Highlights — 31 October 2014
PUP Petrocaribe lawsuit “unpatriotic attempt to play politics …” – PM Barrow

BELIZE CITY–A team of heavyweight lawyers of the Opposition People’s United Party (PUP), including Senior Counsels Andrew Marshalleck, Eamon Courtenay and Godfrey Smith, this week filed a lawsuit in the Supreme Court of Belize against Prime Minister and Minister of Finance Dean Barrow, the Government of Belize and Alba Petrocaribe (Belize Energy) Limited, a joint venture company formed by Belize and Venezuela, calling on the court to stop the Barrow administration from spending proceeds of the concessionary financing deal through which Belize has gotten over US$100 million on credit from Venezuela for social programs.

Julius Espat, PUP area representative for Cayo South and chairman of the Public Accounts Committee, told Amandala that the lawsuit was filed by the PUP legal team on Wednesday—an action which the Barrow administration has described as an “unpatriotic attempt to play politics with a breakthrough program that is of vital national financial and developmental importance,” which “in truth has nothing to do with the law.”

At a Ministry of National Security press conference held in Belize City this afternoon, Prime Minister Dean Barrow affirmed plans to use part of the proceeds from the Petrocaribe arrangement to finance the purchase of badly needed helicopters for the Belize Defence Force—Espat’s claim notwithstanding. Barrow said that he is confident that his Government can “get a pass from the Venezuelans” to use the funds to buy a helicopter.

He added that the Opposition’s attempt to stop the Government from spending the funds “cannot win either in the Supreme Court or in the court of public opinion,” and that in terms of accountability, the Venezuelans were in Belize 6 months ago and did a complete evaluation of the program. Following that, they gave Belize accolades for an “impeccably run” program, he said.

In his Supreme Court application, Espat is asking the court to declare that the revised Loan Agreement between the Government of Belize and Alba Petrocaribe Belize Energy Ltd. made back in September 2012 and providing for the making and repayment of certain loans by the Government is unenforceable, because Parliament has not authorized it.

He is also asking the court to declare that Government cannot use public funds to pay Venezuela and is further asking the court to restrain the Government with an injunction from making any such payments.

Furthermore, Espat’s lawsuit asks the court to declare that any proceeds from the bilateral arrangement between Belize and Venezuela form part of the Development Fund, established under the Finance and Audit (Reform) Act, 2005.

Deputy Financial Secretary, Marion Palacio, told us when we asked whether such a fund has been established, that “inflows under the Petrocaribe Accord are deposited into a special account at the Central Bank, and these deposits are usually referred to as the ‘Petrocaribe funds’.”

Espat is also asking the court for a declaration that all spending from this program which has been done without Parliamentary approval is unlawful, and calls on the court to issue an injunction against the Government of Belize to stop Barrow from spending the proceeds of the Venezuela Petrocaribe deal in a manner that is contrary to Belize’s Constitution and Financial laws.

“It is definitely not a Julius Espat thing. I was given authorization by the People’s United Party, through the National Executive of the party, to lead this issue,” Espat told us.

He added that the executive had met about a month ago and made a pronouncement on the matter. Also among those giving legal advice are Opposition Leader Francis Fonseca and Magali Marin-Young, Espat said.

“Certainly, when the program first began under the PUP in 2005, it was never taken to Parliament, and there was never any accounting of how the financed portion of the petroleum purchases was spent by the then Government, or even how much it amounted to,” the Government response said.

Espat said that the lack of a transparent system for the management of the funds under the PUP administration was wrong, and it is wrong now.

Whereas the Government has said that Espat’s lawsuit is “utterly without merit,” Espat told us that it will be for the court to decide on that. He also expressed the hope that the court will see the case as a matter of urgency.

Earlier this month, Barrow tabled the Alba Petrocaribe motion, explaining that Section 7.2 of the Finance and Audit Reform Act requires a resolution of the National Assembly to authorize such borrowing, and so today’s loan motion was intended to fulfill that requirement.

He had also explained that Petroleos de Venezuela S.A. (PEDEVESA) supplies the fuel, subject to certain terms and conditions, via a joint venture agreement between the two states. Belize repays 50% of the cost on a 90-day cash basis and the other 50% is financed over 25 years, under a program that allows the country to use the retained proceeds for initiatives such as social projects. Barrow said that since 2012, the financed portion, which will be repaid at 1%, has amounted to US$114,307,356.

Prior to filing the lawsuit, Espat wrote the Office of the Auditor General, Dorothy Bradley, calling on her to undertake an audit of the Petrocaribe monies. In his affidavit to the court, Espat said that Bradley “responded by way of letter to me dated the 17th day of October 2014, informing in effect that she would not look into the matter while the motion was pending before the House because such consideration would be premature.”

The Government’s statement in response to Espat’s filing with the Supreme Court, says: “The Government of Belize deplores the suit filed by the Opposition PUP against the Petrocaribe program, as an abuse of the process of the court.”

Whereas the Government is contending that it had not previously taken the Petrocaribe motion to Parliament because it does not consider it to be a loan, Espat challenged that position, questioning why Barrow would then take the matter to Parliament in the form of a loan motion, if indeed it is not a loan.

“It is a special commercial and diplomatic arrangement under which our sister Bolivarian Republic of Venezuela sells Belize petroleum on terms that oblige us only to pay a part of the purchase price upfront, and keep the rest as credit to be paid instead on installments over 20 years,” the Government contends.

It added that, “Out of an abundance of caution, however, and because there is nothing to hide from a Government that has repeatedly told the public of the multiplicity of infrastructure and social projects being paid for out of the Petrocaribe program, the current administration has introduced into the House a motion to treat the funds as a loan and authorize borrowing in that regard.”

The Barrow administration, which holds a majority of seats in Parliament, asserts that the motion “should easily be approved by the full House at its meeting next month.”

Espat said that if the motion passes through Parliament before the court hears his application against the Government, he would simply have to amend his claim.

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