Nobody has successfully rebutted any of the arguments put forward by Mrs. Sephlin Lawrence, the Director (CEO) of the Social Security Board (SSB) in her memos of 13th and 23rd July, 2011, to SSB Chairman, Mr. Halva Hendrickson, and in which she mentioned some big mistakes that had taken place at the Beacon Heights Development.
All that we’re getting are cavalier responses Like “SSB has lots of money” and “the Beacon Heights Project will be profitable”.
They remind me of the Prime Minister’s now notorious comments such as “national debt, me arse”, and “Yes, our debt is high, but we’re land rich so we have nothing to worry about”.
Big mistakes.
Do you see where we are today?
Let’s deal with the first big mistake. Yes, SSB has lots of money, but the last actuarial review to 31st December 2008 said that:
- “investments continue to be poorly diversified with asset allocations well outside the target ranges established in the Fund Investment Policy”;
- “poor diversification and extensive use of short-term deposits to support long-term liabilities makes the overall Fund high risk”;
- “if the current 11% contribution rate remains unchanged, total expenditure will exceed contributions for the first time in 2016 and current reserves together with future contributions will be sufficient to meet future expenditure risks until 2043”; and
- “during this period (that is, the three-year period ending 31st December 2008) the average yield on investments was 6.5%. With inflation averaging 6.2%, however, the average real rate of return was only 0.3%”.
So while SSB has money, that money can and will evaporate if SSB doesn’t invest your money more wisely and if it doesn’t act carefully. To make matters worse, SSB may be forced to consider raising contribution rates, a proposition which would be tough enough in ordinary times, and far tougher in times like now and going forward over the next 2-5 years.
Then, the situation has to be viewed in the context of the massive national debt and the fact that the Government, SSB and the National Bank, our three most vital national institutions, are tied up in a relationship which, largely due to the high Government debt, requires great responsibility, watchfulness and prudence, not cavalier attitudes and comments.
Meanwhile, the actuarial review of SSB for the three-year period ending 31st December 2011 may well indicate a reduction in contributions for the years 2009, 2010 and 2011 as a result of economic contraction and resulting job losses. It may also reveal a continuing low net return on SSB’s investments because of inflation rates which may be even higher for the period 2008-2011 than they were for the period 2005-2008.
Secondly, the fact that the Beacon Heights Project is likely to be profitable still begs the question as to how much more profitable it could be if SSB had exercised, and if it does in the future exercise, better judgment.
So you shouldn’t be shocked to learn that since she sent the two memos to Mr. Hendrickson there has been an effort to marginalize, discredit and even trivialize her?
Persons with high connections (and some close to the Beacon Heights affair) are blaming her (even without empirical evidence) for leaking the memos, and referring to her in disrespectful, sexist and patronizing terms. One of them reportedly said that, being a female, she was merely venting her emotions, a comment which should offend not only the several females on the Board, but also all females, and all citizens and residents.
Big mistake.
Do you believe that they also might have sought to tell Minister Sam Condor, directly or indirectly: (i) that the contract with CONTEC is okay; (ii) that CONTEC is financially and otherwise stable; (iii) that he (the Minister) has a responsibility to protect CONTEC’s reputation and its ability to complete the contract in an efficient, timely and cost-effective manner; (iv) that if SSB terminated the contract, CONTEC could initiate legal action against SSB, at great cost to SSB; and (v) that he should make a public statement asserting his confidence in the Board, in CONTEC, and in the Project? I do.
These persons seem to care more about preserving the hegemonic trough from which they self-servingly feed than about the Social Security Minister’s legal and sacred responsibility of transparency and accountability to the people of this country, or about the state of the Fund.
Indeed, their agenda includes further marginalizing and embarrassing the Minister himself (following their victory over him in the National Security-Permanent Secretary- “dark and depraved mind” mini soap opera two months ago) by probably asking him to say certain things (see two paragraphs above) in his Beacon Heights address and having him pre-record the address for later broadcast.
He should’ve given a live broadcast on any station that would have accepted him. And he should’ve said:
“Fellow Citizens and Residents, I am not accusing or condemning anybody, but in order to make sure that you are fully informed, and your interests best preserved, I’m ordering an immediate, independent investigation. The work on the houses can be continued by the subcontractors. And sales can continue, although the exclusive arrangement with one realtor to sell the 191 houses will be ended, because it is, in my considered opinion, contrary to the public interest. In 4-8 weeks, we’ll have a report. This report will include, not only Beacon Heights, but all other investments of SSB, in full detail (including the times when the SSB investments were made), for example, lands, the $15 million plus in CLICO, BAICO that we have not recovered yet, company shares bought, Treasury Bills, deposits with financial institutions, loans, mortgages, and so on. In addition, we’ll look at the advice in successive actuarial reports about the inadequate diversification of SSB’s investments. Then we’ll see where we go. And the findings of the independent investigation will be shared with you, the public”.
That statement, followed by action, would’ve saved the day for the Minister and for us. And some other big mistakes would’ve been revealed in the process.
But he didn’t do that. Instead, he pre-recorded his statement, it was aired on the night of Friday, 4th November, 2011, and he said exactly what the hegemonists who seek his downfall wanted him to say.
Big mistake.
He’s my dear friend. And in the spirit of friendship, I say that he has been one of the last beacons (no pun intended) of hope among the leaders of this country. The people of this country need him to be strong for them, but he isn’t showing them that strength. Meanwhile, the hegemony lives on, arrogant, conflicted, compromised, unconscionable, twisted and perverse as ever.
Sam has to decide whether, through acquiescence, he’s on the side of the hegemony, or, through action, on the side of the people.
Meanwhile, I’m now hearing that despite the concerns, the anxieties and the anger being voiced by people in relation to Beacon Heights and their money, SSB is now considering buying 3 acres of land from CONTEC at Potato Bay for $10 million.
That’s $3.3 million per acre, or $75.00 (about US$28.00) per square foot.
A load of money. Even for developed land, and especially in this tough market.
And if the land in question isn’t developed, or not fully developed, then up goes the costs to SSB if it wants to develop it. Plus, selling it, even at cost, worse so at US$30, US$35 or more dollars per square foot, will be a difficult, if not impossible, proposition for some time to come.
So why is SSB considering buying it? That’s what I asked someone. And her answer floored me. She said:”They want to help out CONTEC”, explaining that the $10 million would go a long way in helping out CONTEC pay off its debts and giving itself a better chance of completing the Beacon Heights contract.
Of course, this exposes the disingenuousness of those who seek to downplay the problems at Beacon Heights, including contractor-related problems. And much as I share the sentiment of the Board with regard to wanting CONTEC to survive and do well, sentimentality isn’t a criterion for investing SSB (our) money. And SSB buying the land provides absolutely no assurance of smooth sailing henceforth for CONTEC, or otherwise.
Further, SSB needs to concern itself more with what’s best for it, and for our money, rather than obsessing itself with a particular contractor, especially given the problems on the record to date.
Then, as if that’s not bad enough, I’m also hearing that if SSB doesn’t buy the 3 acres at Potato Bay, then maybe National Bank, which also has a lot of money, can be asked to do so.
For what? To “help out”? If the investment isn’t prudent for SSB, then how can it be prudent for the Bank?
Our institutions are being manipulated and misguided in the cause of private interests, and that is a big mistake. And the guardians of the public interest are betraying that public interest. That too is a mistake.
Poor people are already catching their tails to get land, and those who do have are experiencing great difficulty making their payments. In addition, nearly 5,000 acres of Government lands are tied up by National Bank. So the “land rich” talk is a mistake.
And now the problems with Beacon Heights and SSB investments.
Land and Social Security are the two pillars of survival and hope for the people of this country. The two pillars of the people’s patrimony.
Who is guarding the guard? Nobody, it seems.
If Sam doesn’t make his presence felt in standing for the public interest, then he too will have made a big, big mistake. People are still prepared to work with him. But not for much longer.
I’m also calling on Dr. Timothy Harris to take a principled and assertive stand. He too is a beacon (again, no pun intended) of hope, but like Sam, his window of opportunity is short and closing.
The people of this country are feeling exposed, unprotected, disrespected and abused. And that, for somebody, will prove to be a big mistake.
