Luke Browne, the Ministry of Finance economist that wrote a letter in January asking if Building & Loan Association was about to collapse. (Photo: Facebook)
Luke Browne, the Ministry of Finance economist that wrote a letter in January asking if Building & Loan Association was about to collapse. (Photo: Facebook)

KINGSTOWN, St. Vincent, Feb. 11, IWN — Some matters relating to investor confidence and “the government takeover” of the Building & Loan Association (BLA) are “frankly baffling,” Opposition Leader Arnhim Eustace said at a press conference on Monday.

He described as an “important aspect”, the role — prior to Building & Loan being taken over by the Financial Services Authority on Feb. 1 — of persons, and their immediate family members, “in the service of institutions related to the supervision and takeover of Building & Loan”.

“I speak here of the Ministry of Finance, with particular attention to the Minister, Dr. Ralph Gonsalves and Ministry of Finance officials, including Luke Browne,” Eustace said.

Luke Browne, an economist in the Ministry of Finance, wrote a letter in a newspaper on Jan. 18 that triggered a run on BLA.

And, Eustace, a former prime minister and former minister of finance, noted that up to the time of being taken-over by the FSA, the BLA was under the supervision of the Ministry of Finance, an arrangement that began in 2010.

“It is the Ministry of Finance that signed the memorandum of understanding with Building & Loan to improve Building and Loan’s condition,” Eustace said.

He said that while Browne is identified as an economist in the Ministry of Finance, it was unclear whether he was a public servant or a civil servant.

“Nonetheless, as an official of the Ministry of Finance, the only moral justification for going public with respect to the state of affairs at Building & Loan, which precipitated a run … on the institution, as his letter has done, is that he has tried all the proper internal channels to draw the matter to the attention of his superiors in the Ministry of Finance,” Eustace said.

Browne has said that he acted as a shareholder of BLA rather than as a Ministry of Finance employee and that before going public, he unsuccessfully attempted to get answers from the management of the BLA.

“But they were supervising Building and Loan. They were already for years supervising the Building and Loan and they said they were making progress. So what’s this?” Eustace said, noting an FSA statement before the take-over about it assessment of the Ministry of Finance’s work with the BLA.

“In going public, was Mr. Browne … inviting inferences that the Minister and all relevant authorities were unwilling to deal proactively with what he, an official under that very minister, deemed to be an institution on the brink of collapse; and that he was therefore faced with no other option but to expose it publicly and risk a run on the institution?

“What is Mr. Browne’s real status in the Ministry of Finance?

“What previous efforts did he make to have this matter addressed internally so as to avoid a loss of investor confidence in Building & Loan and St. Vincent in general?” Eustace said.

Both Prime Minister Dr Ralph Gonsalves and Browne himself have said that he is involved in pension reform at the Ministry.

Prime Minister Dr. Ralph Gonsalves, left, and Opposition Leader Arnhim Eustace (File montage).
Prime Minister Dr. Ralph Gonsalves, left, and Opposition Leader Arnhim Eustace (File montage).

In addressing the role of the Minister of Finance, Eustace said the BLA had entered into a memorandum of understanding with the Ministry of Finance in February 2010, which continued under “close” FSA supervision since the FSA’s establishment in November 2012.

He noted that both the FSA and the Ministry of Finance fall under the Minister of Finance, which is headed by Gonsalves.

Eustace then announced that some $1 million at Building & Loan in the name of Theresa Francis, Gonsalves’ mother, was withdrawn in full “in the final months of 2012”.

Gonsalves, speaking separately on Monday, accused Eustace of “nastiness” over the disclosure and said his brothers withdrew the money based on the advise of a former director of the BLA.

Gonsalves, who deposited $21,000 at the BLA on behalf of one of his daughters, said he will urge his brothers to reinvest the money at the BLA.