It was a day filled with drama on Independence Hill in Belmopan when opposition militants including Kenny Morgan were ejected from the gallery during the meeting of the House of Representatives. We'll have that story shortly but first to the business of the day. It was a House session filled with important government business including the passage of the finance and audit reform bill, the cruise ship port development project bill, and the mutual legal assistance in criminal matters bill. But perhaps one of the most interesting moments came when the Prime Minister finally revealed and unveiled the long obscured inner-workings of the Jeffrey Prosser/BTL deal. We first go to his response to a question by the leader of the Opposition.
Hon. Said Musa, Prime Minister
"On the 30th of April 2004 ICC and the Government of Belize and the International Bank of Miami entered into an agreement whereby ICC assumed the debt service payments directly with the Miami Bank in respect of the US$57 million which government had borrowed from the bank to buy the Carlisle shares. ICC continued making debt service payments from the 30th of April 2004 to the Miami Bank until the 22nd of November 2004 when there was a default for the reason, as we understand it, that some unexpected difficulties arose for ICC to obtain financing from the Royal Bank of Trinidad and Tobago, RBTT. The negotiations with RBTT are still in progress we are informed and ICC has requested the government for an extra 90 days to pay in cash the balance of the purchase price with interest and all attendant costs. The extension of time is secured by a pledge of all the Carlisle shares as was the position with the April agreement. As part of the agreement with ICC/BTL they have also agreed to assume the debt of US$9.8 million which is owed by Intelco to the Belize Social Security Board and in addition ICC/BTL will assume the US$9 million owed by Intelco to the International Bank of Miami as part of the process of acquiring the assets of Intelco. Should ICC fail to meet its obligations as agreed within the extended time, we reserve the right to take such action with regards to the pledged shares so as to fully secure the interests of the government and the people of Belize."
Hon. Dean Barrow, Opposition Leader
"Madam Speaker a follow-up question, the prime minister has not answered why did he repeatedly tell the nation and the House that the money had been paid? He is not confessing that it was not never paid."
[Applause from the Gallery]
Hon. Said Musa,
"Madam Speaker I have already explained that payment was made in the form of 2 promissory notes. As a lawyer he should know that promissory notes are negotiable instruments."
And while Musa defended the promissory note, later on in a statement he explained the rationale for pursuing a deal with Jeffrey Prosser.
Hon. Said Musa,
"It was hoped that with the Prosser group taking over the reigns of BTL a new chapter of friendship and harmony would open on the Belizean telecommunications scene to replace the previous confrontational and litigious atmosphere which had plagued the telecommunications market. It appeared to us that the Prosser group would be more sensitive and accommodating of the government's mandate to hold down the tariffs for public utilities. Since the default committed by the ICC on the 22nd of November, the government has negotiated with the Capital Markets Financial Services to re-profile all GOB loans with the International Bank of Miami including the US$57 million. Madam Speaker, I must mention in this context that the debt service payments by ICC to the International Bank of Miami was secured by a pledge of the share certificates of all the Carlisle shares to the value of US$57 million. These share certificates are now with the International Bank of Miami as the government had to cure ICC's default by re-profiling the loans, the government is entitled to be delivered possession of the share certificates for the US$57 million. The government is prepared to grant ICC an extension of 75 days to make good the default in cash payment. As part of this extension it is agreed that ICC will indemnify the government against any cost and losses suffered by the government in re-profiling the US$57 million loan. In addition, BTL has agreed to assume Intelco's debt to BSSB in the amount of US$9,806,546 as part of the process of acquiring the assets of the Intelco. We are negotiating with ICC that they also assume the balance of Intelco's loan from the International Bank of Miami to the amount of US$9 million which was secured from a revenue stream from the government for telecommunication services being provided by Intelco. In the event that ICC and Belize Telecom are unable to come up with the money at the end of the extended period, the government will be free to take such action with regard to the US$57 million share as may be considered prudent in the public interest. Madam Speaker these are the facts surrounding the BTL shares. We believe that the original decision by the government to buy out Carlisle shares was in the public interest and was fully justified by the circumstances prevailing at the time."
Hon. Dean Barrow,
"To suggest that there was a problem with Carlisle which required the buyout without considering that it was this government that in the first place sold off the telephone company to Carlisle because of its relationship with Carlisle is unforgivable. To suggest again that Mr. Prosser was the new love of the government's life in respect of telecommunications because it was felt that Mr. Prosser would be so good to the people of Belize, in terms of rates he set they would be in harmony and there would not be attempts arbitrarily to increase rates, when in fact Mr. Prosser, even before the sale was complete, made it plain that he would satisfied with nothing less than 100% ownership of BTL and that he would not want competition and when the government had to give him a guaranteed 15% rate of return is similarly repugnant. We have to set the record straight and I will do this with respect to the adjournment. Generally to whitewash the government's lies by suggesting now that 'well we had been given promissory notes instead of cash payments but we did not lie because promissory notes are equivalent to cash,' again is intolerable and we in the Opposition have a duty to make it clear to the people that what happened was that the government simply lied. When our prime minister tells us government now holds the share certificates, which are on deposit with the bank to guarantee the loan, there is the fact that Prosser is in control of the company, Prosser is in control of the income stream of the company. So it really is a very nice thing for the prime minister to tell us 'well he is being given 75 more days but in the mean time please be reassured because we have possession of the share certificates.' Who has possession of the company? Why should Jeffrey Prosser be allowed to have controlled the company for so long without paying the purchase to the government of Belize. How can the prime minister seriously believe or if he believes, how can he expect us to believe that Prosser who has been given over a year to come up with the $57 million and has not been able to do so, will in the next 75 days not only come up with that $57 million but with the additional amounts that are due on the Intelco loans that SSB and GOB have guaranteed. My goodness, is the prime minister so completely naïve? Is he such an utter idiot or is there something more to this that we cant' understand? I am convinced that no right thinking citizen of this country will be bamboozled, will be taking in, by the absolute nonsense that the prime minister spouted in the statement that he made to the house."
And in response to another question from opposition leader Dean Barrow, Prime Minister Musa finally revealed what is SSB's exposure for Intelco and as only 7NEWS has reported it is close to $30 million.
Hon. Said Musa,
"Social Security's present exposure to the entire Godfrey Group of companies stands at $28,586,175. With the sale of the Intelco assets, SSB expects to receive US$9,806,546 or some BZ$19,613,092; the principal balance then of some $8.9 is expected to be recovered under the remaining mortgages from the Godfrey Group of companies."