Did King, Kenny screw up Finance Act on purpose?
More proof that the problems we face today cannot be solved by the level of intelligence that created them: In July 2003, a soi-disant human rights lawyer and politician named Martinus Francois asked the high court in Saint Lucia to cause the minister of finance to “make a full and frank disclosure of the nature and extent of the obligations of the government of St Lucia to the Royal Merchant Bank of Trinidad and Tobago, in respect of the former Hyatt hotel, referred to in statutory duty of the Minister of Finance under Section 41 of the Finance (Administration) Act 1997.”
Among the grounds on which Francois based his application: “No guarantee involving any financial liability by the government of Saint Lucia to the Royal Merchant Bank of Trinidad and Tobago in respect of the former Hyatt hotel was given in accordance with an enactment approved by a resolution of parliament.”
Francois proved right, if to no avail. If for just this once, the heavy battalions were not on God’s side!
In October 2003 the Francois matter came before trial judge Indra HariprasadCharles, with the Dominican lawyer Anthony Astaphan representing the finance minister Kenny Anthony on behalf of the attorney general’s office.
“On the whole,” concluded Hariprasad-Charles in a written judgment, “I find the arguments advanced by Mr. Francois to be more compelling. Indeed, for much of the hearing I was of the view that the defendant’s case could not be sustained, since the guarantees which form the subject matter of this claim were not approved by a resolution of parliament—that the minister of finance had no power under Section 39 of the Finance (Administration) Act 1997 to borrow in order to refinance the government’s obligations in respect of the former Hyatt hotel and that parliament acted ultra vires the act to authorize such borrowing when it passed the resolution.”
As it turned out, the judge was both right and wrong: parliament never approved guarantees given but parliament had legal authority to authorize payment on default, regardless! (Yes, crazy. But then, nowhere in the world is the law more an ass than in Saint Lucia!)
As for locus standi the particular matter: “I think I should say a few words about the respective roles of parliament and the courts. The legislature and the judiciary are independent of one another and it is necessary for the courts to observe the paramount need to refrain from trespassing upon the province of parliament. But it is not an interference with parliament for the court in a proper case to pronounce on the legality of a statutory instrument: it may, in fact, assist parliament.”
On behalf of the attorney general’s office, Astaphan appealed the HariprasadCharles’ decision in favor of Martinus Francois. Following a hearing on 19 March 2004, presided over by Justices Albert Redhead, Adrian Saunders and Hugh Rawlins, the appeal court delivered its judgment on March 29, wherein is stated the following:
“Members of the parliament of Saint Lucia must have known what they were voting for. The resolution was before them. The resolution speaks quite clearly of borrowing to finance capital and recurrent expenditure and also for financing [actually, it spoke of re-financing obligations to a specific hotel; an important difference!] government’s capital works program.
“The members of parliament must be taken to understand what are capital and current expenditures and what is a capital works program. If the members of parliament did understand, and in my view they must have, then when they voted unanimously on the resolution they were passing a resolution for the government to borrow to finance capital and recurrent expenditure and for financing [?] government’s capital works.”
Did the judge mean to say by the last quoted line the MPs, when they voted “unanimously” for the government to borrow to “finance” recurrent expenditure, knew they voted with respect to “refinancing obligations to Hyatt?”
Well, not according to the facts of that particular matter. Marius Wilson, Arsene James and Marcus Nicholas, soon after the remembered House meeting, announced that they had been misled by the wording of the resolution.
No matter, the appeal court overturned the HariprasadCharles decision. Which was hardly the end of the matter. At the Ramsahoye Commission of Inquiry, both the appeal court decision, and what in parliament had preceded it came in for heated debate, sometimes embarrassing to watch, including that by the time the controversial resolution to permit borrowing to meet obligations to Hyatt came before parliament the hotel had long been sold into bankruptcy— with no demands on the government!
Perhaps most important of all, it finally came to light that the government never had any obligations to Hyatt and indeed the money borrowed for the purposes of “refinancing” the effectively non-existent “obligations” was used to pay the debts of a mysterious company called Frenwell that was never part of the government’s arrangements with Hyatt, and in any case was never mentioned in the resolution.
The politicians had their usual way while the people took it in the neck. (Admittedly, some willingly in the best interests of de partee.) Nothing new. Water under the bridge.
Just over a month ago the current administration, at the recommendation of an accommodating high-priced Ramsahoye Commission of Inquiry, ostensibly set out to block all existing loopholes in the Finance (Administration) Act first enacted in the time of the Vaughan Lewis administration—on All Fools Day 1997, it turns out!—“to make provision for the proper management of public funds.”
Henceforth, ministers of finance would be unable to do what the Lewis version of the act had permitted Kenny Anthony to do with its consequent disasters. The law was amended so that no future government minister could on his own guarantee loans without first obtaining parliamentary approval.
The amended law required ministers to fully disclose before parliament the name of the borrower, financial status, ability to repay, purpose of loan and so on—in advance of government guarantees.
Oh, but things are seldom as they seem. Immediately following the above remedial clause that gave taxpayers reason to celebrate is Clause 3 that effectively cancels the impact of clauses one and two and permits government ministers, present and future, full legal authority to guarantee bank loans according to their particular fancy—with no need even to inform parliament. Out of the frying pan, into the flames. A situation that was bad enough had been turned by the stroke of a suspect pen into a previously unimaginable nightmare!
Now, considering this presumed slip-up was publicly underscored the same week the amended act was debated in the senate, that is to say, some five weeks ago, why has there been no obvious attempt to make it right?
The silence of the hams since then is as palpable as it is ominous. Is the by no means blind or dumb leader of the opposition uncharacteristically holding his peace for fear of bringing up Rochamel all over again just months before the next general elections?
Is he saving his criticism of the amendment until a later date?
And what about the current finance minister and his diamond-eared attorney general? What about the House Speaker? What say the independent and outspoken senator Everistus JnMarie? Will these ostensible guardians of our democracy—not to say the Consolidated Fund!— allow possible personal embarrassment to prevent them from making right what by now they must know is wrong and amounts to spitting in the trusting public eye and calling it holy water?
Already there are those who believe the “mistake” was made on purpose—and with the imminent elections in mind! Editor’s Note: The preceding was first published on 31 March 2011. Recently, the prime minister recalled that when he was leader of the opposition he had “deliberately kept silent” while the King government rendered the Finance Act a protective fence full of escape routes! See “How To Pull Wool Over Sheeple Eyes” in this issue!
Independent Senator Everistus JnMarie talked a good line in his time at the Senate. Alas, not nearly enough!
Former House Speaker Rosie Husbands-Mathurin: She presided over the amendment of the Finance (Administration) Act in 2011. Recently the current prime minister reminded the House that while he had been “deliberately silent” during the procedure, one journalist had
written extensively about the messed-up amendment.