Cooperatives and credit unions, they are the cornerstones of society. And rightly they should be because they bring together the resources of many small members, who would otherwise be marginalized, to jointly own and control one enterprise. Regulated by government, that model of collective strength has worked well in Belize, affording access to capital and opportunities to members. But one of the leading lights of this movement may be in trouble and senior public servants are the ones blowing the whistle.
7 News has obtained a status report compiled by a government group known as the subcommittee on fishing cooperatives.
Dated July of 2003, the report renders an unsparing review of the operations of the Northern Fishermen Cooperative society. The findings have created quite a stir in the countries largest Cooperative, and in the following story, you'll find out why.
Jules Vasquez Reporting
With a total membership of 678 fishermen and earnings of 14.5 million dollars last year, the Northern Fishermen Cooperative Society, headquartered in Belize city, is one of the wealthiest enterprises in Belize.
But surprisingly, even with earnings of 14.5 million, its profits in the last financial year were only 35 thousand dollars, down from 80 thousand the year before, and down from 300 thousand dollars in the mid 90's.
So what went wrong with Northern? Well, according to this report that’s been circulated to members, a whole lot, and those problems begin at the top with management. According to this report compiled by the registrar of cooperatives, the 9 member management committee owes 3.4 million dollars in loans, led by its chairman, Santiago Marin who owes 1.254 million. Another board member has a loan of 945 thousand dollars.
These huge loans add up to leave the cooperative with a massive receivables bill, 12.5 million dollars, that’s money outstanding, 10.7 million dollars of it to members. And this registrar’s report says that 27% of that amount is doubtful.
The report goes on to say that the managing committee “members abuse their positions to issue large and unsecured loans to themselves and their associates.”
And while the managing committee received lavish loans, top staffers got hefty salary advances. According to the report, manager Bobby Usher received 427 thousand dollars in salary advances, while his accountant, Modesto Sam received 552 thousand dollars in advances. The report concludes that there is “no credit ceilings for advances to staff, and no security for advances to staff.” The report goes on to state that “the by laws of the cooperative do not allow for loans to staff.” It as that “no promissory notes exist for these advances and no collections are being done.”
The report also shows that when it comes time for bonuses, the management is generous to itself. Managing committee members received 33,500 dollars in bonuses, almost as much as the net profit of 35 thousand dollars.
The cooperative is 16.7 million dollars in debt, 6.3 million of that owing to the troubled DFC.
It’s quite the corporate spectacle and members will meet in a special general meeting to discuss it on Friday.
That meeting we are told has now been rescheduled to Friday September 24th and is no longer being called a special meeting. Under the laws of Belize, the registrar of cooperatives should regulate cooperatives and maintain oversight to make sure they operate in their members' interests.