Mrs. Narda Garcia has officially been replaced as the Chief Executive Officer of the Belize Social Security Board (SSB), and her replacement, announced on Friday, August 31, is University of Belize board of trustees chairman, Dr. Louis Zabaneh, effective this week.
Garcia’s termination was one of several recommendations tabled last July in the final report of the Senate Special Select Committee, commissioned in September 2004 to investigate the loans and securitization portfolio of the Belize Social Security Board. (Garcia still has a case pending in court against the Senate Special Select Committee due to come up in October.)
The investigation of the SSB was initiated after great public outcry over the use of Social Security funds to settle the debts of the Glenn Godfrey group of companies, the chief one being Intelco.
Dr. Louis Zabaneh’s father, Eugene Zabaneh, was one of the principal shareholders of Intelco, the Alliance Bank and Z-line Bus Services – the company which was paid $14 million out of the $30 million loan Novelo got from the Development Finance Corporation – one of the biggest loans that was included in the securitization pool.
Dr. Zabaneh has told us that he was involved in the said securitization program after mid-2001. In a prior interview with our newspaper, he told us that he facilitated the completion of the process by providing macroeconomic data to external parties, assisting with the organization of visits by some of these external parties, and helping Mr. Ian McMillan to try to bring things to a successful completion.
Zabaneh, who holds a doctorate in applied economics, had also served as the executive assistant in the Ministry of Budget Management under Hon. Ralph Fonseca, who was the man in charge of the SSB while the securitization program was being instituted.
Concomitant with the announcement of Zabaneh’s appointment on Friday was the presentation by Prime Minister Said Musa, who is the Minister responsible for public finance, of amendments to the Social Security Act – promised over a year ago.
At Friday’s House of Representatives meeting, PM Musa informed that he would add a new member to the board of directors of the Social Security Board to represent “the indigents” and the Belize Council of Churches would nominate that representative.
This would bring the SSB’s board, chaired by Michel Chebat, to a 5-5 split, with Government holding 5 seats, the National Trade Union Congress of Belize holding two seats, the Belize Chamber of Commerce and Industry holding one seat, the Belize Business Bureau holding one seat and one seat being held for “indigents.”
Under the proposed amendments, the chairman would be a private sector representative who would have a second and casting vote, Musa also said.
The amendments put a limit on administrative expenses of the SSB and make provisions for an annual actuarial review. They specify the manner in which the SSB’s funds are to be invested and require a recommendation from the SSB’s investment committee for investments, as well as public disclosures of any transactions that involve SSB board members. PM Musa said that penalties are included for violations, but he did not elaborate on them.
Senator Godwin Hulse, who chaired the Senate Special Select Committee, has recommended minimum prison terms of 10 years and fines of two to three times the loss one causes the Social Security Board to incur, but early indications are that the penalties are not nearly as tight.
While we were unable to get a copy of the proposed bill this week to get more details of the proposed amendments, we are informed that it should be published in the Government Gazette shortly and available for public consumption.
According to PM Musa, the amendments also make provisions for the expansion of the National Health Insurance Scheme, which should have been expanded to the north side of Belize City at the start of this month. To date, Government has made no official announcement on the expansion.
It is noteworthy that the most recent actuarial review of the SSB, which was tabled in the House on Friday, cautions against the expansion of the NHI using SSB funds.
That report says that, “The short term branch reserves of the SSB have declined steadily due to NHI project changes, to a level close to the minimum accepted international benchmark of six months average expenditure.”
The report goes on to say that, “…the SSB should re-evaluate the extension of the NHI, bearing in mind that no further allocation of the SSB’s funds are feasible without endangering the scheme.”
The NHI scheme is projected to use $40 million of SSB’s funds between 2006 and 2009, with Central Government contributing roughly $53 million over that same time frame.
Another recommendation of public interest that Musa made on Friday was for the SSB to initiate a special relief fund for workers affected by disasters such as hurricanes.