Editorial

Pay it back

In the heyday of the PUP under Prime Minister Said Musa, and his Finance Minister Mr. Ralph Fonseca, Dr. Victor Lizarraga was an inside player.

He received several contracts to build government houses, and when he expressed his desire to build a private hospital, Prime Minister Musa arranged for the Government of Belize to guarantee a loan from the Belize Bank.

That loan money helped to build Universal Health Services, now known as the Belize HealthCare Partners. But Universal racked up huge debts, and Dr. Lizarraga was forced to sell.

The people who bought Universal bought the assets, but not the debts. The money owed to the Belize Bank began to grow with each month of compounded interest until the debt had become quite large.
The Musa Government did not bother to protect its investment in Universal, even though it knew it was responsible for paying back the loan in case of default.

It was wrong for Prime Minister Musa to provide a government-backed guarantee for a private business loan. Some would say it amounted to malfeasance. His further failure to protect the government from future loss was unbelievably reckless.

Now Mr. Musa wants the Barrow government to pay off this debt which has now grown from $30 million to $90 million. He told the media after learning of the CCJ’s ruling that he felt vindicated.
Vindicated! Why vindicated? Because the people of Belize must now pay for his adventurism with public funds?

The Caribbean Court of Justice has ruled that the Government of Belize must pay. But the ruling is no vindication for Mr. Musa’s actions. The court ruled that the Belize Bank at the time of the loan had a reasonable expectation of getting back its money from this loan. That is why the Government of Belize has been required to pay the debt.

There is a principle in law that says that a person or entity should not profit from an illegal act, and a government guarantee for a private project is regarded by many as grossly illegal. But this was not something that the CCJ considered as important or relevant.
Since the money now has to be paid out of the country’s Consolidated Revenue Fund, the National Assembly and the Senate are now required to give their approval.

Prime Minister Dean Barrow is now expected to summon a meeting of Parliament to authorize the payment. Once he has done that, he will have discharged his duty under the court order.
But the members of the House and Senate are not under any obligation to do the CCJ’s bidding. Parliament is a sovereign body which can say “yea” or “nay” to any proposal.

Parliament may decide that this is a PUP matter, best handled by the PUP if and when it comes to office. The debt will continue to grow as it has grown, and the Belize Bank will have to wait, as it has waited, if Parliament says “No”.

This is really the best position! Let Mr. Musa and his colleagues take care of the problem that he created. The Belize Bank, if it wants to be paid, should come to an “accomodation agreement” with Belize about those crippling interest charge

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