These are my emails to formally raise the issue of the applicability of our Integrity in Public Life Act—which requires Public Officials to file declarations of their interests and assets as an Integrity safeguard—to the Directors of CL Financial.
This is an issue I first wrote on in May 2009 and the questions remained unanswered, so the questions have now been put directly to the relevant officials.
To – Mr. Martin Farrell, Registrar of the Integrity Commission
Dear Sir,
The Integrity in Public Life Act requires that “Members of the Boards of all Statutory Bodies and State Enterprises including those bodies in which the State has a controlling interest” are required to file returns and declare interests with the Integrity Commission.
Clause 3.1. of the CL Financial Shareholders’ Agreement of 12th June 2009 – see https://afraraymond.net/wp-content/uploads/2010/03/mou21.pdf – specifies that the Board of Directors of CLF shall consist of seven Directors, four of which shall be nominated by the Government. The GORTT has a controlling interest and it is public knowledge that the GORTT has exercised those rights, amounting to strong influence evidencing control.
It seems clear that the directors of CL Financial Ltd are therefore persons who should file declarations, and therefore also the directors of subsidiaries under their influence and control, but having visited your offices earlier today to examine the Register of Interests it seems that these Directors have not been filing returns with you.
For your information, your staff confirmed to me today 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)
I am therefore requesting, in the public interest, your confirmation that Directors of CL Financial and the companies within its control are required to file declarations or your confirmation that those Directors are not required to file or such other informative response that will satisfy this complaint of apparent non-compliance.
From: Afra Raymond <afraraymond@gmail.com>
Date: Mon, Sep 10, 2012 at 10:13 PM
Subject: Compliance of CL Financial Directors with the Integrity in Public Life Act
To: [email hidden by author]
To – Senator Larry Howai, Minister of Finance & the Economy
Honourable Minister,
The Integrity in Public Life Act requires that “Members of the Boards of all Statutory Bodies and State Enterprises including those bodies in which the State has a controlling interest” are required to file returns and declare interests with the Integrity Commission.
Clause 3.1. of the CL Financial Shareholders’ Agreement of 12th June 2009 – see https://afraraymond.net/wp-content/uploads/2010/03/mou21.pdf – specifies that the Board of Directors of CLF shall consist of seven Directors, four of which shall be nominated by the Government. The GORTT has a controlling interest and it is public knowledge that the GORTT has exercised those rights, amounting to strong influence evidencing control.
In addition, the CL Financial bailout has consumed large amounts of public money, in which connection I would invite your attention to the 3rd April 2012 affidavit of then Minister of Finance, Winston Dookeran, in which the public money committed to this bailout is detailed as –
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 amounts to an estimated $24Bn of public money to be expended in bailout exercise and it is my contention that our country’s Integrity safeguards must be firmly in place to reduce any potential for improper behaviour or the suspicion of such.
It seems clear that the directors of CL Financial Ltd are therefore persons who should file declarations, and therefore also the directors of subsidiaries under their influence and control, but having visited the Integrity Commission offices earlier today to examine the Register of Interests it seems that these Directors have not been filing returns.
For your information, Integrity Commission staff confirmed to me today 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)
I am therefore requesting, in the public interest, your confirmation that Directors of CL Financial and the companies within its control are required to file declarations or your confirmation that those Directors are not being required to file or such other informative response that will satisfy this complaint of apparent non-compliance.
This downloadable document is the 3rd April 2012 affidavit of then Minister of Finance Winston Dookeran, filed as the key evidence in the government’s case in reply to the High Court challenge mounted by Percy Farrell on behalf of a group of CLICO policyholders.
It is an important document since it is the official attempt to deal comprehensively with the claims that the new laws passed in 2011 to control the bailout were unconstitutional – those laws were the Central Bank (Amendment) Act, 2011and the Purchase of Certain Rights and Validation Act, 2011. [To read the separate Bills progress in the House of Representatives, you can click here and here respectively.]
The most interesting ones are the paragraphs in which Dookeran states –
Para 16 at which CLICO is identified as holding 53.6% of the insurance industry’s total liabilities in T&T. That is a clear statement as to the extent to which this company was allowed to become literally ‘too big to fail’ and it also seems to me to comprise grounds for preventing this kind of over-concentration of risk to ever emerge again.
Para 21 which details some $12Bn of public money already spent on this massive bailout.
Para 22 which estimates that a further $12Bn of public money is needed to meet the creditors’ claims.
Para 76 which confirms that the quarterly reports on the restructuring of CLICO for December 2011 and March 2012 have been filed in the High Court as required by the new laws cited above.
It has been virtually six months since my last commentary on the CL Financial fiasco, my silence was due to other pressing duties, but Terrence Farrell’s No Sacred Cows published in the Trinidad Express on 16 July demands a proper reply. For those of you who have not read it, this is a good time to take the chance to do so, by clicking on the link above.
The fact that there are potent questions of whether the best process was followed in making the critical appointment of the new Central Bank Governor, Jwala Rambarran, has been raised by several commentators, most notably in last week’s BG View Is Jwala’s appointment good or bad for T&T? Those questions revolve around the scope of discretion which our governments are allowed in these matters and the extent to which the public interest can be sacrificed in favour of what can appear to be political favouritism. Matters of public importance must always be open to robust scrutiny in the press.
My own view is that there is a critical series of Central Bank issues which are in danger of being obscured by the line Farrell has taken in this debate.
Email exchange with Dr. Terrence Farrell
On Tue, Jul 24, 2012, at 8:53 AM, Terrence Farrell wrote:
Dear Mr Raymond,
I took note of your article in today’s Express. I do not respond in public to comments on articles I write and I will continue that policy in respect of your comments. I merely attach for your perusal the Adlith Brown Memorial Lecture I delivered at the Central Bank in November 2010, and in particular the sections dealing with CLICO and CL Financial. That lecture was delivered before a full auditorium including Governor WIlliams and his top staff. Suffice it to say, it did not endear me to the Bank!! My name did not appear on the Bank’s invitation list for about a year afterward.
You do not know me, but I am not one who ‘puts water in my mouth’. I call a spade a spade and a shovel a shovel. Those who suggest that I leave my critiques only for this government have not read or have forgotten my article in the T&T Review on ‘Our Irresponsible Elite’, my articles in the Express on the Integrity in Public Life Act and sundry others. Re the Central Bank and CLICO, I did not have all the information then since the inquiry had not yet started and in fact up to now, the Governor and the Bank have not yet testified to the Commission. They should do so in September. But I felt I knew enough to suggest that the Bank had failed in respect of CLICO and CL Financial.
The assessment of Williams’ tenure will come (and I may well do it myself) and in that assessment the CLICO/CL FInancial debacle will not have done the Bank proud. That though is no reason to now appoint a new governor of questionable credentials and no argument to defend the ongoing assault on our institutions.
Stay well
Terrence Farrell
On Tue, Jul 24, 2012 at 9:27 AM, Afra Raymond wrote:
Dear Dr. Farrell,
Thank you for your swift, pointed response to my article in today’s Express.
I am familiar with the Adlith Brown Memorial lecture you delivered in November 2010 and it is my view that, given what was known at that time, your critique of the Central Bank was muted – space limits did not allow me to delve into all those areas, but the evidence I cited in today’s article was all available by mid-2010. You did say that you may make a full critique of the CBTT’s role in this fiasco and that would be interesting to consider. I am not surprised that you were off the CBTT ‘guest list’ for a spell, which that tells a sad story of hubris and such.
With respect to the new Governor and for what it is worth, I am all in favor of us upgrading these systems by which key appointments are made, as per the second para of my article. I will be sure to hold him to the same high standard to which our leaders should set.
From: Afra Raymond
Date: Wed, 25 Jul 2012 12:18:41 -0400
To: Terrence Farrell
Subject: Re: Your Article in Today’s Express
Hello Dr. Farrell,
I am soon going to publish onto my blog an expanded version of the Express article and would like to include our email exchange, along with your 2010 Adlith Brown Memorial lecture – I am seeking your agreement to that.
More than just this immediate request, the fact is that the decision of our educated classes to opt-out of the public debate has led us to a time which is much poorer, in all the senses of that phrase…The voices we hear are largely party-political roars which are barely-sensible, the reluctance of our thinking-class to engage in a critical discourse is really the source of the brandy being served in ever-stingier portions, with some people choosing to express it as a declining (I should have written ‘increasing‘) proportion of water…As always, these issues have more than one cause and I am inviting you to reconsider your stance of not responding to comments on articles you write…let me just say that in other places it would be a matter of professional pride and minimum editorial standards that such a response be forthcoming…Of course, we might agree that not everything foreign is to be imitated, but surely such habits which cultivate progressive discourse are to be emulated….
On Wed, Jul 25, 2012 at 2:49 PM, Terrence Farrell wrote:
Apologies for the tardy response. I am out of the country and did not have Internet access for a while.
I have no problem with you publishing the exchange on your blog. The Lecture should be on the CCMS website.
Terrence Farrell
Sent from my BlackBerry® device from…
From: Afra Raymond
Date: Wed, Jul 25, 2012 at 2:00 PM
Subject: Re: Your Article in Today’s Express
To: Terrence Farrell
Much appreciated, I do hope you can find time to ‘tune-in’ to our discourse…
Dr. Terrence Farrell
For those who do not know, Dr. Terrence Farrell is a former national scholar and a highly-educated member of the regional financial sector. Among his several top positions, he has been a Deputy Governor of the Central Bank of T&T. In addition, he has also held top-level private sector appointments in the financial industry.
In writing on the CL Financial fiasco, I have adopted the phrase ‘Code of Silence’ to describe the unspoken agreement that the entire mess is to be mentioned as little as possible. That silence is especially pronounced amongst those best equipped to analyse the issues, so the intention of the Code would appear to be to preserve the existing order of things.
Silence is the Enemy of Progress, so this crisis has exposed an abysmal showing from our most educated brethren, miserable really. Nothing from the Accountants, Lawyers, Bankers, Insurance or other professional and industry associations. UWI is only now becoming involved in the necessary discourse.
So, why am I taking precious time to respond to Terrance Farrell? A few examples to show my concerns –
Firstly, in the 30th January 2009 Central Bank Press Release – by then Governor Ewart Williams – on the first page we are told:
…In our regular monitoring of CIB, and of Clico since 2004 (when insurance supervision was transferred from the Ministry of Finance), the Central Bank has consistently focused on these deficiencies but have been stymied by the inevitable challenge of change and by inadequacies in the legislative framework which do not give the Bank the authority to demand these changes….
So we need to pause here and look closely at the three facts before us –
Ewart Williams was saying that since 2004 serious problems were identified in the CL Financial group and that he did not have the proper tools to deal with these.
Within a week of that fateful bailout date, our Parliament had debated the Central Bank (Amendment) Bill and the Insurance (Amendment) Bill, both being assented to on Friday 6 February 2009.
Farrell’s opinion is that the Governor must be “…sufficiently strong and respected to keep the financial system stable…”. In his appreciation of Ewart Williams, he clearly conferred that level of performance onto the outgoing Governor.
The burning question is ‘Where were these Draft Bills when the CL Financial crisis was gathering force since 2004?‘ Had they been prepared and never been put to the political administration or had they been submitted and rejected by the politicians? Or are we to believe that both Bills were swiftly drafted?
Of course all three facts cannot be correct and I believe that the third fact is the false one. Farrell’s inference that Williams had the necessary stature to be an effective Governor is obviously disproven by the CL Financial fiasco.
Please remember that this is the same Governor who had two investments with that ‘deficient’ group. How can one possibly reconcile a top official of acumen and strength with that investment?
But there is more. According to para 23 of the 16 April 2010 affidavit by the Inspector of Financial Institutions:
…With respect to the Creditors of the Petitioner, the Petitioner has met the statutory obligations for the Board of Inland Revenue (except for Corporation Tax Returns for 2007, 2008 and 2009 which are being prepared and remain outstanding)…
I am reliably advised that means that CIB did not pay Corporation Tax for those years. Yet CIB was able to retain its banking licence thoroughout that period, and, upon collapsing, obtain an immediate bailout on most generous terms.
Farrell also tells us that the Central Bank needs to be “…a decisive actor when action is required…”. Obviously, that standard did not obtain over the last decade.
The entire scenario reeks of corruption in the highest offices in the Republic and on the largest possible scale. We are witness to an epic swindle being carried out on our Treasury and in broad daylight.
There is plenty more evidence to discuss on this issue, including the seminal 15 July 1996 Republic Bank Letter to Shareholders which warned of the perils of the then ongoing aggressive takeover by CLICO.
At the critical turns in this crisis, we have been without Farrell’s views in terms of the rigorous scrutiny from which we ought to have been benefitting.
Farrell also adds, in relation to Williams’ impact at the Central Bank, that it was “…repaired and strengthened by Ewart Williams over the last ten years…”. That seems to be a straight case of Nearer to church, further from God’. Given Farrell’s reading of events, it seems that Ewart Williams is being treated like a ‘Sacred Cow’.
That is the root of my concern here, given Farrell’s headline ‘No Sacred Cows’, which is usually used to convey that someone is a fearless critic.
I continue to be outraged that the outgoing Governor appears to have retired with full benefits after having presided over a disaster on this scale.
The quest for better governance is not just a matter of criticising the administration, the educated commentators also have to hold to some consistent standard of rigour. Given his background, I consider Farrell’s contribution on this fiasco to be lacking that standard.
It is not too late, because I am sure that the Colman Commission would benefit from Farrell’s input in relation to the strategic view of the roots of the crisis and the sort of interventions which could have avoided this sorry situation.
For my own part, I will be looking to see how Rambarran performs on the burning issue of properly applying the ‘Fit & Proper regulations’ to the Financial Sector. Given the poor record of the outgoing Governor on this count, I am going to be calling for the new broom to make a clean sweep.
Afra Raymond chats in ‘The Barbershop‘ with John Wayne Benoit on i95.5FM about the CL Financial bailout and Public Procurement issues and other topics. 30 June 2012. Audio courtesy i95.5FM
This is the video of the segment from the show Making A Difference with Felipe Noguera called Caribbean Economic Forum. Appearing with guest Afra Raymond was David Walker, another prominent analyst on the CLICO debacle. Video courtesy Making a Difference
The former Minister of Finance, Karen Nunez-Tesheira, is once again in the news, due to her dispute with the Integrity Commission as well as her expected testimony at the next session of the Colman Commission.
The former Minister has had to defend against allegations of insider information1 related to her early withdrawals from CLICO Investment Bank (CIB). [Hansard report of February 4, 2009 calls it “PERSONAL EXPLANATION Allegations of Insider Trading.”] There was a lengthy address to the Parliament on Wednesday 4 February 2009. The 7 March 2009 revelation in the Trinidad and Tobago Guardian Newspaper, that Nunez-Tesheira was a CL Financial shareholder was also the cause of further defensive statements to Parliament on 27 March 2009. In the first wave of defence, there was silence as to the fact of Nunez-Tesheira’s shareholdings in CLF. In November 2011, her attorney attempted to challenge my position on this at the Colman Commission, but I maintained that ‘If the genuine attempt was to address the perception of corruption in a forthright fashion, all the information should have been given’. In the second wave of defence, there was no mention of the fact that the insolvent CL Financial group paid a dividend to its shareholders after writing that fateful letter to the Central Bank for financial assistance. Again, through the unfolding scandal we are witness to responsible officials who chose to be selective in making the required full and frank disclosure. All to the detriment of the tax payer.
Those attempts to defend against the allegations were only partially successful, since there is little doubt that Nunez-Tesheira’s reputation has been damaged by the entire episode.
Nunez-Tesheira is now alleging that the Integrity Commission failed to properly notify her of exactly what possible charges have been notified to the Director of Public Prosecutions. I understand that the charges relate to an allegation that the CLF shareholding held by Nunez-Tesheira amounts to a conflict of interest in relation to the discharge of her duties as Minister of Finance at the time of the bailout.
If the former Minister’s concerns are true, that may negate the fundamental investigation, which would be a real pity in terms of settling the elementary accounts of that turbid period.
I have my own serious concerns, derived from the same set of facts, about the lessons to be learned from the decisions of that individual, Karen Nunez-Tesheira.
Form of Oath (affirmation) for A Minister or Parliamentary Secretary
I, A.B.. do swear by………… (solemnly affirm) that I will bear true faith and allegiance to Trinidad and Tobago and will uphold the Constitution and the law, that I will conscientiously, impartially and to the best of my ability discharge my duties as ………… and do right to all manner of people without fear or favour, affection or ill will.
To my mind, the only reasonable reading of the phrase ‘conscientiously, impartially‘ is that personal, family, friends or other commercial interests must never be present or considered when discharging public duties. The closing phrase specifies without fear or favour, affection or ill will, the plain meaning of which only reinforces the previous point.
I keep returning to the National Gas Corporation (NGC) Press Release of 4 February 2009 in response to widespread rumours that its heavy withdrawals had prompted the collapse of the CL Financial group. That Press Release rebutted those allegations, but was interesting in that it also spoke of CIB’s failure to return significant deposits in November and December 2008. This citation from the Press Release –
That official NGC statement establishes that the CL Financial group was known to have been in very serious financial difficulties as far back as November 2008 – after all, over a three-month period CIB was unable to repay in excess of $250M in matured deposits. Given the high degree of trust between the CL Financial group and the government of the day, that breach must have been known at the very highest level.
Then I move to consider the extensive interview Nunez-Tesheira gave on 4 February 2009 to the Trinidad Express on the broken deposits, the headline being truly priceless ‘Everybody knew CIB was in trouble’. That interview formed part of my submission at the Colman Commission, with neither its inclusion, nor my inferences from it, being challenged by Nunez-Tesheira’s attorney during his cross-examination on 10 November.
…She then said: “On December 31, 2008, I withdrew an account which had matured on December 31, 2008”. Since then, Express investigations have discovered that Nunez-Tesheira had (not one) but two accounts with CIB, which matured (not on December 31) but was due to mature in April and August 2009 respectively. And she applied on December 30 to break these two deposits.
In an interview with the Express on February 4, Nunez-Tesheira also confirmed that her sister made an application on December 30 to break the $2.1 million deposit held in her late mother’s name, Una Nunez. In that interview Nunez-Tesheira said: “Everybody knew CIB was in trouble.” But she stressed that she only received the formal brief on the issue of CL Financial troubles on January 14.
In an interview on the same day with this newspaper, she stated: “The information about CIB and the concerns about CIB, were out there in the public domain for a long time, and my sister being a banker, would have been one of the persons who would have heard the concerns about CIB.”
Asked if in hindsight she should have declared her investments in CIB and CMMB before making any statements in the Parliament on the issue, Nunez-Tesheira said she had no need to do so. “In answering that question, it would imply that there was something that somehow was untoward,” she said, adding that there was not(hing untoward)…
In her statements to the Parliament Nunez-Tesheira was emphatic on these important points – from page 629 of Hansard of 4 February 2009 –
...Prior to January 14 of this year, I can truthfully state that I had no personal, formal or informal information about the extent of the liquidity difficulties the Clico Investment Bank has found itself in, other than the information known and available to any other citizen of Trinidad and Tobago and those on the other side, for that matter. Like any other citizen of this country, I also have to attend to my personal affairs and I did so until December 30, 2008 with respect to my personal transactions with Clico Investment Bank…
The emphasis is mine.
The emphasis on extent, as distinct from the existence of the liquidity difficulties, is crucial. The way that statement to Parliament is crafted, it is possible to have been aware of the existence of the liquidity problems and still claim to have been ignorant of the extent of those problems. In my view, Nunez-Tesheira’s choice of words is artful, since she is already on the record as to her motivations in ensuring that her family monies were withdrawn from CIB when she learned of the financial problems there.
The then Minister of Finance was also clear that she took official action only at the point when she was officially informed.
In my view, this sequence of facts represents a real, clear example of breach of public duty and breach of the ministerial oath of office. By her very own words Nunez-Tesheira was informed and believed that the group had problems, as a result of which, she took the necessary steps to protect her own family’s financial position. Following that, the then Minister was officially advised that the CL Financial difficulties were now going to be requiring a State bailout at which stage she took official steps to deal with the crisis.
In my opinion, the Oath of Office does not permit that course of action. Under the terms of that Oath, officeholders are required to properly discharge their duties at all times. A holder of ministerial office ought not to allow family interests to come into conflict with his/her duty to protect national/public interests. It seems clear to me that the actual course of decisions by Nunez-Tesheira in this episode is contrary to both the spirit and intent of the Oath of Office.
So, firstly, we have Nunez-Tesheira’s apparent decision that the information as to CIB’s financial crisis – wherever it came from – was solid enough to take immediate steps to protect personal interests. Apparently, the public, proper duties of that office awaited an official letter. I tell you.
Next, we have the payment of the final dividend by CLF and the burning question of whether her Cabinet colleagues were informed by Nunez-Tesheira that she was not only a shareholder, but also in receipt of dividends from the very group that was seeking a State bailout. Those are the questions which can only be answered by lifting the conventional veil of Cabinet secrecy.
If you are not outraged, you haven’t been paying attention…
This is the recording of my actual testimony on my Witness Statement and the amended Power Point presentation.
I was led in evidence by Counsel to the Colman Commission, Peter Carter QC, with questions at the close from these parties –
Gita Sakal, former CL Financial Corporate Secretary – represented by Justin Phelps, who had a few questions on the post-Shareholders’ Agreeement Directorships.
Karen Nunez-Tesheira, former Minister of Finance – represented by Frederick Gilkes, who questioned my assertions on the Minister’s undeclared shareholding.
This shows the attempts by various parties to object to my showing the PowerPoint presentation…some of those parties and their attorneys include –
Central Bank – represented by London-based Bankim Thanki QC
Lawrence Duprey – represented by London-based Andrew Mitchell QC
PriceWaterhouseCoopers – represented by Russell Martineau SC, former Attorney General and former President of the Law Association
Andre Monteil – represented by Martin Daly SC, Sunday Express columnist and former President of the Law Association
It is really instructive to consider the various arguments put forward by these parties in an attempt to limit my testimony and ultimately to deny it the benefit of clear illustration via PowerPoint.
There is going to be a real struggle to show the information on this series of financial and economic crimes. That information needs to be shown in as digestible a form as possible, which was the point of my presentation.
Between the strong opposition of the parties who were at the centre of the crisis and the refusal of the government to fund multi-media facilities, we have a fight on our hands to get at the facts.
The Bailout Timeline aroused great concern, with one attorney going so far as to call for the removal of the photos since they might be seen “…as a rogue’s gallery…” Another area of concern was the inclusion of the phrase “…final and fateful…” to describe the CL Financial AGM on 23 January 2009…yes, folks, that is the same one that gave a glowing account of the group’s plans to find opportunity in the global storm, a mere 10 days after writing to the Central Bank for urgent financial assistance and only 7 days before the MoU was signed. Of course, all of those objections ignore the fact that this timeline was published here in ‘CL Financial Bailout – Retirement Planning‘ on 28th April 2011
The Governor of the Central Bank slide was also the source of tremendous concern as no-one even wanted to call his name or the title of his office…VS Naipaul really had it right when he spoke of ‘…a thing with no name…‘ Again, the fact is that every one of the statements cited in this slide come from the Governor’s prepared statements, as shown in the footnotes.
After:
The Commissioner, Sir Anthony Colman ruled that the requested changes would be made and that slideshow can be seen here on the Commission’s website.
It has been virtually six months since my last commentary on the CL Financial fiasco, my silence was due to other pressing duties, but Terrence Farrell’s 
Afra Raymond chats in ‘The Barbershop‘ with John Wayne Benoit on i95.5FM about the CL Financial bailout and Public Procurement issues and other topics. 30 June 2012. Audio courtesy i95.5FM
or view below
AfraRaymond.net 