Tag: Trinidad

The Treasury Scandal

I wonder if is Bobol?
What dey doing with Taxpayer’s Money at all!?
I wonder if is Bobol?
What dey doing with Taxpayer’s Money at all!?
—Opening stanza of ‘The Treasury Scandal’ by Atilla the Hun (1937)

I took this title from the late 1930’s kaiso by the great Atilla the Hun (Raymond Quevado) on the scandal of some $200,000 missing from T&T’s Treasury.  His outrage was rooted in the fact that the story came-out in bits and pieces and of course, none of the ‘Big-Boys’ was ever jailed, or even charged for that theft.  That was a massive amount of money in the 1930s – at that time a good Woodbrook house cost about $6,000 – so that could give you an idea. Atilla was lamenting the lack of accountability and transparency in how Public Money was being managed.  The ‘Treasury Scandal’ was a true episode from the bad-old-colonial-days of the 1930s, but of course we have progressed a great deal since then, having achieved Independence, Republican status and universal education.

dookeran-portrait
Winston Dookeran, MP

The problem is that despite the obvious movement forward, we are witness to yet another ‘Treasury Scandal’. I am referring to the CL Financial bailout, announced in January 2009 and still ongoing at an anticipated cost of $24Bn – according to paras 21 and 22 of the 3 April 2012 affidavit of then Finance Minister, Winston Dookeran.

It is vital to look back before we go forward.  In 2008 and 2009, the Indo-Trinbago Equality Council (ITEC) campaigned strongly on the issue of the Secret Scholarship Scandal’. The suspicion was that there was a secret scholarship fund operated by the State without any transparency and ITEC used its Parliamentary representatives and the Freedom of Information Act to force the Patrick Manning-led PNM administration to publish the details they had been trying to conceal.

The published details included the names of those who benefited from the funds as well as the amounts, dates of payments and details of the courses of study to be pursued.  Some of the more controversial issues to emerge from the publication of those scholarship details were –
devant-anand

  • From the names given, it seemed that less than 10% of the recipients were citizens of East Indian descent;
  • The PNM administration was never able to demonstrate how those scholarships had been advertised, or for that matter, any objective process used to choose from the applicants;
  • Unlike other Scholarship arrangements, there was no requirement for these scholarship winners to do any kind of national service;
  • A number of people who were reported to have received money, went public to say they had never even applied for, far less received, scholarships. The question arising was ‘Where did that money really go?’;

A total of $46M of Public Money was paid during the 5 year period under examination.  The President of ITEC at that time was Devant Maharaj and its leading attorney was Anand Ramlogan, both of whom now serve in the Cabinet.

I fully supported ITEC in that use of the Freedom of Information Act to force publication of important information on the use of Public Money, which is the property of every citizen.

In my view the failure and or refusal to account for the colossal and unprecedented expense of the CL Financial bailout is indicative of a ‘Quiet Coup‘ against our Republic.  I am deliberately borrowing Simon Johnson’s potent phrase, used to describe the coup of Financial Capital against the USA published in a fascinating and essential article from The Atlantic.  The fact that two successive administrations have remained bound to these arrangements and the low priority given to transparency and accountability in this matter all speak to the potency of the plotters.

“Emerging-market governments and their private-sector allies commonly form a tight-knit—and, most of the time, genteel—oligarchy, running the country rather like a profit-seeking company in which they are the controlling shareholders… As masters of their mini-universe, these people make some investments that clearly benefit the broader economy, but they also start making bigger and riskier bets. They reckon—correctly, in most cases—that their political connections will allow them to push onto the government any substantial problems that arise.”
—Simon Johnson. “The Quiet Coup” in The Atlantic. 2009.

The CL Financial group was able to use its considerable political clout and financial footprint to achieve a binding agreement that our Treasury would be used to pay its debts.  Absolutely unprecedented and all negotiated in less than three weeks, we are told.  That is the official version of this astonishing story.

Given the likely existence of a ‘Code of Silence’ in this tangled affair, I have been making use of the Freedom of Information Act in my campaign for transparency and accountability in the CL Financial bailout.

If we are ever to start to untangle this web of deceit and betrayal, we must get details of who got their money out, how much, on what terms and when.  On 8 May 2012, I applied to the Ministry of Finance via the FoIA – from which the Central Bank is exempt – to request this information –

SIDEBAR: “Cabinet approves Clico plan” courtesy Newsday

newsday-clip

Read the Newsday’s laconic report on this matter here.

  • Accounts – The audited accounts for the CLF group or whatever figures the Minister is relying on;
  • The briefing given to the Independent Senators in September 2011 before debate of the two supplementary bailout Bills;
  • Details of the creditors, especially EFPA holders, to see who got what money;
  • Whether the Minister required CLF’s Directors to comply with the Integrity in Public Life Act.

The Ministry replied on 14 August to say that the information requested is likely to be exempt and I am now challenging them in Court.

If it is right and proper to use the FoIA to force publication of the details of a Secret Scholarship Scheme of some $46M over 5 years, why is it acceptable to conceal the details of some $24Bn in Public Money? That is over 521 times more Public Money being spent in secret…yes, $24Bn is over 521 times more money than $46M.

For all we know, some of the people on the Ministry’s list of persons who have been paid could be the same ones protesting via the various Policyholders’ Groups.

To quote Cabinet Minister Devant Maharaj in October 2011, as part of the ongoing campaign on the Secret Scholarship Scandal:

Maharaj said yesterday that he rejected Williams’ claim thatthen prime minister Patrick Manning’s handwritten note on one of the applications for the matter to be handled quietly was ministry protocol, as was claimed by Yuille-Williams. “It seems as if this was the overriding motto for the disbursement of these funds,” Maharaj added. “This was a blatant attempt to hide the facts from the glare of public scrutiny.”

Russell Martineau, SC
Russell Martineau, SC

At this time the Ministry of Finance is publicising the end of the CL Financial bailout so that all the Public Money spent on this can be repaid and there are various official reports of how this is to be achieved.  At the very same moment, the said Finance Ministry has engaged a high-powered and expensive legal team, headed by Russell Martineau SC, to oppose my attempts to have the basic information published.

That is today’s Treasury Scandal.

Ministry of Finance Dance

minFaffidavitThis is the 12th July affidavit filed by the Ministry of Finance in reply to my claim under the Freedom of Information Act (FoIA) filed against them in this matter.

This is a most interesting document for several reasons –

  • Attorneys – The legal team is led by Russell Martineau SC, former AG and former President of the Law Association. Martineau was lead attorney for CL Financial’s auditors, PricewaterhouseCoopers, during the recently-concluded Colman Commission and he strongly opposed my submissions as you can see in this revealing clip. His Junior in this case is Gerald Ramdeen, who was Junior Counsel to the said Colman Commission.
  • My recent supplemental application – On 18th March, I made a further application under the FoIA for the details of the creditors of CL Financial, particularly the EFPA holders, in relation to the amounts repaid and claimed. It is interesting that the Ministry of Finance chose to treat with this in their affidavit.
  • The objection – Despite several readings of this 5-page affidavit, I am not clearly able to see just what is the Ministry’s real reason for objecting to the release of the requested info.
  • State-controlled Enterprises – The recent Appeal Court ruling in #30 of 2008 on the meaning of State-controlled Enterprises is a real threat to the public interest in relation to the governance arrangements in situations like this. The final sentence of para #14 is “In any event, CL Financial Ltd. is a private company and is not a public authority under the provisions of the Freedom of Information Act.” Well I tell you.
  • The fundamental position – At the Court hearing on 23rd May, the lead attorney for Finance, Russell Martineau SC, was emphatic in stating to Justice Ronnie Boodoosingh that there was no intention of compromising or considering the release of even some of the requested information. It is going to be a fight for every item of information.
  • Public Secret – We are now being told that the bailout process for CL Financial is nearing its end with a procedure having been agreed for the recovery of the Public Money which has been spent. Serious and justified concerns are being voiced at this time since there is no way to be sure how much money has been spent or the terms of the final settlement. I will be writing more on this shortly. We are being told that the agreed terms of the settlement are solid in protecting the public interest, yet this very Ministry, Finance, is using a highly-paid legal team to oppose the publication of fundamental information.

The burning question remains…

What is the big secret?

Charting our losses: ‘A picture is worth a thousand words’

The last four articles in this series have focused on what I call ‘two sides of the same coin’ – the coin being the large-scale and improper use of Public Money.

I examined the THA/BOLT office project called MILSHIRV being undertaken with the Rahael group and the Calcutta Settlement land scheme in which the HDC acquired developed lands at several times the proper price the State could have paid.

Throughout this type of critique one has to strive for effective balance and fundamental integrity.  The extent of the waste and/or theft is never easy to pinpoint when one is working from outside and relying solely on published documents, but my best efforts to establish those facts is what is presented.  Of course it is impossible to say for sure that any amount of money was stolen in a particular project, hence the phrase ‘wasted or stolen’.

Objectively, it does not matter whether the money is wasted or stolen, if it is ultimately unavailable for the benefit of the Public.  Once spent, that Public Money is gone forever, which is why Value for Money is of such importance in any proper Public Procurement system.

Subjectively, however, the errors of inexperience or poor process must be differentiated from an active conspiracy to defraud.  Although the objective measure of loss might be identical in terms of the dollar-amount, there are different long-term consequences.  Innocent errors and miscalculations can be rectified over time by ongoing review processes.  Deliberate conspiracies to defraud require concerted and well-grounded attacks in order to be eliminated.  What is worse about the deliberate conspiracies is that they affect the very atmosphere in which public business is conducted.

We end up with a situation where it pays to pay a bribe and the decision not to pay is to suffer delay.

That is why we are where we are today.  Simple so.

One of the important lessons emerging from the Wall St disaster is that the variety of financial regulators with their varying rules and experiences allowed financial players to engage in ‘Regulatory Arbitrage’. That was  the scenario in which financial players shopped for pliable or suitable regulators within which to channel their products, resulting in the unprecedented financial disaster we are all living through.

Here in T&T we have seen a similar pattern in our financial markets, but the point being made here is that it has also emerged in the Public Procurement arena, with TIDCO paving roads; the rising profile of State-owned entities which were deliberately excluded from the formal procurement controls; those same companies breaking their own rules and so on. That is the emergence of a toxic kind of ‘Procurement Arbitrage’, which is the reason why we must have over-arching regulations to control all transactions in Public Money.

So, there are two types of losses being charted here –

  1. Firstly, inexperienced officials or poor processes can approve wasteful uses of Public Money through sheer ignorance.
  2. Secondly, there is deliberate conspiracy to defraud the Treasury of our precious Public Money.

Only a Court can establish whether the lost Public Money was wasted or stolen, so I have ventured no opinion as to which is which. Readers can reach their own conclusions.

These charts illustrate the extent of the waste or theft of Public Money in the THA/BOLT and Calcutta Settlement projects.

‘A good example is worth a thousand words‘

THA/BOLT – MILSHIRV Project

Rental Rates THA- BOLT chart
Occupancy Excess THA-BOLT
Rental increase chart with table THA-BOLT

 

Click on the charts above to see full size version

Calcutta Settlement Land sale – Eden Gardens

stamp duty Eden gardens Chart 1 20130405-1
Acquisition options HDC chart 2 20130405

 

Click on the charts above to see full size version

CL Financial bailout – Colman’s endgame

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 chides 3 ex-ministers.” Trinidad and Tobago Newsday. October 23 2012.

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.

“Colman praises Nunez-Tesheira for co-operating.” Trinidad Express Newspapers. October 22, 2012

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 –

  1. 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).
  2. 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.
  3. 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.…”

“Karen: HCU financed my election campaign.” Trinidad Express Newspapers. October 22, 2012

“….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….”

“Harnarine: HCU financed UNC and PNM.” Trinidad Express Newspapers. October 23, 2012.

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…“

“Colman to deal with 3 witnesses in contempt.” Trinidad Express Newspapers. June 15, 2012

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.

The DPP’s role

The intervention of the DPP in this situation is now cause for concern since he is reported to have written to the Colman Commissionto say –

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 was encouraged to read the DPP’s statement that

“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.

Get to Hell outta here!

I only starting to talk about it in the last little while, but this season is always one of reflection and re-dedication for me, with the two month transition from Emancipation Day on 1st August to Independence on the 31st August, then onto Republic Day on 24th September…I always spend this spell in some sober reflection, in between the life. It seems to me that the very sequence of events and the consequent holidays in the season imbue it with an inner meaning in terms of a national transition to some kind of depth and purpose…Emancipation to Independence to Republican status…maybe that is just sentimental of me, but let us see…

So there has been a growing campaign to challenge the presence of Jack Warner in our Cabinet – the leading people in that effort have been Lasana Liburd  of Wired868 and Kirk Waithe of Fixin’ T&T – The effort is a necessary one as it raises questions as to the proper role and functioning of the Cabinet in our Republic…I have gone a little further in calling for a higher standard in terms of who is eligible to be admitted to our Parliament…I believe the minimum test should be the ‘Fit & Proper’ rules as established by the Central Bank, in which case Dr Bhoe Tewarie would also be ineligible…Now we have had people being scandalized that Jack Warner was made acting PM after he resigned from FIFA and this morning the place is buzzing with talk about Collin Partap’s dismissal from Cabinet for allegedly refusing to give a specimen of his breath to the police after partying.

At this 50th year or Jubilee Juncture, the burning question in this arena is how are we doing? Have things improved on that governance aspect?

Eric Williams
Patrick Solomon

What is interesting is that amidst all the sound and fury, we can sometimes miss the lessons history can offer us as to the roots of some of these issues…I am saying thank you here to Judy Raymond – yes, she is my cousin – who has started a series of fascinating articles which are using the Guardian’s extensive archives to show some situations from earlier days…I did resign from the Guardian, but the edition of Sunday 26th August had a real classic, “PM: Who don’t like it…Could Go!” which recalled the infamous 1964 episode in which the ‘Father of the Nation’ defied his critics by re-appointing and promoting Dr. Patrick Solomon…also see “Solomon Acts as PM,” and “Minister Took Stepson From Cops.”

Of course, every right-thinking person knows that ‘Two wrongs do not make a right‘ – so that is not what I am saying.

I think that our ongoing concern over arrogant and irresponsible behaviour in high office has serious roots, so we need to dig deep to end this nonsense.

‘King’ David Rudder, used the opening stanza of his 1996 classic “The Strange Tale of Madame Occohantas and the Westminster Dreadlocks” on the virtual silencing of our Parliament by the growing rift between the then PM, Patrick Manning, and the Speaker of the Parliament…all of which lead to a messy climax with a bizarre State of Emergency being imposed so as to virtually imprison the Speaker of the House.  I tell you…Rudder’s first verse is something our children should learn in school…

“Big Big war in the House of the Balisier!
One ah de Warriors break-away!
Because Bad-John ting is part ah dey Tribal lore.
From de days of rough-neck O’Halloran,
Right down to ‘slapperman’ Solomon! 1
So in de tradition, Occahontas declare a war!”
© 1996 Lypsoland Music. Lyrics Used by Permission.

Listen to it here

Rudder was telling us about all then and now…in fact is Sparrow who gave Rudder the 1986 acclamation of dubbing him ‘King David’…which leads right back to the start…

Yes, the title of this post is from the Mighty Sparrow’s biting classic on that scandal – you can hear it here. The fight for betterment is a part of our lives now and we must keep it up! Listen to Sparrow…yuh think it sorf?

  1. The ‘ole-talk’ at the time was that Solomon slapped a policeman when he went to have his stepson ‘released’ – he was the then Minister of Home Affairs, with responsibility for the Police Force.

VIDEO: POS Rotary Luncheon Speech – 24 April 2012

On Tuesday 24 April 2012, JCC President Afra Raymond addressed the POS Rotary Club at their luncheon on ‘The Imperative of Public Procurement – The Government to Government Arrangements‘ – the Power Point presentation is shown here.

  • Programme Air Date: 24 April 2012
  • Programme Length: 0:32:36

Continue reading “VIDEO: POS Rotary Luncheon Speech – 24 April 2012” →