This is the video of my address to the 4th Biennial Business Banking and Finance Conference (BBF4) held at the Trinidad Hilton from 22 to 24 June, 2011. The session I participated in was devoted to ‘Lessons from the Financial Crisis: The Resolution of Failed Entities.’ [See the acknowledgement letter from the conference convenor here.]Video courtesy UWI
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 –
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 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.
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.
Continuing from last week’s critique of the revised bailout and its implications, I have further concerns as to the process by which the legislation was passed.
I am aware that the Members of Parliament were given a briefing, so that they would be better informed on this complex matter. That briefing was conducted personally by the Minister of Finance and the Governor of the Central Bank, together with their advisers and certain CLICO officials.
The briefing provided background information on these areas –
I am also told that the Members of Parliament were not given copies of the presentations, which seems to have effectively limited them to gaining certain impressions or the limited notes they would have been able to take during the briefing.
That account of events, given to me by more than one Parliamentarian, seems to suggest that the very rationale of the exercise, said to be the elevation of public rights over private ones, could have been subverted.
The reality is that, despite the extensive debate on the matter, this is the position –
The Parliament benefits from briefings on complex and important matters, but it is unacceptable that those briefings should be somehow shrouded in secrecy. The Minister of Finance and Governor of the Central Bank need to publish their full Parliamentary briefing, without delay, to remove any lingering doubts. Good governance, transparency and accountability demand no less.
Another aspect of the emerging situation is the recent reports that the Board of Inland Revenue is investigating the three top CL Financial executives for alleged non-payment of taxes. The report in the Sunday Express of 13 November stated that the tax filings of Lawrence Duprey, Andre Monteil and Gita Sakal were under official scrutiny, incredibly enough, it was also stated that Duprey’s chauffeur was in receipt of up to $3.9M in a particular year.
I had always wondered at whether people who enjoyed favour at the highest level really paid all their taxes. I have pointed out that in the case of Clico Investment Bank (CIB) there are serious and unanswered questions on that point arising from the affidavits of the Inspector of Financial Institutions in the CIB winding-up action. It seems that fresh and serious doubts are now arising on the tax compliance of some of the top CL Financial officials, so we will see. In view of the relaxed stance taken in relation to Anti-Money Laundering and Tax Evasion in the revised bailout process, we should not be surprised if these BIR cases slip into obscurity.
We need to be alert to the costs and other consequences of this crisis. Huge sums of taxpayers’ money are being spent to rescue companies who do not appear to have complied with our tax laws and there are no accounts being discussed.
Last week Wednesday and Thursday I appeared before the Colman Commission to give my testimony in this matter. On Wednesday afternoon there was a very negative reaction to my attempts to introduce a Power-Point presentation as a way to better illustrate some of the points I have been making. It was a frustrating and comical experience for me to hear supposedly learned men asking ‘What is this?’ and one of them even saying that he had no idea what it was…Here, in Port-of-Spain in 2011, we have learned men saying that they don’t know what a Power Point presentation is for. Of course, I am all for transparency, so their patently transparent ‘blocking tactics’ were most welcome, because they showed the viewers on TV just ‘Who is Who and What is What’. Thank you, colleagues, for doing a better job than I ever could have. The public is not stupid and your behaviour has had a clear impact on those who were viewing. That said, the Commissioner ruled that my evidence would be taken the next morning and so it was.
For those who are interested and want to know what all the fuss was about, stay tuned to www.afraraymond.com for a full article on this situation, including the so-called ‘offensive’ slides.
With respect to the method of presenting the evidence in the Colman Commission, I have some serious concerns as to the effect of relying only on written or oral testimony. The volume and complexity of the material and the fact that a wide audience, beyond the attorneys, is watching this Public Enquiry, means that there needs to be an upgrade in the way in which the information is presented. I have written to the Commission on this already and was shocked to learn that a request for further funding for multi-media was apparently rejected at the highest level.
There have been two Power Point presentations to the Colman Commission – my own and Ms. Maria Daniel of Ernst & Young, who was just before me – and in both cases the witnesses had to rent their own equipment.
The purpose of this Public Enquiry is to bring some light and justice to this very shadowy and crooked episode. I am here asking the Prime Minister, Minister of Finance and the Attorney General to take proper leadership on this issue. The people need to see the evidence if they are to understand.
I can well remember the Prime Minister’s campaigning words, echoing in my mind “Serve the People! Serve the People! Serve the People!”.
Finally, I am writing to the Integrity Commission this week to request, again, that they obtain declarations from the Directors of CL Financial, as required under the Integrity in Public Life Act.
If you are not outraged, you haven’t been paying attention…
The new bailout formula was approved, as two new Acts, by our Parliament on 14 September –
The first one prevents any lawsuits against the Central Bank by claimants, while the second gives the Minister of Finance the right to borrow up to $10.7Bn and places the Republic Bank Ltd. (RBL) shares formerly held by CLICO into a new investment vehicle, NEL 2.
These seem to represent what I am calling the Final Solution, in that the clamour and protest which had marked the last year seems to have been fading away. There have been queries from the various ‘Policyholders’ groups’, but those have been limited.
Whatever one thinks of the actual bailout, which I maintain is a perversion of our Treasury, there are valuable lessons to be learned from all this. The main lesson for me is the Power of the Few. In that although only about 16,000 investors were affected, they were able to mount a successful campaign to improve their position. We need to note that lobbying and campaigning can be effective in gaining benefits for limited groups. To all the weak-hearts who say nothing ever changes, please take note.
We also saw the position set out by the PM in her important speech on 1 October 2010 being reversed, in that the claimants’ rights to sue the Central Bank have been extinguished. There are rumblings about a challenge to the constitutionality of that restriction, but we will have to wait on that one to play out. The fact that the right to challenge the Central Bank’s actions in respect of the bailout has been removed opens fresh dangers in terms of the payout process.
We have all had bad experiences of what usually happens when serious unrestricted power is held by someone who does not have to answer for their actions. My concern is that there does not seem to be any avenue for oversight of or appeal/redress against the Central Bank, in the event that claimants feel they are receiving unfair treatment. That concern will have to be addressed at some stage.
Even as an account of the payout, we have deficient reporting with no true profile of the wealth being returned having been presented for public consideration. The Central Bank and Ministry of Finance is in possession of this critical information as to the amounts of money to be returned to claimants, but that is being suppressed, for whatever reason. This episode has been a real stain on our stated ambitions towards accountability, transparency and the ever-distant ‘Good Governance’.
A related point is that the PM gave a clear commitment to revealing who benefited from the first wave of bailout funds, said at the time to be of the order of $7.3Bn. The PM’s speech is at pages 19 to 34 of Hansard – at pg 24 –
…The previous administration injected $5 billion into Clico and they spent $2.3 billion to bail out the other distressed entities such as CIB in particular, so coming to a total of $7.3 billion has gone into that hole and yet today the Government and, therefore, the taxpayers of this country have been called upon to come up with another $16 billion to $19 billion. So what happened to that $7.3 billion? Where did it go? Who are the people that were paid? How was it utilized? What happened to that $7.3 billion?…
The concern here is that we are not at all sure that this new arrangement will in fact yield the required information as to who are the real beneficiaries of this bailout. In view of the fact that the entire deal is a burden on our Treasury, this opaque arrangement is unacceptable.
After all –
Expenditure of Public money – Accountability – Transparency = CORRUPTION
Quite apart from those concerns, the fact is that provisions should have been made for Anti-Money Laundering and Tax Evasion screening. The Treasury must not be used for Money-Laundering and the proper safeguards need to be put in place to prevent this.
The lack of accounts for the CL Financial group, after 31 months under State management, is also unacceptable. The essential terms of the bailout are being sidelined, since the original agreement was for the State injections of cash to be repaid via asset sales. Both 2009 agreements – the January MoU and the June CL Financial Shareholders’ Agreement – also spoke to the preparation of accounts and provision of information.
The perturbing aspect is that there continues to be a uniform silence as to the preparation of these overdue accounts, so the taxpayer must wonder just how, or if ever, these vast sums of bailout money are to be recovered. This is the burning question which is at the root of my outrage.
The new arrangement is also silent as to the position with respect to other creditors of the CL Financial group, so there is no certainty as to how those claims would be treated. On 31 October, Trinidad and Tobago Newday reported on ‘CLICO Bahamas seeks $365M from CL Financial’. There are substantial regional and local claims outstanding, so the entire cost appears is an unknown quantity at this time, given the lack of accounts.
As I pointed out previously, the Directors and Officers of the CL Financial group and its subsidiaries ought to be subject to the provisions of the Integrity in Public Life Act, by reason of its being a State-controlled company. The Integrity Commission needs to demand the required declarations from those persons, if we are to secure the required level of transparency.
The continuing failure of the Central Bank to make rulings as to the extent to which CL Financial’s Directors and Officers at the time of the collapse are ‘fit and proper persons’ is the final piece of the sorry picture.
The State’s period controlling the CL Financial group, ends on 11 June 2012 – a mere 7 months away – at which time the group will return to its owners. Given the fact that the Central Bank has not made an adverse ‘Fit & Proper’ finding against Lawrence Duprey, in the absence of accounts and with a significant part of the RBL shares divested in this fashion, what will be the out-come? Is the stage now set for Lawrence Duprey to return?
I spent last Wednesday afternoon in New York’s Zucotti Park, with so many points to share on that experience. For now, I leave this striking slogan of the Occupy Wall Street movement –
If you are not outraged, you haven’t been paying attention…
The way the Ministry of Planning & the Economy (MPE) is persisting in their course of action on the Invader’s Bay development is perturbing in terms of the long term consequences of short-term decision-making.
At Section 2.0 of the Request for Proposals (RFP) for Invader’s Bay we read
…For Trinidad and Tobago this is a “major waterfront transformation” along the line of other signature waterfront developments such as Darling Habour (sic) in Sydney, Baltimore Inner Habour (sic), the Habour-front (sic) in Toronto, London Docklands and Teleport City in Tokyo. Although the genesis of the projects may vary, the result has generally been bold and dramatic. With the change in the manner in which ports operate and cargo is transported, waterfront property is now more valuable for its residential, retail and recreational function than simply for port activity with heavy industry, docks and fenced off warehouses, as is the case currently in Port of Spain…
We are being asked to consider the Invader’s Bay initiative ‘along the line’ of other leading international examples, which in itself is a good place to proceed from. The reality is that those developments cited by the MPE all took decades to conceive and what is more, the authors of the RFP know that. Yet we are also being asked to believe that a workable concept/s could be devised for Invader’s Bay in an RFP which is silent on the current strategic plans for the capital and only gives proposers 6 weeks to prepare.
Of course the lack of consultation will severely limit the participation of many important developers, not to mention the public.
The point is that in all those cities cited by the RFP, there is a serious commitment to consultation, which means that those large-scale transformations took considerable time to conceptualise.
In the city of New York, for example, there has been a long-standing commitment to community-based development. Check this 6 October webcast from The New School – the introduction is instructive –
For decades, deliberations over land use in New York City have included developers, community boards, elected officials, the Department of City Planning and other city agencies. Do the people who live and work in city neighborhoods have a sufficient voice? Do residents improve the process, or impede progress? Who is best positioned to determine a neighborhood’s needs, and what are the best structures for public participation? New York has long been a leader in community-based development but as the city recovers from the Great Recession, what does the future hold?
And that is just one reference, readers can ‘Google’ to find the many other supportive examples. In the very RFP, as well as in the recent budget, there is a clear commitment to consultation in national development. Except in this case.
But there is more.
As I wrote in the opening of ‘Reflections on Republic Day’, on the Raymond & Pierre website on 27 September 2007 –
The best example I can think of for the kind of broad commitment to consultation is, of course, the site of the World Trade Centre in Lower Manhattan: Ground Zero. This is a very interesting example since the site is privately owned and the City of New York is controlled by the Democrats while the Republicans control the national government of the USA. Against this background of different players we have the fact that the destruction of the WTC was a most severe blow to US prestige and power. The entire defense apparatus was rendered useless by that attack. Arguably, there could be no site in the world with a more urgent claim to large-scale redevelopment.
Yet, the fact is that a sort of compact has been arrived at between the parties to the effect that no redevelopment will take place unless and until everyone has had their say. For example, there was a recently concluded international competition for the design of the 911 Memorial. There were over 5,000 entries from more than 60 countries and a winner was just selected.
As expected, the consultations have been controversial and emotional but the fact is that an environment existed in which such an understanding could work. Whatever one’s view of the American imperium, there is a potency to the existence of that huge crater at the heart of their main city while the necessary conversations go on. Time for us to think again.
At that time I was protesting the haste and waste of the then PNM regime, a consequence of their pattern of proceeding with huge developments without any consultation.
At Section 3.1 of the RFP –
TENURE ARRANGEMENT
The proposed Developer will be chosen via this RFP process and shall then enter into a Memorandum of Understanding (MOU) with the Government of Trinidad and Tobago (Ministry of Planning and the Economy) for an agreed lease rate. It is expected that this activity would be finalized within one (1) month of the submission of the said RFP.
Which means that we can expect the choice of the proposed Developer will be made and the lease agreements completed in one month from the closing date. Yes, Friday 4 November.
Sad to say, there is even more. The RFP also specifies –
“…If financing has to be sourced from an external source, the Developer MUST submit a letter of guarantee from the financier as well as a profile of the financier. Failure to comply with this requirement will result in disqualification…”
When we raised the point that this is an impossible condition for new bidders to satisfy, given the sheer scale of the proposed development, both Ministers – Tewarie and Cadiz – attempted to indicate that this mandatory condition was flexible. Unbelievable, but true.
As leaders, whether in government or non-governmental organisations, we have an obligation to learn from the past. This is an effort to document the events in this episode, so that there will be a record, when the Invader’s Bay matter comes to be critically examined in the future.
The clear inconsistency of the position taken in the budget on urban planning was highlighted in last week’s column. With respect to this project, we noted the attempt to cast this development in the same light as other examples which all involved long-term consultation, the silence on the existing plans, the impossibly-short timetable to elicit fresh proposals, the even-shorter timetable for selection and agreement of lease terms, the wobbling on the financial requirements and incredibly, that the scoring criteria were to be finalized after the proposals were submitted.
It is literally impossible to determine which of these is worse than the others and it is beyond the imagination of any fiction writer I know to take a plot this far. But this is what is happening in our country today.
In my mind, all of these, taken together, show that the publication of the RFP is a form of sham dialogue and openness. If this is the genuine attempt by the MPE, to properly seek the public interest, then I am giving them an ‘F’ for effort.
What we are seeing here is a recipe for disaster, we already have all the ingredients of corruption, so what is next?
It really does make me wonder who runs this country and when, if ever, can we achieve consistent and equitable government. Who is the real power?
The Ministry of Planning & the Economy (MPE) announced last week that 10 proposals had been received in response to its RFP for Invader’s Bay.
Given that MPE has not carried out a Needs Assessment for this prime property, for whatever reason, I will continue to outline the relevant elements for the Invader’s Bay property. This is not intended to be complete, just a list of what I consider to be the critical items a proper Needs Assessment would include –
There is always the question of who controls the terms of these public debates. The intention from this side is to have that flawed RFP withdrawn. To proceed as things stand is to continue on a path which lacks the necessary transparency and public participation. The quantities of money involved and the absence of those critical elements means that we would be proceeding with all the ingredients for corruption.
This RFP amounts to an invitation to tender, so the bogus idea that this is just a discussion or consideration of proposals must be discredited. It is nothing of the sort. This RFP is a tender process to put these valuable public lands into private hands, which is quite different from a consultation. We have to stop any attempt to mix-up the two processes.
The State and its agencies have an over-riding obligation to be exemplary in their conduct.
The 2012 budget sets out three urban development projects, at pages 31 and 32 –
- Invader’s Bay – “…significant interest has been expressed in the transformation of the waterfront along Invader’s Bay. This development has great potential for promoting commercial activities in the services sector and will benefit the country significantly. Such projects are meant to be private sector initiatives utilizing green building technologies and will assist in making Trinidad and Tobago an attractive destination for new investments…”
- Sustainable City Project – East Port of Spain – “…This initiative, is part of a wider “Emerging and Sustainable Cities Initiative” supported by the Inter-American Development Bank of which Port of Spain has been chosen as one of the five pilot cities from170 eligible cities in the hemisphere…This project is being developed in partnership with the East Port of Spain Council of Community Organizations, the Caribbean Network for Urban and Land Management at UWI, the East Port of Spain Development Company, and other key stakeholders. This exercise has also engaged the Making Life Important Initiative of the Ministry of National Security…”
- Chaguaramas – “…the Chaguaramus Development Authority is spearheading development in the North-Western region and a master plan detailing land use proposals for that region will soon be subject to public discussion…”
Of course those three proposals are favouring Trinidad’s north-west peninsula, which returns to the theme of balanced development, but a further description of their relative merits is beyond the scope of this article. I am inviting readers to consider the varying approaches to an important long-term large-scale issue such as urban development.
In the cases of east POS and Chaguaramas, the commitment to widespread consultation is manifest, yet there is no such commitment evident in the case of Invader’s Bay, which seems to me to be ‘the jewel in the crown’. The three current strategic plans for POS, all paid for by Public Money, are being ignored by the very Ministry responsible for Planning.
Good Public Administration requires actions which foster the confidence and trust of the public, that is indisputable. Those policies and actions must be transparent, reasonable and, above all, consistent, if the public is to place real trust in the hands of the administration.
For all those reasons, it is unwise for any administration to operate in an inconsistent fashion.
In the case of Invader’s Bay, with the stakes so very high, it would be reckless to continue in this manner.
Discussion is revolving around the country’s earnings from our energy resources and the likely size of the next year’s budget, expected to be delivered in early October.
Given the fact that our energy resources are reported to be declining in both quantity and value, it is very important that we make best use of that stream of resources to both sustain the existing arrangements and create a new series of industries to replace those declining earnings.
In my view, our focus in this critical transitional period has to be on making best use of those limited tax dollars. Although that is an objective on which we can assume broad consensus, there seems to me to be far too little discussion on the ways in which that can be achieved.
When we consider that most of the capital expenditure in the country takes place via the State and its agencies, it is clear that proper control of that expenditure is key to making the transition for our society. The other parts of State expenditure are recurrent, such as salaries and rents.
The growth of corruption in State expenditure is a clear danger to good order and national development. White-Collar crime, as it is sometimes called, is a growth industry because there is almost zero chance of being detected or punished and huge rewards.
The danger to good order is the fact that merit has a declining role in the way State spending decisions are made. It is clear that other factors have become dominant – things like friends, family and political affiliation are now well-understood to be the ingredients of success in getting work from the State. That is the case for all political administrations so far in our country, but it must change if we are to make the transition to a sustainable economy in which different values and income sources take the lead.
The budget of the present financial year is the largest in our country’s history and it is true that the major part of that expenditure could be classed as exceptional items, having to deal with settling large debts of State Enterprises and the huge CL Financial bailout payments. The point here is that those huge expenses arose in situations with a distinct lack of transparency and accountability, from the lack of accounts at UDECOTT and HDC to the naked corruption of the CL Financial bailout, there is a pattern.
If there is no transparency and no accountability, there will be corruption and that is inescapable.
Public Procurement
Public Procurement refers to any expenditure or receipt of public money, which is money due to, or ultimately payable by, the State. That definition covers all the Ministries and State agencies as well as modern arrangements such as BOLT, PPP, concessions and so on. In the PP’s first budget, there were disclosed plans to spend almost $14.0Bn in the capital program of the Ministries and State Agencies. We need a proper Public Procurement system to manage these vast sums of money.
It is for this reason that the People’s Partnership commitment to implementing a new and effective Public Procurement system is to be welcomed. The JCC and its partners – the Chamber of Commerce, the Manufacturers’ Association and the Transparency Institute – have submitted a draft Bill for consideration of the Joint Select Committee established by Parliament.
Finance Minister Winston Dookeran made good on the PP’s pre-election promise to lay in Parliament the new Public Procurement proposals within one month of the election.
The level of political support for this initiative has been encouraging, but there is the issue of priorities to confront in this matter.
I am referring to the fact that the second part of the PP commitment to a new and effective Public Procurement system was that it was to have taken effect on the anniversary of the election.
That target has been missed and the work of the Joint Select Committee has been preserved so that it can proceed when the Parliament re-opens at the Waterfront.
The challenge we have to confront is the race to implement public projects in a manner which reminds me of the phrase I had coined for the last administration – ‘Project Fever’, like a new strain of political dengue.
The need to stimulate economic activity is something everyone appreciates and the perceived competition between Ministers is becoming part of the new reality. Provided that there are effective local content provisions, the more projects the country is doing, means more work for our professionals, contractors, workforce and suppliers. No one would argue against an increase in economic activity.
The problem is that, in the absence of proper controls, those short-term imperatives can lead directly to the dire long-term consequences which I referred to earlier. The State now has to spend immense sums to clear up debts which arose during an earlier spending frenzy, with operatives, who would have all said at the time that this or that project was essential.
These frenzied moments of activity are the correct place for the application of real leadership in terms of the national priorities, particularly in relation to the issue of expenditure. I am calling on Finance Minister Dookeran to make this issue of controlling expenditure a number-one priority in this budget.
Given that the ongoing flow of projects is strong and constant, a proposed program would look like this –
Without proper control over expenditure, we will continue to lurch from crisis to crisis. We need to stabilize the economy and restore the importance of merit in our public decision-making.
Afra Raymond is interviewed on the “Centre Stage” show on Power 102 FM in Trinidad and Tobago, hosted by Chris Seon, Cliff Learmond and Sherma Wilson, on the Colman Commission and the revelations and possible consequences.
These are the two draft Bills which contain the Government’s proposals to resolve the CL Financial bailout fiasco. The latest article on this blog ‘Balancing the Scale‘ deals with some of the issues arising from these proposals – Purchase of Certain Rights and Validation Bill 2011, and Central Bank (Amendment) Bill 2011.
These Bills are part of the Order Paper (Agenda) for Parliament’s sitting today, Wednesday 14 September 2011.
The Colman Commission into the failure of CLF Financial and the Hindu Credit Union is just about to move into its second round of Hearings and the public can expect to have further testimony on the losses suffered by people who deposited monies with CL Financial.
I have made several submissions to the Commission and have been invited to give evidence. I am reliably informed that there have been strong and unanimous objections to my participation in the Colman Commission. It would seem that only the Commission itself is interested in having my testimony go onto the record.
It is not surprising to me that objections of that sort would be arising now, but readers need to have a context.
The Colman Commission was established to find out how this fiasco occurred, recommend methods to stop a recurrence and also to identify responsible people who are apt for lawsuits or criminal charges. The main parties can be expected to give self-serving evidence, designed to exonerate themselves from any blame. We can also expect to hear more attempts to put the blame onto Wall Street, despite the claims in the CL Financial 2007 Annual Report– this is from the preamble –
…“The Next Wave of Growth” is the theme of this annual report, highlighting, to quote our Chairman, “that out of any crisis opportunities will emerge and our progress during the year under review prepares us to seize those opportunities and unlock value.” We have confidence in our ability to not only navigate this financial storm but to find fresh and profitable opportunities within it…
That Annual Report was published on 23 January 2009 – yes, that is 10 days after Duprey wrote to the Central Bank Governor for urgent financial assistance and one week before the bailout was signed on 30 January.
The Colman Commission is a Public Inquiry into a matter of major importance; it was approved by the Cabinet and installed by the President of the Republic. A Commission of Enquiry can only make findings on the evidence submitted to it, so it would be very important for some people to have certain evidence omitted.
One of the most outrageous aspects of the entire Uff Enquiry was the use of public money by UDECOTT to attempt to block certain documents coming into evidence. Those various attempts to limit the scope of the Uff Enquiry were disgusting to all right-thinking people and seemed to be a straight case of the ‘tail wagging the dog‘.
It is unacceptable that the Ministry of Finance could be taking a position which is seeking to exclude my evidence from the Commission. If that were so, it would mean that Ministry is acting in a manner which effectively dilutes the Commission and what is more, appears to be incompatible with the intention of the Cabinet to have a full public enquiry into this matter of national concern. In addition, the Central Bank is also reported to have objected.
The Colman Commission needs to be robust in getting at the truth of this financial disaster.
At the time of writing I have no details of the new bailout plan, proposed to be laid in Parliament for debate on Wednesday 14 September. According to a report in the Trinidad and Tobago Guardian, the proposed plan is in two limbs, the first includes the issuance of new bonds to raise monies for the payment of policyholders, while the second is the creation of a prohibition against lawsuits against the Central Bank.
The three concerns I have at this stage are –
As a result we have two insurance companies operating in our country without any accounts, which is in breach of the very regulatory framework of the Central Bank.
The Finance Minister must address these relevant concerns if this proposal is to gain any support. It brings to mind the recent point made by Independent Senator Subhas Ramkhelewan, in debating the recent proposals to increase the State borrowing limits, that the Parliament needs proper details of the ways in which those monies are proposed to be spent, because no person could borrow money from a diligent lender without giving details. We need, as a country, to insist on these higher standards.
We need to move away from the black box and the magician’s hat, towards a more transparent situation in which large-scale public spending decisions are based on a solid series of rationales.
…2. To make such findings, observations ad (sic) recommendations arising out of its deliberations, as may be deemed appropriate, in relation to:
(i) whether there are any grounds for criminal and civil proceedings against any person or entity; whether criminal proceedings should therefore be recommended to the Director of Public Prosecutions for his consideration; and whether civil proceedings should be recommended to the Attorney General for his consideration;
It seems to me that the result of these proposals could be to thwart that part of the functions of the Colman Commission as they relate to the Central Bank.
It is at moments like this that a responsible and long-term approach to these huge issues is in the interest of the entire nation.
In this article, which was published on September 13th 2011, I stated that there were unanimous objections to my appearance as a witness at the Colman Commission. I wrote that on the basis of certain reports given to me by persons who were present at those meetings, but after receiving a challenge from the attorneys for the Trinidad & Tobago Securities & Exchange Commission (TTSEC), it was impossible to corroborate that aspect of the article – i.e. that the TTSEC had objected to my appearance.
This notice is to correct the record in that respect, I do regret any inconvenience or damage caused to the TTSEC by my publication of those allegations. – a Correction with similar effect was published in the Business Guardian of 18th November and I do regret the delay in publishing this one here for blog-readers.
Afra Raymond
AfraRaymond.net 