Former PricewaterhouseCoopers executive promoting “public mischief” about CLICO – CL Financial scandal

Afra Raymond rips into William Lucie-Smith

Our friend Afra Raymond has been looking at the whole CL Financial – CLICO mess in a series of excellent articles. Now Afra in turning his attention to the misleading propaganda and outright lies being promoted by many of the guilty big shots who helped create the mess in the first place.

Given that PricewaterhouseCoopers PwC consistently signed clean audit reports for CLICO and CIB despite the inaccurate and fraudulent accounting, people might want to question anything said by current or former PwC executives like William Lucie-Smith.

What did William Lucie-Smith know and when did he know it?

Trinidad Government guts CL Financial – CLICO investigation team: effectively shuts down probe.

UPDATED: July 14, 2010

Trinidad & Tobago Attorney General denies investigation shut down. Says it was “streamlined”. Calls Trinidad Express article “completely untrue”.

but…

Election Trinidad and Tobago – How will a Peoples’ Partnership Government handle the CL Financial fiasco?

CL Financial bailout & The Peoples’ Partnership

by Afra Raymond

The CL Financial bailout has been a major public concern since it was announced on 30th January 2009 and I have been critical of the steps taken by the current administration to deal with the collapse of what was the Caribbean’s largest conglomerate.

The leader of the Peoples’ Partnership (PP), Kamla Persad-Bissessar, has been noted for her strong criticism of the actions of the Minister of Finance in making early withdrawals from the CL Financial group before the collapse.  Her arguments in the Parliament are an important part of the story of this fiasco.

National elections are Monday, with the distinct probability of a victory by the united PP, so it is timely to consider the way in which that group might handle the bailout.

Kamla Persad Bissessar - Finally a woman for T&T Prime Minister?

In addition to her major contribution to this debate, the opposition leader has recently promised to revisit the terms of the bailout and that is an intriguing development.

It is impossible at this stage to know what the PP will do on this important public matter, but I have been considering the role of certain major players.

The Insiders

For example, these are prominent people, formerly from the highest level of the CL Financial group –

CLICO stupid question #1 “Where were the politicians and business leaders when this was happening?”

Peter N. Boos asks “Where were the politicians and business leaders when this (Clico mess) was happening?”

That’s easy to answer in the case of now Barbados Prime Minister David Thompson…

Barbados Prime Minister Thompson was lawyer for CLICO when they failed to file financials for 13 years! Then as Prime Minister he bailed them out with your tax dollars.

While CLICO and its associated companies cooked the books and failed to file legally-required financial statements for 13 years, David Thompson was CLICO’s lawyer. Mr. Thompson and his law firm represented Clico and Leroy Parris in many of the transactions that are rightly questioned by the poor victims.

There. That was pretty simple, wasn’t it?

This excerpt is from The Nation newspaper article The Rise and Fall of Clico by Peter N. Boos

“To simplify it, the post Cyril Duprey leadership of CLICO took the company on a journey that no well-regulated and properly managed insurance company ever can or would take.

Investments of insurance companies funds are regulated by law and are there to protect the people to whom the funds are owed.

In CLICO’s case, insurance funds, held in a fiduciary relationship for pensioners, policyholders and depositors, were used to invest in high risk asset purchases, many of which made little or no returns.

Sugar plantations and other distressed real estate in Barbados being glaring examples.

Interest rates promised to depositors were well above normal commercial rates offered by banks or other insurance companies.

This financial model is not a viable equation for any business far less for an insurance company. Policyholders, depositors and pensioners of insurance companies expect prudence, low risk, high security and integrity from their insurers and their managers.

They also should be able to place confidence in regulators to ensure compliance.

Yet this was allowed to happen right under the noses of the financial regulators across the Caribbean. Why did this happen? We must find out.

Where were the politicians and business leaders when this was happening?”

Also see…

The Nation – Mia Mottley: Leroy Parris should repay CLICO

Memories of CLICO: John Mauldin, Michael E. Lewitt and The Death of Capital

Profligate – definitions 1 & 2:

1 : completely given up to dissipation and licentiousness

2 : wildly extravagant

Most of us ordinary folks never seem to have the time, education and family guidance to become interested early enough in global economics or in global anything. It is our nature or nurture to think only locally. We hold an item in our hands in the village retail store but we do not wonder or even know that the same item from the same factory is sold all over the world at widely differing prices. And we never consider that the price can be thought of in money, in time or any number of other methods of quantifying and comparing value.

The cost of a shovel: not as simple as you might think

In New Jersey I can buy a good quality shovel with my pay from one hour of work as a welder. North of Mumbai that same shovel from the same factory is only half the price in US dollars – but it now becomes a week’s worth of work for a welder.

Why is that? How does money work? If I can’t really understand the pricing of a common item like a shovel, how can I understand what just happened in Europe where it looks like the world is arranging another bail-out for irresponsible spendthrifts and crooks – this time the profligate Greeks?

How do all these give-aways and bailouts impact a person of ordinary means living near Grape Hall, Barbados?

What should I do with my modest income, and even more modest savings and investments? How should I plan the next five years to put my family in a stronger position when nobody knows what financial storms are just over the horizon?

These are not calm waters for anyone and many, indeed most, of those talking heads in government and on TV who offer financial advice appear to be the same ones who caused this mess.

An Old Friend…

An old friend recently sent me a piece from John Mauldin’s Outside the Box financial column at Investors Insight.com.

The article is called The Death of Capital and is a mix writings by Mauldin and Author Michael E. Lewitt. I’m not sure that I understand it all or most of it. I don’t know what a “Structured Investment Vehicle” is or why Lewitt is calling for them to be banned but I get about 90% of the article and it boils down to this quote…

“What Adam Smith pointed out more than two hundred years ago is equally true today – our society, fed by the media, worships wealth at the expense of other values that are far more important to a cohesive and healthy society. The entire mission of The Wealth of Nations was to try to recognize man for what he is – a social animal who is reliant on the good opinions of his neighbors – and to develop the optimal economic system to harness that human essence for the good of all mankind. Smith believed that system was a free market, and history has by and large proven him correct. But the United States has strayed from a free market model to a system that privatizes gains and socializes losses.“

All I could think of was CLICO & CL Financial

The profits that were taken from the company by Leroy Parris, Dupris and friend Prime Minister David Thompson are theirs.

The losses? Well… those losses are on the backs of you, me and our children and maybe the next couple of generations.

Privatized profits. Socialized losses.

That is what Thompson, Parris and the rest of the CLICO clan are doing to you and to me.

Further reading

BFP April 16, 2010 – CL Financial Shocker: “10 to 15 cents in the dollar available to pay claims”

Ian Bourne’s Bajan Reporter: CLICO Unplugged: An Insider’s Perspective

CLICO Scandal: Interlocking Directorships a recipe for corruption and self-serving behaviour

CL Financial, CLICO Investment Bank & Interlocking Directorships

Our old friend Afra Raymond has written another well-researched article about the CL Financial – CLICO financial collapse. This one focuses on ‘What main event/s caused the group to fail?’ and as usual Afra is asking questions the news media should long ago have asked.

And what dirty little secrets has Afra dug up from the fetid swamp of lies and corruption where Duprey and Parris hope no one looks?

Here’s a sample…

“One of the main rumours making the rounds at the time of the bailout was that the State-owned National Gas Company had made heavy withdrawals from CLICO Investment Bank.  Those withdrawals and the requests for the return of further deposits were said to have triggered the ‘crash’ within the CL Financial group.”

… from the April 25, 2010 Afra Raymond – Trinidad Guardian article Taking In Front

Why would National Gas Company have wanted to make “heavy withdrawals” from Clico Investment Bank?

Could it be that one of the Directors of NGC also served on Clico and therefore had insider knowledge that allowed one company to profit over the other?

Afra Raymond

Read what Afra has to say…

A continuing concern, in light of the growing challenges to the old order of the commercial and financial world, is the role of inter-locking Directorships.  That is the situation in which a very small group of people control most of the major companies and activities in a society.

Critics of that situation would say that such situations are a recipe for corruption and self-serving behaviour.  The small group of people can enrich themselves, leaving the leftovers for everyone else.

Those who support that situation would say that the emergence of such a small group of leaders is natural, particularly in a small society such as ours, and the real challenge is to develop rules and norms which limit the possible negatives.

This is an issue which I am exploring in the ongoing series to examine the governance implications of the UDeCOTT fiasco.  It is not surprising that it is also a feature of the CL Financial collapse and there is an example of that in the case of National Gas Corporation and CLICO Investment Bank.

The CLICO Investment Bank Directors

At the time of the collapse, the Board of Directors of CLICO Investment Bank comprised –

Mervyn Assam (Chairman)
Amjad Ali
Anthony Rahael
Maria Thorne
Michael Callendar
Faris Al Rawi

The NGC Executive

At that time, the National Gas Corporation’s executive management included –

Ms. Olave Maria Thorne, Vice President, Legal and Corporate Management and Company Secretary – Yes, the same person.

Comment on Afra Raymond’s latest article

This comment about Afra’s article was forwarded to us, but we don’t know if the author wishes to be identified, so we’ve changed some things about and removed some details…

You are onto something here on this issue of interlocking directorships.

Did Ms Thorne know something that we haven’t yet found out? How is her position different to the Minister of Finance and the Chairman other than they seemed to have benefited directly. Would her interest have rested at that of the NGC or did she personally benefit? Did she or did she not?

For us to stay quiet on these things would only lead to more anger in our society as more and more of our people now understand what these things mean and with the human carnage that has been created by this CL Financial debacle, I don’t think we have seen the real emotional outcry as yet, but it is coming.

“The governments approach to drip feeding hope is slowly losing currency.”

As more and more people feel cheated and exposed, only time will tell whether it would remain bottled up as it has been so far or explode into something sinister and ugly.

I pray not.

Similarly, we have to focus on the role of the Auditors. Internationally they are being called to account – i.e Goldman Sacs, where Ernst and Young are being called to board. In this region we seem to be approaching their seemingly ‘gross failures’ with a sense of the untouchables.

The time has come for those of us who lead public opinion to call for a serious overhaul of our financial and business systems in light of all this.

While we are being told things are being dealt with the CL Financial issue, other companies could be doing exactly the same thing and nothing is being done to close the stable door.

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

CL Financial Shocker: “10 to 15 cents in the dollar available to pay claims”

“We also read recently that former CL Financial chief, Lawrence Duprey, had taken steps to limit the information he was required to furnish to the liquidator of CLICO (Bahamas) as to his private assets, allegedly acquired with CLICO funds…”

… Afra Raymond’s latest article talks about who’s going to get screwed in CL Financial/CLICO bailout. A small clue: Lawrence Duprey is doing just fine, thank you!

Our friend Afra Raymond is responsible for much of the good and aggressive reporting and commentary about the CL Financial & CLICO scandal. At BFP we’ve done some research ourselves and we even discovered a Florida company that was previously unreported in the news media, yet appears to be linked to a fraudulent CL Financial company real estate transaction in Florida. (See BFP’s article: EXCLUSIVE REPORT BY BARBADOS FREE PRESS: CL Financial Group Collapse – Insiders Took Bribes To Have Company Purchase Land For More Than Market Value!)

That said, we have to comment upon how absurd it is that blogs and part-time citizen journalists like Afra and BFP are often the ones taking the lead in covering this ongoing financial scandal. I mean, how absurd is it that bloggers discover CL Financial company connections that the regular news media is unaware of? Something is wrong there, folks!

Here’s Afra’s latest effort that appears on his blog under the title Ten to one is Murder!

The CL Financial bailout – Ten to One is Murder

A Kaiso title for the Election season.  And yes, we are told that CL Financial will rise again.  The picture is even more clouded than a year ago and the rumours abound

The latest developments are –

Press conference of 24th March – Following a front-page Express story, on the impending lawsuit by Justice Carlton Best to recover his $57,000 CLICO deposit – see ‘I want my Cash‘ at the Trinidad Express – the Governor of the Central Bank held a press conference that very day to tell us that those waiting for the return of their deposits would have to hold strain. See Delay your Redemptions at the T&T Guardian.

The further shocking news, after all the emphatic official statements that the group had good assets, was that if those were liquidated there would only be 10 to 15 cents in the dollar available to pay claims.

Now how could that possibly be the case? How are we to reconcile these conflicting accounts of the situation with CL Financial’s assets?  Is it that they are fully-pledged, over-pledged, or is there actually any ‘headroom’ within which the taxpayer can have a chance to recover the huge sums advanced so far?  Which is it?  Please note that this is not an isolated situation, as shown by another threatened  lawsuit from a former Attorney General of Guyana for the recovery of over $500,000 from CLICO – see Kaieteur News Online Former Attorney General threatens to sue CLICO Trinidad.

Post-Cabinet Press Briefing – The Minister of Finance confirmed the Governor’s position to the media the next day, as reported in this paper – T&T Guardian Clico Policy holders be patient.

In that article, the Minister is reported to have affirmed, again, that “…“The CL Financial Group had sound assets that were valued at more than $100 billion…”  Both the Governor and the Minister took steps to recover their own funds before the group’s financial troubles were public knowledge and that sits awkwardly, in the public mind, with their current appeals for patience.

Dr. Euric Bobb – At a Central Bank press conference on 31st March, resigned as Chairman of CLICO and as a Director of CL Financial, of which he was the Chairman, until his resignation late last year.

Governance – His statements as to the poor governance at CLICO, the leading company in the CL Financial group, were astonishing, to say the least – see “Governance was an alien term in CLICO‘ at the T&T Guardian. No reconciliation of the company’s bank accounts.  No audit committee.

Those are serious shortcomings in the basic accounting and governance controls in any company.  For one which had investment as its centrepiece, those are shocking.  They give the impression of unprofessional and haphazard management of a significant part of our nation’s savings.  They detract from the reputation of the CL Financial chiefs.  Surely these shortcomings found their way into the Management letter from the Auditor to the Board and Shareholders?  Was the Central Bank aware that these elementary controls were absent?  Even if there are serious shortcomings in the financial procedures at CLICO, are we not entitled to rely on the Supervisor of Insurance or Inspector of Financial Institutions to resolve those in favour of the investing public?

… continue reading this excellent but shocking article at Afra Raymond’s blog

CL Financial bailout is a grievous attack on the very integrity of our Treasury

“We have now been bound into a long-term arrangement to restore the fortunes of one of the Caribbean’s riskiest adventurers.”

“…it seems clear that the cupboard is bare and that this CL Financial group has no unpledged assets of any value.”

“We are… advancing an unlimited quantum of taxpayers’ funds, for which no security has been provided and those funds are being advanced at ZERO interest.”

“…the State (takes) all the risk, a massive injection of capital, responsibility for management, yet even in the case of a successful outcome there is no return either by way of interest on the funds advanced or equity in the rejuvenated enterprises.”

“..where is the $5.0Bn missing from the CLICO Statutory Fund?”

These are some excerpts taken from Afra Raymond’s latest article on the CL Financial – CLICO bailout. Afra used a Freedom of Information demand to obtain the June 12, 2009 CL Financial shareholders’ agreement with the Trinidad & Tobago government – and what a scam that agreement is.

Afra explains how we taxpayers are being raped to save the skins of a few big shot friends of government – and it’s not just the Trinis.

With the full and enthusiastic participation of their David Thompson DLP government, Barbados citizens are also being raped as our Prime Minister uses our money to bail out the Godfather of his children, long-time legal client and political supporter, Leroy Parris.

Barbadians of all ages, colours and political stripes should read Afra Raymond’s articles – but they should also think for themselves as they read the original documents that are posted on Afra’s website.

Florida: Just one of the Duprey family mansions

Taxpayers take all risks while the Bigshots keep their Mansions

My friends, you don’t have to listen to what Afra says. You don’t have to listen to what Barbados Free Press says. You can think for yourself so read the original documents and make your own list of questions and demands of the elected politicians who have pledged the wealth of your nation and your future in a bailout that lets Parris and the Dupreys and the rest of them keep their mansions and offshore bank accounts.

As CLICO's lawyer, PM Thompson helped build the house of cards

Then ask Barbados Prime Minister David Thompson to show all the CLICO – CL Financial bailout documents and business records that remain hidden from the taxpayers because Barbados does not have a Freedom of Information law.

Here is Afra’s latest article published in full. You really should visit his website and read it there, but we’ll leave it up here in full because… ya never know!

COMMENTARY on the CL Financial Shareholders’ Agreement of 12th June 2009
By Afra Raymond, Chartered Surveyor

Read this article at: www.afraraymond.com

FOR YOUR INFORMATION: A copy of the official agreement between C.L. Financial Limited and the Government of Trinidad and Tobago (PDF) has finally been delivered to me per my request under the Freedom of Information Act.  The CL Financial Shareholders’ Agreement (SA) of 12th June 2009, which I requested on 16th November 2009 under the Freedom of Information Act, was sent to me by the Ministry of Finance on 11th March 2010.  My emailed response to the Minister of Finance is on the home page of this blog.

My preliminary comments are –

Quantum – The shareholders’ agreement (SA) is silent as to quantum, which would seem to mean that the group will enjoy unlimited access to taxpayers’ funds.  The 2010 budget statement on 7th September states an estimated allocation to the CL Financial bailout of $5.4Bn – but subsequent events have only added to the confusion.  To wit, the $50M USD for the British-American Insurance recovery (as per 2nd November ECCU press release) and the ‘up to $510M’ announced to be available to meet the pensions due to ex-Caroni workers.  Question being whether the $5.4Bn includes the subsequently-announced amounts or are those to be added-on?

Security – At the preamble to the SA – on page 5 – we are told that “…valuable consideration…” is being offered by CLF as per the original MoU.  Of course, given the Governor’s revelations on 7th April 2009 – see http://guardian.co.tt/business/business/2009/04/08/govt-left-empty-handed-cl-financial-bailout – that is simply not so.  Indeed, it seems clear that the cupboard is bare and that this CLF group has no unpledged assets of any value.

Interest – No mention of interest at all.  We are therefore now advancing an unlimited quantum of taxpayers’ funds, for which no security has been provided and those funds are being advanced at ZERO interest.  Given the well-established rule that late payment of taxes makes a taxpayer liable to 20% interest and the interest rate the Federal government charged AIG for their bailout funds – it was 8.5% above the benchmark LIBOR, which was at 3.0% – it is clear that this represents a massive concession to the CL Financial group.  Quite apart from the bailout itself, the 325 shareholders of this group are also benefiting from this unprecedented and unexplained facility of ZERO percent interest rate.

Accounting – Section 4 of the SA sets out the procedure for a proper system of accounts, culminating at 4.4.5 – “…shall ensure that an annual report of CLF is prepared and dispatched…in manner consistent with standard corporate practice…“.  The accepted interpretation of this language informs us that the word ’shall’ denotes an obligatory, non-voluntary duty.  If that is the case, when can we expect publication of the 2008 annual report, accompanied by audited accounts, as per ’standard corporate practice’?

The role of the Shareholders – The MoU of 30th January, at Para (c) of its preamble, spells out its aims as “…to protect the interests of depositors, policyholders and creditors of these institutions…“.  According to the second sentence of the Ministry of Finance press release of 12th June 2009 – this is the penultimate document in the ‘Quick-Guide’ in the CL Financial bailout section of this website – “This new agreement is designed to give substance to the Memorandum of Understanding (MOU) of January 30th 2009.”  The SA of 12th June 2009 was the subject of that press release.  The SA, at Para A. of its preamble, states the intentions of the parties as having been set out in the MoU of 30th January 2009 and ends by “…their stated understanding, inter alia, that certain steps be taken to correct the financial condition of CLICO, CIB and BA in order to protect the interest of depositors, policy holders, creditors and shareholders of these institutions…” (These two words are put in bold as my own emphasis).

I questioned that official version in ‘Fit and proper?’, ‘Party of parties’ and ‘Figuring it out’ – all available on this blog.  Now that we have the actual SA to work with, it is clear that the statement in 12th June press release is extremely misleading.  The SA does not just ‘…give substance to…‘ the original MoU, it in fact is an entirely different species of agreement.  The Shareholders’ Agreement constitutes a written guarantee to protect the 325 shareholders of this CLF group.

Assisting the incoming Management – Clauses 2.3.3 and 2.3.4. of the SA, require the outgoing CL Financial chiefs to render all assistance to the incoming Board and Management in terms of all records and accounts etc.  The question here is ‘Have the new Board and management been receiving the full assistance of the previous CLF chiefs?’  If not, what is being done about it?  If yes, where is the $5.0Bn missing from the CLICO Statutory Fund?

“…several important and shocking facts came to light.”

CL Financial – CLICO scandal: Silence from Price Waterhouse Coopers as forensic investigator Robert Lindquist submits report

“No one is questioning the role of Pricewaterhouse Coopers in this Clico fiasco. PwC consistently signed clean Audit reports for Clico and CIB despite knowing about the inaccurate and fraudulent accounting. CIB’s accounts for the 2007 year end were signed off on December 3rd 2009, less that 45 days before the company crashed. There was no going concern qualification, or subsequent events note that should have been in the audit report. Surely PwC knew of the company’s predicament when they signed the accounts!”

“CIB’s accounts for the year ended December 31st 2007 were signed off on December 12th 2008 to be exact. PwC knew about CIBs predicament and still signed a clean audit report. We are a backward community if that firm is allowed to continue unscathed.”

… Above comments left by BFP reader “Trini Whistleblower“ on May 18, 2009 & June 7, 2009

What did PWC know about CL Financial & CLICO – and when did they know it?

I don’t know much about business, auditing or bookkeeping other than what I’ve read here and there – but I have the impression that a small business person could successfully hide many offside and questionable transactions from their employees, accountant, the tax people and their husband or wife.

At least, a business owner might be able to hide them for a while because, unlike a public company, small private businesses don’t usually get audited. The relatively small number of transactions is easier to juggle too. Also, a small business person can make some side deals for cash once in a while, maybe have some inventory “stolen” or “damaged beyond repair” while they sell it out the backdoor for cash.

Yes, a small business owner could probably pocket ten or twenty thousand dollars a year without raising too many red flags – and it could probably be done successfully for years if the owner doesn’t get too greedy.

Of course, if you’re a multi-national public company like CL Financial & CLICO that has to be audited every year it becomes much more difficult to hide missing cash, inventory and company value to the tune of, oh – for instance – say, 76.1 BILLION DOLLARS.

Yet that is exactly what happened…

One moment CL Financial was worth over 100 Billion dollars and a few days later it was worth only 23.9 Billion.

Now, like I say folks, I’m no accountant or auditor like the very prestigious firm of Price Waterhouse Coopers, but I can subtract 23.9 from 100 and determine that we seem to be missing 76.1 Billion dollars.

Just a minute – I’m going to check if any of those missing billions might be lying around in my desk drawer… Nope, not here. Maybe in the boot of Shona’s car? No, not under the bed either. I wonder where the 76.1 Billion dollars could be…?

I’d wager that right now there are a few Caribbean bankers, politicians and business people who don’t want shareholders and forensic auditors looking too closely in their desk drawers or in the boot of wifey’s car… or too closely at various financial transactions that happened over the last ten years.

It would be a good guess to assume that some folks at Price Waterhouse Coopers are making plans for early retirement.

Price Waterhouse Coopers and some of their associates have some serious explaining to do about where the MISSING 76.1 BILLION dollars might be and why they failed so miserably in their duties.

Hang ’em High!

The elites, including Prime Minister David Thompson, are doing their best to protect Sylvia and Lawrence Duprey, Leroy Parris and other friends – but in the end a few sacrificial lambs will have to be offered to the public.

How will the Caribbean banks, politicians and business people retain public confidence if they don’t publicly hang a few bodies at the crossroads?

The question I have is: How many of the hanging bodies will be Price Waterhouse Coopers employees and associates?

Further Reading

Keltruth Blog: Forensic investigator Robert Lindquist Submits Report on CL Financial & CLICO. Government Silent.

Keltruth Blog: What is the Nature of the Relationship between Leroy Parris of CLICO and Barbados Prime Minister David Thompson?

About BFP’s use of the PWC logo: This logo only consists of typefaces, individual words, slogans, or simple geometric shapes. These are not eligible for copyright alone because they are not original enough, and thus the logo is considered to be in the public domain – so stick it where the sun doan shine if you be PWC comin’ after poor little BFP!

CL Financial & CLICO Bailout – The Mystery of the Missing Billions

What is the cost of the Bailouts? Where did all the money go?

As we enter the wrongside of the boom, it is a little like traveling to the dark side of the moon.  Familiar navigation points fade from view and we are forced to use bearings that are new.

The quality of our political rulers has now joined in unholy matrimony with the sheer recklessness of their anointed deal-makers to put our economy into an entirely new and perilous place.

At these moments of turmoil and impending crisis, it is always interesting to observe closely what key people are not saying.  Yes, the pauses and silences can be very instructive in these situations.

I do believe that our national appetite for melodrama, bacchanal and commess is being played upon to distract us from the seriousness of the situations facing us.

The main example is the CL Financial bailout, which was announced a little over a year ago when the first Memorandum of Understanding (MoU) was signed on 30th January 2009.

Given the subsequent revelations as to the withdrawals of funds by important people and the shareholdings of the Minister of Finance in CLF, it is impossible to say exactly when the actual bailout began.  All we can say for sure is that we, the public, were told of a bailout on 30th January 2009.

There has been a cascade of bewildering and disturbing events – those are set out at my blog, www.afraraymond.com – and we are now at a position of deep confusion.  The resignations of three top-level executives of the group and the subsequent bald press releases are most disturbing.  They speak of disputes and jostling taking place in terms of this huge group we are now committed to rescue.  For the record, those resignations were –

12th January – Steve Bideshi, CLF Group CEO, effective 31st January
19th January – Michael Carballo, CLF Group Finance Director, also effective 31st January
3rd February – Claude Musaib-Ali, CEO of CLICO, effective 14th February

Forensic Auditor’s Report due… but so what? Where are the audited accounts for these companies?

The growing sound we are hearing is that the Bob Lindquist forensic report into the dealings of CLICO etc. is to be completed at the end of February.  Many people for whom I would normally hold some respect are anxiously awaiting that report to see what possible wrong-doing might be revealed.

In my view it is an error at this time for us to be awaiting the publication or selected leaking of such a document.

We need to press for the Audited Accounts of the CL Financial group as at 31st December 2008.  Those accounts should be signed-off by the same professional firm which did the 2007 audit, the internationally-renowned PriceWaterhouseCoopers.

That is the most important single document, since it will fix an asset value at the end of 2008.  That is –

12 months after the last audited accounts, which showed a total asset value of $100.666Bn.  See –  this PDF

55 days after Michael Carballo, the then-Group Finance Director, gave statements to the Business Guardian that the group had assets of $100Bn and could weather any storm.  See – this Guardian story.

13 days before Lawrence Duprey, the group’s Executive Chairman, wrote to the Governor of the Central Bank to request urgent financial assistance.  That letter was accompanied by a table setting out the group’s asset values – totaling $23.9Bn – and was read into the Hansard by the Minister of Finance on 4th February.  See Hansard at page 628.

16 days before a dividend of $3.00 per share was paid to the CL Financial shareholders.

30 days before the historic press conference to announce the bailout, at which it was repeatedly stated that the CL Financial group had $100Bn in assets.

Despite its obvious importance in the mystery of the missing money, there is complete silence as to the progress of the 2008 audit.  It is almost a full year overdue and the only accounts we hear of are the forensic and confidential ones.

The CL Financial group’s audited accounts were always published anyway, so why can we not have a clear, official statement as to when the 2008 audited accounts will be published?  What is the mystery?

This country is now bailing-out a group which has failed and/or refused to provide its annual audited accounts and that is unacceptable in terms of the proper expenditure of our taxpayers’ funds. (BFP editor’s comment: To bring this a little closer to home so we slow Bajans can understand, just substitute “Barbados” for “this country” and “CLICO” for the reference to “group”.)

Let us mark this moment well, because if the 2008 audited accounts are allowed to fade into obscurity, please do not think that we, the citizens, will be treated any better with the 2009 accounts.  Please take note that this is a recipe for even greater levels of corruption than what besets us now.

C.L. Financial Bailout – Turmoil, Instability and Unanswered Questions

CL Financial bailout – The Governor speaks

by Afra Raymond

My last column on this important matter was published on 31st December, almost a month ago, with several major developments since then.  The main development in my view is that we had some truly remarkable statements from the Governor of the Central Bank.

The messages on the CL Financial group are now so confused that the most charitable phrase possible, is that the public is getting ‘mixed messages’.

The Top-level resignations – The group CEO, Steve Bideshi – a former senior manager at Citigroup – was reported on 12th January to have tendered his resignation, effective 31st January.  (See – Bideshi quits CL after 6 months or Trinidad Express article here)

We are told that his reason for resigning is the breakdown of negotiations for his compensation package.  Our governments have a serious track-record of agreeing and then secreting the terms of compensation for its high-fliers.  Just think of Caribbean Airlines, PetroTrin and UdeCOTT.  It is unbelievable that government was unable to agree terms with this one CEO.  Arguably, Mr. Bideshi was heading the largest and most complex group within the State’s control.

On 19th January, we were told that Michael Carballo, the group Finance Director, was resigning, also effective 31st January.  (See – Guardian’s Another executive leaves CL Financial or Trinidad Express article here)

Carballo had the unique position of being the only senior executive to survive the crisis at the group and keep his position.  We were not given any reason for his departure, but we were told that Carballo is to continue acting as a Director on CL Financial’s Board.

Bideshi and Carballo were the two top executives at CL Financial.  What is going on?

To date there has been no proper explanation as to the causes of these major resignations or clear statement on the way forward.  To have both the group CEO and Finance Director resign within a week of each other, effective within less than a month, speaks of turmoil and jostling.  That kind of thing would not happen if the situation was stable.  The purpose of this bailout was said to be the avoidance of systemic risk and the maintenance of confidence in our financial system.  The official silence on this startling development only adds to the impression of ‘more in the mortar than just the pestle’.

… continue reading the full article at Afra Raymond’s blog article CL Financial Bailout – The Governor Speaks

CLICO news media blackout continues in Barbados

As CLICO's lawyer, PM Thompson helped to build the CLICO house of cards

“Can anyone say what has happened to the 2008 financials of Clico Insurance Barbados, Clico General Insurance and Clico Mortgage and Finance? According to Barbados law the financial statements for these companies should have been made public by April 30, 2009”

… comment left by BFP reader “Donald Duck, Esq”

According to research by independent citizens like “Donald Duck, Esq”, CLICO and associated sub-entities haven’t filed their bookkeeping accounts and are now 9 months past due.

That’s actually just following the old pattern established when David Thompson was CLICO’s lawyer in the days before he became our Prime Minister. Consider this folks: CLICO filed it’s 1993 financial statements in 2006 so the monkey-business has been going on for a long, long time.

The events surrounding CLICO, parent company CL Financial and all the other associated entities are, thus far, the scandal of the century – but you’d never know that by reading the Barbados news media where “investigative reporting” is confined to regurgitating government press releases. Both The Nation and The Barbados Advocate newspapers continue to sanitize anything they write about the CLICO – CL Financial mess – and neither paper asks any questions.

Questions such as “Why is the Barbados Government bailing out CLICO when they can’t even produce up-to-date accounts?”

Oh… the papers do continue to print adverts for CLICO and receive payments for the same. Golly… do ya think that the advertising revenues are connected with the absence of real reporting on the CLICO story? Nah… couldn’t be. The journalists and editors of the Barbados news media are far more ethical and professional than to kill a story for advertising revenues… aren’t they?

As to the reason why the Caribbean Broadcasting Corporation (CBC) doesn’t do any in-depth investigative reporting on CLICO or CL Financial, I’m sure it’s just an oversight that has nothing to do with the fact that CLICO big guy Leroy Parris is in charge at the CBC thanks to his friend Prime Minister David Thompson.

The CL Financial – CLICO scandal is huge and the people of Barbados deserve better from their news media than they have been getting. C.L. Financial’s assets vanished into thin air – $100.7 billion down to $23.9 billion in just 12 months! There were phony shell companies, executives who took bribes to have the company purchase land in Florida for more than its real value and on and on and on.

When compared to the CL Financial – CLICO scandal, Sir Allen Stanford looks like a kid who pocketed a sweet without paying – but until the Barbados news media decides that they serve the public interest, Barbados citizens will continue to be kept in the dark about how much of their money went missing, where it went and who profited from their losses.

Further Reading

October 1, 2009: C.L. Financial’s assets vanished into thin air – $100.7 billion down to $23.9 billion

September 22, 2009: Conflicts of Interest and Sinister Secrecy Continue in CLICO Scandal

July 14, 2009: How CLICO Barbados Supported Trinidad Politicians With Your Barbados Tax Dollars & Insurance Premiums

C.L. Financial’s assets vanished into thin air – $100.7 billion down to $23.9 billion

“Given accounting conventions as to intervening events and their reporting, it is startling, to say the least, that this balance sheet should have declined to $24Bn just 12 months and 13 days after their reporting date. Only 56 days after publication.  This is an aspect of the fiasco which has not been discussed in public, so far.

We need to hear some accounting of this extraordinary situation.  Just to select one item of interest, Loans and Advances are shown as $21.975Bn in the CLF 2007 accounts and yet only $8.0Bn is there at 13th January 2009.

My reading of this is that CL Financial’s assets declined in value from $100.7Bn at the end of 2007 to $23.9Bn at the beginning of 2009.”

… from Afra Raymond’s excellent article Finding the Assets

Further Reading

BFP, June 3, 2009 – CL Financial, CLICO Fraud Report: Dummy Company, Phantom “Consultancy” Payments, Vanishing Money Transfers From Company To Company

BFP, June 2, 2009 – EXCLUSIVE REPORT BY BARBADOS FREE PRESS: CL Financial Group Collapse – Insiders Took Bribes To Have Company Purchase Land For More Than Market Value!

New Barbados Senator Is Proof Of Ongoing CLICO DLP Incest

Swearing in Ceremony - Senator Jepter Ince promises to protect Clico's interests, come what may!

Does CLICO still own the David Thompson government?

One thing you have to admire about Prime Minister David Thompson – he never forgets his friends. Thompson has not forgotten all those long years when CLICO and CEO Leroy Parris supported the losing DLP Democratic Labour Party with campaign donations and supported David Thompson personality by handing CLICO’s legal work to Thompson’s law firm.

Yes sir – you can admire loyalty to friends.

The problem starts when the friends are now the Barbados government that dispenses your tax dollars to CLICO without transparency or rules about conflicts of interest. Then the friends arrange to place CLICO alumni in strategic positions throughout the government to assist the interests of this “band of brothers”.

Yup, there is far more to Friday’s appointment of CLICOite Jepter Ince as a new Barbados senator than simply tossing out a perk to an old friend. For Leroy Parris, David Thompson and the CLICO band of brothers, it is about the continued implementation of the strategy to protect their past business dealings from real scrutiny by the public and burned shareholders.

Senator Ince’s Qualifications?

Qualifications? Hell – he should be under investigation for the CLICO Fund debacle!

For a start, when Jepter Ince was working for CLICO and advising Barbadians to borrow from Clico Mortgage & Finance Corporation to invest in the Clico Balanced Fund, he and CLICO failed to tell folks that some of the so-called “investments” were into the less than solid “investments” of other CL Financial Group companies. “Investments” like way over-priced Florida swamp land real estate where it is now alleged that senior CL Financial people took millions in kickbacks while Mr. Ince’s clients got screwed.

See BFP’s articles…

EXCLUSIVE REPORT BY BARBADOS FREE PRESS: CL Financial Group Collapse – Insiders Took Bribes To Have Company Purchase Land For More Than Market Value!

CL Financial, CLICO Fraud Report: Dummy Company, Phantom “Consultancy” Payments, Vanishing Money Transfers From Company To Company

See Keltruth’s articles about the oh-so-close relationship between Clico and Prime Minister David Thompson…

Payback!

Lack of Transparency – Private Citizens Losing Money

What is the Nature of the Relationship between Leroy Parris of CLICO and Barbados Prime Minister David Thompson?

We should be having a public inquiry where Mr. Ince would have to answer questions about his actions, the actions of the companies he worked for and the actions of the other senior CLICO allumni who worked with him.

But that isn’t going to happen, friends.

The fix is in.

Say hello to your new Barbados Senator Jepter Ince…

Ince is new Senator

8/1/2009 – Barbados Advocate

BARBADOS has a new Senator. He is financial consultant, Jepter Ince, who was sworn in yesterday in a brief ceremony at Government House.

Speaking with the Barbados Advocate just after the occasion, the new Democratic Labour Party Senator said that his appointment came about after he was recommended by the Prime Minister, David Thompson and his appointment was approved by Cabinet. He replaces former Senator Derek Alleyne, who is the new Director at the Urban Development Commission.

How CLICO Barbados Supported Trinidad Politicians With Your Barbados Tax Dollars & Insurance Premiums

One cheque for TT$5 million to Patrick Manning's PNM (Trinidad). Keltruth Blog questions how many Barbados dollars ended up covering CL Financial Group's political donations instead of paying CLICO Barbados policy holders.

UPDATED: April 8, 2010

It’s always interesting to go back a year or so and see what people were saying and thinking as the whole CL Financial / CLICO mess was oozing its way through the sewer of lies and corruption engineered by the company leadership and their political lapdogs. Here’s an article we first published in July of 2009.

How Many Millions Did CLICO & CL Financial Spend On “Political Donations” ?

The central theme of the article is: CL Financial, CLICO and the associated companies gave millions to Caribbean political parties and politicians – and that money should now be returned by the politicians.

In consideration of the fraud and nonsense that went on at CL Financial & CLICO, we believe that the political parties and politicians should return this money to the little people who have been hurt most by the corruption and the failure of the politicians to properly regulate Parris, Duprey and the rest of the so-called “leadership” that caused this mess.

Here’s our original story…

How Can Prime Minister David Thompson Justify This Abuse By Leroy Parris & CLICO Barbados?

In the corrupt convoluted mess that is the story of CL Financial and CLICO Barbados, there is one fact that stands clear: CLICO Barbados would have done just fine weathering the financial storms if only CEO Leroy Parris and the other CLICO management hadn’t allowed their company to be raped to prop up CL Financial’s fraudulent schemes and payoffs.

And what a rape it was. As we detailed in our stories…

EXCLUSIVE REPORT BY BARBADOS FREE PRESS: CL Financial Group Collapse – Insiders Took Bribes To Have Company Purchase Land For More Than Market Value!

and

CL Financial, CLICO Fraud Report: Dummy Company, Phantom “Consultancy” Payments, Vanishing Money Transfers From Company To Company

… Leroy Parris and his fellow conspirators traded CLICO Barbados financial health and assets for worthless paper secured by Florida swampland in a deal arranged by other CL Financial companies. And that is just one example of the “management” provided by Leroy Parris.

Now your tax dollars are cleaning up the mess and Leroy Parris continues with his fat government position at the CBC as given to him by his old friend Prime Minister David Thompson. And at CBC, Parris still can’t seem to obey the rules – even the ones he insists upon for other lower human beings.

How Many Millions Did CLICO & CL Financial Spend On “Political Donations” ?

Keltruth Blog has the story that CL Financial and associated companies paid millions of dollars to Caribbean politicians – writing cheques like the one featured at the top of our story. Without integrity legislation and the transparency of campaign financing rules and disclosure, Barbados citizens will just have to guess as to the amount that was given to David Thompson’s DLP campaign.

But no matter how many tens of millions of dollars that CL Financial and CLICO gave to politicians, YOU, the Barbados taxpayer, are on the hook.

Prime Minister David Thompson is bailing out CLICO and your tax dollars are going to cover the sins of Leroy Parris and company.

Read Keltruth Blog’s CLICO: Trinidad Politicians Before Policy Holders?

CLICO SCANDAL: Lawrence Duprey’s Wife Bought Yet Another Florida Mansion As The Company Was Failing

Mrs. Duprey Is Also CL Financial Board Member

Mrs. Duprey Owns 4 Florida USA Mansions On The Same Street – Worth Over US$14 Million

At the same time that CLICO parent CL Financial was failing, Sylvia Baldini – Deputy Chairman of CL Financial and wife of big boss Lawrence Duprey – bought a fourth mansion on her Florida street for a cool US$3 million dollars. Yup… Mrs. Duprey owns four homes in Florida.

That sure makes me feel good about Barbados Prime Minister David Thompson handing 10 million dollars to bail out failing CLICO Barbados without hardly a thought. What security did Prime Minister Thompson receive for the ten million dollars? Hey… none a your bidness!

Keltruth Blog has been doing some online research and appears to have come up with a way to identifiy Florida real estate owned by non-residents!

Oh…..!!!! This should be fun. 🙂

Has anyone looked up “Owen Arthur”???

Don’t go to Keltruth unless you want to be even more infuriated…

Keltruth Blog: CLICO: Sylvia Baldini’s Four Multi-Million Dollar Homes In Florida!