Mr. Elcott Coleby, Deputy Director, Bahamas Information Services, recently corrected reports that The Bahamas Mortgage Corporation (BMC) will be building 127 "low-cost" homes for $60 million ($480,000 each). He assured taxpayers that they will be built for $10 million ($78,741 each).
The $60 million being borrowed from the National Insurance Board, will apparently be issued in tranches of $10 million each. Presumably this means a total of 762 houses will be built with the funds borrowed from the country's social security fund?
His rebuttal to the question that the government corporation is "technically bankrupt" suggests the BMC "has always been able to meet "ALL" of its financial obligations and is not insolvent." "Additionally, the corporation has never defaulted on any of its principal and interest payments on its bonds and does not receive subvention from the Bahamas Government."
This is a very carefully crafted answer, but in the hope his refutation is a genuine desire to be transparent about taxpayer money, it would be useful if Mr. Coleby would be so kind as to answer the following questions:
- What is the total book value of mortgages held by BMC?
- What is the current default rate of BMC mortgages?
- What is the total dollar amount of defaulted mortgages?
- What is the total debt of the BMC?
- While the Bahamas Government has not provided a direct subvention, do they guarantee the bonds and other debt of the BMC?
- What is the balance of the Sinking Fund (An accrued fund intended to result in the programmed liquidation of a substantial exposure or bad debt which mitigates the perceived and actual risk)?
- Is the sinking fund money provided by the government/taxpayer?
- Are Bonds paid off from earnings of the BMC at maturity or by issuing more Bonds (debt)?
- If the BMC were to close today, what would the Bahamas Government be obligated to pay?
- Why doesn't the BMC publish an annual financial report in the press like private sector financial institutions are forced to do?
Mr. Coleby closed his response by suggesting that the BMC "continues to provide a valuable public service by assuring that affordable public housing is within reach of an increasing number of Bahamians." Realising that political rhetoric is par for the course for most governing political party members, this point alone (providing a valuable public service) gives reason to pause, and here's why – If reports are correct that approximately one third of the mortgages held by the BMC are in arrears, causing the "owners" tremendous stress, the houses being provided are not "affordable" and maybe the entire BMC "modus operandi" needs a rethink to be considerate to the taxpayers of today and those that will have to foot the deferred debt in the years ahead?
This all begs the question; Is the Bahamas Mortgage Corporation a liberator, providing affordable "low-cost" housing, or is it an albatross to mortgagees and taxpayers?
Should we have any confidence in the National Insurance Board as they recklessly “invest” the people’s money into politically directed investments.. When it comes to fiduciary prudence, they have no idea or even care how they invest the people’s money or the risks that are inherent in such investments..
Didn’t we just go through this breach of judgment with the City Markets pension funds.. Management, if that’s what you call these thugs, and the Pension Fund Trustees violated their fiduciary responsibilities and obligations by approving self-dealing investments in a blatant conflict of interest to the determent of the company’s employees.. These thugs belong in jail and should be fined for their criminal behavior.. A careful reading of the footnotes of the company’s last published Annual Report disclosed in vague accounting language this probable criminal conflict of interest.. Yet, not a word from our so-called securities regulators who haven’t a clue and have no idea what was going on..
The Bahamas Mortgage Corporation is another example of what appears to be constructive in theory but in reality is a failure in practice.. There is no meaningful transparency as the Bahamian public is kept in the dark.. The questions raised above in this blog will never be answered as management just doesn’t really care.. As for the so-called Directors, they just collect their checks, say thank you and keep their mouths shut.. Just another bunch of yes men lining up at the public trough for their payout..
Like all of our public corporations, they are nothing more that albatrosses losing tens of millions of dollars of the public’s money.. They are part of the huge economic bubble known as the Bahamian economy.. May God’s grace be upon us when the bubble bursts and we become hopelessly adrift on sea of despair and financial disaster.. For some, it is only a matter of time; for others we pray that constructive and prudent change will at last be forthcoming..
Trade winds expresses the outrage of many Bahamians as knowledge of government theft and corruption grows. Unfortunately the gang of thieves have four more years to finish us off.
Yep, just in time for the Alternate set of thieves to pillage some more!
Thank you Joan Margaret for your commentary.. One must ask what do you expect of a nation where 350 plus alleged murderers out on bail walk the streets of the country.. Frustration and outrage aside, we now accept crime as an everyday occurrence.. Our system of justice has become a failure with to many unenforceable laws and no semblance of order.. No one is held accountable as our system of courts and penal system are rapidly breaking down..
The same is true in our securities regulation as was mentioned in the City Markets example.. The real losers here, besides the pension fund holders, are the twenty percent Bahamian shareholders who loss their total equity due to incompetent Directors and a corrupt and foolhardy management.. One can only ask where was the so-called securities regulators who were evidently asleep at the switch with no securities fraud investigation ever forthcoming.. One can only conclude that a people who accept rampant corruption are as corrupt as the perpetrators themselves.. Once again no answers will be forthcoming as no one really cares that the nation’s reputation is once again called into question..
Used to be that Bicycles had to be licensed, and it was an enforced law in the 50’s, 60’s, even into the 70’s.
We eroded the Rule of law when we started letting the little laws slide.
Ignorance became a valid excuse when society stopped teaching their children the importance of, and penalties for breaking the law.
When Civil servants no longer cared to be administering the law, but were compelled to administer the various Ministers edicts, no matter how unlawful.
That there is a class or two of people who ride above the law only serves to feed the corruption, and the perception of Corruption.
That the majority of us worship these fools adds insult to injury.