From THA/BOLT to Calcutta – tangled webs: Part 1

Artist Impression of THA Admin building courtesy Amera Caribbean Development Ltd.

With the THA elections having become a kind of national contest, the issues of governance and integrity loom large.  The two relevant controversial issues, both of which emerged late last year, were the THA/BOLT office project and the HDC’s proposed purchase of land at Calcutta No. 2 Settlement.

Both those projects have given me serious cause for concern in terms of proper public procurement practice, so much so that I see them as being two sides of the same coin.  Both these cases are models of inadvisable dealings in Public Money of a type which no prudent or reputable company would undertake.  I am choosing my words carefully since recent reports are that litigation has already started on both projects.

I do not at all agree with the widespread myth that corruption is a minor thing which adds maybe 10% or 15% to the cost of projects.  That misinformation is nothing but public mischief which has blinded us to the scale of the theft of Public Money, so it must be completely demolished.  In the case of the 1970s to 1980s ‘Government to Government Arrangements’ the then PM, George Chambers, told the nation that two out of every three ‘Petro-dollars’ was wasted or stolen.  In the ongoing imbroglio over the $1.6Bn Piarco Airport project, we learned from the DPP’s S.34 statement that $1.0Bn of Public Money had been located in offshore bank accounts.

The DPP’s S.34 Statement on Wednesday September 12, 2012

“…These cases involve allegations of a conspiracy to defraud the Republic of Trinidad and Tobago of over TT$1 billion by the fraudulent use of bonds and the rigging of the contracts for the various Construction packages for the Piarco Airport Project…”

The DPP’s full statement is here.

Also, from “Cops target MP in $1Bn airport scam” in Trinidad Guardian of Friday 5 March, 2004 –

“…TV6 News reported last night that Lindquist and Interpol officers had discovered more than $1billion stashed away in off-shore accounts, arising out of corruption in the airport project…”

This article deals with the THA/BOLT project, which is a Public Private Partnership. The PPP is a procurement model now being pursued by this government, according to the strategy outlined in the 2013 budget.

Build Own Lease Transfer (BOLT) is a subset of the PPP procurement method.  Under a BOLT arrangement a client has a facility built by the private sector at their expense – the client makes agreed rental payments so that the developer can cover the cost of building the project and a reasonable profit.  At the end of the agreed lease period, the facility is transferred to the client.

There has been effective use of PPP to produce Public Goods like the Brian Lara Promenade.  BOLT has also been used to procure prominent POS buildings such as NALIS, UTC HQ and Ministry of Works HQ (via Republic Bank) and the AG’s office at Cabildo Chambers (via NIPDEC).

The PPP can be a feasible method of procuring public goods, offices or other facilities in situations where the State is unable to commit to the capital expenditure and there is a pressing need.  The strong selling-point of the PPP is that the private sector takes the risks and is allowed to make a reasonable profit while the public sector can add to its stock of capital goods without the risks of project execution.

These PPP arrangements are now being intensely criticized in developed jurisdictions as having served the public interest very poorly.  The focal point of much of the criticism has been the fact that, despite the rubric, the private sector has seldom taken any genuine risk.

Turning to the actual THA/BOLT deal, I have to say that the decision to publish a large number of the important documents in relation to this arrangement is to the credit of the THA. The 225-page ‘bundle’ is here.

Orville London, THA Chief Secretary

In response to the request from the Minister of Finance, THA leader Orville London said:

…that under the laws and the T&T Constitution the Finance Minister has no authority to instruct him to provide information to him within any timeframe.

However, London said, in the interest of public disclosure and considering that this particular transaction has generated so much discussion he believed that he had a responsibility to make the information available to the public and the Minister…

This is a bold and in my view admirable initiative by a leading Public Official and I have to say that it has tempered my scepticism over this project.  I only wish that Cabinet Ministers took a similar view of their responsibilities.

The THA ‘bundle’ details the ongoing financial shortfall in allocations from Central govt, the main point of which is the fact that the THA is definitely resource-starved in relation to the arrangements with Central govt.  When one considers the financial state of the THA alongside the national economic outlook – we are in our fourth year of deficit financing in relation to the national budget – it is a sobering background to this discourse.

I have spoken with all the main parties to this arrangement and this is a summary of the THA/BOLT deal.  The THA purchased a 3-acre parcel of land at the corner of the Claude Noel Highway and the Shirvan Road from private landowners for $12M and immediately leased it back to them for a 199-year lease at a nominal rent.  The private developers have agreed to erect an 83,000sf office building at a cost of $143M and the THA has agreed to lease it for 20 years at a fixed rent of $15.61psf – an annual rent of about $15.55M, totalling some $311M over the term of the 20-year lease – with the property reverting to the THA at the end of the lease.  Those offices are to be built for the THA’s Division of Agriculture, Marine Affairs, Marketing and the Environment.

There have been recent reports of the AG’s lawsuit to test the legality of the THA/BOLT arrangement, so this is not an attempt to pre-empt the Court in ruling on those submissions.

My concerns arise at the level of the Needs Assessment, which must be the first stage of any proper procurement process, public or private.  The purpose of the Needs Assessment is to determine the rationale for and scope of the project so that preliminary consideration can be given to the key elements before any high costs are incurred.  In this case, we are told that the developer approached the THA, which is unusual to the extent that best practice requires that extra care be taken with unsolicited proposals.

The main points concerning me are that once again we are seeing large-scale expenditure of Public Money without a proper business case having been made.  The opinion of Hamel-Smith & Co as to the legality of the transaction is of no comfort to me, this is a matter of making a sound investment decision.  A legal opinion is necessary but not sufficient.

Senate president, Timothy Hamel-Smith

That 6-page legal opinion,dated 3 January 2011,by Timothy Hamel-Smith (who was appointed Senate President on 18 June 2010) is at page 168 of the ‘bundle’.

• Quantity of space – at pages 68 and 69 of the THA ‘bundle’ there is a ‘Note for Executive Council’ which summarises that the offices occupied by that Division – a total of 22,500sf is detailed, while a further 6,000sf can be reasonably surmised for the last Department.  The average rent being paid by the THA for this Division is $8.17psf, also please note that a total of 28,500sf is now occupied by the Division for which the THA is procuring an 83,000sf office building.
• Quality of space – The cost of $143M for that space equates to $1,723 per square foot and I am reliably informed that the contract calls for a fully fitted and finished office building.  That figure is at the absolute upper end of the range of costs for office buildings.
• Rent levels – According to the THA’s adviser on this project, Peter Forde, at the THA Press Conference on 10 September 2012 – see
  

  …the monthly payment of $15.61 per square foot per month was not an unreasonable rate because there were properties in Scarborough where tenants were paying as much as $10.00 per square foot. He stressed that even if there was inflation the rate will remain the same…

  The first issue I have with that is the attempt to use the $10psf comparable to justify the $15.61psf rent.  That is an unreasonable ‘stretch’ by my standards as a professional valuer.  Did the THA seek the opinion of the Commissioner of Valuations?  Secondly, the fact that the rent cannot be increased in the event of inflation is a distraction, since the likely effect of this new, huge THA office building is that the rental market in Tobago will become saturated with the offices they vacate.  The result of that is the decline in office rental values, so in the absence of any provisions of provisions for rent adjustments, the burning question has to be ‘What real risk is this developer taking?’.  Risk Allocation remains a real issue.

So, in summary, we have a semi-autonomous Public Authority contracting, at a time of tremendous financial strain, to build first-class facilities three times larger than the second-class ones it currently occupies.  Finally, please note that according to the ‘Note’ I cited earlier, the current monthly rent bill of the THA Division is $231,788, while the new monthly rent under this arrangement will be $1.295M – over five times more.

At the start of this article, I gave examples of the ratio at which Public Money was wasted or stolen, so just compare this project to those figures.

My next article will delve into the Calcutta Settlement land deal and its own peculiarities.

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.

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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

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“….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 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: First Up Interview – 6 March 2012

JCC President Afra Raymond speaks on Procurement revelations in the Parliamentary debate on No-Confidence in the Prime Minister on First Up with Paul Richards and Jessie-May Ventour.

• Programme Air Date: 6 March 2012
• Programme Length: 0:26:32

First Up Interview: 6 March 2012

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Media Integrity Too webcast

Media Integrity Too

A timeline of events within the People’s partnership period…

• 4 November 2010

  Afra Raymond’s Agreement for Freelance Services with CNMG was discontinued. My agreement with CNMG was as a Commentator with a one-hour current affairs program to be aired alternative Sundays and weekly editorial slots on Friday mornings as part of the ‘First Up’ program.

  	“Termination of Services”
  	“Caribbean New Media Group fires journalist Afra Raymond, stops his CL Financial, CLICO fraud coverage”
  	“Afra Raymond let go from CNMG”

• 6 November 2010

  Fazeer Mohammed re-assigned at CNMG.  Fazeer was the popular co-Host of the leading breakfast TV show ‘First Up’. He subsequently resigns.

  “FIRED: On the heels of argument about Kamla, CNMG cuts journalist Fazeer Mohammed.”

• September 2011

  Marcia Henville suspended from 102.1FM.  Marcia was the outspoken livewire who led a highly-popular drivetime talk-show examining current affairs

  “Powerless 102″

• October 2011

  TnT Mirror and I95.5FM are reportedly the subjects of an embargo in respect of State advertisement – both these outlets have been identified as being strongly critical of the present Peoples Partnership government. MATT issues a statement condemning “advertising boycott.” Minister of Foreign Affairs and Communications denies the existence of the advertising embargo in January 2012.

  	“State firms using ads to punish.”
  	“Press Release: MATT condemns advertising boycott (October 29, 2011)”
  	“No boycott on media houses: Suruj denies claims of discrimination.”

• 8 December 2011

  O’Brien Haynes resigns as CEO of Radio Vision Limited (which includes Power 102.1FM)

• 29 December 2011

  Ian Alleyne is the subject of Police Search on TV6/CCN/Express offices.  Ian is the controversial host of ‘CrimeWatch’, the country’s most popular TV show, a hard-hitting and interactive outlet for the #1 public concern – the relentless rise of violent crime.  ‘CrimeWatch’ is deeply critical of certain elements in the Police Service. MATT issued a statement on the “TV6 raid”

  	“Police seize Crime Watch video from TV6 premises.”
  	“Statement on TV6 raid (December 30, 2011)”

• 31 December 2011

  Afra Raymond’s column on Karen Nunez-Tesheira sent to her by Trinidad and Tobago Guardian’s Ag Editor-in-Chief. My Business Guardian columns had been a critical analysis of a range of issues from ‘Property Matters’ to the ongoing scandal of the ‘CL Financial bailout’.  I resigned as a columnist at the Guardian on 4 January 2012

  “Media Integrity”

• 31 January 2012

  David Mohammed suspended indefinitely from 102.1FM. David was the originator of ‘The Black Agenda’ programme, which rose to become T&T’s most popular radio program. ‘The Black Agenda’ programme can be followed on Twitter, on Youtube or on Facebook. The only report I have seen in the print media on David’s virtual dismissal was in the T&T Mirror. Also, there were statements of support from the National Workers’ Union, and the OWTU.

  “Muhammad gets his Power cut.”

• 9 February 2012

  CCN Directors are requested to present themselves for Police interview, which seems to have arisen out of the same episode with Ian Alleyne and the broadcast of the so-called ‘rape tape’.

  Cops want interviews with CCN directors

• 9 February 2012

  The Newsday office and reporter Andre Bagoo’s home is the subject of Police search.  Andre is the lead investigative reporter for the Newsday, with emphasis on politics and corruption in public administration.

  “Media Association statement on Newsday raid (10 February 2012)”

• 14 February 2012

  Open Police surveillance of Andre Bagoo’s home is reported.

  	“Police car outside reporter’s home: lawyer wants answer.”
  	“Police tactics toward Newsday ‘intimidatory’”
  	ABUSE OF POWER

This is a sinister pattern, which we need to recognise now.

To seed this discussion, I have three threads…

1. The use of Police resources to target journalists is questionable in light of the apparent, unexplained delays in dealing with the CL Financial chiefs, the UDECOTT chiefs and of course, the HCU chiefs.  The Police anti-media operations were apparently executed in exemplary fashion with warrants being obtained and searches done using the element of surprise – no reasonable person could find fault with the execution of those operations.  The burning question for me, given the apparent delays in prosecuting or even searching the ‘White Collar robbers’ – even during the recent SoE – is ‘What are the priorities of our Police Service?  Are our limited Police resources being effectively allocated in the fight against ‘White Collar crime’?
2. The second issue is the agenda of the Media practitioners.  Despite the strong and clear statements from the Media Association of T&T (MATT) on these issues – the embargo of State advertising for the Mirror and I95.5FM, the Police search of TV6/CCN on the Ian Alleyne issue and the Police search of Newsday and Andre Bagoo – there is still no MATT comment on the Power 102.1FM dismissals and the issue of the Guardian’s Acting Editor-in-Chief sending my column on Karen Nunez-Tesheira to her for comment.  We need to be mindful of self-censorship in a world in which most of the media is in private ownership.  Which shifts into my next point…
3. Lastly, there are the issues emerging from the world we live in now.  It is a truly New World, with the commonly-held conviction that ours is a ‘free society’.  Our Constitution guarantees freedom of speech, freedom of expression and freedom of association.  It also guarantees the rights of property owners and that takes me straight to the vexatious juxtaposition of those rights.  You see, if we do live in a society with all those rights, the question arises ‘What is wrong with the owner of a media outlet deciding to let-go/fire/suspend indefinitely/re-assign a particular commentator?’  Even more to the point – “Are we saying that the privately-owned media can pick-and-choose their commentators, but the State-owned outlets have a different set of rules to follow?”  Despite the provisions of T&T’s international anti-corruption and media treaty obligations in favour of whistle-blowers, there are still those who want to know what is wrong with the government deciding how to place its advertisements.

I am closing this off now; to let the discussion flow…the battle-lines are clear to me…our sentiments on the free nature of our society come into conflict with the impulse for self-protection once we achieve Public Office.  In this rounds, given the boundless nature of the new technology, we are going to see a sharper, more wily, battle to reduce the strength and clarity of our media.  I greet it.

As always, the struggle is against the enemy without and the enemy within…

• Please view my iPad oPinion video Podcast on this topic here

VIDEO: Afra Raymond testimony in the Colman Commission, Day 1

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.

Colman Commission testimony: 9NOV2011

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VIDEO: 4th Biennial Business Banking and Finance Conference (BBF4)

This is the video of my address to the 4^th 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

• Programme Air Date: 24 June 2011
• Programme Length: 0:15:21

4th Biennial International Conference on Business Banking and Finance

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CL Financial bailout – The Truth about the Truth

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 –

• The status of the various outstanding audited accounts;
• A ‘profile’ of the monies owed in terms of amounts owed to certain classes of policyholders.  I am told that quite a small number of these claimants held a large proportion of the monies being claimed;
• The various lawsuits/judgments against the Central Bank;
• The rationale given for extinguishing the right to sue the Central Bank in this matter was that public rights and stability were being given preference over the exercise of private rights.

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 –

• Accounts – There has still been no proper, clear statement on the status of these CL Financial and CLICO accounts, which is unsatisfactory.  An emerging view is that this is a calculated silence, since the companies are insolvent, which would make the Directors liable for the criminal offence of ‘trading while insolvent’.  That is a considerable issue, which could only be overcome by the State issuing a guarantee to the group’s creditors, which would have exposed the Treasury to the full extent of the huge claims.  The silence is a shabby ‘third way’, which gives a further insight into why the bailout remains untenable to so many of us.
• There is no publicly-available profile of the monies owed in terms of amounts owed to certain classes of policyholders.  That is a major omission and one can only wonder why the information is being effectively suppressed.  In addition, there were statements that the claims of Credit Unions and Trade Unions will be fully-paid, which seems to be a favourable treatment in comparison to the individual claimants.
• In respect of the lawsuits and judgments, I do not see how the block on lawsuits against the Central Bank can stop claims in foreign Courts.
• The rationale of public rights being preferred over private rights is a solid one in a matter of this type, but upon reflection one is left with a different impression.  How can public rights be said to prevail in a situation where the public is denied the essential parts of the picture?

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.

Duprey, Monteil, Sakal

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…

CL Financial bailout – The Final Solution?

The new bailout formula was approved, as two new Acts, by our Parliament on 14 September –

• The Central Bank (Amendment) Bill, 2011
• The Purchase of Certain Rights and Validation Bill, 2011

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…