Tweet
Latibeaudiere must have been turbocharged
MARK WIGNALL
Thursday, November 05, 2009
Lurking between every line of the prime minister's recent presentation on reasons given for the dismissal of BOJ head, Derick Latibeaudiere, were questions begging to be asked.
MARK WIGNALL
When in the two-year existence of this administration did wisdom fall upon it and allow it to see the BOJ boss unworthy of further tenure in the post? Remember, the prime minister did not make out a case that the former BOJ head was incompetent. After making it clear at the beginning of his statement to the nation that it was purely on the basis of certain provisions of Latibeaudiere's terms of employment contract that he was terminated, the prime minister said towards the end, "I wish to record the government's appreciation for the many years of service that the former governor has given to the bank and to Jamaica. There may have been policy differences between himself and governments past and present, but his strong leadership and valuable service cannot be denied and should not go unrecognised."
Unlike the experienced and documented reality which saw, as yesterday's Observer editorial stated, ".the governor presided over one of the worst performing economies in the world. Inflation was never consistently in the single-digit target range; the exchange crashed to US$1 to $90; interest rates skyrocketed to dizzying heights; economic growth was non-existent; the International Monetary Fund negotiations remain incomplete; debt/GDP became one of the highest in the world and a massive banking sector crisis was allowed to happen," the JLP leader and prime minister has implied, unbelievingly, that he and his party had no problems with the former BOJ head's competence in his job.
Or, at the very least, the prime minister's statement is telling us that there was nothing even remotely suspect about Mr Latibeaudiere's competence to warrant a mention in the presentation delivered on Tuesday. Therefore that forces us to reveal another question lurking. When, over the two years of this administration's existence, did it dawn on the Cabinet that the former BOJ head's contract or parts of it were "unacceptable" and "embarrassing"?
With a salary of a little over $14.5 million and rent a little over $10.8 million, maintenance $13 million, a simple gross monthly package for the former BOJ boss was about $3.2 million. Out of that he should end up with, after paying taxes, about $2 million take-home, enough to easily make payments on the over $50-million loan he got at five per cent, courtesy of the taxpayers of Jamaica.
But it doesn't end there. You then add ". a fully maintained car, entertainment expenses, medical and life insurance, guaranteed pension and all other benefits to which non-contracted service employees of the Bank are entitled." In addition, the former BOJ head will now be entitled to, ". a settlement in the terms provided by the contract which include payment of salary which would have been earned for the balance of the contract, any vacation leave due and amazingly, because it is a most unusual provision in a fixed-term contract, redundancy payments calculated on the same basis as would apply to a non-contracted service employee of the bank, inclusive of his successive contract periods."
If we are to follow the logic of the prime minister's presentation, Mr Latideaudiere should not be blamed. "The former governor is not to be blamed for the absurdly generous and open-ended contractual terms that he enjoyed. He was the beneficiary. That blame must be laid squarely at the feet of the former government and the former minister of finance in particular, who authorised and signed the contract."
Let us attempt to separate the fluff from the facts. First, if in the middle of, maybe, the most important and crucial ever of all IMF engagements, the political administration has chosen to dismiss its Central Bank governor against the background of hard-wired terms of employment made in heaven, if the government is not to be blamed for just rank stupidity, it must mean that Latibeaudiere's dismissal and by extension his general application of policy at the BOJ was an unwritten part, something that would satisfy a major item in the IMF conditionalities.
Second, the prime minister's praise of the former BOJ head is major fluff, designed either to satisfy a legal technicality in any future wrangling over his contract, or more likely, it was plain pandering to an international lending agency which is never comfortable with an open admission by the political directorate that dissonance exits between itself and its chief technocrats. So the prime minister threw it back at the politics, blaming Omar Davies for "...the absurdly generous and open-ended contractual terms that." Mr Latibeaudiere enjoyed.
Said one JLP insider to me, "We couldn't say it like Seaga, that the firing of Latibeaudiere was the best thing to have happened in a long time. And if Seaga was there and the BOJ head was fired, Seaga couldn't say it too."
We have been told that the former BOJ head ran his post like a law unto himself and that between 2006 and 2008 he secured a $55-million loan at five per cent, and "in her annual report for financial year 2007/2008, the auditor-general states that no evidence was presented of the approval of the Board of Directors for these loans and that the management of the bank had indicated that under its current arrangements there is no specific requirement for board or ministerial approval."
Which, by process of simple elimination, would mean that the BOJ head gave himself the loan. But with such a sweet contract which puts him in a better position that if he had lived in a house provided for him in his contract and recognising that a house had been previously bought and refurbished for him but he never moved in, so it was sold at a pittance of a profit (who bought it?), he opted for that over-generous part in his contract which ". requires that new valuations must be done every two years and the appropriate adjustments made. In addition, the bank is required to pay the full cost of maintaining the residence. It sets no limits on the amount that can be paid for either rent or maintenance."
Over the next few weeks unwanted focus is going to be made on former finance minister, Omar Davies, whose involvement in the forward sale of bauxite, the sale of the Heathrow slots and now, his role vis-a-vis Latibeaudiere would, at the very least, make us seriously question both his judgement and fiscal prudence in handling delicately sensitive matters for the overall benefit of the public interest.
If, as the prime minister indicated, in his after-midnight presentation weeks ago, a new approach in governance in the second part of his mid-term is truly on, we will support him, but only after we begin to see tangible results.
The economic storm clouds, time, the quality of his governance and public opinion are not on Mr Golding's side, and of course, the Latibeaudiere firing reminds us that there are other matters of public importance still on the front burner demanding urgent attention.
observemark@gmail.com
MARK WIGNALL
Thursday, November 05, 2009
Lurking between every line of the prime minister's recent presentation on reasons given for the dismissal of BOJ head, Derick Latibeaudiere, were questions begging to be asked.
MARK WIGNALL
When in the two-year existence of this administration did wisdom fall upon it and allow it to see the BOJ boss unworthy of further tenure in the post? Remember, the prime minister did not make out a case that the former BOJ head was incompetent. After making it clear at the beginning of his statement to the nation that it was purely on the basis of certain provisions of Latibeaudiere's terms of employment contract that he was terminated, the prime minister said towards the end, "I wish to record the government's appreciation for the many years of service that the former governor has given to the bank and to Jamaica. There may have been policy differences between himself and governments past and present, but his strong leadership and valuable service cannot be denied and should not go unrecognised."
Unlike the experienced and documented reality which saw, as yesterday's Observer editorial stated, ".the governor presided over one of the worst performing economies in the world. Inflation was never consistently in the single-digit target range; the exchange crashed to US$1 to $90; interest rates skyrocketed to dizzying heights; economic growth was non-existent; the International Monetary Fund negotiations remain incomplete; debt/GDP became one of the highest in the world and a massive banking sector crisis was allowed to happen," the JLP leader and prime minister has implied, unbelievingly, that he and his party had no problems with the former BOJ head's competence in his job.
Or, at the very least, the prime minister's statement is telling us that there was nothing even remotely suspect about Mr Latibeaudiere's competence to warrant a mention in the presentation delivered on Tuesday. Therefore that forces us to reveal another question lurking. When, over the two years of this administration's existence, did it dawn on the Cabinet that the former BOJ head's contract or parts of it were "unacceptable" and "embarrassing"?
With a salary of a little over $14.5 million and rent a little over $10.8 million, maintenance $13 million, a simple gross monthly package for the former BOJ boss was about $3.2 million. Out of that he should end up with, after paying taxes, about $2 million take-home, enough to easily make payments on the over $50-million loan he got at five per cent, courtesy of the taxpayers of Jamaica.
But it doesn't end there. You then add ". a fully maintained car, entertainment expenses, medical and life insurance, guaranteed pension and all other benefits to which non-contracted service employees of the Bank are entitled." In addition, the former BOJ head will now be entitled to, ". a settlement in the terms provided by the contract which include payment of salary which would have been earned for the balance of the contract, any vacation leave due and amazingly, because it is a most unusual provision in a fixed-term contract, redundancy payments calculated on the same basis as would apply to a non-contracted service employee of the bank, inclusive of his successive contract periods."
If we are to follow the logic of the prime minister's presentation, Mr Latideaudiere should not be blamed. "The former governor is not to be blamed for the absurdly generous and open-ended contractual terms that he enjoyed. He was the beneficiary. That blame must be laid squarely at the feet of the former government and the former minister of finance in particular, who authorised and signed the contract."
Let us attempt to separate the fluff from the facts. First, if in the middle of, maybe, the most important and crucial ever of all IMF engagements, the political administration has chosen to dismiss its Central Bank governor against the background of hard-wired terms of employment made in heaven, if the government is not to be blamed for just rank stupidity, it must mean that Latibeaudiere's dismissal and by extension his general application of policy at the BOJ was an unwritten part, something that would satisfy a major item in the IMF conditionalities.
Second, the prime minister's praise of the former BOJ head is major fluff, designed either to satisfy a legal technicality in any future wrangling over his contract, or more likely, it was plain pandering to an international lending agency which is never comfortable with an open admission by the political directorate that dissonance exits between itself and its chief technocrats. So the prime minister threw it back at the politics, blaming Omar Davies for "...the absurdly generous and open-ended contractual terms that." Mr Latibeaudiere enjoyed.
Said one JLP insider to me, "We couldn't say it like Seaga, that the firing of Latibeaudiere was the best thing to have happened in a long time. And if Seaga was there and the BOJ head was fired, Seaga couldn't say it too."
We have been told that the former BOJ head ran his post like a law unto himself and that between 2006 and 2008 he secured a $55-million loan at five per cent, and "in her annual report for financial year 2007/2008, the auditor-general states that no evidence was presented of the approval of the Board of Directors for these loans and that the management of the bank had indicated that under its current arrangements there is no specific requirement for board or ministerial approval."
Which, by process of simple elimination, would mean that the BOJ head gave himself the loan. But with such a sweet contract which puts him in a better position that if he had lived in a house provided for him in his contract and recognising that a house had been previously bought and refurbished for him but he never moved in, so it was sold at a pittance of a profit (who bought it?), he opted for that over-generous part in his contract which ". requires that new valuations must be done every two years and the appropriate adjustments made. In addition, the bank is required to pay the full cost of maintaining the residence. It sets no limits on the amount that can be paid for either rent or maintenance."
Over the next few weeks unwanted focus is going to be made on former finance minister, Omar Davies, whose involvement in the forward sale of bauxite, the sale of the Heathrow slots and now, his role vis-a-vis Latibeaudiere would, at the very least, make us seriously question both his judgement and fiscal prudence in handling delicately sensitive matters for the overall benefit of the public interest.
If, as the prime minister indicated, in his after-midnight presentation weeks ago, a new approach in governance in the second part of his mid-term is truly on, we will support him, but only after we begin to see tangible results.
The economic storm clouds, time, the quality of his governance and public opinion are not on Mr Golding's side, and of course, the Latibeaudiere firing reminds us that there are other matters of public importance still on the front burner demanding urgent attention.
observemark@gmail.com
Comment