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New stats – Ralph committed GOB to $24 mil for 3 Godfrey companies

GeneralNew stats - Ralph committed GOB to $24 mil for 3 Godfrey companies
Even while controversy continues to brew over a $33 million private debt that is becoming a public liability, another government financial scandal is rearing its ugly head. The parties in this latest development are not new to us, and in fact, we can say that it is a continuation of what had erupted in August 2004 when we learned that $6 million of your Social Security funds was used to meet the private debts of a string of Glenn Godfrey-related companies.
 
That scenario arose because the Government, through the Social Security Board (SSB) and the Development Finance Corporation (DFC), had guaranteed a pool of mortgages in excess of $200 million that were sold on the international market. Some of the debtors did not meet their obligations, and since then taxpayers have had to eat tens of millions in debt.
 
The scandal over these bad debts led Government to endorse a public call for an inquiry by the Senate. In the final report of the Senate Special Select Committee, we learned that in 1999 the Government had entered into an agreement where the SSB functioned as a go-between for two Godfrey-related entities – St. James and Provident Bank – where it signed a put and call option and a guarantee for the transaction, in favor of the Provident Bank.
 
While the SSB report did not reveal who exactly signed those agreements binding the Government, and how much money was at stake in that transaction, Amandala has been able to review three similar and subsequent agreements – also with a group of Glenn Godfrey-related companies – that put Government on the hook for in excess of $24 million.
 
But what is even more concerning to some senior Government officials is whether the person who signed those put option agreements – giving clear guarantees to the Provident Bank – had the legal authority to do so. All three agreements, signed in 2001 and 2002, bear the signature of Hon. Ralph Fonseca – not when he was the Minister of Finance, but when he was the Minister of Budget Management, Investment and Trade. The agreements say that Provident Bank, Godfrey’s bank, was lending the money to the Godfrey-related companies on Government’s request, and the funds would not have been loaned to the companies if Government did not sign the agreements, which in simple terms insure that the lender would lose nothing by financing the Godfrey-related projects.
 
The documents claim that the Minister was acting with “due authority of Cabinet.” Still, when the Prime Minister was questioned about those agreements at a press conference today, he flatly denied knowing anything about them:
 
“I am not aware of that,” he firmly told the media.
 
One agreement is for US$3.7 million for the failed La Galleria Maya project, a Bahamas registered company that was supposed to build a 30,000 square foot casino and related infrastructure for Northern Data Processing Limited EPZ in Santa Elena Corozal.
 
Another of the agreements is for a US$6.5 million loan for the Internet in Schools Program and Government’s Wide Area telephone Network, under LGS Services Limited.
 
The third is for US$1.8 million for Northern Property Management Limited, registered in the British Virgin Islands. That company was supposed to build a 1.5-mile, four-lane access road from the Belize-Mexico border to Galleria Maya. Even that project never materialized as planned.
 
Our sources say that Government continues to be bound by these agreements, and the Prime Minister said today that there is a legal dispute over them.
 
While he did not provide many details, the Prime Minister said that the legal advisor in the Ministry of Finance, Gian Ghandi, is helping Government prepare to take the matter to court.
 
Since last year Government has been threatening to take legal action against the Godfrey group of companies, after having lost a $5 million deposit in the Antigua Overseas Bank and a further $1.8 million to meet Northern Data Pro defaults.
 
When we reported on this matter in 2005 and 2006, there was no revelation of the terms on which the Government had agreed to support the financing of these Glenn Godfrey-related projects. At the time the focus of the debate was on the failed Intelco, for which millions in payments are still being made from the public purse under the claim that Government was moving to liberalize and modernize the telecommunications sector.

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