Calcutta Settlement again

163940In light of the many questions raised by readers after the last article on the HDC’s purchase of land at ‘Eden Gardens‘ in Calcutta Settlement, I am continuing there.

The previous article discussed the Calcutta Settlement scheme and its relation to implementation of national housing policy.  There is little, if any, connection between the provision of affordable housing and the acquisition of those ‘Eden Gardens‘ lands, at what is surely the highest price in Central Trinidad.  How we create and implement a progressive housing policy is a critical part of this discourse, but there is more.

Another important aspect of this episode is the fact that sound land administration policy appears to have been abandoned for expediency.  Expediency should never eclipse proper policy, especially when neither the process nor end-result advance the ultimate objective of serving our citizens.

The sidelining of sound land administration policy was essential in order to get the Calcutta Settlement scheme approved.  National Land Administration policy is important so that we can be strategic in using the country’s property assets for proper national development, as opposed to the enrichment of a select few.

The State is a unique player in our country’s land arena, so we need to place this Calcutta Settlement episode into proper context from a land administration viewpoint.

This is the framework –

  • Size – The State is by far the largest land-owner in the country, which means that there are only limited situations in which it will require private lands;
  • Wealth – The State is the wealthiest entity in the country, which means that it alone can bid at certain levels for the best properties.  Applied to this case, a reasonable question would be ‘Who would have purchased ‘Eden Gardens’ and at what price, if the State had not proceeded?‘;
  • Compulsion – The State is the sole entity in the country able to lawfully acquire land for a public purpose against its owner’s wishes, which means that if an owner of private property takes an unreasonable position during negotiations, the State can compulsorily acquire it;
  • Planning Authority – The State is the national planning authority, which means it has the power to approve its own designs and proposals;
  • Statutory undertaker – The State has ownership and control of the principal utilities, electricity and water/sewerage;

So, if the State intended to construct affordable housing in Central Trinidad, it could have chosen from the abundant State-owned property in the area, granted planning permission for its own proposed development and provided services.  The State could only have bought the ‘Eden Gardens‘ land by ignoring sound land administration principles.  Elementary policy was ignored in favour of sheer expediency, or worse, the enrichment of carpetbaggers at the expense of the Public Interest.

What was the advice of the Commissioner of State Lands on this transaction?  Was his advice sought?  Bizarre and expensive precedents are being set in situations of zero benefit to the Public Good.  This deal is detrimental to the Public Interest.

At a level of State policy, there was a collapse into expedience and a continuing silence as to the role of ‘Eden Gardens’ in the national housing policy.  But when I delved into the documents in my possession, there were even more causes for concern.

The Registrar General’s records show that there were three transactions executed on the same day for this property – It was Wednesday 3 February 2010 –

  1. Deed # DE2010 004276 02D001 rescinded the 2004 Sale Agreement (the one for $17M, registered in 2007), with the deposit returned and no claims made;
  2. Deed # DE2010 007816 95D001, Point Lisas Park Ltd (PLP) purchased the property from the owner, Sookdeo Deousaran, for $5M, paying Stamp Duty of $350,000;
  3. Deed # DE2010 003449 63D001, PLP mortgaged the property to said Sookdeo Deousaran for $18.5M at 8%, to be repaid on the last day of January 2012.

These purchasers were prepared to pay $17M for this undeveloped property in mid-2004, but ended up paying only $5M for it in early 2010.  On the same day, they mortgage it for $18.5M.  By happy coincidence, or otherwise, the property with infrastructure added was offered to the HDC at $200M in late January 2012, two years later.  Literally unbelievable.

What is more, the fact that the second and third of those deeds were executed on the same day is deeply perturbing as to the operation of the Stamp Duty section of the Board of Inland Revenue.  The second deed transfers the property for $5M and Stamp Duty is paid on that, yet the third deed shows a mortgage granted the same day on the same property for $18.5M.  Normal practice in the finance world is for a mortgage to be taken on a property at some fraction of its current market value.  Both those deeds were registered at the San Fernando office of the Registrar General’s Dept.

If there were a reasonable gap between the first sale to PLP and the new owners mortgaging the property, it might be possible to claim some increase in value due to its physical development or obtaining permission to develop.  But since both transactions took place on the same day, there is no way anyone can claim a genuine difference in value.

The 8% interest rate on the two-year mortgage is instructive, in that the actual rate at which finance was offered at that time for similar projects was in the 10.5-12.0% range.  The reasonable conclusion being that both sides had a high degree of comfort with each other, indicative of close collaborators.

S.84 of The Conveyancing and Law of Property Act (1939), states that the penalty for falsely stating the consideration in a deed is a modest fixed fine and a further penalty payment of 5 times the amount of the understatement.  Those penalties apply to both the buyer and seller, perhaps to discourage these dishonest practices.  The Act goes further to offer the penalty payment as a reward to the person making the report of the understatement.

S.86 of that Act also specifies a small fixed penalty for an attorney found guilty of “…knowingly and willfully…” recording a false consideration and mandates that the said attorney “…shall…” be disbarred.  Of course an attorney who had prepared only one of those deeds could reasonably claim to be genuinely unaware of the entire transaction, so we will see.

Sad to say this ‘Eden Gardens’ scheme is reminding me of the CL Financial antics. I am thinking about the the affidavit of the Inspector of Financial Institutions  stating that Clico Investment Bank did not file its Corporate Tax returns for 2007, 2008 and 2009 and the fact that, despite those lapses, they were able to obtain a bailout on ‘sweetheart terms‘.  The Eden Gardens chiefs were able to understate the property value to avoid the true level of Stamp Duty, but were also able to get Cabinet to agree to effectively bail them out, also on ‘sweetheart terms‘.

Always remember that the land at ‘Eden Gardens‘ cost $663,000 per lot as agreed by the Cabinet, seemingly unaware that the developers were offering lots there for sale at $400,000 only months before.

The HDC purchase was completed on 9 November 2012 and recorded in DE 2012 026026 11D001.  The para before the $175M sale price is the one which specifies the 2010 deed for $5M, just so.

I approved of the diligence of our AG in challenging the legality of the THA’s BOLT project.  This ‘Eden Gardens‘ scheme is also in need of urgent investigation, so we will see.

My final point is that all the information cited in this article is available on the internet, so where is the basic due diligence?  These sorts of schemes should not even get past the first gatekeeper, far less into the Cabinet for consideration.

From THA/BOLT to Calcutta – tangled webs: Part 2

Last week I set out my main concerns in relation to poor procurement processes with the THA/BOLT project.  A large amount of Public Money was being committed to a project with little apparent regard to Value for Money concerns in an arrangement which seems to expose the THA to the principal risks at a time of limited financial resources.

This article is a critical examination of the controversial proposed purchase of 50.6 acres of land at Calcutta Settlement by the Housing Development Corporation (HDC).

The HDC’s role is to build and maintain homes to satisfy the requirements of its main client, the Ministry of Housing and the Environment.  According to that Ministry –

The Corporation is mandated by the Act to:

  • Provide affordable shelter and associated community facilities for low and middle income persons and;
  • Carry out the broad policy of the Government in relation to housing.

With over 125,000 applicants on the HDC’s waiting-list, there is no doubt that, for many poor people, the HDC is their only hope of getting a reasonably affordable home of decent quality.  That means that the HDC is an important implementing agency in our nation’s welfare provisions, which is a role I fully support.

edengardensplanThis post is about ‘Eden Gardens’, which is on the western side of Calcutta Settlement Road No. 2 in Freeport, just north of Central Park, opposite to Madoo Trace.  The property comprises 264 residential lots at an average size of 5,600 square feet, 2 residential/commercial lots, 2 nursery school sites, 2 recreation grounds and 4 playgrounds.

In November 2011, the HDC obtained a valuation from Linden Scott & Associates at $52M.  In January 2012, the owners of Eden Gardens, Point Lisas Park Limited, offered the property to the HDC at $200M.

That is an intriguing sequence of events, since the HDC would hardly pay for a valuation on a property they were not interested in.  If we accept that the property was likely offered to the HDC before they ordered the Scott valuation, then one has to ask on what terms was it offered.  That letter of offer, the original one, must be disclosed now.

In April 2012 the Commissioner of Valuations advised the HDC that the current open market value of the property was $180M.  In June 2012 Cabinet approved the HDC purchase of that property for $175M, which is $663,000 per lot – at an average lot size of 5,600sf that equates to $118 per sf.

The normal professional and commercial practice when buying in this quantity, is to obtain a discount on the unit price.  It would be reasonable to expect that these lots could be sold for significantly more than the HDC agreed to pay.  We will see.

There was a lot of argument in the public about this transaction, so I was prompted to look closely at the deal.

I have these serious concerns –

  1. Point Lisas Park Limited (PLP)
    1. On 1 June 2004, Anthony Sampath, Patrick Soo Ting and Azad Niamat agreed with the owner, Sookdeo Deousaran, to buy the property for $17M. That Sale Agreement is registered as deed # DE2006 023638 20D001.
    2. On 26 April 2007, PLP was incorporated as Co. # P2956 (95), with the same three individuals who agreed to buy the property for $17M as its Directors.  On 6 May 2011, the Companies Register recorded that  Kayam Mohammed became a Director.
    3. On 3 February 2010, according to deed # DE2010 007816 95D001, PLP purchased the property from Sookdeo Deousaran for $5M, paying Stamp Duty of $350,000.

    These purchasers were prepared to pay $17M for this undeveloped property in mid-2004, but ended up paying only $5M for it in early 2010.  This is the same property which was offered to the HDC at $200M in early 2012, two years later.  Literally unbelievable.

    calcutta-timeline_v4

    The stated payment of $5M shown in that 2010 deed is a massive understatement of value, probably being only 10% of the true market value.  The Stamp Duty properly payable on a $50M sale of land would have been $3.5M.  The Stamp Duty Section of the Board of Inland Revenue has the discretion to refer transactions to the Commissioner of Valuations in cases where they suspect that the consideration shown on the deeds is understated.  I am reliably informed that in this case the BIR did not seek an opinion from the Commissioner of Valuations.

    I am calling for that 2010 transaction to be revisited immediately, with a view to the State recouping the proper Stamp Duty.  The Public Interest demands no less.

  2. The missing link 
    163940Between 2004 and 2012, the infrastructure for Eden Gardens was built, which included the roads, street lights, drains, water and electricity supply. Eden Gardens lots were available in 2011 via at least two real estate agents – Golden Key Real Estate Ltd. and Samko Realty – at $400,000 per lot.  This was widely advertised.
  3. The valuations
    • Linden Scott & Associates in November 2011 – $52M
    • Commissioner of Valuations in April 2012 – $180M

    Those lots were known to have been on sale at $400,000 in 2011, so the entire development of 264 lots could have earned its owners a total of say $106M.  Even if we allow a figure of $5M for the “2 residential/commercial lots and the 2 nursery school sites”, we are still in the range of $110M as the ‘Gross Development Value’.

    Given that these lots were clearly not selling at the $400,000 price-point, those estimates are at the upper end of possibility.  Which means that we have to adopt a lower ‘Gross Development Value’, say $95M-100M.

    If the entire development is to be acquired by a single purchaser in early 2012, that purchaser must deduct from the Gross Development Value to cater for –

    • Stamp Duty – at 7% of the Purchase Price;
    • Legal Fees;
    • Developer’s Profit – at a minimum of 25%;
    • Agents’ fees for the sale of the lots;
    • Cost of Finance to account for the cost of borrowing that sum until the lots are sold;
    • Time Value of Money, to account for the element of delay in recouping one’s investment.

    I estimate that those discounts would amount to 35-40% of the Gross Development Value.  If we adopt that approach, the maximum net present value of Eden Gardens in early 2012 as a fully-infrastructured property would be in the $60M range.

The meaning of it all

The usual accepted practice of residential development can be expressed by this ‘rule-of-thumb’, to spend less than twice the cost of the lot does not make best use of that land.

Even if we ignore the ‘rule-of-thumb’, one has to wonder

‘In what way does this transaction satisfy the HDC’s mandate?’

It is most disturbing that there has been this amount of debate without the issue of the end-user ever being mentioned.  How do the real needs of the homeless feature in this massive HDC transaction, if at all?

To my mind this Calcutta Settlement scheme resembles the HDC’s flagship project at Fidelis Heights in St. Augustine which created an elaborate, expensive multiple-family project with no allocation of new homes to the needy people on the waiting-list.

I have established via a separate enquiry that only about 2% of the HDC output of new homes is allocated to those who can only afford to rent and this project is likely to be a continuation of that detrimental trend.  The HDC continues to allocate vast sums of money to housing those who can afford to buy, while leaving the left-overs for those who can only afford to rent.  That policy is inimical to the interest of the poorest members of the public, to whom the HDC is literally the last refuge for decent housing.

In all the circumstances, it seems that we need to have the air cleared on these issues –

  • What is being done about the under-stated consideration in the 2010 deed for the sale of Eden Gardens?
  • How many of the 264 lots were sold at the 2011 asking-price of $400,000?  That is important since it establishes a benchmark for the proper value of these lots in the open market.
  • When did Eden Gardens receive all the required approvals?
  • When was the infrastructure completed at Eden Gardens?
  • On what terms was Eden Gardens originally offered to the HDC?
  • There is an abundance of develop-able State-owned lands in the vicinity, particularly since the 2004 closure of Caroni Ltd.  So why did Cabinet agree to buy private lands in Calcutta Settlement at these prices?
  • Who owns Point Lisas Park Limited?

I close by reminding readers of the corruption ratio set out in the first article.  As I wrote in June 2008, referring to the Manning government and its UDECOTT antics –

…Either the Cabinet or its advisers are responsible. We are either dealing with a lack of rectitude at the highest level of our republic or a sobering naivete…

Declarations –

  • Raymond & Pierre Limited, under my leadership, provided certain professional advice on this property in 2007.  No aspect of that advice has formed part of this article.
  • Linden Scott is a former colleague of mine, having trained at Raymond & Pierre Limited.  He is now a rival professional.
  • Raymond & Pierre Limited have provided professional advice to the HDC in the past.

From THA/BOLT to Calcutta – tangled webs: Part 1

tha-bolt1
Artist Impression of THA Admin building courtesy Amera Caribbean Development Ltd.

With the THA elections having become a kind of national contest, the issues of governance and integrity loom large.  The two relevant controversial issues, both of which emerged late last year, were the THA/BOLT office project and the HDC’s proposed purchase of land at Calcutta No. 2 Settlement.

Both those projects have given me serious cause for concern in terms of proper public procurement practice, so much so that I see them as being two sides of the same coin.  Both these cases are models of inadvisable dealings in Public Money of a type which no prudent or reputable company would undertake.  I am choosing my words carefully since recent reports are that litigation has already started on both projects.

I do not at all agree with the widespread myth that corruption is a minor thing which adds maybe 10% or 15% to the cost of projects.  That misinformation is nothing but public mischief which has blinded us to the scale of the theft of Public Money, so it must be completely demolished.  In the case of the 1970s to 1980s ‘Government to Government Arrangements’ the then PM, George Chambers, told the nation that two out of every three ‘Petro-dollars’ was wasted or stolen.  In the ongoing imbroglio over the $1.6Bn Piarco Airport project, we learned from the DPP’s S.34 statement that $1.0Bn of Public Money had been located in offshore bank accounts.

The DPP’s S.34 Statement on Wednesday September 12, 2012

“…These cases involve allegations of a conspiracy to defraud the Republic of Trinidad and Tobago of over TT$1 billion by the fraudulent use of bonds and the rigging of the contracts for the various Construction packages for the Piarco Airport Project…”

The DPP’s full statement is here.

Also, from “Cops target MP in $1Bn airport scam” in Trinidad Guardian of Friday 5 March, 2004 –

“…TV6 News reported last night that Lindquist and Interpol officers had discovered more than $1billion stashed away in off-shore accounts, arising out of corruption in the airport project…”

This article deals with the THA/BOLT project, which is a Public Private Partnership. The PPP is a procurement model now being pursued by this government, according to the strategy outlined in the 2013 budget.

Build Own Lease Transfer (BOLT) is a subset of the PPP procurement method.  Under a BOLT arrangement a client has a facility built by the private sector at their expense – the client makes agreed rental payments so that the developer can cover the cost of building the project and a reasonable profit.  At the end of the agreed lease period, the facility is transferred to the client.

There has been effective use of PPP to produce Public Goods like the Brian Lara Promenade.  BOLT has also been used to procure prominent POS buildings such as NALIS, UTC HQ and Ministry of Works HQ (via Republic Bank) and the AG’s office at Cabildo Chambers (via NIPDEC).

The PPP can be a feasible method of procuring public goods, offices or other facilities in situations where the State is unable to commit to the capital expenditure and there is a pressing need.  The strong selling-point of the PPP is that the private sector takes the risks and is allowed to make a reasonable profit while the public sector can add to its stock of capital goods without the risks of project execution.

These PPP arrangements are now being intensely criticized in developed jurisdictions as having served the public interest very poorly.  The focal point of much of the criticism has been the fact that, despite the rubric, the private sector has seldom taken any genuine risk.

Turning to the actual THA/BOLT deal, I have to say that the decision to publish a large number of the important documents in relation to this arrangement is to the credit of the THA.

• The bundle of documents are here.

Orville London, THA Chief Secretary
Orville London, THA Chief Secretary

In response to the request from the Minister of Finance, THA leader Orville London said:

…that under the laws and the T&T Constitution the Finance Minister has no authority to instruct him to provide information to him within any timeframe.

However, London said, in the interest of public disclosure and considering that this particular transaction has generated so much discussion he believed that he had a responsibility to make the information available to the public and the Minister…

This is a bold and in my view admirable initiative by a leading Public Official and I have to say that it has tempered my scepticism over this project.  I only wish that Cabinet Ministers took a similar view of their responsibilities.

The THA ‘bundle’ details the ongoing financial shortfall in allocations from Central govt, the main point of which is the fact that the THA is definitely resource-starved in relation to the arrangements with Central govt.  When one considers the financial state of the THA alongside the national economic outlook – we are in our fourth year of deficit financing in relation to the national budget – it is a sobering background to this discourse.

I have spoken with all the main parties to this arrangement and this is a summary of the THA/BOLT deal.  The THA purchased a 3-acre parcel of land at the corner of the Claude Noel Highway and the Shirvan Road from private landowners for $12M and immediately leased it back to them for a 199-year lease at a nominal rent.  The private developers have agreed to erect an 83,000sf office building at a cost of $143M and the THA has agreed to lease it for 20 years at a fixed rent of $15.61psf – an annual rent of about $15.55M, totalling some $311M over the term of the 20-year lease – with the property reverting to the THA at the end of the lease.  Those offices are to be built for the THA’s Division of Agriculture, Marine Affairs, Marketing and the Environment.

There have been recent reports of the AG’s lawsuit to test the legality of the THA/BOLT arrangement, so this is not an attempt to pre-empt the Court in ruling on those submissions.

My concerns arise at the level of the Needs Assessment, which must be the first stage of any proper procurement process, public or private.  The purpose of the Needs Assessment is to determine the rationale for and scope of the project so that preliminary consideration can be given to the key elements before any high costs are incurred.  In this case, we are told that the developer approached the THA, which is unusual to the extent that best practice requires that extra care be taken with unsolicited proposals.

The main points concerning me are that once again we are seeing large-scale expenditure of Public Money without a proper business case having been made.  The opinion of Hamel-Smith & Co as to the legality of the transaction is of no comfort to me, this is a matter of making a sound investment decision.  A legal opinion is necessary but not sufficient.

Senate president, Timothy Hamel-Smith
Senate president, Timothy Hamel-Smith

That 6-page legal opinion,dated 3 January 2011,by Timothy Hamel-Smith (who was appointed Senate President on 18 June 2010) is at page 168 of the ‘bundle’.

  • Quantity of space – at pages 68 and 69 of the THA ‘bundle’ there is a ‘Note for Executive Council’ which summarises that the offices occupied by that Division – a total of 22,500sf is detailed, while a further 6,000sf can be reasonably surmised for the last Department.  The average rent being paid by the THA for this Division is $8.17psf, also please note that a total of 28,500sf is now occupied by the Division for which the THA is procuring an 83,000sf office building.
  • Quality of space – The cost of $143M for that space equates to $1,723 per square foot and I am reliably informed that the contract calls for a fully fitted and finished office building.  That figure is at the absolute upper end of the range of costs for office buildings.
  • Rent levels – According to the THA’s adviser on this project, Peter Forde, at the THA Press Conference on 10 September 2012 – see

    …the monthly payment of $15.61 per square foot per month was not an unreasonable rate because there were properties in Scarborough where tenants were paying as much as $10.00 per square foot. He stressed that even if there was inflation the rate will remain the same…

    The first issue I have with that is the attempt to use the $10psf comparable to justify the $15.61psf rent.  That is an unreasonable ‘stretch’ by my standards as a professional valuer.  Did the THA seek the opinion of the Commissioner of Valuations?  Secondly, the fact that the rent cannot be increased in the event of inflation is a distraction, since the likely effect of this new, huge THA office building is that the rental market in Tobago will become saturated with the offices they vacate.  The result of that is the decline in office rental values, so in the absence of any provisions for rent adjustments, the burning question has to be ‘What real risk is this developer taking?’.  Risk Allocation remains a real issue.

So, in summary, we have a semi-autonomous Public Authority contracting, at a time of tremendous financial strain, to build first-class facilities three times larger than the second-class ones it currently occupies.  Finally, please note that according to the ‘Note’ I cited earlier, the current monthly rent bill of the THA Division is $231,788, while the new monthly rent under this arrangement will be $1.295M – over five times more.

At the start of this article, I gave examples of the ratio at which Public Money was wasted or stolen, so just compare this project to those figures.

My next article will delve into the Calcutta Settlement land deal and its own peculiarities.

Replying to the Ministry of Finance on our Freedom of Information application of 8th May 2012…

letter-tiltI was trying to find out these four things –

  1. CL Financial accounts and if those are not available, the figures on which the Minister of Finance has been relying
  2. The presentation made to Members of Parliament in September 2011 to brief them prior to the debate on the Central Bank (Amendment) Bill and the Purchase of Certain Rights and Validation Bill 2011
  3. Details on the composition of the creditors of the CL Financial group, in particular EFPA holders.  I was asking who was owed money and who got paid.  That is at the centre of this issue
  4. Declarations filed by Directors and Officers of the CL Financial group under the IPLA – I have since established that those declarations are not being filed, so this pursuit is about the first three questions.  

A fuller background on all this can be read here.

This is my reply to the letter sent by the Ministry of Finance on 14th August 2012.

Stay tuned, because this is going to be a real battle to get at the truth.

The Plot to Pervert Parliament

We have witnessed two grievous Constitutional outrages.  We have to keep our eyes on the ball in this season of mass distractions. For the government, there is every reason for us to ‘move on’ and forget about these deliberate violations of our constitution.

  1. The first was the State of Emergency – declared on August 21 2011 – with no proper reason ever being given for the suspension of our Constitutional rights.  All the persons arrested were poor people.  All of whom had to be released for lack of evidence, in a situation where the Police had the complete freedom to search for evidence.  But what is worse, the suspension of our Constitutional rights was not used to gather evidence against the White-Collar bandits who have this nation by the throat.  That State of Emergency would have been an ideal opportunity to gather evidence against this most evasive, well-advised and malodorous class of criminal.
  2. The second was the S.34 scandal – on August 31 2012 – which I have called the Plot to Pervert Parliament.  This abuse of our legislative process allowed high-profile White-Collar Criminals to escape justice.

An abusive double-attack, so how do we speak the Truth to Power?

According to Abraham Lincoln “…Nearly all men can stand adversity, but if you want to test a man’s character, give him power…”

These scandals continue to echo in the mind of so many people that it is only a matter of time before we have a thorough Public Enquiry.  We must record who abused their office.  Also, we need to remember clearly, who are these apologists who are now insisting that nothing big happened and in any case, it is all over.

The Prime Minister explains her decision to fire the Justice Minister
The Prime Minister explains her decision to fire the Justice Minister

On Thursday 20 September, the PM spoke to the nation about the S.34 scandal. That was a memorable address which placed the blame squarely with Minister of Justice, Herbert Volney, whose dismissal was then announced. Quite likely the administration thought that would have been the end of the scandal.

The blogosphere has been ablaze with emails from one Herbert Volney – sometimes he claims that he is angry and betrayed; other times he is still devoted to the PM; then again he is critical of the new Minister of Justice and wants to be re-appointed; he is wrongly identifying people in the public eye.  It is like having a ringside seat at the implosion of a grown man.

One thing for sure is that Volney does not seem happy to continue taking all the blame for S. 34. So that means the complete collapse of the Official Version on S.34, which was that the Minister of Justice was largely responsible. It was always a doubtful strategy to build a case on the weakest strand of reasoning, but necessity is the mother of invention.

SIDEBAR: Minister of Justice vs the Chief Justice – Herbert Volney, MP, Sept 2010

volneyarchie

Some of the many unanswered questions must include –

  • The quiet shift – In between the lower House and the Senate, the meaning of S.34 was changed so that instead of a 10-year period from being charged, accused persons could apply to the Court to be discharged 10 years after allegedly committing the offences.  That was a huge shift in favour of those accused of White-Collar Crimes.  So what was the real reason for changing the law?  No one has ever said.
  • The Parliamentary assurances – We hear about public and private assurances over the proclamation of this Act.  It is unacceptable that some assurances are never recorded in Hansard.  All assurances must be registered, given the ongoing decline in the ethical standards of our Parliament – does anyone remember Volney’s insulting and bizarre ‘apology’ to the CJ, early in his Ministerial career?  See sidebar. An enquiry must place those assurances onto the record so that the public can be informed.
  • Did the President seek or receive legal advice before signing-off on S.34?  If he did, what was that advice?  If he did not, should he have taken legal advice?
  • Having determined that Volney was to blame, did the PM enquire why he committed these acts of gross misconduct in public office?  If the PM did enquire, what was Volney’s reply?  If the PM did not enquire, we have every right to be skeptical about the entire Official Version.
  • We are now seeing that the agreed pre-conditions for S. 34 are not in place, so why the early proclamation?  Was this just a ‘get-away-from-justice’ card for the Piarco Airport Accused?
  • The President’s request to the PM for a report under S.81 of the Constitution has now sparked a new wave of claims.  Where does the truth lie?

The way the politics plays in our country, I think that it is a good thing that we no longer seem to be on a march to any early election over S.34 or anything like that.  The political culture here is such that if the Peoples Partnership had won an early election called on this issue, however slight the margin of victory, we would have been decisively told to ‘move on’, as the electorate had spoken. This is exactly how a lot of the political nonsense endures.

We are now in a position to demand that the government put some serious effort into answering the many genuine questions which are buzzing on this issue.  An independent examination of the facts would be a start.

Learned, Lying Leaders are the bane of our country. No public official in our Republic can be above review, not even the PM or President. Our upcoming discussions on Constitutional reform must balance these questions.

CL Financial bailout – Colman’s endgame

We are entering the endgame of the Colman Commission, so we need to maintain full vigilance.  We must bear witness in a sober manner.

The PNM element

Former PNM Ministers Danny Montano, Conrad Enill and Mariano Browne were recently named by Commission Chairman Sir Anthony Colman as having declined to testify.

“It is noticeable that there has been a remarkable lack of cooperation from others, who were responsible for political decision-taking — to mention a few names: Mr. Enill, Mr. Browne and Mr. Montano in particular — have not offered to come and give evidence,” Sir Anthony said at Winsure Building, Richmond Street, Port-of-Spain.

“It is surprising perhaps that those who were the political representatives of the people of Trinidad and Tobago have not been able to provide assistance to the Commission in circumstances where it might have been expected of them,” he added.

“Colman chides 3 ex-ministers.” Trinidad and Tobago Newsday. October 23 2012.

Colman then named three former Cabinet ministers who had been previously named in testimony at the enquiry in relation to the HCU.

“To mention but a few names Mr (Conrad) Enill, Mr (Mariano) Browne and Mr (Danny) Montano in particular have not co-operated to come and give evidence,” Colman said.

“Colman praises Nunez-Tesheira for co-operating.” Trinidad Express Newspapers. October 22, 2012

That refusal to appear before a Commission of Enquiry amounts to a kind of contempt of court, since it is wilful disrespect for a lawful enquiry.  These are PNM Seniors, whose testimonies would have been invaluable in unraveling this series of financial collapses.

Here is why those missing testimonies are so important –

  1. Mariano Browne is a Chartered Accountant who left a successful career as a Banker – including a significant part of that career spent at CLF, Browne was the first head of Clico Investment Bank and CLF’s Barbados Banking arm – to become Minister of Trade and Minister in the Ministry of Finance after the 2007 general elections.  In addition, he is PNM Treasurer, so he could have given a rare insight into the linkages between these collapses and the large-scale donations made by both the CL Financial Group and the Hindu Credit Union (HCU).
  2. Conrad Enill comes from a Credit Union background, was also Minister in the Ministry of Finance up to the 2007 general elections and served as PNM Chairman up to their 2010 election loss.  Enill called for an investigation into the finances of HCU as far back as mid-2002, but swiftly withdrew from that course of action after reportedly being pressured by then PM Manning.
  3. Danny Montano is also a Chartered Accountant, who was Minister of Labour at the time of the HCU collapse (that Ministry has supervisory responsibility for Credit Unions).

“…THE Hindu Credit Union (HCU) financed Karen Nunez-Tesheira’s successful campaign to become the Member of Parliament for D’Abadie/O’Meara in the 2007 general election.

However, Nunez-Tesheira was not the only People’s National Movement (PNM) candidate who secured campaign financing from the HCU during that election.

This was revealed yesterday as the commission of enquiry into the collapse of CL Financial and the HCU resumed at the Winsure Building on Richmond Street in Port of Spain.…”

“Karen: HCU financed my election campaign.” Trinidad Express Newspapers. October 22, 2012

“….THE Hindu Credit Union (HCU) financed the campaigns of the country’s two major political parties—the People’s National Movement (PNM) and the United National Congress (UNC)—in the 2007 general election, former HCU president Harry Harnarine said yesterday….”

“Harnarine: HCU financed UNC and PNM.” Trinidad Express Newspapers. October 23, 2012.

It is clear that the testimony of these three former PNM Cabinet Ministers would have been crucial to the Colman Commission unravelling this financial fiasco.  I am convinced that the matter of what Cabinet knew at the time it took the bailout decision is crucial.  For one thing, was Cabinet told that the beleaguered CL Financial group had paid a dividend on 16 January 2009, three days after they had written to the Central Bank for the bailout?  If the Cabinet knew of the illegal dividend payout, why were no provisions made in the MoU of 30 January 2009 for the recovery of those monies?  If the Cabinet were not told, then we are contemplating what might be a prior case of a senior Minister misleading colleagues to get the required result.  A kind of pre-S.34 situation.

Both Browne & Montano are Chartered Accountants, so this reported refusal to give evidence seems to be a case of ‘conduct unbecoming a professional’.

The PNM is now making serious efforts to market itself as a party which stands for good values in terms of Accountability, Transparency and Good Governance.  Given the PNM’s track record that is a great challenge.  These reported refusals are doing great damage to those efforts.

Ironically enough, at this moment Dr. Bhoe Tewarie and Karen Nunez-Teshiera, are both looking better than these three former Ministers, given that they have appeared before the Commission.  Just imagine that.

Sir Anthony Colman was reported to have issued subpoenas for certain missing witnesses in the HCU matter and held them in contempt of court when they failed to appear.  I am waiting to hear whether the same treatment will apply to these PNM Seniors.

“…THREE witnesses have been held in contempt of court for not responding to subpoenas issued by the Commission of Enquiry into the collapse of CL Financial and the Hindu Credit Union.

A commission of enquiry has the same status as that of a High Court.

Those deemed to be in contempt of court yesterday by commissioner Sir Anthony Colman are former chief executive officer of HCU Communications, Gawtam Ramnanan, former HCU financial consultant Jameel Ali and Dave Jagpat…“

“Colman to deal with 3 witnesses in contempt.” Trinidad Express Newspapers. June 15, 2012

It seems like this is yet another episode of inconsistent behaviour which serves to reinforce my belief in this potent ‘Code of Silence’.  Let me explain with these facts set out above.  One group of witnesses have offered weak excuses of the familiar kind – questionable medical certificates and so on – they were served with orders compelling their attendance (those are called subpoenas) and when they failed to respond, Colman made a ruling that they were in contempt of court.  That group was HCU witnesses.

Another group of witnesses took a different approach….they actually have decided not to testify and communicated that to the Colman Commission as described above.  Why has Colman not issued subpoenas or made any adverse rulings against these reluctant witnesses?

They are former member of the PNM cabinet, so I have to ask myself if there is a tacit agreement as to areas which will not be ventilated in this Enquiry.

Those areas which are seemingly off-limits now seem to include serious questions as to whether the Cabinet was misled.  This is a sobering example of the channels of power.  We have to bear witness.

The DPP’s role

The intervention of the DPP in this situation is now cause for concern since he is reported to have written to the Colman Commissionto say –

Roger Gaspard, SC, DPP
“…I am particularly concerned that an otherwise credible prosecution might be stopped by the court on the grounds that a defendant’s right to a fair trial had been fatally compromised by the publicity attendant upon your enquiry. As such, I shall be issuing a press release warning the media against the publication of any material which may jeopardise the police investigation and any potential criminal proceedings…”

We also read that “…Gaspard also issued a stern warning to media houses last night to cease publication of “anything which might jeopardise, hinder or otherwise prejudice the investigation or any possible proceedings which might result from it…“.

The Colman Commission has maintained the modern standard of Public Enquiries in that the public can choose from attendance in person, live TV, streaming webcasts, online transcripts and online witness statements.  It seemed to me that the position being taken by the DPP could jeopardise the public interest in having this information broadcast in the widest possible terms.

On 10 November, my mind churned as I read this – “…Meantime, the Commission of Enquiry is set to restart on December 3 with former Central Bank Governor Ewart Williams and Inspector of Financial Institutions Carl Hiralal expected to take the witness stand…”

At this stage we are expecting to hear the testimony of the Chiefs in this series of disasters – Lawrence Duprey, Ewart Williams, Carl Hiralal, Robert Mayers, Ram Ramesh, Faris Al-Rawi, Amjad Ali, Anthony Rahael, Andre Monteil.  I am very concerned that we are now seeing what appears to be a detrimental development in terms of complete transparency.

I was encouraged to read the DPP’s statement that

“I remain mindful of competing public interest factors including the fair trial rights of potential defendants, the freedom of the press and the requirement of open justice.”

This is definitely an aspect which needs our most intense scrutiny.

The former CLICO CEO

Gene Dziadyk

Finally, we come to the matter of former CLICO CEO, Gene Dziadyk, with whom I have been in correspondence, writing and offering to tell the inside scoopon what went wrong inside CLICO.

I have read his material and he takes a completely opposite view to me as to what has happened here.

My own view is that the CL Financial group was able to use its track-record of huge political donations and other links to obtain full State support on favourable turns when the inevitable crisis emerged.  The CLF group was able to use its links to take advantage of the State.  Dziadyk’s view is that the State used the crisis to take advantage of the CLF group in general and the CLICO policyholders in particular.

I cannot see any way that we could both be right.  The critical point is that only the publication of the audited, consolidated accounts and other details I have been pursuing will allow us to see the truth of this matter.

But the fact that Dziadyk is a trained actuary, who was at the centre of the scene for so long, makes his testimony invaluable for the insights it will allow the Colman Commission.  I was therefore very surprised to read that he is not going to be called as a witness.

Readers who are interested in having the testimony of Gene Dziadyk form part of the Colman Commission to state their support for that to happen – the Secretary to the Enquiry is Judith Gonzales and her email address is comsecclfhcu@gmail.com.

These kinds of issues are exactly the ones on which the public input of Seenath Jairam, SC is sorely missed.  Having decided to take the Ministry of Finance brief and later deciding to return it, any of Jairam’s subsequent public utterances will be coloured by those decisions.

That is the point I was making in the previous column on the sacrifices which leadership demands.