Admitting that it was he who advised President David Granger to not disclose the ExxonMobil US$18M signature bonus, Minister of Foreign Affairs, Carl Greenidge yesterday said that he thought then and still believes that publicising of the deal holds serious implications for Guyana pertaining to the border controversy with Venezuela.
“I think the main concern at the time when the deliberations were taking place was to not show our hand. It was simple as that,” Greenidge told a press conference he called following an address to the National Assembly on the matter.
“If you are in a court case with someone else, you and your lawyers have to work on a strategy. If you are aware of what the other side is going to do, how much money they have to spend, how much money they devoted to whatever…aware of all the lawyers that were recruited and will be recruited, you can structure your strategy to make life difficult for them. In terms of either stretching out processes or carrying things in certain directions. It is a very real risk and does involve problems,” he added.
The government has come in for sharp attacks for withholding information on the signing bonus and Auditor General Deodat Sharma has said that he is investigating the matter. On Wednesday, President Granger said he took the decision to place the US$18M bonus at the Bank of Guyana. He is scheduled to hold a press conference today at which he is likely to face more questions on the issue.
In his address to the House earlier in the day, Greenidge had explained that the background against which the decision was taken is instructive and that all members of the APNU+AFC Cabinet were aware that the payment was made by Exxon, although some might not have understood that it was a signature bonus.
He informed that it was Minister of Natural Resources Raphael Trotman who proposed to Cabinet that the payment of a bonus be had when the 1999 Contract with ExxonMobil was reworked and they approved the idea. Commentators had queried the rationale behind an entirely new agreement with Exxon.
“During the course of 2015 and 2016, after discussions with ExxonMobil, the Minister of Natural Resources proposed to Cabinet that the payment of a bonus on the extension of an agreement by the company be undertaken. Cabinet agreed and in June 2016 the Minister duly reported that the negotiation had been completed. The full Cabinet approved the terms negotiated and the arrangements to receive the funds,” he said.
“Nothing about the levy was either particularly secret or illegal. Many agreements are approved during the course of any year without being announced. The intended use of funds received by Government usually determines how they are passed through Government accounts. That aspect does not normally attract the attention of the Cabinet. This was no exception,” he added.
However, not all members of Cabinet knew the purpose for which the funds would be used and the Foreign Affairs Minister explained why.
Said Greenidge, “Given the purpose for which the funds were to be used, and its implications for national security neither the President nor the Ministry of Foreign Affairs saw any merit in advertising the matter. In fact, so great was the concern that only those who needed to know were informed as to the purpose of the deposit. Consequently, only those Members of the Cabinet directly involved and the relevant technicians were informed. The fact that those who were investigating this matter could have stumbled on the reason for the holding of the funds and still feel it necessary to make it both public and use it for sensational headlines is testimony to the sense of responsibility in certain sections of our media”.
Assuring that from the onset there was no intention by government to deceive its people but because of the sensitivity of the border controversy it felt it was the soundest decision, he reasoned that evidence of five signatories needed to withdraw any money form the account is testimony of this.
‘Tight fiscal situation’
According to Greenidge, since taking office in 2015, the Guyana Government has been struggling to pay for goods and services received and given the border situation at the time felt that the money could be used towards payment for legal fees.
“ As we all know, since we have been in office, the Guyana Government has found itself in a very tight fiscal situation in that its needs for funding far exceed the total cost of the goods and services for which it has to pay. At the same time, the MoFA was participating in discussions under the aegis of the UN Secretary-General’s Personal Representative (UNSGPR) in relation to a resolution of the territorial controversy. There have been times in 2016 and 2017 when we were unable to make timely payments to the legal team advising the Government. This is an undesirable situation. It is the responsibility of the Minister of Foreign Affairs to make sure that payments for services contracted by the MoFA are made according to the terms of the contract. The MoFA had an eye on events due in 2018 and, in particular, the need for funds to pay the enlarged team of lawyers that would be required should the UN SG honour his commitment to refer the Guyana case to the ICJ [International Court of Justice] without further procrastination after December 2017,” he said
“Faced by the existential importance of the ICJ case, and given that the case had not been yet referred by the Secretary General of the United Nations to the ICJ, the MoFA advised that money be held separately and securely until such time as we were clear as to when it would be needed. Out of concern that adequate funds may not be available from the general budget — i.e. the Consolidated Fund — when it was time to pay for these critical services, the Minister of Foreign Affairs, advised the President that arrangements be made to set aside sufficient funds to make the payment when needed. More specifically he asked that US$15m of the sum received by the Government from the ExxonMobil exercise be earmarked for this purpose,” he added.
From the US$18M, it was also agreed that US$3M be set aside for the funding of urgent training of Guyanese in needed skills such as engineering and petroleum geology.
He informed that so far the money has not been touched and remains in the account at the Bank of Guyana.
And to persons who have condemned the move by government to not place the money in the Consolidated Fund arguing that it was breaking of the law of the land, Greenidge rejected the assertions saying that only persons unfamiliar with the laws would say such.
“The earmarking of funds is not unusual in Westminster-type systems. The monies collected by GGMC and GFC, for example are earmarked, meaning that they do not go to the Consolidated Fund in the first instance, if at all. This process is also in keeping with that used for other monies received from external sources such as the IDB especially where overseas contractors may have to be reimbursed,” he posited.
“Monies received are sent to the Central Bank, the Central Government’s banker, and located in accounts held there. Those accounts can then be kept separate, separately managed and separately audited in keeping with the rules of those agencies which member states embrace either when we join the agency or when we sign the loan agreement. By contrast the monies so deposited will be converted into Guyana dollars and transferred to the Consolidated Fund. In pursuit of the decision of Cabinet, the Secretary to the Treasury gave instructions about the placement of the funds. The Central Bank, the Government’s banker, was directed not to utilize the funds to meet any Government expenses without written instructions from a named set of persons, the most senior public financial officers in the country. In this case, members may think of it as the equivalent of a suspense account,” he added.
He singled out Commentator Christopher Ram, who first went public about having knowledge of the bonus, saying that Ram’s statement that suggested that paying such funds into the Bank of Guyana (BOG) is a ‘flagrant breach of Art 216 of the Constitution’ was nothing but a bold statement that “flies in the face of the practice everywhere”.
“In any case, the Article in question does not require that the payment be deposited in the Consolidated Fund immediately. Members are free to have a look at the provisions of Sec. 37(2) of the FM&A Act which governs the handling of public funds which is the topic at issue. That article provides for public monies to be held in Extra-Budgetary Funds, Deposit Funds, etc. until they are credited to the Consolidated Fund. So if the manner of raising of the funds was not illegal and their placement in a Deposit Fund at the BOG was not illegal either, what then is the song and dance about?” he questioned.
Financial experts have said that the money cannot be kept in limbo and required the establishment first of an extra-budgetary fund via legislation after which the money could be deposited into the fund.
Greenidge added yesterday, “Perhaps it was based on the erroneous belief peddled by one commentator that this was an agreement negotiated overseas. That song and dance arise from an assumption, often explicit on the part of the commentators that the intention was to utilize the funds for the benefit of the Ministers directly involved.
‘Press inadequacies’
The media came in for sharp criticism from Greenidge too who said that he believed that the media learning that the monies were being used for the Guyana-Venezuela controversy would have relented in pursuing the matter.
“We would have expected, that a media recognizing that this is such a sensitive matter for Guyana- the referral of the matter to the court – that having maybe unearthed something they might not have anticipated, they would let it lie instead of making up all sort of stories of what were motives, what was possible and highly unlikely and that sort of thing. We have a media and commentators that have a far way to go in terms of maturity, and that is so for the political process too, I will admit that but you and I know that. I don’t think the press is aware of its own inadequacies,” he argued.
“I don’t know that all the details have been spelt out but the main parameters have been spelt out. When the press have finished with us, we are in a situation where we are worried. Up to just now I had a member of parliament say to me ‘ we know you say $18M but we know you have another $2M somewhere’ and the process of bashing is not helpful. In the last three days, at least three ambassadors have raised with us either how their entities or their activities are portrayed by the Guyana press. One of them was asking if this is the view of the Guyanese public…we have to look at those things. We are in a process trying to attract businesses. Investment is very important to us as a country and we are completely irresponsible how some of these matters are dealt with. The people you are competing with don’t have those and don’t believe in that way,” Greenidge added.
