The Senate Special Select Committee, they worked for 22 months, went through reams of documents, and spent thousands of man hours narrowing down the conclusions to what would go in the historic final report. The effort was led by Chairman, chief dynamo and moral compass Godwin Hulse, with membership from Senators Richard "Dickie" Bradley for the government, Moises Chan for the churches and Rene Gomez for the unions.
But with all that representation, after all that work, to us at 7NEWS, it seems somewhat anti-climactic that the best they could come up with was that Narda Garcia had to go. After all, hadn't protestors shouted that on Albert Street over a year ago? And that's what got us to thinking, maybe some of the framers of the report would have wished to say more, to declare more boldly, to point fingers and name names...but they were possibly hamstrung and humbugged by lawyers sympathetic to the government and its friends.
We don't have the still unreleased final report or any of the previous un-sanitized drafts to show this, but we did look more closely to the commentary that attended the presentation to find tell-tale signs to show that there was a sharp difference between what was and what might have been.
Jules Vasquez Reporting,
We heard her testify, on April 6th, 2005 she said.
Narda Garcia,
[April 6th 2005] "I can only say again that, to me, where the problem starts and finishes is with St. James. You know who the principals of St. James are and who is involved with all the documentation. Bring St. James and let them answer the questions."
But they didn't bring St. James, in fact in its final report, the Senate Special Committee couldn't touch the principal mover behind that company Glenn Godfrey.
Senator Godwin Hulse,
"Mr. President we attempted in this document without singling out Mr. Godfrey to detail his role in these transactions and yes there were many persons involved in the transactions but he wore several hats and he wore several important hats."
Several hats, but not a single act of fraud according to the report, and the closest they got to implicating Godfrey was this tame, neutered suggestion from page 120.
Senator Richard "Dickie" Bradley,
"The Senate Committee is of the view that information contained in the
report in respect to the documents covering Data Pro, Aquarius, Western Caribbean, International Telecom, and the two other mortgages which were signed containing representation and warranties and other statements, that is or may be misleading, false or deceptive, that these things could amount to offenses under the criminal code of this country and in particular section 20, section 143, section 164, and section 165. This committee therefore recommends that the DPP be handed the information, i.e. the copy of this report and all the relevant matters in the file, and that it is his responsibility to pursue this matter.
And the matter is that Godfrey was:
- The Chairman of the DFC when it put together the package of mortgages
- The Managing Director of the Belize Mortgage Company, that special purpose vehicle that sold the mortgages in North America,
- A Director of St. James that first sold the mortgages to DFC,
- And a shareholder and director of Western Caribbean Properties and ITL or Intelco - that received the proceeds from the securitization.
A sordid mingling of interests, but apparently legal. Still, Hulse thought he had Godfrey, when his companies issued in-house insurance certificates worth millions from St. James' Building Society to St. Paul's and Hulse thought he had him for false representations.
Senator Godwin Hulse,
"I has been harping on representation number 43 in the warranties for months and it says that no mortgager is related to a director of the seller, that is the operative clause. And I will raise it Mr. President for the purposes of airing it. I felt very strongly that in the case of the Chairman of the DFC that that was an erroneous representation and I argued that he in fact was related to the mortgager companies. My legal colleagues convinced me, or attempted to convince me, that he was not; there was no relative relationship."
Hulse lost the argument and it clearly left him bitter and smarting, that he had to excise from the report a statement of indictment, a declaration of certifiable systematic criminal wrongdoing. The fact that he couldn't bell the cat, left Hulse, with his head downcast and language terse and measured.
Senator Godwin Hulse,
"Eventhough though I found myself overruled by the superior knowledge of the legal minds and argued against the inclusion of the statements in this report, which may or may not, or could or could not be legally correct, and especially since we are a legislative body, I agreed to excise that particular representation and the connotations attendant therewith from the report, particularly where they border on such interpretative legal incorrectness."
And though legally incorrect, Hulse said that by common sense - Godfrey must have been obliged to do better.
Senator Godwin Hulse,
"Though sentiments, which though legally questionable, would defy common sense to explain otherwise. I say that Mr. President because from my accounting knowledge, companies are owned by their shareholders who may be persons and other entities but those shareholders are the beneficiaries of the profits of the companies and of the liabilities to the extent of their limitations. In other words the shareholders own the company.
So when I saw a company whose majority shareholder would benefit, and I saw the majority shareholder the very same person who was the director of the seller, I really thought they were related. But I found out Mr. President, I really have found out, that in fact just the utterance of that statement and the logic I applied made me legally wrong.
I felt inside of me that because he was associated with these companies who mortgagers and he knew the process all the way along the line, and I also thought because even though he suggested, and he is right, I hasten to say he is right, he had responsibility to advise anyone along the way. It is my good solid straightforward common sense Belizean in me that says something is just not right and I wouldn't do them. And that is why I said to everybody, 'look those things I am associated with you know.' But legally we were wrong."
And on that
somber tone of defeat, Hulse also went into some detail about how he believed Godfrey had broken the law but he couldn't get the point past PUP Senator Bradley.
Senator Richard "Dickie" Bradley,
"In relation to the two insurance certificates, Mr. Godfrey told the committee that it is an in-house insurance which was issued in accordance with the law. And the law does state clearly that the insurance act does not apply to building societies. It says that. But other members of the committee felt strongly enough that that is the reason it is here. It is a matter that can be easily clarified."
Senator Godwin Hulse,
"And of course Senator Bradley fought us, let me use the accurate words, fought us to convince us that, 'man the piece of that legislation says building societies are exempt, any lawyer reading section 35 will know that.' Perhaps Mr. President that is why I am not a lawyer yet. Because I started to think if it was that easy, and maybe it is, maybe it is and maybe I am dead wrong, but if it was that easy then everybody would form a building society which is very easy to form and sell insurance.
But I will not go into that issue because we have already recommended that the DPP gives us a yes or no or whatever he does. The more important issue of the insurant Mr. President was that the companies involved went through the process of creating insurance documents when the Chairman, major shareholder of those two companies, said to us in the Senate hearing, 'we had changed our minds sometime before.'
Why would Social Security and the DFC accept insurance certificates from an in house company to cover some $19 million. It makes absolutely no sense. Me Godwin Hulse is borrowing from the DFC, from the Social Security sorry. You need insurance so me Godwin Hulse is going to give you my own insurance to cover my debt to you, so in the event my project loses, I can pay you what you had. That doesn't make any sense to me. I am lost."
And to illustrate how truly mystifying it is, Hulse pointed to the fact that government insured the whole package properly.
Senator Godwin Hulse,
"Where did we go to insure? Where did we go to insure the whole program? We didn't go to a small insurance company Mr. President. The government of Belize went to Steadfast, a division of the Zurich Company. Its assets are in the trillions of dollars, paid half of the tsunami debt in Southeast Asia. That is where we went for insurance. That is where the foreigners said if you want our project, boss, give us insurance from them and we will pay $8 million in premiums.
So to turn around in the same project and DFC, of all people, and Social Security, with the expertise residing in them, to accept some in-house insurance from a company they never heard about - that was never anything - (that) just blew me away. I don't accept that that could be by any stretch of the imagination acceptable."
The Prime Minister returns to Belize from a CARICOM Heads of Government meeting tomorrow, but no date or time has been announced for him to be formally
presented with the report. When he does get it, he must weigh the fates of the always loyal Social Security CEO Narda Garcia, Chairman Yasin Shoman and Director of Finance Rolando Zetina, the only three who were there during the securitization era and who are still there today.
As we've noted Garcia, and for that matter Shoman, never once pointed to government higher-ups as the source for their costly and now thoroughly condemned investment decisions. It's left now to be determined if the Prime Minister will judge this as loyalty and protect Garcia as he has done in the past.
Whichever way it goes for the CEO of Social Security, she's not going to be left destitute. Last year, after a selection process, the board voted to hire Garcia as CEO on a 5 year contract which, with benefits and allowances, is reported to be worth upwards of $500,000. Her husband, the recently re-elected PUP standard bearer for Corozal Southwest, dr. Greg Garcia also works for the Social Security Board.
