ExxonMobil signing bonus
President Granger must immediately accept responsibility for his government’s deceiving of the public on the signing bonus from ExxonMobil which was transmitted to the administration sometime in 2016. Given all of the sanctimonious rhetoric that has flowed since 2015 from his administration and experts hired by it on the transparency that will accompany the new oil economy, the secrecy around the signing bonus is reprehensible and will do lasting damage. Trust in the administration’s handling of negotiations with multinational behemoths like ExxonMobil has been broken. Unvarnished and understandable scepticism will greet all future pronouncements on agreements of this sort and the government will be weakened in its negotiating stance.
It is unclear what President Granger can do to retrieve situation. His Minister of Natural Resources, Mr Raphael Trotman has lost all credibility and should have done what is required in these circumstances: resign. Even up to Friday Mr Trotman refused to say how much was received as a signing bonus from ExxonMobil. The original figure mooted was US$20m, others have suggested it is more or less. Immediately, questions will arise to what the true sum was and whether it was all received. The conduct of the Minister of Finance, Mr Winston Jordan has been equally disgraceful. He was clearly well aware of the signing bonus and his performance in Parliament on Friday was devoid of any understanding that he is a servant to all of the people of this country and not a sheriff of a ward in Georgetown. He was completely dismissive of the people’s right to know and sought refuge in the inanity that he had not been asked the correct question. His conduct is unbecoming of a Minister of Finance.
Even if President Granger were to fire those culpable in this matter, he himself has to answer as to why he allowed this important matter to be kept from the public. He has to take the ultimate responsibility. What makes it even more insupportable is the fact that the assigning of the bonus to the Bank of Guyana is flagrantly in breach of Article 216 of the constitution which states that “All revenues or other moneys raised or received by Guyana (not being revenues or other moneys that are payable, by or under an Act of Parliament, into some other fund established for any specific purpose or that may, by or under such an Act, be retained by the authority that received them for the purpose of defraying the expenses of that authority) shall be paid into and form one Consolidated Fund”.
None of the excuses provided by the government
so far for the secrecy about the bonus hold an atom of credibility. The major one presented is that the signing bonus was earmarked to pay legal fees associated with the expected transfer of the Guyana-Venezuela border controversy to the International Court of Justice in The Hague. There was no reason why this could not be revealed to the public and it is difficult to see how Venezuela could have gained by becoming aware that the bonus would be set aside for legal fees. As a matter of fact such use would have been well received by the public particularly if the receipt of the money complied with the law and it was deposited in the Consolidated Fund.
While Minister Trotman says the money was earmarked for legal fees, critics and sceptics would be well in order to ask how credible this was and whether the public could be assured that this was indeed the intended use. The legal fees to be paid couldn’t be so onerous as not to be afforded through the usual arrangements. Various other international firms have been hired for important tasks and will be remunerated through the usual means, PricewaterhouseCoopers being the most recent example. Furthermore, even if the legal fees for the Venezuela controversy were to be paid via the signing bonus, an appropriation would have had to have been made via the Consolidated Fund through either an allocation in the budget or by a financial paper. What was the method Minister Trotman et al were contemplating for the payment of legal fees? What is to stop this bonus from being used for any other purpose such as for election campaigning or any number of other ventures?
This play at secrecy is from a bygone era and a hare-brained decision. In the age of modern technology and the culture of openness, the chances of the signing bonus being kept secret were slim to none. Whoever concocted this secrecy plan is completely out of touch with reality and betrays an intent to deceive. This is really not surprising as a number of such persons have been hired by the Granger administration.
A mockery has now been made of the work of applying for membership to the Extractive Industries Transparency Initiative (EITI). The EITI Standard requires countries and companies to disclose information on the key steps in the governance of oil, gas and mining revenues. Was the local committee of EITI stakeholders advised that one of the key steps in the governance of mining revenues was a secret bonus squirrelled away in an account outside of the constitutionally-mandated Consolidated Fund? The entire approach to membership of the EITI was founded on utter deceit.
Having been wracked by internal turmoil over the question of the GECOM Chairman, coalition partner, the Alliance For Change (AFC) now faces an even more dire dilemma. Its leader, Mr Trotman was a full participant in a decision to keep this signing bonus from the public. Was the AFC as a party aware of this bonus? If not, will the AFC exclude its leader from discussions on this matter? There are numerous examples from its opposition days where the AFC railed against acts like the hiding of the bonus. One will suffice. In February, 2015, the AFC led a protest over the loaning of $3b by the Guyana Geology and Mines Commission to the Central Housing and Planning Authority. The AFC raised a number of concerns including that the money could be earmarked for election campaigning and more importantly that the transaction should have been via the Consolidated Fund.
Its questionable reputation having preceded it, ExxonMobil has now been exposed as a party to a secret arrangement for an oil bonus. It could have easily insisted that this matter be made public as part of the new agreement signed in 2016 with the government and considering that it was required to report this payment in its home country. Its complicity in this matter will no doubt be noted further afield.
In October of this year, Stabroek News made a series of attempts to elicit answers from Minister Trotman and his ministry about whether a signing bonus had indeed been received from ExxonMobil. All of these efforts were met with prevarication and obfuscation and there was no clear information until the newspaper obtained a copy of the letter seeking the establishment of an account for the bonus. The questions that have to be asked about the bonus will now have to be answered by President Granger. They follow:
1) Whose decision was it that an entirely new agreement be concluded with ExxonMobil’s subsidiary, EEPGL and what was the rationale for this? Did Cabinet have any input in this?
2) At what point of those negotiations for a new agreement did the matter of a signing bonus arise and was this matter taken to Cabinet for deliberations?
3) When it was agreed that the signing bonus be paid, who decided it should be kept secret and paid into the Bank of Guyana and not the Consolidated Fund? Was Cabinet involved in this discussion?
4) What are the conditions attached to the bonus and what has ExxonMobil gotten in return?
5) What is the size of the bonus and what factors were employed in its calculation?
6) Where has the bonus been deposited and who are the custodians, is it earning interest, who is authorised to withdraw from it and have there been any withdrawals from it?
President Granger has inexplicably avoided holding press conferences since assuming office more than 30 months ago. The crisis his government is now enveloped in requires that he submit himself to detailed questioning on the signing bonus and the best forum for this would be a press conference.