Finsac - the real scandal!

Collin Greenland, Contributor

APPARENTLY 'TIS the season for inquiries, so we are well into the FINSAC probe with the accompanying 'noises' reaching deafening decibels in the various attempts to have diverse agendas promoted and/or discredited. Some critics of this FINSAC commission have described the humongous costs as scandalous, especially since these funds could have been better spent on schools, hospitals, roads, and cleaning drains. However, our finance minister, Audley Shaw, in his characteristic pugnacious defence, has countered that the expenditure of $79.9 million budgeted for the inquiry is "value for money", compared to the $140 billion that the financial meltdown cost this land we love. Mr Shaw has stated that this is a small price to pay for the lessons to be learnt.

Interestingly, in all the elaborate recounting of what transpired during those trying FINSAC years, by central characters such as former Finance Minister Omar Davies, former FINSAC General Manager Anthony Hylton, et al, scant, if any, reference has been made to the fees paid to forensic accountants to unravel the financial complexities during that troubled period. The real scandal, in this writer's humble opinion, is that almost half a billion dollars of fees were paid to these specialist investigators, but their findings and corresponding recommendations are not made available to us taxpayers. Part of the tragedy is that these high fees paid to foreign experts are not even being discussed by the plethora of analysts and commentators that has joined the debate.

Spend on foreign experts

Research at FINSAC, conducted by this writer, revealed that the expenditure on foreign experts was nearer to half a billion dollars' worth of fees, and were carried out by Canadian forensic accountants from Ernst & Young and Lindquist, Avery, Krol, broken down as follows (See table).

Another $37,538,289.15 was allegedly paid to Lindquist, Avery, Krol during an undetermined period, which brought the total fees paid to that forensic accountant to $199,058,643.29. Adding this to the Ernst & Young total of $328,340,998.33, the resulting total is a whopping $427,399,641.62. Subsequent visits to the FINSAC office, while they were on Knutsford Boulevard, failed to secure additional information, and my more recent visit to their Shallimar location bore no additional fruit.

The good thing about the current FINSAC commission, however, is that unlike those huge sums previously paid to Ernst & Young and Lindquist, Avery, Krol, all of the current 80 million will be paid to Jamaicans. According to an excellent investigative report done by Gleaner Staff Reporter Tyrone Reid, "official" documents revealed that the FINSAC commission's chairman was budgeted to be paid $15.12 million for 70 "man days" work. His other two commissioners are budgeted to receive about $7.58 million each, noted attorney RNA Henriques $15.12 million, another attorney $11.7 million, and the secretary of the Commission $8.1 million for "75 man days". Not to be ignored also is the $5 million budgeted for The Jamaica Pegasus hotel under the heading "accommodation" for 60 "man days".

Transparency and accountability for these lucrative fees earned by Jamaican professionals/organisation are great, but why not the same level of probity on the much larger fees paid to our foreign counterpart. This writer is by no means xenophobic, but the results of work done by these expensive foreign experts, should be unearthed, the files dusted off, and the findings/recommendations assessed to ascertain their value. The real scandal, therefore, is we spent nearly half a billion to unravel complexities brought about by FINSAC, but ignored the results of this work and proceeded to incur another $80 million. What a scandalous web we weave!

Collin Greenland is a forensic accountant. Comments to: columns@gleanerjm.com or cgreeny.collin@gmail.com.

FEES PAID TO FORENSIC AUDITORS BY FINSAC

PERIOD ERNST & YOUNG LINDQUIST, AVERY, KROL

97 / 98 142,672,674.72 36,315,933.45

98 / 99 9,285,825,.09 38,657,831.54

99 / 00 96,963,763.14 34,800,948.79

00 / 01 80,428,735.38 21,465,844.52

01 / 02

02 / 03

03 / 04 31,285,795.9

TOTALS 328,340,998.33 161,520,354.14