This is a most interesting document for several reasons –
Attorneys – The legal team is led by Russell Martineau SC, former AG and former President of the Law Association. Martineau was lead attorney for CL Financial’s auditors, PricewaterhouseCoopers, during the recently-concluded Colman Commission and he strongly opposed my submissions as you can see in this revealing clip. His Junior in this case is Gerald Ramdeen, who was Junior Counsel to the said Colman Commission.
My recent supplemental application – On 18th March, I made a further application under the FoIA for the details of the creditors of CL Financial, particularly the EFPA holders, in relation to the amounts repaid and claimed. It is interesting that the Ministry of Finance chose to treat with this in their affidavit.
The objection – Despite several readings of this 5-page affidavit, I am not clearly able to see just what is the Ministry’s real reason for objecting to the release of the requested info.
State-controlled Enterprises – The recent Appeal Court ruling in #30 of 2008 on the meaning of State-controlled Enterprises is a real threat to the public interest in relation to the governance arrangements in situations like this. The final sentence of para #14 is “In any event, CL Financial Ltd. is a private company and is not a public authority under the provisions of the Freedom of Information Act.” Well I tell you.
The fundamental position – At the Court hearing on 23rd May, the lead attorney for Finance, Russell Martineau SC, was emphatic in stating to Justice Ronnie Boodoosingh that there was no intention of compromising or considering the release of even some of the requested information. It is going to be a fight for every item of information.
Public Secret – We are now being told that the bailout process for CL Financial is nearing its end with a procedure having been agreed for the recovery of the Public Money which has been spent. Serious and justified concerns are being voiced at this time since there is no way to be sure how much money has been spent or the terms of the final settlement. I will be writing more on this shortly. We are being told that the agreed terms of the settlement are solid in protecting the public interest, yet this very Ministry, Finance, is using a highly-paid legal team to oppose the publication of fundamental information.
This is the interview on Caribbean Corruption for ‘Time to Face the Facts‘ which was broadcast out of Barbados-based Caribbean Media Corporation on Sunday 26th May 2013.
The audience was regional via cable and global via their Facebook page. The interviewer is Jerry George and the format was a live call-in. Video courtesy Jerry George
The case is a critical challenge to the detrimental notion that $24Bn of Public Money can be spent without Accountability or Transparency. That notion does violence to any healthy conception of the Public Interest, so I expect this contest to be a sharp one.
“Power concedes nothing without a demand…” Frederick Douglass…Freedom Fighter and esteemed ancestor…
“Sunlight is the best disinfectant!” Former US Supreme Court Justice Louis Brandeis…
What is being pursued here is our right as citizens of a modern republic to the details of these huge expenditures of Public Money – the CL Financial bailout is costing some $24Bn, about $3.5Bn USD! – and the background to how critical legislative support is obtained. It is my view that S.34 was not the first time and that the spectre of ‘regulatory capture’, which underlines much of the discourse around the Great Depression 2, is in fact founded on a sinister degree of ‘legislative capture’.
Having had a series of ‘cat and mouse’ exchanges with the Ministry of Finance since my Freedom of Information Act application made on 11 May 2012, this is my pre-action protocol letter sent to them by my attorney on Thursday 7 March, seeking their proper reply in 7 days…that time expires at midnight today, Wednesday 13 March, so stay tuned, because we are going to the High Court after that…
CL Financial accounts and if those are not available, the figures on which the Minister of Finance has been relying
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
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
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.
Afra Raymond chats with Fazeer Mohammed on the Morning Edition show giving a year end wrap up of issues including the Colman Commission and The CL Financial bailout. Video courtesy TV6
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 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.
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 –
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).
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.
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.…”
“….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….”
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…“
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.
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 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.
The last month or so has spoilt us for choice when it comes to amazing scenes being witnessed in relation to the CL Financial bailout and the ongoing Colman Commission.
As I wrote in July 2010, in criticising the appointment of Jack Warner to the Cabinet –
“…We need to be mindful of the relationship between morals, ethics, law and of course, that scarce commodity, good sense. Obviously, law is the paramount authority, because we live in a republic ruled by laws, not men. No one should break the law and there are penalties for doing that. But we also know that in life we make many important decisions without referring to any laws. Those are sound decisions, which form norms, eventually described as custom-and-practice or culture. There are many acts, which are at one and the same time both deeply offensive to right-thinking people (and I think that most people are right-thinking) and in breach of no particular law. Many acts, with no need for examples, since this is a newspaper any child could pick up and read…”
Karl Hudson-Phillips, QCSeenath Jairam, SC
The main talking point was the decision of the Law Association President, Seenath Jairam SC, to accept the Ministry of Finance brief for the Colman Commission after the dismissal of Michael Quamina and Fyard Hosein SC. Apart from our friendship, Seenath Jairam is an attorney in whom I have utmost confidence in these areas. That said, his acceptance of that brief was a serious lapse of judgment, since in my view a leader cannot behave the same as the ordinary members of an association. A leader who is unable to realize that his role demands unique sacrifices will soon exhaust his supporters’ loyalty.
The public argument between Jairam and Hudson-Phillips was upsetting for some people, but to me it showed undue preoccupation with status and mutual respect at the expense of the client’s interest. Hudson-Phillips objected to the apparent decision by Jairam to accept that brief without consulting either his clients or the dismissed attorney. It seemed to me that if all those people had been consulted, Hudson-Phillips would have been just fine. All of which Jairam proved in his reply.
The entire exchange came across as being very self-interested with scant attention being given to the major interest at stake in this sorry affair. No surprises there for a lot of us.
Sen. Larry Howai, Minister of Finance
The starting-point is Minister Howai’s decision to change attorneys at this advanced stage of the Colman Commission. From what I have seen, it seemed that Fyard Hosein was doing a good job in representing the Ministry of Finance, so what was the basis of that decision to change attorneys?
The largest single interest in this entire CL Financial bailout is the taxpayer and I maintain my view that they have been very poorly served in the entire process. The taxpayer is represented in this matter by the Ministry of Finance, which is in charge of the Treasury.
For one thing, the legal costs to the Ministry for the Colman Commission have increased tremendously as a direct result of that decision. The new team will have to read and digest vast amounts of complex material; all of that time has to be paid for by us.
It also seems to me that the new team will, as a result of the sheer size and complexity of the matter, be operating at a serious disadvantage. The quality of our representation is also sure to be diluted, however eminent the various new attorneys.
So, a high public official decides to switch attorneys at a very advanced stage of what is likely one of the most complex, hotly-contested and expensive matters in our country’s history. That decision immediately inflated the legal costs, with the predictable side-effect of likely diluting the quality of the representations to be made on behalf of us taxpayers.
There are serious concerns that the switching of these lawyers was an act of political revenge. When this matter came up during the Senate sitting on 15th October 2012, Howai is reported to have said “…We consulted on whom we should choose… no I don’t want to get into detail, everybody will have their own point of view but at the end of the day the client decides…”
It seems from that reported statement that the Minister is relying on his undoubted rights to switch teams. The obvious concerns and the care which that Ministry should exercise as upholders of the public interest appear to be of low priority.
Howai’s refusal to even attempt an explanation of such a major decision in a matter of this size and consequence is deplorable. The distracting argument between the two leading lights only contributed to the seriousness of our crisis. I would like to hear from the Law Association, or even some of the leading attorneys on this matter.
That refusal to explain and the distraction of the argument are elements in what I have been calling the ‘Code of Silence’.
The CL Financial bailout continues to be a major failure on any scale, both in the causes of the fiasco and especially the manner in which it has been handled.
This is my update on what has been the progress in this campaign.
The equation for our reality check is –
Expenditure of Public MoneyMinus Transparency
MinusAccountabilityEqualsCORRUPTION
In May 2009, I wrote that the Directors and Officers of the CL Financial group should be required to file declarations under the provisions of the Integrity in Public Life Act (IPLA).
According to the IPLA, the Schedule detailing those persons is at page 31 – one of the classes of person required to file declarations to the Integrity Commission is –
“Members of the Boards of all Statutory Bodies and State Enterprises including those bodies in which the State has a controlling interest.”
I have put the last part of the sentence in italics to emphasize the deliberate choice of language by the legislators. The drafting of legislation is a painstaking exercise of strategy, debate and sometimes compromise…my point being that the inclusion of that last phrase must mean that the legislators intended to go beyond merely saying ‘Statutory Bodies and State Enterprises’, which would be the obvious, to specify that the IPLA must also apply in situations where the State has a controlling interest.
The CL Financial Shareholders Agreement (the Agreement), of 12 June 2009, which I obtained by using the Freedom of Information Act, specifies at clause 3.1 that the Board of Directors of CLF shall consist of seven Directors, four of which shall be nominated by the Government. The government has been exercising its rights under this clause, so it is clear that the State’s controlling interest in the CL Financial group is effective.
Quite apart from the four companies named in the bailout Memorandum of Understanding of 30 January 2009 and the Agreement – i.e. CL Financial, CLICO, British American Insurance and Caribbean Money Market Brokers – it is also clear that CL Financial controls the other companies in the group. This effective State control therefore extends to include enterprises which are majority-owned by CL Financial, such as Home Construction Limited, Angostura Holdings Limited, Republic Bank Limited and Methanol Holdings Trinidad Limited.
This very issue of the meaning of the IPLA in relation to state-controlled companies was ruled upon by the High Court in HCA1735 of 2005, in which one of the two issues being determined was –
“…(2) What is the meaning of the expression “Members of the Boards of all Statutory Bodies and State Enterprises including those bodies in which the State has a controlling interest” in paragraph 9 of the Schedule to the Integrity in Public Life Act as amended?…”
The written judgment of Justice Judith Jones states in its conclusion –
“…Conclusion
248. In my opinion therefore the words “Members of the Boards of all Statutory Bodies and State Enterprises including those bodies in which the State has a controlling interest” as found in the Act must be taken to mean:
‘the members of the management or decision making body of:
all organisations or bodies established by Statute;
all businesses or companies controlled by or on behalf of the State’.
249. Further for the purpose of determining control by or on behalf of the State a business or company shall be taken to be controlled by the State if the State exercises or is entitled to exercise control directly or indirectly over its affairs; if the State is entitled to appoint a majority of the directors of the Board of Directors or holds at least fifty percent of the capital of that body.
250. This interpretation to my mind is in accord with the purpose and intention of the legislation as expressed by the Constitution and the Act, that is, to preserve and promote the integrity of persons exercising executive or legislative functions on behalf of the State…”
I am advised that TSTT appealed that High Court decision and that judgment is awaited since mid-2010.
I confirmed that key CL Financial Directors have not been filing declarations under the IPLA. On Monday 10 September, I consulted in person with Integrity Commission staff who confirmed to me that none of these people have filed declarations or been required to file such for 2009, 2010 or 2011 –
Gerald Yet Ming (CLF’s current Chairman)
Hayden Charles (CLICO Director)
Ronald Harford (Republic Bank’s Chairman)
Dr Euric Bobb (former CLF Chairman)
Rampersad Motilal (Managing Director of Methanol Holdings Limited)
According to the 3 April 2012 affidavit of then Minister of Finance, Winston Dookeran, the public money committed to this colossal bailout is –
Para 21 (a) $5.0Bn already provided to CLICO;
(b) $7.0Bn paid to holders of the EFPA and
Para 22 $12.0Bn estimated as further funding to be advanced.
That is a total of $24Bn in public money being paid to satisfy the creditors of the CLF group.
I wrote on Monday 10 September to both the Integrity Commission and the Minister of Finance & the Economy to report my serious concerns on this unacceptable state of affairs. It simply cannot be right that the Directors of this huge state-controlled group are allowed to escape the provisions of the IPLA. There must be proper transparency in matters of this kind, if good order is to be preserved in our society.
CL Financial accounts and if those are not available, the figures on which the Minister of Finance has been relying – The reply is to ask me to provide further information as to what I mean. The Minister of Finance is making analyses and justifying his positions in public, including proposing legislation to Parliament – he must therefore be relying on some figures or estimates to proceed in this way. When I ask for those details, the Finance Ministry is mystified and needs me to explain what I really mean. Just imagine that!
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– The reply is to claim that the presentation is an exempt document which the Ministry is therefore unable to provide. The official presentation made to our Members of Parliament in this matter is deemed secret, which seems incompatible with the notion of a free, democratic society, so it will not rest there.
The recent revelations about the Plot to Pervert Parliament in relation to the S.34 debacle and the way in which the country, its significant institutions and its legislature have been misled for the benefit of political financiers have given me pause. I am now reflecting that the bailout and shareholders agreement were never debated, they were both declared as fait accompli. What is more, the new 2011 laws I am writing about here have a similar flavour of Abuse of Office in that we are being told that the contents of that presentation to Members of Parliament are secret. The S.34 fiasco involved an alleged stealing of $1Bn in Public Money and we are all now seeing the extent to which these white-collar criminals and their servants will go to cover their tracks. It is truly revolting. So, the question is ‘‘Given what we now know and the fact that the CLF bailout involves many billions of dollars in Public Money, is it reasonable to assume that our Parliamentarians and Public Officials will be responsible and honest in their dealings?’ I will be returning to this, it is turning in my mind.
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 – The reply states that the information requested is likely to be exempt from the Freedom of Information Act. That is another aspect of this to be challenged.
Declarations filed by Directors and Officers of the CL Financial group under the IPLA – The reply points out that those declarations are secret, which is correct, but also goes on to state that this is not to be construed as an admission or denial that the IPLA applies to those Directors and Officers. Well I tell you.
The region’s largest privately-held group of companies is now under State control, in a situation of huge insolvency, with no proper accounts and no declarations being filed by the Directors.
It is as if the sheer size and power of this CL Financial event is warping all the usual rules – like a black hole or anti-matter – to the extent that it seems like the Freedom of Information Act is now being used for the Incarceration of Information!
This development is a serious peril to our Treasury. It must be a matter of the gravest possible concern to all right-thinking people that our fundamental Integrity safeguards appear to have been circumvented or ignored in a matter of this size and consequence.
This is the 12th July affidavit filed by the Ministry of Finance in reply to my claim under the Freedom of Information Act (FoIA) filed against them in this matter.
The CL Financial bailout continues to be a major failure on any scale, both in the causes of the fiasco and especially the manner in which it has been handled.
AfraRaymond.net 