one stipulated by the Act.

Open letter to President Carmona

On Tuesday 12th December 2017, I published an open letter to President Carmona together with my colleagues, Reginald Dumas and Victor Hart, calling on him to make these appointments in as transparent and open a manner as possible. That letter was carried as a ‘letter to the editor’ in the Guardian of Wednesday 13th and was also the subject of a Newsday article on Thursday 14th – ‘President urged to give Procurement details‘.

The large-scale waste and theft of Public Money remains one of the most serious concerns for our country and the full implementation of the Public Procurement and Disposal of Public Property Act is therefore a matter of very high priority. That implementation should be done in a manner which fosters confidence and sets the table for a new era of proper dealings in the conduct of our nation’s public affairs.

We are encouraged by the 2nd November 2017 Press Releases from the Office of the President and the Ministry of Finance, both stating that the appointment of the Board for the Office of Procurement Regulation is anticipated to be made by the end of this month, December 2017.

As a matter of best practice in these most crucial appointments, the public should be apprised of the details of the selection process. This is simply not a matter we can afford to have go awry, since there is such a dire need for transactions using our increasingly limited Public Money to be properly supervised.

As a parallel example, we would offer for adoption the 39th recommendation of the Uff Report:

“The reviewing of tenders and the making of decisions upon the award of contracts should be undertaken in as transparent a manner as possible, including demonstrating clear compliance with procurement rules, so as to allay suspicion of improper actions or potential corrupt influences.”

The point is that contracts, particularly large-scale, shou ld not be awarded without elementary transparency so that the public can be assured of straight dealings. The appointment of the Procurement Regulator will be one of the most critical contract awards in the history of our Republic, albeit an employment contract.

We are therefore requesting, in the public interest, that the following details be published before the appointments are made:

  • the selection process being used;
  • the identity of the firm or personnel implementing that process;
  • the identity of the shortlisted applicants.

We anticipate an early and positive reply in the collective interest of instilling and maintaining a high degree of public confidence in the processes involved in this critical matter.

We await your response.

Reginald Dumas

Victor Hart

Afra Raymond

VIDEO: Morning Edition interview on “Letter to President” on Office of Procurement Regulation

VIDEO: Morning Edition interview on “Letter to President” on Office of Procurement Regulation

This is the interview with Fazeer Mohammed on the Morning Edition programme on TV6 where he and Reggie Dumas discuss their open letter to President Carmona on the appointment of Board of the Office of Procurement Regulation.( See letter below.) Video courtesy TV6

Programme Date: 18 December 2017
Programme Length: 00:03:39 and 00:22:30

Our Open Letter to President Carmona is here for your attention –

The large-scale waste and theft of Public Money remains one of the most serious concerns for our country and the full implementation of the Public Procurement and Disposal of Public Property Act is therefore a matter of very high priority. That implementation should be done in a manner which fosters confidence and sets the table for a new era of proper dealings in the conduct of our nation’s public affairs.

We are encouraged by the 2nd November 2017 Press Releases from the Office of the President and the Ministry of Finance, both stating that the appointment of the Board for the Office of Procurement Regulation is anticipated to be made by the end of this month, December 2017.

As a matter of best practice in these most crucial appointments, the public should be apprised of the details of the selection process. This is simply not a matter we can afford to have go awry, since there is such a dire need for transactions using our increasingly limited Public Money to be properly supervised.

As a parallel example, we would offer for adoption the 39th recommendation of the Uff Report:

“The reviewing of tenders and the making of decisions upon the award of contracts should be undertaken in as transparent a manner as possible, including demonstrating clear compliance with procurement rules, so as to allay suspicion of improper actions or potential corrupt influences.”

The point is that contracts, particularly large-scale, shou ld not be awarded without elementary transparency so that the public can be assured of straight dealings. The appointment of the Procurement Regulator will be one of the most critical contract awards in the history of our Republic, albeit an employment contract.

We are therefore requesting, in the public interest, that the following details be published before the appointments are made:

  • the selection process being used;
  • the identity of the firm or personnel implementing that process;
  • the identity of the shortlisted applicants.

We anticipate an early and positive reply in the collective interest of instilling and maintaining a high degree of public confidence in the processes involved in this critical matter.

We await your response.

Reginald Dumas

Victor Hart

Afra Raymond

Property Matters: The Ethics Gap – part five

Property Matters: The Ethics Gap – part five

This article will examine the perennial issues of the ‘interlocking directorate‘ and the role of our professional institutions in maintaining standards.

The previous article examined the High Court ruling against valuers, Charles B. Lawrence & Associates, arising from the 2012 lawsuit of Intercommercial Bank Limited (IBL) for a negligent valuation of a property on San Fernando Bypass.

Lawrence valued the property for $15M and also made a defensive claim that the bank ought to have known that the property sold two months prior for $450,000. That claim of contributory negligence failed, unsurprisingly. It is literally unbelievable that any property could increase in value from $450,000 to $15.0M in two months.

The Court took expert witness evidence from two other valuers, Brent Augustus (for IBL) and Roy Gumansingh (for Charles B. Lawrence & Associates), who both gave opinions that the property was worth $15.0M in 2008, on the assumption of commercial use. The Lawrence Report assumed commercial use and that was found to be ‘wholly misleading‘. That Report also failed to properly point out the presence of occupiers/squatters on the site, which both Augustus and Gumansingh took account of. In any case, the best offer received for the property was $2.0M, two years after the Lawrence valuation. Continue reading “Property Matters: The Ethics Gap – part five” →

AUDIO: Interview on Sky 99.5 FM on corruption – 12 December 2017

sky995fmThis is my interview on 99.5FM on The Breakfast Roundtable on Sky 99.5 FM on Tuesday 12th December 2017, with Jessie-May Ventour, Dr. Wayne Heywood and Edison Carr to discuss the implementation of the Public Procurement & Disposal of Public Property Act and other topics relating to corruption in T&T being at serious levels now. Audio courtesy Sky 99.5 FM

Programme Date: 12 december 2017
Programme Length: 00:43:44

The Ethics Gap – part four

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Photo credit: futureatlas.com

My focus has been on grand corruption, the large-scale acts of fraud which endanger the very stability and rationale of our society and its key institutions. No act of grand corruption is possible in isolation. The only way to steal these large amount of money is to have the collaboration of responsible officials and professionals, who either look the other way or actively assist in the looting.

That was the case in Eden Gardens and the other episodes covered thus far. None of these acts of grand corruption would have been possible without the intentional help of professionals such as attorneys, engineers, accountants or even surveyors. Our current private and public sector systems rely on the professional standards and ethics of those professionals to ensure value for money. Continue reading “The Ethics Gap – part four” →