The newly-elected Government of Belize has today contacted Venezuelan authorities to try to unravel the mystery of the US$10 million (BZ$20 million) that remains unaccounted for from the Venezuelan grant, which we are now told amounts to BZ$40 million and not BZ$20 million as was previously claimed by the then PUP government.
Last week, we had conveyed reports coming from the Government that even though the former Said Musa administration had earmarked $10 million for housing, it had been overspent by $5.3 million during the month leading to elections, even though the National Assembly never vetted the spending.
New information suggests that more than the overspending of the housing allocation, 50% of the entire grant is unaccounted for. A letter from BANDES (Banco Desarollo Economico y Social de Venezuela) to the Government of Belize claims that the Venezuela grant to Belize was US$19 million for housing – that’s BZ$38 million total – and another US$1 million (BZ$2 million) for the completion of the Marion Jones Sports Complex.
The Government only has a paper trail for US$10 million, and today the big question is, where is the other half of the money?
Last week, the Government issued a statement saying that it won’t honor any more cheques issued under the Venezuelan grant scheme because the funds had dried up. Those holding bad cheques in their purses and wallets will be even more angered at the suggestion that US$10 million from the Venezuelan money has apparently been diverted to unknown quarters.
Attorney General Wilfred Elrington, who is also the Minister of Foreign Affairs, told Amandala that the newly appointed chief executive officer in his ministry, H.E. Alexis Rosado, called his attention to the letter on Friday, February 22, two weeks after the elections. The letter is all the documentation GOB has on the specifics of the Venezuela grant, we were told. When we asked whether we could see a copy of the agreement in question, Elrington told us that “nobody [in Government] seems to have a copy,” and that they would be trying to get one from Venezuela.
He further informed that neither the Financial Secretary nor the Governor of the Central Bank were able to say anything about the other US$10 million, as there is no evidence of any other deposit here in Belize.
“We are in the process of ascertaining what the situation is,” he added.
As we had previously reported, former Housing Minister Ralph Fonseca, former PUP campaign manager, was GOB’s point man in dealing with Venezuela, and he was in charge of issuing the housing grants.
The day after the People’s United Party lost the elections, BANDES vice president, Luis Arias Bellorín, wrote former Foreign Affairs chief executive officer, Amalia Mai, asking her to give account of the US$20 million, which the Government got in accordance with not one, but two agreements signed December 28, 2007. That same day, the Government received a wire transfer of US$10 million.
Dated February 8, 2008, the letter (a translation of which we reprint along with this article) quotes agreements signed between Fondo Autónomo de Cooperación Internacional, administered by BANDES, Banco Desarollo Economico y Social de Venezuela, based in Caracas, the country’s capital, and the Government of Belize.
We note that according to official information from the bank, the fund was created for poverty alleviation and for fostering growth in needy countries. Belize is one of several regional members that subscribed in June, 2005.
Central Bank Governor Sydney Campbell told Amandala that the funds arrived on Friday, December 28, 2007. He explained that the funds were wired directly from BANDAS, Venezuela, to the Central Bank’s Account at the Federal Reserve in New York, USA. There were two transactions only, one for US$9 million and another for US$1 million.
Campbell explained that the funds go into Government’s Consolidated Revenue Fund with the Central Bank, and Government can move funds out of that account to meet payments through local commercial banks. Campbell said he could not indicate the specifics of the transactions with the banks.
Our sources indicate that one of the local banks against which housing grants were written was the Belize Bank.
It is a fact that the Venezuela grant was used for electioneering. We know that the People’s United Party standard bearers and area representatives were given allocations in the run-up to elections, which allowed them to facilitate loans and grants for their constituents. Financial Secretary Joe Waight had told us the week after the elections that the allocations per division were in the region of $100,000 to $150,000, and that US$7 million of the funds had already been used up.
To date, there has not been a full accounting of how the funds were spent. In fact, that is just what the Venezuelans are asking the Government to do. The February 8th letter implores Mai to submit disbursement information and a report on how the advances from Government were used, as stipulated in the two agreements between the Government and the Venezuelan bank.
But the most glaring part of the letter is the claim that the agreement was for US$20 million (equivalent to BZ$40 million), since the former Government had claimed Venezuela had only given US$10 million to Belize – US$1 million for the sporting facility and the remainder for housing, and social projects.
When we called Mai this evening, she refused to comment on the matter, insisting that she is not going to say anything because she is no longer with the government, even though she was in office when the money was received, and she was the person to whom the letter was written. We asked her specifically if she knew anything about the December 28, 2007 agreement, and again she refused to comment. “The Venezuelans could more help you,” she told us.
We did call Venezuela this afternoon (which is two hours ahead of our time) to speak with Bellorín, but we were told that he was not in office. We left our contact information, asking for him to call us back. We have nothing yet from that angle.
For its part, Government is hoping that it has more luck in getting clarification from the Venezuelans. Prime Minister Dean Barrow told us this evening that the Financial Secretary, Joe Waight, this morning sent out queries to the relevant Venezuelan authorities, and the Ministry of Foreign Affairs has been asked to communicate with the Embassy of Venezuela in Belize, to express to them that since the money came from Venezuela, that Government would have a similar interest in clearing up the matter.
Barrow furthermore told us that Government would issue a public call on former Prime Minister Said Musa and former Housing Minister Ralph Fonseca to present a statement on what happened to the other US$10 million.
Barrow told us that he does not see how the Venezuelans could have made a mistake on the amount of funds involved.
Barrow commented that while the Government knows of the US$10 million that came to the country through the Central Bank, the other US$10 million was apparently routed through some other account, of which they do not have the details.
We have been trying to contact former P.M. Said Musa since Friday, but to no avail. On Friday evening when we called his law firm, the phone rang off the hook. Today, we managed to speak with an employee, who took our messages. All our subsequent attempts at reaching him through his office and a family contact failed; our call has so far not been returned.
Apart from there being a lack of accounting with respect to the Venezuelan grant, there is still no accounting on how three shipments of fuel from Venezuela, made since 2005 under the PetroCaribe deal, have been used.
We note that Government’s financial advisor, Dr. Carla Barnett, had indicated in a letter dated January 9, 2008, to Amandala, that spending the Venezuela money without National Assembly approval amounted to a contravention of the Finance and Audit (Reform) Act of 2005.
She noted, however, that there are no meaningful penalties for contravening the provisions of our finance laws.
Up to now, the issue has been whether the outgoing government had the legal authority to spend the US$10 million. Now, the question is whether they told the truth about how much they got, and where the other US$10 million from Venezuela is.
(Note: It is conventional wisdom that bankers don’t ordinarily make mistakes when quoting loan or grant amounts in financial agreements. We note that a similar situation arose with the Universal Health Services deal, in which Musa had signed a loan agreement for US$33 million, twice the reported amount of BZ$33 million. Musa had claimed that the figure of US$33 million was an error, and that the loan was actually for BZ$33 million. We are not sure if Government and the bank ever sorted out the US$33 million loan document question.)