If everything goes as planned for the Commission of Inquiry into the Development Finance Corporation (DFC), Belizeans will be all ears and eyes – glued to their radios and television sets – to hear just what Honorable Ralph Fonseca, “the architect of growth economics in Belize,” will have to say at today’s public hearings on the happenings of the much-debated DFC.
While the Commission will not disclose what issues they will raise with Fonseca, we suspect that they will try to get his input on the questionable $50 million loan the DFC made with the Belize Bank, supposedly for DFC to repay a debt to GOB; the bedeviling $9.5 million Mahogany Heights land transaction that is still tied up in the courts; the sale of Print Belize for $2.3 million when the assets were valued at $3.8 million; and the extent to which Fonseca had a say in the internal running of the DFC.
Assuming that his “recollection” won’t fail him, Fonseca’s testimony could prove key to unraveling some of the contorted areas of controversy that have been troubling the Commission. That is because after the People’s United Party (PUP) returned to power in August 1998, Fonseca, the area representative of Belize Rural Central, had been Government’s lead financial architect. He has been the Minister in control of two highly liquid public financial institutions – the Social Security Board (SSB) and the Development Finance Corporation, for several years. Fonseca shared responsibility for these entities with Prime Minister and Minister of Finance, Hon. Said Musa.
After the PUP was re-elected to office in 2003, Musa gave Fonseca full rein over the Ministry of Finance, but he was pressured to take back Finance from Fonseca in late 2004, after seven other Cabinet Ministers, who were demanding Fonseca’s ouster from Cabinet, resigned their posts in protest of what they, and some members of the public, had claimed was a decaying public purse.
One of the major programs Fonseca initiated and oversaw was the securitization of hundreds of millions of dollars through the DFC and the SSB, and many of the transactions discussed in the DFC hearings to date are tied to that securitization pool.
The current investigation of the DFC came in direct GOB response to a spate of public protests on these issues early in 2005 and a call from the National Trade Union Congress of Belize for an investigation of the DFC. There was a similar probe into the SSB which ended last July, but that probe did not indict Fonseca or any Minister of Government, and found that the directors of the SSB and its then chief executive officer/general manager, Narda Garcia, were the ones culpable for mismanaging the SSB’s funds.
The Commission of Inquiry into the DFC has so far called witnesses from all tiers of the DFC, from its administrative staff to directors of the board. They have also heard public testimony from former financial secretary in the Ministry of Finance, Hugh McSweaney. We don’t know exactly how many people the Commission has questioned to date, since they have taken some testimonies “in camera.”
One man who was supposed to give public testimony, but who will likely be called to give “in camera” testimony is David Novelo. Novelo was summoned to appear in the public hearing of February 2, but the Commission said that they did not call him then because they had run out of time. Subsequently, however, Novelo has mounted a legal challenge to the Commission, going so far as to question the legality of the Commission. Still, there are important questions that the Commission has to ask David Novelo about a $30 million loan the Novelos got with the DFC – what Novelo has said is the biggest loan in DFC’s history. That story climaxed with Novelo Bus Line being put into receivership, and the principals still owing DFC $27.5 million, according to recent testimony from the forensic auditor, Mark C. Hulse – whose work Novelo also challenges.
But it is not only Novelo who has mounted a challenge against Hulse’s audit and the Commission. Former DFC chairman, Glenn Godfrey, made it known to the Commission when he appeared briefly at the public hearing on Monday, March 5, that he will have a strong statement to deliver before the Commission when he testifies at 9:30 a.m. on Tuesday, March 13.
Already, Godfrey has told the Commission that the “forensic audit report you have there is not worth the paper it’s written on.” But Commissioner Merlene Bailey-Martinez stopped him dead in his tracks and let him know that it was not right for him to cast such aspersions on a document he has, purportedly, not seen.
(ED. NOTE: The ruling PUP’s approach has become, to seek to put the DFC Commission of Inquiry itself on trial. All witnesses have now been appearing with expensive attorneys at their side. Personal attacks have been launched in the ruling party’s newspaper on Commissioner Merlene Bailey-Martinez and on media reporting of the DFC hearings. The point in the eyes of the public is, however, that as far as is known, no money is missing from the Commission. All the financial shenanigans, questionable loans, and public refusal to repay, took place at the wrecked Development Finance Corporation.)