NNP Takes $20 Million from NIS

Main headquarters of the NIS - coming to the financial rescue of the NNP Government

Main headquarters of the NIS – coming to the financial rescue of the NNP Government

After criticising the former Tillman Thomas administration for selling state properties to the National Insurance Scheme (NIS) to pay salaries a year ago, the scheme has now come to the rescue of the nine month old Keith Mitchell-led administration.

The Board of Directors of the island’s lone Social Security institution met on Monday to approve a request made by government to purchase approximately EC$20 million dollars worth of Treasury Bills to make payments to public sector employees.

The funds will be primarily used by government to pay salaries for the period November and December, as well as outstanding back pay to public officers.

During Tuesday’s weekly post-Cabinet briefing, Minister for Communications and Works, Gregory Bowen confirmed the reports that were widespread in the country that the cash-strapped administration had turned to NIS for a financial bailout.

Bowen told reporters that the Ministry of Finance under the guidance of Prime Minister, Dr. Keith Mitchell, had approached the NIS Board of Directors on the purchase of government Treasury Bills.

“The Ministry of Finance has approached the NIS Board and it’s primarily to pay the back-pay really and … to have a reserve, because you know they (Ministry of Finance) have two salaries payments in December and it’s really to ensure that you know you have that, because it will be one issue if you pay the back pay and then you owe or you short change people on their salaries…”, he said.

“…Remember back pay is over $40 million plus to be paid over three years. We have already paid a sum for this year and we have to pay this sum at Christmas and so we are simply ensuring that the cash is there to do this,” he added.

Minister Bowen was asked why did the NNP regime go to the NIS for this money in light of claims made by Prime Minister Mitchell in past years that he had never borrowed funds from the scheme.

He said: “Well if you have to sell Treasury Bills …and you have to pay interest rates, the best person that you may give the opportunity to is NIS.”

When asked the difference between the NDC and the NNP-led governments going to the NIS for monies to pay public officers, the senior government minister said: “No, the NDC never was faced with paying of back-pay ($40 million), an increase in the wage bill from $15 to $28 and $30… You must remember we have back pay as well. If you did not have the back pay, and we must now give the unions, some form of credit for facilitating this, they could have asked for the $40 plus $50 million now.

“We had an agreement that we’re going to pay it overtime. We are saying we should not default on this so we should have cash readily available to supplement what we’ll be collecting from taxpayers so that we pay them and we pay them on time.

“The NIS has finances to invest and they have to earn something for their workers, so we could have left them out and we could have gone to the OECS Exchange Market and we could have gotten the same financing,” Bowen responded.

According to Bowen, the nine-month old Mitchell government felt it was better to do the transaction with NIS and allow them to get the interest payments rather than do it on the regional market.

According to a well-placed source, the Board of Directors received notice late last week that there was to be a meeting of the members on Monday to discus a one-item agenda, namely a request from Government for the scheme to buy $20 million worth of Treasury Bills from the Ministry of Finance.

Over the years, Dr. Mitchell often boasted that in his earlier 13 year tenure as Prime Minister, he never once borrowed any funds from NIS but instead was making payments to the scheme for monies borrowed by previous governments.

THE NEW TODAY is also trying to ascertain reports that the Mitchell government also borrowed EC$5 million from Petrocaribe, the Venezuelan oil agreement, to help finance its operations in the upcoming days.




When THE NEW TODAY spoke with a senior staffer at the Ministry of Finance last week, he admitted that the salaries for civil servants could be described as “touch and go”.

He dropped hints that the Mitchell government was experiencing a severe shortfall in revenue and was virtually forced to look at raising funds on the regional security market, as well as utilising its overdraft facilities at the local commercial banks.

The source also expressed concerns over the manner in which the trade union representative on the NIS board handled the request made by NNP regime to secure the $EC20 million in Treasury Bills.

He recalled that the representative of the Trade Union Council (TUC), Bert Patterson of the Technical & Allied Workers Union (TAWU) was strongly opposed to a request made by the former National Democratic Congress (NDC) government of Tillman Thomas to borrow monies from NIS to pay the salaries of civil servants in November 2012.

He spoke of Patterson leading the charge for NDC to sell some of the assets of the State in order to get the green light from NIS to borrow monies.

“I remember Bert and them saying that they did not want any worthless piece of paper from government in the form of bonds. They were asking the government for something more concrete like assets. That is the reason why the government sold some of the buildings and lands to NIS in order to get the money from NIS to pay the salaries of the workers”, he said.

The official pointed out that Patterson was instrumental in getting the TUC to hold a meeting of the management council to firm up its position that the Congress government had to exchange state assets in order to get funds from NIS.

“This is what Bert did the last time. Now today, he is behaving differently with the NNP. Ask him if he called for the TUC to hold a management meeting to discuss the request of the NNP government. I am telling you that there was no meeting of the TUC management to come up with a position on this one.

“He (Bert) met on the side with Madonna Harford (President of TUC) and informed her that government contacted the NIS Board and wanted them to meet to give them the OK for the $20 million. That is what he did. Bert and them playing games.

Paterson is an executive member of TAWU, headed by President-General Chester Humphrey, an expelled member of Congress.

Humphrey has vowed to make sure that NDC with Thomas or former Finance Minister Nazim Burke as the helm never returns to power on the island.

When THE NEW TODAY contacted Patterson for comment on the issue, he denied the allegations made against him and branded them as “totally incorrect”.

He said the person who made the assertion either “did not know the facts or purposely not come forward with the facts”.

“I will not go into details as a Director (of NIS) but that is all I am prepared to say”, he added.

 

 

 

 

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