Governor Harrison Highlights Safeguarding Anguillian's Money - In Relation To Social Security Loan

The office of Governor Alistair Harrison forwarded his speaking notes from a press conference where he remarked on one of the sour points between him and the Chief Minister in relation to the Social Security Board seeking a loan of US $200 million to fund a number of projects on Anguilla. Social Security falls within the responsibility of the Chief Minister, Hubert Hughes, who turned 77 on October 15,  since he also serves as Minister of Finance.

Governor's Remarks:

"I don’t want to comment in detail on this matter.  Mr Bellingham is still waiting for a reply from the Chief Minister to his letter of 30 September on the issue, and for answers to the questions that the FCO sent to him.
 
What I do want to do is to explain why I think this matter is so important, and why the people of Anguilla need to know the facts. The Anguilla Social Security Fund was set up thirty years ago by Ronald Webster. It provides short-term benefits in case of sickness and maternity leave to its 10,000 or so insured members, and important long-term benefits including, since 2002, a non-contributory pension. Everyone in Anguilla hopes to reach retirement age and to have some assurance that their pension will be paid.
 
The Anguilla scheme is regarded as a model of its type. It has assets of around EC $250 million, ie just under US $100 million. It's worth remembering that figure. And it's worth remembering that the scheme is not just for the 9-10,000 people already covered, but also for the young people and children (and all the children to come) who will one day enter the workforce and one day hope to go and collect their pensions, and other benefits due to them.
 
On 9 July this year the Chief Minister signed a guarantee for a loan mortgaged on the assets of the Social Security Fund - a loan for US $200 million, more than twice the value of those assets. The loan, if it had been taken up, would have been guaranteed by that money, and if the social security money ran out the guarantee would have fallen to the Government of Anguilla. In short, if things went wrong, you the people of Anguilla would have ended up paying twice over.
 
The loan would have financed a brand new HQ for the Social Security Fund, and new Government offices. Executive Council looked at these ideas earlier this year and agreed to explore the plans. EXCO wanted to be certain that the project was practical; that the rent from the offices that Social Security and the Government did not need would pay for the loan; and that it was the right thing for Anguilla in these straitened times. No final decision was taken, but Ministers and officials were looking at the ideas in a cautious and professional way.
 
It is unclear what happened next, which is why the matter is being investigated. But it appears that a loan was offered at an unbelievably low rate of interest - 1.5% as against the 6-8% that might be typical on such a loan over such a long period.  This proposal should have set alarm bells ringing. We are currently establishing, with the help of the relevant authorities, what actually happened and it would not be helpful to say more at this stage.
 
Before guaranteeing the loan the Chief Minister appears - on the basis of his recent public comments - not to have consulted EXCO; nor the Attorney-General; nor his own experts in the Finance Ministry; nor the House of Assembly; nor the British Government, with whom Government borrowing, and Social Security borrowing, have to be agreed. But the most important stakeholder he failed to consult was the people of Anguilla. On whose advice he did this, and with what due diligence in advance of his decision, is what we are trying to establish, among other things.
 
Let me come back to that figure - US $200 million: around EC $35,000 for every man, woman and child on this island. 
 
It's not my money; 
 
- it's not the Foreign Office's money; 
 
- it's not the Government of Anguilla's money; 
 
- it's the people's money.
 
My job here is to ensure the good governance of Anguilla in the interests of the people of Anguilla. In this case, to safeguard their money. I want to ensure that we understand what so nearly went wrong, and to ensure that it will never happen again."