G.M. answers questions on Social Security
General Manager of the Belize Social Security Board Narda Garcia has been having a tough fortnight. She?s made presentations to several bodies, including Cabinet and the Belize Governance Improvement Commission, in an attempt to explain how it was that the S.S.B. guaranteed millions of dollars in questionable loans to companies owned by former PUP Minister Glenn Godfrey. This afternoon, Garcia and her financial director, Rolando Zetina, took turns answering questions from the media and social partners. And while numerous valid issues were raised, complete answers were few and far between. Here are some excerpts of the exchange, beginning with General Manager Garcia addressing the phenomenon that since the scandal broke, a number of people have stopped making Social Security payments.
Narda Garcia, General Manager, S.S.B.
“Some sectors of the media have been promoting that. But we are saying that, that’s something that is definitely irresponsible because people’s benefits will be determined by the contributions that you have. And of course, we must agree that while we probably had some mistakes and that has been agreed by many before. The money is safe and they should continue paying their Social Security benefits because at the end of the day, the sectors of the media that are promoting not to pay, they will not give them the benefits when they are in the most need.”
Janelle Chanona
“My questions regard the Investment Committee. Minister Ralph Fonseca said yesterday that he didn’t approve the S.S.B. guarantee for the Godfrey loans securitization, that is for the loans to be included in the bundle. So, I would like to know who did? How did it happen? And why were they no due diligence? Because obviously the international firms involved had a government guarantee so they weren’t really interested in doing their own due diligence if at the end of the day, government was going to pay anyway. What did the Social Security Board gained from guaranteeing those loans? What was exchange for the risk? Regarding Mr. Glenn Godfrey himself, does any know where St. James Building Society got so much money that it could lend its own chief eighteen million dollars? Aren’t there laws against this in securitizing the St. James loans? Did S.S.B. ever wonder how one man’s company could borrow so much from his own Building Society? Why did the Toledo Fish Farm qualify for two million dollars in direct S.S.B. loans as did Lisa Shoman, Toney Vega Junior? As you motioned several times in the investment committee policy and guidelines–one of the benefits that Mr. Zetina pointed out this afternoon as well is that you can sell your assets readily, but if the assets aren’t there, if there is little or no–that will qualify for the amount of money that they got, what was their benefit of such risky investments. Why did the S.S.B. routinely violated its own investment guidelines? As per page fifteen, loans will not be considered for the sole purpose of saving businesses from going bankrupt. Loan proposals and other investments approved by the investment committee should be presented to the S.S.B. by the General Manager for final approval and implementation. Only well established, successful enterprises with proven tract record should be considered.”
Narda Garcia
“Who approved the S.S.B. guarantees? The board of course; investment committee advised recommended and the board approved. There is no other way of doing it. What did S.S.B. gain from the guarantees? I answered that to Jules already. We grew the economy and in turn we got more contributions. Does anyone know where St. James?…I can’t tell you that. I don’t work for St. James so I can’t tell you that. We were presented with mortgages, mortgages were assigned and we securitized those. I don’t know where they got their money.”
Janelle Chanona
“But that doesn’t come under due diligence?”
Narda Garcia
“Yes. Why did Toledo Fish Farm qualify for a two million direct loan? The Toledo Fish Farm and Tony Vega?those loans were taken to the investment committee and the board and they were approved. As the general manager, I implement it. Why did S.S.B. routinely violate its own investment guidelines? I think you have the investment guidelines here. I guess the Investment committee was looking at each loan in its own merit and they decide to approve these loans. They then recommend it to the board and the board approved and the loans were given.”
Janelle Chanona
“What about the interest rates? Why did they differ so sharply from one company to another?”
Narda Garcia
“I guess the investment committee and the board will look at the specific investment they made. There is no particular reason why.”
“I believe that the investment decisions are looked at first by the investment committee, are recommended to the board, and the board will decide which investment it will make or it will not make. Obviously, at the point of securitization–as I repeat, as I said before and I will again–the rational used by the board at the time is that they will participate in fostering economic development and growth in country. So there was not a direct benefit to the board, but indirectly the fund benefited from economic growth and hence more contributions.”
Narda Garcia
“We haven’t had a board meeting and I think all the concerns of the public and the recommendations including the one given by the Chamber will be considered, but I can’t tell you it will be accept or not. Personally, I feel that you can do any independent audit that you want and you won’t find anything else that we have sent out. But yes I will take your–ensure that the board looks at the recommendations that the Governance Improvement Commission and Chamber of Commerce has put forward.”
