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EDITORIAL - Probe deals yes, but be careful
published: Saturday | May 24, 2008
We have no problem with the decision by Contractor General Greg Christie to probe what Audley Shaw, the finance minister, claims were "sweetheart deals" between his minister and the merchant bank, Dehring Bunting and Golding (DB&G) during the previous People's National Party (PNP) administration.
Indeed, Peter Bunting, the PNP's general secretary and former CEO of DB&G, who rejects suggestions that his former bank received special favours from the PNP government, should welcome the probe - assuming that it is done properly.
First, however, to Mr Bunting specifically and why he has risen in this newspaper's estimation as a politician, a position which we hope he will allow us to maintain.
During the Budget Debate earlier this month, Shaw, the finance minister since last September, pointed to two transactions involving DB&G - now owned by Bank of Nova Scotia - which he painted as the then ruling party raping the public treasury on behalf of its friends and supporters. One was a deal, structured by the merchant bank, in which it discounted a debt owed to the Government by Michael Lee Chin as part of his purchase of the National Commercial Bank during the financial sector meltdown of the 1990s. Shaw claimed DB&G did little but earned a big commission for the arrangement.
An incensed Mr Bunting accused the minister of playing dirty politics, while others in the financial sector appeared to suggest that there was nothing untoward about the arrangement. About the second deal, Mr Bunting claimed it never took place. This, according to Mr Shaw, involved the purchase and resale to the Government by DB&G of assets held by an agency used by the Government to bailout failed financial sector companies. The minister suggested that DB&G, made a killing. Mr Bunting demanded that Mr Shaw be censured by the legislature.
This week, Bunting withdrew his charge that Shaw misled the House and apologised. According to Mr Bunting, there was a misunderstanding on both sides. There was no outright purchase arrangement as Shaw had suggested, he claims. Rather, DB&G had provided short-term financing to the Government, structured as a repurchase (repo) deal to get out of hard currency lending restrictions that were in place on merchant banks. In any event, he insists that the entire arrangement was above board.
It is not often, in our culture, that we have politicians backtracking or recanting, and it would not have been surprising to us if Mr Bunting had prevaricated, waffled and attempted to weasel his way out of this situation. However, Bunting's initial response says something about the nature of our politics - its absorption with points-scoring and hit-backs. Even if he felt provoked by Shaw's assertion, a measured and studied response would have been better than outright, headlong attack. There is virtue in gathering the facts.
Which brings us to Christie's probe. As we had noted during Mr Shaw's initial statement, financial markets are notoriously skittish and rely significantly on confidence.
It is important that they are properly regulated and that we ensure that deals are honest. However, it is easy, and is the wont in our environment to assume the worse about people who earn money, particularly if they are involved in complex financial engineering. Point made.
The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner. To respond to a Gleaner editorial, email us: editor@gleanerjm.com or fax: 922-6223. Responses should be no longer than 400 words. Not all responses will be published.
published: Saturday | May 24, 2008
We have no problem with the decision by Contractor General Greg Christie to probe what Audley Shaw, the finance minister, claims were "sweetheart deals" between his minister and the merchant bank, Dehring Bunting and Golding (DB&G) during the previous People's National Party (PNP) administration.
Indeed, Peter Bunting, the PNP's general secretary and former CEO of DB&G, who rejects suggestions that his former bank received special favours from the PNP government, should welcome the probe - assuming that it is done properly.
First, however, to Mr Bunting specifically and why he has risen in this newspaper's estimation as a politician, a position which we hope he will allow us to maintain.
During the Budget Debate earlier this month, Shaw, the finance minister since last September, pointed to two transactions involving DB&G - now owned by Bank of Nova Scotia - which he painted as the then ruling party raping the public treasury on behalf of its friends and supporters. One was a deal, structured by the merchant bank, in which it discounted a debt owed to the Government by Michael Lee Chin as part of his purchase of the National Commercial Bank during the financial sector meltdown of the 1990s. Shaw claimed DB&G did little but earned a big commission for the arrangement.
An incensed Mr Bunting accused the minister of playing dirty politics, while others in the financial sector appeared to suggest that there was nothing untoward about the arrangement. About the second deal, Mr Bunting claimed it never took place. This, according to Mr Shaw, involved the purchase and resale to the Government by DB&G of assets held by an agency used by the Government to bailout failed financial sector companies. The minister suggested that DB&G, made a killing. Mr Bunting demanded that Mr Shaw be censured by the legislature.
This week, Bunting withdrew his charge that Shaw misled the House and apologised. According to Mr Bunting, there was a misunderstanding on both sides. There was no outright purchase arrangement as Shaw had suggested, he claims. Rather, DB&G had provided short-term financing to the Government, structured as a repurchase (repo) deal to get out of hard currency lending restrictions that were in place on merchant banks. In any event, he insists that the entire arrangement was above board.
It is not often, in our culture, that we have politicians backtracking or recanting, and it would not have been surprising to us if Mr Bunting had prevaricated, waffled and attempted to weasel his way out of this situation. However, Bunting's initial response says something about the nature of our politics - its absorption with points-scoring and hit-backs. Even if he felt provoked by Shaw's assertion, a measured and studied response would have been better than outright, headlong attack. There is virtue in gathering the facts.
Which brings us to Christie's probe. As we had noted during Mr Shaw's initial statement, financial markets are notoriously skittish and rely significantly on confidence.
It is important that they are properly regulated and that we ensure that deals are honest. However, it is easy, and is the wont in our environment to assume the worse about people who earn money, particularly if they are involved in complex financial engineering. Point made.
The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner. To respond to a Gleaner editorial, email us: editor@gleanerjm.com or fax: 922-6223. Responses should be no longer than 400 words. Not all responses will be published.
