The Association of Concerned Belizeans (ACB) is still awaiting a formal reply from the Solicitor General on whether the debt of Universal Health Services (UHS), cited in a settlement deed between the Government and the Belize Bank, was US$33 million, as stated in the document, or BZ$33 million, as the Prime Minister Said Musa, has maintained.
A week ago we had reported that two bank documents—one of them the deed signed by the Prime Minister himself—had cited the UHS debt as of March 2007 as US$33 million (or BZ$66 million), while a loan note accompanying the deed was for BZ$33 million.
The most favored explanation was that the US$33 million was just an error on the bank’s part, but an alternative explanation was that the Government could have entered into another deal with the bank to settle 50% of the UHS debt via some other undisclosed means, leaving the remaining BZ$33 million to be settled via the loan note.
At a government function last week Friday, Channel 7 News Director, Jules Vasquez, put the question to Prime Minister Musa. Musa said that the US$33 million stated in the documents were the bank’s error—an error he did not see when he signed the settlement deed in March. However, Musa did not say what would be done to correct the “error.”
"Are you concerned that you signed something for US$33.45 million?” Vasquez asked P.M. Said Musa.
“Yes, it is one of those typographical errors that we omitted to notice, yes,” Musa replied.
The news station had previously questioned Attorney General Francis Fonseca about the matter, since he was the second government signatory on the document. He appeared to be unaware of the “error.”
“I don’t know what you are talking about or what you read. I am saying to you it’s Belize dollars, final – end of it,” Fonseca had replied.
Whether the currency is US or Belize dollars, the fact remains that the very legality of that settlement deed and the loan note are currently being challenged before the Supreme Court. The ACB is challenging the March agreements, claiming that Musa requires legislative approval before signing such documents—approval that he clearly did not have when he signed them.
Under the Finance and Audit (Reform) Act of 2005, the Government cannot enter into any loan over $10 million without National Assembly approval, and the loan note clearly exceeds that limit.
The UHS debt was presented via a motion in the House of Representatives on Friday, May 18, but was withdrawn the following week amid intense public pressure from the private sector, the unions, the Opposition United Democratic Party and unwavering rejection by the vast majority of Belizeans.
Musa had reported that the bank had agreed on a discounted debt of $29 million over 25 years. When he withdrew the motion, however, the bank replied that the discount was off the table, and it reasserted its claim for the $33 million that Musa had committed to paying via the March loan note.
The bank has contended that, “…the debt remains as is stated in the March settlement agreement and the March loan note and interest has accrued, and continues to accrue, at a default rate on the debt.” That default rate is 17%.
We note that according to the loan note, the entire amount is due by Sunday, September 23, 2007, and the last business day before that, is Independence Eve, Thursday, September 20.
However, the bank has noted that under the terms of the loan note, it has the right to demand full payment of interest and principal at any time it so chooses before that date—and especially if it considers Government to be in default of the debt.
When Jules Vasquez asked P. M. Musa on Friday about meeting the September 23 payment deadline, his response was, “I believe we will be able to settle this matter long before that.”
The Belize Bank has indicated that it would pursue London arbitration under the terms of the March 23 loan note to recover the debt, which was originally incurred by the UHS, but which the bank insists is now Government’s obligation, because Musa, as the Minister of Finance, had signed an open-ended, unlimited guarantee for all of UHS’s debt to the bank.