KINGSTOWN, St. Vincent, Feb. 11, IWN – Prime Minister Dr Ralph Gonsalves on Feb. 4, invested $21,000 in the embattled Building & Loan Association (BLA) on behalf of one of his daughters, and urged other Vincentians to invest also.
But one week later, he is on the defensive, explaining why two of his own brothers withdrew money from the building society while it was under the supervision of the Ministry of Finance, which he heads.
The money was withdrawn on Oct. 1, 2012, he said on radio Monday.
The withdrawal came months before a Jan. 18, 2013 letter in a newspaper by Ministry of Finance economist Luke Browne, questioning the financial health of BLA.
The letter triggered a run on the institution and reports say millions of dollars were withdrawn ahead of a take-over by the Financial Services Authority (FSA) on Feb. 1.
At a press conference on Monday, Opposition Leader Arnhim Eustace disclosed the information about the withdrawal of money from the account of Theresa Francis, Gonsalves’ mother.
Gonsalves, in his response on radio, accused Eustace of being “nasty” and of beating up on his 93-year-old mother, who he says has Alzheimer’s.
In making the disclosure, Eustace told a press conference at his New Democratic Party headquarters:
“I am reliably informed that funds in excess of EC$1 million, all monies held at Building & Loan in the name of Ms Theresa Francis, mother of the Minister of Finance, Dr. Ralph Gonsalves, were withdrawn in full in the final months of 2012.
“… I don’t know who else, in related institutions, or in the Ministry of Finance, or in the FSA or anybody else whose families might have withdrawn resources just before the FSA take-over. … But I have this information and I have no reason to doubt that there may be others. I just don’t know at this time.”
Eustace’s disclosure and Gonsalves’ comments on Monday are the latest development surrounding the 72-year-old BLA.
The building society came into focus when The Vincentian newspaper published the letter by Browne, which asked if BLA was on the verge of collapse.
Gonsalves said Monday that he was told that BLA “came under stress” after Browne’s letter.
The run on BLA is said to have prompted the FSA — which is responsible for the oversight of the non-commercial bank financial institution — to take over BLA on Feb. 1.
An FSA statement before the take-over revealed that BLA had been under the supervision of the Ministry of Finance since 2010.
“And this period when this money was withdrawn overlaps with the period of the Minister of Finance, who was responsible for the supervision of Building and Loan,” Eustace further said of the withdrawal.
“In the circumstances, how can investors be expected to maintain their investments in Building & Loan when immediate family members of the minister in supervision of the Building & Loan have withdrawn theirs?” Eustace told the press conference.
“With respect to the immediate future, many members will no doubt continue to apply to withdraw their respective investments in Building & Loan. … I advise, in my capacity as a citizen and Leader of the Opposition and shadow minister of finance, that the forgoing be taken into consideration to assist members in making an informed decision about their investments. You have to take into account all the factors you are hearing about.
“Further, I call on the FSA to give the members of the Building and Loan Association — the 20-odd thousand people — a more fulsome account of the status of Building & Loan, with all deliberate speed,” Eustace said.
The FSA had previously said that it will meet with shareholder of the BLA.
Meanwhile, Gonsalves said he was not aware that his brothers had withdrawn their mother’s moneyfrom BLA.
“They withdrew the money, I understand today, on the first of October last year,” he said on WE FM’s “Shake-up”, noting the Oct. 1, 2012 date of the transaction.
Gonsalves further said he was unaware of the development when he opened the account for his daughter last week.
“I did not know then that my two brothers, who own the account with my mother — not me, I have no interest in it, none whatsoever — that they had taken out the money on October the first.”
Gonsalves said when he opened the account last week, he mentioned that his parents had an association with BLA since the 1940s and had said his mother and brothers still had an account there.
“Of course, somebody then, who is inside Building & Loan office, went and look up Theresa Francis and tell Eustace.
“I don’t know if it is anybody who has left the organisation since the FSA went in who told him … because I doubt anybody who is there will do a thing like that.
“But this is an attempt by Eustace to politicise something and score a narrow political point in relation to a woman who is 93 years of age in a wheelchair, suffers from Alzheimer’s,” Gonsalves said.
Gonsalves said that when his press secretary, Hans King, told him of Eustace’s announcement he called his brother to inquire.
“He said, ‘I drew it out because a past director of Building & Loan advised me to draw it out. He said, ‘And he did not advise me once; he advised me repeatedly,’” Gonsalves said.
“I will urge them, that FSA has taken over, to put back the money — some or all…” Gonsalves said in relation to his brothers.
Correction: In an earlier version of this story, we said Luke Browne’s letter was published on Jan. 18, 2012. It was actually published on Jan. 18, 2013.