Minister criticizes policy in wake of scandal
The concept of using the public purse to enrich the governing elite is not a new concept–not in Belize and not anywhere. But it appears that the level of financial impropriety by the Government, Development Finance Corporation and Social Security Board on behalf of INTELCO has become so outrageous that the blue and white wall of political solidarity could no longer remain standing. Today Minister of Works Jose Coye, an accountant by profession, spoke to the media about the mess at S.S.B….and while his tones were muted, his discourse restrained, there was no mistaking that for Coye–and at least several of his colleagues–it?s time to admit the mistakes and set things right.
Jose Coye, Minister of Works
?I have taken time out to have a look at the latest financial statements of the Social Security Board and of course that includes all the listings of the receivables, loans and all the disclosures as far as the liabilities and securities. And I am prepared to say at this point, with the knowledge that I have now of the financial information that the Social Security funds as it relates to INTELCO, certainly is experiencing some undue risk. And I say so because I think that firstly, the investment itself was a high risk investment; the nature of investment. I am not opposed to the competition, I am a strong believer in that competition, but from the fact that you are about to compete with a company that is nationally established in itself to me suggests that there will be high risk. I never believe that the Social Security funds, and this is a strong belief and I am not alone in that, should ever be invested in high-risk investments, even though it may bring you high returns. I think the investment of the Social Security funds indeed, should be virtually risk free to the extent that it can be done, and it can be done in some cases. My second concern about that investment is that when I examined it, apart from the investment itself in terms of the telecommunications industry, is that it seems to me that it was not adequately backed and I believe that where Social Security funds are being invested and any funds for that matter, the Development Finance Corporation?s funds, I think prudent management will dictate in any investment that if you are going to put your funds on the line in a lending institution, you will want to ensure that those funds will be properly backed, in most cases by physical assets. When I looked at what those funds are being backed by, and from information I gathered, some of it, is I think asset backed where the market value could be said to likely to at least make up in the event that those debts will not be paid. I think that is prudent banking management. You are lending money, you want security. So, of course you are taking risk. So I am indeed concerned myself about what I have looked at and I think we need to come open with everything. There is need for full disclosure of the Social Security Board funds. The Social Security has about two hundred and forty-six million in its reserve; that is tantamount to what you will call the equity in a corporation; that is its net assets. And yes, there are out there in investments, in the banks, maybe about thirty odd percent are in the banks. We have about thirty odd percent too are in housing and of course in other areas. But we need to make sure that those funds because they are pension funds, they are hard earned funds and we cannot expose them to undue risk. So I think one, the Government needs to come quite open and disclose everything about the Social Security and I take it that we have to find ways indeed to make sure that hopefully not a penny will be lost, that we cannot assure now.?
With Coye?s criticism, comes suggestions for ways forward.
Jose Coye
?The Government needs to put forward a financial plan. We need to move immediately to put in place improved financial management. I think there is need for our overall reform of the whole fiscal process immediately and we need to make full disclosure of the D.F.C., the Social Security, the Central Bank, and the Central Government. And I could say this at the last Cabinet Meeting it was in fact being discussed and I take it that the Prime Minister and the Cabinet has supported that. Now, whether the decision makers at the time, decide to make that investment because of who the person was rather than the purpose for which it was to be invested; I am not privy to that decision making because the Social Security and the Development Finance Corporation, I think the management control of them must be brought under the purview of the cabinet. So, whether it was done out of favoritism, which to me is certainly intolerable, but if it was done simple out of poor investment instinct, that to me, needs to be corrected.?
?I am saying that better management comes out of team spirit and we do have competent people in our Government. Certainly in our Cabinet, certainly in our House of Representative, we have some good representative that are ministers and we do have technocrats; we have good bureaucrats or whatever we want to call them and we have some highly competent and trained public officers. Second to none I would say in this hemisphere, but we need to give them the opportunity to be able to use their ability. Some of our Public Officers are Harvard graduates; they come from the best universities in the region. And I think together we can put a plan in place, but we need to do it now. We need the team spirit; we cannot do it as individuals.?
While Coye chose his words carefully, the bottom line is that companies controlled by former P.U.P. Minister Glenn Godfrey were granted millions of dollars in loans guaranteed by the Social Security Board with little or no collateral. It remains to be seen how the Prime Minister and his Minister of Finance will react to the growing discontent. Among the options are:
a) Continue to stonewall in the hope that B.T.L. will soon buy INTELCO and the public will forget about the scandal.
b) Admit that some mistakes were made and proceed to blame the civil servants at D.F.C. and S.S.B.
c) Tell the truth, take their licks and initiate a more prudent policy for the future.
