In 1998 the People’s United Party promised ten thousand homes that never materialized; in 2011 the Prime Minister Hon. Dean Barrow delivered over 10,000 homes to deserving home owners within three months, without having promised them. Firstly ,the Prime Minister announced in his Independence Day address in September of 2011 the writing off $62.6 million worth of mortgages to homeowners, who had mortgages with the Housing and Planning Department; an initiative that affected 9,200 mortgage holders, and in his New Year’s message, the Prime Minister announced the writing off of another 782 mortgages with the Social Security Board.
Well, over 10,000 homeowners are now in possession of their homes free of any mortgage, and totally unencumbered. Fundamental to these initiatives was the primal objective to ease the financial burden on Belizeans, whether red or blue, yellow or any other colour.
It cannot be forgotten that those who will benefit the most are persons belonging to the People’s United Party simply because they were the only persons who could have qualified; given the partisan nature of the selection process, for a mortgage prior to 2008. Most poignant still is the fact that even under those circumstances prospective homeowners were required to pay for a house and land that was front loaded with corruption so that the land, construction, and financing of the house were all done with a singularly corrupt motive in mind, a motive that was executed to the fullest; PUP corruption in full stride Ralph and Said, like the Japanese kamikaze, carelessly careening round the curves of corruption.
Those who were unfortunate to have benefited from either a Housing and Planning Department mortgage, under the PUP,or a Social Security mortgage, were secure - unbeknownst to them, in a securitization hustle. Mortgages travelled from collector to collector as they were bundled up and sold off in the international markets. As faith would have it, the only thing secured in securitization was that every new collector added on his legal and administrative fees so that mortgage holders saw their payments go up; while their poorly constructed houses on over priced lands descended into decay.
Eight miles on the Western Highway, Fresh Pond in Burrell Boom, Finca Solana in Corozal, developments in Santa Elena, San Ignacio and San Pedro, are just a few examples where corruption and abuse coalesced; where millions were spent. Lands were acquired from favoured PUP’s at inflated prices, PUP unqualified contractors were hired who bought cheap material and hired cheaper labour still, so that by the time the house was complete, the government knew then as the UDP know now, that they would be selling houses with one hand, and taking it away with the other. Anyone who reads a newspaper will know that week after week, the hundreds of foreclosed houses speaks to a nation and people under the pressure and strain of PUP corruption.
The toilet paper flowed from Belize Investment Management Company, BIMCO, a subsidiary of Social Security Board, to L & J’s collection agency, a Dickie hustle, to St. James Building Society, and then Alliance Bank, a Glen hustle, to Government of Belize, and then back to Social Security Board.
It was the United Democratic Party and the Hon. Prime Minister Hon. Dean Barrow decided to announce in his New Year’s message that the burden on the Belizean people must end. There is no longer a promise of 10,000 houses, over 10,000 Belizeans now have their homes.
The Prime Minister New Year's gift to 780 homeowners was mortgage forgiveness.
For sure, the UDP has made much political mileage out of it - and even though detractors warn about vote buying and insider trading - for the persons who fall within the 50 thousand dollar or less bracket, it is a saving grace.
Many of these folks have had their mortgages bouncing around for a decade or more going from BIMCO to a Building Society to St. James, even to commercial banks - often times without them even know. All those paper transactions were part of the PUP's housing boom - which, in a silent way, led to Belize's own little subprime crisis with toxic mortgages being bundled off into securitization schemes.
That's another very long story for another time - for homeowners the story is no end of month mortgage to pay. For retired teacher Eric Neal that means 480 dollars he doesn't have to pay every month.
He thought he wasn't included in the program because he pays at Heritage Bank, but on Wednesday the Prime Minister announced on radio that he would be included - he went to the UDP headquarters to thank the PM - whom we had just interviewed.
We spoke to Neal about what it means:
Jules Vasquez "When did you first take it out, with whom and what route did it travel to end up now at the bank?"
Eric Neal, retired teacher "It was BIMCO first on the northern road, then from there when the other government took they demolish BIMCO and then they went to St. James and the from there it went to another one in between but then it ended up at the Alliance Bank then now Heritage Bank. So that was the route it took."
Jules Vasquez "And so throughout the history of this loan you've paid all those different agencies?"
Eric Neal "Constantly, I paid faithfully."
Jules Vasquez "And so you no longer have to pay that?"
Eric Neal "No more."
Jules Vasquez "How does that translate? What does that mean to you?"
Eric Neal "It means everything in this world to me. I mean gee whiz! The balance of the loan is being written off. It's between $8,000 - $10,000 I guess. That's a heck of a lot you know Jules."
Alfonso Noble, Guardian Newspaper "$480.00 a month. What will you do with that money now?"
The House of Representatives is being convened for next Friday and speculation is that the prime minister may drop a bomb. PM Dean Barrow will also seek House approval to write off over seventeen million dollars in housing loans with the Social Security Board. According to the PM, the government will spend in the range of six million dollars to acquire the loans made to over seven hundred persons, each worth fifty thousand dollars and less. And now according to one report, top management and staff members of the social security will also be included in the pool. The staff members got loans at concessionary rates—eight percent on the declining balance—which means that they pay lower interest rates than other mortgage holders. The loans are granted to the staff from the contributions paid by all workers and employers. And according to the report, some select staff members who owe above fifty-thousand dollars will also qualify in the write-off, including mangers at the very top. They are beating the system by going to commercial banks with S.S.B. recommendations to get loans to pay off any amount owed above the ceiling of fifty thousand dollars. We called Social Security Board today but no one was available to comment on the report.
In the Prime Minister’s new year's message, the Prime Minister announced that Government would be buying over from the social security those mortgages with a balance under fifty thousand dollars. For those whose debts are being forgiven, it is a grand gesture and sure to be welcomed. However, there has been criticism from sectors of the society saying that it is the taxpayer who is getting the raw end of the deal and it amounts only to an election ploy. The Prime Minister had told the media that while the value of the mortgages being forgiven is 17 million dollars, that is just the face value as the real value is approximately 6.9 million dollars. Yesterday, we spoke to Minister John Saldivar who addressed the write off issue and spoke about how many people will benefit.
Hon. John Saldivar Well for sure, the figure that we have come up with now is ten thousand, but it a combination of a write-off that was done a few months ago, right after September 21st, when we first wrote-off the sixty-two million dollars in mortgages that were with the Ministry of Housing. That write-off affected over nine-thousand two-hundred home owners, or mortgages holders. We are now doing the write-off of seven-hundred and eighty-two loans from the Social Security Board and so in total that brings the total amount of home owners or mortgages holders up to ten-thousand that have now been relieved of those monthly payments. If we look then at an average monthly payment of four to five-hundred dollars, you are looking at a possible significant impact in terms of the purchasing power of those home owners who now do not have to pay their mortgages.
The Minister also had some advise for home owners, saying that people need to manage their loans properly.
Hon. John Saldivar In all of this, what we certainly have to do is advise those who have benefitted from this program to use the extra cash wisely and not to see this fritter away with reckless decisions. It is a significant contribution that has been made by the government to these ten thousand mortgages holders and we certainly urge them to guard this new asset with serious responsibility.
Bite my tounge...I am happy for these fortunate families, yet it seems to be election stratagy...but let them keep on helping folks out for the vote. Even if its years later. Its a good thing.
The government will write off over $17million worth of Mortgages owed to the Social Security Board by 782 persons without actually spending a cent, Prime Minister Dean Barrow told The Reporter on Wednesday, January 4.
PM Barrow said about 60% of the mortgages are non-performing; therefore, government would barter with the SSB for the loans at a discounted value of $6.9million.
SSB’s Chief Executive Officer Merlene Bailey told the Reporter that in 2005 the mortgages, which originally belonged to the Ministry of Housing but were consolidated and sold to the SSB, were used as mortgage-backed securities with the Royal Merchant Bank of Trinidad (RMBT).
Under the standard principles of securitization, the mortgages should have been owned by RMBT and taken off SSB’s books, as mortgagees would “technically” be making payments to the RMBT.
However, for whatever reason, SSB maintained the risks and the then PUP government paid off SSB’s obligation to RMBT in full.
This indebted SSB to the government for about $469,000 per month or upon government’s request.
Bailey explained that by the end of the current fiscal year, March 2012, the total payment due to the government would have grown from $9 to about $11 million.
Therefore, trade off relieves the SSB of a substantial portion of their obligation, leaving them with a balance of about $4million for the amount due at the end of this fiscal year.
Nevertheless, it does help with a debt that the SSB has to pay up until December 2013, Bailey said.
The overall initiative has been criticized by some as a stunt to gain political mileage, at the expense of tax payers’ money.
It is also believed that the government had borrowed the money that was used to pay off RMBT; therefore, leaving the question of the status of that loan.
But, PM Barrow maintained that the goal is to liberate the poor and the middle the burden, while giving them more money to spend that can help stimulate the Belizean economy.
Mortgages of $50,000 or less will be written off, and the matter will be taken to parliament so as to officially implement the program.
He denied that it is a partisan or vote-buying manoeuvre, saying that it will benefit everyone, even those of the Opposition, People’s United Party.
House meets Friday – $7 mil in loan write-offs to be tabled
Official sources indicate that the Barrow administration will move on Friday, January 13, 2012, to pass a write-off motion for nearly 800 mortgages of $50,000 or less, following a New Year’s Day announcement by Prime Minister Barrow signaling that the debts currently held through the Belize Social Security Board, which had purchased the loans from the Ministry of Housing, would be forgiven.
We understand that the motion for roughly $7 million in write-offs for mostly non-performing loans is not quite ready and is still undergoing drafting by Government’s legal counsel, Gian Ghandi. The matter is also expected to be discussed at Parliamentary Caucus tomorrow.
Additionally, the government is getting ready to introduce new legislation that would put into effect reduced electricity rates which are expected to be announced in the next few days.
Barrow had also said in his New Year’s Day address that the day after the new rates are announced, the House would change the laws to ensure the rate reduction takes immediate effect.
At Friday’s House Sitting, reports of the Social Security Board and the Central Bank are also scheduled to be tabled, along with proposed changes to the Representation of the People’s Act, which governs how politicians are elected.
Amandala tried to reach Prime Minister Barrow for his comments on Friday’s meeting, but when we contacted him, he told us he was unavailable and in a meeting. At press time, he had not returned our call.
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SSB chair to convene emergency meeting over loan write-off controversy
Social Security Board (SSB) chairman Lois Young told Amandala today, Monday, that she is convening an emergency board meeting following reports that SSB staff, including senior management, who have SSB mortgages have been trying to borrow from banks to reduce their debt so that their mortgages would fall under the $50,000 ceiling for a recently announced government write-off program.
In his New Year’s Day message, Prime Minister Dean Barrow had indicated that the Government would purchase millions in loans from the SSB and then proceed to write them off, giving homeowners more financial leverage.
The move has been criticized in some quarters as electioneering, using taxpayer dollars, since municipal elections are due in March and general elections, due in 2013, may be called early.
Young told Amandala that the list of persons who would benefit from the SSB write-off was closed since last October 31, and new persons cannot get on the SSB list.
She also said that any move by SSB staff to take advantage of the write-off would, in her view, be considered “insider trading,” which would be wrong.
She said that if SSB staff were to be added to the list, it would mean that persons already on the list to benefit from the write-off would have to be taken off.
According to Young, such a move cannot be approved by the SSB and a meeting would be held by this Wednesday with SSB’s Chief Executive Officer, Merlene Bailey-Martinez, and the board, to discuss the matter.
P.U.P. wants investigation into S.S.B.’s write offs
The Social Security Board is scheduled to meet on Wednesday to deal with reports that select staff members have found a way to benefit from the write-off of mortgages of up to fifty thousand dollars offered by the Prime Minister. We first reported about the allegations of insider trading among staff members, including top management, on Friday. Select staff members reportedly were reducing loans above fifty thousand dollars to be able to qualify for the write-off. The opposition picked up the issue today in a release alleging that certain staff members have been promised that once the balances of fifty thousand dollars and lesser amounts are forgiven by GOB, they will be further facilitated with SSB staff loans, at concessionary rates, to pay back commercial banks. The P.U.P. goes further to allege that the C.E.O. is among those who have reduced their loans to be able to qualify for the debt forgiveness even though there’s a requirement of five years employment to qualify for a housing mortgage at the concessionary rates offered to S.S.B. staff. Says the P.U.P. release: The “Friends and Family” plans coupled with the “Feast or Famine” approach of this U.D.P. administration is bankrupting our nation, morally and fiscally; and Belizeans deserve better. On behalf of the people of Belize, as the constitutional Opposition, the P.U.P. demands an immediate investigation of the entire scheme of S.S.B. mortgage debt write off.” Prime Minister Dean Barrow announced the write-off in his New Year’s address. About seven hundred and eighty mortgage holders would qualify for the debt forgiveness.
In his interview with Love News also expressed concern over allegations that some people are abusing the government write-off of social security mortgages intended for those who cannot afford to pay off their housing loans.
Francis Fonseca – Leader of the Opposition “We certainly welcome any relief to homeowners and persons who are holding mortgages with the Government of Belize, Social Security Board so we welcome that relief for them, many of these people were not in a position and have not been in a position for a very long time particularly over the past four years to meet their payment so we have no argument with government writing off those loans. In fact it was the People’s United Party that for the most part many of these individuals were able to own their home through the efforts of the People’s United Party, were able to get those mortgages through the People’s United Party. What we are very concerned about right now is what we are hearing coming out of Social Security Board is that a very select few members of the top level staff of the Social Security are in fact seeking to circumvent the rules and seeking to put themselves in a position to benefit from this loan program and the write off of these loans. It is our understanding that certain select staff members have been given the opportunity to, because they have loans over $50,000 and would not therefore qualify under the loan program for a right-off. They have gone to private commercial banks to get loans that will allow them to reduce their balances below 50,000 or to 50,000 to qualify under the loan program and therefore have that remaining balance of 50,000 or less written off. On top of that it is our understanding that it may be that those individual that who have now gone to the private commercial bank to get a loan for example, let’s say your loan outstanding balance was $80,000.00 so you went to a commercial bank and you got a loan for $31,000.00 so that your balance will be $49,000.00, that $49,000.00 would be written off, you would then have a loan of $31,000.00 to a private commercial bank. It is our understanding that there is even consideration to have new loans to Social Security given to those individuals at lower interest rates so that they could then use those loans to go and pay the private commercial banks. It seems like a web almost, it is a real travesty, a web sort of conspiracy to allow a select few members of staff to benefit from this program which as we understand it was to target low income individuals who are not able to properly meet their loan obligations.”
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DIRECTOR OF IMMIGRATION RESPONDS TO ALLEGATIONS
There have been allegations of mass naturalizations of non-Belizeans. Earlier this week Vision Inspired by the People issued a release condemning what they said were a number of irregularities in the process. Today Leader of the Opposition People’s United Party, Francis Fonseca, told Love News today that the legal process ought to be followed in getting Belizean citizenship, but the information that his party has received is that this is not being done.
Francis Fonseca – Leader of the Opposition “What we see taking place and the information that has reached us at the People’s United Party is that last week for example, last week Friday the television cameras saw it, we had over 400 persons going to the George Price Center in Belmopan, being sworn in as Belizean citizens. It is our understanding, the reports that we have gotten suggests that many of these applicants, many of these new Belizeans citizens did not meet the criteria for being Belizean citizens. Many of them did not present the proper documents that are required for you to become a Belizean citizen. Many of them as we understand it have not lived in Belize for the required period of time to become or qualify to be a Belizean citizen so there was not a proper vetting process. In fact our information suggests that in fact many of these applicants presented their documents for the first time at the George Price Center where the Minister of Immigration Carlos Perdomo was present signing and approving these applications. Our information is that in some cases there was absolutely no vetting of these applicants; so it seems that what is taking place is a sort of complete wholesale giveaway of Belizean citizenship for the purpose of padding the electoral list and helping certain constituencies. As we understand it many of those persons who were sworn in last week were targeted for divisions in the north of Belize, Corozal South East, Orange Walk Central, Orange Walk East, in some blatant attempt to assist those representatives of the UDP in that area. We find this absolutely disgusting, it is wrong, it is improper and we certainly hope that public officers are not engaging in any misconduct in the execution of their duties as it relates to this matter. As we understand if from the Immigration Department there is an intention to swear in an additional 480 individuals this Friday on the 13th of January and again the proper vetting has not taken place and again it seems that there is going to be another round of abuse and misuse and misapplication of the process, granting Belizean citizenship to persons who do not properly qualify to become citizens of Belize.”
Today Director of the Immigration Department Ruth Meighan went on record to say that there is nothing underhanded going on in the registration of new Belizeans.
Ruth Meighan – Director, Immigration Department “What we are doing, the Immigration Department processes applications for nationality throughout the year and these people have to meet certain requirements for them to qualify to become nationals of Belize. The issue is we are processing a lot of applications now but they all must meet the requirement so there is no illegal activities going on in the Immigration Department.
Patrick Jones - Reporter I understand that last week there were two swearing in for people who just got their nationality, is that so?
Ruth Meighan – Director, Immigration Department “No, we had one swearing in ceremony last Friday. We have been having ceremony, since I came to the Immigration Department we have been having swearing in ceremony so there is nothing unusual about that either.”
Meighan says that the process of obtaining Belizean nationality is simple and straightforward and that the integrity of the system is being upheld by her department.
Ruth Meighan – Director, Immigration Department “Basic requirements according to the law where the person, they have two section under the regulation where you can apply, you can apply for nationality through marriage and you can apply through registration which is section 10 and section 11 of the law. Under section 11 the person is required to live in Belize for at least one year after marriage but that is an administrative policy that is put in place. For section 10 you have to be living for five years in addition to that you have to show legal residence. We have looked at those persons who have ordinary residence, who have been able to establish stay in Belize saying that they have been working and provide us with temporary work permits, or they may have been able to establish through school records or through whatever legal document they can provide us, that is what we use to verify stay in Belize and the person must be living in Belize for at least five years.
Patrick Jones - Reporter So basically the concerns as raised by VIP is not valid at this time.
Ruth Meighan – Director, Immigration Department “I don’t know what the concern is, I really haven’t heard it other than little rumors here and there but as far as the Immigration Department is concerned, we are processing applications and we are doing it through the legal process, there isn’t anything illegal going on in the immigration department.”
Meighan says that in the period of just over a year since she has been at the Immigration Department, there have been a little over five hundred persons who have utilized the legal process to obtain Belizean nationality.
Chairman Accuses SSB Staffers Of "Insider Trading"
Social Security's Board of Directors will have an emergency meeting tomorrow to discuss what Chairman Lois Young calls "insider trading."
She's referring to confirmed reports that Social Security employees, including senior management, have made loans to bring down their mortgage balances to under fifty thousand dollars - that they get into the Prime Minister's mortgage forgiveness programme.
It's a once in a lifetime opportunity to get fifty thousand dollars deducted from your mortgage debt. But today, the Chairman told us that for SSB employees to qualify themselves for eligibility after the plan was circulated internally in late 2011 - violates the spirit of the government's proposal - and constitutes what she says can only be called insider trading.
She says that any staff member's mortgage balances which were reduced to fifty thousand dollars or less after the date when the first request was made by government will be included in a list which will be reviewed by the Board tomorrow.
She says she is concerned about people at Social Security who got wind of the proposals and may have taken advantage of that information.
And the PUP is also concerned. The party issued a release implicating senior management today stating that very senior members of management have positioned themselves to benefit from the program.
We called CEO of SSB, Merlene Bailey Martinez who told us she was driving and could not speak - but assured us that the board will deal with the matter tomorrow.
The PUP release adds that quote, "certain 'select' members of staff of the SSB have obtained loans at commercial banks and other lending institutions in Belize, to pay down these mortgages, to take their balances below $50,000 in order to benefit as well."
The release concludes, quote, "If this program was ever meant to help struggling Belizeans, then what it is alleged is happening at the SSB, could only be described as a travesty."
The PUP has demanded an immediate investigation of the entire scheme of the SSB mortgage debt write off and calls upon Board members especially those representing the Private Sector and the Trade Unions to speak out on the matter.
PM Says SSB "Insider Trading" Will Not Be Tolerated
Social Security's mortgage forgiveness program was supposed to be a populist, pro-poor initiative - but it has turned into a political hot potato with the disclosure that SSB senior managers were participating in what the chairman has called insider trading.
That means they used the insider knowledge they had as employees to bring down their mortgage balances so that it would be included in the forgiveness programme - and that - we are reliably informed - extends right up to the CEO, Merlene Bailey Martinez who - according to our information - brought down her balance in November.
As the PM put it, they "tried a thing" - but, simply put, it didn't and won't work:
Prime Minister Dean Barrow - Prime Minister of Belize "My position is that the Government of Belize has paid for - I believe - 782 mortgages. The list of the persons that were in the $50,000 and below category is a list that we have and have had for some time. There is no way any SSB staff member, who was not on that list can now get on to the list in consequence of having paid down to try and get their loans under $50,000. From the time I learned of the situation, I indicated to the CEO that Government would not pay a penny more than the agree purchase price for the agreed number of mortgages."
Jules Vasquez "The Opposition has alleged that CEO Merlene Bailey Martinez is among those who, subsequent to the announcement or some knowledge, reduced the balance of her mortgage to bring it into that $50,000 threshold."
Prime Minister Dean Barrow "Well, all I will say that is Mrs. Bailey has confirmed to me that she is not proposing her name for even any kind of consideration in terms of whatever might the Board decision, with respect to persons who did that, so I will leave it there. She says that she is not in the 'mix' at all, in terms of the decision that the SSB Board will have to make with respect to persons who might have paid down."
Jules Vasquez "But, you're only taking it half way. I'm saying that isn't it a fundamental breach of ethics if she, as CEO, tried to cease upon an opportunity, in which the spirit of it was for the poor and middle class."
Prime Minister Dean Barrow "But I'm saying, don't you first have to ascertain from her whether she did in fact paid down. I wouldn't want to comment on that until you've had a chance to speak with her. I believe that I do know the answer."
Jules Vasquez "I spoke to her and she wouldn't - she said that she was driving."
Prime Minister Dean Barrow "I would prefer that you wait until the SSB meeting is over because clearly, the SSB Board will require a sort of tracking list or records that will track the transactions with respect to all SSB staff member loans."
SSB Bombshell!: CEO Suspended In Insider Trading Inquiry
And so that left it in the hands of the Social Security Board of Directors - which met this afternoon at Social Security's Belize City Office.
We knew the outcome would not be nice, because Chairman Lois Young has been vocal in her criticism of SSB staffers who used an inside advantage to qualify under the programme.
But what did her Board of Directors decide today?
They started meeting at 2:00 and we waylaid them outside the Board Meeting at SSB Headquarters in Belize City and when they emerged at 5:30 - here's what they had to say:
Lois Young - Chairperson, Belize Social Security Board "Well, we had a long and thorough meeting, and we realize that we need to investigate further. We're going to have an investigation conducted independently of the Social Security Board, and in the meantime, we have suspended the Chief Executive Officer and the Internal Auditor for 2 week initially, and in any event, until the investigation is completed."
Rowland Park - Reporter Newspaper "Who is going to conduct the investigation?"
Lois Young
"It will be an external - I won't say who it is, but it will be done externally, by an external body or entity. We will review it. We've got to interview more people in SSB, ourselves, including the 2 officers who are suspension, and then come to a final decision."
Rowland Parks - The Reporter Newspaper "Can you say what was the reason specifically why officers were suspended?"
Lois Young "No, I won't say that here."
Geovanni Brackett - Plus TV "Can you tell us at this time how many are staff of SSB who perfected the loan as a result of 'insider trading' knowledge? And also, have you all made any decision as to how you will deal with future 'insider trading'?"
Lois Young "The external investigation will come up with a final figure on that question - exactly how many staff members are involved, and that is why I'm saying that this is just a preliminary step that we're taking. We have to be fair to everyone who is involved."
Alfonso Noble - The Guardian Newspaper "How does this affect the write-off process?"
Lois Young "That has nothing to do with us. That's a Government initiative. This is an internal matter to SSB, but SSB being a public body, I thought that I should just answer your questions."
Chairman Young called our office and stressed that the word suspension which she used is incorrect; the CEO and Internal Auditor have been placed on "administrative leave."
It's an absolutely withering blow to the reputation of CEO Merlene Bailey Martinez. While Chairman Young would not confirm that she did bring down her loan balance to get in on the programme - it is unlikely that such a stiff penalty - absolutely unheard of for a CEO - would have been meted out if she had not participated.
Our information says that her mortgage was in the 80 thousand dollar range and she made a loan to bring it down to fifty thousand dollars - reportedly as early as November, 2011 - when no public announcement had been made.
It comes as a shock to all involved as Bailey-Martinez - former chair of the DFC Commission of inquiry - had enjoyed an absolutely untainted reputation as a public official.
But, now she is under suspension and facing an internal inquiry...
There is a major shakeup in the Social Security Board tonight and it is the first of a kind. The Board of Directors at an emergency meeting today, recommended that its C.E.O. Merlene Bailey be suspended from her duties at S.S.B. This comes on the heels of a story we broke on Friday of insider trading at the S.S.B. The board has also recommended that the internal auditor, Denise Mahler, should be suspended and that an independent audit should take place forthwith to determine whether there was any financial wrongdoing with S.S.B. money. The emergency meeting, which started at one-thirty today concluded after five and only dealt with the issue at hand. The board determined that Bailey had acted inappropriately when she encouraged her staff, including top management, to reduce their loans to be able to participate in the write-off of seventeen million dollars owed to Social Security in housing loans. More than a dozen of S.S.B.’s staff members, we are told, reduced their loans to qualify.
Prime Minister Dean Barrow, in his New Year’s address, announced the settlement of seven hundred and eighty-two mortgages through the Social Security Board. The condition of the write-off is that each loan must not exceed fifty thousand dollars. But today, that goal post was changed and the write-off will apply to those whose mortgages were originally at fifty thousand dollars. Earlier this morning, the PM told News Five today that members of S.S.B.’s staff would not be allowed to get on the list that has already been approved since September, 2011.
Dean Barrow
“My position is that the Government of Belize has paid for, I believe, seven hundred and eighty-two mortgages. The list of the persons that were in the fifty thousand dollars and below category is a list that we have and have had for some time. There is no way any S.S.B. staff member who was not on that list can now get on to the list in consequence of having paid down to try and get their loans under fifty thousand dollars save and except if the Social Security Board wants to absorb any write-off. It is my understanding that the chairman has indicated and I believe she may have done some informal sounding of the other members of her board but she has indicated that it ain’t going to happen and the only way it could happen is if S.S.B. were to absorb the cost, because there would be a cost. From the time I learned of the situation I indicated to the C.E.O. that government would not pay a penny more than the agreed purchase price for the agreednumber of mortgages.”
Two senior staff members of SSB placed on suspension
Social Security's Board of Directors held an emergency meeting today to address allegations that senior management and other employees of social security have qualified themselves for the Prime Minister’s mortgage forgiveness program. SSB Chairman, Lois Young, verified what the People’s United Party had said in their press release sent yesterday that "certain select members of staff of the SSB have obtained loans at commercial banks and other lending institutions in Belize, to pay down these mortgages, to take their balances below $50,000 in order to benefit as well." In speaking with the media yesterday, Lois Young referred to it as "insider trading” when certain employees at Social Security, privy to the proposals in 2011, may have taken advantage of that information. Today, the board looked at a list of staff member's mortgage balances which were reduced to fifty thousand dollars or less after the date when the first request was made by government. At the end of that meeting today, two senior staff memebers were suspended and an investigation is being set in motion. Geovanni Brackett reports.
Geovanni Brackett, PlusTV Journalist The SSB held a meeting this afternoon. At the end of the meeting at about 5:35 this evening, we spoke to the Chairman Ms. Lois Young, who said that they will hire an external entity to conduct an independent investigation. In the meantime, as of today, the Chief Executive Officer and the Internal Auditor have been put on suspension for two weeks, while the investigation commences. Ms. Young would not elaborate on how many members of the SSB staff actually benefited or perfected their loan as a result of insider knowledge, but she said that that is pending investigation. We also asked if it is true that Mrs. Bailey Martinez, the Chief Executive Officer had made a loan of eighty thousand dollars and she would not comment on that, saying that after the investigation, they will release further information and that’s where it is right now as a result of the meeting.
Social Security has not issued any release on the matter and we tried getting a statement from the CEO’s office but were told that we should try again tomorrow.
Today was anything but business as usual at Social Security Headquarters in Belmopan as the boss had been sent home - suspended, or nicely put, placed on "administrative leave" after the board launched an investigation into "insider trading", reportedly by more than 10 staffers.
Chairman Lois Young called it insider trading because she claims those persons used their inside knowledge that government was preparing a mortgage forgiveness programme to get their balances under the fifty thousand dollar threshold.
Solid information says that CEO Merlene Bailey Martinez did this - as early as November - and others followed.
So Bailey-Martinez has been suspended along with the internal auditor Denise Mahler. We could not confirm if Mahler participated - or simply failed to report the irregularity, or both.
Chairman Lois Young says they will remain on suspension for two weeks or until an independent investigation is completed.
In the meantime, we understand there has been a mood of stunned disbelief at Social Security as Bailey-Martinez is known to be strict and scrupulous, but has now fallen from grace with a mighty thud - with the tremors resonating all through the organization.
A terse communiqué sent to staff this morning from the executive secretary simply informs them that Leticia Vega - the head of the office of Strategic Management is holding over as the Chief Executive Officer and Carol Moss is holding over as Manager of the Internal Audit department until further notice.
Staffers have not been told about the when the independent audit will commence or - for those who tried to get into the mortgage forgiveness programme - what will happen to their outstanding balances, or the money paid in.
Chairman Lois Young did not respond to our questions about the investigation today.
Whatever the case, the Ministry of Finance's list has been finalized and tomorrow the house is expected to approve the write-off of 6.9 million dollars in mortgages - which is the present value of the 17 million in mortgages 0- many of which are impaired.
Government Writes Off Mortgages; Opposition Says Piñata Politics
Today the government went to the House Of Representatives loaded with goodies: first there was the Social Security Housing Loans and Debt Relief Write Off Motion and then the announcement of decrease in electricity rates.
But, the thunder was stolen in one case and tainted in the other. First, the news of those new light rates was already reported in last night's news, and, second, the SSB write-off has been marred by the controversy of the CEO and other Social Security staff trying to cash in on the programme.
So, before he rushed in with all the political fanfare, the Prime Minister had to explain that those who were not on the list when it was first broached by government at the end of September, 2011 - won't be getting on - which cuts off all the inside traders:
Hon. Dean Barrow, Prime Minister "I should make one thing clear; the list is the list that I said was given to me as of the 30th of September. No name has come off, and no name has been added; there was a great brouhaha about goings on among staff at SSB. Let me make absolutely clear. And, again, members on the other side will be able to look at the original September 30th list to verify that it is that exact list that is being reproduced now for the House to approve."
"Again there may well be, Mr. Speaker, as we proceed the discovery that one or two of those names on the list may be the names of persons that have died, and their loans as a consequence have been written off by insurance. In that case I will need for SSB to replace those loans, because we have bought 781, at that juncture when that can become clear if there are such instances. We can look at who next there was on the list that was just over $50,000.00 and try to slot them in."
"Mr. Speaker, but you know what happens now. People are saying to me 'what happened to the loans and mortgages that are at DFC?' Well, being always for the people we can promise today that there will soon also be a form of assistance with the DFC mortgages."
"Now Mr. Speaker let me be clear. I don't know whether it will be a complete write off, whether it will be a lowering of the interest rates or a combination of both and so I cannot go beyond saying assistance there will be in one form or another."
"But for now `Mr. Speaker we are happy that so many additional families are benefiting once again from another of the UDP's pro people initiatives. There are some would be spoilers that we called "blue konkas" that have tried to reign on this parade, but it is clear that the joy at what we are doing is not confined only to those home owners that are benefiting directly. All right thinking citizens resoundingly approve of compassion on the part of their government. Compassion that gives a welcome and significant boost both to individual disposable income and to collective economic activity."
"The nominal value of the mortgages being written off is just under 17 million dollars though we have been able to acquire them for 6.9 million because of the impairment factor. Mr. Speaker on behalf of a government that is always for the people I now take pleasure in moving the motion."
And while he got a standing ovation from his side of the house - the opposition was not impressed.
Leader, Francis Fonseca agreed that a write off is a good thing - but there's nothing to cheer about when so many people can't pay their mortgages, while said Musa colorfully likened it to piñata politics:..
Hon. Francis Fonseca, Leader of the Opposition - PUP "Any relief, Mr. Speaker, offered to struggling home owners- who are for the most part unable to meet their mortgage obligations- is welcome and supported. In fact the great majority of the persons benefiting from the government write off are individuals who were given the opportunity to become first time home owners under the PUP's housing expansion and development program."
"Like all Belizeans we are justifiably concern about the reports that have been forthcoming. About the alleged abuse and so call insider trading by senior Social Security Board managers and staff. Mr. Speaker, purportedly the CEO of Social Security Mrs. Martinez has paid $20,000.00 to the Social Security Board for a mortgage with a loan balance of about $69,000.00. Furthermore, several select members of staff of SSB were advised on what was necessary in order for them to qualify for a write off and were allegedly given recommendations by the CEO of SSB to obtain loans at commercial banks and other lending institutions in Belize to borrow to pay down these mortgages to take their balances below $50,000.00."
"Why has it become a matter for celebration and grandstanding and patting yourself on the shoulder when some 800 Belizean families have fallen into poverty; are no longer able to meet their mortgage payments; have effectively lost hope and given up. Mr. Speaker, these families deserve jobs and economic opportunities, not just handouts."
Rt. Hon. Said Musa, Former Prime Minister "Most of these homes, Mr. Minister of Works, were built by the People's United Party providing home owners in this country. I think even the Minister of Tourism will agree with me."
"Mr. Speaker, in other words it is the PUP that did all the heavy lifting so that now the UDP government can be generous with assets created by the People's United Party, and, of course, it is being done now in a last hitch desperate effort to try to win votes from these poor people. Now that the election is drawing near, the UDP is trying to take advantage of the situation - dishing out - bursting the piñata. It has become a piñata campaign now. Free ham and turkey. Write off the mortgages; dish out the cash. In other words, the housing department and the representatives of the UDP and the Social Security Fund now have become one big piñata to dish it out."
"The final insult now, as pointed out by the Leader of the opposition, these fat cats in the Social Security, fat cats UDP, yes, in the Social Security Board have been taking advantage of the Social Security write off or at least attempting to. I am happy to hear that when it was exposed - not by the government but by the media, Channel 5 and Channel 7 that exposed this racket that was going on - it was only then that the government through the Prime Minister has now responded to say that they will not benefit. This very same sanctimonious lady, who presided over the DFC Commission of Inquiry, this pious sanctimonious lady who kept talking about corruption here and there with no proof. Now we have the real corruption that was attempted in Social Security Board. That's right."
Hon. Dean Barrow, Prime Minister "Those on the other side who tried to concentrate their fire on the CEO of the Social Security Board can't get away with that. What it appeared was being attempted by staffers at SSB had and has nothing to do with the government's write off program. In any case what was contemplated could never have happened because from the time I learned of the allegations that were making the rounds I spoke to the Chair of the Social Security Board, and I knew that the Chair was going to convene to deal with the allegations. I also knew that I had the list upon which the contract was concluded, the list on the basis of which I have negotiated. And there was no way anybody would have been able to add to that list without the approval of the government of Belize, and there was no way in the world that the government of Belize would have given that approval. So I am not going to try to defend the CEO, but I do have to observe that the thunderous denunciations of the CEO coming from the member for Fort George is rich, its ironical. If I were the CEO I would take some comfort from the fact that the man who is my greatest detractor is the man whose record is so well known. I listen to the member for Belmopan talking about all the compromises that the member for Fort George made when he was Prime Minister. I should rephrase that - the various ways and the countless individuals to whom he was compromised. And I recollect what Bettie Davis said about that starlet, looking at her she observes to people, 'there goes the good time that was had by one and all.'"
House approves write-off of 781 mortgages worth $17 million
Prime Minister and Minister of Finance Dean Barrow on Friday, January 13, tabled a motion in the House of Representatives for the write-off of $17 million worth of mortgages which he said have an impaired value of $6.9 million. Government has purchased the mortgages from the Belize Social Security Board (SSB), and Barrow today confirmed the list at 781 beneficiaries, “who had originally borrowed $50,000 and below.”
Opposition Leader Francis Fonseca questioned: “Why has it become a matter for celebration and grandstanding and patting yourself on the shoulder when some 800 Belizean families have fallen into poverty [and] are no longer able to meet their mortgage payments?”
Barrow said that the call for help from homeowners increased after the Government “wrote off 9,000 almost 10,000 mortgages” held by the Ministry of Housing last year and some of the mortgage holders whose loans had been transferred to the SSB were saying if government had not sold their mortgages to the SSB, they would also have benefited.
Now that the Government has written off hundreds of loans formerly held by SSB, Barrow went on to declare that assistance is coming to mortgage holders of the Development Finance Corporation (DFC), who have also been “asking about the loans at DFC,” said Barrow.
On Friday, he announced: “There will soon also be a form of assistance [for] the DFC mortgages...” He said he doesn’t know whether it will be a complete write-off, a lowering of interest rates or a combination of both, but he could say assistance will come in one form or another.
National Trade Union Congress of Belize president, Dylan Reneau, told Amandala Thursday that, “A lot of trade unionists benefited from the initial write-off [for $60 million]. They are extremely happy!”
President of the Belize Chamber of Commerce and Industry Kay Menzies pointed out, however, that, “...one way or another, if the mortgage payer is not paying, then the taxpayer must... it is not just workers’ funds but taxpayer money going forward that will have to cover the cost of any effort like this.”
In explaining the history of the mortgages, Barrow said that most of the beneficiaries did not have original mortgages with SSB, but held loans with the Ministry of Housing, the BIMCO, Belize Building Society and St. James Building Society, and they were sold to the SSB, “when SSB was a little more than a feeding trough to Government” under the Opposition People’s United Party. The mortgages were then put in a pool for which advance cash was earned from overseas, through a securitization program.
The debts were principally held by the Royal Merchant Bank of Trinidad and Tobago (RBTT), and Barrow said most of the clients who had the housing mortgages “were not consulted or informed until even after the fact...”
He added that, “They also found their repayment schedule had been altered by the Social Security Board to their disadvantage.”
SSB CEO Merlene Bailey-Martinez told Amandala on Tuesday that SSB had been receiving about 40% of what was due to them from those who held those mortgages. The SSB had to find nearly $300,000 monthly from its pool of funds to meet its payment to the Government.
According to Barrow, GOB pocketed the proceeds of the sale of mortgages to SSB, but the SSB had to take a discounted payout.
Government prepaid some of that $70 million SSB had to service to the RBTT, which was to be repaid to Government by SSB in monthly installments. Those monthly installments now stand at roughly $469,000, with payments due until 2013 and even after this write-off, the SSB still owes the Government about $8 million and is left with about 100 mortgages from the pool, the CEO reported to us earlier this week.
Barrow furthermore explained in the House that the SSB has been repaying in lump sum at the end of the financial year and there is a line item in the budget for those, listed as repayment of securitization monies. For March 2012, said Barrow, the government had budgeted to collect $4 million from the SSB, but SSB had scheduled repayment of $11 million.
SSB will, therefore, not be collecting the $6.9 million but using it to pay for the mortgages as an offset transaction. Government, said Barrow, would still end up with budgeted collection of $4 million. Therefore, the transaction would not dent Government’s cash flow, he added.
Barrow said that the list of beneficiaries tabled in the House is as of the 30th of September 2011: no name has come off, no name has been added. As for “the great brouhaha about the goings on among staff of SSB,” who have been accused of insider trading for trying to benefit from the scheme by lowering their mortgages to fit within the $50,000 ceiling, Barrow indicated that none of them are getting their loans written off in the government pool, and members of the National Assembly can look at the original September 30 list and see it is exactly the list being introduced now for the House to approve.
Fonseca commented on the alleged insider trading scheme on Friday, saying, “...purportedly the CEO of Social Security Mrs. Martinez has paid $20,000 to the Social Security Board for a mortgage with a loan balance of about $69,000. Furthermore, several select members of staff of SSB were advised on what was necessary in order for them to qualify for a write-off and were allegedly given recommendations by the CEO of SSB to obtain loans at commercial banks and other lending institutions in Belize to borrow to pay down these mortgages to take their balances below $50,000.”
Former Prime Minister Said Musa pointed out that many of the mortgages the ruling United Democratic Party has been writing off were issued under his administration, which ended in 2008. He said that the UDP is taking advantage of things by dishing out “piñata goodies,” in the form of the mortgage write-offs and millions spent over the X-mas “ham and turkey” giveaways. Musa called it “a piñata campaign,” saying that “...the Housing Department and the representatives of the UDP and the Social Security Fund now have become one big piñata to dish it out.”
The internal auditor has started its review of Social security's insider trading scandal. Today staffers were notified by the acting CEO that starting today,
the accounting firm of Panel Kerr Foster had launched the investigation of SSB's staff housing loans.
The notice informs them that selected staffers will be interviewed, and they will be notified of this via letter from the accountants.
Those interviews are expected to be conducted next week - meaning that that the two week administrative leave for CEO Merlene Martinez and internal auditor Denise Mahler will likely have to be extended.
Chairman Lois Young had said that they would remain suspended until the investigation is completed.
The opinions and views expressed on this board are the subjective opinions of Ambergris Caye Message Board members and not of the Ambergris Caye Message Board its affiliates, or its employees.
"It was BIMCO first on the northern road, then from there when the other government took they demolish BIMCO and then they went to St. James and the from there it went to another one in between but then it ended up at the Alliance Bank then now Heritage Bank. So that was the route it took."
In the Prime Minister’s new year's message, the Prime Minister announced that Government would be buying over from the social security those mortgages with a balance under fifty thousand dollars. For those whose debts are being forgiven, it is a grand gesture and sure to be welcomed. However, there has been criticism from sectors of the society saying that it is the taxpayer who is getting the raw end of the deal and it amounts only to an election ploy. The Prime Minister had told the media that while the value of the mortgages being forgiven is 17 million dollars, that is just the face value as the real value is approximately 6.9 million dollars. Yesterday, we spoke to Minister John Saldivar who addressed the write off issue and spoke about how many people will benefit. 
Social Security's Board of Directors will have an emergency meeting tomorrow to discuss what Chairman Lois Young calls "insider trading."
"My position is that the Government of Belize has paid for - I believe - 782 mortgages. The list of the persons that were in the $50,000 and below category is a list that we have and have had for some time. There is no way any SSB staff member, who was not on that list can now get on to the list in consequence of having paid down to try and get their loans under $50,000. From the time I learned of the situation, I indicated to the CEO that Government would not pay a penny more than the agree purchase price for the agreed number of mortgages."
And so that left it in the hands of the Social Security Board of Directors - which met this afternoon at Social Security's Belize City Office.
"Well, we had a long and thorough meeting, and we realize that we need to investigate further. We're going to have an investigation conducted independently of the Social Security Board, and in the meantime, we have suspended the Chief Executive Officer and the Internal Auditor for 2 week initially, and in any event, until the investigation is completed."
There is a major shakeup in the Social Security Board tonight and it is the first of a kind. The Board of Directors at an emergency meeting today, recommended that its C.E.O. Merlene Bailey be suspended from her duties at S.S.B. This comes on the heels of a story we broke on Friday of insider trading at the S.S.B. The board has also recommended that the internal auditor, Denise Mahler, should be suspended and that an independent audit should take place forthwith to determine whether there was any financial wrongdoing with S.S.B. money. The emergency meeting, which started at one-thirty today concluded after five and only dealt with the issue at hand. The board determined that Bailey had acted inappropriately when she encouraged her staff, including top management, to reduce their loans to be able to participate in the write-off of seventeen million dollars owed to Social Security in housing loans. More than a dozen of S.S.B.’s staff members, we are told, reduced their loans to qualify.
Social Security's Board of Directors held an emergency meeting today to address allegations that senior management and other employees of social security have qualified themselves for the Prime Minister’s mortgage forgiveness program. SSB Chairman, Lois Young, verified what the People’s United Party had said in their press release sent yesterday that "certain select members of staff of the SSB have obtained loans at commercial banks and other lending institutions in Belize, to pay down these mortgages, to take their balances below $50,000 in order to benefit as well." In speaking with the media yesterday, Lois Young referred to it as "insider trading” when certain employees at Social Security, privy to the proposals in 2011, may have taken advantage of that information. Today, the board looked at a list of staff member's mortgage balances which were reduced to fifty thousand dollars or less after the date when the first request was made by government. At the end of that meeting today, two senior staff memebers were suspended and an investigation is being set in motion. Geovanni Brackett reports. 
Chairman Lois Young says they will remain on suspension for two weeks or until an independent investigation is completed.
In the meantime, we understand there has been a mood of stunned disbelief at Social Security as Bailey-Martinez is known to be strict and scrupulous, but has now fallen from grace with a mighty thud - with the tremors resonating all through the organization.
A terse communiqué sent to staff this morning from the executive secretary simply informs them that Leticia Vega - the head of the office of Strategic Management is holding over as the Chief Executive Officer and Carol Moss is holding over as Manager of the Internal Audit department until further notice.
Whatever the case, the Ministry of Finance's list has been finalized and tomorrow the house is expected to approve the write-off of 6.9 million dollars in mortgages - which is the present value of the 17 million in mortgages 0- many of which are impaired.
Today the government went to the House Of Representatives loaded with goodies: first there was the Social Security Housing Loans and Debt Relief Write Off Motion and then the announcement of decrease in electricity rates.
"Again there may well be, Mr. Speaker, as we proceed the discovery that one or two of those names on the list may be the names of persons that have died, and their loans as a consequence have been written off by insurance. In that case I will need for SSB to replace those loans, because we have bought 781, at that juncture when that can become clear if there are such instances. We can look at who next there was on the list that was just over $50,000.00 and try to slot them in."
"Any relief, Mr. Speaker, offered to struggling home owners- who are for the most part unable to meet their mortgage obligations- is welcome and supported. In fact the great majority of the persons benefiting from the government write off are individuals who were given the opportunity to become first time home owners under the PUP's housing expansion and development program."
"Most of these homes, Mr. Minister of Works, were built by the People's United Party providing home owners in this country. I think even the Minister of Tourism will agree with me."
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