“The infamous accommodation agreements”: What are they? Where did they come from?
“Everybody in this country has heard about it, but few understood the nuts and bolts,” Private Sector Senator Godwin Hulse said during the Special Sitting of the Senate on Monday, July 4, 2011, as they were debating the re-nationalization of BTL.
Senator Hulse said that the agreements obviously were “accommodating” two parties – meaning, the Government, on the one hand, and the Ashcroft-controlled Belize Telemedia Limited, on the other.
Senator Hulse explained that the mess that was consequently created finds its origins in some dubious transactions that found their way into the pool of mortgages that were used in the North American Securitization Program.
Hulse was the head of the investigations led by the Senate Special Select Committee, which probed some of these transactions. It was during those proceedings that BTL agreed to take certain assets of the failed enterprise, Intelco, from the Government, on credit from GOB.
Hulse noted that the assets in question were seriously overvalued, but “Government needed a bailout.”
“The bailout was, BTL was encouraged to buy those properties from the government. So having bought it, there could be no argument,” said Hulse.
On Tuesday night’s The Adele Ramos Show, chairman of BTL, Nestor Vasquez, was asked what he knows about these transactions and BTL’s pending obligation to the Government of Belize.
Do you have any knowledge of BTL having any financial arrangement with Government to acquire assets under the Intelco scheme? Does BTL owe the government for any assets?
Vasquez said that he was not aware of any such obligation.
On Monday, Hulse said, “I would like to ask the question now, whether those [assets from the Government] are still on the books of BTL. Government is still paying [under the securitization program] so [we] should see if BTL is paying for those properties,” Hulse added.
BTL’s 2010 financials state that, “As part of an ‘Accommodation Agreement’ entered into in September 2005, Telemedia [BTL] purchased several properties from the Government of Belize (“GOB”) for BZ$19.2 million.”
It added that the Accommodation Agreement also included a financing arrangement with the Government at a very concessionary rate of 6.188% per annum to purchase the said properties.
“The loan is repayable in twenty-eight quarterly installments of $685,714 with the first installment payable on June 30, 2006, and the last installment due on March 31, 2013,” BTL explained.
The company indicated that at the time the financial report was compiled, the loan was in arrears, but an arrangement had been reached with the Government for BTL to resume repayment.
Amandala contacted Financial Secretary Joseph Waight to find out the status of that loan. He informed us that, “The former owners [the Ashcroft group of companies] had stopped paying when the dispute over the Accommodation Agreement arose.”
To date, said Waight, the balance on this Loan Note is about $10 million.
“BTL has proposed settlement over a period of time [about two years], and the GOB has accepted this proposal,” he added. Waight said that the agreement for repayment was made last year, and payments are to resume this financial year and continue into next year.
In explaining more about the transaction, Senator Hulse said that BTL had agreed to purchase four properties formerly held by Glenn Godfrey’s Intelco, through an arrangement with the Government of Belize.
Hulse told Amandala that St. James Building Society, a Glenn Godfrey entity, had originated the loans in September 2001 and the Social Security Board had bought the mortgages in April of 2002 when St. James had already been wound up.
Senator Hulse said that the evidence indicated that St. James had closed in May of 2001 and transferred all assets to the Alliance Bank, leaving St. James with no assets and no liabilities. St. James did not exist, he added.
SSB paid money (nearly $20 million) to St. James, which went to Hibernia Bank in New Orleans, USA.
“St. James did not lend the company [Intelco] any money,” said Senator Hulse, adding that the “paper mortgages” were later sold to SSB.
After this transaction, and while the details of the deal began to unfold during the Senate investigations, the assets were sold off to BTL—an arrangement which gave birth to the accommodation agreements.
Intelco, St. James, Western Caribbean, all got their money, said Senator Hulse, but the Government is out of pocket.
Senator Hulse said that the Senate Special Select Committee investigation report into the SSB transactions put under the securitization program, which outlines recommendations for further probes on the criminality of certain transactions, later languished at the Office of the Director of Public Prosecutions.
DPP Cheryl-Lynn Vidal, who assumed office after the presentation of the report to the DPP’s office, confirmed today that the report is still at her office, but added she would not go on record to say anything more at this time.
“The Senate Select Committee is of the view that the information contained in this Report is [in] respect to the documents covering the following Mortgages: Data Pro, Aquarius, Western Caribbean Properties Ltd., International Telecommunications Ltd. [Intelco], and the two other mortgages which were signed containing representations and warranties and other statements that is or may be misleading, false or deceptive; may amount to offences under the criminal code chapter 101 and in particular sections 20, 153(1), 164 (1)(2), 165(2) and recommends that the DPP pursues this matter for which the committee makes its report available to him,” says page 121 of the Senate Special Select Committee’s report.
If prosecutors were to take up any of the recommendations, they would have to initiate separate investigations.