Over the past weeks, so much has been said of the $33 million Universal guarantee. But if you're counting numbers, 33 million ain't much in the vast scheme of government deals gone wrong. Earlier this week we showed you that government says that in direct and contingent sums, Glenn Godfrey related companies have government in the hole for $64 million.
Coming in very close to that is the entire BTL fiasco. From November of 2003, when government decided it would get Michael Ashcroft out of the picture and get a new owner for BTL, the bill has been running. In terms of additional costs to government, it's worked out to one of the most expensive ventures in modern history and may be a textbook case on how not to sell a utility company. Jules Vasquez has been crunching the numbers and total he came up with might make you shudder.
Jules VasquezReporting,
Michael Ashcroft and the Prime Minister...indeed they go way back and as Belize's wealthiest investor and his favored Prime Minister, they should. In fact Ashcroft saw PM Musa as the alternative to the often glacial and thoroughly difficult relationship he had with Musa's predecessor Prime Minister Manuel Esquivel.
But when Ashcroft and the PUP did fight - their fallout was enormous and when the Musa administration lost that fight, taxpayers have been and will be paying for the collateral damage. When Prime Minister Musa decided to sell BTL to Jeffrey Prosser in December of 2003, he let Ashcroft who was selling the shares dictate
some of the terms of the sale and that's come back to haunt taxpayers.
The cost of the entire Ashcroft-Prosser-Ashcroft scenario is in the tens of millions of dollars.
- First, government paid Ashcroft a premium of US$5 million for his controlling interest, a cost that was never passed on to Prosser.
- And then Prosser didn't pay US$2.6 million for a million class 'C' shares.
- And then when Prosser's ICC defaulted, government had to pay another US$1.983 million to the International Bank of Miami to re-profile that debt.
- The interest cost on that debt with the International Bank of Miami was US$913,000 and the interest cost on the re-profiled notes was another US$3.3 million.
- Of course there was an ensuing legal battle with ICC and that cost the government another US$2.89 million.
And while that was happening, Ashcroft then initiated international arbitration proceedings against the government, basically because of all that was happening with Prosser.
- To get him to stop that arbitration, government had to pay Ashcroft's Carlisle Holdings US$123,000 and another US$7,000 in arbitration fees.
- So add another US$130,000 more to the tab.
Of course, Ashcroft wasn't finished there. Government would pay dearly for crossing him.
- It also had to forego collection of some $17 million in business tax - what was legally termed a "set off."
- That innocuous legal euphemism hardly captures the public loss of a settlement that cost the government and taxpayers those $17 million, particularly in a time of austerity.
- And there was still the Sunshine venture: government would have to get Social Security to make a $10 million availaible via low cost financing,
- and government itself would have to lend $10 million to that venture to pay for shares which Ashcroft's companies presently control.
Add it all up and it comes to a cost of $70,788,104 million.
A staggering figure and when you look at the total, we're not sure how it all benefits Belize. But maybe Ashcroft had it right in March of 2004 when he told us:
Michael Ashcroft,
{March, 2004]"You get the politicians you vote for."
One thing that we didn't put in there, but which does pertain is the $6 million in business tax credits to BTL that government has agreed to as a refund for a Glenn Godfrey property which Prosser's BTL had agreed to buy but Ashcroft's BTL wanted no part of it. In regards to the ongoing, still unresolved dispute between Prosser, Ashcroft and the government in the middle, we note that tomorrow an unusual piece of legislation will go before the House called a Vesting Bill. More on that tomorrow.
