Sexing Up Parliament.

Barbados is drifting toward the bizarre. One MP, the personable Patrick Todd (Minister of State: Education & Human Resource Development; pictured), has apparently suggested that fellow MPs declare their sexual orientation (see Nation News). Now, he has said that he is not homophobic--interesting that he does not need to say that he is not hetero-phobic. But that does not mean the country is not. So, let an MP put his or her sexual head over the parapet and let's see how well they are received. It's not such a bad idea if you believe that Parliamentarians are now ready to be open about their assets as well as their 'liabilities'. You want to know what a fellow legislator likes between the sheets, or in the kitchen, or in the barnyard, or on the small screen, but you're balking at finding out how they obtained the assets and generate the they have? Come on, now. You're pulling one of my two legs.

I do not listen to the Bajan Parliament on the radio much, but it would be funny to hear the Speaker referring to the Member for St. Peter or St. John (the parishes just happen to be the seats of the previous and current prime ministers, and have no relationship to private parts), with the rider ('homosexual', or 'heterosexual', or 'uncertain sexual preference') while the budget debate is going on. Hansard will need to be read very carefully to ascertain how and why voting was the way it was. Did the gays gangs together to overturn the straights? Is a gay MPs constituency always at the bottom of the list when funds are being allocated? My curiosity is now pricked.

From now onI think Minister Todd should go by the nickname "Sweeney", in honour of the famous demon (butchering) barber of Fleet Street. I can imagine plenty a Bajan, who on hearing that his or her MP is not as straight as an arrow, would be ready with the cut-throat razor to do a little paring of the margin of the member for wherever. Makes me wince.

Barbados, for all the claims of 'little England", is not a liberal democracy. It could not handle having someone in Parliament like Matthew Parris or Lord (Peter--there you go again) Mandelson, who would be bringing their boyfriends to cocktail parties. Nor could it deal with the openness of US Congressman, Barney Frank, the openly gay representative from Massachusetts. It's not at the rabid end of the scale like Jamaica, where burning and killing is deemed "good for dem". But, I am not sure where toward that end of the scale it lies. So, Minister Todd, I think you are playing too much with your members. Nice idea, but it's time is not yet ripe.

State of The Police.

I'm an unfortunate individual. I spent 30 years living in the UK, and was so unaccustomed to seeing police with guns that I am still fearful when I visit the US, while I live in Barbados, when I visit Jamaica, and see policemen with firearms. I know that police officers are not saints, so I am happier when I feel the stakes are even and they and I are unarmed.

I visited Washigton DC over the past few days and encountered perhaps the most shocking experience I have ever had with a police officer. I was searching for a parking space and saw a police car parked in front of the store I needed to visit. I pulled in front and got out just as the female officer returned to the car. "Excuse me, where could I find parking that would give me easy access to this store?" I asked. "You don't see de sign? Ev'wher' we got signs tellin' you whe' to park. Now move your car an' let me get out." OK, I thought. Bad day? I noted the licence plate of the car and went back to my car. I pulled ahead a few inches and the police car pulled out and made a fast U turn and went on her way. I used to have no fear of asking a police officer for directions. Now, I will be more wary.

I was always dumbfounded to see American policemen acting like louts while on duty: eating food like yobbos, talking as if they were in a crowded market, and behaving just like ordinary people. I was always accustomed to seeing what could be regarded as "better behaviour" by the police. I guess times have changed.

The police and may officials can be a law unto themselves, and that can be very scary.I am not in Barbados so am leery of offering comments on the case I read in the papers that two press workers were arrested while trying to follow a story on policy misconduct (see Nation Newspaper). From the distance of another island, further to the north, I will watch how this story unfurls.

What's In A Name? Plenty.

More and more over the past weeks, I have paid closer attention to the names that people have. I used to think that many people were named by sadistic parents to have monikers that would plague them all their lives. Now, I see that perhaps there's a sinister logic in some names and how lives pan out.

First up, Bernie Madoff (pronounced 'made off'): he is now the man of the mo. with his reported US$ 50 billion bilking of almost everyone who lived.

Next, the man who is now in charge of the US Securities and Exchange Commission, that is responsible (loosely of course) for supervising financial activities in investment, etc, Christopher Cox (pronounced 'cocks'--yes, like chickens, dummy, or the other things that we tell children not to play with if they don't want to go blind). I don't know if Chris was playing with his, but he was played for a sucker, that's evident, though he was not the first.

We have Illlinois Governor, Rod Blagojevich (pronounced 'blag-oh-ja-vich'). On the streets, a blag or to blag is lying to getting something (like into a club or some goodies) through confidence trickery or cheekiness. The man is the name, yo!

We also have George Soros (pronounced 'sore us'). Georgie was famous for breaking the Bank of England when he had more money to play with than the central bank and broke the back of the pound in currency speculation on what is called "Black Wednesday" (September 16, 1992), and forced the pound out of the European Exchange Rate Mechanism. The bank surely got sore. Soros is anything but sore now as one of the world's richest men. The Bank of England? Now trying to stop sterling slide off the cliff again.

I'm stretch a bit with Kenneth Lay, former CEO of Enron, and his co-executive Jeffrey Skilling ('is killing'), who were had up for a range of securities fraud charges. Lay has several meanings, including, to lie, to bet, to press down by force, to calm, to dispose of, to have sexual intercourse;o in some metaphorical or literal senses, our Ken was doing a lot of that. Jeff, clearly was the final nail. Ken and Jeff's lies were surely killing a lot of good people and a business.

These are some of the prominent instances that we know about, and I imagine our news hounds have enough material in their archives to titillate my senses that this is more than a string of coincidences. You know that I don't believe that things happen just by chance.

Needing A Good Kick Up The Backside.

If there is one thing I really cannot tolerate about how things go in this fair isle it's the fact that complaining is a sport where Bajans would have great Olympic prowess but doing is still a work-in-progress. Few people seem to realise that grumbling and groaning alone changes diddly squat.

"Come on, Jonesy! Do you want me to come on and kick it for you?" one of my football coaches used to scream. I get the same feeling when I read about the disasters of the national soccer team. Maybe I should drag my 50-plus year old body out and give them all a good kick up the a***.

As a former footballer, coach, referee, etc.--said it enough times now--I know a bad set up for developing football when I see one. So what is it about the way that things don't get done here that leaves the national team crying the same tears into their glasses of milk as they did a few months ago? (see Nation News report). Captain Norman Forde is blaming the team's inadequate preparation over the past three weeks for their winless performance and early exit from the Digicel Caribbean Championships Finals

Wasn't it a mere few months ago that the Bajan team was complaining about how they were badly prepared for their matches against the US in the World Cup, when they got thumped by something like a cricket score (see Convince Me Please). Some lame stories about how the Americans practised with balls while the Bajans had to practice with coucou rolled up in paper mache. Injustice! Which part of "not learning any lessons" is not being taken seriously? Pathetic!

The team, called the "Tridents", and those who manage and organize its football need to have those three prongs shoved up somewhere sensitive. The team trains on a piece of land (the YMCA field) where you would not even grave cows. Their warm-up match before playing Jamaica was their own under -17 national squad. Result? Don't ask. The referee robbed the team. Please. Imagine Michael Phelps racing against his gold fish in his mum's pond in preparation for the Olympics. Imagine Usain Bolt running in some hobnailed boots against a blind donkey in Trelawny in preparation for his quests in Beijing. Make sense?

I'm sure that Bajans would like to have some sporting success but they don't seem to have a clue about how to go about making improvements to a shoddy situation. Afterwards, the litany of excuses would embarrass a schoolboy who had just tried to tell his teacher that his pet weevil had eaten his house and that his homework was buried under the now rotted house. Who cares if another team like Grenada is better or not on paper? The match is played on grass. Duh!

As many good coaches say, "Just do your job!" If not, give us all a break. At least they did not manage to disgrace themselves totally, like some of the players in the following video:

Foot-In-Mouth Disease.

Every year, Wired News compiles a list of the most entertaining tech-centric misstatements and verbal foibles from government officials, CEOs and tech luminaries (see Wired's website). I am not sure why the prize should be limited to techie misstatements. The news is full of such misstatements, and in the era of the hot mike, many public figures are like dumb criminals who rob liquor stores and seem not to realize that almost everywhere has a video camera these days, and blab about people "under their breath" but in full ear shot.

I will scour news reports for such events, and see what warrants mentioning over a week. Had I started this idea earlier, I would have given the prize with glee, to the sneering Jesse Jackson on his off-camera moment when he wanted to squeeze the nuts of now President-elect Obama. I guess when Reverend Jackson cried on the night of November 4, after the Senator was declared president-elect, it was not because he could feel a certain tightness below the belt.

For me, this week's prize would go to Governor Ed Rendell (Democrat, Pennsylvania, National Governors Association chairman. He got caught by the hot mike giving his views on President-elect Obama's choice of Secretary of Homeland Security, Governor Janet Napolitano (Democrat, Arizona).

"Janet's perfect for that job. Because for that job, you have to have no life. Janet has no family. Perfect. She can devote, literally, 19-20 hours a day to it."

After a barrage of criticism, Governor Rendell was quick to reinterpret his comments:

"What I meant is that Janet is a person who works 24/7, just like I do. She has no life. Neither do I."

I am not going to get into it about what defines a life and what having no family is supposed to mean. I hope that Governor Napolitano will feel secure in whatever new home she lands in the Washington area, and will always have the welcome mat ready for her old buddy, Ed.

Finally, we have to remember that Governor Rendell was the man who said last February (with regard to his own state), regarding then Senator Obama, "Some whites are not ready to vote for an African American candidate." I like the Governor's dancing afterwards to clarify his comments, which you can watch.

Playing Word Games.

When public figures get caught with their pants down, literally and figuratively, they are fair game. If they get caught with them down on the job, so to speak, they are even fairer game. So, when the head of a major international organization is exposed for having an affair with one of his senior subordinates--consensual or not--he at least should get the gloves-off treatment.

I do not agree with Anne Sinclair, wife of the IMF's Managing Director, Dominque Strauss-Kahn (the couple are pictured). She is a celebrated French journalist, who said on her own blog: "Just this, before any malevolent rumours start, a few quick details: everyone knows that these things can happen in the life of any couple. For my part, this one-night stand is behind us. We have turned the page." Interesting. He turns the sheets; she turns the page. This is now the standard public officials' wifely response: remember New York Governor Elliot Spitzer and Senator Clinton? In good political fashion, because let's not forget that Mr. Strauss-Kahn is first and foremost a prominent French politician, the call is for the "establishment" to rally round.

Mr. Strauss-Kahn apologized to the IMF's Executive Board, his family, the former employee, and staff of the IMF (the Fund), saying that he made "a serious error of judgment" in having the extramarital affair with the employee. No kidding! But after an official enquiry (see Board statement and report), he will be allowed to hold onto his position.

So much irony. Here we are at a time when the world is looking for new direction and leadership in a worsening financial crisis, and politicians are again talking about giving the Fund a new mandate. The same weekend that its MD stands up to call for major changes, the noted financial newspaper, The Wall Street Journal, scoops and tells the world that he has been finding himself a new man date. This happened in January-February this year, when financial meltdown was not yet looming, and calm heads should have been in place.

I'm sure that the staff employee, Ms. Piroska Nagy (who has since resigned and now working for the European Bank for Reconstruction and Development), and her husband, Mario Blejer (former President of the Argentine central bank, former IMF employee, former Bank of England Advisor, see his website) have gone through enough public grief to last a life time. But, after only a week of this public glare, it may not even be much beyond the beginning.

The Fund has made a great play in recent years for more transparency, greater accountability and improved governance, not only amongst member countries over economic and financial policies, but also with regard to what it does itself (see its website). Does it pass its own test? I would say not. As Mr. Shakour Shaalaan, the doyen of the Fund's Executive Board, is reported to have said (see NY Times report): "Mr. Strauss-Kahn would have to work to regain the trust of the staff, particularly female employees. 'There are a number of staff who are not at all happy, and do not approve of the managing director’s behavior.'" That will be the very least.

Situation Vacant: No-On-The-Job Training Needed.

A good friend and former colleague of mine just lost his job at the start of this week (see Reuters report). I had to hold back a snarl. He had made a tough decision just over a year and a half ago to return to his native country, Guinea, to become the Finance Minister. The country had just come through a national crisis, and a new government of "national consensus" was being put in place.

His working career started simply enough (see summary). He was an engineer by initial training and only later gravitated to economics, a field in which he then got a doctorate in the US, taught and then worked at the highest levels.

He had done what many sons and daughters with origins in poor countries do after they get a good education. He migrated to a developed country (USA) to further study and work. He then did what is also common, he made a decision to go back home and "help". I remember once being told by Alassane Outtarra (former prime minister of Cote d'Ivoire; former deputy Managing Director of the IMF; former presidential candidate for his country) "Dont stay too long at the Fund." He meant that every economist at the IMF, who had come from another country, should aim to go back home and help his or her country develop. If they worked again at the Fund, it should always be at a higher position than the one they left. He really meant those who had come from poor, developing countries, but the advice could apply equally to say those who came from developed European countries.

My snarl was forming because my friend was yet another "sacrifice" on the altar of a president who has a long habit of dismissing successful officials, especially his prime ministers. Dr.Dore had chaired the organizing committee for his country's 50th anniversary celebrations, and his pparent failing had been to organize these poorly: there had been a number of diplomatic snafus, and some major protocol errors concerning foreign dignatories. He was also getting some heavy flak from the unions. His reported failings were not in having managed to get his country's economy back from a financial abyss--of hyperinflation, rapidly falling currency, and little growth--and into a shape where they could once again get financial assistance from institutions like the IMF and World Bank. Nor were they in the area of helping his country move to a point where they would get major debt relief, which would then open the way for more investment in education, health and other social services.

Our careers were not necessarily similar, though we had both worked a lot on European countries. We had each started at the IMF in the early 1990s and really only met in early 2003 when we were each designated to be "resident reprentatives" (similar to an ambassador but for the IMF) in Africa. He was to cover Senegal and Guinee-Bissau, both of which bordered his home country, Guinea. I was to cover Guinea (and later also Sierra Leone). We met and got to know each other better during a week of discussion with other resident representatives, in Addis Ababa, Ethiopia. We stayed in touch as our work continued over the next 3-4 years. I visited Senegal and stayed in his residence, with him there or when he was not there. His office staff got to know me and take care of my needs whenever I was in Senegal, and often when I needed help for someone who had to pass through Senegal. He visited Guinea often to check on his family and home, and we would often talk in my office or at my residence about problems he had in his job, very rarely did we speak about problems in Guinea. We spoke more about our problems doing a job whose value is largely about "keeping the door open" to discussions. It's the only form of institutionalized daily contact with a country that the IMF has. But, being out of Washington, out of sight can often be out of mind--until there is some crisis.

My friend is from a part of Guinea that I adore, the Fouta Djallon, a lush mountainous region in the middle of the country, sometimes referred to as the Switzerland of Africa. That would be for the natural beauty, not for the wealth and efficiency. He helped me appreciate some of the beauty of a country whose natural resources are to die for--bauxite, gold, diamonds, rivers, rich soil--yet are mainly squandered or plundered. A country that could feed most of the subregion yet has to import the bulk of its food. A country with the potential to produce hydroelectricity for its whole area, yet cannot provide regular electricity even in its capital. A crying shame.

My snarl turned into a wry smile when I read a story at about the same time about America's equivalent to a Finance Minister, Secretary of the Treasury, Henry (Hank) Paulson (see picture; he's the clean shaven one). He, with Chairman of the Federal Reserve Ben Bernanke (the bearded one), is presiding over a possible financial calamity for the US and maybe most of the world--what some have referred to as the country's worst financial mess since the Great Depression. Mr. Paulson, a former CEO of Goldman Sachs, a major investment bank, admitted to Fox Business News: "We're not proud of all the mistakes that were made by many different people, different parties, failures of our regulatory system, failures of market discipline that got us here". Mr. Paulson acknowledged that the government's initial response to the crisis was probably too meek. For that admission, he was not asked to "fall on his sword" and resign, nor was he fired; he is left to soldier on and we hope help solve the problem. Different strokes for different folks.

My friend worked and lived in a country whose president has been there for nearly 25 years. He is what is called a military man, a former army general who initially got power in a coup. He happens to be in his mid-70s. His behaviour is often referred to as "erratic". Some of this sounds like a picture that is a bit familiar for one of the US presidential candidates.

When I started writing this, it was 2am in the morning. A short while after starting it a friend posted a Facebook item that the IMF's Managing Director (MD), Dominique Strauss-Kahn (DSK), was being investigated about an improper sexual relationship with a subordinate (see Wall Street Journal report). I honestly thought I was dreaming, but got confirmation from another friend/ex-colleague later in the morning. This MD had been in the post just about a year and last weekend was seeming like the toast of the town at the G7 Finance Ministers' Meetings. Now, he may be toast. Ironically, the former President of the IMF's sister organization, the World Bank, Paul Wolfowitz had to resign about 15 months ago under the pressure surrounding his relationship with a staff member. I will be interested to see how this plays out and if in someway DSK avoids either resigning or being dismissed.

High office comes with many stresses, and always has the risk that dismissal will come for real faults or for no real faults at all. At the highest levels, good conduct and performance are no guarantee for success; nor is poor performance and conduct a sign that dismissal will follow. Most of us never get the dubious pleasure of working under such bizarre conditions.

Putting it on the stump.

Those of us who are not politicians often suspect that a large part of getting "up on the stump" is a good degree of acting and game playing. For that reason, we can more easily understand how a not-so-good Hollywood actor can become president of a country. We can also understand why that great profession of "theatre without curtains"--lawyer/advocate/attorney--produces so many politicians; we are often confused into thinking that it's because we need lawyers to frame laws. Forget it. So, I have loved some of the drama dressed up as politics while Barbados moves to have a new government budget.

About 15 months ago, I remember a great deal of "gnashing of teeth" and cries of foul by the then Minister of Tourism when asked on a Sunday edition of regular radio call-in program, Down to Brass Tacks, how he had moved from near-beggar to millionaire on a minister's salary in the matter of a few years. The precise words are less important to me than the reaction, but listen anyway.



The Minister took umbrage at the question and said that he would not "lower himself" to respond, and that it was rubbish, and he was appalled that such a question could be posed of him. He then stormed out of the radio studio. I remember being flabbergasted by that reaction. The minister later got a sizeable settlement a few weeks later (B$ 60,000) from the radio company for a libel suit brought after this incident (see Nation report).

Since those days, the government has changed, and the former Minister is one of those now "working outside the house", so to speak.

In the long aftermath to this incident, it's very interesting to see whether politicians would be prepared to put their money on the stump (i.e., let us see their money to show that they are honest and good for their word).

It is amusing to see what has happened over the past two days following the new government's recent budget presentation. A little like "strip poker", the first garment was thrown to the ground: the new leader of the opposition, Ms. Mia Mottley, showed her all to Parliament! (We'd been warned by Matthew Farley that this would happen.) She stripped in front of those male members ... and declared her "sizable" assets to Parliament. Take a breath; calm down. While she made her response to the budget she showed that he had a whopping B$ 3.5 million in assets, with liabilities of B$ 1.5 million; well this "declaration" apparently covered at least her assets in Barbados.

In the theatre of politics this was a master stroke, given that the new government had put a lot of emphasis on accountability, integrity, transparency, etc. and stated that a declaration of assets would be a must for its ministers. It has not happened yet, so they stood bare naked for not having honored that pledge. Then, to show good political solidarity, the former PM, Mr. Owen Arthur, also declared his assets, though by limiting the details showed us a big "but". But, for the "record" he is worth about B$ 1.3 million (if I get the figures right), with liabilities of about B$ 0.5 million.

They should both take a bow, and wait to see if the government can do better in the "show-and-tell" that should follow.

I am no lawyer or accountant, but I know that laying some document in front of Parliament or making claims don't necessarily meet the tests needed to confirm that all is as it was declared. But let me not pick too many nits right now. There is no framework or obligation in Barbados for politicians to declare their assets. The declarations will and should be dissected and if they are found to have been "economical with the truth" (to use the words of Margaret Thatcher) then we will see where the axe falls. However, some "standard" has now been set for politicians to be open about what they are worth, and how they accumulated their wealth. It is a legitimate set of information about someone who is given the public's trust to handle and oversee the nation's assets. If a politician or public official takes umbrage at request for that information--no matter how it is phrased--then there is inevitable suspicion cast on that person.

In the realm of US politics, where a lot more money is involved in politics, we see politicians rushing to get the leg up by declaring their assets, getting their spouses to declare their assets, even their children if they are old enough to possibly have assets and not represent just a set of heavy liabilities. In modern democratic countries, strectching through Europe, Asia, and some of Africa, and Central and South America, being open with the populace about wealth is more the norm for politicians than the exception, though it's not universal. It's still not the norm in the Caribbean, and that should change.

Will the Budget budge anything?

Barbados' Prime Minister made his first budget speech presentation yesterday afternoon. I did not get to listen to all of it, and I will not make plans to listen to the subsequent debate, not because I have no interest but simply because I don't have the time. I have no intention of pretending to be clever and make a full assessment of the budget. I spent a short while today reading the prepared text (see link), and a few things really struck me.

The PM stirred up the ants by waving again the red rag of implied lack of accountability and poor governance of financial affairs by the previous administration. He summarily cancelled the contract with a company named 3S for improvements to the so-called ABC Highway, to expand the highway and build flyovers. The PM has a very dim view of the financial rectitude surrounding this project:

"ABC highway ... is an example of the most reckless and wanton disregard for financial prudence and management."

He elaborated:

"Work started and no contract was signed and, despite the decision of the Cabinet of Barbados, Three S has still not signed a contract. No specifications, no bill of quantities, no working drawings and no contract! From an original projection of $119 million in November 2005, by May 6, 2006 the projection had reached $143,614,460.23 in less than six months. By December 17 2007, the figure for road widening only moved from the original figure of $40 million to a revised figure of $70, 231,220.00 and then to an amazing $117 million. Despite the
decision of my Cabinet, Three S is now claiming more.

Enough is enough!

As Prime Minister and Minister of Finance, I am ordering an immediate termination of the contract with Three S; a full investigation of that sordid mess - the terms of which will be set out shortly; and that the Ministry of Transport, Works and International Transport work with the Barbadian contractors to have the road widening completed.

Furthermore, there will be no flyovers!!"

I've made clear my views on the flyovers issue and applaud this decision as being sane and appropriate for a country of only 166 square miles, even if it has the world's highest traffic density and road network density.

But this road project is still going to extract a heavy price:

"In an effort to ensure that we meet previous commitments in respect of the ABC Highway project, I propose to increase the fees for the use of the highway with effect from August 1, 2008. The new fees will be as follows and are expected to yield an additional $46 million in a full year."

So, out of total expected revenue gains of B$ 104 million, two-fifths of this will come from dipping into the pockets of those who own, operate and use motorized vehicles. Barbadians have had a long love affair with motorized transport. (Visitors like me will get stung too, as my driving permit will now cost ten times what it did, from B$ 10 to B$ 100; I should rush out and renew early.) In my mind that huge bite for revenues is an unfortunate result of not helping people understand that increased wealth does not have to be manifested by higher car ownership, and the almost inevitable result of the real cost of fuel being kept low. Weaning people away from this love may be part of the PM's thinking. One could believe that, given other measures to provide or subsidized free public transport.

Ironically, there was some "guidance" in one of the newspapers this weekend on how to save money through changing driving habits. (See "The Cost Cutters – Easing gas pain " in the Sunday Sun; dont be fooled by the title, it is about driving.) It notably left out suggestions like sell the car, buy a bicycle, or walk. It did suggest "going public...on weekend outings such as picnics" or taking a bus excursion to the museum! It did mention consolidating trips and car-pooling. Here lies part of Barbados' traffic problem. The car has taken on the role of an essential. So, the main "sin" that Barbados has that can be taxed relates to the car; not booze or ciggies as it is in the UK.

The other aspect of the budget that struck me, and this I heard live, was a certain creative thinking. In different areas we like to believe that size does not matter. Barbados is very small, and it needs to deal with the fact that it lacks land to do many things that it feels are needed to help develop. It's not like Guyana with acres of land and very few people; it's a dot with a reltively large population, and not well-distributed. But , to help overcome this, it will "grow land", so to speak:

"To help solve this dilemma, Government has been invited by a number of private sector joint-ventures involving significant local and foreign investors of good repute and business success, to facilitate the creation of additional real estate acreage off the coasts of Barbados through reclaiming lands including constructing offshore islands and constructing marinas for yachts."

I've seen the benefits of land reclamation projects, and I know that such projects are part of Dubai's development plans, especially to boost tourism.

The budget is also treading a fine line in setting out a policy related to foreign investors. On the one hand we have the "already announced a policy of protecting our East Coast from Pico Teneriffe to Skeetes Bay as a national park area and from the purchase of land by foreigners", stated in the budget speech. This sounds like a slap for foreigers. But we also have the PM putting out feelers for what he calls "philanthropy capital", wanting to tap the supposed deep pockets of those foreigners who have made Barbados a second home, as well as Bajans living abroad who are looking to find ways of investing in their native land.

"Investing private capital for a public return is a new approach to development financing, where corporations or wealthy individuals “invest” resources on the expectation of social or environmentally sustainable returns, whether or not they also expect a cash return.

The new source of philanthropy capital has a range of advantages over traditional sources of development financing such as bilateral and multilateral aid or remittances. These include independence from politics, flexibility in development projects invested in and the ability
to provide seed capital and long term funding.

Financing economic opportunities for the poor in developing countries, coupled with the rise of social entrepreneurship using private capital to finance development challenges, is highly effective at transforming economies and fueling economic growth."

Now I will stop and think a good while and wonder what will happen. You just told foreigners that they cannot get their hands on any more prime real estate in the country, which is the asset that many of them want. Instead they can put their money into "social or environmentally sustainable"projects and do not expect a cash return. This is not even a second-best for most potential investors. Maybe the idea will work. Barbados will stop being the Caribbean choice for a lot of the rich, partying crowd to come and plough their money into real estate. Instead they will be hoping to get tapped up to finance a long list of worthy causes. There had better be a much better environment of governance, accountability and transparency for this to work. I personally don't buy the idea; yet am happy to be proven wrong. Even committed individuals don't plough so much into their beloved projects. Barbados' new government will have to do a lot of convincing for that general idea to change. Anyway, why give to Barbados that seems to be already wealthy and well developed rather than put money into the world's really needy regions? Maybe the Bajan diaspora will take this on.

So, in his first foray onto the budget stump, Barbados' PM has made clear that he has a very different view of what Barbados will physically look like in the near future. It will have no flyovers, and it will soon be an arhipelago. He will stop rich and famous foreigners owning land they want to buy, and instead hope that they will see Barbados as a new charity of choice. And they say that politicians lack vision.

Changes in the wind?

It's interesting to try to see changes in the social, economic, and political landscape. As a commentator on such issues, I am admittedly a neophyte, so I will tread warily. Today, I note two events that I think could have important repercussions.

The first issue is the dismissal of the acting head of Barbados' Sanitation Services Authority (SSA), Stanton Alleyne, and "documents pertaining to his dismissal handed over to the Director of Public Prosecutions" (see report in the Nation).

Immediate reactions on the part of employees of the SSA to the dismissal of their head was to park trucks and put down their tools. This morning the workers will be informed by the National Union of Public Workers, what level of industrial action would be taken.

At the heart of the dismissal is suspicion of wrong doing and possible conflicts of interest at least, which involve businessman Andrew Thomas of Andrew Builders--who asked that the authorities investigate the relationship between his company and SSA. As reported, the Attorney General's office is "in receipt of copies of two cheques issued to [Mr. Alleyne] on the 19th of March 1999 and on the 8th of April 1999 from a company having a contractual relationship with the SSA, and that these cheques were subsequently drawn by him."

I want to tie this dismissal to news that the government will table by August draft legislation on integrity legislation as well as a Freedom of Information Act and Defamation Act; the hope is to put them to Parliament by end-2008 or early 2009. The Democratic Labour Party (DLP) had promised during the election campaign that in government it would take new legislation in these areas to Parliament within 100 days of being elected. I'm not going into that piece of political puffing, but now look to see if this will be a serious attempt to change something seriously lacking in the public life of Barbados. Integrity legislation should make clear the responsibilities and duties of ministers and public officials and moniter their integrity and accountability. A Freedom of Information Act should allow citizens access to much (most?) information, excluding matters of national security and specific personal information. A Defamation Act would hopefully get some clarity into issues related to freedom of expression (see summary comments) and maybe encourage journalists here to open up debate on important issues rather than ducking for cover at the threat of being sued.

From what I have seen and heard in 18 months here, public life is a bit of a free-for-all, or maybe "free from accountability for those in office", with little real sense that ministers and public officials have a clear idea of what integrity means or how they should be accountable to the electorate and the public. Amongst the local bloggers, Barbados Free Press (BFP), has been trying to kick life into this issue--cutely acronomyized as ITAL--but holds out little hope that this will be more than another piece of fooling most of the people most of the time (see BFP blog post). I take a different view, believing that fundamental changes such as these pieces of legislation will represent cannot, and should not, be the things that get rushed into play, just to confirm some electoral promise. But, I also hope that Bajans are getting ready to hold a government's and its public servants' feet to the fire, or to fire their ******, good and proper.

The second issue is an interesting and initially disconnected play on accountability and integrity, in the broader game of political football. It is today's opinion column in the Nation by political commentator Peter Wickham, entitled provocatively "Welcome, Clyde" (see article). Now, there is no veiling what Mr. Wickham thinks of Mr. Clyde Mascoll. First, there is the quick sharp elbow of faint praise, just after kick off, as the ball is being stroked around in midfield:

"Mascoll's intellect was clearly one of his more attractive characteristics."

Then, with nothing less than a period, the first gentle kick in the groin:

"He has, however, since thrown himself into the political environment and his record has been less than stellar in this regard."

But just as the trainer has used the cold sponge to dull the pain, and in case you got the impression that this leg was not seeking to please the home crowd, we smell a dogfight brewing. When discussing Mr. Mascoll's rise up the ladder of one (opposition) political party and his subsequent flip over to the ruling party, in comes Mr. Wickham with two hard but Gattuso-like legal tackles that send Mr. Mascoll crashing to the turf:

"... Mascoll ... sought to identify persons like myself suggesting we were biased and indeed unintelligent because we did not see things his way. Secure in the knowledge that he was right and armed with the advice of those who told him what he wanted to hear... Mascoll awaited what was the final assault from Thompson and thereafter still did not appreciate that his political future was better secured within the DLP. Hence instead of negotiating, he, to everyone's surprise, crossed the floor to become one of the chief architects of the same BLP policies that he was critical of a few weeks prior."

Finally, to close out the home leg:

"We will perhaps never know what prompted Mascoll to cross the floor, however history has demonstrated that he made a fundamental political error. Today he is a former junior minister in the BLP administration, while few would disagree that he could have just as easily been the Deputy Prime Minister and Minister of Finance in a young DLP administration, with the prospect of becoming the Gordon Brown of Barbados.

Mascoll will find it difficult to defend his past political judgement and for this reason one would have assumed he would be seen as a liability to the BLP. Notwithstanding, he has now emerged as the "chosen one" yet again and it will be interesting to follow his political and economic logic over the weeks and months ahead."

Some welcome that. A clear victory for Wickham in the first leg.

If you are not aware of why the ex-Minister is again the "chosen one" you will have to read his weekly columns, which have now started to appear in the Nation. I have a feeling that we are going to see some sparks flying in the next leg on the editorial pages and on the radio airwaves. We may see no clear winner and should get ready for a long penalty shoot-out with perhaps a nervy series of hard shots, with good saves, and some good goals in coming weeks and months. Game on!

The cost of living is not just higher for the individuals.

Another Barbados blog, Bajan Reporter, posted an article on the well-known south coast roti house, Ackee Tree, stating that the restaurant would put on Facebook details of outstanding meal tabs, in a kind of "name and shame" way of getting paid (see link to Facebook). Failure to pay would lead to the debts being passed to a debt collection agency, it was reported. I am not really an investigative journalist, but I thought I would approach the owner of Ackee Tree, Martyn Field, to hear from him what was going on.

Martyn indicated that the report is true, and that over B$10,000 is outstanding. He has decided that rather than name and shame to start discussing with other bars and restaurants on the south and west Coast and to circulate the names of the debtors between them. He is sure that many of the same names are going to pop up. He has also been well informed that many of the culprits have formed a "Boycott the Blue Bench" group, wishing that the establishment suffers the ultimate ill-fate of closing down. Some even boast of owing other bars for well over a year and have no intention of paying their debts. Martyn reports that the circulation of the list has created quite a stir, both whipping up support and drawing wrath, in the middle is the bar with a low customer count at the worst time of the year.

I know how convenient it is to run up a tab with a favoured restaurant, but I also know that I am getting credit, and that prompt payment is essential to help that enterprise stay in business. It's the first time that I have come across this idea of "doing a runner" and not paying for meals.

However, Martyn then went on to discuss a different matter, that is further reaching, that of how small enterprises such as his are coping with increased costs. His restaurant faces a huge challenge with the price increases for flour, gasolene, rice, beef, rum and most everything else and soon to be chicken. He decided that rather than pass the price increases on to the customer at this time that Ackee Tree rotis, which are supposed to be 1lb should be that instead of the near 2lb version that was served before.Now the customer is getting that which is advertised. But wait. Now the complaints are abound that the rotis have gotten small and the prices have gone up. How do we win? he asks. Should he just pass on the price increases and put more pressure on the customer or stick to our advertised product.

He mentions that BS&T, which boast of million in profits is so price sensitive it has already increased the price of milk and other sundry items that has caused the pressure on the wider public. One would think that they are the ones who could absorb the increases for a bit longer than they have. It is indeed a challenge.

I have mentioned before that the prices of so many restaurants in Barbados were absurdly high that I have decided to boycott most of them. Ackee Tree is one where value for money really seems to have been the case. But it's easy to see that they are on a thin thread. It's hard enough to give good quality food and pleasant service. It's really hard to do with some of the price increases recently announced in Barbados. It's doubly hard when customers fail to do their part and just don't pay: it's theft. I look forward to seeing the list circulated, on Facebook or elsewhere, and would gladly help disseminate it.

Getting your just rewards. Being taken for a ride by airlines and hotels?

I've written a lot about fraud in recent times and have what I would call a healthy skepticism of a lot of "corporate" practices. There are many stories that one reads or hears of about how airlines and hotels try to filch frequent fliers/visitors so that the points they accumulate are null and void. I have just had one of those experiences.

I was checking my balance for a major hotel chain, whom I have honoured with my money and nights, and where I have stayed several times in the past 24 months. First, I found that my account details were not recognized online, and on checking found that my card had expired at end-April 2008. So I called and was told that a new card would be on its way in the mail. No problem. So, I asked about my points balance, recalling that there was enough for a night stay (30,000 points). Yes, the balance had been over 40,000 points, but they expired in June 2007 due to a lack of activity over the preceding 12 months; that expiration would have been pre-notified. Alarm bells started ringing. I said that I knew that the airlines and hotels liked it when these points expired, but it was frustrating to not have been forwarned. I took a deep, sigh-laden breath.

I first asked if a copy of the notification could be re-sent to me. A pause; a consultation; a supervisor came on the line. No, the company could not re-send the notification. Shame, I responded, but I really would like proof that it was sent. Was that not possible? Another pause. No. I took a deeper, more sigh-laden breath.

I was then asked what did I want done. I have heard this question before and recognized it as a ploy to see where the customer was prepared to go. We were in a negotiation!

I said, give me the proof on pre-notification or reinstate the points. Another pause. I was then asked when I had last stayed with the chain. I knew that I had been on a week-long visit to Washington DC in late 2006, and was checking my records I said; so was the supervisor he said. He confirmed that I had had a stay in October 2006. So, I said, the points were annulled prematurely. Another long pause. He repeated the principle for annulation. I repeated that I understood and that there had been an error. Another long pause. Yes, sir, you are correct. The points had been annulled prematurely and would be reinstated to my account in a couple of days. How nice, I thought. "Thank you" I said.

I said that I would check again in a few days and if I did not see what had been promised, I would be calling back.

Was I being subjected to a standard business practice, which means that people fall to the line of least resistance, do not ask questions and lose their just rewards?

For frequent travellers some of this is not new. Accumulating the miles and points is very easy, but using them is hard and losing them can be easy. The airlines have recently become more aggressive in cutting the values of the miles and points (see an example).

The true cynic in me asks questions such as "If the customers' miles and points are annulled, where do they go?" It does not take much imagination to see that if the miles have been accumulated then annuling them for a customer does not remove them from "the system". Could it be that these annulations then get transferred into a pool of usable miles that can be exploited by company employees for themselves, friends and families? Who would imagine such a fiendish scheme? We already know that many companies do not let employees keep miles and points they accumulate on business travel and then pool those for the benefit of travel by other administators. And like the cashier who keeps a few pennies from the change that should go to a customer, they all add up.

It's Sunday, so if what I suspect is the case is in fact true, I will pray for the forgiveness of all the souls who are part of this sort of scheme.

Travel is normally put in the category of leisure activity. Those who travel a lot know that there is often not much leisure, and nowadays much less pleasure--ask my wife who wasted Thursday at the airport in Trinidad trying to get back from a day/night visit to Guyana, then could not connect for her three day weekend business trip to St. Kitts. Well, she did then get the leisure of a weekend in Bim and the pleasure of the company of her family and friends over the weekend.

Life ain't easy.

Fraud everywhere? What do we do?

A friend and I have been having discussions about frauds in the region--particularly surrounding Jamaica's so-called "unregulated investment schemes". In that regard a case is pending against possible fraud by Cash Plus and its found, Carlos Hill, who before his foray into this venture in Jamaica in 2002 had previously done a bit of jail time (10 years) for another series of frauds in the US. However, my eyes had hit upon a series of major "corporate" frauds--meaning by organized groups or companies--as I scour the newspapers in recent months. Here are a few cases from the UK and USA.

Britain's Office of Fair Trading names 112 building firms in bid-rigging scandal, [April 2008] alleging that they participated in cartel-type activity in bidding for thousands of public sector construction contracts, worth £3 billion, including tenders for schools, universities and hospitals (see report in The Times).

Severn Trent (a water company) admits fraud and fined £35.8m, [April 2008] after Britain's Serious Fraud Office brought charges alleging that the company manipulated water leakage data in its annual reports to the regulator in 2001 and 2002 (see report in the The Times). This was a first for a regulated utility company. The same report notes that in February 2008, the Water Services Regulation Authority (Ofwat) confirmed that it had fined Southern Water a total of £20.3 million for backdating letters to customers and deliberately misleading regulators.

Mortgage fraud is funding terrorism, say police [March 2008] (see report in The Times): An intelligence report by the Association of Chief Police Officers said that terrorists and criminals are conning British banks out of £700 million a year to help to finance their illegal activities, alleging that organised crime groups used mortgage fraud to generate income and launder money from the proceeds of their operations, such as drugs, human trafficking and prostitution.Fraudsters can con lenders out of money by using corrupt surveyors to issue false valuations. This allows them to apply for a loan that is larger than the value of the property. On a larger scale, solicitors can assist criminals to secure mortgages illegally. The buy-to-let market is particularly vulnerable to mortgage fraud, whether through new-build apartment complexes or large-scale renovation projects. [I highlight some respected professional practioners who apparently support these frauds.]

Largest health care fraud in US, (see US Department of Justice report): HCA Inc. (formerly known as Columbia/HCA and HCA - The Healthcare Company) agreed to pay the United States US$ 631 million in civil penalties and damages arising from false claims the government alleged it submitted to Medicare and other federal health programs.

My reading of local papers in Barbados and Jamaica has located very few cases of what could be referred to as corporate fraud. I have seen more cases with allegations against individuals. Barbados' PM recently stated that price gouging exists in Barbados and I wait to see if this statement unfolds into any form of legal action against companies. Some have commented on the recent fine imposed of PriceSmart (a shopping club), for selling chicken wings at a huge margin above the regulated price, and being fined B$3,000 for that. As someone mentioned yesterday on the radio, that seemed like a slap in the face for the consumer. We often read of allegations against high ranking politicians, misappropriating state funds. For example:

Antiguans learned ([2002] that for years government officials treated the state insurance fund, the Medical Benefits Scheme like a personal checking account. Instead of paying for medical services, evidence shows that money deducted from workers' salaries went for lavish parties, foreign travel for government cronies, kickbacks to the program's accountant, cosmetic surgery overseas for officials and even toys for the children of fund administrators. Add to this that in the midst of the public outcry, the government issued an astonishing statement revealing that since 1978 it had failed to contribute the equivalent of 120 million Eastern Caribbean dollars, or US$ 48 million to the insurance fund to cover government workers' salaries. (see report). During the case there were also allegations of rigged bidding for supplying government, and of government ministers awarding contracts to their associates.

We can often find cases of Caribbean individuals (in or of the islands) being involved in frauds, such as the current case against Barbadian, Seibert Phillips, executive director of the Evelyn Douglin Centre, Brooklyn NY, which works with children and adults suffering from mental disabilities, who is suspected of giving a friend a US$ 250 000 "no-show" job; and allowing a close relative to run up almost US$20,000 in petrol charges on the centre's credit card; making illegal political campaign contributions to a member of the New York State Assembly; and using the agency's funds on an array of high-priced items, ranging from luxury automobiles and flat screen television sets to travel for himself and staffers (see report in The Nation).

Advance fee (or "419" or "Nigerian") scams also seem to be prevalent in the region. [The 419 refers to the relevant section in the Nigerian Penal Code that deals with fraud, and many of them originated in that countryin the early 1980s as the oil-based economy declined. Several unemployed university students first used this scam as a means of manipulating business visitors interested in shady deals in the Nigerian oil sector before targeting businessmen in the west, and later the wider population.] The fraud usually involves a scammer (often claiming to be a high ranking official) offering his victim a large amount of money. In order to access the money, the victim must pay a fee in advance. And then another fee because something has gone wrong. And then another one … until he/she realizes it is a scam. Most of us are aware of these scams through spam or unwanted e-mail solicitations (Ironically, my work e-mail address cannot filter these out and I get on average about 20 such solicitiations a day. I've won the UK National Lottery about 5 times today already. My private e-mail addresses recognize and trash such messages. I hope my employer is not in cahoots.) Despite publicity and warnings about advance fee scams, estimates are that US$ 100 million is scammed every year from Americans alone. (For more details of what this scam can look like and the terms used see the Crimes of Persuasion site. There is a daunting list of possibilities.)

Caribbean countries do not have large diverse economies that would allow a wide range of shady tricks to dupe people. Our sense of familiarity with each other does open the door to certain kinds of confidence tricks, as may be happening with pyramid schemes in Jamaica. We also lack some of the widespread private sector systems that would allow for the kind of scams operated by corporations as reported in the UK and US. We have large public sectors (major employers and contractors) and often see monopoly suppliers or only a few suppliers in the private sector. This facilitates certain corrupt practices between the public and private sectors through rigged bidding, and preferences in awarding contracts and procurement, or other forms of misappropriation of public funds. Our regulatory bodies tend to be weak and underresourced. We also have a legal system that has not adapted well to changing economic and social realities. Politicians tend to be held in awe and are often not challenged as much as they should be to account properly for what they and the administrations they run do.

Scope for ripping off and being ripped off exists everywhere. We take certain kinds of "abuse" without much real protest in most of the region--not just corruption and fraud. Most of the people in most of the region's countries show little tendency to react--Haiti is an exception, where people rioted last weekend over food price increases; it is a very poor country with a long history of violent civil strife. In Barbados, the protests about rises in flour and petrol prices has been largely verbal; it's a wealthier country known for its conservatism. In Jamaica (where murder rates are amongst the world's highest), individuals are more likely to attack each other for transgressions but leave corprorations and government alone, so no surprise that investors with Cash Plus calmly stand around wondering if they will ever see their money again. Certainly, people have shown little tendency to act in the region. But we are not so different from people elsewhere when it comes to responding to acts that cause us personal loss. In the US, those who suffered from the sub-prime mortgage crisis are mainly hoping for some kind of government help so that they can hold on to their homes. Those who sold the loans fraudulently are mainly gone into the wind. Some who helped finance the deals are faltering and the eventual costs are mounting.

So, we seem to be in about the same state as people in bigger countries and economies. We get taken for a ride and we tend to accept it.

Barbados' PM speaks with the people

Barbados' PM did what I think is a first, by holding a "press conference" on radio and TV, with three "senior media" persons, helping to set the agenda for the discussion in the studios of the Caribbean Broadcasting Corporation. The media professionals were quick to jump on the PM not delivering on pre-election promises: "Did you flatter to deceive?" one asked. The PM has not done all that he said his government would in 100 days. Well, surprise! Reality shows that things are not so easy as they seem when you are not responsible when you actually have to do something sensible, workable, and fair.

First, I would applaud the approach of not just giving a stiff speech in a "state of the nation" style. It's not quite like what Jamaica's PM, Bruce Golding, is doing with his weekly "call-in" show, but it suggests a sense of coming down to talk with the people. I would, however, go back to asking why people think that the only worthwhile questions come from the media professionals. There are several learned local analysts who could have made up a panel to pose some very broad and tough questions. Anyway, someone should reflect on that for next time.

Second, in terms of content, I took away several important points:

Cost of living:

Price gouging exists big time in Barbados, and if those enterprises which are protected do not give good service and value for money, the government will remove the protection and open up the market to wider competition. The PM cited how certain basic goods could be landed in other nearby Caribbean islands for much less than in Barbados and the only reason why was that the enterprises concerned were "ripping off" the people. He also mentioned that there was a time when local supermarkets seemed able to provide goods at affordable prices: many of the supermarkets are now gone and prices have become very unaffordable.

A lot of recent price increases are imported, coming largely from the rise of commodities (rice, flour, and crude oil, especially). This has caused food riots in many places, including neighbouring Haiti last weekend. Crude oil price rises have been meteoric recently: prices touched record levels of US$ 112 a barrel, and international traders talk about US$ 120 being "inevitable". There's a double whammy here. The US$ falls on the exchange markets and that raises the price many commodities (including metals like gold, which has already sailed above US$ 1000 an ounce, but since tapered back). People also look for a way to protect themselves from inflation ("hedging") and buy ahead using things like oil futures and their prices also rise.) So, domestic petrol prices need to rise just to reflect the higher world market price.

The price of petroleum products has to increase. Current prices were based on crude oil at US$ 65 a barrel, and carried a subsidy. Do the maths. So, the PM wants people to wake up to the new reality, noting that the subsidies on petroleum products were costing B$8 million per month. So, from midnight Monday gasolene prices would rise by about 25 percent (to B$ 2.67 a litre). [Diesel would rise from B$1.46 per litre to B$2.57 and kerosene from B$1.37 per litre to $1.51. From today, Liquid Petroleum Gas 100-pound cylinders move from B$144.75 to B$188.15, the 25-pound cylinders increase from B$38.76 to B$49.63, while the widely-used 20-pound cylinders goes from B$31.01 to B$39.70. To soften the blows measures would be introduced in the coming Budget to help manufacturers, farmers, fishermen, public transport operators and the poor.] Despite all the reporting of world events, many people are still "shocked" and "surprised" with such an increase.

The PM also mentioned flour (where local producer prices just went up 30 percent), and cement. Both have become "essentials" in many developing countries. Flour is the input of many basics like bread, and that says it all. Cement goes into buildings and when the country has a boom in construction, both private residential and private commercial, the sting of higher prices is felt quickly.

Governance and accountability:

The PM danced a bit, but essentially said there is a "code of conduct" for MPs and his Cabinet works from the existing "rules book". I think he knows that what he promised ahead of the election is not satisfied by that. He said that there is an independent commission looking at the issues and there will be an obligation for MPs to declare their assets. But....the codes must not discourage people from wanting to participate in public life.

He then turned on the moderators, by asking why the need for such a code should be limited to public officials. Why not a similar code for the private sector? A long silence passed.

He did defend his right to remove the speech writer used by the previous PM. He added that there had been a lost sense of right and wrong under the previous government, and the use of public money for charity (e.g., paying pensions to someone who was not covered) was not defensible. He did not go too deeply into what the new government was unearthing about usses of public funds, but we are hearing rumblings. He also added that courtesy demanded that "political appointees" under a previous administration should tender their resignations when a new administration came into power.

Energy usage:

We need to save energy, but I heard nothing concrete in terms of policy proposals, except that the PM wants inputs from as wide a base as possible so everyone is encouraged to help "brain storm" with each other to come up with ideas on energy saving. I would suggest we do that huddled around a fire, but that is probably energy wasteful and would add carbon emissions.

There was not much real debate during the press conference, but plenty of that will come on the radio, in the streets and homes in coming days. There was also that peculiar sense that the questioners gave that problems were not there before the government was elected after the January 15 election. That is the shallowness that bothers me sometimes, without having any partisan notions. There is the disservice of not properly setting the scene or context. In the end, someone like the PM has to say, the subsidised petrol prices should have risen some time ago, and then it sounds like a defensive comment.

So, a refreshing foray into a new approach to democracy? At first blush, yes. But I wait to see if the strong words on anti-competitive behaviour will really turn into something tangible. The money in many pockets is already stretched. Hopefully, people won't have to go on rampages for the price gouging to stop.

Fraud?

I try to see in the same way things that are essentially the same. So, I'm going to try to do that with some events that may appear to be different and which, as a result, seem to get different reactions. But are they essentially different?

Fraud is defined as "intentional perversion of truth in order to induce another to part with something of value or to surrender a legal right" or "an act of deceiving or misrepresenting". So, let's look at some recent examples, some regional others in the much wider world. As some are the subject of court proceedings I won't go beyond stating some of the relevant reports seen recently.

Kern Spencer blinded by Cuban light bulbs? (see previous post on this blog).

Was Bear Stearns' collapse just a bad market event? With a lot of red ink still to flow on the outcome of the US subprime mortgage market collapse, a prominent investment bank, Bear Stearns, collapsed several weeks ago. At least one prominent investor is going to court with claims of fraud (see report): a US billionaire accuses the company and employees of duping him and his wife into buying 150,000 shares of the struggling brokerage's stock -- including 100,000 shares on March 14, the day that federal officials first intervened to keep the firm from tumbling into bankruptcy. On March 14, Bear stock was plummeting from US$ 57 to US$ 30 amid rumors that it might fail. Two days later Bear agreed to an emergency buyout by JPMorgan Chase & Co. at US$ 2 a share, a price later raised to about US$ 10. But it was not all bad news as some large hedge funds, betting that Bear would collapse, made millions of US dollars from it (see Wall Street Journal article). On April 3, A US Senate Banking Commission questioned senior officials from the US Federal Reserve, the Securities Exchange Commission, and the CEOs of Bear Stearns and JPMorgan Chase. On April 10, one US Senator asked for an investigation into possible insider trading (see report), requesting that the U.S. Justice Department and the Securities and Exchange Commission investigate stock trading prior to the deal with JPMorgan Chase', and the role of short selling in the collapse of Bear: trading in Bear shares spiked in the days before the buyout.

Was General Electric engineering something? Just two days ago General Electric reported a 6% drop in first-quarter net profit -- largely over trouble in its financial-services businesses -- and cutting its 2008 earnings outlook (see report). It was GE's first major downward earnings revision for years. Consequences? GE shares fell nearly 13%; GE's plunge erased US$ 55 billion from its stock-market value; the major US stock indexes fell more than 2%. Reason? On a conference call with investors, Chief Executive Jeff Immelt put the blame for the miss squarely on Bear Stearns. The 13% stock decline was the largest for GE since the stock market crash of 1987. Mr. Immelt, who had repeated the 2008 forecast on March 13 and called it "in the bag'' in December, blamed the lower earnings on the collapse in credit markets. He said "We had planned for an environment that was going to be challenging...[but] after the Bear Stearns event, we experienced an extraordinary disruption in our ability to complete asset sales and incurred marks of impairments and this was something that we clearly didn't see until the end of the quarter." Credible?

Is Cash Plus now cash minus? Jamaica's so-called "alternative investment schemes" have been taken up vigorously as possible sources of quick riches. But, this week Carlos Hill and his Cash Plus group continued a rapid fall from grace and Mr. Hill was arrested (see report) on suspicion that he and others defrauded billions of Jamaican dollars from lenders to the failed alternative investment club Cash Plus Limited (see report). Some J$ 4 billion of investors’ monies cannot be accounted for. The police action came a day after it was announced by Cash Plus’ court-approved co-interim receivership manager, Kevin Bandoian, that Cash Plus would not be able to make good on its promise to start making repayments to its approximately 40,000 lenders by April 14, as Carlos Hill was unable to secure the necessary funding or “access enough liquidity”. Cash Plus amassed a large pool of lenders with its promise of a 10 per cent monthly return on monies loaned to the company. A brief recent history:

2002: Cash Plus Ltd, led by Carlos Hill, started operations in Jamaica.
May 2007: Purchased the Hilton Kingston hotel.
July 2007: Acquired Drax Hall Estates, St Ann.
September 2007: Became sponsors of the National Premier League football. The Financial Services Commission (FSC) issued cease-and-desist orders on Cash Plus, its CEO, Carlos Hill, and Kahlil Harris.
February 2008: Cash Plus announced plans to resume payments of monthly returns by March 31, but indicated that this was contingent on FSC approval.
March 2008: Cash Plus says it is unable to resume payments on March 31 and gave an April 14 date for resumption; court appointed receiver/manager.
April 9: Court-appointed receiver/manager announces that Cash Plus is broke.
April 10: Carlos Hill arrested.

Eliot Spitzer forgot to include himself in his fight for moral rectitude? (See previous blog post.) As attorney general, he prosecuted cases relating to corporate white-collar crimes, securities and internet fraud, and notably pursued cases against companies involved in computer chip price fixing and investment bank stock price inflation (see an interesting article on the basis of his success in fighting Wall Street).

Plucking money from the public in Barbados? Local Bajan "shopping club", PriceSmart, admitted it had overpriced chicken wings last year (see report). In March this year, they were ordered to pay B$ 3,000 cost in seven days or a representative will spend two years in jail. (But do some arithmetic. They sold the chicken at B$ 17.28 per kilo--a retail price greater than $5.36 per kilo--that's a B$ 11.92 per kilo excess, so the fine represents the sale of about 250 kilos. Sounds like they are licking their fingers at getting off so lightly.) The company claimed that it had no plans to cheat the Barbadian public. Their lawyer argued it was an honest mistake based on what the company thought was the "honest and proper fulfilment of the order they placed". So, the company got a little sting, but the customers had been well filleted.

There are regulators or "gate keepers" who have been set up to try to control behaviour in certain areas and they work to different degrees of effectiveness. They have to have facts before they can deal with frauds. But even with facts they can sometimes be unable or unwilling to act. They are usually unable to deal with all the possible misdeeds in the area they cover.

There are also the individuals who are the perpetrators: they should know what they are doing. But few are willing to own up to fraud until they are caught and unequivocally found guilty.

There are the "customers" who take risks knowingly or unknowingly (if they are investors) or seek normal service (if they are shoppers), and then suffer losses. There may be mechanisms to allow them to get back some or all of what they lost, but maybe not. Should they look to blame someone? We tend to get extremely angry when we hear of the frauds and then the losers get nothing back. Do they all deserve sympathy? My view is that if you take a risk then you need to deal with its two sides--the risk and the reward--you can't have your cake and eat it. If you were going about your normal business (like shopping) you deserve a lot of sympathy; this should be clear and more so if the fraud was something like selling spolied or contaminated food as "fresh" or mislabelling medicine and putting people's lives at risk.

Every interaction between people has the potential for fraud or deception. I would not fall into the false sense of security that comes from thinking that somehow there are areas immune from this. Even those in well-established and respected organizations that are supposed to uphold the moral flag at its highest, such as the Anglican and Catholic churches have been guilty of much fraud and deception (especially financial and sexual). I remember with deep unease and really much bitterness the sense of being personally hacked when in the mid-1990s I learned that the very church where I worshipped was now the home of a major embezzeller, when Ellen Cooke, the wife of the rector of St. John's Episcopal Church, McLean, Virginia, and who was national treasurer was accused of and later sentenced for misappropriating US$ 2.2 million of Episcopal Church funds for her personal use (to buy mainly jewelry and a house, see report). I felt hacked both by her own acts as by the apparent blind eye her husband, my rector, must have turned, and her subsequent attempts to claim that "sexism" faced at Church headquarters made her do it". The courts ignored that and sentenced her to five years in jail. The rector resigned. The church congregation, which included several US Congressmen and Colin Powell, was emotionally destroyed.

My personal sense of betrayal is as deep when I hear of athletes in sports that I love and in which I participated being found out to be "drug cheats". Fortunately for me so far, none of my childhood sporting heroes has yet fallen on this needle. But you have to feel for the rest of the US relay team who may lose their gold medals because of Marion Jones' doping convinction (see report)--they have so far refused to give them up--and can taste the added mixed anguish of Jamaica's relay team and some other 30 or so athletes who stand to benefit from any medal reallocation. International Olympic Committee executive board has just held meetings to decide on this.

Somewhere along the way fraud comes from greed, which will always will be one of the seven deadly sins. I don't know how you stop people being greedy.

Zimbabwe. Things are normal!

I have been struggling for a couple of weeks over how to express my feelings about the current non-outcome from Zimbabwe's presidential elections on March 29. Phrases such as "vote fiasco" have already been used (see latest CNN report). I tried to explain to a good and learned friend how Africans in general were not going to see the decline of a leader and just accept that as we would in the Caribbean. He told me I was full of ****! I also knew that African political leaders would not come out and condemn any part of the process. I did not speak to my friend again on this because I knew what he would say.

So, no surprise that once again, political leaders in southern Africa have convened a summit meeting to discuss Zimbabwe--this time the electoral stalemate. The Southern African Development Community (which could be shortened to SAD Community), a regional bloc of 14 nations, also implicitly acknowledged reports that Zimbabwe's governing party had sponsored violent attacks on opposition supporters since the election on March 29 by urging the government to ensure that a runoff, if needed, will be held “in a secure environment.” Their conclusion today offered what has been called "a weak declaration that appealed for a quick release of the results and the conclusion that the country is not in crisis". By the way, Zimbabwe's president did not attend the summit, which is widely seen as a major snub for the African leaders. South Africa's president, Thabo Mbeki, played the matter as one would expect, having had meetings with President Mugabe in Harare on his way to Zambia (see report): "There is no crisis in Zimbabwe," he told reporters.

The delay in releasing the election results and the process of recounting votes before results have been declared by Zimbabwe's Election Commissionhave raised the spectre of fraud in the minds of many commentators (see New York Times report). The results for legislative elections held on the same day as the presidential vote, were posted, and Mr. Mugabe’s party, ZANU-PF, lost its majority in Parliament. Over the past week the governing party has demanded recounts involving an increasing number of seats. A state-owned newspaper, The Sunday Mail, reported today that votes for 23 seats (out of 210) would be recounted, raising the possibility that the opposition’s victory could be reversed, Reuters reported. Zimbabwean state television reported Saturday it had unearthed a secret document detailing plans by the opposition Movement for Democratic Change to rig the elections. Isn't it amazing what powers the opposition can muster after being out of power for some 40 years?

Concluding that Zimbabwe is "not in crisis" when the country has hyperinflation, with prices reported to be rising over 100,000 percent a year, and rising, is incredible. Just figure out what that means a day, even every hour. By the hour, it would exceed what several other countries call very high inflation over a year, and they mean between 15-40 over 12 months. (Read about Iceland's plight with its current "high inflation".) In Zimbabwe, essentials like bread and soap have all but disappeared from many shops, according to news reports. Estimates indicate that 80 percent of the population live below the US$ 35 a month poverty line. Some 80 percent of the population is unemployed. The government has banned political rallies, while the opposition called for a general strike. If all of that does not make a crisis in your eyes then your view of normal must be very strange.

It's part of the business of diplomacy to dance around real issues (read the transcript of a press conference with African Finance Ministers yesterday, during the IMF/World Bank Spring Meetings in Washington, DC). Just look at an extract from what Botswana's Finance Minister said:

First, the influx of Zimbabweans over the border into his country "has been so significant that I think it has not been possible even on the Zimbabwean side for them to issue passports to everybody once they come to Botswana. So, many of these people who have come without their travel documents, and this means that this has caused quite a strain in our facilities, and every so often, our immigration officers take them back. And then, after leaving the border, sometimes by the time they arrived, some had already crossed the other side. So, we've been having that immediate problem, because it means if they need health facilities in Botswana, they must get it and many other things, but the situation as you aware is changing."

Then he mentions the election. "The impasse is simply that the results of the presidential election have not yet been announced. There seems to be some technical problems, technical or otherwise, by the Commission, because it really is the Commission that ought to announce, but they are failing to announce. The international community is waiting, including the Zimbabweans themselves. But I am one of the optimists. I think that Zimbabweans are getting close to solving their problems, and hopefully this coming week will bring miracles, and the announcement will come and they will work with them on that."

I don't know why you need "miracles" to solve "technical problems". I am not going to excuse Botswana's Finance Minister because he is supposed to focus on technical and financial rather than political issues.

Look again at the picture above from the SAD Community summit. Arms folded. Lips sealed. Remind you of the "three wise monkeys principle" to "see no evil, hear no evil, speak no evil"? If you don't know the phrase it is commonly used to describe someone who doesn't want to be involved in a situation, or someone deliberately ignoring the immorality of an act they have seen or in which they are involved. Some argue that the phrase came from the teaching of Buddhism that if we do not hear, see or speak of evil, we ourselves shall be spared all evil. Oh, such wishful thinking!