On Wednesday last week a lawsuit lodged by the PUP against the UDP government on March 5, 2019, was heard by the Chief Justice, Hon. Kenneth Benjamin, in the Supreme Court. The lawsuit contends that the government has repeatedly violated the Finance and Audit Reform Act and the Constitution, and the stated aim of the claimants is to have the Supreme Court stop the Minister of Finance and the Financial Secretary from spending any more money from the Consolidated Revenue Fund without proper authorization. The Chief Justice has reserved judgment until early next year.
The PUP doesn’t appear to be asking the court to look at the spending as criminal wrongdoing, as they did in a case they brought before the court in 2014. That case specifically had to do with the use of funds from the Petro-Caribe program. Prime Minister Dean Barrow described the charge as an “unpatriotic attempt to play politics”, and then went to the House and introduced a Bill (that was passed into law) to allow for spending of Petro-Caribe funds that had already been spent.
The lead attorney for the defense (UDP) in this present case, Mr. Justin Simon, Q.C., offered that the government might be guilty of some procedural errors, and the Financial Secretary, Mr. Joseph Waight, concurred that the letter of the law was not followed when the government used certain funds. The Amandala reported the Financial Secretary saying, on the specific matter of the spending of Petro-Caribe funds, that “it was impractical for government to go the National Assembly after every Petro-Caribe shipment.”
The government is allowed to use unapproved funds for urgent or unforeseen needs, but the Finance and Audit Reform Act limits the amount that can be spent. This “supplementary budget” must be taken to the House for approval within three months.
It has become a habit of governments to use/abuse this facility, and the PUP is charging that a whopping $1.3 billion was spent this way by the Barrow government. Much of that spending was of Petro-Caribe funds.
In 2012 the government was getting a sizable share of revenues from oil wells in Spanish Lookout that were still producing at a high rate, so it wasn’t strapped for cash.
Belize wasn’t broke in 2012, and we were about to become awash in cash, thanks to Petro-Caribe. Actually, the Petro-Caribe program was introduced in 2005. The program was set up for Caribbean and Central American countries by the then oil-rich Bolivarian Republic of Venezuela, under the leadership of the late Hugo Chavez, to alleviate the high cost of fuel (Belizeans still ended up paying full market value), and for social programs. Under the program Belize paid for 40 to 60 percent of the fuel shipment upfront: the balance was to be paid over 25 years at an interest rate of 1%.
Under the caption, “A Brief History of Petro-Caribe in Belize” on the website http://www.petrocaribe.bz, it is mentioned that Belize got its first shipment of oil from Venezuela in November 2005, but there were no arrangements for its handling and it ended up being sold to Banana Enterprises Ltd. at Big Creek, at a discount. Esso, the giant oil importer in Belize, was reluctant to handle the Venezuelan oil, and thus the arrangement with the company in the south continued. The government received the benefits as set out by the Petro-Caribe program, and Banana Enterprises Ltd. got their share from the handling of the oil from Venezuela.
Between 2007 and 2009 Belize received 15 shipments from Venezuela, valued at $US41 million, after which shipments stopped. According to the website, the purchasers in the south soured on the arrangement, one of their reasons being that the landed cost of fuel from Venezuela was higher than what Esso was supplying, and the Venezuelans weren’t completely happy either, because under the arrangement they did not feel that the people of Belize were benefiting as they should have from the program.
The Prime Minister, Hon. Dean Barrow, has charged that the difficulties in implementing the program at the time came about because the PUP didn’t want to deal with Esso: they wanted to deal under the table with their friends in the south. The Petro-Caribe came to a halt under the UDP in 2009.
The Petro-Caribe program re-started in September, 2012. Former Prime Minister, Hon. Said Musa, has said that the UDP did not revive the program through a stroke of brilliance, but because of a stroke of luck. Musa said that Esso didn’t want to handle the oil from Venezuela, but in 2011 Esso was bought by a company with a subsidiary called Puma Energy, and this new company had no problem with handling oil from Venezuela.
The UDP has charged that the PUP didn’t account for funds received from the program between 2005 and 2008, when they were in government, and the PUP has countered that all the UDP has to do is check with Joseph Waight, the Financial Secretary, and he will show them that all was in order.
The trouble the UDP got into with the spending of the Petro-Caribe funds most likely came about because of timing: the budget for fiscal year 2012/2013 had already been presented and then out of the blue came this sudden, cheap money in September 2012, and they couldn’t wait to spend it. They didn’t wait. They were in hog heaven, squealing in delight, and in that giddy state they apparently forgot that there is a process when handling the finances of the country.
There is no argument that this government for the haves —which throws crumbs to the masses while they build First World structures to impress the wealthy and the well-off —would have run into a stop sign if they had sought House approval for the Petro-Caribe projects before implementing them. They would have spent/squandered the Petro-Caribe funds exactly the way they did, because in our warped system the power of the government is near total.
There is the argument that the Opposition party in the House, and the people, would have had a say before the fact, but as a former Prime Minister said: “The minority will have its say, and the majority will have its way.” In this present case, the majority had its way, but they could get their wrists spanked.