We also asked the Prime Minister about the guarantees for three loans for Glenn Godfrey companies. As we first reported last night, 7NEWS has received reports from multiple senior sources that say there are $28 million in guarantees for Godfrey companies which have not been activated. But when we asked the Prime Minister about it, he gave a response that left us with more questions than answers. So we went digging and we came up with gold: three guarantee agreements that, up to now, had been secret. Jules Vasquez has the details.
Jules Vasquez Reporting,
They are called 'put option agreements' between the Government of Belize and the Provident Bank and Trust of Belize Limited. There are three of them, and 7NEWS has obtained signed copies of the documents, two of them dating back to 2001, and one to 2002. A put option is like a guarantee in as much as "the put" as it is called - allows the bank the option to call on the government to buy the loan at any time. It's a financial contract and it is an obligation, in this case on the government to take over the loan, in certain events - such as a default.
The first put option is for US$3.7 million to finance a 30,000 square foot casino in Northern Belize. That never happened but government is still liable because as the agreement says the bank has agreed to grant the credit facility to the company Galleria Maya, on the condition that government agrees a put option. There it is, a guarantee signed by the Minister of Budget Management for a private loan to a private company to build a casino, of all things.
Also in 2001, government, again in this case the Minister of Budget Management, signed a put option for US$6.5 million to establish a fiber optics, wide area network - linking all government offices and other government institutions. It's the famous internet in schools programme - where all the computers were, as you remember - 'free'. The system is dead, but the loan is alive and those computers weren't so free because government is still liable by this guarantee.
And then in 2002, there was one more, again with the signature of the Minister of Budget Management for US$1.8 million to build a four lane access road 5 miles long. That road or a semblance of it has been built - but it goes nowhere because it was supposed to go to the casino in the first put option - the one which was never built. A catalogue of ruin and financial recklessness - and today the Prime Minister addressed it - or he tired to.
Jules Vasquez,
Would you discuss the government held guarantees for LGS, Galleria Maya, and Northern Property Management?
Rt. Hon. Said Musa,
"In terms of the LG matter, that matter has been gone into with a fine tooth comb with the Social Security Inquiry. It has been gone into by the DFC Inquiry. As far as I am concerned there are still some matters of contention, of dispute, in respect of those so-called guarantees, or put options, it is a matter of disputes and indeed there will be civil action taken shortly. In fact the legal advisor of the Ministry of Finance has been working on that, to take action against the relevant parties in respect of that."
Jules Vasquez,
But did not a Minister of your government, the Minister of Budget Management at the time, sign a put option for those figures, for those guarantees?
Rt. Hon. Said Musa,
"I am not aware of that, like I said, my information, understanding is the matter is a matter of dispute, it will go before the courts and it will be resolved at that point."
A completely bewildering answer since neither the SSB inquiry nor the DFC inquiry dealt with any of these put option.
The amounts listed in the story were the principal figures which add up to US$12 million, $24 million Belize that government guaranteed for private companies. With interest, they are now reportedly up to $28 million. As we reported, the Provident Bank has not called upon these guarantees but our reports say they have sent notices notifying government that they are liable. And also, these were not disclosed in the debt restructuring exercise.
But beyond that, they were signed by the Minister of Budget Management, which raises serious constitutional issues. Because while the Prime Minister may argue, as he did today, that he is authorized to enter such agreements, the same can hardly be argued for the Budget Management Minister.
Reviewing the documents, the question of a related parties transaction also arises to because Glenn Godfrey is connected to Provident Bank and Trust and was also a principal player in LGS, Galleria Maya and Northern Property Management Limited.
