$17.5 million...that's what the Senate Special Select Committee on Social Security is looking for. That's the amount of money Glenn Godfrey's companies received in early 2002 to develop two properties that were never developed. The money was instead flowed into Intelco, which went bankrupt. So now, Social Security, which guaranteed the transaction, is left holding the debt and using the money from your contributions to pay it. But as the Senate hearings have shown, Social Security never really had a guarantee. So that practice of paying Godfrey's debt finally stopped at the end of January and somebody, either government or Godfrey, still has to refund social security $1.8 million for payments it made.
In a few minutes, we'll tell you who'll refund them that money, but first we look to who's paying the current debt which continues to accumulate at a rate of over $500,000 a month. Yesterday in his sworn testimony before the Senate Special Committee on Social Security Glenn Godfrey said twice that BTL had taken over and was paying his debts. Here's what he said.
[June 9th, 2005]
Glenn Godfrey,
"There were two occasions where as part of the overall arrangement to take over the assets of Intelco and to settle everything, the BTL agreed to
also buy the underlining assets which would be the three parcels of land at the face value of the mortgage, so BTL now has that obligation to do that."
Senator Richard "Dickie" Bradley,
"So the noise we have heard which has concerned us that two large mortgages, in total of millions of dollars, having been defaulted on was which already included in a package already sold to foreign investors, who is to meet the monthly payments for those mortgages?"
Glenn Godfrey,
"The BTL. The board of directors that was appointed by Prosser, and the subsequent one appointed by government, both undertook to accept the liability on those mortgages and pay off the debt."
Senator Richard "Dickie" Bradley,
"Can they go to recover somewhere the shortfall in default?"
Glenn Godfrey,
"Well there is no shortfall."
Senator Richard "Dickie" Bradley,
"There is no default?"
Glenn Godfrey,
"I know that BTL has made several payments. I don't know if anybody is sure what BTL has been doing of late, but certainly I know for a fact they paid at least three payments."
Well today BTL fired back at Godfrey flatly refuting his sworn testimony. A statement from the company issued at 5:55 pm says, "BTL categorically denies assuming any liability for Intelco and....it is management's firm position that it will not expose BTL to any liability for which no value has been received." The bottom line there is that BTL has flatly denied Godfrey's statement that BTL has made "several payments" for Intelco's debt. The BTL statement does go on to say that under the Prosser Group, BTL assumed a promissory note with the Alliance Bank as part of the buyout of Intelco's assets. But government guaranteed the transaction and now BTL says it has gotten no Intelco assets but it has paid $2 million. $5 million more was to have been paid on June 1st, but that was not paid, because BTL says it is trying to get the first $2 million back. Again, if this deals fall through as it appears to be doing, government, meaning taxpayers, is the guarantor.
