Code of Silence surrounds CL Financial bailout

Many professionals knew what was coming. Some withdrew their money. All kept silent.

by Afra Raymond

“The Code of Silence is deep and powerful in the case of the CL Financial bailout.”

“Aside from legally-empowered regulators, there are other informal ‘regulators’ upon whom society relies to make decisions.  With one notable exception, the informal ‘regulators’ have been silent throughout this CL Financial fiasco and have failed the broader society in this colossal matter.”

Throughout this series of articles on the CL Financial bailout I have touched on the existence and effect of a Code of Silence amongst our ruling elite.

This is sometimes called the Information Age, with the latest news and ideas being ‘pinged’ or ‘tweeted’ across the Social Networks.  The new reality demands a complete shift in our attitudes to information.  Our leadership class has blatantly refused to share their information and insights at moments of crisis, which shows the challenge facing us if we are to progress

Just to give two examples, think of the many secret reports from all the Commissions of Enquiry before the Uff Commission and the steadfast refusal of our political leaders, for many years, to even consider a Commission of Enquiry into the Coup.  It is widespread and literally sickening to all right-thinking people.

We have had a new start and some reason to hope for change, by the PP government’s appointment of Commissions of Enquiry into the 1990 Coup and the financial collapse (CL Financial and Hindu Credit Union).

Even now, alongside those hopes, the new government has still not published the Bernard Report into the Piarco Airport Project. Despite the progress, we cannot be complacent, the slope is slippery and the stakes are high.

The Code of Silence is deep and powerful in the case of the CL Financial bailout.

On 3rd October, I set out a few of the failures on the part of the regulators.  Those failings are real and serious, but sometimes a shift in focus can be beneficial.

If we look beyond the legally-empowered regulators, there are other informal ‘regulators’ upon whom society relies to make decisions.  Those would include Civic Society Organisations, Trade Unions, Institutions of Higher Learning and Professional Bodies.  Society has been able to rely on these because they are seen to represent collective knowledge and insight, rising above individual interests to attain broader perspectives.

Those bodies, with one notable exception, have been silent throughout this CL Financial fiasco and have failed the broader society in this colossal matter.

I am being forced by these events to re-examine my fundamental assumptions on the degree of our reliance on these bodies.

This is the real nadir of corruption, when we seem to have lost our way in the long grass and we not even talking about the politicians and so on.  This one is not about them.  It is about us and our feet of clay.

Let me explain –

Law Association – This is one of the leading Professional Bodies and their silence has been deafening.  The President of the Law Association is former Independent Senator, Sunday Express columnist and eminent Senior Counsel, Martin Daly.  Daly is widely regarded as a fearless and irreproachable voice on many matters.

The tangled web in this CL Financial bailout has included early withdrawals, overlapping Directorships between depositors and bankers, payment of dividends after asking for state financial assistance, misleading negotiating positions taken by the CL Financial chiefs, a huge zero-interest payout to the CL Financial chiefs which left their shareholdings intact, attempts to sell assets in breach of the MoU.  Most of all the serious and inescapable conflict of interest of the then Minister of Finance, who is an attorney – every single attorney I have spoken with agrees that this was a clear case of conflict of interest.

Yet, not a word from the Law Association.  Am I alone in expecting any better?

Institute of Chartered Accountants of Trinidad & Tobago (ICATT) – The entire collapse is shot through with a failure of accountants at several levels and yet this professional body has been silent on all this.  After ignoring my open letter and other attempts to start some dialogue on this, Anthony Pierre, ICATT’s President, agreed to appear on a TV interview with me on CNMG.  That interview was broadcast on Sunday 26th September 2010 – it can be viewed at http://wp.me/pBrZN-qW – in the ‘Sunday Morning Politics’ slot.  When I put the question to him as to the errors and/or omissions of the professional accountants in this huge collapse, Pierre took the position that there was no cause for concern.

I do not accept that position, but of course the Commission of Enquiry and hopefully the publication of those long-overdue accounts will shed some more light.

University of the West Indies (UWI) – There has been very limited engagement from UWI on this matter, which is a pity when one considers that the areas of study there include economics, finance, law, business management and accounting.

Of course, the former Campus Principal and now Director of UWI’s Institute of Critical Thinking is Dr Bhoendratt Tewarie, who was also a member of CL Financial’s pre-collapse Board.  That is the same Board which approved payment of a dividend 3 days after CL Financial’s Executive Chairman wrote to the Central Bank for urgent financial assistance.  Dr Tewarie is also reported to have been at the final Annual General Meeting of CL Financial, held at Trinidad Hilton on 23rd January 2009.  The timing couldn’t be better for a report to shareholders – after all, the Central Bank had been written to 10 days before, the dividends approved a week before and the bailout itself was just 7 days away.  So what happened at that AGM?  Were shareholders given an honest report from the custodians of their capital?

The late Professor Dennis Pantin did write several times on the CL Financial collapse and bailout in his Sunday Guardian column.  Dennis made the early call for a Commission of Enquiry into this entire mess and that has now been acted upon.

Another UWI figure in the whole mess is Dr. Patrick Watson, who is Professor of Economics and Director of the Sir Arthur Lewis Institute for Social and Economic Studies (SALISES).  Professor Watson is a government Senator in the current Parliament, who after maintaining his silence on this economic catastrophe since January 2009, has now become most vocal since the budget speech.

Is a straight case of nearer to Church further from God.

Trade Unions – The two groups which one can normally expect to have a public position on these long-term, large scale issues are the Oilfields Workers’ Trade Union (OWTU) and of course, the Federation of Independent Trade Unions and NGOs (FITUN).  Neither of those bodies rose to the challenge and we are the poorer for it.

Trinidad & Tobago Transparency Institute (TTTI) – Yes, the TTTI did make a strong statement calling for improved accountability in the bailout process.  That is a Civic Society body doing its job.

What really happened?

But apart from us in the Civil Society, there is another level of the Code of Silence being practiced in that some of the very people who were in charge of this huge crash have rejoined public life, saying nothing about the crash.

They have been recycled.  Yes, I know that recycling is good, but this one is toxic.

Caribbean Money Market Brokers (CMMB) – Robert Mayers was the former Managing Director of CMMB, who retired on 8th December 2008 – see http://legacy.guardian.co.tt/archives/2008-12-09/business2.html – which is less than two months before that company collapsed.  Mayers is a most articulate and willing public speaker, who was most recently discussing the national budget on the electronic media.

We have heard nothing from Mayers on how the collapse presented itself and there is no concerted attempt to pass on any lessons learned to a younger generation of citizen.

Clico Investment Bank (CIB) – CIB was chaired by Mervyn Assam, recently appointed as a Special Ambassador with responsibility for Trade and Industry.  Faris Al-Rawi, attorney-at-law, was a Director on that Board and he is now a PNM Senator.

Neither man has made any attempt to publicly explain this shocking insolvency, which was estimated by the Central bank to be of the order of $4.7Bn.

All those people appear to have been anointed, in what must have been a private ceremony, then re-presented as ready to serve.  We deserve no less than a proper explanation from these Directors and Officers and I was pleased to see PNM Senator Penelope Beckles recently joining me in calling for them to be questioned publicly.

… to be continued tomorrow

Afra Raymond is a Chartered Surveyor.  This series on the CL Financial bailout can be viewed or readers’ comments made at www.afraraymond.com.

3 Comments

Filed under Barbados, Business & Banking, Consumer Issues, Corruption, Crime & Law, Economy, Offshore Investments

3 responses to “Code of Silence surrounds CL Financial bailout

  1. 79

    Looks like said code of silence extends to this thread too.
    Not a comment, yuh!

  2. BFP

    Hi 79,

    We notice an interesting fact on this end of the blog: sometimes the number of comments have nothing to do with the popularity of an article. This is especially true about CL Financial and CLICO where just mentioning those words draws thousands of visitors from search engines, but they don’t discuss their pain – they seek information.

    Other times an article about something will attract a couple of dozen people who are highly interested in the subject. Lots of comments, but no mass audience.

    The best part is that even we writing the blog are surprised every week when some article draws thousands and it wasn’t suspected. Our old article “Cute little baby is about the size of a pen” has drawn tens of thousands of people over the years and still does. Let me see if I can find the stats and I’ll be more exact.

  3. Pingback: Barbados Free Press spreads the word for AfraRaymond.com | AfraRaymond.com