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Lord report is P.M. stunt to fool CDB, says Rene Gomez

GeneralLord report is P.M. stunt to fool CDB, says Rene Gomez
The unilateral report of Supreme Court Justice Herbert Lord of the Commission of Inquiry into the Development Finance Corporation has been the center of controversy since Monday. While everyone expected that the trade unions would take the lead in getting that report quashed, the most unlikely player emerged on Wednesday to block the release of the report via a court injunction.
 
Former DFC chairman Glenn Godfrey took the Government of Belize to court over the publication of the Lord report, but by the time the Chief Justice, Dr. Abdulai Conteh, granted the injunction, it was too late—the Government had already published it on its website (www.belize.gov.bz).
 
Despite the lateness of the injunction, it is significant in that the Chief Justice declares in his ruling that “This was not a one-man Commission. It is therefore improper to have only one of the two Commissioners make a ‘Report.’”
 
In light of the Chief Justice’s ruling, the Government is at the moment holding off on its plans to forward Justice Lord’s report to the Director of Public Prosecution.
 
CJ Conteh said Wednesday that there is “a very troubling issue as to the propriety of [Lord’s] report so submitted, bearing in mind that it was a joint Commission.”
 
The National Trade Union Congress of Belize (NTUCB), which fought for the inquiry in early 2005, and got Government to commit to the investigation as a part of the 11-point agreement of February 11, 2005, is appealing to the Government to remove the Lord report from its website, and to only accept a joint report by both Commissioners.
 
The DFC Commission is currently made up of two members, both co-chairs – Justice Lord sitting for the Government of Belize and Merlene Bailey-Martinez sitting for the NTUCB.
 
Last Thursday, Lord went ahead and submitted a report without Bailey-Martinez, whom he had accused of foot dragging in bringing the Commission to a close. She has refuted his allegations.
 
When Commissioner Bailey-Martinez learned of Lord’s intention to file a unilateral report, she immediately wrote the Prime Minister, appealing to him not to receive it, so that they could complete their work and file a joint report.
 
We understand that the Prime Minister had been in possession of her letter by Tuesday, when he ordered the publication of Lord’s report—suggesting that he had decided not to accede to Commissioner Bailey-Martinez’s request to hold off on the Lord report.
 
Cabinet Secretary, Robert Leslie, told us that as soon as the Prime Minister had finished reading the report on Tuesday, he gave the directive to have a press release issued and to have the Lord report and forensic audit placed on the web. While the report was published Wednesday morning, there was a delay with the audit, which had not yet been received in electronic format, Leslie added.
 
He said that the directive to publish the documents had already gone out when the Office of the Prime Minister received word from Godfrey’s attorney, former Solicitor General, Elson Kaseke, indicating they would go to the Supreme Court for an injunction to block the publication of the report.
 
It was not until hours after Lord’s report had already been published that CJ Conteh granted that injunction.
Late Thursday evening, the Lord report was removed from Government’s website, but the report of forensic auditor Mark C. Hulse, prepared for the Commission of Inquiry and which should form a part of the final report, was added to the site.
 
According to the Cabinet Secretary, the Office of the Prime Minister is conferring with Solicitor General Edwin Flowers, who would advise them on the way forward, and whether they should proceed in sending the report to the DPP—which is unlikely, because of the Chief Justice’s ruling that there cannot be a unilateral report.
 
The Prime Minister is currently on tour in Stann Creek West. He is due to return to office Friday, when it is expected that a decision will be taken on the way forward. Leslie told us that the report has not yet been forwarded to the Director of Public Prosecutions, even though the Government’s press release had said that the report would be sent over to him.
 
NTUCB president, Rene Gomez, told Amandala this morning that the Congress has written PM Musa, making an appeal similar to Bailey-Martinez’s, asking him to only accept a joint report.
 
“It is illegal because the Commission of Inquiry is not finished yet, because they have other parties to question,” Gomez insisted, adding that the Lord report is “superficial” for a report that should have covered two years of work.
 
He added that the terms of reference for the Commission require “a full, faithful and impartial inquiry,” which indicates that Lord’s submission cannot be accepted as a final report of the Commission. Lord’s report focuses heavily on the Novelos and Arnaldo “Pappy” Pena, but includes only a few lines about Universal Health Services, a major borrower, Gomez added.
 
“I have heard in the grapevine that this is just a stunt from the PM to secure a policy-based loan from the CDB, because the [DFC] report needs to be in first, and they want to say to the CDB that the report is in now, so release the money,” said Gomez.
 
Attorney Lois Young, SC, who has been advising co-chair Bailey-Martinez during the course of the Commission of Inquiry, spoke with us today on whether the Prime Minister’s acceptance of Lord’s Commission had effectively made the Commission of Inquiry defunct.
 
Young told us that in her opinion, the Commission is still alive and well. She said that the Commission could only be dissolved in three instances: 1. If the Statutory Instrument appointing that Commission had set a fixed date for it to end – which it does not, 2. If the Prime Minister dissolves the Commission by publication in the Gazette, and 3. If the Commission has finished its work and presents its report to the Prime Minister.
 
Like Lord’s submission of his report, the events of Wednesday took Commissioner Bailey-Martinez by surprise, since she had not been advised of the Prime Minister’s intended course of action.
 
The NTUCB’s letter tells PM Musa that they are deeply concerned over his decision to accept Lord’s report, and even more disturbed that he has decided to release it, “knowing fully well the legal ramifications of this action.”
 
The NTUCB insists that they have an agreement with the Government that there would be a single report of the Commission, not two reports, and they will accept no deviation from that agreement.
 
“The NTUCB and the majority of Belizeans, expect ONE REPORT (the Commission’s Report), signed off by both commissioners,” the NTUCB’s letter emphasized.
The NTUCB furthermore notes that, “…the Commission has not completed its work since the proprietors of Novelo’s and Universal Health Services, two of the major borrowers in default, have still not appeared before the Commission to testify.”
 
The NTUCB asks Prime Minister Musa to remove Lord’s report from the Government’s website, and publish only an official report of the Commission with the forensic audit after the Commission has completed its work.
 
The NTUCB is copying its letter to the Secretary General of the Organization of American States, Opposition UDP Leader Dean Barrow, the General Secretary of the Caribbean Congress of Labor, all its affiliates, and the Belize media.
 
Apart from challenging Lord’s report in court, Glenn Godfrey went on to indicate to the media that the Commission has breached natural justice by not informing him of what his colleagues, attorneys Norman Neal and Christopher Coye, had said in response to testimony he, Godfrey, gave during a public hearing under oath.
 
Obviously, that concern will remain whether there are two singular reports from the Commission co-chairs or one joint report with both their signatures. It is, therefore, very likely that Glenn Godfrey will make further legal challenges to the Commission’s work, as he had warned when he appeared for public hearings in March.
 
We have recalled in previous articles that the Commission had indicated its intent to recall Glenn Godfrey to testify after Coye and Neal disputed his testimony about the $30 million Novelo loan. However, up until the time of Lord’s submission to the Prime Minister, no attempt had been made to call Godfrey back to testify.
 
Godfrey further complains that the breach of natural justice comes because he has no clue what Coye and Neal said about him, because they testified “in secret,” and he has had no chance to respond to them.
 
We understand that even though the Commission may have decided not to call back Godfrey, they did have the option of forwarding the transcripts of Coye and Neal’s testimonies to him (under the cover of a warning letter termed a “Salmon Letter”), and give him a chance to offer comments on those testimonies. At the time of Lord’s submission, however, this had also not been done.
 
Lord’s 93-page report makes three recommendations for strengthening the DFC Act, including imposing criminal penalties on board members who breach the law, and the inclusion of a representative of the NTUCB on the DFC’s board.
 
One of the key aspects of the Commission’s work is “to determine whether any wrongdoing occurred in the operations of the DFC during the said period and if so, to identify the persons responsible, if possible.”
 
We note that while Lord’s report calls the names of some board members, particularly those who did profitable business with the DFC while they were sitting on the board, it does not tell us the names of all directors who ran the DFC for the period under investigation, and there is no indication which board was in place when certain key transactions were made at the DFC.
 
Among the 44 witnesses called during the course of the hearings, there were a few former DFC directors who were called to give in camera testimonies – the contents of which should become public via the Commission’s final report.
In the end, Lord’s opinion is that the real responsibility for DFC’s demise rests in the hands of the directors and senior managers.
 
“On a whole it seems the board of directors, the General Manager and Chief Executive Officer are the responsible officers along with other senior managers who made decisions to enter into many transactions with inadequate collaterals, and they did not exercise the due care and diligence required of them,” he writes.
 
“The Commission concluded that the board caused many of the major problems which beset the DFC, as it sat by and allowed the institution to sink lower and lower into debt and made very few efforts to correct the wrongs and problems besetting the DFC,” Lord’s report said. “Even though the GOB has reimbursed the DFC and has taken over the outstanding balances in many instances the bottom line is that to the extent that it did so, it had to use public funds.”
 
His report, therefore, does make it clear that the Government was fully aware of DFC’s woes and deteriorating financial position, to the extent that it used public funds to bail out the DFC, and even though he held DFC’s directors and managers accountable for the loss of public funds at the DFC, he ascribed no responsibility to the government officials that pumped hundreds of millions of dollars of public funds into the DFC to keep it from utterly collapsing.
 
“The Board of Directors, especially the first board 1999-2003, some members, its chairman and deputy handled this institution as an extension of their own private business,” Lord writes.
 
What struck us about Lord’s report is what appears to be an underlying thesis, that while there were a handful of people who gained handsomely from DFC’s millions, the DFC’s main program to build homes for ordinary Belizeans had very poor results all around. The most classic case he highlighted was Mahogany Heights for which, he said, $81 million were spent, but only 371 houses built, with homeowners still being unable to get their titles because of a legal dispute between the original owner and a business partner.
 
He noted that the housing programs resulted in not just failures, mostly due to poor construction and unfulfilled obligations by some contractors, but also resulted in serious financial losses to the DFC.
 
(Note: There was a date error in our last report, Justice Lord submits 93-page DFC report to PM Musa. We indicated that Lord had filed his report three days prior to the June 15 meeting; however, that report was filed on July 12 and not June 12, as was implied. We apologize for the error.)

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