The DFC apart from being insolvent, it may be the biggest political and financial wreck Belize has ever seen, and last year the errors of DFC cost tax payers $100,000 a day. But the wreckage has only been estimated by limited information and random reckonings, because few know the extent of the damage done at DFC. Well now a Commission of Inquiry has been formed to find out what went wrong at DFC and determine who's responsible. As a product of the steely negotiations between Government and the Unions in early February, Government conceded to the appointment of a 3 person Commission of Inquiry to investigate the DFC. It was agreed that the Unions would appoint one member, the Government another, and they would both agree on the third person.
Today those names were announced. The Unions have appointed former Director of Immigration and retired Assistant Accountant General Merlene Bailey Martinez, the Government has appointed Chief Magistrate Herbert Lord and both sides have agreed on retired teacher David Price. It has further been agreed that Price will chair the Commission in what will be public hearings.
The Commissioners will investigate the DFC from first January 1999 to 31st. December 2004 focusing on the disbursement and performance of loans. The commission will also investigate the DFC's mortgage securitization program which channeled hundreds of million of dollars into housing programs. Perhaps most importantly, the Commission will determine whether there was any wrongdoing in the DFC and identify those responsible the next issue now is to choose the forensic auditor t has not yet been decided if that professional will be local or foreign.
As we've noted many times on this newscast, though it has been glibly touted by politicos as a development bank, the record shows that the during the Musa administration operated as a convenient, low-cost banking center for many well connected government insiders who could well afford credit at commercial lending institutions but just couldn't be bothered with the red tape and the higher costs, so just lined up at the publicly guaranteed trough. Proof of that is in the fact of the IDB report on the DFC which showed that the largest 50 loans account for $160 million, just about half of the DFC's total portfolio. Currently the DFC has a default rate upwards of 33%, while the average commercial bank couldn't go much above a default rate of 5%.
