Walker: Where is the $$ coming from?

Where is the Central Government getting an additional $1 billion annually to give the Tobago House of Assembly? This from David Walker, a chartered accountant who has worked with large financial institutions in London and other world capitals. An information technology expert, Walker, who heads the Santa Rosa Group, which was formed out of the Clico debacle, argues that it is difficult, if not impossible, to end the budgetary deficit within the planned five years.

Q: Mr Walker, you seem to have some misgivings about the recently announced increase in the annual allocation to the THA by the Central Government.
A: (In the lobby of the Kapok Hotel, Thursday evening) It is not a misgiving. Certainly I am happy for Tobago and my misgiving really is the impact on the national economy.

Meaning?
The impact has got to be the increase in expenditure of at least $1 billion, that is, moving from the current four per cent to just over six per cent. Tobago is going to get an additional $1 billion, so the question has got be asked: where is the money coming from? Is it coming out of existing expenditure, which I assume they would have said if it was the case? So I am left to believe that is going to be additional expenditure on top of any current allocations.

Would that adversely affect the planned ending of the deficit within the next five years?
Mr Raphael, I have always had difficulty understanding how it would be achieved within five years and we were not given any specifics except for the nebulous statement about efficiencies within the public sector. So to achieve that in five years it is going to be difficult if not impossible.

Before going further, Mr Walker, I want to establish your bona fides. Can you give us something of your background?
Certainly. I am a chartered accountant who has worked in London for almost 30 years. I have been involved in major transactions there and I have been a consultant for some of the largest financial institutions internationally.

I have been responsible for designing and developing information systems for Nat West Bank, one of the largest banks in Europe; Nationwide Anglia Society, the largest building society in the world. I did work for GE Capital, the largest industrial conglomerate in the world.

With that sort of record, why did you decide to come back to T&T five years ago?
My father was terminally ill and I felt I had to be here for him and I started doing consultancy work here and, ironically, the Clico thing happened. I also did a bit of political work by assisting Winston Dookeran before he became Minister of Finance, in doing some analysis along with Mary King, Prof Patrick Watson and Indera Sagewan-Alli. I made more money working in England, but I did not enjoy my life there the way I am enjoying it here.

Mr Walker, do you have issues with this Government in the context of not being offered a position after working with the team which assisted Mr Dookeran?
I was disappointed in that I was not given the opportunity to utilise all the expertise that I have developed down the years to assist in the running of the country… It was a severe disappointment to me. But that’s water under the bridge. When I reflect on it, more often than not I am actually pleased. It is almost like they have done me a favour by allowing me to concentrate on working in the private sector.

What made you get involved in the Clico debacle?
Having had so much experience in the financial services sector, in financial reconstruction and how to rescue collapsed financial institutions, I was very concerned when the issue began, so I wrote an article entitled, Clico: a look into the Abyss. That’s where it started—and I am not a policy-holder of Clico. We pulled together a team of consultants called the Santa Rosa Team, so named because the first meeting was held at a home in the district.

Members of the group are totally committed because we feel a great injustice has been done and they want to be part of the solution and almost on a daily basis we are hearing heart-rending stories, especially from the elderly, about the hardships they are enduring because of this untenable situation.

Are you seeing the light at the end of this tunnel, as it were, Mr Walker?
Unfortunately no, at least not in the short term, and there is total commitment by our group to press on against what is an illegal solution.

Which is?
I am talking about the recently amended Central Bank Act, which expressly forbids any legal action against Clico for any matter whatsoever, even for pursuit of matters that have already been won in court. Now the only reason that kind of legislation could be enacted has to be in order to commit an illegal act.

Mr Walker, are you suggesting, insinuating or alleging that the Government engaged in an illegality by passing that piece of legislation?
Absolutely. The measure was passed which states very clearly that nobody could sue Clico for anything once the company is under the control of the Central Bank (CB). And we see no signs of the CB relinquishing this control of Clico any time soon.

How is this affecting the policy-holders?
Let me give you one of the most extreme examples. There is a policy-holder who was told by their auditors to produce a statement of account to show how much you have deposited with Clico. Would you believe that they refused to give the policy-holder the statement? We have nobody to turn to, as the regulator is running the company, and you know you cannot go to the regulator to complain about the regulator.

There is simply nobody you can turn to and one of the most depressing elements in this whole scenario is the complete silence of the legal fraternity upon the passage of this oppressive piece of legislation. No attorney has come out and spoken against it.

Don’t you think, Mr Walker, that Government took that action in order to keep the company afloat?
No. I don’t agree, because there was a correct way to do so, as is being done in every other country, which is, the company comes to the government with a plan which has a cost and the government would agree or disagree. If it agrees, the company goes about running its business.

No government in any other part of the world has had any difficulty with policy-holders because there is no nexus between the government and policy-holders, unless one is created, as was done here.

So policy-holders simply have to hold their heads and bawl until whenever this mess has been resolved one way or the other?
Effectively a gun has been put to their heads. I wouldn’t mince words on this… they really don’t have a choice in the matter. The choice that they have is whether to pursue a course of legal action to make good the deficit they suffered, and we are encouraging  people to join us to pursue that action. But the difficulty we are having is we simply do not have the kind of financial resources to do so.

Finally, Mr Walker, how do you rate the handling of the economy by the PP administration?
In the run-up to the last general election we were severely critical of the way the economy was being handled by the then PNM administration, and we were particularly concerned about the deficit and the consequent increase in the debt situation. But the situation has not improved. I am also concerned about the inability of this Government to start the diversification of the country’s economy.