Full details on $19 billion bailout, Mr Howai

On Wednesday, Finance Minister Larry Howai described as “especially painful” the way the failure, collapse and bailout of the CL Financial group had been handled.

Outlining that the State had advanced over $19 billion to bail out investors—in particular policyholders at insurance companies Clico and British American (Trinidad)—Mr Howai lamented that issues relating to inter-company transactions and inter-company liabilities had not been addressed as part of the process of disbursing the bailout funding.

The failure to address these issues, the minister argued, had “seriously compromised” the State’s ability to recover the $19 billion advanced, which has fiscal implications because the Government now has to borrow money in order to finance its infrastructural development programme. The charge that the recovery of $19 billion of taxpayers’ money has thus been compromised is too serious for Mr Howai to make the statement and just leave it there.

The CL Financial bailout involves a sum that is equal to about one-third of the Government’s estimated expenditure in the 2013 fiscal year and a large number of people, who had been financially hurt by the collapse of Clico and British American. It is also clear that the bailout prevented the meltdown of T&T’s financial system.

These three factors alone dictate that the minister provides Parliament and the nation with much more detail on these inter-company transactions and liabilities and why they were not addressed. In fact, with the fourth anniversary of the collapse of Clico passing unnoticed last week, now would be the right time to provide a full and thorough accounting of his Government’s handling of the bailout.

Such an exercise would cast some light on the lack of transparency (secrecy almost) with which the Government has gone about disposing the assets of the CL Financial empire. The previous minister did not provide any details after the Government negotiated the sale of a CL Financial energy company to a Canadian concern.

Mr Howai did not provide a detailed explanation following the disposal of CL Financial’s Jamaican rum assets to an Italian company. Now, apparently, other assets are in the process of being disposed and there has been no accountability. This is simply not good enough.

The taxpayers of T&T have never been provided with a full accounting of the CL Financial/Clico/CIB bailout in terms of the assets and liabilities that have been under the State’s control since June 2009, more than three years.

While the Minister of Finance has spoken on a number of occasions about the $19 billion that the State has spent, there has been no word on the value of the 56 per cent stake in Methanol Holdings that is owned by Clico and no word on the value of a rejuvenated and cleaned-up Clico, 49 per cent of which is owned by the State.

In his statement on Wednesday, Minister Howai described the failure and collapse of CL Financial as a blot on the economic landscape of this country. He should be aware that many taxpayers of T&T also consider the lack of transparency and accountability with which both this administration and the previous one have handled this CL Financial affair as constituting a blot on the economic landscape.