As we showed you earlier, it was a noteworthy day at the DFC public hearings, so big that in the afternoon, two senior counsels were in the room. Derek Courtenay accompanied his client Jorge Omar Espejo who was called to testify - as counsel for commissioner Merlene Bailey-Martinez, Lois Young watched on. Espejo was brought in as chairman after Glen Godfrey and, to the surprise of some, the man with 34 years banking experience, couldn't reveal much to the commissioner. Here's what he said about paying the Belize Bank $439,000 for a $50 million loan he had never seen the originating documents on.
Merlene Bailey-Martinez, Commissioner
"Who authorized, the DFC authorized the payment of $439,000 to the Belize Bank? On what basis, what did you see to confirm that the Belize Bank had actually carried out your instructions?"
Jorge Omar Espejo, Former DFC Chairman
[Pauses] "I can't recollect that there was a document sent to me. It was merely the booking of an entry between the Ministry of Finance in their records and the DFC in their records. Nothing came directly to me on that."
Merlene Bailey-Martinez,
"You never saw anything?"
Jorge Omar Espejo,
"Not me."
Merlene Bailey-Martinez,
"So what was the basis on which you paid the Belize Bank $439,000?"
Jorge Omar Espejo,
"That is something that the accounting people would need to...that doesn't necessarily come to my desk."
Herbert Lord, Commissioner
"But who would have authorized the payment of that $439,000 as interest? Would it have been the board, would it have been you as the Chairman or some other person?"
Jorge Omar Espejo,
"Once the transaction is documented and it is agreed, the internal workings of it is done by the operational people."
Espejo also revealed that he did not attend the so-called phantom DFC board meeting in March of 2004 at which it was decided to take the $50 million loan. Notable because his name is on the minutes a shaving been there, but he says it was a computer error.
Merlene Bailey-Martinez,
"Mr. Espejo did you not have the authority or an obligation to mitigate that loss right away to deal with that situation and say listen, until this thing is sorted out, we cannot pay, which eventually happened? Why did you not think you had that obligation or did you not think you had that obligation?"
Jorge Omar Espejo,
"Let me just consult a second." [Talking to attorney.] The original transaction was between the government and Hamze. We went to the government who transferred the asset to us, we wished to avoid a legal situation with Hamze. We went to the government for a resolution of the problem and the government undertook to resolve the issue."
Merlene Bailey-Martinez,
"What I am saying is that you had a responsibility under the DFC Act to protect that investment, right? Do you have any response to that?"
Jorge Omar Espejo,
"One second." [Talking to attorney.] "Yes what I can say to that is that my understanding is that the matter is still under litigation. The DFC still holds title to the land and the government has undertaken to resolve the matter."
