BeliLeaks? U.S. Embassy WikiLeaks cables prompt response from Leader of Opposition

Last Friday we first exposed information on Belize coming from WikiLeaks, an organization that publishes private, secret, and classified data from anonymous news sources, news leaks, and whistleblowers. It claims to have more than a million documents from the first year it was launched in 2006. An encrypted version of WikiLeaks’ archive of U.S. State Department cables had been available online via bit torrent for months, but the decryption key was difficult to find. But on September first 2011, the decryption key became available and an onslaught of comments from ambassadors to the U.S. state department and confidential files went public. Included are summaries of news events and opinions by former U.S. Ambassador Robert J. Dieter on a wide array of topics including an allegation that during the last People’s United Party Government tenure, former Minister of Natural Resources, John Briceño, received bribes for awarding drilling and exploration contracts. The allegations had been aired in 2007, but the wikicables on Belize have given them new wings. News Five spoke to Briceño who denied them once more.

Jose Sanchez

“The allegations, I guess the big one is about you received a bribe to give an oil contract and that’s how you got a cable company.”

John Briceño, Leader of the Opposition

“First of all we need to point out that one it’s an allegation. There is absolutely not one shred of evidence to point out that there is any truth to that. What is important to point out, the Government of Belize made a policy of trying to get Belizean investors involved in the oil industry. Like Lagoon Resources, there was another Belizean company that applied for the same area—there were several companies and the Belizean company put the best deal possible and that is why the recommendation was made to the cabinet to give it to the Belizean company as opposed to Lagoon Resources. As to the allegations about trying to make a connection between the bribe and the buying of cable companies that my family owns, I want to make it absolutely clear that that is not true. Presently anybody can check at the bank and see that we made some substantial loans and we continue to make some huge payments every month to try to clear off our obligations to the bank.”

Jose Sanchez

Just for clarity sake, no Lagoon Resources company gave you or family members one point five million US dollars or any dollars for that point?

John Briceño

“Absolutely not. And there is not a single individual in Belize or outside of Belize that can come with a shred of evidence to say that me or any member of my family have benefited from the decisions that I have made as the minister of natural resources including the department of petroleum.”

Jose Sanchez

“Now has Lagoon come to say it will take you to Court or anything of that matter to show that there is any legal ramifications—anythign that came after this happen?”

John Briceño

“Well that is precisely the point. If they had any evidence that I did any wrongdoing, they could have taken me to court; but they have not—they chose not to. They were upset that their application was not accepted. But as I have pointed out earlier, the process that we did was that the recommendations come from the department of geology; it comes to my ministry and then as the minister I forward it to the cabinet. That has always been the process—it was an open and transparent process that we followed during my tenure as minister of natural resources.”

Channel 5

Leader of Opposition denies old corruption allegations about oil contract

There was a second contract that came out on Miles Tropical Energy. The principals of that company were Oren Miles and Allen Saum. Saum is the man that the Prime Minister’s nephew Kimano Barrow had a falling out with over contracts for Paradise Energy Limited. But in the years before the fallout between Barrow and Saum’s Paradise, there was trouble already with Miles Tropical. At that juncture Saum accused the government of accepting bribes. Briceño says that although both incidents were in the same U.S. State Department cable, he had already left cabinet and was no longer the Minister of Natural Resources.

Jose Sanchez

“The next contract dealt with Miles Tropical Energy and you are saying now a hundred thousand U.S. spent anything with you, with any driver of the Prime Minister or any minister for that matter. Anything transpired there?”

John Briceño, Leader of the Opposition

“Well if you were to look at the dates, those allegations were made after I had left. I was no longer the minister when those allegations were made, so it would be unfair for me to comment on something I was never a part of—I wasn’t even in the cabinet.”

Jose Sanchez

“But at the end of the day, at least the Wikileaks from the U.S. Embassy is saying that after these events happened that you were removed as the natural resources minister, but did that have anything to do with the allegations?”

John Briceño

“That’s absolute rubbish. Everyone knew at that time why I resigned from cabinet and that I wanted to spend more time in my constituency and those two allegations have absolutely nothing to do with my decision to resign from cabinet or be asked to resign from cabinet.”

Jose Sanchez

“Having read most of the Wikileaks on Belize, they are mostly news summaries with opinions that weren’t necessarily meant to be published. Why do you think these allegations from 2005 are growing new wings?”

John Briceño

“Well obviously the party in government, the U.D.P. wants to find something to be able to attack the P.U.P. they want to use it as a distraction from the real issues that are affecting the Belize people: the issue of jobs, the issue of the economy, crime, health, education, broken infrastructure, failed town council and municipal bodies all across this country. These are the real issues that are affecting the daily lives of Belizeans; anything that they can get their hands to distract the Belizean people, they will use it; just like the ninth amendment.”

Jose Sanchez

“I don’t know if you’ve had a chance, but have you read the other Wikileaks on the performance of the performance of P.U.P. or U.D.P. government for that matter?”

John Briceño

“I have gone through some of them, I have not gone through all of them; but I think what would be interesting when we hear the Prime Minister’s comments when he admitted to the American Embassy here on his move on the acquisition in B.T.L. has killed investor confidence—that it has gone down to zero. I hope that he will be interviewed and what will be his answers when he did admitted on issues where he was really talking really bringing down the former chief justice; that he made it seem so personal as to why he had to be changed including the foreign minister. I think it will be very interesting to hear what is it that they have to say about the allegations made about their government.”

Channel 5

Wikileaks Cable shows BNE was fearful of nationalization

We’ve reported periodically on US diplomatic cables dumped online by Wikileaks tonight in one cable, Wikileaks exposes the perception over the investment climate in Belize. And while the ninth amendment targeted public utilities to be enshrined in the constitution, rumblings in probably the most lucrative industry had long feared the Barrow administration’s intent on nationalization. A summary of a Wikileaks correspondence between the U.S. State Department and the U.S. embassy in Belmopan touched on the fears of the oil sector. It said “A windfall profit tax on oil production is coming to Belize. The only questions are how much of a bite it will take and how much of a disincentive it will be to U.S. investors. While the Prime Minister and government say they are consulting and taking industry concerns into account, the U.S. firm behind the sole oil producer in the country is talking of de facto nationalization of its investment.” And why would Belize Natural Energy fear the government even before plans were made public for the B.E.L. and B.T.L. nationalizations? The release goes on to say “In addition to a financial beating, the GOB is taking a political beating after winning office in February, 2008 on a platform that included promises to reduce energy and food prices.” And most people remember the infamous dollar tax that would be placed on fuel. The Wikileaks cable goes on to say that a Colorado firm, CHx, which is a major investor in BNE had expressed concern to the U.S. embassy over de facto nationalization of their investment, should the tax pass as initially drafted. The Embassy noted that it spoke to both governments regarding the long-term implications for investor confidence since both the tourism and energy sector rely on U.S. investors. The embassy also suggests it has gone to bat for BNE numerous times on other issues in the past. But it recognized BNE’s shortcomings and said that though it believes BNE is a good corporate citizen, at times its management had operated on the assumption that it is easier to ask forgiveness than permission, which has created a perception with some that the firm is arrogant and flouts the rules.

Channel 5

WikiLeaks brings the heat!

Since the anti-secrecy organization Wiki Leaks obtained hundreds of thousands of classified US diplomatic cables and has been posting them on its website, Belize has been spared this naked exposure. But last week it was Belize’s turn to feel the heat, as dozens of confidential cables sent from the US Embassy in Belize to the Foreign Office in Washington were posted on the Wiki Leak’s website.

The cables cover a wide range of subjects, providing valuable insights into the first few months of the Dean Barrow led United Democratic Party government.

During the first few weeks of the Barrow administration, the Government of Belize had written a strongly worded letter to Belize Natural Energy (BNE) threatening to close the company down if it refused to revisit the Production Sharing Agreement.

Prime Minister Barrow is reported to have told the then US Ambassador, Robert Dieter that it was only fair that Belize should get more revenue from BNE oil production.

That declaration, appeared to have had a calming effect for it prompted the Embassy, to dispatch a cable to Washington on March, 26, 2008, saying: Government appears to back away from threat to close Belize Natural Energy.”

The opening lines of the cable reads: “Following Embassy intervention, it appears that the GOB is going to step back from a threat to terminate the production sharing agreement (PSA) of the sole oil producing company in the country. A March 17 letter to Belize Natural Energy (BNE), a firm with substantial U.S. investments, cited seven areas where the company had been either late or otherwise deficient in payments or regulatory compliance (reftel). U.S. investors, required by the terms of their loan agreements to disclose the letter to their bankers, expressed concern that the language about termination would cripple BNE’s ability to raise capital, particularly in current markets, and could amount to expropriation.”

This cable goes on to explain to authorities in Washington that Natural Resources Minister Gasper Vega told the US Ambassador that the new government intends to be more business like.

“Vega said that the new government intends to be “serious and firm, but just” with all players in the energy sector.

The previous government, he said, had been lax in its oversight of both exploration and production and the new government intended to put things on a more businesslike path.

“We’re not anti-capitalism,” Vega said, but until recently BNE “used to do whatever they wanted,” missing deadlines for payments and filings with impunity. He said that, in retrospect, the March 17 letter may have been stronger than intended, but that it had achieved a desired result:

In his note at the end of the cable the ambassador advised Washington that: “The next issue of concern will likely be new taxation imposed on oil producers when prices remain at or are above a level that the government feels produces “windfall profits.”

The Embassy’s July 9, 2008 cable dealing with the windfall tax on oil production opens saying: A windfall profits tax on oil production is coming to Belize. The only questions are how much of a bite it will take and how much of a disincentive it will be to U.S. investors.

The results of a July 9 stakeholder meeting will indicate how far the government plans to push its tax proposal.

The embassy report to Washington goes on to explain government’s justification for the windfall tax.

“Barrow told the DCM July 7 that it is “only fair” that the government get “a little bit more” revenue to compensate for the “battering” that Belize’s finances have taken in recent months.

“In addition to a financial battering, the GOB is taking a political beating after winning office in February on a platform that included promises to reduce energy and food prices. “A Colorado firm, CHx, is a major investor in BNE and has expressed concern to us over “de facto nationalization” of their investment, should the tax pass as initially drafted.

The Embassy cable goes on to explain that nearly a dozen other firms with production sharing agreements had agreed to a counter-proposal that they presented to government in late June.

A comment at the end of the cable says that BNE and CHx wanted to be assured that this would be the last new tax burden that they would have to face.

Two weeks after the Barrow administration took office; Prime Minister Barrow approached US Ambassador Dieter and “made a pitch” for law enforcement assistance in the form of wireless interception equipments for the Belize Police Special Branch.

Quoting the PM, the cable said: “He said that the capability was essential to anti-drug and anti-gang efforts in Belize.

In response we noted that a similar request had been made by the previous government. The capability the police were looking for was fairly expensive, and more importantly Belize’s legislation governing communications intercepts was antiquated and could be read to prohibit such activity.

“Barrow said that he was open to ideas on implementing legislation that would provide for oversight and approval of wiretap and intercept requests and noted that the new government enjoys a majority that enables it to amend the constitution if necessary.”

The cable ends with this observation: “Initial meetings with the new government have given some encouraging signs of a serious commitment to tackle crime and corruption problems. We were not enthusiastic about the previous government acquiring communications intercept technology because of the lack of oversight and the possibility that it would be used for purposes other than law enforcement or national security intelligence collection.

If Barrow carries through with new legislation that offers the prospect of the equipment being used strictly as intended we believe the idea is definitely worthy of consideration”

But by September 3, 2008 the picture of optimism that the Barrow government had painted, that it would be tough on corruption, had faded and the Embassy dispatched a cable that said Belize had gone back to the old ways of corruption.

The summary reads: “Discussions of misappropriation and mismanagement in the Ministry of Economic Development leading foreign trade organization and allegations of ministerial level corruption developed further last week.

“Today’s Cabinet meeting will determine the outcome according to the CEO of the Ministry of Economic Development. The Prime Minister’s actions should be a strong indicator of whether he intends to follow through on his campaign pledge to not tolerate corruption) even in his own party”.

In 2009, when the government first nationalized Belize Telemedia Limited (BTL) the American Ambassador to Belize was assured that it was a one time effort on the part of GOB. This assurance was given at a meeting with the Ambassador and other Embassy staff members on December 15, 2009, when they met with BTL board member Allan Slusher and Financial Secretary Joseph Waight.

Both Waight and Slusher told the Americans that BTL would have been sold off a little more than one year after government had first nationalized it. They pointed out that due to the pending litigations, the company might be difficult to sell.

“While Slusher stated that it is the intent of the GOB to re-privatize the company at the &earliest opportunity, and that the original timeline was one year, he admitted that this will take longer than expected due to forthcoming litigation that will be lengthy.

“They believe that until this litigation is complete, the chances of selling BTL are slim.”

“Slusher confided that PM Barrow was personally opposed to the nationalization because he knew it would send the wrong signal to investors. However, neither he, not his advisors, could see another way to stop BTL and Ashcroft from continuing to fleece the country.”

The American Chamber of Commerce had pointed out “that since the nationalization, internet service quality has not improved, access to voice-over internet protocol (VOIP) has not been unblocked and rates remain the same...”

“The distinction between an expropriation and nationalization in the public interest is a very important issue, as this will be a key factor in determining the GOB’s obligations under international investment treaties”

“Today in Belize, it is difficult for many Belizeans to make the distinction between the Nationalization of BTL and the government’s proposed 9th Amendment to the Constitution. This is so because the administration has fused the two issues as one and the same, when they are not, especially the amendment to Section 2 and Section 69 subsection (9) of the Constitution that has absolutely nothing to do with the nationalization of the telecommunications company.

In the coming weeks, The Reporter will publish more stories that are based on the WikiLeaks posted diplomatic cables.

The Reporter