One man who will be watching those senate proceedings closely is minister of state in the ministry of finance Jose Coye. As the most publicly forthright member of the G7, Coye was the first to break rank when he spoke publicly about mismanagement of social security funds on August 10th, 2 days before the G7 group went into the prime minister's office demanding the ouster of Ralph Fonseca as minister of finance.
Well, many days and nights of love and war have passed since that first burst of outspoken-ness and today Coye spoke with the media. He said that the process now is not about blame, it is about reform and the UDP chaired public finance committee of the house of representatives must lead the charge:
Jose Coye – Minister of State in the Ministry of Finance
"The public accounts committee is an institution which is built, yes, around the auditor general which is provided for in our constitution. There are the laws under the finance and audit act that tells us how we are to account for that money. It tells us that those accounts for the government must be prepared and submitted to the auditor general three months after the end of the financial year. And then the auditor general is to have those accounts audited within six months after it was given. So within nine months and nine months after the end of a financial year the account should have been audited. They go to the house and then the are referred to the public accounts committee.”
Jules Vasquez
Q:"None of this happens though."
"This has not been happening for many years now. To the public accounts committee, the strength of it, it is already there in the standing orders to be showed. But what is the strength of it? The strength of it is that it allows the media to be in it. It allows the public at large to be there. So when those accounts are brought before the public accounts committee to be examined and to be reported on. It's not whether you have four PUP's and two UDP's because what is important is that every member will be able to examine those accounts and the public is there to ask questions and the media is there to participate. So there is limited space for secrecy and if that is what gives us the transparency and what gives accountability to government spending.”
Q: "But what people are experiencing is a visceral issue that, hey, my future may have leveraged their private fortunes of their friends, their political friends on my financial future, my financial safety net. How do you respond to it?"
"My response to it, Jules, is that yes, if there is a failure in complying with the internal controls, with standards the prudential rules and with all the other manuals and guidelines that are there, because obviously in the Social Security Board, in the DFC, the central government, in any institution of this type there will be internal controls. There will be guidelines, administrative guidelines and if there is not compliance with those guidelines then I think disciplinary action should be taken.”
Q: "So should the board of Social Security be fired?"
“If the board of the Social Security failed to comply and it resulted in any losses they should be fired. I am not whether it is this board. To my recollection it is not this board that made those decisions. But I would say that whatever board that would not have complied with the internal controls, with standards, with guidelines and it resulted in losses, obviously they should be fired."
"The question which was asked to before and I believe it will be kept asking. Was it a wise thing for the Social Security to have become involved in securing investment in the telecommunication industry? To me that is not so much the issue but that can be debated. But what was important is that once it decided to go that way it should take the appropriate measures to ensure that there were proper assets, adequate assets to back that guarantee. And that is the essence of the failure.
Q: "Shortly before you were made Minister of State in the Ministry of Finance Social Security Board which comes under the Ministry of Finance invested 7 million in land out at San Pedro, Northern Ambergris Caye, I should say. What is your opinion on that investment at this time?"
"We have looked at that investment. Certainly it is one that we had singled out for questioning. And from the information that we had so far it would seem to me that the investment that the Social Security made is not an investment that I would consider to be an unwise investment. I wouldn't consider it to be such. But what I would say is that the timing was not good. Because we were in a period where the Social Security board was coming under question and I think they should have seized in doing any kind of investment until this matter would have been cleared up."
Q: "What is your assessment of our immediate short term risk profile in terms of, are we heading for a default?"
"I would say Jules that we have already taken measures as part of the debt management to re profile debts. You are well aware that some time now we start out to refinance through the floating of bonds. That became unfeasible and we discontinued the pursuit of that. But we have re profiled, so have we have proposals, to re profile two debts and with that re profiling we will be able to go through for the next few years of course. And then as we get all the figures together and we put in place debt management. And I must say this that it begins certainly with the fiscal tightening that will be needed. We need to certainly reduce the capital outlays and by doing that we can begin to reduce the debt."
Jules Vasquez
"We've been cutting back on expenditure, we've been refinancing debt."
Jose Coye
"And I would say that we have reduced the debt in the first six months of the calendar year. The debt has been reduced but we need to continue the cutback in the sense that the fiscal deficit cannot be sustained.
Q: "Is Ralph Fonseca responsible for the quote, unquote the mess we are in?"
"Jules, I would not want to assign blame to anyone person."
Q: "But then its not one person, its all you all. So are you to blame?"
"We are all responsible. The question of blame would be a differerent matter. We are all responsible. I have said many times and I am repeating it. As a member of the cabinet I am responsible but if there is any wrongdoing of anyone I am not guilty for them.
Jules Vasquez
Q: "I will challenge you then. You are guilty. I'm saying that when the government takes on, we'll just talk about that 36 millon U.S. short term bridge financing as you call it, when the government takes on a debt like that, I'm saying that it should go to the national assembly. It should somehow go out to the public. And I am saying that you are guilty then, in suppressing that, in knowning about that. Knowing that we will need to float a bond, everybody sitting on their hands until the bond appears in May. We are going to float a bond. Knowing that we are going to float a bond to pay that. So I'm saying that you are guilty, you condoned it."
Jose Coye
"For?"
Jules Vasquez
"The loan was taken..."
Jose Coye
"For the bridging loan?"
Jules Vasquez
"The loan was taken"
Jose Coye
"And you are saying that he loan didn't go to the...”
Jules Vasquez
"National Assembly. It didn't go there."
Jose Coye
"O.K."
Jules Vasquez
"I didn't know about it in the press. No public information were put."
Jose Coye
"So it was a non compliance."
Jules Vasquez
"It was a non compliance and you all knew at the time that you would need to float a bond to pay
that loan."
Jose Coye
"Yes."
Jules Vasquez
"Nobody said anything. Everybody sat on their hands."
Jose Coye
"Yes"
Jules Vasquez
"May comes we can't float that bond because the world, global finacial situation has changed."
Jose Coye
"Yes"
Jules Vasquez
"We can't float the bond so we are in a crisis and RBTT is looking to bail us out but I'm saying that you knew. You condoned it. You didn't act to stop it. You didn't act to publicize it.”
Jose Coye
"Are you suggesting that the short term borrowing, the bridging was a wrongdoing?"
Jules Vasquez
"I'm not saying it's a wrong doing. I'm saying it's a...”
Jose Coye
"You think it was a bad judgment."
Jules Vasquez
"I'm saying that it put us in a very bad situation when we were unable to float the bond."
Jose Coye
"Well it will put us in a... any bridging that we are going to do. Any financial bridging certainly puts you in a position that if the long-term loan that will refinance it does not come about it's a risk you are taking. But if you are saying to me now that I knew that the funds were being barrowed, and that certainly it was not being done in the best interest of the public in terms of how it is being used now that's different."
For its part, speaking on the public finances committee, the UDP has offered that it is opposition chaired but government controlled and government does not have audited financials for it to review.