Dear Editor,
I refer to the letter by Chartered Accountant, Mr. Chris Ram, captioned, “Financial statements presented by the Stabroek Block co-venturers are not in accordance with generally accepted accounting principles” (SN, October 01, 2023). Once again, profuse thanks are extended to Mr. Ram for what is clearly painstaking and dogged work of the highest quality. He has peeled back the layers, and pared down to the kernel: what kind of partners does Guyana have? If this is a joint venture arrangement, then Guyana should not be floundering about in these murky waters.
Mr. Ram pointed to Generally Accepted Accounting Principles (GAAP), and where Exxon has fallen short. A standing feature of GAAP, a prime objective, is that there must be clarity, consistency, and comparability in financial information presented. In view of what Mr. Ram has shared with the Guyanese public, it is my position that Exxon was more about concealment and pulling the wool over the eyes of the Government and people of Guyana than about anything to do with clarity. In any joint venture (co-venture) information sharing is a two-way street. Since business is primarily about money, then the financials and the numbers must be about that clarity about which GAAP is so serious, one of its highest priorities. In other words, any and all accounting and financial statements that Exxon presented [presents] to Guyana has to be transparent and as clear as the light of day.
Based on Mr. Ram’s letter, I detect that Exxon went the other way in its efforts to obscure and bury significant disclosures under a skein of nifty corporate verbiage that misleads instead of informs. From my perspective, Exxon is not a real partner, one that can be considered trustworthy. Not when it engages in these accounting acrobatics, and with narratives to match. I recall, decades back, that GAAP standards for accounting statements were that they had to be accurate and reliable (there was a third word that eludes). What is reliable about what Exxon delivered to Guyana for its accounting statements? The finer point has to be what is accurate given the company’s clear repeated instances of dodginess with its statements.
It is painful that Mr. Ram brought up Enron and Arthur Andersen, the accounting firm. The losses still rankle some 20 years later. But Mr. Ram’s point is well taken that Coun-try Head, Mr. Alistair Routledge’s startling statement that the ‘books are/were audited’ falls flat. After all, it is what is in the books, or what is left out (or massaged for specific outcomes), that determines what goes into the audit report. Mr. Routledge should also know full well that the final audit report (audited books) hinges on negotiations that depends on the intimacy of the auditor-auditee relationship. Enron and Arthur Andersen had such a cozy relationship, with mutual understandings about continuity in a lucrative audit arrangement, plus rich contracts for Andersen’s consulting arm. Enron’s shareholders and workers paid heavy prices, and the American taxpayers picked up the tab. Outsiders like me were hit twice. Sarbanes-Oxley closed some of the gaps.
On another note, in this so-called joint venture, there are not four partners, as I see it, but three. Guyana is on the outside, more of an afterthought, and is patronized and subject to Exxon’s barely disguised corporate paternalisms. Which genuine partner does what Exxon (Hess and CNOOC) inflicts upon Guyana? Through information deficits? Via information mists? Via financial information moves that reek of the less than clean-handed? In all of this, Guyana is on the receiving end, passive and dependent on what is given to it. In this one-sided partnership characterized by the unequal, the unknowing, and the unchallenging, I remember that old saying when betrayal and other snaky moves are in motion: the wife is the last one to know. Thanks to Mr. Ram, all Guyanese know now what they have in Exxon for a partner. To be brutally candid, I would not want to be in the same foxhole with Mr. Routledge, or any of Exxon’s people, facing North Koreans or Iranians. Who would be with me, who has my back? This is where Guyana is today.
Sincerely,
GHK Lall
