Posts Tagged central bank
This is the Order by Justice Boodoosingh to grant me the right to have the Judicial Review heard in Court…our first hearing is set for 1 May 2013
What is being pursued here is our right as citizens of a modern republic to the details of these huge expenditures of Public Money – the CL Financial bailout is costing some $24Bn, about $3.5Bn USD! – and the background to how critical legislative support is obtained. It is my view that S.34 was not the first time and that the spectre of ‘regulatory capture’, which underlines much of the discourse around the Great Depression 2, is in fact founded on a sinister degree of ‘legislative capture’.
Having had a series of ‘cat and mouse’ exchanges with the Ministry of Finance since my Freedom of Information Act application made on 11 May 2012, this is my pre-action protocol letter sent to them by my attorney on Thursday 7 March, seeking their proper reply in 7 days…that time expires at midnight today, Wednesday 13 March, so stay tuned, because we are going to the High Court after that…
Afra Raymond chats with Fazeer Mohammed on the Morning Edition show giving a year end wrap up of issues including the Colman Commission and The CL Financial bailout. Video courtesy TV6
- Programme Air Date: 10 December 2012
- Programme Length: 0:31:49
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 –
- Mariano Browne is a Chartered Accountant who left a successful career as a Banker – including a significant part of that career spent at CLF, Browne was the first head of Clico Investment Bank and CLF’s Barbados Banking arm – to become Minister of Trade and Minister in the Ministry of Finance after the 2007 general elections. In addition, he is PNM Treasurer, so he could have given a rare insight into the linkages between these collapses and the large-scale donations made by both the CL Financial Group and the Hindu Credit Union (HCU).
- Conrad Enill comes from a Credit Union background, was also Minister in the Ministry of Finance up to the 2007 general elections and served as PNM Chairman up to their 2010 election loss. Enill called for an investigation into the finances of HCU as far back as mid-2002, but swiftly withdrew from that course of action after reportedly being pressured by then PM Manning.
- Danny Montano is also a Chartered Accountant, who was Minister of Labour at the time of the HCU collapse (that Ministry has supervisory responsibility for Credit Unions).
“…THE Hindu Credit Union (HCU) financed Karen Nunez-Tesheira’s successful campaign to become the Member of Parliament for D’Abadie/O’Meara in the 2007 general election.
However, Nunez-Tesheira was not the only People’s National Movement (PNM) candidate who secured campaign financing from the HCU during that election.
This was revealed yesterday as the commission of enquiry into the collapse of CL Financial and the HCU resumed at the Winsure Building on Richmond Street in Port of Spain.…”
“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.
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
“…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
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 email@example.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.
This downloadable document is the 3rd April 2012 affidavit of then Minister of Finance Winston Dookeran, filed as the key evidence in the government’s case in reply to the High Court challenge mounted by Percy Farrell on behalf of a group of CLICO policyholders.
It is an important document since it is the official attempt to deal comprehensively with the claims that the new laws passed in 2011 to control the bailout were unconstitutional – those laws were the Central Bank (Amendment) Act, 2011 and the Purchase of Certain Rights and Validation Act, 2011. [To read the separate Bills progress in the House of Representatives, you can click here and here respectively.]
The most interesting ones are the paragraphs in which Dookeran states -
- Para 16 at which CLICO is identified as holding 53.6% of the insurance industry’s total liabilities in T&T. That is a clear statement as to the extent to which this company was allowed to become literally ‘too big to fail’ and it also seems to me to comprise grounds for preventing this kind of over-concentration of risk to ever emerge again.
- Para 21 which details some $12Bn of public money already spent on this massive bailout.
- Para 22 which estimates that a further $12Bn of public money is needed to meet the creditors’ claims.
- Para 76 which confirms that the quarterly reports on the restructuring of CLICO for December 2011 and March 2012 have been filed in the High Court as required by the new laws cited above.
There will be more to say on this, as we need to delve into the accountability framework in relation to this exercise.
Expenditure of Public Money Minus Transparency Minus Accountability Equals CORRUPTION
It has been virtually six months since my last commentary on the CL Financial fiasco, my silence was due to other pressing duties, but Terrence Farrell’s No Sacred Cows published in the Trinidad Express on 16 July demands a proper reply. For those of you who have not read it, this is a good time to take the chance to do so, by clicking on the link above.
The fact that there are potent questions of whether the best process was followed in making the critical appointment of the new Central Bank Governor, Jwala Rambarran, has been raised by several commentators, most notably in last week’s BG View Is Jwala’s appointment good or bad for T&T? Those questions revolve around the scope of discretion which our governments are allowed in these matters and the extent to which the public interest can be sacrificed in favour of what can appear to be political favouritism. Matters of public importance must always be open to robust scrutiny in the press.
My own view is that there is a critical series of Central Bank issues which are in danger of being obscured by the line Farrell has taken in this debate.
Email exchange with Dr. Terrence Farrell
On Tue, Jul 24, 2012, at 8:53 AM, Terrence Farrell wrote:
Dear Mr Raymond,
I took note of your article in today’s Express. I do not respond in public to comments on articles I write and I will continue that policy in respect of your comments. I merely attach for your perusal the Adlith Brown Memorial Lecture I delivered at the Central Bank in November 2010, and in particular the sections dealing with CLICO and CL Financial. That lecture was delivered before a full auditorium including Governor WIlliams and his top staff. Suffice it to say, it did not endear me to the Bank!! My name did not appear on the Bank’s invitation list for about a year afterward.
You do not know me, but I am not one who ‘puts water in my mouth’. I call a spade a spade and a shovel a shovel. Those who suggest that I leave my critiques only for this government have not read or have forgotten my article in the T&T Review on ‘Our Irresponsible Elite’, my articles in the Express on the Integrity in Public Life Act and sundry others. Re the Central Bank and CLICO, I did not have all the information then since the inquiry had not yet started and in fact up to now, the Governor and the Bank have not yet testified to the Commission. They should do so in September. But I felt I knew enough to suggest that the Bank had failed in respect of CLICO and CL Financial.
The assessment of Williams’ tenure will come (and I may well do it myself) and in that assessment the CLICO/CL FInancial debacle will not have done the Bank proud. That though is no reason to now appoint a new governor of questionable credentials and no argument to defend the ongoing assault on our institutions.
On Tue, Jul 24, 2012 at 9:27 AM, Afra Raymond wrote:
Dear Dr. Farrell,
Thank you for your swift, pointed response to my article in today’s Express.
I am familiar with the Adlith Brown Memorial lecture you delivered in November 2010 and it is my view that, given what was known at that time, your critique of the Central Bank was muted – space limits did not allow me to delve into all those areas, but the evidence I cited in today’s article was all available by mid-2010. You did say that you may make a full critique of the CBTT’s role in this fiasco and that would be interesting to consider. I am not surprised that you were off the CBTT ‘guest list’ for a spell, which that tells a sad story of hubris and such.
With respect to the new Governor and for what it is worth, I am all in favor of us upgrading these systems by which key appointments are made, as per the second para of my article. I will be sure to hold him to the same high standard to which our leaders should set.
Thanks for taking the time to respond.
Sent from my iPad
From: Afra Raymond
Date: Wed, 25 Jul 2012 12:18:41 -0400
To: Terrence Farrell
Subject: Re: Your Article in Today’s Express
Hello Dr. Farrell,
I am soon going to publish onto my blog an expanded version of the Express article and would like to include our email exchange, along with your 2010 Adlith Brown Memorial lecture – I am seeking your agreement to that.
More than just this immediate request, the fact is that the decision of our educated classes to opt-out of the public debate has led us to a time which is much poorer, in all the senses of that phrase…The voices we hear are largely party-political roars which are barely-sensible, the reluctance of our thinking-class to engage in a critical discourse is really the source of the brandy being served in ever-stingier portions, with some people choosing to express it as a declining (I should have written ‘increasing‘) proportion of water…As always, these issues have more than one cause and I am inviting you to reconsider your stance of not responding to comments on articles you write…let me just say that in other places it would be a matter of professional pride and minimum editorial standards that such a response be forthcoming…Of course, we might agree that not everything foreign is to be imitated, but surely such habits which cultivate progressive discourse are to be emulated….
I await your reply…
On Wed, Jul 25, 2012 at 2:49 PM, Terrence Farrell wrote:
Apologies for the tardy response. I am out of the country and did not have Internet access for a while.
I have no problem with you publishing the exchange on your blog. The Lecture should be on the CCMS website.
Sent from my BlackBerry® device from…
From: Afra Raymond
Date: Wed, Jul 25, 2012 at 2:00 PM
Subject: Re: Your Article in Today’s Express
To: Terrence Farrell
Much appreciated, I do hope you can find time to ‘tune-in’ to our discourse…
For those who do not know, Dr. Terrence Farrell is a former national scholar and a highly-educated member of the regional financial sector. Among his several top positions, he has been a Deputy Governor of the Central Bank of T&T. In addition, he has also held top-level private sector appointments in the financial industry.
In writing on the CL Financial fiasco, I have adopted the phrase ‘Code of Silence’ to describe the unspoken agreement that the entire mess is to be mentioned as little as possible. That silence is especially pronounced amongst those best equipped to analyse the issues, so the intention of the Code would appear to be to preserve the existing order of things.
Silence is the Enemy of Progress, so this crisis has exposed an abysmal showing from our most educated brethren, miserable really. Nothing from the Accountants, Lawyers, Bankers, Insurance or other professional and industry associations. UWI is only now becoming involved in the necessary discourse.
So, why am I taking precious time to respond to Terrance Farrell? A few examples to show my concerns -
Firstly, in the 30th January 2009 Central Bank Press Release – by then Governor Ewart Williams – on the first page we are told:
…In our regular monitoring of CIB, and of Clico since 2004 (when insurance supervision was transferred from the Ministry of Finance), the Central Bank has consistently focused on these deficiencies but have been stymied by the inevitable challenge of change and by inadequacies in the legislative framework which do not give the Bank the authority to demand these changes….
So we need to pause here and look closely at the three facts before us –
- Ewart Williams was saying that since 2004 serious problems were identified in the CL Financial group and that he did not have the proper tools to deal with these.
- Within a week of that fateful bailout date, our Parliament had debated the Central Bank (Amendment) Bill and the Insurance (Amendment) Bill, both being assented to on Friday 6 February 2009.
- Farrell’s opinion is that the Governor must be “…sufficiently strong and respected to keep the financial system stable…”. In his appreciation of Ewart Williams, he clearly conferred that level of performance onto the outgoing Governor.
The burning question is ‘Where were these Draft Bills when the CL Financial crisis was gathering force since 2004?‘ Had they been prepared and never been put to the political administration or had they been submitted and rejected by the politicians? Or are we to believe that both Bills were swiftly drafted?
Of course all three facts cannot be correct and I believe that the third fact is the false one. Farrell’s inference that Williams had the necessary stature to be an effective Governor is obviously disproven by the CL Financial fiasco.
Please remember that this is the same Governor who had two investments with that ‘deficient’ group. How can one possibly reconcile a top official of acumen and strength with that investment?
But there is more. According to para 23 of the 16 April 2010 affidavit by the Inspector of Financial Institutions:
…With respect to the Creditors of the Petitioner, the Petitioner has met the statutory obligations for the Board of Inland Revenue (except for Corporation Tax Returns for 2007, 2008 and 2009 which are being prepared and remain outstanding)…
I am reliably advised that means that CIB did not pay Corporation Tax for those years. Yet CIB was able to retain its banking licence thoroughout that period, and, upon collapsing, obtain an immediate bailout on most generous terms.
Farrell also tells us that the Central Bank needs to be “…a decisive actor when action is required…”. Obviously, that standard did not obtain over the last decade.
The entire scenario reeks of corruption in the highest offices in the Republic and on the largest possible scale. We are witness to an epic swindle being carried out on our Treasury and in broad daylight.
There is plenty more evidence to discuss on this issue, including the seminal 15 July 1996 Republic Bank Letter to Shareholders which warned of the perils of the then ongoing aggressive takeover by CLICO.
At the critical turns in this crisis, we have been without Farrell’s views in terms of the rigorous scrutiny from which we ought to have been benefitting.
Farrell also adds, in relation to Williams’ impact at the Central Bank, that it was “…repaired and strengthened by Ewart Williams over the last ten years…”. That seems to be a straight case of Nearer to church, further from God’. Given Farrell’s reading of events, it seems that Ewart Williams is being treated like a ‘Sacred Cow’.
That is the root of my concern here, given Farrell’s headline ‘No Sacred Cows’, which is usually used to convey that someone is a fearless critic.
I continue to be outraged that the outgoing Governor appears to have retired with full benefits after having presided over a disaster on this scale.
The quest for better governance is not just a matter of criticising the administration, the educated commentators also have to hold to some consistent standard of rigour. Given his background, I consider Farrell’s contribution on this fiasco to be lacking that standard.
It is not too late, because I am sure that the Colman Commission would benefit from Farrell’s input in relation to the strategic view of the roots of the crisis and the sort of interventions which could have avoided this sorry situation.
For my own part, I will be looking to see how Rambarran performs on the burning issue of properly applying the ‘Fit & Proper regulations’ to the Financial Sector. Given the poor record of the outgoing Governor on this count, I am going to be calling for the new broom to make a clean sweep.
Afra Raymond chats in ‘The Barbershop‘ with John Wayne Benoit on i95.5FM about the CL Financial bailout and Public Procurement issues and other topics. 30 June 2012. Audio courtesy i95.5FM
- Programme Date: Saturday, 30th June 2012
- Programme Length: 0:49:03 + 0:35:47
This is the video of the segment from the show Making A Difference with Felipe Noguera called Caribbean Economic Forum. Appearing with guest Afra Raymond was David Walker, another prominent analyst on the CLICO debacle. Video courtesy Making a Difference
- Programme Air Date: January 2012
- Programme Length: 0:20:14
This is the recording of my actual testimony on my Witness Statement and the amended Power Point presentation.
I was led in evidence by Counsel to the Colman Commission, Peter Carter QC, with questions at the close from these parties –
- Gita Sakal, former CL Financial Corporate Secretary – represented by Justin Phelps, who had a few questions on the post-Shareholders’ Agreeement Directorships.
- Karen Nunez-Tesheira, former Minister of Finance – represented by Frederick Gilkes, who questioned my assertions on the Minister’s undeclared shareholding.
This shows the attempts by various parties to object to my showing the PowerPoint presentation…some of those parties and their attorneys include -
- Central Bank – represented by London-based Bankim Thanki QC
- Lawrence Duprey – represented by London-based Andrew Mitchell QC
- PriceWaterhouseCoopers – represented by Russell Martineau SC, former Attorney General and former President of the Law Association
- Andre Monteil – represented by Martin Daly SC, Sunday Express columnist and former President of the Law Association
It is really instructive to consider the various arguments put forward by these parties in an attempt to limit my testimony and ultimately to deny it the benefit of clear illustration via PowerPoint.
There is going to be a real struggle to show the information on this series of financial and economic crimes. That information needs to be shown in as digestible a form as possible, which was the point of my presentation.
Between the strong opposition of the parties who were at the centre of the crisis and the refusal of the government to fund multi-media facilities, we have a fight on our hands to get at the facts.