Govt to transfer US$18M bonus to Consolidated Fund

Oil bonus scandal

– but only when Guyana goes to ICJ over border controversy

By Jarryl Bryan

In the wake of heated debate and criticism regarding Government secretly collecting and banking a US$18 million bonus from oil company ExxonMobil, Finance Minister Winston Jordan is assuring that the money would eventually be relocated to the Consolidated Fund.
When news of the signing bonus first broke, Government had claimed that the money would be used for legal fees to settle Guyana’s border controversy with Venezuela. Confronted by the media on Thursday, Jordan said that while the money would eventually be transferred, this would only be done when Guyana actually has to go to court.
“The money is temporarily in an account at the Bank of Guyana and by the way, it’s earning interest. When the activity has been activated, that is, if we are going to the Court, the monies will be transferred to the Consolidated Fund. I will go to the Parliament to seek a supplementary budget for the exact sum to pay the lawyers and so forth,” Jordan told reporters.
While serious concerns were raised about the transaction possibly violating the Fiscal Management and Accountability (FMA) Act, Jordan dismissed those concerns. The Minister said that if this was so, then there were a number of accounts which also violate the Act. He gave one such example as the Lotto Fund.
“Let’s go to the Lotto Fund, for example. We get 24 per cent from the proceeds of Lotto, isn’t that supposed to go exactly into the Consolidated Fund? But instead, it goes to the Lotto Fund and expenses are expended out of the Lotto Fund and at the end of the year, you transfer whatever is the balance to the Consolidated Fund,” Jordan related.
He maintained that like this fund, the Government determined on its own what to do with the signing bonus. The law says that with a few exceptions, money received by Guyana must be paid into a Consolidated Fund. Informed that the Auditor General would be launching an investigation into the transaction, Jordan professed to welcome this move.
Guyana, in the throes of a controversy with Venezuela, is expected to have its matter referred to the International Court of Justice (ICJ) if a resolution is not reached with Venezuela by this year-end.
There have been specific actions which have led to this drive to seek a final resolution. These include Venezuela President Nicolás Maduro issuing a decree purporting to extend the Spanish-speaking country’s boundary into offshore Essequibo and incidents between the Venezuelan military and Guyanese.

Signing bonus
Guyana, which had a longstanding agreement with ExxonMobil, renegotiated that agreement after the company’s 2015 oil find in the Stabroek block. In May of that year, Exxon confirmed that more than 295 feet of high-quality oil-bearing sandstone reservoirs had been discovered at its Liza 1 exploration well.
Included in the new agreement was a two per cent royalty rate, an increase of one per cent. But Government had repeatedly pleaded ignorance to reports that it received a US$20 million signing bonus from Exxon. These reports gained traction after the bonus was exposed by Chartered Accountant Christopher Ram.
Evidence of the shady transaction came to light in a leaked correspondence dated September 20, 2016 and addressed to the Governor of the Bank of Guyana with this subject line: “Signing bonus granted by ExxonMobil – Request to open bank account”.
It shows that Finance Secretary at the Finance Ministry, Hector Butts, has requested that a foreign currency account be opened at the Bank in order to receive a deposit in the form of a ‘signing bonus’ to be given by ExxonMobil.
The letter stated, “This account should not be treated as part of the Bank’s reserves. Instead, the proceeds should be held in the currency of the deposit, that is United States dollars, and invested in secured interest-bearing securities.”
The missive also listed the signatories to the account: Hector Butts, Finance Secretary at the Finance Ministry; Louise Bouyea, Deputy Finance Secretary at the Finance Ministry; Jawahar Persaud, Accountant General (Acting) at the Finance Ministry; and Jennifer Chapman, Deputy Accountant General at the Finance Ministry. The letter was also copied to Natural Resources Minister Raphael Trotman.
Condemnation has already flowed in from the Transparency Institute of Guyana Inc (TIGI) and from Ram himself. The Government has been slammed for being given the opportunity to, but refusing to come clean on several occasions.
After the fact, both Natural Resources Minister Raphael Trotman and President David Granger defended the secrecy by saying the money would be used to defend Guyana’s sovereignty in the legal process.