An­drea Perez-Sobers

Se­nior Re­porter

an­drea.perez-sobers@guardian.co.tt

At­tor­ney Gen­er­al John Je­re­mie yes­ter­day laid in Par­lia­ment the long-de­layed Re­port of the Com­mis­sion of En­quiry in­to the col­lapse of the CL Fi­nan­cial group and the Hin­du Cred­it Union, re­veal­ing that the State spent ap­prox­i­mate­ly $28 bil­lion res­cu­ing CL Fi­nan­cial and its sub­sidiaries, with a fur­ther $3 bil­lion to $4 bil­lion spent in sub­se­quent years on le­gal, ac­count­ing and ad­min­is­tra­tive mat­ters linked to the col­lapse.

Je­re­mie said the Gov­ern­ment’s in­ter­ven­tion to sta­bilise the fi­nan­cial sys­tem im­posed a sig­nif­i­cant and long-term bur­den on pub­lic fi­nances.

Ac­cord­ing to the re­port, State in­ter­ven­tion was nec­es­sary to pre­vent a wider fi­nan­cial cri­sis fol­low­ing the col­lapse of CL Fi­nan­cial in 2009. The res­cue rep­re­sent­ed one of the largest fi­nan­cial in­ter­ven­tions in T&T’s his­to­ry, with the ul­ti­mate cost borne by tax­pay­ers.

Je­re­mie told Par­lia­ment no crim­i­nal charges have re­sult­ed de­spite more than a decade of in­ves­ti­ga­tions and hun­dreds of mil­lions of dol­lars paid in pro­fes­sion­al fees.

The At­tor­ney Gen­er­al al­so dis­closed that the Com­mis­sion of En­quiry re­port cost tax­pay­ers ap­prox­i­mate­ly $150 mil­lion, which in­clud­ed the fees for the late sole com­mis­sion­er, Sir An­tho­ny Col­man, and sup­port­ing at­tor­neys.

The AG said the State can no longer jus­ti­fy con­tin­u­ing cost­ly civ­il pro­ceed­ings that do not yield re­sults, an­nounc­ing his in­ten­tion to bring an end to these ac­tions in a cost-ef­fec­tive man­ner.

The re­port found that in the case of Cli­co and its re­lat­ed com­pa­nies, the Gov­ern­ment com­mit­ted bil­lions of dol­lars through cash in­jec­tions, guar­an­tees, as­set pur­chas­es and long-term fi­nanc­ing arrange­ments to pro­tect pol­i­cy­hold­ers, de­pos­i­tors, and the sta­bil­i­ty of the fi­nan­cial sys­tem.

It not­ed that li­a­bil­i­ties as­sumed by the State ran in­to tens of bil­lions of dol­lars, in­creas­ing pub­lic debt and se­vere­ly lim­it­ing fis­cal space for oth­er na­tion­al pri­or­i­ties.

The re­port said the scale of the bailout con­strained Gov­ern­ment spend­ing on in­fra­struc­ture, so­cial ser­vices and eco­nom­ic de­vel­op­ment for years, while ex­pos­ing weak­ness­es in reg­u­la­to­ry over­sight and en­force­ment. It con­clud­ed that the col­lapse had last­ing con­se­quences for fis­cal sus­tain­abil­i­ty and pub­lic con­fi­dence in fi­nan­cial in­sti­tu­tions.

The fail­ure of the Hin­du Cred­it Union (HCU) com­pound­ed the strain on pub­lic fi­nances. The Com­mis­sion es­ti­mat­ed that State in­ter­ven­tion to sta­bilise HCU ex­ceed­ed $1 bil­lion. It found that HCU op­er­at­ed for years out­side the ap­pro­pri­ate reg­u­la­to­ry frame­work, func­tion­ing as a de fac­to bank while re­main­ing reg­is­tered as a co-op­er­a­tive, al­low­ing sig­nif­i­cant risks to go unchecked.
Ap­point­ed in 2010, the re­port was com­plet­ed in June 2016. In­stead of lay­ing the re­port in Par­lia­ment, for­mer prime min­is­ter Dr Kei­th Row­ley di­rect­ed that it be sent to the Di­rec­tor of Pub­lic Pros­e­cu­tions, Roger Gas­pard, to con­sid­er the pos­si­bil­i­ty of crim­i­nal charges.

The At­tor­ney Gen­er­al said the re­port de­tailed ex­ten­sive ev­i­dence, in­clud­ing mil­lions of emails, foren­sic ac­count­ing records, and more than 1,600 box­es of doc­u­ments, yet in­ves­tiga­tive re­sources were lim­it­ed. He ques­tioned how such a large and com­plex fi­nan­cial col­lapse could be in­ves­ti­gat­ed with min­i­mal po­lice staffing and no clear out­comes.

Karen Nunez-Tesheira, who served as min­is­ter of fi­nance in 2009 when the CL Fi­nan­cial em­pire col­lapsed, said she was not sur­prised by the re­port’s long de­lay, ar­gu­ing that there was nev­er any re­al ur­gency to make its find­ings pub­lic. She said she had pub­licly ex­pressed doubts years ago that the re­port would ever be laid.
“I said at the time that I did not think so. I be­lieved that it would be col­lect­ing cob­webs,” Nunez-Tesheira said. “I be­lieved it was not in the par­ty’s in­ter­est to pub­lish or dis­close the find­ings of the re­port, and what the At­tor­ney Gen­er­al said is con­sis­tent with what I thought.”
She wel­comed the re­port’s re­lease, say­ing the pop­u­la­tion de­served to know how pub­lic mon­ey was spent and who was re­spon­si­ble for the col­lapse of CL Fi­nan­cial, which con­tin­ues to have re­gion­al reper­cus­sions.
The head of the Cli­co Pol­i­cy­hold­ers Group, Pe­ter Per­me­ll, al­so wel­comed the lay­ing of the re­port, de­scrib­ing it as long over­due and nec­es­sary for clo­sure.

Per­me­ll said the tim­ing was sig­nif­i­cant, com­ing just days be­fore the an­niver­sary of the Jan­u­ary 30, 2009, col­lapse. He added the re­port had the po­ten­tial to bring clar­i­ty on what tran­spired, but stressed that full clo­sure for pol­i­cy­hold­ers would on­ly come when out­stand­ing bal­ances owed to them are paid.