Government says that it has to settle the $33 million debt Universal Health Services, a private hospital, owes to the Belize Bank because it guaranteed the loan; the doctors of the Karl Heusner Memorial Hospital, a public hospital in the same locale, say they don’t believe the guarantee even exists.
The matter has sparked immense public interest and strong opposition from some medical professionals in the public sector. That is because UHS has not paid the bank, and so Government may have to give up 8,000 acres of the Jewel to square off the debt.
A month ago, Government could not produce the document. Now, the Ombudsman is claiming that he’s seen it, but can’t order for it to be disclosed under the Freedom of Information Act, because the guarantee is confidential.
Since January, the Association of Concerned Belizeans (ACB) has been trying to get the Government to disclose the document, because like some KHMH medics, they, too, believe that Government did not pen the guarantee.
The ACB has pursued its rights under the Freedom of Information Act, and the latest response to them is that the document cannot be released because it is confidential and private.
Legal Counsel in the Ministry of Finance, Gian Ghandi, told us that Government has asked the Belize Bank’s permission to release the document, but the Bank has not given its consent.
The ACB has been trying to secure the document from Government for over two months, and it says that its next move may be to go to court to challenge the classification of the document as exempt, and force Government to release it. They are due to meet late this evening in their regular weekly meeting, when they plan to discuss the way forward.
Government did not respond to the ACB before the 14-day deadline stipulated under the Freedom of Information Act, so the ACB pursued its legal recourse of taking its case to the Ombudsman.
Acting on ACB’s behalf is Lois Young, SC, a prominent attorney. The Ombudsman wrote her on March 14, attaching a letter from Financial Secretary, Dr. Carla Barnett, informing that she had seen no such guarantee.
Now, the Ombudsman says that he has seen it, but can’t order that it be disclosed to the ACB, because the document is exempt under the Freedom of Information Act.
On March 26, 2007, Rodriguez wrote to Young saying, “…I inspected the document requested and am satisfied that the document is an exempt one, according to law, the Freedom of Information Act. I, therefore, regret not being legally empowered to order disclosure to ACB.”
Legal counsel in the Ministry of Finance, Gian Ghandi, outlined Government’s legal position to the Ombudsman. Ghandi cites two sections of the act. Section 31 allows documents to be exempt “if its disclosure would constitute a breach of confidence” while 27(1) allows exemption of a document “if its disclosure under this Act would involve the unreasonable disclosure of information relating to the personal affairs of any person (including a deceased person).”
Ghandi went on to tell the Ombudsman that the document “contains a provision which prohibits the Government from disclosing it without written consent of the other party, which consent has not been forthcoming. The document also contains information about the private affairs of a customer with its bank and it’s disclosure violates the right to privacy of the customer. Such a right is also guaranteed by section 14(1) of the Constitution.”
Ghandi advised the Ombudsman that under section 40 of the Freedom of Information Act, he could demand to see the document, to satisfy himself that it is, indeed, exempt. Ghandi said that he personally presented Rodriguez with the document for him to review. Rodriguez has agreed with GOB that the document cannot be disclosed.
There has been some confusion as to whether the guarantee was given by the Development Finance Corporation or Central Government/Ministry of Finance. When we first learned of the guarantee, it was from chairman of UHS, Dr. Victor Lizarraga, who had told us in 2004 that DFC had guaranteed the loan because DFC had approved a loan to UHS but the funds were late, and so, according to Lizarraga, the UHS had to get bridge financing from the Belize Bank. The bank refused to lend without a government guarantee, Lizarraga had told us.
We understand from Government that the DFC guarantee in question was dated 2003, even though Lizarraga has told us that the loan agreement with the Belize Bank was penned in September 2002.
According to our official source, in 2004, when DFC was experiencing financial trouble, the bank demanded a more secure guarantee from Central Government. That new guarantee, according to the official, was penned towards the end of 2004.
GOB’s spokesperson on the UHS deal, Health Minister, Hon. Joe Coye, had told the media, on more than one occasion between January and February, that the guarantee was a Ministry of Finance guarantee. Coye opined that it was wrong for Government to have guaranteed that private debt.
Initially the loan was for $17 million, but due to non-performance it has ballooned to $33 million.
Over the past few months Government has reportedly been in negotiations with the Belize Bank to swap 8,000 acres of land on North Ambergris Caye to settle the debt. Government has said that in settling the debt, it would assume 100 percent ownership of UHS and divest some shares to doctors and other hospital employees.
Coye had said that Government would have taken over UHS on February 19, but to date that take-over has yet to take effect.
The question that now remains in the ACB’s mind, as well some KHMH employees’ minds, is: how could the Government have given such an open-ended and secret guarantee to the UHS – if really it did?
The ACB also questions how it is that the guarantee comes up now, when the Financial Secretary could not produce the document a month ago.
Ghandi said that at the time, Dr. Barnett was right, because the document was located in the Ministry of Finance afterwards.