Tue | Feb 7, 2023

FINSAC just won't go away!

Published:Friday | February 19, 2010 | 12:00 AM

A reader
emailed me. I offer the exchange in its entirety before making a few relevant comments:

"Over the years, I have read many of your articles and found them balanced on most issues excepting those issues which relate to the previous PNP (People's National Party) Government, and Omar Davies in particular, and one wonders what worldly offerings would permit a man to compromise his integrity, honesty and morality. Do you think that the Jamaican people have a right to know:

(a) Is there information that could possibly come out of the inquiry that is so damning that you and the folks you represent would go to any lengths to try to discredit and discontinue it? Only you and the interests you represent can answer that.

(b) If the Bank of Jamaica (BOJ) had advanced or loaned those financial institutions monies to ease their liquidity problems, would it have stopped the run on these institutions, The United States Treasury did the same thing recently with their major banks and the recovery of these banks is clear." (Typos and grammar corrected)

My response, with minor correction/change: "I certainly think the Jamaican people have a right to know. That is the point exactly. I was a member of the board of FINSAC. I've written a book on the meltdown, detailing the general and specific causes of the bankruptcies. There is a lot the Jamaican people ought to know which I do not have the information to tell them. What we are being given is a cherry-picking of the information. If there is going to be an enquiry, then bring the forensic accountants who investigated the institutional failures, bring back chief executive officers, owners and managers, etc. - let them give submissions under oath.

Then, publish the delinquent borrowers' list - all of it. Perhaps then the Jamaican people will know where blame is to be placed, who benefited and who lost.

This does not seem to be the path on which we embarked. If one is merely looking to score political points and suggest that entrepreneurs were Finsac'd, as if FINSAC caused their downfall, that high interest rates were the cause of the meltdown, then that is flying in the face of truth. Foreign banks did not fail. Our banks' risk assessment managers did a very poor job. They loaned money without the requisite due diligence. Some claim they approved loans to friends and did many other improper things. Many borrowers had bad loans with two, sometimes three, of the failed banks. Some left loans unpaid and simply moved on to other banks to get new accommodations.

I hold no brief for the PNP or Omar Davies. I happen to think that he was a good finance minister and as far as I know the only real issue I have with him as minister was his approval of the use of funds to enhance his party's chances of winning an election. Then again, all our finance ministers from the '70s onward seem to have done this. He was the only one honest or stupid enough to tell people that he did!

I know Carey J and have great respect for him, as I have written in a previous column; but if he had any matter before FINSAC, I honestly think he should recuse himself. Indeed, I thought he would if that were the case. From what I have read in the press, with no basis to judge the allegations, it is unwise for him to continue if they are true. So I do not oppose an enquiry at all. I support, however, a full one.

Finally, our local financial institutions did not have liquidity problems. Theirs was a problem of insolvency. They were effectively bankrupt. I pride myself in being honest, impartial and willing to speak truth. Quite apart from your thought that I stand to benefit in any way from my opinions, through 'worldly offerings', I may have, on the contrary, lost potential worldly offerings! But that is not what my columns are about.

I've got no reply. I make the comments that follow, because the principles upon which these are based are core elements of how and why societies can sustainably prosper. First, it is obvious that Jamaican political partisanship defies logic; but my readers know this. I once thought this was unique. Our political scientists often use the word tribalism to describe it. Perhaps it is a lazily and unimaginatively chosen description of a concept. But it is here to stay. Our former minister of national security, Peter Phillips, himself trained in the area of political science and sociology, is said to have originated the pithy saying that Wilmot Perkins on his talk show oft repeated of former Prime Minister Patterson's description of Jamaican politics as a "fight for scarce benefits and political spoils carried on by hostile tribes which seem to be perpetually at war"! Phillips is also reputed to have said that in Jamaica "he who plays by the rules gets shafted". Were these honest and true reflections of Jamaica that we want to change?

But, you know, I am beginning to believe that, perhaps, this is part of the human condition. I forgot who said it but the saying goes something like this: "Check where one's bread is buttered, the heart certainly follows." So, can you imagine someone working for Toyota and simultaneously publicly admitting the company neglected to investigate issues of software controlling acceleration and breaking? You can't really. The employee who does this is called a whistle-blower.

This is reminiscent of David vs Goliath. Big tobacco in America was called to book by Jeffrey Wigand, one-time research and development boss of Brown & Williamson Tobacco Corp, then the third-largest tobacco company in the US. The corporation knew of the powerfully addictive nature of nicotine and research results confirmed that additives used to improve flavour caused cancer - these were hidden. It virtually buried documents potentially inimical in lawsuits initiated by litigants - sick, dying or dead smokers. A fine movie was made of the episode:
The Insider
, starring Russell Crowe. Wigand insists he was no whistle-blower and not disloyal. He says he was "loyal to a higher order of ethical responsibility".

He simply told the truth, he says, about what he saw, knew and experienced. He lost his wife to divorce and his children too. He was made to question his very sanity as enormously wealthy companies hounded him, persecuted him in their resolve to make him a pauper in an effort to discredit and/or desist. We know the final outcome - a huge legal settlement and bans on smoking in public spaces. Telling inconvenient truths is not easy. FINSAC seemingly falls into a similar category.

Just as in science, if the true results of experimental and other research are hidden, ignored or falsified, products and procedures based on them shall fail, perhaps with horrendous consequences. Our university offers tenure to staff; suggests research, enquiry and publication will not be censured; books will not be banned. US Supreme Court judges are given life tenure. All these things are in place in order to protect those who must seek and speak truth, go with conscience and, as Wigand insists, "be loyal to a higher order of ethical respon-sibility". If we are to truly move beyond half-truths and, yes, propaganda, a commission of enquiry would be fantastic. The one we have, however, is awfully flawed. It appears to be a costly and injudicious effort aimed at creating restricted peepholes into a murky pool that masks so much of Jamaica's 'plunder culture' and 'Port Royal Syndrome'.

Wilberne Persaud has written several columns on FINSAC in the past and had declared that he had served on the board of FINSAC.