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’.
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.
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
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.
The Colman Commission was established about a year ago as a Public Enquiry into the failure of the CL Financial group, some of its subsidiaries, and the Hindu Credit Union. The Commission is also mandated to report on the causes of these costly failures, so that it can make recommendations for possible prosecutions and the regulatory or systemic changes needed to avoid further collapses.
There has been a lot of fresh information revealed at the Commission and that is good, since the public now has a much better view of the various episodes behind the scenes. The sole Commissioner, Sir Anthony Colman, has now made a statement which outlines his progress in this huge and complex matter. Colman expects to take at least one more year and will be continuing his examination of the HCU matter when the CL Financial stage is completed.
Despite all the evidence about staggering sums of money and the heated public discussion that has sparked, I am perturbed by the way the essential information is being handled.
Since it is a Public Enquiry into a huge financial collapse, the financial information has to be front and centre if we are to get at the facts.
It is common knowledge that the link between performance and pay is essential in obtaining quality results in any competitive situation. That basic fact, with which most people would agree, is now seriously challenged by some of the key events in the global financial meltdown. It is beyond the scope of this article to delve into the new learning emerging from this global crisis, suffice to say that the old learning has literally been ‘tested to destruction’.
An unhealthy relationship between pay and performance would be a problem for any company, but in a financial company the issue is worse. That is because the investors expect those companies to endure and prosper, so that they can collect the expected returns.
The Colman Commission will be unable to fulfill its mandate if it does not uncover the relationship between pay and performance in the failed companies. Colman will also need to consider the motives and behaviour of the investors, who must also form a significant part of the story. Without their participation and investments, the failed companies would have had no money to lose.
There is a strong interest in keeping the real figures and circumstances out of the news and some of the main items are –
The Accounts
The true levels of salaries, fees, dividends and bonuses
The identities and sums of money returned to those who have benefited from the bailout
The delinquent borrowers who owe the failed companies huge sums of money
The extent to which the failed companies and their chiefs complied with our tax laws
In ‘The Colman Commission – Cloudy Concessions’, published here on 1 September, 2011, I pointed out the danger of allowing the HCU claimants to testify without stating the amounts invested for the public record. It was my view that those concessions represented the ‘thin edge of the wedge’ in terms of the entire exercise being a Public Enquiry into a series of financial collapses.
In this recent, third session of evidence Hearings, we have had three examples of the ‘widening wedge’ in respect of financial information.
The first example is the recent imbroglio on the testimony of the CEO of Methanol Holdings (MHTL), in which significant financial information was excluded, apparently by agreement between the various parties and the Commission. This is exactly the kind of danger I had been warning about, since MHTL is a significant, supposedly healthy, part of the failed CL Financial group and there is bound to be considerable public interest in its financial performance. Yet, the Colman Commission agreed to exclude that financial information, so the public is none the wiser as to the overall health of the CLF group, despite paying for a public Enquiry. This issue was highlighted in the Guardian editorial of Tuesday 15 November, 2011, which ended by emphasizing the public’s right to know.
The second example was the decision on Directors’ monies – as reported in the Business page of this newspaper on 16 November, 2011 “…Commission Colman has ruled that the means of remuneration for CL Financial officials should be disclosed to the Commission but not the actual quantification of them…”. That bizarre concession removed any possibility of reporting on the real state of affairs at these failed companies. If the Commission continued with that arrangement, it would have been impossible for any real understanding of the crisis and its causes to be derived from their work.
The third, most notable, example was even more noteworthy, being the reversal of that decision and the grounds for that reversal, as reported in the Express of 16 November, 2011
…The board appearance fee was revealed yesterday on the same day that Sir Anthony Colman, the lone commissioner in the Commission of Enquiry, ruled that the remuneration packages of those involved with the conglomerates collapse could be made public….
Colman yesterday reversed a decision he made on Tuesday…
“My attention has been drawn to the fact that in fact some evidence has already been circulated in regard to Mr (Michael) Carballo’s remuneration package and also Mr (Lawrence) Duprey’s remuneration,” Colman said.
“I have come to the conclusion that it would be grossly unfair if there were a general bar on further evidence as to remuneration of participants so I reverse the ruling which I made yesterday and the result would be that the remuneration of participants can be put into evidence,” he said.
“I do not accept that if the remuneration emanated from any of the companies involved there could be any question of confidentiality,” Colman said”
It is remarkable to me that an appeal restricted to the principle of fair-play seemed to have caused this reversal, in a situation where the initial concession was toxic to the fundamental enquiry which is being conducted at public expense, supposedly for our benefit.
This is an Enquiry into a colossal financial collapse, so therefore the money must be front and centre at all times. We must have scrutiny as to its origin, rationale/contract for payment and its disposition for tax purposes.
Sir Anthony Colman needs to be watchful of the wily attorneys, who may seek again to tempt him to agree to conceal some more financial information which might be awkward for their clients. The fact is that all those companies are now being funded by the Treasury and we have a right to know what caused this huge mess.
It is not a concession, we now own the mess, so we must be allowed to see all of its parts. No sacred cows.
Sidebar: Colman’s Challenge
Colman’s statement as to the difficulty of running the Enquiry was most instructive, with a total of 49 lawyers appearing for various parties and a further 5 for the Commission.
Colman has had to maneuvre between 18 parties to the Enquiry, three non-parties and over 800,000 documents.
Which only makes it all the more important that the Colman Commission be given the necessary administrative/legal support and multi-media resources so that it can better serve the purposes for which it was established.
We have the resources in this country to give each SEA student a new laptop, so it should be no challenge to provide those resources to the Colman Commission.
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 
or view below
The 
AfraRaymond.net 