In the past weeks, we've heard much about Social Security's money and its various misuses. Well tonight, we have proof. 7NEWS has obtained a document listing all of Social Security's investments as of May 2004 and it tells us how much has been invested, and how well those investments are doing. All we can say is hold onto your seats; this one's going to be a rough ride.
Jules Vasquez Reporting,
This document obtained by 7NEWS shows the entire Social Security Board investment portfolio. It tells exactly how $254,457,138.52 of your money has been invested.
Some things jump out immediately and the most startling is the $46.8 million that has been invested in the DFC. Startling because by all accounts the DFC is insolvent which means that $46.8 million of your Social Security money is as good as dead. And what is in that $46.8 million? Well in the agriculture sector one for $6 million, is just described blankly as loan #7, another, loan #11 is for $1.1 million. None of those have made any payments since July of 2003.
And then Social Security money has been used to cover $11.7 million in student loans, bundled into 5 different loans all of which have paid nothing since July of 2003. And while education is dismal, housing is pathetic. $27.1 million, has been used to cover DFC housing loans and guess what, no payments have been made on that since July of 2003. That includes one loan for $2.5 million, made in 2003 for which no payments have ever been made.
And that's not the worst of it. The bottom line on this is a mysterious entry $53,608,000 invested in "mortgages". For this line item, there is no explanation, no payment, no money received. We are informed these are the mortgages that social security guaranteed to securitize, and contain a bundle of highly dubious debts, including $18 million loaned to Glenn Godfrey's companies which was bundled into a DFC securitization guaranteed by the Social Security Board.
Godfrey defaulted on his loan payments from November to two days ago forcing social security to pay it, until he paid his arrears allegedly with this $6 million check. Here's what DFC's General Manager had to say about the loan to the former Chairman.
Troy Gabb, DFC CEO
“Mr. Godfrey was the chairman at the time. I can’t say exactly whether or not because he was the chairman this was placed in. It was a project that St. James that they had planned to improve this particular asset and at that point in time when the transaction was concluded everybody was of the understanding that when he gets the funds he will put it in improving the facility.”
“So as part as the transaction itself it was a sound transaction and the transaction itself in reference to the two facilities those were to be developed. Those assets to be developed and that was the whole process of what transpired. There was nothing at all wrong with the transaction.”
Stewart Krohn, Channel 5
At what point did you realize the borrower was not using the money for what he had said he would have?
Troy Gabb,
“But it didn’t matter at that point in time as long as the debt was being serviced.”
Stewart Krohn,
Would you say this was a massive case of extreme poor judgment?
Narda Garcia, General Manager SSB
“In the case of SSB I would say that we did the transaction because we were assured that there was enough level of coverage in terms of the gob guarantee, in terms of the insurance etc. Etc. So that at the end of the day for investments so to speak or if we had to pay in the event of a default that we would be covered.”
That 17 million is believed to be bundled into this mystery item for $53 million. But from all this, the bottom line is that your social security money, which should be preciously guarded, and judiciously invested above all else, has been squandered, thrown into the dissolute and decadent cesspool of financial woe that is the DFC.
And for what, well social security should invest your money for the greatest, safest yield it can find so that when you claim a benefit, it's there. Just leaving it in a bank would earn 9% what is this portfolio yielding? Overall, plus the mystery mortgages: a withering 4% it is indubitably, a catastrophe piled atop a tragic and reckless misuse of public funds. And if that's what SSB's portfolio, which should be so carefully guarded, looks like, we shudder to think what's in the DFC's portfolio.
Of the $254 million listed as investments only $35 million is in the bank, earning 8.8%. Again, those investments are at May of 2004. And if you're expecting some ease to come to Social Security when DFC's portfolio is bought over according to Gabb for $120 million by the Belize Bank...think again. A well-placed bank executive today told us to take that story with a large serving of salt.