KINGSTON — Group Managing Director of National Commercial Bank (NCB), Patrick Hylton, has suggested that “every single debtor’s file” from the FINSAC experience be opened up to public scrutiny, to allow for informed public opinion on whether the Financial Sector Adjustment Company (FINSAC) acted fairly.
Testifying at the Commission on Tuesday, Mr. Hylton said that to make a determination as to whether or not FINSAC treated debtors fairly, would require careful and detailed analysis of the majority, if not all, of the thousands of loans the company purchased.
“This would include those loans that were reviewed by the oversight committee, as well as those that sought to take advantage of the special window of opportunity that was offered and publicized in the media in 2001, as these represented special efforts to give people an opportunity to resolve problem loans,” he said.
He said that if there were 20 complaints to the commission, of the “tens of thousands” of facilities handled, such a set of circumstances could not lead to any reasonable conclusion as to whether FINSAC was generally fair to debtors, and the extent to which debtors were treated similarly.
“To my mind, the only fair way to accomplish that is to have every single debtor’s file open to the scrutiny of the commission and, perhaps, the public,” he suggested.
“If this is done, then the original loan circumstances, the record of the negotiations which took place, the rationale for FINSAC’s approach, as well as the response of the debtors will be public knowledge, so that an informed opinion can be adopted,” he stated.
He added that, another important reason for that approach was the fact that, to the extent that the loans were purchased by the government and funded with taxpayers’ money, every dollar of write-off reflected a benefit at the taxpayers’ expense.
“In those circumstances, taxpayers should be informed of who the beneficiaries were, and the magnitude of the benefits they received,” he said.
Mr. Hylton, who headed FINSAC between 1998 and 2003, said that while there was no explicit undertaking to bail out borrowers, “the reality of circumstances conspired to effectively result in significant compromises to debtors at taxpayers’ expense”.
“The truth is that there were hundreds of millions of dollars, and possibly billions of dollars of write-offs. In many instances, where the circumstances dictated no other reasonable alternative, this would include some level of principal on the loans,” he stated.
He said that FINSAC approved significant write-offs on “hundreds, possibly thousands of debts”, irrespective of colour, class, race religion, creed or political persuasion.
Mr. Hylton’s examination was led by his attorney, Dave Garcia, General Manager of NCB’s legal and corporate compliance division, who is representing the bank. He was also cross examined by attorneys, Sandra Minott Phillips (Jamaican Redevelopment Foundation Inc.), Brian Moodie (FINSAC) and Anthony Levy, who has represented Thermoplastics Limited at the enquiry.
The Commission comprises Worrick Bogle, chairman and Charles Ross, Co-commissioner. (Retired) Justice Henderson Downer is their legal adviser, and Judith Clarke, Commission’s attorney.
By BALFORD HENRY, JIS Reporter & Editor