Godfrey’s testimony: defiant, rude and ultimately unconvincing
It was billed as the last public hearing of the Commission of Inquiry investigating the financial affairs of the Development Finance Corporation. Appearing to testify was no less than the former board chairman for much of the period under investigation, Glenn Godfrey. But before Godfrey was sworn in this morning his attorney, former Solicitor General Elson Kaseke, requested that co-chairs Merlene Bailey Martinez and Herbert Lord give him leave to make a presentation to the commission.
Merlene Bailey Martinez, Co-Chair, D.F.C. Com of Inquiry
“It will not delay or stop the hearings of the Commission, okay. So it is with that in mind and if you could tell us what the presentation is about then we can decide where we go from there.”
Elson Kaseke, Attorney for Glenn Godfrey
“Thank you very much Madam Chair. We are not here to engage in any dilatory tactics, we are here to make submissions.”
Merlene Bailey Martinez
“Just make your submission Mr. Kaseke.”
Elson Kaseke
“Much obliged. Justice Herbert Lord, Mrs. Bailey Martinez, co-chair of the D.F.C. Commission of Inquiry. I beg your leave to introduce myself, I am Dr. Elson Kaseke.”
Merlene Bailey Martinez
“It’s five minutes Mr. Kaseke.”
Elson Kaseke
“What is five minutes Madam Chair?”
Merlene Bailey Martinez
“You have five minutes to address the commission on what concerns you have. Otherwise from that sir, you need to just table it so that the commission can make an informed decision on what you’re saying. If you would like to table it, then we can take a short recess and read it and make a decision.”
Elson Kaseke
“I want to make my submissions. I will table thereafter. I do not know why I am not being allowed to make my submissions. Why am I being limited to a straight jacket, being given five minutes?”
Merlene Bailey Martinez
“Just go ahead Mr. Kaseke, please.”
Janelle Chanona
“When Kaseke got his five minutes, he took thirty-three to dismiss the D.F.C. Commission of Inquiry as illegal, bias, and a miscarriage of justice. On behalf of his client, the former solicitor general also maintained strong objections about comments made by the now deceased David Price; pointed out that council to Merlene Bailey Martinez, Lois Young, should not be at the head table; and asserted that Herbert Lord as a Justice of the Supreme should not be on the Commission.”
Elson Kaseke
“He did not have the right to cross examine any witness, he did not have the right to ask the Chairman on what basis he was making the finding, the prejudgment that he would be found guilty of cross dereliction of duties as D.F.C. chairman. No documents have been disclosed by your Commission to my client. My client did not know, was not a witness or a party before your Commission. This in my respectful submission is bias in prejudgment written lodge.”
Herbert Lord, Co-Chair, D.F.C. Commission of Inquiry
“Mr. Kaseke This present Commission has not said that. You quoted Mr. Price and I said to you Mr. Price is deceased and whatever he thought will not be reflected in the final report.”
Elson Kaseke
“The Commission was never dissolved. It was continued, so you have to determine what happened to—”
Herbert Lord
“We will determine what we have heard and we will make our own determination; Mr. Price cannot write from the grave. Therefore, your comments as to a predetermination is neither here nor there.”
Glenn Godfrey, Former Chair, D.F.C.
“I certainly believe in growth economics and I believe in what the new government was attempting to do, which is to jump start the economy, to make more houses available as they had promise, to fulfil their manifesto. So after I thought about it for awhile, I finally decided, yes, I will take the appointment and I will take it because I feel that somebody has to go there to be able to implement the policies of the government as regard growing the economy and as regards building all these houses, which were for me a dire need and still continue to be a dire need in Belize City and the country as a whole, especially San Pedro.”
“Even today, the loan portfolio of the D.F.C. remains liquid and profitable. What took D.F.C. down, and it’s not even fair to say took D.F.C. down, because while people are saying that, oh government had to bailout the D.F.C., government didn’t bail out any D.F.C. What government did was to live up to the promises it has made when we took over the projects. It’s a simple thing. Unfortunately, there were people both inside the government and outside the government who wanted this thing to look like a bailout, that the institution had collapsed. D.F.C. had not collapse, D.F.C. today is still viable.”
Herbert Lord
“So if I understand you correct, you are saying had these projects not been taking on, in your opinion, D.F.C. would still be a viable institution?”
Glenn Godfrey
“It’s not in my opinion, it’s in the opinion of the present chairman, it’s in the opinion of people like Ms. Longsworth, who said, if you look at the portfolio now, you will see that even with some bad loans—and again, those loans and I will come back to that, were good loans at the time we agreed to give them, but, they were based on certain commitments government had given that government defaulted on. The case of the Novelo’s loan, there was a commitment from government in writing that they would give Novelo’s an exclusive franchise. This was not a bus line; this was a franchise to run the entire country and that nobody else would be given licences. That never happened.”
Merlene Bailey Martinez
“You have seen this letter?”
Glenn Godfrey
“What I’ve seen is the terms and remember I have asked—at various times I’ve tried before I came here because I thought if I could get it I could be more useful to the commission to get to the bottom. To get information I was met with a blank wall. So normally what would happen in a case like this, there would be disclosure. If I wanted to see a document, I could write, I could get it. So I don’t have the advantage of that type of information, but certainly I recall seeing in the loan document, the summary that was prepared for the board, because clearly the board won’t go to look into the files to find this and—that said that government had given a commitment to give the Novelo’s an exclusive. And I believe also there was something signed by Mr. Maxwell Samuels that said the same thing.”
Merlene Bailey Martinez
“You have seen that document?”
Glenn Godfrey
“I believe I have seen that document where he said—I think it created a great uproar and then Government backed off. And of course as a result of that, Novelo’s collapsed.”
Merlene Bailey Martinez
“How do you mean they backed off sir?”
Glenn Godfrey
“Have you seen such a document?”
Merlene Bailey Martinez
“How did the government back off?”
Glenn Godfrey
“By not honouring the commitment they had given.”
Merlene Bailey Martinez
“When they withdrew the commitment or just—how did they not honour it?”
Glenn Godfrey
“They gave licenses to other bus lines. … In the Novelo’s loan, the final approval to issue the whole thirty million dollars in one tranche, that was approved by round robin and I think it was ratified by the next meeting, which I didn’t attend.”
Merlene Bailey Martinez
“Which you didn’t attend.”
Glenn Godfrey
“No, I don’t believe I attended the subsequent meeting.”
Merlene Bailey Martinez
“Okay, what I am asking really is, under what types of circumstances would you consider it necessary to approve or to get by round robin?”
Glenn Godfrey
“When the decision has to be made urgently. … They had made deposits on buses, spare parts, building materials, lands and they said, if we don’t get that money we will lose millions of dollars, so we need that money now. So I said, well I can certainly understand your position. I had no concern about issuing the entire amount in one tranche because at that point we had sixty million dollars in securities for the Novelo’s group. Sixty million dollars with powers of attorney to sign addition securities, and of course we had this big promise that the Novelo’s were going to get the exclusive for the entire country.”
“I’m sure Mr. Bautista was aware that this thing had been approved by round robin. That’s why I was very surprised—I don’t know if he was just totally intimidated by the Commission because he seemed to not be able to explain what had happened. But certainly there was nothing unlawful, illegal, or improper, unethical about getting that loan approved in one day. If we didn’t do it, they would have suffered huge losses and it would not have been good for our prospects of collecting that loan.”
Merlene Bailey Martinez
“Do you know where the loan stands right now?”
Glenn Godfrey
“I have no idea. But again, I don’t think that that had to do a lot to do with Mr. Novelo or the quality of the loan. It had a lot to do with certain things that were very much outside his control and outside of the possible foresight of the board at that time.”
Herbert Lord
“Bearing in mind that the D.F.C. had certain guidelines which says that this amount should be lent pro rata so much, so much because the D.F.C. had to be able to trace the money. If I was borrowing fifteen million, possibly four million would be allowed to be in the first phase and then maybe another four in the second.”
Glenn Godfrey
“That’s not true.”
Herbert Lord
“I am saying bearing in mind the guidelines. I am just giving you examples of what could have been the guidelines. I am not saying it was.”
Glenn Godfrey
“Those guidelines were established by the board and was subject to be changed or overwritten by the board.”
Herbert Lord
“Okay, and this is one case in which it was overwritten.”
Glenn Godfrey
“This is one case in which it was done.”
Herbert Lord
“May I ask why?”
Glenn Godfrey
“Because of the urgency.”
Herbert Lord
“Then would you tell us what created the urgency?”
Glenn Godfrey
“I have been through that already, if you want me to repeat it again.”
Herbert Lord
“I wouldn’t mind.”
Glenn Godfrey
“They had made down payments on certain equipment and other things that they had had to make down payments on and they had a deadline in which they had to make the remainder of the payments or they would have lost their down payment and would have suffered huge amounts of losses. And in those circumstances the board of directors agreed that it would be stupid not to help them to rescue themselves out of that situation.”
And according to Godfrey, Government’s default on its promises to another group of investors also caused the collapse of the loan to Universal Health Services.
Glenn Godfrey
“I can’t really recall that we had anything in writing, but I would say that certainly, if given what was being projected by government, the way N.H.I. was going to work, that they would need an organisation like that. So I don’t know that government would be willing to go out there and say, guess what, if you build this hospital I will use it. As a businessman you have to say, well these are the plans, certainly if government will use the hospital, it is appropriate, but I don’t think any government.”
Merlene Bailey Martinez
“But they did that in the case of the bus franchise.”
Glenn Godfrey
“Yes.”
Merlene Bailey Martinez
“So that could have been done as some kind of confirmation of the government’s policy.”
Glenn Godfrey
“Yes and it would have been as valuable, I suppose as the reassurances they got on the bus matter with Mr. Novelo.”
“D.F.C. in fact had given a letter commitment that they would provide the funds, so it was only fair that D.F.C. help in whatever way they could to make sure. But after that, the money came out in such dribbles and drabs that the project overextended itself, built up a half of the fifty—if it was thirty million, I can’t remember the exact amount, fifteen million of that is arrears of interest; strange as that might seem. So in a way Mr. Victor Lizarraga was a victim of many unfortunate occurrences.”
Today’s questioning also involved the role of Godfrey’s private companies in the affairs of the D.F.C. In one particular line of probing, the witness was presented with letters from his law firm to the corporation requesting payment of over one point seven million dollars in legal fees and government stamp duty in connection with the Novelo loan. But this afternoon Godfrey insisted that despite those documents, his firm never financially benefited from the transaction. He says a member of his firm, Christopher Coye, acted independently when he gave advice to D.F.C.’s legal counsel, Norman Neal.
Glenn Godfrey
“What happened was that all that went to pay—anything he collected went to pay his commission. The law firm itself did not get anything out of it.”
Herbert Lord
“If you are saying so, then his commission was very huge, because I have a letter which is signed by Mr. Christopher Coye in which he estimated the total amount to be one million seven hundred and forty-six thousand, four hundred and eighty dollars. That’s a huge commission.”
Glenn Godfrey
“The amount of what?”
Herbert Lord
“He wrote a letter to Mr. Bautista about the Novelo’s Limited loan and he gave them the estimated total, supplementary mortgage, recording fees, recording fees, other office expenses, and he gave an estimated total of a million seven hundred and forty-six thousand, four hundred and eighty dollars as the amount being charged.”
Glenn Godfrey
“That’s why I wanted to show you the bill because the bill says nothing about that. The bill says that out of this entire thing, around sixty percent was registration fees, stamp duty recording fees, stamp duties, office expenses, land taxes. This was entirely an arrangement between Mr. Coye and–”
Herbert Lord
“Professional fees he quotes as follows: D.F.C. premium fees, seven hundred and fifty-thousand; Sales Tax, sixty thousand; attorney’s fee, four hundred and fifty thousand; Sales Tax thirty-six thousand; Stamp Duty a hundred and twenty, recording fees, a hundred and fifty; recording fees, sixty; other expenses, one-fifty; estimated total one million seven hundred and forty-six thousand, four hundred and eighty dollars.”
Glenn Godfrey
“I have never seen that. This is what I have seen.”
Herbert Lord
“You’ve never seen another letter he wrote also on March sixth, 2001, which he was talking about the Alliance Bank Limited would act as the paying agent and that there is a promissory noted which was executed and that the attorneys for both parties agree to arrange for finalising the preparation and executing of all remaining security arrangements?”
Glenn Godfrey
“I have not seen that, this is what I have seen.”
Elson Kaseke
“But Justice Lord.”
Herbert Lord
“Thank you. He says that he has not seen it, I will not argue with you.”
Elson Kaseke
“I want to put on record that that is what we have been complaining about, that if the Commission intended to use these documents they should have disclosed it to my client. I mean this is a justifiable objection.”
Herbert Lord
“I agree with your objection, but looking at it as I see it, it’s on the letterhead of your client, which means that somehow there should be a copy in his office. As I am aware of it, attorneys at law, particularly attorneys who have offices, always have a copy in their offices. And this is on a letter head from your client, and if you look at it carefully, it’s signed Glenn D. Godfrey per Christopher Coye. So I am saying maybe your client has not seen it, but he should be aware of it.”
Elson Kaseke
“I have not seen that document, but if you had queries you should call Mr. Coye.”
Glenn Godfrey
“I was on a leave of absence during the entire time of this transaction here.”
Herbert Lord
“And all I am saying is if he is claiming this as cost, that’s a very high cost he was claiming for himself, almost two million dollars.”
Merlene Bailey Martinez
“The point of the fact is that Mr. Godfrey’s law firm benefited financially from this transaction and that is the point of it.”
Glenn Godfrey
“The transaction had nothing to do with D.F.C. directly, it had to do with the transaction between one member of my law firm and another attorney. … To suggest that we had any direct relationship with D.F.C., me or Mr. Coye is totally wrong.”
In addition to the often tense confrontations between Godfrey and Bailey Martinez, the witness crossed the line when at one point he clearly called the co-chair’s counsel, Lois Young, an obscene name. Bailey Martinez stopped the proceedings to admonish the witness. Godfrey later told the media during the break: “I don’t care if you got that on tape.” Despite that incident, Godfrey has agreed to reappear before the Commission if it should become necessary. It is likely that today’s public hearing was the Commission’s last. With the completion of the forensic audit, according to Bailey Martinez, the final report of the Commission of Inquiry is expected to be released “as quickly as possible.”
