CL Financial Bailout – False Firing?

Prime Minister Kamla Persad-Bissessar greets former Clico chairman Gerard Yetming, second left, and former Senate president Timothy Hamel-Smith, second right, after they showed up at a UNC “foot soldiers” mobilisation meeting in Debe on Tuesday. Also in photo are Oropouche East MP Dr Roodal Moonilal and UNC campaign manager Rodney Charles, left. PHOTO: RISHI RAGOONATH
Prime Minister Kamla Persad-Bissessar greets former Clico chairman Gerard Yetming, second left, and former Senate president Timothy Hamel-Smith, second right, after they showed up at a UNC “foot soldiers” mobilisation meeting in Debe on Tuesday. Also in photo are Oropouche East MP Dr Roodal Moonilal and UNC campaign manager Rodney Charles, left. PHOTO: RISHI RAGOONATH

I smiled at the page three photo in another newspaper of the Prime Minister holding hands with recently-dismissed CLICO Chairman, Gerald Yetming, at a UNC meeting in Debe on Tuesday 23 June 2015. As serious as the situation is, I just couldn’t help myself.

Yetming was a UNC Minister of Finance during the Panday administration and had been appointed on 28 September 2010 as Chairman of CL Financial Ltd, the parent company of the ‘CLICO group’ being bailed-out by the State.

I declined many requests for comment on this controversial episode, since something about it did not seem quite right. The actual CLICO dismissals were incredible to my mind, not only because there did not seem to be any conflict between the stipulations in the CBTT’s 3 June Press Release and the reported beneficiaries – that is explained in the sidebar. It is even more bizarre when one considers that Yetming, in whom all confidence was apparently lost after allegedly-unauthorised payments to former CLICO Directors, still serves as Chairman of the parent company, CL Financial Ltd.

There is a widely-held view that the CL Financial chiefs should not be recovering any of their money from this huge collapse before the completion of the Colman Commission and the publication of its Report. I share the public concern that no money should be paid to the persons who were in charge of that sinking ship. Not one cent. Nothing should be paid to the CLF chiefs until we have had the proper opportunity to consider the findings of the Colman Commission. Even with its severe limitations, that Colman Report would be our closest opportunity to understand this epic financial crime. To pay out money to those Directors and Officers who were responsible before the Report is published would be reckless in the extreme and jeopardises the public interest. Continue reading “CL Financial Bailout – False Firing?”

Integrity Reflections – the background

SIDEBAR: THE MEANING OF THE LAW

“…legislation must be followed or driven by will. Laws are just what they are, convoluted and meaningless blocks of text until they are made alive/and relevant by human effort, human with a reasonable degree of collective/societal rectitude…”

—Quote from one of the several FaceBook convos emerging from last week’s column.

It was alleged, in a 2006 lawsuit (CV 2006-0817), that the Integrity Commission wrote to the Directors of TSTT to exempt them from filing declarations as required under the Integrity in Public Life Act (IPLA). The existence of that letter was never denied and that litigation ended by compromise at an Appeal Court Hearing on 28 October 2013.

It seems improper for any Public Authority to issue a letter which negates the law. I have on several occasions requested that the Commission publish the 2006 letter, but to no avail. Given the inaction on my complaint in respect of CL Financial’s Directors, these questions arise:

  1. Was that TSTT letter an isolated episode?
  2. Have there been other unspoken compromises in relation to the oversight of the Integrity Commission?

This article gives the detailed background to the Integrity Commission’s inaction in relation to the CL Financial Directors. At the very least, the facts in this matter speak to a severe lack of focus on the critical aspects of the Commission’s role to secure good standards of integrity in Public Life. It is my view that this is a matter of the first importance on which the Commission’s inaction could only have been detrimental to our collective interests. Continue reading “Integrity Reflections – the background”

Property Matters – Only a matter of time

whooshThe way the Ministry of Planning & the Economy (MPE) is persisting in their course of action on the Invader’s Bay development is perturbing in terms of the long term consequences of short-term decision-making.

At Section 2.0 of the Request for Proposals (RFP) for Invader’s Bay we read

…For Trinidad and Tobago this is a “major waterfront transformation” along the line of other signature waterfront developments such as Darling Habour (sic) in Sydney, Baltimore Inner Habour (sic), the Habour-front (sic) in Toronto, London Docklands and Teleport City in Tokyo. Although the genesis of the projects may vary, the result has generally been bold and dramatic. With the change in the manner in which ports operate and cargo is transported, waterfront property is now more valuable for its residential, retail and recreational function than simply for port activity with heavy industry, docks and fenced off warehouses, as is the case currently in Port of Spain…

We are being asked to consider the Invader’s Bay initiative ‘along the line’ of other leading international examples, which in itself is a good place to proceed from.  The reality is that those developments cited by the MPE all took decades to conceive and what is more, the authors of the RFP know that.  Yet we are also being asked to believe that a workable concept/s could be devised for Invader’s Bay in an RFP which is silent on the current strategic plans for the capital and only gives proposers 6 weeks to prepare.

Of course the lack of consultation will severely limit the participation of many important developers, not to mention the public.

The point is that in all those cities cited by the RFP, there is a serious commitment to consultation, which means that those large-scale transformations took considerable time to conceptualise.

In the city of New York, for example, there has been a long-standing commitment to community-based development.  Check this 6 October webcast from The New School – the introduction is instructive –

For decades, deliberations over land use in New York City have included developers, community boards, elected officials, the Department of City Planning and other city agencies. Do the people who live and work in city neighborhoods have a sufficient voice? Do residents improve the process, or impede progress? Who is best positioned to determine a neighborhood’s needs, and what are the best structures for public participation? New York has long been a leader in community-based development but as the city recovers from the Great Recession, what does the future hold?

And that is just one reference, readers can ‘Google’ to find the many other supportive examples.  In the very RFP, as well as in the recent budget, there is a clear commitment to consultation in national development.  Except in this case.

But there is more.

As I wrote in the opening of ‘Reflections on Republic Day’, on the Raymond & Pierre website on 27 September 2007 –

The best example I can think of for the kind of broad commitment to consultation is, of course, the site of the World Trade Centre in Lower Manhattan: Ground Zero. This is a very interesting example since the site is privately owned and the City of New York is controlled by the Democrats while the Republicans control the national government of the USA. Against this background of different players we have the fact that the destruction of the WTC was a most severe blow to US prestige and power. The entire defense apparatus was rendered useless by that attack. Arguably, there could be no site in the world with a more urgent claim to large-scale redevelopment.

Yet, the fact is that a sort of compact has been arrived at between the parties to the effect that no redevelopment will take place unless and until everyone has had their say. For example, there was a recently concluded international competition for the design of the 911 Memorial. There were over 5,000 entries from more than 60 countries and a winner was just selected.

As expected, the consultations have been controversial and emotional but the fact is that an environment existed in which such an understanding could work. Whatever one’s view of the American imperium, there is a potency to the existence of that huge crater at the heart of their main city while the necessary conversations go on. Time for us to think again.

At that time I was protesting the haste and waste of the then PNM regime, a consequence of their pattern of proceeding with huge developments without any consultation.

At Section 3.1 of the RFP –

TENURE ARRANGEMENT

The proposed Developer will be chosen via this RFP process and shall then enter into a Memorandum of Understanding (MOU) with the Government of Trinidad and Tobago (Ministry of Planning and the Economy) for an agreed lease rate. It is expected that this activity would be finalized within one (1) month of the submission of the said RFP.

Which means that we can expect the choice of the proposed Developer will be made and the lease agreements completed in one month from the closing date. Yes, Friday 4 November.

Sad to say, there is even more.  The RFP also specifies –

“…If financing has to be sourced from an external source, the Developer MUST submit a letter of guarantee from the financier as well as a profile of the financier. Failure to comply with this requirement will result in disqualification…”

When we raised the point that this is an impossible condition for new bidders to satisfy, given the sheer scale of the proposed development, both Ministers – Tewarie and Cadiz – attempted to indicate that this mandatory condition was flexible. Unbelievable, but true.

As leaders, whether in government or non-governmental organisations, we have an obligation to learn from the past. This is an effort to document the events in this episode, so that there will be a record, when the Invader’s Bay matter comes to be critically examined in the future.

The clear inconsistency of the position taken in the budget on urban planning was highlighted in last week’s column. With respect to this project, we noted the attempt to cast this development in the same light as other examples which all involved long-term consultation, the silence on the existing plans, the impossibly-short timetable to elicit fresh proposals, the even-shorter timetable for selection and agreement of lease terms, the wobbling on the financial requirements and incredibly, that the scoring criteria were to be finalized after the proposals were submitted.

It is literally impossible to determine which of these is worse than the others and it is beyond the imagination of any fiction writer I know to take a plot this far. But this is what is happening in our country today.

In my mind, all of these, taken together, show that the publication of the RFP is a form of sham dialogue and openness. If this is the genuine attempt by the MPE, to properly seek the public interest, then I am giving them an ‘F’ for effort.

What we are seeing here is a recipe for disaster, we already have all the ingredients of corruption, so what is next?

It really does make me wonder who runs this country and when, if ever, can we achieve consistent and equitable government. Who is the real power?

Property Matters – The EFCL Query part 3

On Thursday 14th July, the EFCL published a full-page response to the first article in this series – it was also the same day that the second article in this EFCL Query was published.  Although it was comforting to see the clear statements on EFCL’s ‘speak out’ component, Whistle-Blowing policy and procedure and Fraud Policy, the central concerns are greater, if anything.

I deliberately used the word response, since no reasonable person could consider that advertisement to be a reply to my emailed queries.

If EFCL were really replying to my query, it would have been no problem to provide a copy of the documents and answer the simple questions.

EFCL’s preferred course of action is to spend more taxpayers’ money on expensive artwork and advertising, so the further question is ‘Why?’.

Considering that all I was doing was questioning the existence and origin of an important policy of this State-owned company, it is perturbing to be having this level of challenge in getting a simple clarification.

As I wrote in this space last week – ‘So, what is the secret?

What could be the delay or difficulty in providing a copy of the EFCL’s Confidentiality Policy, as requested?

In the first article in this series, I posted the documents which had been passed to me.  The simple question is whether these are the genuine documents.  There was no attempt by EFCL to even answer that important query.

It is important because the EFCL advertisement told readers that “…Employees were not asked to sign under threat of dismissal…

The first sentence of the preamble of the Staff Confidentiality Agreement is –

All new and existing employees will be given a copy of this confidentiality policy and will be required to sign a confidentiality agreement at the time of hiring or during their service to the company.

The emphasis is mine – yes, it reads ‘required to sign’.

But there is more, because the EFCL advertisement also stated that –

Staff who asked for time to get external advice, were allowed to.

However, clause 1 d. of the Confidentiality Agreement states –

The existence of this agreement and its terms are confidential and none of the parties to this agreement may disclose anything about this agreement or its subject matter or implementation to any person except if required by law to do so.

It is clear that the EFCL advertisement and the documents sent to me cannot both be true.

So, which is true?

Why did EFCL not send or publish the documents?

Quite frankly, it appears that EFCL is making a great effort to conceal or obscure its true policy on confidentiality, for whatever reason.

If this is the kind of effort being put into obscuring the elementary policy of this State-owned company, I can scarcely imagine their reaction to queries on particular projects, Directors’ benefits or tender procedure.

The behaviour of the State and its agents must be exemplary.  Public Officials have an obligation, in my view, to behave in a fashion which fosters trust and good order.

It is all starting to resemble a tangled web, sad to say.

Again, I hope that my doubts are misplaced.

SIDEBAR

Five simple questions for EFCL…

  • Is there a new EFCL Confidentiality policy?
  • When did that come into effect?
  • Would you please provide a copy of that policy?
  • Was that policy approved by the Board of Directors?
  • Is the Ministry of Education aware of this new policy?

Property Matters – The EFCL Query part 2

efcl-confidentialDespite the first column in this series, I have had no direct reply or even acknowledgement from any of the EFCL officials to whom my initial queries were directed.

It seems that the people concerned would rather not write, on this matter at least.  A meeting has been indirectly suggested, which of course would have to be properly recorded and minuted – no word on that meeting as I write again.

What could be the delay or difficulty in answering the five simple questions posed last week –

  1. Is there a new EFCL Confidentiality policy?
  2. When did that come into effect?
  3. Would you please provide a copy of that policy?
  4. Was that policy approved by the Board of Directors?
  5. Is the Ministry of Education aware of this new policy?

Four of those questions require basic yes/no responses, while only one requires a date.

I closed Sunday Guardian’s article by reminding readers of the equation

Expenditure of Public money – Accountability – Transparency = CORRUPTION

The elementary accountability of a public company having its policies available for the public to consider seems to be either lacking or of low priority in the case of EFCL.  As we move along, it will be interesting to see how the Transparency part of the equation works out.

In researching this article, it emerged that our country is a signatory to two relevant international conventions.  As I understand it, the effect of our State having become signatory to those agreements is that the country has adopted those standards.

The first one is the Inter-American Convention against corruption, which was signed by our country in April 1998.  At that time, UNC was in power, under PM Basdeo Panday.  At Article III, clause 8, we are obliged to

…consider the applicability of measures to…create, maintain and strengthen…Systems for protecting public servants and private citizens who, in good faith, report acts of corruption, including protection of their identities, in accordance with their Constitutions and the basic principles of their domestic legal systems…

The second convention is the United Nations’ Convention against Corruption, which was signed by our country in December 2003.  At that time, PNM was in power, under PM Patrick Manning.  At Article 8 – Codes of Conduct for Public Officials, clause 4 obliges us to

4. Each State Party shall also consider, in accordance with the fundamental principles of its domestic law, establishing measures and systems to facilitate the reporting by public officials of acts of corruption to appropriate authorities, when such acts come to their notice in the performance of their functions…

So, what is the big secret?

I do understand that staff at companies like this can jeopardize the integrity and effective operations of the organisation by leaking certain confidential information.  That would be a proper concern of management and a confidentiality policy is one of the ways that could be dealt with, just one.

During the Uff Enquiry, UDeCoTT claimed several times that this or that document was confidential and used its lawyers to protest strongly, sometimes even seeking the protection of the High Court.  That was outrageous conduct by a state-owned company, which appeared to be trying to frustrate the Uff Commission, appointed by the State, by seeking to conceal documents.  A case of ‘the tail wagging the dog’.

This situation is one in which it seems that the dangers of leaks in relation to tendering estimates, for example, has been conflated to cover all information in the company.  It appears to be part of a new policy which does not conform to either good labour relations or our country’s international obligations with respect to Whistle-Blowers.

Given the electoral promises made by this government and the importance of the struggle to reduce the menace of corruption in our society, it is very important for us to be attentive to these matters.

UDeCoTT wanted to conceal certain documents and one had to wonder why, given that they are not involved in secret work.  If it was not so serious it would be comical, they are not a spying, military or health institution.  UDeCoTT is just a facilitator for erecting buildings, yet their chiefs were able to pretend to the public that a large part of what they did was confidential. That kind of secrecy could never be in the public interest.  Not ever.

Similarly with EFCL, one has to ask – What is the secret?  That organisation is responsible for the repair and maintenance of schools, using Public Money to do so.

I wonder if that document, which a number of EFCL staff have now been required to sign, is legal and binding?  Could it withstand a challenge in the Courts?  Did EFCL take proper legal advice in this matter?  Was that advice followed?

The legitimate interests of taxpayers require that the management of State Enterprises take proper steps to handle these integrity challenges – Does the EFCL Confidentiality Agreement achieve this?

There is a certain kind of way in which this episode with EFCL is starting to remind me of the early UDeCoTT grappling, before Uff and so on, with tremendous difficulty in getting basic dialogue going, shadow-boxing and bizarre positions being taken.

I really hope that I am wrong, because the correct, encouraging attitude to Whistle-Blowers is essential for the success of the larger Public Procurement agenda.

Property Matters – The EFCL Query

Continuing the series of examinations into the purpose and performance of our State Enterprises, this week I am looking at an important issue which seems to be emerging at the Education Facilities Company Ltd. (EFCL).

EFCL is a state-owned company involved in the building and maintenance of schools.  It consumes public money in the execution of its functions and that is why it is important to put these points now.

efcl excerpt 3

One of the biggest public concerns is the high level of white-collar crime, which means bribery, corruption, fraud, over-billing, ‘back-fitting’, tax-evasion, asset-stripping and so on.  White Collar crime is a growth industry, since the rewards are very high, while the risk of being caught or punished is extremely remote.

Due to the size of the State, a great deal of that white collar crime can be found in State Institutions.  Once Public Money is being spent, we must demand a high standard of accountability and transparency.

In terms of principles, there needs to be an appropriate balance between the long-established ‘Right of privacy‘ in commercial transactions and the growing ‘Right to know‘ which is part of the emerging social order.  There will be different views as to where the correct balance exists and furthermore, the consensus position will shift as time passes.

It seems to me that the default position should be that, in doubtful cases, the right of the public to information should prevail, since we are the ones paying the costs.  Indeed, that position forms part of the Freedom of Information Act, so that is substantial support.

In early 2009 we witnessed an attempt by the then PNM government to amend the Integrity in Public Life Act (IPLA) so that people reporting breaches of that Act would have been forced to give their names and addresses.  That arrangement would have given even greater protection to corrupt officials, since virtually no-one would want to make a report.  Of course people are strongly encouraged to report ‘normal’ crime like rape, robbery, murder and so on – further encouragement is offered by allowing them to make anonymous reports via 800-TIPS, for example.  Those proposals to amend the IPLA would have encouraged corrupt behaviour by reducing the reports.

That Bill was piloted by then Attorney-General, Bridget Annissette-George.  The proposals were strongly opposed in the Parliament and in the wider society, eventually being withdrawn.  One of the strongest protestors in the Parliamentary debate was Dr. Tim Gopeesingh, who was reported to have accused the government of trying to intimidate people into not making reports. [Hansard, 1 May 2009 p.441] On that occasion, the Standing Orders were used by Colm Imbert, to curtail Gopeesingh’s presentation. [Hansard, 1 May 2009 p.455]

The normal good governance provisions for annual accounts, Board Meetings, minutes and so on are very important.  But those provisions must be supplemented by an atmosphere and a series of institutional arrangements which facilitate Whistle-Blowers.  There must be clear channels and protection for Whistle-Blowers if we are to have any chance of reducing corruption in our country.

Without the assistance of Whistle-Blowers, we would not have known of the Piarco Airport or UDeCoTT fiascos and we know for sure that somebody leaked the file on the Heights of Guanapo Church just prior to last year’s election.  We need encouragement for Whistle-Blowers – in some countries they are even given big cash rewards.  The JCC has been active with its partners – TTMA, the Chamber of Commerce and the Transparency Institute – in making Public Procurement proposals to the Joint Select Committee.  An important element of those proposals is the creation of proper channels for Whistle-Blowers.

I recently received a copy of some EFCL documents, which were stated to be their new Confidentiality Policy Statement and a Staff Confidentiality Agreement for the signature of employees.  I was also told, separately, that EFCL staff are being required to sign that Agreement, under threat of dismissal.  What is more, the Agreement contains a specific clause which forbids revelation of either the existence or the terms of the agreement.

efcl excerpt 2

If those documents are genuine, there are serious grounds for concern, so I made a written query via email on Friday 1st July to the EFCL’s CEO, Paul Taylor, and its Chairman, Ronald Phillip.  I outlined what had been reported to me and asked these questions –

From: Afra Raymond <afraraymond@gmail.com>
Date: Fri, Jul 1, 2011 at 1:13 PM
Subject: EFCL Confidentiality Policy
To: paul.taylor@efcl.co.tt
Cc: ronald.phillip@efcl.co.tt

Hello Paul,

I am reliably informed that EFCL staff were recently directed to sign a ‘Confidentiality Agreement’, the rationale being that it is the new Company policy.

Before taking this any further, I am requesting your written response to these questions –

  1. Is there a new EFCL Confidentiality policy?  When did that come into effect?  Would you please provide a copy of that policy?

Assuming a new Confidentiality Policy is in place, these are my queries –

  1. Was that policy approved by the Board of Directors?
  2. Is the Ministry of Education aware of this new policy?

I would appreciate a timely response.

With best wishes.
Afra Raymond

That email was also copied, purely for information, to the Minister of Education.  At the time of writing, there has been no acknowledgment or reply.

efcl excerpt 1

This is a serious development for these reasons –

  1. The Super-Confidentiality provisions mean that staff are forbidden to obtain any advice, which seems to be a breach of good labour relations, at the very least.
  2. The unilateral imposition of this new document does violence to the proper meaning of the word ‘Agreement’.
  3. The ‘Guiding Principles’ at page 2 refer to ‘privileged information‘ and ‘EFCL’s right to privacy‘, both of which seem to me to be leading away from greater transparency and improved procurement procedures – which leads into the final point
  4. This administration promised, both on the campaign trail and post-election, to make new procurement legislation a priority.  The Joint Select Committee on Public Procurement was Chaired by Dr. Tim Gopeesingh, Minister of Education.   EFCL is the principal State Enterprise within the Ministry of Education, so what is Dr. Gopeesingh’s position on all this?  Is this taking place with Dr. Gopeesingh’s knowledge and/or approval?

It is clear to me that this kind of stealthy restriction on the possibility of staff becoming whistle-blowers is incompatible with the high-profile public statements of support for a new, effective public procurement system. Those statements range from the promises at page 18 of the People’s Partnership Manifesto to numerous speeches by the present Prime Minister.

The reality is inescapable –

Expenditure of Public money – Accountability – Transparency = CORRUPTION

I am closing by wondering, aloud, if this is the shape of the new Information policy for our State Enterprises.

SIDEBAR: What is a Super Injunction?

It is possible for a prominent person to obtain a Court Order called an injunction to prevent the publication of material which is likely to be damaging to their reputation.  That is a long-standing legal right and there has been a recent series of decisions in the UK in which super-sensitive, high profile people have been able to obtain ‘Super-injunctions’ from the High Court, which have the effect of prohibiting the publication and further prohibiting revealing the very existence of the injunction itself.  Of course the media have been fighting that in Court and there are two investigations underway into whether the ‘Super-Injunction’ is itself an abusive instrument.  The emerging thinking seems to be that these ‘Super-Injunctions’ are destroying the information balance I outlined earlier.

efcl excerpt 4

This EFCL Confidentiality Policy, if it is so, would seem to be a similar device, doing great violence to the information balance.