Posts Tagged corruption

CL Financial Bailout – The Real Case

Sen. Larry Howai, Min of Finance

Sen. Larry Howai, Min of Finance & the Economy

In 2013 I sued the Minister of Finance & the Economy for his continuing failure or refusal to provide the details relating to the huge $25 Billion bailout of the failed CL Financial group.

On Wednesday 22 July 2015, the High court ruled in my favour by ordering the release of all the requested information.

The basic principle behind the Freedom of Information Act is that the information held by Public Authorities belongs to the public, unless one of the valid exemptions is applicable.

The Court also granted the State a 28-day stay of execution which seems intended to allow them the time to decide whether to appeal before they have to provide the requested information. Given the ongoing Information War and the high stakes to maintain the ‘Code of Silence’ in relation to this bailout, I would not be at all surprised if the State were to appeal against this ruling.

The unexplained gap

On 1 October 2010, the Prime Minister addressed Parliament to explain that $7.3 Billion had been spent on the bailout and that a further estimated $7.0 Billion was required to settle all debts. That is a 2010 estimate of $14.3 Billion to settle the CL Financial bailout, but the current estimated cost of the bailout is in excess of $25 Billion. That means that over $10.5 Billion more than the 2010 estimate has been spent, so where did all that extra money go? That information and the defined official policy of secrecy are at the heart of this scandal. Read the rest of this entry »

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CL Financial Bailout – Steal of a Deal

The CL Financial bailout was a steal of a deal for the owners of that troubled company. After all, the wealthiest man in the Caribbean was able to obtain an interest-free loan exceeding $25 Billion in Public Money at a time when no one else would lend him. Our Treasury was effectively the ‘lender of last resort’, so those terms were hugely in favour of CL Financial and its controlling shareholder, Lawrence Duprey. What is more, the shareholders kept all their shares.

In the previous column, I stated my view that Mariano Browne had taken what seemed to be a position supportive of Lawrence Duprey’s attempt to regain control of CLICO. I also pointed out that Browne was a member of the Cabinet when that fateful and detrimental deal was made to bail out CL Financial in 2009 and called on the significant members of that Cabinet to explain their rationale. I went further to say that Browne was one of the five significant persons who had been requested to testify and refused to do so.

browne-karen-dupreyI am pleased that Mariano Browne has replied on the record, so this column will deal with those valuable points. For starters, it is even clearer than before that former Minister of Finance, Karen Nunez-Tesheira, has serious questions to answer in relation to her central role in this bailout. Given that financial training and experience formed a weak part of her profile, one can only wonder at what prompted Manning to appoint Nunez-Tesheira to that position. We will see. In addition, the terms which were negotiated between the State and CLF are essential to understand today’s dilemma with respect to Duprey’s ambitions. A related issue which needs clarity is the role of the powerful, unelected ‘bigger heads’ who are seemingly in control of our country.

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Duprey and his cohorts benefitted from an unprecedented degree of access to key decision-makers in the Cabinet and the Central Bank.

One of the enduring paradoxes in how our society is governed is the lopsided distribution of information. There is an abundance of relatively unimportant information, alongside a severe scarcity of critical facts on the big issues of the day. It seems that we are now ‘Amusing ourselves to Death‘, to borrow an insightful phrase from Neil Postman.

There is a world seen and a world unseen. The challenge is to discern the scope and influence of the unseen world. The current lexicon describes the unseen world as the ‘Deep State‘. I have no doubt that such a state of affairs exists in our country. So what do we know about the huge decisions in our society’s governance and how do we come to know those things?

For instance, the most serious decisions are taken by the Cabinet, which consists only of members of Parliament – some directly-elected as MPs and others appointed as Senators. Some of those decisions are announced at the Thursday afternoon post-Cabinet Press Conference. But the coverage is always partial with my suspicion being that stories are often presented so as to conceal their less-favourable aspects.

Cabinet seems to operate according to two conventions – the first being ‘Collective Cabinet Responsibility’ and the second being that the discussions of Cabinet are secret. The Freedom of Information Act gives Cabinet documents a 10-year embargo against publication. So, the first problem is that the highest decision-making Chamber in our Republic is essentially a secret one. I have always felt that the veil of secrecy which covers Cabinet’s deliberations is most times severely detrimental to our collective interests. This sordid CLF bailout fiasco fortifies that view.

Another critical aspect of the current arrangements is the role of the powerful Party Political Financiers, which is rarely revealed, but often suspected. In the case of the CL Financial group, we know that CLICO was a major funder of both major parties, which gives this bailout fiasco its lingering, bitter, flavour. There are few opportunities for us to get a real insight, beyond rumours, as to the true role of the party financier. Apart from the role of CL Financial as financiers, we also learned in the Colman Commission that Nunez-Tesheira’s 2007 campaign benefitted from Hindu Credit Union (HCU) financing.

The 2009 negotiations

One question I always ask is whether Karen Nunez-Tesheira told her colleagues that CLF had paid a dividend three days after it requested a bailout? As a shareholder, she would have been in receipt of dividends. If the Cabinet was told, they should have insisted on immediate repayment of any dividend since an insolvent company cannot pay a dividend. If the Cabinet was not told, we are dealing with a most deceptive course of action. Which was it?

So, what did Browne say about those negotiations?

…I have said that Duprey’s (and other shareholders) legal position is strong as the government depended on a MOA (memorandum of Agreement) the time frame of which has long since passed. On that basis, the shareholders have rights. Even if the state has expended money, the State and or its agents (the Central Bank) must do so in way that protects both the policy holders and the shareholders.

That was my advice in cabinet and at the Finance Policy Committee. The view of the Minister of Finance prevailed. I am of the opinion that Karen Nunez Tesheira was wrong then and is wrong now…

Browne is concurring with my view that the State’s position is weak in this bailout endgame, the key point being “…the shareholders have rights…”. Being bound by the first convention of ‘Collective Cabinet Responsibility’, Browne kept his silence during the raging controversy of the past 6 years, but he has now chosen to break the secrecy convention. I am grateful to him and it is telling that the most expert Cabinet member in that critical arena of finance and economics is now revealing his recollections of these critical events.

karenandlawrenceNunez-Tesheira needs to share the rationale for the bailout formula which let Duprey and the other shareholders keep their shares and loaned those huge sums of Public Money to the wealthiest man in Caribbean on an interest-free basis. What were the public policy considerations which could possibly have supported such a course of action?

Browne goes further to outline a situation in which he seems to have been excluded from the negotiations –

…And for the record I have not been part of any negotiations with Clico or CLF as part of the bailout action. Neither was I a part of the cabinet which took the decision to support the CLF/ CLICO Group. Those decisions were taken at a Cabinet meeting of which I was not a part on 29th January 2009 as I was in Barbados representing the Minister of Finance at a COFAP meeting. This bailout was always the province of the Minister of Finance and the Governor of the Central Bank and (sic) had no part in those decisions.

Further, Clico/CLF/Duprey made no contributions to the PNM during my tenure as Treasurer…

I can remember Browne telling me before that he had been involved in negotiations related to the CLF Shareholders Agreement of June 2009. That Agreement, at para A of its preamble, undertakes to protect the interest of shareholders. Note – Browne has since denied this claim of mine, so that has to be noted.

Of course, we know that Browne was part of the Cabinet which made those decisions, even if he was not in attendance at those particular meetings (I have no reason to doubt him), it is immaterial. As a member of that Cabinet he bears collective responsibility.

Duprey’s intended re-entry

Browne contested my statement that he seemed to be supporting Duprey’s attempt to regain control of CLICO –

…With regard to your opinion, I am am (sic) supporting nothing…The state only owns 49% of the company. If the shareholders act in concert there is nothing to prevent them from having an extra ordinary shareholders (EGM) Meeting and replacing the state appointed Directors. It is unlikely that Lawrence Duprey can pass the fit and proper rule and therefore cannot be appointed to CLICO’s Board, but he can be appointed to the CLF Board…

Browne listed the reasons which seemed to favour Duprey’s position, which position is fortified by his interpretation of the fit & proper rules. In his view, those rules would have prevented Duprey’s appointment to CLICO’s Board, but he would have still been eligible to sit on CL Financial’s Board. If we are considering a situation in which CLICO would still have CLF as its majority shareholder, that is an entirely misplaced view.

In the Central Bank’s ‘Fit and Proper Guideline‘, the question of ‘Who should be Fit and Proper?’ is addressed at page 2 –

“…4.1 According to governing legislation the following persons referred to in this Guideline as holding “key positions” are required to be fit and proper: -…
…4.1.4 Controlling Shareholder – may be an individual or a corporate entity

  1. Under the IA, any person who is entitled to control at least one-third of the voting power at any general meeting of the company.
  2. Under the FIA, any person who controls twenty five per cent or more of the voting power at any general meeting…

Before the bailout about 89% of CLICO’s shares were owned by CLF, so Duprey cannot regain control of CLICO, either directly or via a holding company, if the fit and proper regulations are enforced. As I said previously, the acid question is whether the Central Bank will summon the will to apply those rules without fear or favour.

This is no academic dispute, since Duprey has made it clear that he is seeking to regain control of CLICO, so that financial company and the rules which govern it, must be central concerns in this matter.

Sunlight is the best disinfectant. Come clean.

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AUDIO: Election Hardtalk interview on Power 102FM – 16 Jul 2015

Power 102 FMAfra Raymond and Peter Permell are interviewed on the ‘Election Hardtalk‘ show on Power 102FMFM by Tony Fraser about the continuing impact of the CL Financial bailout on the economy and the request to get back the company by Lawrence Duprey. 16 July 2015. Audio courtesy Power 102FM

  • Programme Date: Thurday, 16 July 2015
  • Programme Length: 1:19:47

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Integrity Inquiry

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“…The question really is integrity, and if he or she does not have it he or she should not be a Commissioner in the first place. The simple fact is that try as we might, we cannot legislate for integrity…”

From Press Release of 21 June 2013 by then Integrity Commission Chairman, Ken Gordon, in response to strong criticisms of his meeting privately and alone with opposition Leader, Dr Keith Rowley.

Once again we are beset by what appears to be yet another fiasco at the Integrity Commission, so Ken Gordon’s fateful words echo in my mind.

Given the current political season, there is every temptation to discuss this crisis as being caused by the impending election, together with either the improper behaviour of the present Peoples Partnership government or the ‘PNM operatives’ who infest the public service. You can take your pick from those prevailing theories, but I think these recent and alarming events were preceded by earlier ones. So much so that when the entire situation is placed in context, we are facing a troubling scenario in terms of the extent to which we can trust high public officials.

The current crisis is serious enough grounds to require a full Commission of Enquiry into the conduct of the Integrity Commission since the 2000 revisions to the Integrity in Public Life Act (IPLA).

I do not agree with those who call for the abolition of the Integrity Commission, since it is critical that any progressive society establish what are its aspirations and work towards those. Despite the social, religious and legal restrictions on murder, robbery and rape, those acts occur all the time. That sobering truth is no reason at all to retreat from putting strong legal and social prohibitions in place. Society needs laws and institutions to promote its values, so I am not calling for any move towards abolition of the Integrity Commission at all.

Such a Commission of Enquiry is necessary to clear the air on strategic issues and its Terms of Reference would cover aspects such as –

General

  • What is the record of the Integrity Commission in deterring corrupt and improper behaviour by Public Officials?
  • To what extent would the amendments to the IPLA, as proposed by the Ken Gordon-led Commission in its 2012 Annual Report, be effective in improving the Commission’s performance?
  • Given their growing importance of Public Private Partnerships in large-scale projects and commercial enterprises, to what extent should the IPLA apply to those organisations.
  • Apart from the legal framework as outlined above, how can the limited resources of the Integrity Commission be best applied to promote ‘Integrity in Public Life’?

The specific issues

  • 19th October 2004 – The Integrity Commission wrote to then PM Patrick Manning seeking detailed instructions on how to handle Ganga Singh’s complaint against Dr Keith Rowley. According to the ruling in the case brought by Dr Rowley against the Commission – “…The Court does not accept the Integrity Commission’s explanation as to why it wrote to the Honourable Prime Minister on the 19th October, 2004, to ascertain whether an inquiry was to be undertaken and if so, the names of the persons to man the enquiry and their terms of reference…”. The public needs a full and proper explanation as to how and why the Integrity Commission took such an extraordinary decision.
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  • The TSTT exemption – In 2006 the Commission was alleged to have written to TSTT Directors to confirm that they were exempted from filing declarations as required by the IPLA. That letter was the subject of Freedom of Information litigation at both High Court and Appeal Court levels – Magdalene Samaroo vs TSTT CV 2006-0817 and CA 180 of 2010 – and it is fundamental that at no point was the existence of that letter denied. A simple denial would have readily defeated the request for that letter since the Court cannot order publication of a document which simply never existed. The matter was ‘compromised’ by agreement between the parties at an Appeal Court hearing on 28 October 2013, which means that both sides agreed to discontinue the lawsuit. There is obviously something substantial and improper at work here, so an Enquiry can force publication of that suppressed correspondence.
  • The TSTT litigation – Since 2005 TSTT has been in prolonged litigation to remove its Directors from Integrity Commission oversight. The High Court ruled in 2007 that TSTT’s Directors were required to file declarations under the IPLA. That judgment was reversed in the Appeal Court ruling of 27 June 2013 that TSTT was not a State Enterprise, with its Directors therefore not required to file declarations to the Integrity Commission. Upon careful reading of those judgments it seems clear that the Integrity Commission offered little, if any, resistance to the TSTT challenge. This sustained collaboration between the Executive, the supposedly-independent Integrity Commission and the Public Private Partnership also known as TSTT is nothing less than remarkable, given the challenges in getting agreement on important and beneficial matters. A proper account is also required for how and why the Commission agreed to this course of action.
  • The 2009 collapse – The newly-appointed Commission collapsed in early 2009 due to disastrous appointments by then President Max Richards. One of the several outstanding issues at that time was the strong complaint from Justice Zainool Hosein who claimed that President Richards had promised him the position of Deputy Chairmanship and then reneged on that commitment. President Richards proceeded on an extended leave before deigning to make a public statement on 29th May 2009 which amounted to a stunning ‘I don’t have to explain myself’. An important part of this Enquiry would be to establish just how this series of unfortunate appointments were made.
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  • CL Financial group of companies – The Commission has never explained its failure or refusal to seek declarations from the Directors of the CL Financial group of companies, which have been under State control since June 2009. I have personally checked and those Directors do not submit declarations to the Commission. CL Financial is the largest by far of the ‘bodies under the control of the State’, yet the Commission has not exercised its lawful duties in respect of proper oversight, so a full and public examination is necessary.
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  • Emailgate Fiasco – The Commission’s role in this charged affair certainly needs a full, public Enquiry if trust is to be restored. Fixin’ T&T claimed, in its 7 May 2015 letter to the Commission, that the PM had claimed to have had possession of certain files ‘containing information which the IC had requested from Google’. The Commission was asked in that letter whether it was aware of any information being passed onto the PM or any other person. The Commission’s response on the same day was remarkable, in that there was neither confirmation or denial of any information being passed to anyone else. That reticence on such a critical point is even more remarkable when one examines the Commission’s letter of 19th May 2015, which confirmed the end of its ‘Emailgate’ investigation. The first part of that letter states that the provisions of S.35 (1) & (2) of the IPLA prohibits any release of information unless charges are to be recommended. On the one hand, the Commission declines to say if information was released to the PM or anyone else, yet, on the other hand, it stresses the legal rules against such a release. So what is really happening here? What is more, the resignation of two of the IC’s five Commissioners can only add to the sense of confusion in the air. The first resignation came from Dr Shelly Ann Lalchan, supposedly for personal reasons, but the clear statements from the second Commissioner to resign, former Deputy Chairman, Justice Sebastien Ventour, are worrying to say the least. Can it be true that the media was the first place the Commissioners were made aware of that important letter of the 19 May? If that is indeed so, it is clearly unacceptable for a public body to conduct itself in that fashion.

A final issue for an Enquiry to consider would be the role of whistleblowing within bodies such as the Integrity Commission. On the one hand the Commission could not perform its work without reports from people who are reporting suspected wrongdoing, probably in breach of their employers’ rules, yet the very officers within the Commission are prevented from reporting wrongdoing in its own operations. That is the true irony at work and a proper Enquiry will be able to take evidence and make recommendations to deal with this.

A full and urgent Commission of Enquiry into the Integrity Commission is now required.

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Riding the Dragon

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Las Alturas buildings cracked. Courtesy T&T Guardian.

This article is about the Las Alturas Enquiry into the collapse of two new Morvant apartment buildings erected by China Jiangsu International Corporation (CJIC) for the Housing Development Corporation (HDC). This Enquiry seems a politically-motivated one into a serious failure of professional practice which could have cost human lives. It is only in its opening stages, but it is already clear to me that this episode is one which contains serious lessons for our country in terms of the role of Enquiries; the role of the Chinese contractors; the culture of non-enforcement which we practice and of course, the impact of targets and political objectives on proper process. In the case of Las Alturas this is a large-scale multiple-housing project constructed on a former quarry-site on the Lady Young Road, just south of the lookout. Two apartment buildings which were completed in late 2010 were eventually declared uninhabitable due to severe cracking and the proposed demolition of those structures was announced at the end of May 2012. Each building comprised 24 three-bedroom/two-bathroom apartments, with the total cost of those buildings stated by HDC to be in the $29M range. The buildings were erected by CJIC on the design/build basis which usually places all responsibility for soil investigation, design and construction onto the contractor.

The role of Enquiries

The JCC offered to work with HDC in determining the causes of this serious failure and that offer was accepted, but our joint exercise did not last very long. The Commission of Enquiry was announced in September 2014 by the Prime Minister and despite the serious nature of the failure at this project, it seemed to suggest an attempt to discredit the Leader of the Opposition, Dr Keith Rowley, who was Minister of Housing between 2003-2007. I still feel that it was a poor choice of issue to investigate, given the burning questions at Invader’s Bay, the Beetham Water Recycling Project, UWI Debe and EFCL, to name just a few. The Terms of Reference of the Enquiry were published in the Gazette of 3 December 2014 and a five-month period was stipulated for its Report to be made to the President.The Enquiry, which is chaired by retired Justice of Appeal Mustapha Ibrahim, is to examine the causes of the structural failure of two blocks of apartments built in 2008-2010 for the HDC by CJIC. The other two Commissioners are eminent Structural Engineers, Dr. Myron Chin and Anthony Farrell. We have also seen reports of the contractor, CJIC, declining to appear at the Enquiry. I consider that refusal to be deplorable and a real sign that serious penalties need to be attached to that course of action. As it is, the fines for non-attendance are nominal, so people can refuse on a whim, since there are few prosecutions for that.

The role of the Chinese contractors

The really stunning revelation here is that the State was aware, since 2011, that these two buildings at Las Alturas had to be demolished. Despite this, CJIC was able, from early 2012 onwards, to compete for and secure the $500M+ contract for UWI’s Debe campus. The JCC protested at the poor process used in procuring that large-scale project. UWI Principal Professor Clement Sankat was advised that in view of the poor performance by CJIC in local State projects – including UTT Tamana, ETeck Wallerfield and various EFCL – no proper evaluation could proceed to recommend that further contracts be granted to that firm. Given that the normal pre-qualification process requires prospective bidders to identify claims, litigations or disputed matters, one can only wonder how CJIC was able to prevail in that project.

Culture of non-enforcement

One of the seldom-discussed findings of the Uff Enquiry was as to the lack of any culture of enforcement of contracts in the State construction sector, as set out in the sidebar. So, I was both thrilled and intrigued by the headline in this newspaper on Friday 6 March 2015 ‘HDC to sue Chinese contractor‘. The role and reputation of Chinese contractors in the local market have long been a bone of contention for the JCC. That statement was made in opening remarks by Vincent Nelson QC, who is the lead Counsel for HDC at this Enquiry –

“…The Housing Development Corporation (HDC) is moving to pursue legal action against China Jiangsu International Corporation (CJIC), the company contracted to construct the two towers at Las Alturas, Morvant, which subsequently had to be demolished because of structural damage resulting from land slippage. Attorney for the HDC, Vincent Nelson, was adamant about this as he delivered his opening statement at the Commission of Enquiry into the housing project yesterday at the Caribbean Court of Justice in Port of Spain…”

The culture of non-enforcement, considered with the chiefs at HDC (who transferred there after abruptly departing Caribbean Airlines), together with the special influence seemingly enjoyed by the Chinese contractors, all make me very sceptical as to whether a real and forceful lawsuit will ever emerge against CJIC.

The role of targets

Finally, one needs to consider the detrimental role of politically-motivated overambitious targets. The 2002 National Housing Policy set an unforgettable target of 100,000 new homes to be built in 10 years, which translates to an annual average of 10,000, which means a literally impossible 200 homes per week. Those are the facts behind the bizarre ‘numbers game’ which in turn likely had a decisive influence on the decision-makers at UDECOTT, HDC and of course the Housing Ministry. It would be useful, in this season of 100 houses a week and a billion dollars in land each year being promised, to reconsider the role of over-ambitious targets in distorting proper process. Curtis, the first sidebar is entitled

SIDEBAR: The Outline Timeline

This is only an outline, but it is instructive –

  • December 2002 – UDECOTT acquires the Las Alturas site.
  • 2003 – Initial layout prepared for a total of 120 apartments, which was revised later that year to 292 units given the Town & Country Planning Division’s advice on the allowable number of units.
  • December 2003 – CJIC wins tender to design & build 297 apartments.
  • November 2004 – Start on Site.
  • 2005/2006 – Soil problems identified on part of the site.
  • July 2005 – UDECOTT rejects project redesigns for lower units numbers of 142 and 167 apartments. Those redesigns were intended to avoid the unsuitable soils.
  • July 2006 – the project is transferred from UDECOTT to HDC.
  • 2008-2010 – Blocks H & I are built onto the areas reported to be unsuitable.
  • 2011 – Blocks H & I are recommended to be demolished due to severe cracking.

We have also seen reports that both UDECOTT and the HDC were resistant to any reduction in unit numbers on the site.

SIDEBAR: Uff’s understanding

The 2010 Uff Report into the Public Sector Construction Industry contains remarkable findings which were not listed amongst the 91 formal recommendations. At page 269 –

“Holding to account 29.21. …A recurrent feature of practice in the construction industry in Trinidad & Tobago is the extent to which rights and obligations prescribed by the Contract are or are not enforced. A simple example, discussed above, is the apparently mutual ignoring of contract provisions…”

At page 271 –

“…29.26. Underlying all the foregoing, however, is the question of enforcement of contractual rights and duties. What has been observed by the Commissioners is a culture of non-enforcement of rights, which appears to operate mutually, for example, by contractors not pressing for payment of outstanding sums while the employer does not enforce payment of liquidated damages. Whatever the explanation, the non-enforcement of contractual rights available to Government is a serious dereliction of duty on the part of those charged with protecting public funds. Equally, the non-pursuit of sums properly owed to commercial companies is a dereliction on the part of the directors of that company…”

The key point disclosed here is that contractual rights are seldom enforced in State contracts. A move to such a regular practice would require a major shift in our country’s governance culture.

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Integrity Reflections

ic-logoThis column sets out my reasons for seriously questioning the motivation and priorities of the Integrity Commission. Despite my doubts as to the way in which successive Commissions have operated the Integrity in Public Life Act (IPLA), I have continued to offer suggestions as to how their work could be made more effective.

The continuing Code of Silence on the CL Financial bailout, the sharp attack, from many quarters, on our substantial national institutions and the very doubtful history of the Integrity Commission are clear signs that the Public Interest needs to be safeguarded with utmost vigilance at this time.

TIMELINE – these points are detailed in here.

  1. 28 May 2009 – I pointed-out in ‘Judgment Time – Moral Hazard, Part III‘ that there was a link between the control the State was now exerting on the CLF group and the requirements of the IPLA.
  2. 12 June 2009 – CL Financial Shareholders Agreement is signed – clause 3.1 of which gave the Government the right to nominate four of the seven CL Financial Directors.
  3. 10 September 2012 – I formally wrote to the Integrity Commission with my concerns that the requirements of the IPLA are apparently being disregarded since CLF Directors were not filing declarations. The main document supporting that submission was the CL Financial Shareholders Agreement of June 2009.
  4. 20 March 2014 – I wrote to the Commission to request its update.
  5. 21 March 2014 – The Commission states that a reply was either sent or would be sent.
  6. 22 May 2014 – I wrote at length to the Commission to record my concern at their delay and ambiguity in dealing with my original complaint. The Commission’s Annual Reports contain details of how complaints are disposed of, but the 2012 and 2013 editions had no mention of my complaint.
  7. 22 May 2014 – The Commission replied to explain that my concerns had been classified as a query, not a complaint. In addition, the Commission stated that “…With respect to your query we have sought and obtained legal advice…” but that they were unable to proceed further due to the fact that they did not have the full number of members. To my astonishment, the Commission also requested a copy of the CL Financial Shareholders Agreement which had been attached to my original complaint. If the Commission did not have that fundamental document, which is available online at my blog, this request raised the question of ‘Just what were the instructions to the lawyer from whom advice obtained?’ I submitted the requested document the same day. The second issue arising from the Commission’s statement that it had sought legal advice, is the extent to which it appears to have lost sight of its proper ‘watchdog’ role. My point being that the CL Financial Shareholders Agreement was announced by the Ministry of Finance in June 2009, yet it was not until my complaint of September 2012 that legal advice was sought as to its implications for CLF Directors.
  8. 23 May 2014 – The Commission wrote to acknowledge receipt.
  9. 25 September 2014 – Pete London was appointed as the ‘Chartered Accountant’ member of the Commission, which means that the full number of members is now in place.
Dr. Keith Rowley, MP. Photo courtesy the Trinidad Guardian

Dr. Keith Rowley, MP

In relation to the Commission’s history, we need to note the shocking details unearthed during Dr Keith Rowley’s litigation against them. The Commission had made certain findings without giving Rowley the opportunity to respond, as recommended by its advisers and in 2009 the High Court made an historic finding that

“…The Court declares that the Integrity Commission has acted in bad faith in relation to Dr. Rowley and is guilty of the tort of misfeasance in public office…”

At Para 45 (i) of the 2009 ruling

“…The Court does not accept the Integrity Commission’s explanation as to why it wrote to the Honourable Prime Minister on the 19th October, 2004, to ascertain whether an inquiry was to be undertaken and if so, the names of the persons to man the enquiry and their terms of reference. The Court notes that the Integrity Commission is an independent constitutional body which ought to act independently pursuant to its constitutional and statutory powers and duties…”

The entire Commission resigned immediately as a result of that High Court ruling.

deane-martinThe Commission’s independence was fatally undermined by its decision to write to then Prime Minister, Patrick Manning, to seek his instructions on how the complaint against Dr Rowley was to be handled. At that time, the Commission was chaired by Gordon Deane, with John Martin serving as its Deputy Chairman.

The fateful and ultimately fatal compromises made by the Commission were only forced into the open by Dr Rowley’s litigation. Had Rowley not sued, we would likely never have learned of this betrayal.

This is the single largest expenditure ever undertaken on a project in our country, the reported sums are upward of $25 Billion, and the State is in control of the group of companies receiving those huge sums of Public Money.

The State has failed and/or refused to provide details of those huge sums of Public Money, no audited accounts and no other details have been provided in reply to my Freedom of Information requests. I am now litigating that failure or refusal in the High Court.

Some years ago, one of my few lawyer-friends told me of an old ‘coping mechanism’ – ‘Sometimes you get a case which is so wretched…the facts and the law are against your client, so the only thing to do is to hold on for dear life and dance it out by the sheer effluxion of time‘. For whatever reason, that phrase occurred to me in relation to this matter.

My original complaint to the Integrity Commission was made well over two years ago. The sobering conclusion, to my mind, is that the inaction of the Commission in this matter is entirely coincident with the secretive conduct of the State. Hence my title, Integrity Reflections – are we seeing a reflection of the Integrity Commission’s deplorable past?

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CL Financial – Bait & Switch

“They’ve got twelve Aces up their sleeve!
So who the Hell can we believe?”
—Rudder, David Michael. “Back to the Same Ole Same.” The Autobiography of The Now. Lypsoland, 2001. Used with permission

The CL Financial bailout seems to be entering its end-game, with repeated claims from the Minister of Finance that the recovery of the $25 Billion of Public Money spent is now on the cards. The consistent failure or refusal to publish any audited accounts and my ongoing research are telling. We are witness to yet another ‘Plot to Pervert Parliament’, this time it is the biggest project to ever hit this country. The CL Financial bailout.

Plots to Pervert Parliament

In January 2013, I identified the first of these, otherwise known as the ‘S.34 Fiasco’, which of course led me to the CLF Bailout Perversion, committed in January 2009 when our country was presented with its largest-ever public expenditure. The original bailout, presented to our Parliament, as a fait accompli, was the original Plot to Pervert Parliament.

I have come to the sobering conclusion, after much research and consideration, that the Colman Commission is not ever going to provide the details we were led to believe it would. I am now of the view that once again we have been misled and bamboozled by our Parliament. Yet another sick trick, a third ‘Plot to Pervert Parliament’.

The rationale stated for the Colman Commission of Enquiry is in serious conflict with the terms of reference for and consequently, the conduct of that Commission. This article will detail those assertions and show how the public interest is once again being subordinated to powerful private interests.

To understand this crime, one must take a stern view of dates and time.

  • 30 January 2009 – The bailout is announced at a Press Conference on Friday 30 January 2009 at the Central Bank. At that time, we were told that the estimated cost was about TT$5 Billion.
  • 12 June 2009 – Ministry of Finance signs the ‘CL Financial Shareholders’ Agreement’ which, for the first time, discloses that shareholders’ interests were to be specifically protected.
  • 8 September 2010Winston Dookeran’s first budget statement as Minister of Finance, following the Peoples Partnership electoral victory in May 2010, was notable since Dookeran announced a dramatic policy shift. The entire CL Financial bailout was declared to be the first of the ‘great uncertainties’ to be resolved. Dookeran outlined the problem before reducing the rate at which Public Money would be paid for this bailout. A huge storm of protest erupted, with several ‘Depositors and Shareholders groups’ emerging to represent those interests. With Dookeran isolated and the government under mounting pressure from these new protest groups, laws were swiftly drafted to stifle the protestors’ legal options.
  • 1st October 2010The PM’s historic address to Parliament on 1 October 2010  at which the Commission of Enquiry was announced. Most notable was the PM’s outrage at the mystery of the bailout – at pgs 25-26 –

    “…The $5 Billion has been spent—we are advised—to repay matured  EFPA policies in an ad hoc and unstructured manner where payment arrangements were entered into based on levels of funds invested. What criteria did you use to repay investors? Whom did you choose to pay? How were they chosen? These questions need to be answered. Because if it is today after the $7.3 Billion, all these EFPA people, the policy group and so on, they are out there, where is their money? Where is their money? Did you have a priority listing of who should be paid? Why did you go—and you are now crying crocodile tears about trade unions, credit unions, the poor man and the small man—why did you not pay them first? Why did you not pay them first? Where did that $7 Billion go? We need those answers, Mr. Speaker. We deserve those answers. The taxpayers need to know. Because when a parent  has to buy school books and bags to send his/her children to school but they have to pay tax out of the little money, they need to know where that money has gone…Where, how and why; we need to know…”

    The main argument made by the PM was that this was a case which needed serious investigation to establish what had caused this huge collapse and where had over TT$7 Billion of Public Money gone. I could not agree more.

  • 17 November 2010 – The Colman Commission with its Terms of Reference published in the Trinidad and Tobago Gazette. Those were divided into two limbs, causes and consequences. The first to examine the causes of the crisis and the second to make recommendations for prosecutions or other policy changes to prevent a repetition of the crisis.
  • In September 2011, the Parliament voted unanimously to pass two laws related to the CL Financial bailout. The first was to permit the Minister of Finance to borrow a further TT$10.7 Billion to fund the bailout and the second was to grant the Central Bank, which was administering the bailout on government’s behalf, immunity from any legal challenge. For those who consider these assertions of mine to be harsh, just look at Winston Dookeran’s closing words to the Senate on 16 September 2011 –

    “…I just want to give you the assurance which I gave to the Lower House when we debated this, that already the Ministry, along with the Central Bank and Clico, have begun the preparation of a public document—many questions that are still to be answered—to provide the necessary information. In addition to that, we did present to the hon. Senators, for those who afforded us the opportunity to accept our invitation, a document that is in the vicinity of 57 pages as of now, outlining all the necessary information that led to the story that assess what is the current challenges and why the proposals to go forward have been put forward. This document, I assure you, along with the questions and answers, will be converted into a simple, easy to read, hopefully, document for the sake of establishing that this Parliament has mandated us to put this as an anchor document for the purposes of evaluating our performance in the future…”.

    I requested that document via the Freedom of Information Act but it was not provided, which is why my litigation started.

In the course of recent research it became clear to me that the PM’s outraged demands for detailed information as to how the huge sums of Public Money spent in the bailout had been discarded, just like a flimsy Carnival Costume. At no point in its Terms of Reference was the Colman Commission required to examine the details of the actual Public Money spent on the bailout. A new species of lie is born here in T&T, once again…we used to have one called the ‘White Lie’ in those bad-old-days, now we have the ‘Bright Lie’. Right up in our face, as the Parliament is told one thing, with an entirely different thing being done. The Carnival was over, but the Ole Mas was now starting.

One can imagine the ebb and flow as these public promises were neutered in private discussions. Reasons are never given. I suspect that the influence of party financiers and voting blocks was a great element in this travesty. The public right to know how and why these vast sums of Public Money were spent is obviously of low priority for the highest public officials in this Republic.

Truth has a Power all of its own. At this point, in litigation against the Ministry of Finance for that information – the Ministry is represented by a five-member team headed by former AG, Russell Martineau SC and CL Financial is represented by three attorneys. Something resembling legal overkill to prevent publication of information which the PM told the Parliament it was her intention to unearth. Information which then Finance Minister Dookeran assured the Parliament he was compiling into a public document. Another writer has labelled the situation – ‘Afra, the Deviant‘. I tell you.

At every turn, the public interest has been subordinated to secretive private interests. The Courts are literally the last refuge to uphold the lawful rights of the public to obtain detailed information on these matters of the highest importance.

Accountability Calamity

Safeguard Status of query
Audited accounts for CL Financial? NONE
Details of Management accounts, Estimates, Drafts or any figures used by Ministry of Finance? NONE
Details of official briefing to Independent Senators in September 2011? CLAIMED TO BE EXEMPT
Details of Public Money paid out to people and institutions owed money by CL Financial? NONE
CL Financial is now under State control, so do its Directors comply with the Integrity in Public Life Act? NOT ACCORDING TO MY EXAMINATION OF INTEGRITY COMMISSION RECORDS.
Do we understand why the CL Financial group is enjoying this beneficial exemption from the lawful obligation to file declarations? NO WORD YET FROM THE INTEGRITY COMMISSION.

All of the usual integrity, accountability and transparency safeguards have been disconnected. All.

The Code of Silence rules.

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