The administration of Prime Minister Dean Barrow is still trying to unravel the tangled web of surreptitious and convoluted transactions, seemingly intended to mask the secret diversion of public funds to settle the $45 million debt of Universal Health Services (UHS) with the Belize Bank Limited (BBL), even as many Belizeans continue to be in complete disbelief and indignation that the former government of Prime Minister Said Musa defiantly used at least $40 million in funds that were a present to the people of Belize for developments in housing and health, to pay off that private UHS debt, which Belizeans had adamantly and resoundingly said should not be paid from the public purse.
Of even more concern to Belizeans are the reports that even though $40 million of their money is gone, they have gotten absolutely nothing in return.
Barrow told the press and nation Wednesday afternoon that: “…forty million dollars gifted to us by Venezuela and Taiwan was paid over to the Belize Bank. We did not end up owning the hospital, notwithstanding that $40 million was paid. That money was then, as we understand it, deposited in the name of a charitable trust registered in Nevis, but operating from a Turks and Caicos Belize Bank account. In turn, that money was used, $5 million of it, to lend Dr. Venny as a direct loan from the Belize Bank and another $8 million or so as a loan from one of the three vehicles that were used by the Belize Healthcare trust group in connection with this whole UHS deal…
“[And] although Dr. Venny only put up $12 million or $13 million, loaned to him by the Healthcare trust group, he owns 51% of the shares and the Healthcare trust group only owns 49%…
“The government and people of Belize end up having not even one single solitary share…”
A week ago, Prime Minister Dean Barrow, on his way to a regional meeting in The Bahamas, called a press conference at the Philip Goldson International Airport to disclose that US$10 million from a US$20 million grant from Venezuela to Belize had been diverted to the Belize Bank, controlled by British billionaire Michael Ashcroft.
At last week’s press conference, our newspaper had pressed Central Bank Governor Sydney Campbell, to find out exactly how much money had been transferred in January from the BBL’s Turks and Caicos branch to Belize City, and he eventually revealed that it was not just the US$10 million from Venezuela, but a grand total of US$20 million. The source of the other US$10 million was not disclosed until Wednesday, when Barrow filled in the unknown parts of the equation.
The Barrow administration and the public at large have raised many questions over the propriety of the transactions, especially in light of the fact that the money was passed through as many as seven “channels”/“vehicles” in at least five territories (London, St. Kitts/Nevis, Turks & Caicos, Panama, and Belize) before the deal was closed right here on Belizean soil.
At a follow-up press conference held yesterday, Wednesday, March 12, at the Radisson Fort George Hotel in Belize City, Barrow disclosed even more explosive findings from Governor Sydney Campbell.
“As this investigation has progressed, matters have become even more alarming,” Barrow said. “It now turns out, based on the investigation that the Governor of the Central Bank did [that], in fact, the previous administration paid over not 10 million US to the Belize Bank with respect to the UHS debt, but 20 million US dollars. In addition to the 10 million US dollars from Venezuela that we knew about, the inquiry has discovered and disclosed that there is another 10 million US dollars gifted to the people and Government of Belize, by the Republic of China on Taiwan.”
The bigger question is, who got what from the $40 million. Barrow explained that out of the BZ$40 million, the Belize Bank was paid off, and there is indication that at least one UHS shareholder, Dr. Lizarraga, received payment as a part of the deal, Barrow indicated.
He would not disclose much more about their findings on the transactions, indicating that Governor Campbell’s investigations are ongoing.
Taiwan gave US$10 million last September/October
As far back as seven months ago, the Embassy of Taiwan here in Belize made out a cheque in the name of Belize Bank, and forwarded it to ex-Prime Minister Musa, with the stated intent that the money should be used for health care in general, Barrow noted at today’s press conference. It was not to pay off the private debts of UHS, said Barrow.
First Taiwan issued a $6,000,000 cheque in the name of the Belize Bank, dated September 12, 2007, and the face of the cheque shows a stamp indicating that it was cleared at the Bank’s Belize City branch five days later, on the 17th. The Embassy of Taiwan in Belize sent Musa a second cheque, this one for $4,000,000, made out to the Belize Bank and dated October 20.
We checked our records, and the embassy here to see if any public announcement had been made by either Taiwan or Belize on the US$10 million, and strangely, neither Belize nor Taiwan said a word about the transaction.
Prime Minister Barrow referred to letters between the Taiwan ambassador and ex-PM Musa, which indicated that the funds were to be used generally for Belize’s healthcare system.
He indicated that even though the instructions from Musa’s administration to the Belize Bank was that the 2 Taiwan cheques were for paying the UHS debt, it is his understanding that Taiwan did not know that the funds were going to be used to settle a private debt.
Venezuelans tell a different story
In his statement last Wednesday, Musa claimed that he had an agreement with the Venezuelans that the other half of the grant that was diverted to the Belize Bank would not be disclosed “until further notice.” But according to Barrow’s emissaries, led by Ambassador Fred Martinez, who were in Venezuela this week, the Venezuelans did not back up Musa’s claim.
Venezuela went so far as to put in on record, on the “cash payment confirmation” document sent to the Belize Bank (for payment to the bank’s account at the Bank of America in London), that the funds were “only to GOB [for] construction and repair of houses.”
Barrow calls on Belize Bank to refund US$10 million
Barrow said that he has put the Belize Bank’s chairman, Phil Johnson, on notice that he wants at least the US$10 million from Venezuela returned to its rightful owners – the people of Belize, because the document sent to the bank was clear in indicating the purpose of the Venezuela money.
PM Barrow said that he plans to reiterate the same position to BBL principal, Michael Ashcroft, when he comes to Belize on Saturday.
Will anyone be held culpable?
While he was cautious in not ascribing criminal motives to the parties involved, Barrow said that he would be taking legal advice on the matter from three attorneys: Solicitor General Tanya Herwanger-Longsworth; legal advisor in the Ministry of Finance Gian Ghandi; and a private attorney yet to be named.
Public discussion has centered on not only whether the monies would be returned, but furthermore, on who would be held accountable for all that has transpired with the UHS deal.
Responding to our question on this matter, Barrow was reserved in his reply, saying only that “The lawyers will advise us as to first of all whether criminal charges are to be filed, and if so, what those criminal charges would be, and against whom those charges would be filed. I really don’t want to go beyond that.”
Before Venezuela grant – the SSB attempt
We note that even before the Venezuela money came in, around mid-December, the former administration of the Social Security Board, headed by Dr. Louis Zabaneh, was looking at using SSB’s money to purchase at least 51% in UHS. In the days after the proposal became public, the SSB completely abandoned that discussion.
Only two weeks later, former CEO in the Ministry of Foreign Affairs, Amalia Mai, traveled to Caracas, Venezuela, on the orders of ex-Prime Minister Musa, to sign the documents for the Venezuela grant.
Where the debacle all began
The entire involvement of the Musa administration with the UHS has been shrouded in secret deals that only came to light long after the ink had dried on the documents. The controversy of the day is rooted in a guarantee that Musa and former Attorney General Francis Fonseca signed (reportedly in 2004) to cover an unlimited amount of debt for the UHS, even while it was owned by private interests, the main ones being Dr. Victor Lizarraga, Dr. Atanascio Cob and PUP insider Luke Espat. That guarantee became the center of controversy two years later, when Musa’s Cabinet announced that they had made a decision to buy two-thirds, and later 100% of UHS.
Members of Cabinet had told the media that even they knew nothing of the guarantee, and even while the guarantee formed the subject of fierce public debate and opposition, Musa and Fonseca (Francis) went ahead and signed three new secret deals with the Belize Bank – a settlement deed committing the Government to settling the UHS debt, and two loan documents, one for the old UHS debt of $33 million and a new loan of $12 million, partly to pay the debt the UHS had with the Development Finance Corporation, the Government’s development bank which became insolvent and subject to a Commission of Inquiry.
First, the $12 million loan was used to pay off creditors of the UHS, among them the shareholders and affiliated companies, as well as the DFC, after Musa gave the UHS an $8 million discount on its debt with the DFC.
Is the $40 million just the tip of the iceberg?
With the revelations regarding the diversion of $40 million of public funds to the Belize Bank at the end of the second Musa administration, taxpayers have begun to question whether similar diversions of public funds had not been done in the past, and if so, to what extent those diversions had occurred. Some have gone further in demanding a full inquiry of the use of monies gifted to Belize or borrowed by the Government over the past 10 years.
Barrow to meet with Bush
Simultaneously with the heads of government of Barbados and Bahamas, Prime Minister Dean Barrow travels to Washington, DC, next week, where he is slated to have a one-hour meeting with outgoing US President George Bush, who issued the invitation to the three Prime Ministers. After Wednesday’s press conference, Barrow told us that he intends to make a direct request to the US to assist with a special large-scale audit/investigation. He explained that he had already spoken with US Embassy officials in Belize, requesting that assistance, but he would reiterate that request to President Bush. Barrow is slated to leave Belize next Thursday, March 20, Holy Thursday.
What about the other US$10 million from Venezuela?
Belizean authorities have not lost sight of the fact that Venezuela gifted to Belize US$20 million, and while it has been established that US$10 million was deposited in the Belize Bank, there is still the question of what happened to the other US$10 million received through the Central Bank. Barrow said that as far as he is aware, no official investigation has commenced on that portion of the money, since everything has been superceded by the transactions tied to the UHS issue.
Last reports from Government on that matter were that BZ$15.3 million (US$7.65 million) had been spent by the PUP on “housing” loans and grants during the pre-election season, but indications are that the US$1 million portion for the new world-class track at the Marion Jones Sports Complex is still intact.
(And speaking of Marion Jones, even while Belize continues to be in turmoil over the UHS issue, Marion, a mother of two, had her freedom taken away from her this week, as she turned herself in to begin a 6-month prison term for allegedly lying to US federal agents about taking prohibited steroids while competing in the Olympics. On her release, Marion will still have to do two years of community service.)
Not a case in isolation
We note that when Channel 7 asked Musa about the settlement of the UHS debt last September, days before it was due, he said that, “We are convinced that the private sector will take up the matter.” At the time, $6 million from Taiwan had already been paid to the bank for UHS, but Musa never disclosed it.
On January 18, Francis Fonseca, who signed the secret UHS-Belize Bank agreements with Musa, had told the news station that “We are free from all liability…and the Prime Minister has kept true to his word and his commitment that no taxpayers money will be spent in resolving that matter and in paying off that debt. The Belize Bank has been paid, satisfied, and that is the end, in our minds, of that matter.”
We note that there is still a Supreme Court case pending over the whole UHS transactions, dating back to 2004, lodged by the trade unions, the Association of Concerned Belizeans (ACB) and Senator Godwin Hulse, who all maintain that when Musa and Francis Fonseca signed the string of UHS documents, they did so without the approvals required by law from the National Assembly, which made the documents illegal.
When Musa attempted to pay off the Belize Bank last year, the Capital City saw destructive protests that resulted in the damage to public and private property.
In attempting to cool off the public protests over UHS, Musa had issued a statement last May promising that no public funds would be used to settle the UHS debt, and that private investors would be brought in to take it on.
Barrow said today that the bank used the very money that was paid to it from the Taiwan and Venezuela grants to lend Dr. Venny and his group, so that they could own majority shares in the UHS. Housing Minister Michael Finnegan, on his Lik Road TV show Wednesday night, described it as “dead raise” – a term similarly used to describe the manner in which American Jeffrey Prosser – an investor handpicked by the PUP Government and Ashcroft to take over BTL with two promissory notes – transacted that deal. Government facilitated it by taking out a commercial loan from the International Bank of Miami, now pooled in the 2029 super-bond, which we continue to pay.
There are some common threads with the UHS and BTL story. We note that as far back as 2001/2002, when the Government had claimed it would license the failed Intelco telephone company to compete with the then dominant provider, BTL, BTL unilaterally changed the rates, effectively increasing the rates of local calls and reducing the rates of international calls, arguing that it needed to eliminate cross subsidies to make it better able to survive in the new market.
A now defunct organization that went by the name CAPU – the Committee of Action on Public Utilities, led a series of public demonstrations, calling on BTL to roll back the rates and to refund customers their monies, calculated to be in the tens of millions of dollars. To this day, no refunds have been issued to customers.
In a similar fashion as has transpired with UHS, millions in public funds had been used, and are still being used to pay the debts accrued to finance the Intelco “experiment.”
We note that despite extensive investigations into the Intelco matter under the Senate Special Select Committee, and the affiliated transactions under the DFC, not a penny has been paid back to the Belizean people and the files, we understand, are still “live” on the desks of Government authorities.
(To use an simple analogy to describe the UHS transactions, a man takes $3 from a woman’s purse without telling her, gives his son a dollar to buy bread and his daughter $2 to buy bun. So it turns out he also owns the shop, so he ends up with the money and the goods. While the woman and her children, to whom the money belong, stay hungry, he and his children feast.)