Today the daunting details regarding the secret guarantee Prime Minister, Hon. Said Musa, gave to the Belize Bank for Universal Health Services (UHS) were disclosed. So far only a select few people, mostly parliamentarians, have seen the purported guarantee, the latest being Leader of the Opposition UDP, Hon. Dean Barrow, who today questioned the document’s very authenticity and Musa’s authority to venture into such an open-ended promise to pay UHS’s debt to the bank, a debt now standing at $33 million.
In a press conference held in the Caracol room of the Radisson Fort George Hotel this afternoon, Monday, Barrow raised a number of concerns about the guarantee, the chief being whether it had really existed since December 9, 2004, the date on the document.
“There is nothing in the document itself that can prove that the document is a fraud, but you look at all the circumstances surrounding this thing and of course the questions jump at you quick and fast,” Barrow said.
Government officials have told us that the bank required Government to provide a guarantee for the UHS loan after the DFC, government’s development bank, ran into financial trouble. The DFC guarantee, which was limited to the principal of $17 million and had no confidentiality clause, was replaced with an unlimited guarantee with no principal amount quoted anywhere in the document and an additional confidentiality clause.
However, Barrow is questioning whether that document, signed by P.M. Musa and witnessed by the Attorney General, Hon. Francis Fonseca, had existed since December 2004, or whether it is a recent concoction.
He said that the document he saw late Friday evening was “fairly pristine” and appears to have not been handled at all.
The Association of Concerned Belizeans (ACB) is the first entity that asked Government to disclose the guarantee, but Government had responded saying that the document was exempt, due to confidentiality and privacy clauses, and so could not be released, because it requires the bank’s approval. Government claimed it did not have that approval. Now the ACB has gone to the courts, challenging the Government’s decision not to make the document public.
When the ACB requested to see the document, the Financial Secretary, Dr. Carla Barnett, informed that she could not locate such a document at the Ministry of Finance.
Barrow now questions whether the Minister of National Development, Hon. Mark Espat, had seen the document, because the guarantee was also not disclosed in the recent US$500 million debt offering for Belize’s international creditors.
Barrow said that such debt restructuring required full disclosure of all government’s debt and guarantees; Mark Espat told us that had he known of the guarantee, he would have made the disclosure. He said that he had disclosed to international creditors what he believed were all of government’s liabilities.
Late this evening, Minister Espat informed us that he did not learn of a Government guarantee until a couple of weeks ago, when it was being discussed in the media, and had he known of it he would not have supported it. According to Espat, he was absent from last Tuesday’s Cabinet meeting where it was presented, but plans to take a look at it soon.
Barrow told the media today that the debt restructuring agreement could be overturned based on the non-disclosure of the UHS debt.
But beyond that, said Barrow, the debt was never recorded in any of the budget books since 2004, as it should have, had it existed since December 2004.
“While this government is capable of anything, it must strike you as strange that there were these serial non-disclosures of a document that the government says existed on that material date of 9th December 2004. All this, ladies and gentlemen, must beg the question: Is that date of 9th December 2004 authentic? Was that manufactured after the fact?”
And if the document is authentic, Barrow says, it has to be made public, because, in his opinion, there is nothing in the guarantee that is confidential, and Barrow, a practicing attorney and senior counsel, asserted that he knows of no precedent for such a clause.
“It strikes me as most peculiar that there should be a confidentiality clause that says not that the bank shall not disclose the Government of Belize’s business, but that the Government of Belize shall not disclose its own business except that it first gets a written consent from the bank,” Barrow remarked.
He said that “it is absolutely nonsensical for the Government to try and hide behind” the provisions of the Freedom of Information Act on exempt documents, because there is nothing in the document that discloses any of the bank’s business or trade secrets.
The Opposition Leader called on the Government to make the document fully public and to do so “like yesterday.”
Barrow has also challenged the authority of the Prime Minister to enter into the guarantee, for which, he said, Musa had no authority to sign without having gone to the National Assembly for approval.
Musa told Barrow during the recent budget debate that any proposal to settle the UHS debt would go to the National Assembly for approval. Barrow says that this fact alone will require Government to fully disclose the document to legislators and would put the document squarely in the public domain.
Barrow said that the Prime Minister has waived a large portion of the principal repayment for the UHS loan, and not only the interest, as he had told Channel 7 News just last week.
Co-incidentally, on December 9, 2004—the very date on the purported Government guarantee—Amandala had a very candid, face-to-face interview with Dr. Victor Lizarraga, the chief shareholder of UHS, about the UHS situation, and he took time to explain to us the history of the DFC and Belize Bank loan. Titled UHS speaks on $30 million debt, that story relayed Lizarraga’s account of how a $4 million loan originally received from the Social Security Board turned into the transaction that is being debated today. Lizarraga talked only of a DFC guarantee for UHS’s loan, and he never once mentioned any guarantee by Central Government, of which he should have been aware at the time of the interview if the guarantee was sealed on that date.
Lizarraga said that UHS had gotten a $28 million bridge loan from the Belize Bank in September 2002, but it only used $17 million of that money. DFC was supposed to repay the Belize Bank, because this loan was only a temporary fix until DFC could come through with financing for which the UHS had applied, Lizarraga had further explained.
Former DFC general manager and UDP chairman, Doug Singh, who said that he had the privilege of obtaining some financial insights in late 2004 when there was a move to divest some of DFC’s assets, said that UHS owed the DFC close to $13 million, while it held a $17 million overdraft with the Belize Bank. He said that the time of the Government guarantee in 2004 is notable, because by that time UHS had already defaulted or was on the process of defaulting on its bank loan. The government “…was mindful of protecting the interests of the Belize Bank and not of Belizeans,” Singh commented.
We noted from the information Barrow had transcribed from the Government guarantee on Friday that the original financing agreement has been amended twice, but Barrow told us that he had not had the benefit of seeing the original loan agreement nor its amendments to be fully apprised of the context of the unlimited guarantee Government gave the Belize Bank.
The last word from Government on the DFC loan was that it was billed at $12 million, but last week P.M. Musa told Channel 7 News that the loan had been decreased to $4 million. Barrow does not buy Musa’s explanation that he has only wiped off the interest from the loan, and he contends that actually Musa has “forgiven a large portion of the principal.”
The Opposition Leader said that the Belizean people should call the Government to account for the reduction of this DFC loan with UHS, as well as the UHS guarantee.
“Even if you accept that the date is authentic, my God, the contents of the guarantee, the fact of the guarantee is enough in my view to make you want to line up whoever entered into it at the foot of the Swing Bridge and hang them on the nearest lamppost,” he commented.
On Thursday, April 19, Government’s press office boss, Nuri Muhammad called the media to tell them that Cabinet had agreed to let members of the National Assembly see the document. Amandala did not receive a call, but when we spoke with Muhammad today, he apologized for not doing so. Last Wednesday we also spoke with the Cabinet Secretary, Mr. Robert Leslie, and asked him about the major decisions taken in Cabinet. He also did not apprise us of this decision that Muhammad said was made in the last Cabinet meeting. By Friday evening, Channel 5 News was reporting that the information provided to the media was wrong – that only the Leader of the Opposition, and not all National Assembly members would see the document.
Barrow said that when he spoke with Muhammad, the Cabinet Secretary, and the Prime Minister, they all made it clear that all National Assembly members could see, and Barrow offers a practical explanation for this – that they would have to see the guarantee anyway before Government seeks the required approval to settle the $33 million debt with the Belize Bank.
Four other Opposition members present at today’s press conference say that they will ask to see the document this week, some of them as early as Tuesday.
Barrow questions why the members of the National Assembly are more privileged than the members of the public, who, Government has said, cannot see the guarantee document.