S.S.B. hearings reveal discrepancies in dealings with St. James

The Senate Special Committee investigating the Social Security Board loan portfolios held its third public hearing today in Belmopan. The main feature of the session was a special auditor’s report on the Board’s investment portfolio transactions. While the report was referred to and extracts discussed during the meeting, it was not released to the public and will only reach the public domain when the Senate Select Committee presents its report to the full Senate. The hearing opened this morning with Social Security General Manager, Narda Garcia taking the hot seat for the second time to answer some pointed questions regarding millions of dollars that were paid out in questionable transactions. After three hours of testimony, it appeared that the Board’s participation in the securitization programme resulted in a tangled financial mess that has put millions of dollars in Social Security funds at risk. And from the questions that were put to the G.M., it was clear that in two specific mortgages, amounting to nearly twenty-seven million dollars, there were phantoms circling over the transactions, but no one took the time to exorcise them.

Senator Godwin Hulse, Chairman, Select Committee
?Here were two files that first of all had a tremendous amount of inadequacies, if one took the time to read them, not coming to you from St. James but from the D.F.C. Sitting chairman of D.F.C. at the time, Mr. Glen Godfrey. Major investor in both companies and in St. James, Mr. Glen Godfrey. With all these documentation, every piece of documentation, the registered address–whatever company it was–was out of thirty-something Barrack Road. All the signatures and all the transfers were from people who were involved in every company, in other words it was a total in-house package. And the financials of St. James were showing that they were nowhere near this kind of sums having been disbursed. And not withstanding the collateral, which was kind of the small issue really, we didn?t go ahead–now I want to ask you directly Mrs. Garcia, directly, when you read those files and you saw in them the information, the inconsistencies and inadequacies in the file, was there no serious concern of yours alone??

Narda Garcia, General Manager, Social Security Board
?There was.?

Senator Godwin Hulse
?Did you point those out to the board??

Narda Garcia
?Yes I did.?

Senator Godwin Hulse
?And what was their response? ?

Narda Garcia
(Shrugs her shoulders)

Senator Godwin Hulse
?Was there a directive to the board to proceed??

Narda Garcia
?I don?t have any notion of that.?

Senator Godwin Hulse
?But you pointed them out to the board??

Narda Garcia
?Yes, management, myself, and Mr. Zetina pointed out both to the investment committee and to the board of our concerns with those two. As a matter of fact, if you have seen the minutes, even when the transaction costs were being negotiated, we were being asked to pick up the tab for those two loans. And that is when I set my foot down and I said, ?No, I will not pay those.??

Senator Rene Gomez, Member, Select Committee
?Mrs. Garcia, I would comment and I would say it here in your presence that someone has to be made responsible for these monies that have been given out and we are looking at that they will not be recoverable. And if that be the case then, this Senate Special Select Committee will need to submit our recommendations to the Senate as to measures and procedures involving these persons. And I would like to say here Mrs. Narda Garcia, with all due respect to you, that you are taking upon yourself as the C.E.O., all the blame when we know that someone else is behind all of this, but yet you are taking the blame. And at the end of the day probably your job will be in jeopardy because of this gross negligence. That is my comment, thank you.?

Narda Garcia
?Senator Gomez, respectfully I will answer you and tell you that–I will repeat again that I only acted for and on behalf of the Social Security Board. I made my recommendations; they were not taken for whatever reason. I can?t blame anybody if I don?t have any proof. I will not be taken to court for saying person A and person B. The records are there and I hope that you make an objective decision and objective recommendations. I will again repeat that it is my personal opinion for what I know of the entire transaction that St. James and the principals of St. James should be brought before the Senate to answer questions, because they are certainly questions that I can?t answer because I don?t have the answers. And I am repeating it again, bring the principals of St. James, they will have or should have the answers that I clearly don?t have and I don?t think my colleagues at the D.F.C. have.?

?I believe that the experiences that we now have should in fact lead us to better decisions in the future. And I am hoping that the Senate Special Committee or Senate in general will be able to make the relevant recommendations to government. And I think what comes to light or what is evident in the whole process was that the board, in an attempt to assist government with any one policy, probably accommodated too much, to say the least, in these cases. And we probably should have never participated in securitization, that?s debatable. But what I am saying is that to my mind, and I think it was brought forward in the Social Security Reform Commission recommendations, that the board needs more autonomy or clear regulated guidelines on the investment of the Social Security funds.?

A decision on whether there will be a fourth public hearing will be taken next Wednesday. This afternoon testimony was taken from special auditor Mark Hulse.