US$18M bonus
By Samuel Sukhnandan
Despite numerous calls for Government to transfer the controversial US$18 million signing bonus received from ExxonMobil and placed in a private bank account, to the Consolidated Fund, the Government remains firm on its position to keep the monies in that account for a bit longer.
Minister of State Joseph Harmon told Guyana Times on Wednesday that Cabinet has not deliberated on whether to have the monies transferred yet, reiterating that there was a purpose for which these monies were not placed into the Consolidated Fund and that has to do with the border dispute with Venezuela.
“So we have to await a ruling from the United Nations (UN) Secretary General (António Guterres) on what he is going to decide. And according to our Minister of Foreign Affairs (Carl Greenidge) that will take place sometime during the month of January. That’s all I can say right now,” Harmon explained.
After admitting that Government had received a signing bonus from ExxonMobil and its partners more than a year ago and never disclosed this to the public, Natural Resources Minister Raphael Trotman said the bonus was intended to be used for legal fees pertaining to the preservation of Guyana’s territorial integrity, should its case with Venezuela reach the International Court of Justice (ICJ).
But when the oil contract was released to the general public, ExxonMobil clarified that the US$18 million bonus paid to the Government was meant to secure a 10-year extension of the renegotiated contract. ExxonMobil Country Manager Rod Henson made this disclosure when addressing the media at a press conference on the same day that the contract was released.
Harmon noted that until a decision is made by the UN, only then will Cabinet be able to sit and deliberate how the monies will be utilised or whether it should indeed be placed in the Consolidated fund.
Previously, Minister Greenidge had told the National Assembly that Cabinet agreed to collect the bonus in June 2016, stating that the full Cabinet then approved the terms negotiated and the arrangements to receive the funds. He, however, said only those directly involved knew how the monies would be spent.
Greenidge further revealed that not all of the money would go towards paying an “enlarged” legal team to represent Guyana’s interest once the border controversy is referred to the ICJ by the United Nations Secretary General at the end of 2017. The Foreign Affairs Minister said US$15 million would go towards legal fees and the other US$3 million would go towards urgent training for Guyanese in petroleum.
In defending the Government, Minister Greenidge also said that releasing details about the bonus posed a risk to Guyana’s strategy to defend its territorial integrity when the matter is taken before the ICJ.
However, it was repeatedly noted that Government’s move to have the monies placed in a private account is considered to be in violation of the Fiscal Management and Accountability Act (FMA).
The bonus first came to light in a leaked correspondence dated September 20, 2016, and addressed to the Governor of the Bank of Guyana with this subject: “Signing bonus granted by ExxonMobil – Request to open bank account”.
It shows that Finance Secretary at the Finance Ministry, Hector Butts, had requested that a foreign currency account be opened at the Bank of Guyana 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.”
