CLICO bailout has cost Trinidad over TT$25B so far

(Trinidad Express) Sir Anthony Colman’s multi-company Commission of Enquiry (CoE), which principally focused on the illiquid insurance company CLICO and the Hindu Credit Union (HCU), has cost taxpayers $36.2 million.

However, Government’s intervention into the CLICO fiasco has cost taxpayers more than $25 billion.

The 24-month long CoE exercise, which came to an end last Thursday at Winsure Building in Port of Spain, had 85 sitting days, 23 parties, 77 lawyers, 57 witnesses, 50 subpoenas and five million pages of documents.

The Sunday Express obtained a break-down of the $36.2 million cost which comes from the budget of the Office of the Prime Minister (OPM):

Sir Anthony Colman’s fees—$6,852,937.44Legal Fees—$22,240,363.77Salaries—$1,804,149.11Administrative Cost and Incidentals—$5,370,854.67

The legal fees were divided among lead counsels—Peter Carter QC and Edwin Glasgow QC; Junior counsels—Marion Mac Gregor Mason, Gerald Ian Ramdeen, Shankar Bidaisee; Instructing attorneys—Celeste Jules and Varun Debideen; and special adviser Ian Marshall.

All parties to the CoE, who were mostly represented by senior counsel, would have been paid separate legal bills.

“While the CoE has been costly, it is significantly less than expected because I am a tough negotiator on consultancy fees,” said Attorney General Anand Ramlogan, in response to questions from the Sunday Express yesterday.

Ramlogan pointed out to the Sunday Express that the sum was inclusive of two major companies and was significantly less than the Uff Commission of Enquiry of 2009, which cost the State about $60 million.

The cost of the commission is exclusive of the Government’s bailout of Lawrence Duprey’s cash-strapped empire.

The Sunday Express obtained figures for the bailout which state:Funds Disbursed:

1. CLICO bailout—$5.6 billion2. Short Term Investment Products (STIPS)—EFPA, BAT and Mutual Funds—$11.365 billion3. British American—$0.1 billion4. CLICO Investment Bank—$1.87 billion5. CMMB—$0.666 billionTotal—$19.6 billion

Contingencies:1. CIB’s INCs—$2.16 billion2. EFPA judgment dated March 2013—$1.3 billion3. CMMB—$0.835 billionTotal—$4.296 billion

The Sunday Express understands that $2 billion has been re-allocated for the capitalisation of Atrius, the company which CLICO will be re-branded into in the coming months.

In addition, the Government has made provisions of US$55 million for a judicial matter in the Bahamas and has spent US$24 million from the Caricom Petroleum Fund to assist the islands following the collapse of CLICO.

Those sums are also exclusive of legal fees in the CLICO matter.

Last October, Ramlogan revealed in Parliament that the Central Bank had paid some $82.8 million to US forensic investigator Bob Lindquist for investigations.

Ramlogan said Lindquist, between April 2009 to November 2010, received $46 million; February 2011 to August 20, 2011—$10 million; February to September 2011—$17 million; November 2010 to September 2011—$9.8 million; for the grand total of $82.8 million.

Now that the CoE has been concluded, Colman has three months in which to submit his final report to the Government.

Colman’s terms of reference include: “whether there are any grounds for criminal and civil proceedings against any person or entity; whether criminal proceedings should therefore be recommended to the Director of Public Prosecutions (DPP) for his consideration; and whether civil proceedings should be recommended to the Attorney General for his consideration.”

Last November, Colman’s Enquiry was almost derailed after DPP Roger Gaspard announced that a criminal investigation against former CLICO executives and several corporate entities aligned to the collapsed insurance giant had begun, almost three years after the Government had stepped in to bail out the company to protect the country’s financial system from systemic risk.

Gaspard had written to Colman expressing concern about how the public enquiry, which had been 19 months old at the time, could impact on the criminal investigation by the police.

“I am particularly concerned that an otherwise credible prosecution might be stopped by the court on the grounds that a defendant’s right to a fair trial had been fatally compromised by the publicity attendant upon your enquiry. As such, I shall be issuing a press release warning the media against the publication of any material which may jeopardise the police investigation and any potential criminal proceedings,” Gaspard had said.

Gaspard had also made a request to Ramlogan to have the CoE discontinued.

Despite Gaspard’s request, the enquiry continued, but witnesses attached to CLICO failed to turn up concerned that they would incriminate themselves.

Last week, former CL Financial chairman Lawrence Duprey and its former financial director Andre Monteil were among the list of no-shows at the CoE.

Questioned yesterday on whether Gaspard’s action had impacted on the integrity of the CoE, Ramlogan said: “The announcement by the DPP of a criminal investigation when the CoE was 90 per cent complete was significant. The Government thought it best to leave these concerns to the discretion of the commissioner. While the criminal investigation could have hijacked the work of the commission, it was too far advanced to be any detriment.”

As the Anti-Corruption Investigation Bureau and the Fraud Squad of the Trinidad and Tobago Police Service pursue its criminal investigation, the Central Bank has already mounted and instituted civil proceedings against three former CL Financial executives—Duprey, Monteil and former corporate secretary Gita Sakal.

Asked whether the CoE still had value given the public’s dissatisfaction that key players have not yet been brought to justice, Ramlogan responded: “As AG, depending on the findings and the recommendations, it is my intention to pursue all options.”

He explained that when the Government purchased the rights of the depositors, the State stepped into their shoes and the State will pursue all avenues at its disposal to seek justice.

“While I have no control over the criminal process, I do have constitutional jurisdiction in civil law which I can invoke for social justice,” he said.

“Once I have the report, in the coming months I expect an avalanche of activity in the pursuit of justice.

“The collapse of CLICO has burned a hole in the Treasury the size of a national budget. When the Government assumed office there was a stony wall of silence and inaction with regard to the CLICO fiasco,” explained Ramlogan.

He observed that the DPP was never presented with any police investigation report and, in the circumstances, the Government appointed a CoE.

Apart from lack of witnesses, the CoE has had its fair share of challenges—attorneys objected to the releasing of certain documents forcing the commission to adhere to a confidentiality protocol, and the Ministry of Finance’s lawyers were changed mid-commission.

But the commission has produced startling revelations about a company which was funded principally by policyholders’ money—million-dollar salaries paid to executives; companies created by executives and hiving off millions in contracts; and blatant breaches in governance.

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