Ever since last year July when 7NEWS exposed the fact that Social Security was using your money, $6 million of it, to cover Glenn Godfrey's loan payments, the issue of public money used to cover private debts has been a sore subject for a populace weary of Government's reckless management of the public purse. Well tonight, 7NEWS has evidence that $6 million is a quite petty figure, compared to the mountain of debt that government has guaranteed for Godfrey. 7NEWS has obtained a document compiled, presumably by the Central Bank, for the Financial Secretary dated 10th March, 2005. It shows the massive exposure of public funds to cover Glenn Godfrey's private debt and the picture it paints is not pretty. Jules Vasquez has the story.
Jules Vasquez Reporting,
According to the document, "the total exposure is approximately US$33.9 million dollars comprised of various guaranteed loans and payment assignments." It adds, "GOB financial assets of approximately US$5.7 million are at risk of being lost."
That's a staggering conclusion, and according to the document the rundown is as follows: US$7.1 at the International Bank of Miami for Intelco's inter-government intercom service, which the document notes is equivalent to paying a lot for very little phone services. Next is a loan of US$6.5 million from Provident Bank to LGS International Services Limited. LGS you may recall is a Godfrey company, which was originally supposed to work the Intelco deal. That company made a loan from the Provident Bank, which is a bank that Godfrey has interests in, and that loan is now in default and the guarantor is..? You guessed it, GOB even though the loan was between a bank in which godfrey has interets and Godfrey's company.
And then there is the US$20.1 million that Godfrey's companies securitized through the Social Security Board. Those Godfrey Companies have not been making any loan payments. That's why Social Security had to pay $6 million last summer for him, followed by another $1.8 million in December. Well since then, under pressure from the Senate Special Sub-committee, those payments from the Social Security have stopped but this document reveals that now Government is paying. This time not with your Social Security money, but with taxpayers' dollars. According to the document, GOB has paid $800,000 since Social Security stopped paying.
This adds up to the US$33.9 million in government guarantees, but government could also lose another $5 million dollars because of, again, Godfrey's inability to pay. In this very special deal, Godfrey paid government for $5 million in shares in his Galleria Maya project, which never got off the ground. Government took the money, put it in the Antigua Overseas Bank and counted it as foreign reserves. But when Godfrey paid government the money, government, apart from using it as reserves, Government then pledged it as security for another Godfrey loan to one of his companies, Northern Data Pro. Predictably, Northern Data Pro has defaulted and the bank has told the government that it will seize the money today, March 22nd.
That's $5 million more of your money down the drain, all to pay for Godfrey's extravagant and unsustainable business ventures and all because principals in this government never told him "no." The question now is why did they put so much of the public purse at risk, just to help one man.
And if you thought that was the bad news, try this: according to the document government has to pay US$11.9 million for Godfrey in the upcoming fiscal year. It's hugely consequential because that money has not been budgeted. It was not budgeted, because Prosser was supposed to pay it, part of his deal with government and BTL. A deal that's out the door with all the changes that have happened at BTL.
