The report of the Senate Special Select Committee points to many highly questionable transactions guaranteed by Social Security for Glen Godfrey affiliated companies. Foremost among these is the transaction that's been most reported on, a $17.5 million loan to Intelco and Western Caribbean properties guaranteed by Social Security. The collateral in those loans was grossly deficient, tonight we look to the report of the Senate committee and the special auditor to see how reckless the guarantee was.
Jules Vasquez Reporting,
This is a property on top of the Cahal Pech Hill in Cayo, a few years ago Intelco put a tower and an exchange building on it. BTL is now going to be using the property and the tower to install an exchange.
But imagine it as it was in May of 2001, without any building on it. Now imagine it being worth $3 million. That's what Selvyn Hernandez, a systems analyst and employee of Glen Godfrey at Data Pro valued the property for on May 30, 2001. He assigned that rich value 19 days after the same Glenn Godfrey's Intelco bought it for $50,000. Three months later, Godfrey's St. Paul's Building society then insured it for $6.5 million, 130 times the value it had been bought for.
The Senate report notes: "St. Paul was new in business with not one single insurance transaction on record...and St. Paul was an entity controlled by the same persons who controlled St. James the insured and therefore this amounted to self-insurance." We note, they also shared the same address, 35 Barrack Road. The special auditor Mark Hulse in his report notes, "we note here that all these companies are related/associated. They share the same address, directors, shareholders and signatories. The companies, appraisers, witnesses and justice of the peace share the same 35 Barrack Road address."
And while the insurance is one thing the value had to be overstated, grossly in this case, because it was collateral for a publicly guaranteed loan of $9.8 million to build an apartment complex here, which never happened.
Now back to the at that time still undeveloped property bought for $50, 000 used to guarantee a loan of $9.8 million dollars, that's 196 times the original value and at that time it still didn't have one building on it!
That loan was supposedly made from St. James to Western Caribbean properties and then sold to the SSB. But on page 65, the Senate report notes, "there is no record in the audited financial statements for the year 2001 of St.. James making these loans in us dollars to...WCPL as the mortgage documents state."
So there was no loan, but without doing any due diligence, Social Security bundled it into its securitization package and guaranteed the phantom loans. Wearily, the Senate report concludes, "Mrs. Garcia should have known that the fund would be placed in jeopardy, she proceeded to commit the funds of the SSB to guarantee mortgages that were grossly and Inadequately secured."
The Cayo property covered only half that loan, the other piece of collateral was for an equally undeveloped piece of land in San Pedro valued at $300,000 to cover an $11 million loan.
