Setting the Standard

The PP government is establishing a ‘new normal’ insofar as ethics and acceptable standards of behaviour in public office are concerned.  As with any real-time and complex situation, the signals are mixed, but from my point of view, the direction is a welcome one.

To me, the main positive signs were –

  • Coup Enquiry – The July announcement of the Commission of Enquiry into the 1990 attempted Coup, now underway, was most welcome.  It seems certain that we would still be waiting in vain, if either Manning or Panday were still in power.
  • CL Financial bailout – Dookeran’s decision to review the payout to beneficiaries of the bailout was necessary and long-overdue.  Dookeran has done his cause no favours by with-holding the accounts and seeming to suppress vital information, but the decision to revise the bailout terms was a sound one.  On that occasion, he also took the steps of introducing relief for Hindu Credit Union depositors, which was a step in the direction of equity. Even those of us who did not support any bailout can concede that point.
  • On October 1, the Prime Minister resisted the temptation to use the PP’s Parliamentary majority to force through a new law to limit the legal rights of CLICO policyholders.  The PM chose to set aside that legislative proposal and embark on an act of persuasion.  That was a defining moment in our nation’s development of a democratic culture.  The announcement of a Commission of Enquiry into the entire financial collapse (CL Financial and HCU) was another high point.
  • Nizam Mohammed’s removal as Chairman of the Police Service Commission was overdue in my view, but not because of his ‘last-ditch/red-herring‘ attempts to martyr himself.  His primary and unpardonable offence, given his position, was his bold-faced abuse of power in that traffic police episode.
  • mary king
    Mary King

    Even Mary King’s removal from office earlier this week was a welcome sign despite the doubts over who knew what and when.  That was a good move because it is the first time a Minister has been fired for acting in a manner which causes reasonable suspicion.  Up until now in this country the rule followed by the various Ruling Parties has been the ‘wrong and strong‘ one, joined-up with the ‘do as I say and not as I do‘ one.  To have moved away from those immoral practices is a big step in the right direction, despite the ragged edges.

Even when I consider the disastrous Reshmi-gate episode, that list adds up to substantial progress in the right direction.  Democracy is a messy affair and coalition politics has particular challenges, so progress will be uneven, with some pauses along the way.  But progress we must.

The Prime Minister reportedly commented that there was no pressure from COP to replace Mary King with another of its members, so that the replacement would be chosen on merit.

I am very concerned at the fact that the CL Financial collapse has cast a literal shadow over our country.  Aside from the financial costs, there are significant areas of collateral damage which are now becoming visible.  I referred in an earlier article to one of the main externalities in this episode being the fact that many of the CL Financial chiefs are deeply embedded in our political parties.

Even now, with this new government – their honeymoon will end on the first anniversary, I think – we are witnessing acts which can make one wonder if the CL Financial disaster ever really happened.

The official Terms of Reference for the Colman Inquiry into this financial fiasco were published in the Trinidad and Tobago Gazette of 17th November 2010 – No. 144 in Volume 49.  Here is the first sentence in the second paragraph –

…And whereas the President on the advice of the Cabinet has deemed it advisable and for the public welfare that a Commissioner be appointed to enquire into the failure of CL Financial Limited, Colonial Life Insurance Company (Trinidad) Limited, CLICO Investment Bank Limited, British American Insurance Company (Trinidad) Limited, Caribbean Money Market Brokers Limited and the Hindu Credit Union Cooperative Society Limited with a  view to ascertaining why such events occurred…

robert mayers
Robert Mayers

Caribbean Money Market Brokers (CMMB)
The first example is Robert Mayers, former Managing Director of CMMB up until 7 December 2008 – see here.   Mayers is also a Deputy Political Leader of the Congress of the People (CoP), a leading element in the Peoples’ Partnership government.  CMMB collapsed along with some of the significant companies in the CL Financial group – the Terms of Reference for the Colman Commission refer.

On 20 November, there were reports that Robert Mayers had been offered a position as a Director of our Central Bank.  Mayers is reported to have declined that offer on the basis of a conflict of interest.  The burning question has to be ‘What kind of process could produce such a recommendation?

Consider this arresting headline ‘Investment pros set up new business‘ at page 10 of the Business Guardian of 9th December.  It was reported that a new investment house, KSBM, was launched and it seemed that they were profiling.

Given that all four of KSBM’s Executive Directors are ex-CMMB chiefs, Robert Mayers among them, there are inescapable questions –

How come the former chiefs of CMMB, a financial institution which is known to have failed on this scale, can be permitted to open another one?  We are acting as if we have no capacity to learn from our errors.  Just carrying on as though nothing happened.  What is the role of the SEC and the Central Bank in all this?  Have we learned nothing?

mervyn assam
Mervyn Assam

Clico Investment Bank (CIB)
Mervyn Assam was the Chairman of CIB at the time of the collapse.  Assam had been one of CIB’s founders in 1990 and was reportedly ‘cleaning house’ at the bank, which I do believe to be true.

But the picture is far from a simple one.  On 22 January 2009, CIB hosted its inaugural Investment Seminar at the CL Duprey box at the Queen’s Park Oval – I spoke at that event, together with Professor Patrick Watson.  Now, according to  para 5 of the April 2010 affidavit submitted to the High Court by the Inspector of Financial Institutions, Carl Hiralal, in the CIB winding-up petition, the CIB liquidity problem was disclosed to him in a meeting on the 15 January.  I have serious doubts as to the veracity of that statement, but yes, it is still a full week before the Investment Seminar.

Assam held 7,500 shares in CLF as at 7 February 2009.

Assam also launched a lawsuit to recover $1M he had deposited with CIB, that case went against him in January this year – see the judgment – and he is reported to have filed an appeal.

In October, Assam was appointed as Ambassador Extraordinaire and Plenipotentiary of Trade and Industry.  He has served in the NAR period as High Commissioner to London and as a UNC Senator, both in Cabinet and during their recent spell in opposition.

Dr. Bhoendradatt Tewarie
Dr. Bhoendradatt Tewarie

CL Financial (CLF)
Dr Tewarie was a Director on the Board of the parent company, CLF, which wrote to the Central Bank, seeking a bailout, on 13 January 2009.  On 16 January 2009, CLF paid dividends of $3.00 per share to its shareholders.  According to the CLF Annual Return of 7 February 2009, Dr Tewarie held 1,171 shares.

As I write this, we are informed that Dr Tewarie has been sworn in, to replace Mary King.

To be perfectly clear, I am making no allegation of theft against Mayers, Assam or Dr. Tewarie.

Does the ‘fit and proper’ criteria apply to these CLF chiefs?  Should those criteria apply to the holders of high office in our country?  What do you think?

We need new politics like no time before in our country, but that must involve new thinking.  The State must behave in an exemplary fashion if we are to uplift ourselves without civil disturbance and unnecessary confusion.  The State needs to set the standard.

I trust that the Colman Commission will give the proper attention to these episodes.


State Enterprises and Public Procurement

procurement cycleState Enterprises were created to enhance the pace and quality of Public Procurement, yet they are now the scene of the most bedeviling paradoxes in the entire system of public administration.

Some of the key procurement issues which arise in this arena flow directly from the split character of the governance model.

The basic rationale for the existence of State Enterprises is they can be more effective because they are not bound by the strict rules which control the conventional civil service.  The absence of those rules is supposed to allow more latitude in terms of hiring, borrowing and contracting.  State Enterprises can hire professional staff at market rates, enter complex commercial arrangements and borrow on commercial terms, all of which should amount to significant improvements in public services.

The typical State Enterprise is owned by the State, with the shareholding held by the Corporation Sole, an exceptional legal creature which exists within the Ministry of Finance.  Apart from its owner, the State Enterprise will sometimes have a ‘line Ministry’, which would be its sole or main client.  For example, the Ministry of Housing & the Environment is the sole client of the Housing Development Corporation (HDC) and the Ministry of Education is the sole client of the Education Facilities Company Limited (EFCL).

State Enterprises can operate within the existing Companies Act or be established by a separate Act of Parliament, as is the case with the HDC.  That legal framework ought to ensure that a satisfactory standard of corporate governance and accountability is maintained.

The fact is that many of the Directors and Officers of State Enterprises are political appointees, which puts the entire rationale onto a doubtful footing.  Because the salaries and perks are so attractive, not to mention the commercial opportunities, the State Enterprises are prize targets for political appointments and favours.

Some of the main issues which arise when one is considering this sector are –

  • the number of State Enterprises – there needs to be a reduction in the number of State Enterprises.
  • If the politicians can instruct the State Enterprise, via the Permanent Secretary, on specifics, what is the purpose of the Board?
  • Given the preceding point, do the Board members of State Enterprises have the same duties under the Companies Act as in the case of other registered companies?
  • In terms of our proposed Public Procurement legislation, what is the boundary between the fiduciary responsibility of the Directors and the contracting powers of an ‘authorised officer’ – i.e. someone identified as having the power to enter certain contracts?

Proceeding along the Procurement Cycle and using the International Waterfront Centre (IWC) as an example –

  1. Needs Identification – This is the first stage of the Procurement Cycle and it ought to be an objective assessment of needs.  In this case, the IWC was part of a huge, disastrous boom in building new offices in POS – this is all detailed at ‘Capital Concerns – New Office Buildings’ – here.  Before the boom started in 2005, there was 6.5M sq. ft. of offices in Greater POS, at the start of the boom some 3.2M sq. ft., or an additional 50% of the capital’s office supply was approved for construction.  Please remember that Nicholas Tower, which took 5 years to fill, is only 100,000 sq. ft.  Just under 2.8M sq. ft of new offices was actually built in POS in the last 5 years, with 2.3M sq. ft. of that space (82% of it) actually built by the State.  Every State project identified at the outset was executed, but in stark contrast, virtually half the private sector projects stopped before construction began.  The obvious consequence of that over-building by the State has been a collapse in the office rental levels in the capital, which is detailed in the next point.
  2. Reconcile Needs with Funds – This is the stage at which a developer ought to consider critical questions such as the cost of funds, the cost of the project and the returns from it.  That is sometimes called a feasibility test and this is where the IWC dissolves into utter confusion.  When then PM Manning addressed the Senate on 13May 2008, he emphasized that every UDeCOTT project was approved by Cabinet and had been vetted by a Finance Committee on Financial Implications.  That is the most important address if we are to see the depth of the problem with these State Enterprises – see here.  The break-even point on such projects is the rent at which the project can repay its costs of construction – at minimum, those costs would have to include for land, design, construction and finance.  On that ‘bare-bones’ basis, which makes no allowance for maintenance or periods when spaces are vacant, the break-even rent for the IWC is in the $30 per sq. ft. range.  This is the largest single office building ever built in our capital and the best rents ever achieved for space of comparable quality is about half the break-even figure.  There is no way that the IWC project could ever have satisfied any proper feasibility test.  Every new office project started in our capital only increased the supply of offices, which reduced the market rent, which, in turn, increased the gap with the break-even rent.  Under oath at the Uff Enquiry, Calder Hart tried to rationalize the confusion when he confirmed that only one of UDeCOTT’s projects had been subject to a feasibility test and that one was the IWC.  He was even so bold-faced as to estimate a break-even rent in the $20 range, but, when pressed, had to admit that he had left the cost of the land out of the calculations!  That is the extent of the deformed thinking which typified the best schemes of the leading State Enterprise.  Only one of the State’s many office development projects tested for feasibility and in that case, the cost of the land is omitted, yet that same land is included as a part of UDeCOTT’s Assets at $224M in that very financial year.  Political imperatives were allowed to pervert a process which exists to protect the public interest from this kind of empire-building.  But it is in the next part that the full confusion comes to bear.
  3. The rest of the procurement cycle – This is the stage at which tenders were invited for design-build and the winning bidder selected, the project built and the complex opened.  According to UDeCOTT’s statements, the IWC project is its flagship and an outstanding success, having been built on time and within budget.  Even if one accepts those assertions as being true, the IWC project is an example of the tragic consequences of a limited application of proper procurement processes.

As a result we have a completed project which is said to have been built on time and under budget, yet makes no economic sense and has a break-even point at some uncertain point in the future, if ever.

Some collateral damage needs to be noted, to quote one of the former PM’s notable phrases.  Contrary to his statement to the Senate which is cited here, UDeCOTT did not publish its accounts since 2006, which is a breach of both the Companies Act and the Ministry of Finance guidelines.  A total breach of the elementary norms of good corporate governance, which is the protection the private sector structure was supposed to give us taxpayers as a safeguard.  Because of the political element in the operation, we can see clearly that UDeCOTT was carrying-out the instructions of the Cabinet and those Directors have not been punished or censured in any way, apart from their public dismissal.  The consequence of those breaches being condoned at the largest State Enterprises – UDeCOTT and HDC – how does one get the smaller and less-visible State Enterprises to conform to good governance?

If the priest could play, who is we?

This is why we need a complete review of our procurement controls.

An Overview on the CIVIL SOCIETY submission to the Joint Select Committee on PUBLIC PROCUREMENT

This special publication is dedicated to the important issue of Public Procurement.  It is written by the a private sector group, headed by the Joint Consultative Council for the Construction Industry (JCC).  The JCC consists of:

  1. Association of Professional Engineers of Trinidad & Tobago (APETT)
  2. Trinidad & Tobago Institute of Architects (TTIA)
  3.  Board of Architecture of Trinidad & Tobago (BOATT) – observer status
  4. Trinidad & Tobago Society of Planners (TTSP)
  5. Trinidad & Tobago Contractors’ Association (TTCA)
  6. Institute of Surveyors of Trinidad & Tobago (ISTT) comprising Land Surveyors, Quantity Surveyors and Valuation Surveyors.

The private sector group consisted of –

  • Joint Consultative Council for the Construction Industry
  • Trinidad & Tobago Chamber of Industry & Commerce
  • Trinidad & Tobago Manufacturers’ Association
  • Trinidad & Tobago Transparency Institute.

The members of that Private Sector group were part of the Working Party on the Public Procurement White Paper, which was published in August 2005 and laid in Parliament the following month.

The Peoples’ Partnership’s manifesto, at page 18, commits to –


  • Prioritise the passing of procurement legislation and appropriate rules and regulations
  • Establish equitable arrangements for an efficient procurement system ensuring transparency and accountability by all government departments and state enterprises…

In keeping with those campaign promises, the Minister of Finance tabled two legislative proposals in Parliament on 25 June 2010.  Those were a Bill to amend the Central Tenders’ Board Act (originally prepared in 1997, when Ramesh Lawrence Maharaj was Attorney General) and the Public Procurement Bill (originally prepared in 2006, after publication of the White paper).  A Joint Select Committee (JSC) was established on 1 October 2010 to examine those proposals, invite submissions and make recommendations.

The stated target of the PP government is to have the new Public Procurement legislation in place by the first anniversary of their electoral victory – i.e. by 25 May 2011.

Our Private Sector/Civil Society group reconvened last year and made a joint submission to the JSC in December 2010 – it is available here from the JCC‘s website.  Our Private Sector group has had several meetings with the JSC – which was chaired by Education Minister, Dr. Tim Gopeesingh – but the results of those are not featured in this publication.

This special publication is intended to inform readers of the necessity for new Public Procurement legislation in our country and to set out the objectives of our proposals.

The guiding Principles

 These are –

  • Transparency
  • Accountability
  • Value for Money

The broad picture

One of the most serious findings of both the Bernard Enquiry (Piarco Airport Project) and the Uff Report (UDeCOTT and HDC) was the extent to which the largest State projects were being executed outside of any normal system of accountability.  The very purpose of setting up these companies and procurement methods was to bypass the Central Tenders Board.  The natural consequence of that way of proceeding being that if the CTB could be sidelined as a deliberate act of public policy, then other important elements of the regulatory framework are violated as a matter of course.  In the case of both UDeCOTT and NHA/HDC, accounts were not filed for years – since 2006 for the former and 2002 for the latter – in flagrant violation of the rules and laws.

These were the largest State projects – often described as being the flagship or centre-piece of this or that government’s policy – yet they were breaking the main rules and getting away with it.  The ‘getting away with it’ is the cloudy part of the picture, because we never hear of any penalty being sought against those State Enterprise Directors who broke the governance rules.

But that is the very centre of the puzzle and we need to understand it before we can try to unlock it.  So, we are told, time and again, that the only way to really get important and urgent projects done in the correct fashion is to go outside the rules.  The stated reasons are that the old rules are too cumbersome, slow etc… and yet, we end up, time and again, in the same mess.

Some of the features of these fiascos are –

  • Huge cost over-runs on virtually every project.
  • Unfinished projects which virtually no one can make sense of – to date there is no proper rationale for the huge and loss-leading International Waterfront Project, apart from Calder Hart’s bogus explanation to the Uff Enquiry.
  • A gross burden on our Treasury going forward – The continuing delay in completing the accounts for these State Enterprises shows how difficult it is to work out exactly what the State owes and to whom.

What all that tells us is that the existing rule-book seems to be blocking progress and the attempts to bypass it have done little better, if not far worse.

The dismal picture on public procurement is not limited to construction projects and can be found in all the other areas.

A new approach is needed and that is what is at the foundation of these legislative proposals.

What is Public Money?

Central to the new proposals is that any new Public Procurement system must be in full effect whenever Public Money is spent.

Public Money’ is defined at page 5 of our proposals as money which is either due to, or ultimately payable by, the State.

Our proposals are intended to form part of a financial management reform package to include for a National Audit Office and a Financial Management and Accountability Bill.

The intended move is towards a greater transparency and duty of care in terms of how taxpayers’ money is spent.  Our citizens, particularly the unborn ones who will have to pay for some of the wasteful schemes which are littering the landscape, deserve no less.

The new equation confronting us is –

Expenditure of Public Money
minus            Accountability
minus            Transparency
equals         CORRUPTION

We must fix that.

So, what is at stake here?

Our society is beset by large-scale corruption, which sustains wrong-headed decision-making.  The wider social consequences of that toxic culture are now hatching, with a vengeance, in the naked violence and wily crimes which pre-occupy our head-space.

The killing-fields of East POS, the decimation of African urban youths, the URP and CEPEP gangs and the battle for turf are all part of this picture.

As long as our society continues to applaud and reward dishonest, corrupt behaviour, we will continue sliding downhill.

The structure of our economy is that most of the country’s foreign exchange is earned by the State in the form of oil & gas earnings.  The rest of the society relies on the State and its organs to recycle those earnings for the benefit of those of us not directly engaged in the energy sector.

For that reason, the State casts a very long shadow in our country, far more so than in other places.  Virtually every substantial business relies on the State and its organs for a significant part of its earnings.  A healthy connection with the State is essential for good profits.

But that is where the particular problem is, since the conduct of the State and its organs is often found to be lacking in the basic ingredients of fairplay, accountability and transparency.

If the State is the biggest source of funds in the place and the State is not playing straight at all, a serious question arises – How can we hope to uplift our society?

The State has an over-riding duty to behave in an exemplary fashion in its policy and operations.

Due to its tremendous footprint, the State has to behave in that exemplary fashion if we are to move out of this mess.  A positive shift in State conduct will have a salutary effect on the commercial culture and wider society, one that is long overdue.

So, who spends Public Money?

We have a vast, expensive and confusing array of organs, all of which are authorized to spend our money.  For a country of about 1.4M people, we have 26 Ministries.  Just consider that the UK, with a population of about 65 million, has 19 Ministries and the USA, with a population of about 300 million, has 16 Ministries.  For a Caribbean example, Jamaica has twice our population and 16 Ministries.

Quite apart from the number of Ministries, there are two further layers of agencies which also have the power to spend – our country has 73 Government Bodies and 58 State Enterprises.

Given the vast range of operations undertaken by these agencies, any new system would have to be flexible in order to cover all those types of transactions.

The main features of the new system

Three new independent organs will be created –

    1. The Procurement Regulator (PR), with the duty to create overall Guidelines and a common handbook to guide the public procurement process.  The Regulator is appointed by the President in his own discretion and reports only to the Parliament.  Agencies can create their own procurement handbooks, once these conform to the overall Guidelines, as approved by the Procurement Regulator.
    2. The Public Procurement Commission (PPC) will be the investigative arm of the new apparatus to which complaints will be directed.
    3. The National Procurement Advisory Council (NPAC) will be purely advisory and comprises 14 members from a broad range of named private sector/civil society organisations – the JCC, Manufacturers’ Association, Chamber of Commerce, Transparency Institute – as well as the Ministry of Finance and the Tobago House of Assembly.

All expenses are to be drawn on the Consolidated Fund, with the Procurement Regulator and Advisory Council required to report annually to Parliament.

A vital part of our proposals is that Cabinet, Government Ministers or politicians are prohibited from instructing or directing these new agencies in any way.

They are intended to be entirely independent of political influence, which conforms to the proposals in the White Paper.

That freedom from political influence was also specified in both the 1997 and 2006 draft legislation.

A Complaints Procedure

The proposed system will create clear rights to make complaints or report wrongdoing.  Those rights are an important aspect of any modern procurement system and we propose three types of complaints/investigations –

  1. Potential tenderers/suppliers can complain, in the first instance directly to the Agency with which the tendering opportunity resides, then, if that is not dealt with satisfactorily, they can complain to the Public Procurement Commission.  Ultimately, the right to seek the protection of the High Court is preserved, once the established complaints procedure has been followed.
  2. The Whistleblower – We are proposing that whistleblowers be given legislative protection and practical means to bring their complaints direct to the Public Procurement Commission.
  3. The Public Procurement Commission can also, on its own initiative, start an investigation into an area of concern.

There are strict time-limits for acknowledgement and resolution of complaints.

Our proposal is for the Public Procurement Commission to have powers to punish both frivolous complainants as well as parties found to be in breach of the new system.  Those can range from fines to embargoes, during which offending parties can be banned from tendering opportunities.  Offending public officers can be subject to both fines and/or imprisonment.

The concern over the cost of the new apparatus

One of the most frequently expressed criticisms is that as critics of the rationale and operations of significant State Enterprises, we seem to be proposing a new series of state-funded agencies.  Some people have pointed out that these offices are unlikely to be cheap, particularly the PPC, which is to be constituted as a standing Commission of Enquiry under those existing legal provisions.

Yes, there will be new agencies and yes, they will cost money.

Given the recent revelations as to the cost of the Uff Enquiry – already estimated to exceed $50M – there are genuine concerns that we could soon have three new state-funded agencies which could absorb maybe $100M a year.

The challenge here is to move beyond the obvious and factual observations so that we can consider the decisive factors.  Our proposals have the promotion of Value for Money as one of its founding principles and that is good for the public.  So, how can we measure the value for money of these proposals, at this stage?

The scale of public procurement spending

In the case of expenditures direct out of the Ministries, the 2011 Budget has an anticipated capital expenditure for the Ministries of $7.050Bn, as per para 8 at page 4 of the Public Sector Investment Program (PSIP).

Also in that Budget there is an anticipated capital expenditure for the State Enterprises of $6.725Bn, as per the Foreword at page 4 of the Supplementary Public Sector Investment Program (Supplementary PSIP).  The combined figure of $13.775Bn is only for projects, so it excludes the salaries, rents and normal running expenses.  Please note that other elements in public expenditure, beyond just capital projects, will be covered by these proposals.  The guiding principle being that those activities involve the expenditure of Public Money.

There are very limited exemptions from the proposed provisions and those can be viewed at the JCC website.

I am also sure that there are other ways in which Public Money is being expended which are not shown in the national Budget, so the amounts are surely larger than that estimate.

The potential for savings

The scale of the public transactions, involving Public Money, which will come under the control of this new system is huge, at least $14Bn in size.  Even if the new system only saves 5% of that sum every year, we can easily justify an annual running expense in the $100M range, as mentioned earlier. 5% of $14Bn is $700M.

In the next 30 days, we expect our Legislators to make the crucial decisions on this series of proposals and we all need to be vigilant to preserve the key points.

Those key points would include –

  • Heads of Independent organs to be appointed by the President
  • Separation of the Regulator from the Investigator
  • Regulations laid in Parliament for negative resolution, with no Ministerial or Cabinet approval required.
  • Independent Organs funded from the Consolidated Fund, with no requirement to seek a Ministerial approval or Budget vote.
  • Accountability is ensured by the requirement to report annually to Parliament.
  • Private Sector/Civil Society oversight via the National Procurement Advisory Council.
  • Proper provisions for complaints and Whistle-Blowers.

The ultimate question, given what we know now, is – Can we afford not to take this step?

At this unique and challenging moment in what has been a long, twisted journey, the prospects of more corruption and waste are grim.

For these proposals to succeed, the legislators will have to vote in favour of a new law which reduces their power and discretion.  To some, that might be an impossible contradiction and an unreasonable thing to expect, but there will be considerable political credit to the account of those who make this change happen.  Our citizens deserve no less.

CL Financial Bailout – Retirement Planning

When you consider increasing lifespans, inflation and the greater likelihood of major medical expenses as one ages, it is clear that proper retirement planning should be a major factor for most people.

Some extracts from relevant advertisements to start off –

Company A

“Maintain your lifestyle – even after retirement…”

The time passed so fast and now you cannot imagine life without the luxuries you have come to know, the luxuries you deserve. The Company A annuities and pension plans allow you to live the lifestyle that you have become accustomed to – even after you’ve retired – without sacrifices that will affect your current quality of life.

Company B


It can be daunting to consider how much money it takes to retire in comfort. And government pensions do not provide the guarantees that they once did. But it’s never too late – or too early – to get started.

Company C

“At the rate things change today, long-term financial planning has become a concern for all of us.”

The responsibility for securing a comfortable retirement continues to shift from employers to the individual. Whether your goal is saving for retirement or you’ve already reached that goal and you want to be sure that you will never outlive your savings, an annuity may be just what you’re looking for. In Trinidad & Tobago as in the wider world, life expectancy has lengthened considerably with people living well past their retirement age. This introduces a new risk – outliving your savings.

Company C’s preferred plan features “…guaranteed income for the rest of your life…

Yes, Retirement Planning is an essential part of any good investment planning.

Central to the growth and long-term success of the CL Financial group was its ability to mobilise the retirement savings of the Caribbean people in pursuance of its wider commercial objectives.  I have been writing on how it all went wrong and who is to blame.

In preparing my submissions for the Colman Commission it occurred to me that the financial provisions made for the 3 CL Financial chiefs who departed in the last 12 months before the group collapsed is central to understanding the entire fiasco.  It is rich in irony.

Fiduciary Duty of Directors and Officers

The burning questions are –

  1. When did the Directors and Officers of CL Financial (CLF) know that the group was heading to collapse?
  2. When did the Directors and Officers of the failed subsidiaries know?
  3. What did they know and when did they know it?
  4. How much warning did their management controls give them?

The questions are pertinent and the time-line is instructive –

Timeline to CLICO Bailout

  • 31 March 2008 – Andre Monteil retires as CLF’s Group Finance Director.
  • 6 August 2008 – Anthony Fifi retires as Managing Director of the Home Construction Limited (HCL) group, which is wholly-owned by CLF.  Fifi remained on the board of the parent company, CL Financial.
  • Mid-October 2008 – CLF purchases Jamaica Money Market Brokers’ 45% shareholding in CMMB.  Please note that CLF owns 40% of JMMB.
  • 7 November 2008 – Michael Carballo, CLF’s Group Finance Director gives an interview to the Business Guardian that the group had assets of $100Bn and could weather any storm.
  • 18th November 2008 – CLF 2007 Annual Report is published – its Consolidated Balance Sheet disclosed a Total Asset Value of $100.666Bn.
  • 8 December 2008 – Robert Mayers proceeds on pre-retirement leave from his position as Managing Director of CMMB, pending his scheduled retirement, on 28th February 2009, as Managing Director.
  • 13 January 2009 – Lawrence Duprey, CLF’s Executive Chairman, writes, detailing an asset value of $23.9Bn, to the Governor of the Central Bank to seek urgent financial assistance.  See ‘Finding the Assets‘ published on 23 August 2009 for the text of that letter.
  • 16 January 2009 – CLF pays a dividend of $3.00 per share.
  • 23 January 2009 – CLF has its final and fateful Annual General Meeting at Trinidad Hilton.
  • 30 January 2009 – The bailout is announced at a Press Conference at the Central Bank.

What benefits did the departing Directors and Officers enjoy?  Three of the most important and senior CLF chiefs departed in the 12 months prior to the collapse.  To be fair, Fifi was retiring from HCL, which has not been described as a failed company, despite its challenges.  To understand the picture properly it will be necessary for the Colman Commission to examine the terms of the retirement of these CL Financial chiefs.

Those departures must be examined from the documents if they were to be approached from the compensation aspect.  What I mean is that these chiefs would have been paid upon departure and that would likely have been documented.

The suggested line of enquiry is –

  • How much did Messrs. Monteil/Fifi/Mayers receive upon retirement?  Does anyone believe that these chiefs left without compensation after years of service, at the highest possible level?  The amounts actually received and the bases on which those sums were calculated promises to be very interesting.
  • How were those retirement payments calculated? – Were the amounts arrived at by a ‘set’ formula?  Was that formula specified in their employment contracts?
  • Were those sums reduced to reflect the impending crash? – That alternative is the crux of the issue, coming to the point of what did they know and when.   If the sums were reduced to reflect the poor performance of those failed companies, we need to question the misleading accounts given as to the group’s health right up to the very brink of the collapse.
  • Shifts in asset values – I am also wondering if the sudden drop in asset values from $100Bn + to just under $24Bn, in the space of less than 2 months is part of this aspect of the story.  Only when we have those employment contracts published will we be able to consider whether there was any connection between the chiefs’ compensation formula and the asset values or, to put it another way, their departures and the sudden drop in asset values.
  • Performance-related? – Ultimately, we have to wonder as to the implications of the other alternative.  If we learn that these CL Financial chiefs were able to depart the failing group with no reduction in their retirement payments, that would be very serious indeed.  If that were the case, we would be contemplating employment contracts which divorced pay from performance.  Given contemporary norms that link pay and performance, that would be an appalling vista.  We would be seeing that our region’s largest investment group was saddled with a leadership which had constructed for itself the ultimate high-return, no-risk employment and retirement benefits, all at the expense of everyone else.  The ultimate irony.

I am fully expecting that there will be further legal arguments to silence or shroud any efforts by the Colman Commission to delve into this aspect of things.  Colman must be robust in his probe – he must follow the money.

Afra Raymond’s submission to be made a party to the Colman Commission

16th March 2011

Afra Raymond’s submission seeking to be made a party to the Commission of Enquiry into the failure of

CL Financial Limited
Colonial Life Insurance Company (Trinidad) Limited
Clico Investment Bank Limited
Caribbean Money Market Brokers Limited and
The Hindu Credit Union Credit Union Co-operative Society Limited

My name is Afra Martin Raymond and I am a Chartered Surveyor, being a Fellow of the Royal Institution of Chartered Surveyors.  I am Managing Director of Raymond & Pierre Limited – Chartered Valuation Surveyors, Real Estate Agents and Property Consultants.  I am also the President of the Joint Consultative Council for the Construction Industry (JCC), an umbrella organisation which represents the interests of Engineers, Surveyors, Architects, Town Planners and Contractors in this Republic.

This submission is being made in my personal capacity and does not represent the position of either Raymond & Pierre Limited or the JCC.

My work on this vital issue has all been based on the public record and can be seen at

I am willing to give oral evidence before the Commission.

I have been conducting a campaign in the public interest on this important matter.  My work is unfunded and I have no assistance.  Indeed, I have no legal adviser at this Enquiry.

Having followed the issue so closely and attended the opening session on Friday 11th March, I am of the view that the parties thus far identified in this Enquiry are all seeking to advance their own interest.

I am here seeking to be made a party to this Enquiry, in seeking the interest of the silent majority, the taxpaying public, who have had to pay for this huge financial fiasco.

I am making this submission under rule 2. of the Commission’s Rules of Procedure, as a person whose “…participation in the Enquiry may be helpful to the Commission in fulfilling its mandate…

I await your reply.

Afra M. Raymond B.Sc. FRICS

CL Financial bailout – Sunlight Disinfectant

If you think this title is for the latest brand of household cleaner, you would be wrong.  I drew that title from the famous statement by deceased US Supreme Court Justice Louis Brandeis, in reference to corruption and fraudulent dealings: ‘sunlight is said to be the best of disinfectants.

Of course, this is all about the impending Colman Commission of Enquiry into the failure of CL Financial and other companies (including CMMB) and the Hindu Credit Union.

We are attempting to understand our situation in this financial fiasco – how was the entire collapse caused?  Who is responsible?  What can we do to avoid a repetition?

Our House needs a serious cleaning and we need a new commitment to serious retrospection if we are to succeed in understanding this scandalous situation.

To set the stage, there are four principalities being represented in this Enquiry –

  1. CL Financial Chiefs – The people who had Direction and Control of the entire failed group – that would include the shareholders.
  2. The Regulators – The Supervisor of Insurance, Securities and Exchange Commission (SEC) and the Central Bank.
  3. The Auditors – PriceWaterhouseCoopers and Ernst & Young – the former being auditors for the CL Financial group and the latter acting for the Central Bank.
  4. The aggrieved Policy-Holders and Depositors – Several groups have been formed to seek the return of all the monies owed to these investors.

My first point about this Colman Commission is how welcome it is, as a tangible sign of a change in how our country is being run.  No, I did not vote for either group in the last election, but it seems to me that neither of the last two regimes (Manning or Panday) would have initiated a public enquiry into this financial fiasco.

As much as I approve the decision to have this public enquiry, the purpose of this article is to warn against some of the forces now being assembled to erode the enquiry’s effectiveness.  Even though, in this respect, political times have changed, we need to remain vigilant if the Colman Commission is to be effective.

To be sure, the four principalities I listed comprise very powerful players for whom this enquiry is a literal nightmare, since they will be obliged to explain some of their biggest decisions and actions, which they would never have had to explain to anyone outside of their own circle.

If the Enquiry takes place as intended, we are going to be afforded an unprecedented insight into the workings, dealings, arrangements and situations in our leadership class – all of it at a depth and range never before recorded.  Matters that had been only the subject of picong, ole talk and so-called urban legends will all now become part of the official record.  Yes, our Republic will be coming of age.

Our country is a Republic, which to me means that no class of citizen ought to enjoy rights which are superior.  But there has been a pattern of behaviour in this fiasco which has been very disturbing because it violates those Republican expectations.  Of course, I am referring to the fact that a three-tier system seems to have been in operation during the entire meltdown.

  1. The lowest tier comprises those many persons who are now fretting over their investments with this failed group.  Those people have to decide between continued protest action, legal action or just plain pleading to get some relief.  A significant number of them would have placed undue reliance on the CLF products and would be suffering extra stress because they put too many, or all, of their eggs in one basket.
  2. The middle tier is the lucky and/or well-connected people who were able to get back their money after the group collapsed.  When the Prime Minister announced this Enquiry on 1st October 2010, she promised to release details of who received the monies disbursed in that period – i.e. after 30th January 2009.  That list of names and who received what sums would be an absolutely explosive one.
  3. Of course, the top tier and the absolute insiders would be those who had early warning of the oncoming collapse and took steps to preserve their wealth.  That group would have to include the top CL Financial chiefs who left in the 12 months before the collapse – Monteil, Fifi and Mayers.  Major depositors and investors would also have been part of this privileged group.  The Governor of the Central Bank and the last Minister of Finance also withdrew monies just before the collapse.

Maybe I am entirely wrong and there was complete surprise when the CL Financial group collapsed.  But if that is the case, one is really contemplating a slack system of management systems and an entire swath of our ruling elite who are not ‘fit and proper’.  The question of who knew what and when, will be a main point of dispute, because either way you slice it, the picture is unappealing.

You can be sure that the people in the top layer will do anything in their power to protect themselves from the stern scrutiny of those in the lowest group, not to mention the public, who are paying for all this.

I wrote a previous column in this series, entitled ‘Taking in front‘ and on this occasion, in light of what is at stake, I, too, am taking in front.  Having suffered a defeat in that the Colman Commission has now been established, the members of the Code of Silence can be expected to try halting, delaying or just diluting the Commission.

Harry Harnarine, former HCU president. Photo ©
Harry Harnarine, former HCU president. Photo ©

We have already had former Hindu Credit Union (HCU) chief, Harry Harnarine, defeated in the High Court in an attempt to stop the Colman Commission.  I was not surprised to read reports that Harnarine is planning to appeal that decision.  We can expect other strong challenges as this historic process unfolds.

If the members of the Code of Silence are unable to derail the Commission itself, we should not be surprised if they try to cloak the proceedings in some kind of blanket to prevent too much information escaping.

Readers, please note that the process of asking the Court to prevent publication of a particular piece of evidence is a very swift one, with the ruling expected in the very same sitting.  That is because if those proceedings are too drawn-out, it can be actually self-defeating, since the matter which they are seeking to have concealed can be published and discussed while a decision is awaited.

That is the reason we need to beat this drum now.  We cannot wait for the filing of injunctions and then seek to publish.  By then, it would be too late.

The new algebra is simple and inescapable –

Expenditure of Public Money – Transparency = CORRUPTION

Whatever the negatives of the American Imperium, there are still aspects of that society which are worthy of emulation.  The example which comes to mind is the recently-published report of the Financial Crisis Inquiry Commission.

The preface of that Report contains an instructive paragraph, at page xii –

“…This report is not the sole repository of what the panel found. A website — — will host a wealth of information beyond what could be presented here. It will contain a stockpile of materials — including documents and emails, video of the Commission’s public hearings, testimony, and supporting research — that can be studied for years to come. Much of what is footnoted in this report can be found on the website. In addition, more materials that cannot be released yet for various reasons will eventually be made public through the National Archives and Records Administration…”

The US legislature is determined that the inner lessons and testimony on this important crisis are available to all interested parties for the years ahead.  That represents a solid commitment to a learning society, which will at least attempt to draw lessons from the bitterest of experiences.  In my opinion, that commitment is worthy of emulation.

Has our society reached the stage of maturation to commit to an entirely transparent process of retrospection?  That is the question which will be tested in the weeks and months to follow.

The entire proceedings of the Colman Commission must be held in public.  The proceedings must be on TV and available on the internet.  The Colman Commission needs a strong internet presence, with its own website.

Sunlight Disinfectant cleans brighter, you see?

Third submission to the Commission of Enquiry into the failure of CL Financial Limited, et al

14th February 2011

Afra Raymond’s third submission to the Commission of Enquiry into the failure of CL Financial Limited, Colonial Life Insurance Company (Trinidad) Limited, Clico Investment Bank Limited, Caribbean Money Market Brokers Limited, and The Hindu Credit Union Credit Union Co-operative Society Limited

My name is Afra Martin Raymond and I am a Chartered Surveyor, being a Fellow of the Royal Institution of Chartered Surveyors.  I am Managing Director of Raymond & Pierre Limited – Chartered Valuation Surveyors, Real Estate Agents and Property Consultants.  I am also the President of the Joint Consultative Council for the Construction Industry (JCC), an umbrella organisation which represents the interests of Engineers, Surveyors, Architects, Town Planners and Contractors in this Republic.

This submission is being made in my personal capacity and does not represent the position of either Raymond & Pierre Limited or the JCC.

My work on this vital issue has all been based on the public record and can be seen at

I am willing to give oral evidence before the Commission.

My area for focus in this submission is that of Political Party Financing.
In the case of Hindu Credit Union (HCU) these are good references – or

Questioned about allegations that he had helped finance the PNM’s campaign leading up to the last general election, Harnarine replied: “We have assisted all major political parties in consideration of the HCU’s membership, which has a large base.”
Harnarine said he went out of his way to help the UNC, COP and even organised a meeting between Manning and the Indian businessmen.

It is my view that these persons must be questioned by the Enquiry if we are to properly comprehend the extent of the financiers’ influence –

  • former Prime Minister Basdeo Panday
  • former Prime Minister Patrick Manning
  • former PNM Chairman and Minister in the Ministry of Finance, Conrad Enill.  Enill was also the Campaign Manager during the 2007 and 10 elections, so he will possess a clear knowledge of the campaign finance trail.
  • former PNM Treasurer and Minister in the Ministry of Finance, Mariano Browne.

I do believe all the items in this submission to be true and correct.


Afra M. Raymond B.Sc. FRICS


2010 Review

This is the time to reflect on the changes we have witnessed in the last year and the several challenges arising from those. This column will attempt to combine the ‘Property Matters’ concerns with the ongoing examination of the CL Financial fiasco.

The Uff Report

Professor John Uff. Photo courtesy Trinidad Guardian
Professor John Uff

For me, the largest single event this year was the completion of the work of the Uff Commission of Enquiry into the Public Sector Construction Industry, with particular reference to UDeCOTT and the HDC.  The controversial Commission of Enquiry was at the centre of widespread public concerns as to the level of corruption in the State construction sector.  To his credit, the Enquiry Chairman, Professor John Uff QC, PhD, insisted that the proceedings be televised and the results of each day’s hearings were also posted to its website.

The Uff Report made history in this country, since it is the first time that a government has published the Report of a Commission of Enquiry.  That is no small accomplishment and despite the fact that these massive wrongdoings took place under the last PNM administration, the act of publication has to be welcomed.

But there are still challenges, because, for whatever reason, the Uff Commission’s website, has now been shut down, which is a real pity, since it contains the important testimony of many witnesses on the issues in this area.  That website needs to be re-opened and I am calling on the Attorney General, under whose Ministry the Enquiry was operated, to ensure that takes place.  It is no large expense to have these important documents made available to the public.  In light of their educative content, I would suggest that the actual documents be housed at UWI, as they have a direct bearing on the deliberations of the Engineering and Social Sciences Faculties.

Of course we had the sight of a fleeing Calder Hart and a defeated Patrick Manning, his PNM cohorts drinking  bitter tea for his fever, all attributable in my view to the groundbreaking Uff Commission.

Looking forward, we have the fact that the 91 recommendations of the Uff Report were adopted by the Peoples Partnership in the run-up to the 24th May General Election.  We have now been promised that those are to be implemented by Minister of Justice, Herbert Volney.  We await Volney’s early report as to the implementation.

In that connection and taking from the PNM example, I am, once again, calling for the publication of the report of the Commission of Enquiry into the Piarco Airport project.  The Bernard Report must be published now.

CL Financial bailout
A Bailout Cheque payed by taxpayers to CLICO was stoppedThe other huge event of the year was the budget speech on 8th September 2010, in which Finance Minister, Winston Dookeran, disclosed publicly that he was revising the terms of the CL Financial bailout.  That bailout was a hugely suspect act, the largest financial commitment ever undertaken in this country, without proper due diligence or even any proper ventilation in the Parliament.  Our Republic had never been so financially violated and in broad daylight.  It was encouraging to see the Finance Minister take the point to its logical conclusion and of course that brought about the large-scale organisation of various aggrieved groups to put their point.

That series of organisations, committed to the doubtful mantra of the guaranteed investment – whatever that is – took on a series of bizarre and increasingly combative stances.  The signature theme being that ‘We are not responsible for our decision’.  We were being treated to a spectacle worthy of any of the ‘Ole Mas’ presentations of yore, in which successful investors – on average at least $700,000 was invested by each of these ‘protestors’ – having benefited from the operation of the capitalist system were seeking 100% redemption from the State.

The entry of the Prime Minister into this debate on 1st October was in my view a turning-point in our development.  For the first time in my memory a politician, who had the majority, to achieve the significant changes which had been tabled, stepped back from that act of sheer power to attempt an act of persuasion.  It was a signal lesson in the reality of possibility in our lifetime.  Even if one is amongst the Clico Policyholders’ Group (CPG) and feeling aggrieved, the calm audacity of the Prime Minister’s decision must be respected.

Most importantly, we now have a one-man Commission of Enquiry established with the eminent UK jurist, Sir John Colman QC sworn in.  That Commission is to examine the causes of the CL Financial and Hindu Credit Union collapses.  The Colman Commission is expected to start sittings in January 2011 and the Attorney General has directed that its report be delivered in 6 months’ time.

The Manning Factor

Patrick Manning
Patrick Manning

The most comical event of the year is the bold-faced attempt by the former Prime Minister, Patrick Manning, to shift attention away from the PP’s revelations as to the illegal spying activities of various State agencies.  Manning, the original PM, attempted to show-up the Prime Minister, Kamla Persad-Bissessar, with a series of allegations on the status of a house being built with private funds on private lands for a private purpose.  The Prime Minister effectively dismissed Manning’s concocted concerns with the telling observation that all the refutations she quoted were available from the public record, if the accuser had ever been interested in examining that open source.

Having stirred to life and found his voice, it is important to note the several matters on which Manning maintains a stony silence –

  • Calder Hart – Where is Calder Hart?  The nation was told solemnly by Manning that he knewCalder Hart’s whereabouts and further, that Hart was not a fugitive.  We are now told that Calder Hart cannot be located and Manning needs to speak on this.  Is it true that Hart gave Manning his location?  Has Hart changed locations?  Or is it that Manning has not shared that information with the correct authorities?
  • Election rationale – What, if any, was his rationale for calling the general election at mid-term?  I am not sure that anyone knows the answer to this one, but it is surely of continuing interest.
  • Guanapo Church – What is the truth behind the ill-fated Guanapo Church?  It is not my habit to wax scriptural, but that was a ‘house built on sand’ if ever we saw one. The reason for the State Grant of this land and the rapid grant of full planning permission – a record of only one month between the date of application and the grant – remains unexplained.  As for the architect’s plans for this huge church in the grounds of the PM’s residence, the mind boggles.  Where is Pastor Pena? We need to insist that Manning tells us more about this miraculous church.
  • Cleaver Heights – Another area is the wild allegation Manning made, at the close of the 2008 budget debate, as to a ‘missing’ $10M at an HDC project at Cleaver Heights in Arima.  Or was it $20M?  After inserting that case into the ongoing Uff Commission and having the embarrassment of having the allegation evaporate under cross-examination, Manning needs to tell us just how he came to learn of this allegedly missing money.
  • CL Financial bailout – Manning’s conduct in this matter has been the crowning-point of his administration, in my view.  The then Minister of Finance, Karen Nunez-Teshiera, was accused of using ‘inside information’ to make early withdrawals of her own funds from the CL Financial Group and to compound the mischief, being a shareholder of the CL Financial group in the sum of over $10M.  Manning’s steadfast defense of his beleaguered Minister of Finance was a display of loyalty which is seldom seen in higher political circles.  We need to know if the Minister told her colleagues that she was indeed a shareholder of the troubled group.  Did she or did she not recuse herself from the Cabinet’s deliberations?  My reading of the events, as told by the very Minister, is that she did not.

For Manning to fail to come clean on these questions, he would run the risk of damaging his hard-won reputation for upstanding values and leadership.

White Collar Crime
white-collar-cartoonThe obvious connection between these various events is the fact that White Collar Crime – which is sometimes, mistakenly, called victim-less crime – is  afflicting our country in a big way.

The year ahead holds significant challenges as we try to go forward in this morass, to escape the conspiracy which I have titled The Code of Silence.

The only way political rulers can carry on as they do, wasting the country’s money for the benefit of their friends and family, is because they are sure of each other’s silence.  The people in the private sector who were responsible for the financial collapse are no different.  The financial collapse is not, as some have falsely claimed, in any way connected with the Wall Street crisis.  That is only a handy coincidence.  If our regulators and politicians were doing their jobs we would not be in this position.

Please remember that the alarm bells on CL Financial were sounded by Trevor Sudama, since the 1999 budget debate.  More to the point, many of the people who still inhabit the Parliament were there at the time.  Again, I give this administration credit for appointing a Commission of Enquiry into this sordid affair.

Also, please remember that both UDeCOTT and the HDC failed to file accounts for years, in breach of the law and State guidelines.  That failure was not remarked upon by members of the then Opposition.  More to the point, we have now had a change in administration, with no word on the UDeCOTT accounts.  I do acknowledge that certain HDC accounts have now been published and that is to be the subject of upcoming commentary.

The Code of Silence must be broken if we are to progress.