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Speaker Delroy Chuck has called an emergency meeting of the House of Representatives' Ethics Committee for Monday morning to discuss Finance Minister Audley Shaw's allegations that Opposition spokesman Peter Bunting's former investment house, Dehring Bunting and Golding (DB&G), benefitted from a "sweetheart deal" with the previous Government.
Shaw tabled seven documents in the House yesterday supporting his claim of a sweetheart deal between DB&G and the Ministry of Finance and Planning on the sale of cash flows owed by the Jamaica Redevelopment Foundation (JRF), the US-owned company which bought FINSAC's debts from the mid-1990s collapse of the financial sector.
These included correspondences between the ministry and the Bank of Jamaica, the Accountant General's Department and DB&G which suggested that there was an agreement and that, in fact, DB&G was paid the US$29.5 million for the cash flows as well as US$295,000 (J$18 million) in fees for the transaction.
"Mr Speaker, I have presented to you and this Honourable House a minimum of seven separate pieces of information, and I can give you the assurance that I can provide more information, if it becomes necessary, confirming that the transaction did take place," Shaw insisted in a statement to the House, yesterday.
"The question that needs to be asked, Mr Speaker, is, who is really misleading the House of Parliament?" he added in response to Bunting's earlier charge that he had been misleading the House.
But in a swift response, Bunting yesterday said that the documents presented by Shaw reflect a short-term bridging facility which was facilitated, given that the transaction did not occur.
"This, together with the fact that the receivables today remain the property of FINSAC, confirms that the transaction was never concluded," said Bunting who insisted that all transactions between DB&G and the Government were at arms length and can stand up to scrutiny.
The exchange started on April 23 while Shaw was closing the 2008/2009 Budget Debate.
The minister said that he had found information in the ministry confirming two "sweetheart deals" between the ministry, under the previous Government, and DB&G, while Bunting was chairman and chief executive officer (CEO), which cost taxpayers at least $100 million.
Bunting, who is currently member of parliament for Central Manchester and general-secretary and spokesman on industry and commerce for the People's National Party (PNP), which formed the Government at the time of the deals, denied the charges.
In a statement to the House Tuesday, Bunting admitted to one deal involving the sale of receivables from Michael Lee Chin's AIC for the purchase of the National Commercial Bank (NCB) in 2003/2004.
He offered that the previous Government was facing a "significant challenge" in meeting its fiscal target for that year, and that DB&G conceptualised a potential transaction whereby the Government could utilise future payments from the sale of the Bank to yield present value and bring forward a substantial revenue for the Government, which assisted it in meeting the fiscal target.
In response to Shaw's charge that the deal should have been put to tender, Bunting said that it would be "quite unethical" for the Government to put DB&G's idea to tender. Shaw later dismissed that response, stating that such ideas were not unique.
Bunting denied Shaw's other charge that DB&G also sold receivables from the Jamaica Redevelopment Foundation. He said that it was discussed, but no transaction took place.
But Shaw produced documents to back up his claim that the deal did take place.
These included:
. a letter to Shaw on May 14, 2008 from acting accountant general, Maria Clark Proute, confirming that the proceeds of the sale, amounting to US$28.9 million, was credited to the Consolidated Fund Account number 809373 in the Bank of Jamaica on March 31, 2005. The letter also pointed out that the one per cent arrangement fee charged by DB&G was paid to the firm on May 6, 2005 in the equivalent amount of J$18.2 million, and that details of the deal reside in the ministry;
. a Bank of Jamaica letter to Shaw, dated April 30, 2008 confirming that the US$28.9 million involved was credited to the Consolidated Fund (budget);
. a billing memorandum, with tax invoice number, from DB&G to the ministry for the payment of US$295,902 to DB&G as their arrangement fee for the sale of the receivables;
. a copy of a letter to then Accountant General Millicent Hughes, on April 21, 2005, with attached copies of documentation in respect of "the sale of Government financial obligations (receivables) in an amount of approximately US$29.59 million (face value) for which DG&B acted as 'fiscal agent' and was due US$295,902.50 as their one per cent fee;
. an agreement entitled "Sale of GOJ Receivables with full recourse to the Government of Jamaica", signed by Garfield Sinclair and Garfield Edwards, then president and vice-president, respectively, of DB&G and agreed and accepted by representatives of the Ministry of Finance and Planning;
. a letter from FINSAC"s manager in charge of finance and administration, Martin Gooden, to Financial Secretary Colin Bullock, on December 30, 2005 which stated, "the Government, through the Ministry of Finance and Planning, had an obligation to pay to Dehring, Bunting & Golding (DB&G) US$29,590,205.00 on July 29, 2005 under the (Sale of GOJ Receivable with Full Recourse to the Government of Jamaica) agreement. FINSAC paid US$9.590,205.00 directly to DG&B on July 298, 2005. The Debt Management Department of the Ministry sourced and paid the balance of US$20,000,000.00 to DB&G"; and
. a letter from DB&G to the Ministry on July 28, 2005 asking that the amount of US$29.5 million be wired to its Suntrust account with the wiring instructions.
Yesterday in his statement, Shaw asked, "If the member can, in such a brazen manner, deny the existence of this transaction, what will he deny?"
"I trust that the House will consider what measures should be applied to purge the Member of his wilful misleading of this Honourable House," he added.
Speaker Chuck then announced his decision to have the Ethics Committee deal with the matter on Monday..
Shaw tabled seven documents in the House yesterday supporting his claim of a sweetheart deal between DB&G and the Ministry of Finance and Planning on the sale of cash flows owed by the Jamaica Redevelopment Foundation (JRF), the US-owned company which bought FINSAC's debts from the mid-1990s collapse of the financial sector.
These included correspondences between the ministry and the Bank of Jamaica, the Accountant General's Department and DB&G which suggested that there was an agreement and that, in fact, DB&G was paid the US$29.5 million for the cash flows as well as US$295,000 (J$18 million) in fees for the transaction.
"Mr Speaker, I have presented to you and this Honourable House a minimum of seven separate pieces of information, and I can give you the assurance that I can provide more information, if it becomes necessary, confirming that the transaction did take place," Shaw insisted in a statement to the House, yesterday.
"The question that needs to be asked, Mr Speaker, is, who is really misleading the House of Parliament?" he added in response to Bunting's earlier charge that he had been misleading the House.
But in a swift response, Bunting yesterday said that the documents presented by Shaw reflect a short-term bridging facility which was facilitated, given that the transaction did not occur.
"This, together with the fact that the receivables today remain the property of FINSAC, confirms that the transaction was never concluded," said Bunting who insisted that all transactions between DB&G and the Government were at arms length and can stand up to scrutiny.
The exchange started on April 23 while Shaw was closing the 2008/2009 Budget Debate.
The minister said that he had found information in the ministry confirming two "sweetheart deals" between the ministry, under the previous Government, and DB&G, while Bunting was chairman and chief executive officer (CEO), which cost taxpayers at least $100 million.
Bunting, who is currently member of parliament for Central Manchester and general-secretary and spokesman on industry and commerce for the People's National Party (PNP), which formed the Government at the time of the deals, denied the charges.
In a statement to the House Tuesday, Bunting admitted to one deal involving the sale of receivables from Michael Lee Chin's AIC for the purchase of the National Commercial Bank (NCB) in 2003/2004.
He offered that the previous Government was facing a "significant challenge" in meeting its fiscal target for that year, and that DB&G conceptualised a potential transaction whereby the Government could utilise future payments from the sale of the Bank to yield present value and bring forward a substantial revenue for the Government, which assisted it in meeting the fiscal target.
In response to Shaw's charge that the deal should have been put to tender, Bunting said that it would be "quite unethical" for the Government to put DB&G's idea to tender. Shaw later dismissed that response, stating that such ideas were not unique.
Bunting denied Shaw's other charge that DB&G also sold receivables from the Jamaica Redevelopment Foundation. He said that it was discussed, but no transaction took place.
But Shaw produced documents to back up his claim that the deal did take place.
These included:
. a letter to Shaw on May 14, 2008 from acting accountant general, Maria Clark Proute, confirming that the proceeds of the sale, amounting to US$28.9 million, was credited to the Consolidated Fund Account number 809373 in the Bank of Jamaica on March 31, 2005. The letter also pointed out that the one per cent arrangement fee charged by DB&G was paid to the firm on May 6, 2005 in the equivalent amount of J$18.2 million, and that details of the deal reside in the ministry;
. a Bank of Jamaica letter to Shaw, dated April 30, 2008 confirming that the US$28.9 million involved was credited to the Consolidated Fund (budget);
. a billing memorandum, with tax invoice number, from DB&G to the ministry for the payment of US$295,902 to DB&G as their arrangement fee for the sale of the receivables;
. a copy of a letter to then Accountant General Millicent Hughes, on April 21, 2005, with attached copies of documentation in respect of "the sale of Government financial obligations (receivables) in an amount of approximately US$29.59 million (face value) for which DG&B acted as 'fiscal agent' and was due US$295,902.50 as their one per cent fee;
. an agreement entitled "Sale of GOJ Receivables with full recourse to the Government of Jamaica", signed by Garfield Sinclair and Garfield Edwards, then president and vice-president, respectively, of DB&G and agreed and accepted by representatives of the Ministry of Finance and Planning;
. a letter from FINSAC"s manager in charge of finance and administration, Martin Gooden, to Financial Secretary Colin Bullock, on December 30, 2005 which stated, "the Government, through the Ministry of Finance and Planning, had an obligation to pay to Dehring, Bunting & Golding (DB&G) US$29,590,205.00 on July 29, 2005 under the (Sale of GOJ Receivable with Full Recourse to the Government of Jamaica) agreement. FINSAC paid US$9.590,205.00 directly to DG&B on July 298, 2005. The Debt Management Department of the Ministry sourced and paid the balance of US$20,000,000.00 to DB&G"; and
. a letter from DB&G to the Ministry on July 28, 2005 asking that the amount of US$29.5 million be wired to its Suntrust account with the wiring instructions.
Yesterday in his statement, Shaw asked, "If the member can, in such a brazen manner, deny the existence of this transaction, what will he deny?"
"I trust that the House will consider what measures should be applied to purge the Member of his wilful misleading of this Honourable House," he added.
Speaker Chuck then announced his decision to have the Ethics Committee deal with the matter on Monday..
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