CL Financial bailout – The Truth about the Truth
by Afra Raymond
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 on this matter, 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.
Non-payment of taxes by top CL Financial executives
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 13th 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.
My testimony at the Colman Commission
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 that 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…
Afra Raymond is a Chartered Surveyor. He is President of the Joint Consultative Council for the Construction Industry and Managing Director of Raymond & Pierre Limited. This series on the CL Financial bailout can be viewed or readers’ comments made www.afraraymond.com.
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