Gov’t deception on Exxon signing bonus a shock

- Transparency group

Anti-corruption group Transparency Institute Guyana Incorporated (TIGI) yesterday accused the government of “deliberately” deceiving the nation on a signature bonus it received from United States oil company ExxonMobil for a renegotiated agreement that was signed last year.

“The government has failed to handle matters related to oil with transparency and it appears to have deliberately engaged in deception in relation to the matter of a signature bonus. The Minister of Natural Resources [Raphael Trotman] in particular and the government in general have done much to drain whatever residual confidence there was in their handling of the oil industry in Guyana,” TIGI said yesterday in a statement, where it called the disclosure of the signing bonus a “shock” to the nation.

The statement followed the publication of a Stabroek News report yesterday confirming correspondence, dated Septem-ber 20, 2016, from Finance Secretary in the Ministry of Finance Dr Hector Butts to the Governor of the Bank of Guyana (BoG) Dr Gobind Ganga with the reference line ‘Signing bonus granted by ExxonMobil – Request to open bank account.’

“I shall be grateful if you would arrange for the under-mentioned Foreign Currency Account to be opened at Bank of Guyana, in order to receive a deposit in the form of a signing bonus to be given by ExxonMobil. This account should not be treated as part of the Bank’s reserves. Instead, the proceeds should be held in the currency of the deposit, that is, United States dollars, and invested in secured interest-bearing securities,” Butts wrote in the letter.

It is not known who negotiated the bonus, the terms of the payment and what has since become of the money.

TIGI noted that ever since analyst Christopher Ram’s revelation that the coalition government extracted a signature bonus of US$20 million from ExxonMobil for the June 27, 2016 renegotiated contract, there had been “a combination of avoidance of the question, silence on the matter and outright contradiction of the assertion by various government officials.”

However, it said the confirmation that a signing bonus was indeed negotiated and that the BoG was asked in a letter dated September 20, 2016 to create an account to receive it was “a shock to anticorruption advocates and to Guyana as a whole.”

It noted that on September 26 of this year, Ram had questioned Minister Trotman’s signing of a new agreement with ExxonMobil and then in October followed this up with the assertion that a signing bonus of US$20 million was paid, while suggesting that securing the bonus was the real reason behind the renegotiated contract. By then, TIGI noted, Trotman had been asked whether a signature bonus was paid, but he provided no direct answer, although he indicated that the new contract was not much different from the previous one, which to a large extent now lends support to Ram’s conclusion.

TIGI also noted that Minister of Finance Winston Jordan was also asked about the matter and had indicated that there was “no agreement for any bonus” and called the assertion that there was a signing bonus of US$20 million a “figment of the imagination.” Trotman, it added, also said that some statements coming from sections of society were based on “hearsay.”

“There is now proof that there was a signature bonus and furthermore that the government had acted on it more than a year ago before the recorded comments were made. On top of this discovery that a signing bonus was secured, there are the matters of how it has been and is being handled and whether this explains the secrecy and falsehood in which it was shrouded,” TIGI pointed out.

The group further noted that while in the opposition, the APNU and AFC railed against mismanagement of state funds and were especially adamant about the use of the consolidated fund as provided for by the law. “The APNU-AFC coalition government is therefore well aware of the law governing the

consolidated fund and about what moneys should be deposited there. The move to set up a separate account to receive the signature bonus therefore appears as a move to avoid accountability,” it said. It also questioned whether the idea was to use the new account to initiate a sovereign wealth fund. “If so, can we expect that the appropriate legislation will follow?” it further asked.

TIGI added that the verification of the signing bonus and the move to handle it outside of the consolidated fund must galvanise all Guyanese, whether they are supporters of the government or not, into demanding transparency and accountability. “There is just too much to lose by standing behind partisan politics,” it added.

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