Take snout out of NHT trough

Gordon
Robinson, Contributor

I understand Government is attempting to justify its rape of the foremost institution creating real benefits for the 'most vulnerable', namely, the National Housing Trust, by relying on the provisions of the Public Bodies Management and Accountability Act (PBMAA).

Before looking at the detailed provisions, I ask readers to pause for a moment; step away from the trees and trees of obfuscation being peddled; and take a look at the forest which is the massive incongruity created by the use of a statute expressly passed as: "An act to make additional provisions for the management and accountability of public bodies and for connected purposes" to validate a breach of the sacred trust envisioned by the National Housing Trust Act (NHTA). Only politics could make such an oxymoron appear real.

Section 4 of the NHTA sets out the functions of the Trust as follows:

"(a) To add to and improve the existing supply of housing by -

(i) Promoting housing projects to such extent as may from time to time be approved by the minister;

(ii) Making available to such contributors as may be prescribed, in such manner and on such terms and conditions as may be prescribed, loans to assist in the purchase, building, maintenance, repair or improvement of houses;

(iii) Encouraging and stimulating improved methods of production of houses;

(b) To enhance the usefulness of the funds of the trust by promoting greater efficiency in the housing sector."

In the beginning, the trust had no function that didn't relate to the improvement of the existing housing stock or greater housing efficiency. In 2005, when a similarly disgusting rape of the organisation was contemplated, the act was amended to add the further function:

"(lA) In addition to the functions specified in subsection (i), the Trust may provide financing up to a maximum amount in the aggregate of $5 billion for projects for the development of education."

POWER LIMIT

Outside of housing, its power is limited to an aggregate of $5 billion and only for education. It's immediately clear that the NHT has no authority whatsoever to transfer or use any of the Trust Funds for any other purpose, least of all "fiscal consolidation". In my opinion, any such use of a dollar of Trust funds is an egregious breach of Trust for which NHT contributors can hold the directors personally liable.

I'll go to the PBMAA in a short time, but the provisions of that and any other statute are completely irrelevant to the use of Trust funds by the members of the Trust. No other statute, except by express provision, can override the provisions of the NHTA. The PBMAA does not purport to do so. The purpose of the PBMAA is to ensure that public bodies, like the NHT, are held to account and TO MAKE CERTAIN THEY DON'T USE THEIR FUNDS FOR EXTRANEOUS PURPOSES.

A quick look at the title of the parts of that act makes this clear beyond peradventure. Part II is titled 'Corporate Governance and Accountability'. Part III's title is 'Duty of Care, Disclosure, etc, of Directors and Officers'. Parts I (Interpretation) and Part IV (General) do nothing to derogate from these pellucid purposes.

A quick run-through will establish that this statute had no intention of being used by finance ministers to dip into the surpluses or otherwise of public bodies. The PBMAA, as initially passed, mandated public bodies to file audited reports for tabling in Parliament (Section 3); restricted public bodies' ability to hold shares (s.4); restricted borrowing powers (s.5); forced public bodies to be efficient, goal oriented, etc (s.6); work to a pre-prepared corporate plan (s.7); and establish an internal audit committee (ss.8, 9).

The financial secretary was empowered to create a
code of conduct for auditors of public bodies (s.10) who may consult the
auditor general (s.11). The minister may order a special audit (s.12)
or himself prescribe the criteria for appointment of auditors (s.13) who
have wide-ranging powers of enquiry and audit (s.14-16). Every director
of a public body is mandated to act honestly (s.17), including
avoidance of conflicts (ss. 17, 18), but he may rely on the statement of
any independent professional without fear (s.19) and must follow
finance ministry guidelines regarding emoluments
(s.20).

General provisions in Part IV include biannual
reports to go to the minister and court actions, where
necessary.

Where in all that would one fit a
ministerial right to demand a "contribution" to "fiscal consolidation"
from any public body? It's
nonsense.

NHT Chairman Easton
Douglas is quoted as saying, "Under Section 4(5) of the PBMAA, and in
accordance with the Public Bodies Financial Distribution Regulations
2012, the minister of finance has the power to legally require the NHT
to make a financial contribution ... ." But Section 4(5), which was
introduced by way of a 2011 Amendment Act, changed the marginal note to
Section 4 from "acquisition of shares by public bodies", to
"shareholdings and distributions", and provides as
follows:

"(5) Nothwithstanding subsections
(3) and (4), a public body may be requested by the financial secretary
to pay a special distribution into the Consolidated Fund in accordance
with regulations made under Section
24."

OVERRIDE NOT
POSSIBLE

Now that it's clearly understood the PBMAA
can't and doesn't attempt to override any provision of the NHTA (or any
other statute), it's clear why this desperate attempt to legalise
central government raids on the assets of public bodies was worded the
way it is. Public bodies "may be requested" by the financial secretary
to "pay a special distribution". Because every public body is different;
operates under different statutory regimes; and has autonomy under
individual statutes, such requests can't ever be
compulsory.

Directors, not shareholders, run every
company. A shareholder can't demand anything from directors more so when
those directors are trustees of a sacred trust to use funds in their
possession for the benefit of the most vulnerable among
us.

Nothing in the PBMAA, as amended, alters the
functions, powers or duties of the NHT board. If the requested
"distribution" doesn't improve housing or education (to a maximum of $5
billion), it must be refused. If the request isn't made in furtherance
of the PBMAA's purpose (to improve public bodies' accountability), the
request itself would be illegal.

It matters not what
the much-ballyhooed Public Bodies Financial Distribution Regulations
2012 says. Those regulations were passed pursuant to Section 24, which
gives the minister power to make regulations generally, but these must
be "for giving effect to the provisions and purposes of this act". Any
regulation that goes beyond the purpose of the act, which is to hold
public bodies accountable, would be ultra vires the
act itself and void.

DON'T BOW!

The
NHT directors, trustees all, should be very careful how they genuflect
at the altar of politics if it entails breaching their fiduciary duties
to all NHT contributors by acceding to this illegal request. Don't be
frightened or bullied by political leaders' shrill threats to the effect
that, if we don't find it there, we'll have to find it somewhere else.
Find what? For what purpose? To obey IMF dictates that external
creditors must be paid in full at all cost, including forcing local
bondholders to accept an extortionate JDX2 (imposed twice in three
years) with no guarantee there won't be a third. Why doesn't the IMF
suggest that external creditors take a 25 per cent
haircut?

I beseech the trustees of the NHT to advise
Government that if they MUST follow IMF dictates without question or
pause, Government should find the funds somewhere else. If Government
continues to insist, every single one should resign in
protest.

It's important to note that, in coming to my
opinion, I don't have any need to resort to esoteric constitutional
arguments about confiscation of property or misdirection of NHT
contributions (which are refundable in full and, accordingly, not taxes)
into the Consolidated Fund, although these arguments are
attractive.

But why go there when it's obvious, on the
face of the relevant legislation, that any use of NHT trust funds other
than for the purposes set out in the NHTA would be absolutely,
incontrovertibly and egregiously unlawful?

But, let us
suppose for a moment that, somehow, all logic and reason flee the land
and Government is permitted, under the PBMAA, to demand a 'contribution'
from 'surplus' towards 'fiscal consolidation'. The IMF dictate that
four years' 'contribution' should be guaranteed as a prior action would
still be illegal since only a swami with an efficient crystal ball could
be certain that future surpluses would be available from which the
alleged 'contribution' could be taken.

If the NHT
trustees bow to these illegal demands, how do we force Government to use
the funds responsibly? What is 'fiscal consolidation'? Can't the
trustees, on behalf of 'most vulnerable', at least insist on being told
the specific planned destination of these funds and ask for a right of
audit to ensure that the funds do, indeed, go where they were
promised?

AT ODDS WITH ATKINSON

In
this regard, I find myself reluctantly and respectfully disagreeing with
the learned attorney general, a man for whom I have the highest
personal and professional respect.

All I can say about
what I consider to be a hasty analysis by an otherwise brilliant lawyer
is that, sometimes, the complexities of the civil law can catch out
even the most outstanding of criminal-law practitioners, which is where I
understand (perhaps incorrectly) the AG's main practice was
focused.

It gives me no pleasure to conclude that he
has erred and, frankly, I hope I'm proven wrong, but I doubt
it.

This Government seems to have excelled at
squeezing square pegs into round holes. Peter Phillips was sent to
Finance while financiers Peter Bunting went to National Security and
Mark Golding to Justice. Go figure. Now Patrick Atkinson, an exceptional
mind and a perfect candidate for director of public prosecutions, finds
himself in the attorney general's position.

I've said
it before and I'll say it again: We need to find a better way to make
public-service appointments. We don't have so many persons available in
the small talent pool numbering less than three million, to be wasting
genius like Patrick Atkinson where he seems most
unsuited. Peace and love.

Gordon
Robinson is an attorney-at-law. Email feedback to
columns@gleanerjm.com.