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Oct 26, 2006

D.F.C. hearings: managers followed chairman?s orders

Story PictureThe questioning has become increasingly sharp at the public hearings on the Development Finance Corporation as a picture emerges of an institution filled with pliant managers guided by an unseen but powerful hand. News Five’s Janelle Chanona reports.

The D.F.C. commission of inquiry continued today at the Belize Institute of Management with additional testimony from General Manager, Roberto Bautista. This morning, he maintained that even when it came to questionable transactions like writing two checks for thirty million dollars in one day, he was simply following orders.

Roberto Bautista, General Manager, D.F.C.
?I was not in agreement to disburse that second tranche, but I was instructed by my chairman, my boss verbally and in writing to do so. The chairman will have to explain that, he made decision that I assume–I don?t know. As a chairman he made that decision and he would be in a better position to explain.?

Herbert Lord, Commissioner
?But not every decision made by the chairman has to be carried out by the General Manager. There is the case of Adolph Eichman who says I followed orders. Are you telling me that every order that you are given you will follow??

Roberto Bautista
?I?m not saying that.?

Herbert Lord
?Indirectly that is what you are saying.?

Roberto Bautista
?In this particular case what I am saying is that the chairman who instructed me to do so in writing and verbally. And he represents…?

Herbert Lord
?But when you look at the agreement what his instructions were contrary to the very agreement that the Novelo?s signed. Because it sets out what should be accomplished. It sets out what are the phases; it sets out the preconditions for disbursement of the various tranches. The agreement itself sets these things out. And they were not complied with.?

Roberto Bautista
?He was aware of that.?

Merlene Bailey Martinez
?He was aware of that. I am asking why you followed his instructions when it violated the very agreement on which this payment is made.?

Roberto Bautista
?As I said, I followed instructions. He?s my boss. If I didn?t do so I would have been charged with insubordination … you know.?

Merlene Bailey Martinez
?And the country would have been grateful to you Mr. Bautista. When Glenn Godfrey authorized the full final disbursement, how did that affect Glenn Godrey?s law firm in terms of his receipts of legal fees??

Roberto Bautista
?The legal fees, I don?t recall at what point it was disbursed. Whether it was disbursed before this or after. I believe it was done after because if you notice from the disbursement we retained two million dollars for legal fees. So it shows that payment came after disbursement to the Novelo?s project.?

According to the commissioners, they are categorizing such transactions as ?gross irregularities? that must now be investigated as possible criminal wrongdoing. Other instances of irregularities include more than a million dollars to Arnaldo Papi Pena for the construction of prefab buildings in the Corozal Free Zone.

Roberto Bautista
?From what I noticed in the reports, that project was not done. The materials and everything were in the country, he had them in his warehouse, but despite several follow ups, he neva did set it up.?

David Price, Chair, D.F.C. Commission of Inquiry
?You have any idea why that was so??

Roberto Bautista
?I don?t if he changed his mind because we had been following up with him. The last report was that he started and they started stealing some of the materials at the site, which to me wasn?t an acceptable answer you know.?

But while the D.F.C. is now trying to recover those monies through real estate sale, when it comes to collateral for a one point three million dollar loan issued to Bill Lindo for a dredge … it?s all loss.

Roberto Bautista
?It belongs to the D.F.C. because we held a bill of sale. But I don?t think anybody wants to buy it, like I said, it?s more scrap than anything else at the moment from what I gather.?

And when it came to knowledge regarding a fifty million dollar facility from the Belize Bank, the General Manager again claimed ignorance.

Roberto Bautista
?The only thing I can say is that when the payment was made to the Belize Bank for interest, I signed one of the checks, but I did not approve the payment. I was just a signatory to the check to facilitate the payment. That I noted. But that instruction was given to the financial controller to pay because the interest was accruing because of the loan. From what I gathered, it?s a loan that was obtained by D.F.C. for fifty million dollars from the Belize Bank to be able to pay government.?

This afternoon, then financial controller Roy Pandy, agreed with Bautista?s generalized version of the facts. But even though he was the one that booked the transaction, he too was sketchy on the details.

Roy Pandy, Financial Controller, D.F.C.
?Do you see all the signatures of the board there??

David Price
?On this? No I don?t.?

Roy Pandy
?There?s no signatures? On the bottom? Just go to the end of the document please.?

David Price
?There is the signature of the Chairman.?

Roy Pandy
?Go ahead.?

David Price
?Mr. Espejo.?

Roy Pandy
?Only him??

David Price
?There is the signature of a director, whom I believe is Mr. Garcia. There is the signature of a general manager who I believe is Mr. Gabb. No seal is attached. I was reliably informed that thus this does not constitute an agreement.?

Roy Pandy
?Mr. Price I would like to say here that the board members who signed that agreement understood it to be an agreement between the bank and themselves. So this scenario, even though it looks funny, is not necessarily funny because what they were doing were advancing money to the D.F.C. to settle various debts that it had. And it must have been in excess of that fifty million.?

Merlene Bailey Martinez
?Did you see that certificate of deposit Mr. Pandy??

Roy Pandy
?I don?t remember seeing it.?

Merlene Bailey Martinez
?If you are saying that it?s not on the basis of the deposit in the account of the D.F.C., it is not on the basis of you saying or having in your possession the certificate of deposit, what is the basis on which you booked that transaction??

Roy Pandy
?I don?t remember if I had a copy of the deposit. But I am telling you the transaction that we had and government recognized…?

Merlene Bailey Martinez
?You are saying that the proof of that transaction is a certificate of deposit that was issued to the Government of Belize??

Roy Pandy
?Right.?

Merlene Bailey Martinez
?And you are also saying that you never saw that certificate of deposit.?

Roy Pandy
?I?m saying I don?t remember seeing it. The Government recognized having received the deposit for fifty million. In my records, we adjusted what was owed to the Government of Belize to reflect the fifty million dollar input. Now, at the time, I didn?t think I needed to go any further than that.?

David Price
?Your claim is as much as it can be a claim that this was a legitimate transaction, but the commission of inquiry is not of the view that it was a legitimate transaction.?

Reporting for News Five, I am Janelle Chanona.

The public hearings continue on Tuesday.

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