At the centre of the currently brewing storms on the local political front is an accusation leveled by Dr. Godwin Friday in his capacity of Opposition Leader in the House of Parliament. This accusation was later echoed by Jomo Sanga Thomas in his near 20 years old weekly newspaper column dubbed “Explosive Outtakes from Budget Debate.”

Dr. Friday is also President of the New Democratic Party and was at the time delivering his response to the 2020 Budget Debates. Since then and particularly following Thomas’ publication, the Opposition Leader convened a media briefing where he detailed the basis of his accusations.

Since then and particularly following Thomas’ publication, the Opposition Leader convened a media briefing where he detailed the basis of his accusations.

At the crux of Dr. Friday’s allegations is “the government’s illegal use of the overdraft” facility that is provided for by Parliament. As he presented his case, Dr. Friday explained, “the use of overdraft “borrowing” is allowed by law. Each year as part of the Budget exercise, at the end of the debate and approval of the Estimates, the Minister of Finance moves a Resolution to seek parliament’s approval to “borrow” money for the Government by way of fluctuating overdraft to meet the Government’s current financial needs.”

As he presented his case, Dr. Friday explained, “the use of overdraft “borrowing” is allowed by law. Each year as part of the Budget exercise, at the end of the debate and approval of the Estimates, the Minister of Finance moves a Resolution to seek parliament’s approval to “borrow” money for the Government by way of fluctuating overdraft to meet the Government’s current financial needs.”

Friday fingered the government for its “unlawful” practice of exceeding the ($50 million) overdraft limit set by resolution of Parliament; for not paying down the overdraft by year-end as the law requires and for “converting the overdraft to ongoing loans, called Accountant General Loan, without prior authorization from

Parliament to take those loans, and hence making them part of the stock of public debt!”

The ‘Explosive Outtakes from Budget Debate’ column was published, locally, by several online and print media outlets and it served to amplify Dr. Friday’s allegations. It read, in parts, “the biggest story of the 2020 budgetary debate went virtually unnoticed. Every citizen “should be outraged, angry and demand correction, punishment even, but alas only a few persons caught the importance of the revelations. Not many appear bothered…

The biggest story was that the government had routinely violated statutory law and the constitution by not adhering to the legal demands relating to overdraft limits. The legal limits set for government overdraft currently stands at $50 millions. Government gets this authority according to the Financial Administration Act. However, over the last decade the government borrowed way above the $50 million limit. In 2014, the government borrowed as much as $83 million.

“Of critical importance is that whenever the government exceeded its overdraft limits, it never seeks parliament’s approval for the excess borrowing. But that was not all. The government compounded its illegal, unconstitutional actions by engaging in another illegality. It created an Accountant General Loan at the Bank of St Vincent and the Grenadines, and hid the entire transaction from the parliament and by extension the people of St Vincent and the Grenadines.

“The overdraft is a facility intended to tide the government over as the national demands require. But this is to be short term, no more than 12 months. However, when the overdraft is not paid and the balance is turned into a loan at one of the commercial banks, the government simply and routinely exceeds its budgetary and legal limits and creates even greater public debt problems for the country. Fundamentally, these acts are in clear violation of the Finance Administration Act and by extension our nation’s constitution.”

Thomas, who also is the current Speaker of the House of Assembly, recorded his reaction when he first heard the allegations. “When this explosive charge was leveled against the government by Opposition Leader Dr. Godwin Friday in his response to the budgetary proposal, one naturally sat in a state of surprise and wonderment. The hope was for PM Gonsalves and or our Finance Minister Camilo to forcefully refute these statements by the opposition. But alas there was no denial.”

Since his article, Jomo has again come in for some criticisms from the Unity Labour Party’s machinery.

Finance Minister Camillo Gonsalves, in an exclusive ANN interview earlier this week, remarked “the Honorable Speaker of the House in particular being very familiar with the rules of the House, being very familiar with the resolutions and the legislations that we pass in the House should be aware that at least some of the allegations by the Honorable Leader of the Opposition are untrue. And I think that on reflection he will probably acknowledge that.”

Earlier this week Unity Labor Party General Secretary Julian Francis, also Minister of Transport & Works, quoted excerpts from Thomas’ piece while providing intermittent commentary on his Party owned radio station. At one point he said, “ ‘It created an Accountant General Loan at the Bank of Saint Vincent and the Grenadines and hid the entire transaction from the Parliament and by extension the people of St Vincent & the Grenadines.’ It is in the Estimates, it’s not hidden! I mean how could this man who is supposed to be so meticulous, so correct at all times, make these damning statements? The people will be the judge.”

Unperturbed, Thomas on Friday, maintained support for his position as articulated in his column when he appeared live on WE FM with Donnie Collins’ Manifesto 2020 morning radio show. When prompted Thomas responded, “Certain allegations were made by the Leader of the Opposition and I sat there and I expected to hear a response from PM Gonsalves who is a veteran in this thing. He had four hours to talk and he didn’t say anything.

When prompted Thomas responded, “Certain allegations were made by the Leader of the Opposition and I sat there and I expected to hear a response from PM Gonsalves who is a veteran in this thing. He had four hours to talk and he didn’t say anything.

“I expected to hear a response from the Honorable Minster of Finance as it relates to the allegations, he said nothing. So in my mind I took it to mean that they were letting this – see if this could fly under the radar. So I said the biggest outtake for me, from the budget was the allegation made by the Opposition Leader. And I also said that if what the Opposition Leader was saying is true, it meant that the government was engaged in illegality.

“I didn’t stop there. I went to the law. I went to the Financial Administration Act and I said ‘this is what the Act says,’ the Act says you can borrow on an overdraft, it says that the period in which you can do it either by law or by resolution, the period of the overdraft is twelve months, yeah?

“That’s what the Act says! Now I have heard Minister Francis, when it comes as a whip – I don’t know if people understand what a political whip is – but I don’t think there has ever been a political whip in St. Vincent. The man knows how to respond – but he’s off! First thing, he confuses and conflates an overdraft that Donnie Collins or Julian Francis may have with an overdraft that the government would have. That’s the first thing that he did wrong. That is not the same thing because a bank may decide to let Donnie Collins or Jomo Thomas run over on their overdrafts because they may say ‘ok, Jomo may come in or Donnie may come in with his salary next week and he may cover that.’

“The overdraft as is reflected in Sections 44 and 45 of the Financial Administration Act is not a relationship between the bank and the government fundamentally. It is a relationship between the government and the law! The law says that you have 12 months within which to do the overdraft. The law says it’s a fluctuating overdraft and therefore the overdraft is not a loan. The overdraft cannot be willy nilly be turned into a loan because the law does not say that! ….

Let me just say as well that I have spoken to financial people, people with CPA. All of them to a man – and I’ve spoken to people in St. Vincent and people across the region – all of them to a man says that in strict accounting financial terms, an overdraft is not a loan. It’s not a loan.”

The law says it’s a fluctuating overdraft and therefore the overdraft is not a loan. The overdraft cannot be willy nilly be turned into a loan because the law does not say that! …. Let me just say as well that I have spoken to financial people, people with CPA. All of them to a man – and I’ve spoken to people in St. Vincent and people across the region – all of them to a man says that in strict accounting financial terms, an overdraft is not a loan. It’s not a loan.”

Thomas, a practicing lawyer himself, reassured the listening public that he was not talking about the issue because he loved the sound of his voice nor was it because he wanted to “beat up on the ULP.” Rather, as he put it, “I am a Vincentian and I am concerned about St. Vincent.”

He further rubbished claims published by Prime Minister Gonsalves, the Ministry of Finance and Minister Julian Francis that “every single government would have done this” by pointing to his track record. “This is why on matters of judicial review everytime I sue the government I beat them. Because they say ‘oh, everybody has done it’…. Guess what, the fact that everybody was doing it does not make it right! Does not means that it confirms with the law.”

“This is why on matters of judicial review everytime I sue the government I beat them. Because they say ‘oh, everybody has done it’…. Guess what, the fact that everybody was doing it does not make it right! Does not means that it confirms with the law.”

House Speaker Thomas went even further to painstakingly clarify his point, “if you want to turn an overdraft into a loan, you have to get the authority to do it. So the relationship that you have with the bank which says ‘oh I could just talk to the bank and turn it into a loan’ – that is not what the law says.”

The long time activist again reiterated that his stance was not politically motivated nor was it agitated because of any vendettas, real or imagined. “I just want to – like I said in the column – talk about transparency, talk about best practices because I’m telling you. You may recall back in 2001 it was because of the best practice projections of the ULP that the British who had refused to give loan forgiveness to the outgoing Party readily gave, I think, about $15 million loan forgiveness to this government.”

Thomas then tabled several of his academic qualifications in answer to critics whom he said loved to claim, “he ain’t know nothing bout economics, he ain’t know nothing bout finance.” To them he replied, “I have a masters degree in political economy, a masters degree! I did the same regression analysis like everybody else. In law school I did a number of finance and banking classes, so I’m not just talking off of the top of my head. Because people see me walking around in a short pants and a sandal and dashiki sometimes or a tshirt in all of my simplicity they think well ‘this man don’t know nothing.’ Or they think that I’m just a blowhard. But I don’t just talk like that. I don’t want to beat nobody – I don’t have no political axe to grind.”

As to Transport and Works boss Julian Francis’ assertion that the House Speaker was “completely overwhelmed,” Thomas replied, “I wasn’t overwhelmed. I heard information and I took the information for what it was and I expected to hear a response. I don’t have no side!” [sic]

And to the line of reasoning that criticizes the numerical accuracy in Dr. Friday’s allegations Jomo Thomas reminds us “the numbers are not what is fundamental. What is fundamental is that each year you have a limit, and if you ever go over that limit you are breaking the law. In the same way that PM admitted during the October 2019 Debate that when the government went over the $25 million limit on the special warrants it was not ‘a hanging offence.’

What is fundamental is that each year you have a limit, and if you ever go over that limit you are breaking the law. In the same way that PM admitted during the October 2019 Debate that when the government went over the $25 million limit on the special warrants it was not ‘a hanging offence.’

But whether it’s a hanging offence or it’s a reprimand and discharge the fact of the matter is when you go over the special warrants limit you’re breaking the law! When you go over the limit as is authorized in the resolution, you are breaking the law.”
JP.Schwmon.Vincy@Gmail.Com