Heads roll at the Social Investment Fund; 4 executives terminated and Executive Director resigns

There is a purge of the Social Investment Fund. And tonight, four employees: Mike Hernandez, Enrique Romero, Faustino Pineda and Lionel Jimenez have been sent home, while their boss, the Executive Director, Daniel Cano, was asked to step down following an emergency meeting on Monday afternoon of the SIF Board. Their dismissal comes on the heels of allegations and a subsequent investigation by the Contractor General which found that there was enough merit to terminate the SIF executives. In respect of Cano, he was also found to have taken a side job despite SIF regulations prohibiting such activity.  At the centre of the scandal is a million dollar contract for the renovation of the Dangriga market, awarded to a highly placed U.D.P. contractor, Kenard Smart from Corozal. Months ago, Smart wrote to the Contractor General complaining of extortion and on Friday, we showed you the correspondence bearing Smart’s complaints. News Five’s Isani Cayetano has been following this story since last Thursday and has this update.

Isani Cayetano, Reporting

There has been a major overnight shakeup at the Social Investment Fund, in the wake of a recent scandal involving allegations of corruption.  The immediate removal of five employees, including Executive Director Daniel Cano, succeeds an emergency meeting of the Board of Directors which was held in Belmopan on Monday evening.  Charges of financial improprieties against the administration, as well as its members of staff date back to mid-February when developer Kenard Smart blew the whistle on an ongoing extortion scheme in an email sent to Contractor General Godwin Arzu.  That complaint and the subsequent exposure of the SIF employees pertained to a failed Municipal Development Project which included the restoration of the Dangriga Market.  Minister of State in the Ministry of Finance and Economic Development Santiago Castillo Jr. discussed the direct measures taken with the media today.

Santiago Castillo Jr.

Santiago Castillo Jr., Ministry of Finance and Economic Development

“The five persons in question are no longer with SIF. Mister Daniel Cano, the Executive Director has submitted his resignation; it was requested of him. And the other four persons: Mister Mike Hernandez, the Public Relations Officer, the technical officers: Enrique Romero, Fausto Pineda and the engineer, Lionel Jimenez have all been terminated.”

Reporter

“We understand that there is an acting executive director at the moment. Can you explain who this person is?”

Santiago Castillo Jr.

“The acting executive director is presently Nellie Trench and of course we are going to look into terms of reference of all the positions; strengthening them in fact and putting them out for advertisement.”

Reporter

“Sir, at what point did you become aware of these allegations of extortion and corruption at SIF? What did you do when you became aware of it?”

Santiago Castillo Jr.

“That is funny Jules, I was out of the country and just came back in on Saturday the fourteenth and I read it online. I read channel five and seven’s reports on it online and I immediately emailed the C.E.O., Miss Yvonne Hyde, of the ministry and she updated me immediately and what was happening. I arrived on Saturday and was kept fully addressed and then we moved to immediate action to have the board have an emergency meeting yesterday with recommendation from the Contractor General who was at the meeting and how to move forward.”

On Friday, during an interview with Cano in Dangriga, he acknowledged that there were allegations of misconduct being made against him and his staff.

Daniel Cano

Daniel Cano, Exec. Dir., Social Investment Fund [File: September 13^th, 2013]

“I am aware of the allegations and it’s something very serious that has been alleged, something that SIF and the government are looking at very closely.  In fact, this matter is being investigated by an entity outside of SIF and really because of that I can’t say a whole lot more about it.  It is a matter [that’s] under investigation and if wrongdoing is found then clearly measures will have to be taken against the officers who are involved in that.”

Isani Cayetano

“You are also named in this particular allegation sir.”

Daniel Cano

“I am aware of that as well and likewise, the same applies to me.  If there is wrongdoing found then I should be held to the same standard.”

The meeting, convened following those allegations resulted in a recommendation submitted by the Contractor General, Godwin Arzu, to terminate the services of those individuals forthwith.

Santiago Castillo Jr.

“I first found out of any allegations actually. It was when Mister Smart’s contract was finally terminated and then he had in fact, after terminating the contract, gone to the Contractor General. And it was at that time that it was brought to cabinet that there were allegations of misconduct at SIF, but nothing to this level. The only one I knew about was about a five hundred dollar cheque that Mike Hernandez had received which I immediately called on him upon and which he said was a gift to him from Mister Smart during Christmas time.  Other than that I dint know of other cheques that surfaced until the news.”

Reporter

“Sir, I understand that all these persons had excuses like Mister Mike Hernandez in their…when the Contractor General got on them. What did you think of the explanations?”

Santiago Castillo Jr.

“Well the explanations as far as I am concerned don’t cut it at all. One of them is saying five thousand was a loan. There was another three thousand for insurance that his wife sold and he is no longer with his wife. Those were the sort of explanations which—and I am speaking strictly now—if this was the private sector, that doesn’t; it is no nonsense and heads would have had to roll from where I sit. However, we put it in the hands of the Board of Directors, let them make the decisions.”

Reporter

“In an interview with Mister Cano on Friday, he was mentioning that an independent body was conducting an investigation into these allegations of corruption. How different is it from what the board took into effect in terms of looking over what has happened and taking a decision?”

Kenard Smart

Santiago Castillo Jr.

“Well the independent body was the C.E.O. of the ministry and executive members of the board who looked at it before it went to the complete board of directors. And as I said yesterday, the entire board of directors met with the Contractor General to in fact go over all the allegations and move on it.”

While there have been major changes at the organization, the fate of Gush and Emy, as well as Lyndon Bailey’s investment in the project hangs in the balance.  So is the completion of the Dangriga market.

Santiago Castillo Jr.

“Unfortunately for them, our contract is with Mister Smart, K&G Constructions. We have no contract with Gush and Emy and with Lyndon Bailey. They were subcontracted by Mister Smart and up to date, we have paid Mister Smart a total of a little under six hundred thousand dollars in payments for the Dangriga project of which he has not been forthcoming with his part of the deal which is effect; which is why eventually it came to this point and why we got involved. The contract automatically cancelled itself because the contract reads that after hundred days of delay, it is automatically canceled. He got many extensions. First, he was seventy days delayed, and he got two extensions to come up to date with the work and he didn’t. Eventually he was a hundred and ten days delayed—over the hundred days allowed—and that is how eventually it self-canceled. Unfortunately Isani, the sad news that I have to tell Dangriga people is that yes we have to go way back to the drawing board all over again. We have to put it out to tender all over again. This time we will go through it with an even more fine-tooth comb to ensure that a qualified contractor gets the contract and in fact finishes it as quickly as possible for the Dangrigans because they are way behind.”

Reporting for News Five, I am Isani Cayetano.

It is also known that Smart has been awarded by the SIF several other projects aside from the Dangriga Municipal Market. They include the Gulisi School in the south, the Trial Farm Drainage in Orange Walk and the Santa Elena Library in the west.