The Universal Health Services (UHS) debacle has taken a new and shocking turn with news that the Government of Belize has advanced a proposal for the hospital to be taken over with public funds from the coffers of the very liquid Social Security Board.
The Social Security Fund is supposed to be there for the needs of the workforce and retirees in their “Golden Years”, but the vast majority of the fund is tied up in “investments,” some of which have been the subject of public debate and scrutiny.
The question now is whether the restructured SSB board will say “yes” to what has proved to be a very controversial proposal.
The Social Security Board (SSB) issued a very short press release this morning confirming that its board of directors did receive a proposal for “an investment opportunity” with UHS, but specific details were lacking.
“The Social Security Board of Directors has taken the initiative to hire an independent consultant to do a feasibility study. Currently, however, the board has made no decision concerning this offer,” said the release.
We have learned from our sources that the proposal was first presented to the SSB in October – more than a month and a half ago, but neither the unions or the business sector agencies that sit on the board had advised the public about this.
Yesterday morning around 9:30 the UDP Opposition radio station – WAVE, informed listeners that the proposal was to be taken to the investment committee in a meeting about to be held, and even though that meeting did occur at the time of this writing, no formal decision has been announced.
Senator Godwin Hulse, who chaired the Senate Special Select Committee investigation into the management of Social Security funds concluded in July 2006, expressed his consternation that such a proposal would have been tabled at the SSB when he called the KREM WUB Morning Vibes this morning.
There is a short window of opportunity before legislators approve amendments to the Social Security Act that would (or should) give greater protection to the Social Security Fund, and impose penalties on individuals who make investments that do not comply with SSB’s investment guidelines – the essence of which is to act in the best interests of the fund.
The hold up with that piece of legislation, Senator Hulse explained, is that they have sent it to Committee because, “someone snuck in a clause” on page 4, section 41, giving SSB personnel protection under the Public Authorities Investment Act – dating way back to Nov. 17, 1884 – which says that you have to give a month’s notice to bring action against any officer, and the fine could be as little as a measly “ten cent”, effectively nullifying the $10,000 to $20,000 fine in the new reform act.
“Somebody di try jokey wi!” Senator Hulse commented on the WUB. “That’s why the reform act was sent back to committee.”
The new UHS developments have a very long history, dating back to August 2004, when there was great public outcry about the use of $6 million of Social Security funds to settle the private debts of the Glenn Godfrey group of companies, who had defaulted on debt payments under the securitization program.
On the heels of that there was a schism in Cabinet that led to the resignation of seven Cabinet members, the G-7. Amid that upheaval, the Prime Minister issued a national statement dated August 12, 2004, promising that, “The Board of Directors of the Belize Social Security Board will, with immediate effect, refrain from making any new loans to the private sector.”
Just over a year later, in September 2005, the SSB’s board gave the nod for $10 million of Social Security’s funds to be used for a syndicated loan – on highly concessionary terms – that would have facilitated BTL workers with the purchase of shares in BTL. The workers did not take on the shares, and even though certain SSB directors have been calling for SSB’s monies to be returned, those funds are still tied up with shares now under the control of the Belize Bank.
Most recently, when the Prime Minister attempted to get legislators to approve a motion to pay $33 million in UHS debt in May, Musa announced that he would withdraw the proposal – this after “consultations” that informed him that it was best to get a private sector buyer or buyers to take on the hospital.
Ordinarily the ordeals of a private enterprise are not the business of Government; but it became national and public business when the Prime Minister secretly penned a guarantee in late 2004 for UHS – even after committing publicly to financial reforms – and then in March 2007 signed off on two loan agreements totaling $45 million for UHS. It is not known how much of that debt – if any – would be taken on by the entity that would take over UHS.
The public breathed an uneasy sigh of relief on May 24, 2007, when the Prime Minister said in a statement to the nation that, “Our objective has always been sincere: to find the best solution to a very difficult situation. That solution is to convert a high quality private hospital into one that caters to all Belizeans.”
The Prime Minister promised back then that private sector investors could be found to take on the UHS investment and the loans “…can now be effectively serviced without the need for taxpayer involvement.” He also said that UHS would not be a burden to taxpayers.
As our newspaper recently reported, however, Government has been making payments to the hospital as “prepayment for services” – $800,000 total – $200,000 in June, $300,000 in October and another $300,000 on November 27.
GOB had said that it was confident that sale of the UHS will be realized soon to a group of foreign doctors, one of whom, Dr. Vinny (Muthugounder Venugoupal), has worked in Belize before, at the La Loma Luz hospital in Santa Elena, Cayo. The Prime Minister had said that there would be closure on these talks by the end of 2007.
Now, SSB has been thrown into the mix. We understand that after the SSB directors’ meeting in October, when the decision was passed by a simple majority, Dr. Louis Zabaneh, Chief Executive Officer of the SSB, was tasked by the board of directors to find the consultant(s) to do the feasibility study to see if SSB should buy into UHS.
SSB Chairman, Michel Chebat, told Amandala that the proposal is before the investment committee and they are awaiting the results of the study before deciding the way forward. The options being considered are 51% and 100% buy-out by the SSB.
Investment Committee chairlady, Lourdes Smith, did not have much to tell us when we contacted her, but she advised us that a press release would be issued today. She referred us to Zabaneh, who, we were told, was in a meeting when the newspaper called him.