Former Vice Chair and F.S. testify at D.F.C. hearings

Riddle me this, News 5 viewers. Why was today’s session of the D.F.C. Commission of Inquiry like a Belize City gangster style shooting? Answer: Because nobody saw or heard a thing. Janelle Chanona explains.

Janelle Chanona
“The day’s first witness was former Vice Chairman of the D.F.C. Board of Directors, David Courtenay. Like his former colleague Omar Espejo, Courtenay showed up with his uncle, senior counsel, Derek Courtenay.”

Derek Courtenay, Attorney
“Could I ask, Madam and Mister Chairman whether I might represent David Courtenay who appears in answer to your summons.”

Merlene Bailey Martinez, Co-Chair, D.F.C. Inquiry
“No problem.”

Derek Courtenay
“Much obliged.”

The first line of questioning to Courtenay regarded his company C.A.D. Construction and its involvement with the San Lorenzo Housing Project, valued at approximately three million dollars.

David Courtenay, Former Vice Chair, D.F.C. Board
“I went to the area representative. I am a businessman and Government had been elected on the promise to build ten thousand new houses. There was nothing that precluded me from participating in building of houses, that was my business, project management.”

Merlene Bailey Martinez
“The hundred and twenty houses that C.A.D. construction was responsible for, who provided the financing for that?”

David Courtenay
“Construction financing was from the Development Finance Corporation.”

Merlene Bailey Martinez
“What you’re not saying is that D.F.C. bought those houses.”

David Courtenay
“Yes.”

Merlene Bailey Martinez
“So D.F.C. loaned the money to you, as a D.F.C. director and as a CAD construction company director.”

David Courtenay
“No, they did not lend me the money as a director. I was a director.”

Merlene Bailey Martinez
“While you were a director.”

David Courtenay
“Yes Ma’am.”

Merlene Bailey Martinez
“So you turned over the houses that you had built to the D.F.C. So they bought the houses from you and that is how you paid off the loan that you got the D.F.C., so effectively D.F.C. loaned you the money, you built the houses, and the houses were sold to the D.F.C., and they used the proceeds of that sale to pay off your loan. Is that a correct synopsis of what transpired?”

David Courtenay
“In a crude fashion, yes.”

Merlene Bailey Martinez
“Do you know how many of those houses have been sold since you built them about nine years ago.”

David Courtenay
“I was never involved in sales.”

Merlene Bailey Martinez
“Do you know how many have been sold?”

David Courtenay
“I have no such knowledge.”

Merlene Bailey Martinez
“The forensic auditor is saying roughly half of them remain unsold. It’s in the forensic report, half of them remained unsold. So I am asking you right now Mr. Courtenay, as a director of the D.F.C., was that investment made on its economic merits? As a director of D.F.C., was that investment by the D.F.C. in the houses that you built and which has been discounted by ten thousand dollars on the original sale price—each of them have been discounted—and they have still not been able to move more than four of them in as many years. Could you tell me what was the economic merit as a director of the D.F.C. that that decision was made?”

David Courtenay
“Miss Bailey you are asking me to comment on lot of things that I have no knowledge of.”

Merlene Bailey Martinez
“No, I am asking you as a director on the board of the D.F.C..”

David Courtenay
“When that decision was made, I was not in the room.”

When talk turned to the additional issues focussed on by forensic auditor Mark Hulse, Courtenay made his position clear on the accountant’s report.

David Courtenay
“Commissioner Lord, with regards to anything that is contained that document, I on legal advice, will refrain to give any opinion, any comment, with regards to anything contained in this document.”

And as questioning proceeded on other matters, Courtenay failed to recollect much of the details asked of him by the commission.

David Courtenay
“I do not recall, why seven years ago at that particular junction that decision was taken.”

Merlene Bailey Martinez
“Okay. There were some other instances and I do need to get on. Some other instances and the problem with this what we are involved with here Mr. Courtenay is that when I ask you about these things, you say if you show me the minutes or you show me the documents I can comment. But when I show you the documents, now you can’t recall. That is such a problem.”

Derek Courtenay
“As this is going into the record, might I protest. If a witness says I cannot recall what took place seven years ago, I would submit that it really should not elicit from one of the commissioners the statement which is critical of him.”

Merlene Bailey Martinez
“I take your point.”

Courtenay would later testify that he found out that more than thirty million dollars had been disbursed to Eugene Zabaneh and Novelo Holdings through the public hearings, despite the fact that he was then Chairman of the corporation’s Board Management Credit Committee which was to have overseen those very loans.

Merlene Bailey Martinez
“What exactly did you do at all, if anything at all, regarding this project Mr. Courtenay. Please educate me. What did the B.M.C.C. at all. Did you…”

David Courtenay
“The B.M.C.C. did nothing. Management would have brought to us at the B.M.C.C. as was stipulated by the board those conditions, whatever they are set out in those minutes, as we were required to do. If the disbursement had occurred, then there would have been no need for management to bring anything to our committee for us to take any action on.”

Merlene Bailey Martinez
“And did you not question that Mr. Courtenay?”

David Courtenay
“You’d like—how am I going to question what I don’t have knowledge of?”

Merlene Bailey Martinez
“Wait, if the board gave you a responsible to oversee a project for thirty million dollars and nothing came to you to discharge that responsibility, wouldn’t you have asked about it? Did have ask about it?”

David Courtenay
“No Miss Bailey, I would go to a Credit Committee Meeting, management would provide us with papers, and we would deal with whatever is before us and in front of us.”

Merlene Bailey Martinez
“So you did not ask about it?”

David Courtenay
“If I would recall that at some point, some thing was supposed to come to me, I rely on the management of the D.F.C. to give us whatever it is that is before them. They have applications that need dealing with et cetera … If I don’t have any recollection of it.”

Merlene Bailey Martinez
“Okay.”

David Courtenay
“You are telling me that in a set of board papers, you see, for example that narrative that you are—in many instance Miss Bailey, you get a package of paperwork for a meeting, in particular that sort of document, it would commonly be my practice to look at the figures, the bottom lines, et cetera. Miss Bailey, I did not have any knowledge. I was surprised when I heard it at this hearing. I did not have any knowledge or recollection of when these cheques were cut and paid. Sorry, I do not recall.”

Janelle Chanona
“Second to take the stand was former financial secretary Hugh McSweeney. While McSweeney didn’t take the “I do not recall approach”, his answers set a terse tone for the afternoon session.”

McSweeney testified that the Government got into securitisation to bolster the Musa administration’s growth economic policy. A policy which translated to numerous projects and loans being transferred into the D.F.C. One such loan involved Mahogany Heights. McSweeney admitted that he paid out millions of dollars to Abdul Hamze for the land used for the scheme, because he did not know the title was encumbered.

Hugh McSweeney, Former Financial Secretary, D.F.C.
“I am saying I might not have been in the country.”

Merlene Bailey Martinez
“You might not have been. Let’s not go there. Did you or did you not know about the problem relating to …”

Hugh McSweeney
“I can’t recall.”

Merlene Bailey Martinez
“You don’t know. So we’re really flogging a dead horse if you are saying you did not know about.”

Hugh McSweeney
“Except that your statements insinuate that here I am sitting as Financial Secretary and don’t know these big things.”

Herbert Lord, Co-chair, D.F.C. Inquiry
“It’s not only that.”

Merlene Bailey Martinez
“This is not a minor matter Mr. McSweeney. This is a nine point five million transaction.”

Hugh McSweeney
“And I am saying that was well handled by the legal counsel in the Ministry of Finance.”

Herbert Lord
“Yes, but the Ministry of Finance continued making payments until well after.”

Hugh McSweeney
“The legal counsel represented the Ministry of Finance.”

Herbert Lord
“Yes, but monies were still paid to Mr. Hamze even though this problem was on; until long after was it stopped.”

Hugh McSweeney
“When did they pay, did they pay before October 2004? Because I wasn’t there if it was after that.”

Merlene Bailey Martinez
“No, they continued paying.”

Hugh McSweeney
“Between this problem, July and October 2004?”

Merlene Bailey Martinez
“Yes, Mr. McSweeney, right up until the end of 2004 we have the transaction records.”

Hugh McSweeney
“Yes, we did a good job. We made some mistakes, but we did a good job.”

Merlene Bailey Martinez
“In what way did you do a good job, sir?”

Hugh McSweeney
“In what way?”

Merlene Bailey Martinez
“Yes.”

Hugh McSweeney
“As far as I am concerned, the only thing that you can tell me that might have made an oversight of, in the five hundred or so millions I would supervised I each year, is the nine million dollars to Hamze.”

Merlene Bailey Martinez
“No, Mr. McSweeney.”

Hugh McSweeney
“In fact, it was only about three hundred thousand that we paid, according to that thing, that should not have been paid.”

Merlene Bailey Martinez
“No, no, no Mr. McSweeney.”

Herbert Lord
“Hamze was paid seven million; there’s only two million left.”

Hugh McSweeney
“No, we are talking about when it was discovered …”

Herbert Lord
“Yes, But he was a paid a total of seven million dollars.”

Hugh McSweeney
“We did not know that there was a problem. Will you appreciate that?”

Herbert Lord
“Possibly.”

Hugh McSweeney
“Good.”

Merlene Bailey Martinez
“No, that is not the testimony of Director Flowers. It is not the testimony of Director Arzu, who represented you on that board, who said that as a legally trained person immediately as he saw that document he knew something was wrong with that document. That was your and—I could probably get the transcript of that and send it to you. So that was not a matter that your representative was unaware of. That there was a problem.”

“And you are talking you did a pretty good job at the D.F.C. What is the position of the D.F.C. now Mr. McSweeney?”

Hugh McSweeney
“Madam Commissioner, I was not in the management of the D.F.C. I had a director there who you suggested knew about it and might have told me about it, but I can assure you he did not tell me about that.”

“Madam Commissioner, Government of Belize’s problem was a cash problem. As far as I’m concerned, we couldn’t do anything to stop the D.F.C. train.”

Merlene Bailey Martinez
“You couldn’t.”

Hugh McSweeney
“Even though we tried.”

Hugh McSweeney
“Mahogany Heights was transferred the D.F.C. for a certain sum of money and I guess Los Lagos and I guess Cohune Walk. But in these transfers, we’re transferring utilities, we’re transferring street infrastructure that D.F.C. cannot sell. It was intended from the very beginning that Government would have to bail out D.F.C. I’m not telling you that about any formal situation, I’m telling that what I could see down the road from my oversight activities.”

Janelle Chanona
“Throughout the D.F.C. Commission of Inquiry, questions surrounding the more than thirty million dollars disbursed to the Novelo family has been a point of major concern. During next week’s public hearings, David Novelo will appear on behalf of his family to give their side of that story. Reporting for News Five, I am Janelle Chanona.”