Speaker of the House of Assembly, Jomo Thomas, is standing by his position articulated in his Feb. 14 “Plain Talk” column, that the Unity Labour Party administration has violated the Finance Administration Act.
Thomas, in the column, described as “the biggest story of the 2020 budgetary debate”, the Feb. 4 revelation by Leader of the Opposition Godwin Friday that the government broke the law by exceeding the EC$50 million overdraft Parliament authorises it to run at a commercial bank.
Thomas further agreed with Friday when he said the government also broke the law by not repaying the overdraft by the end of each financial year, and when it converted into a loan, without lawmakers’ approval, the amount on the overdraft that exceeded what Parliament approved.
But Prime Minister Ralph Gonsalves, speaking on radio on Feb. 16, said that the opposition leader did not understand the law, and that he misled Thomas, who, like Gonsalves and Friday, is a lawyer.
However, Thomas, speaking on WE FM on Friday, maintained his position, citing his training and telling listeners that he had read the law himself and had sought the opinion of finance experts.
“I went to the law. I went to the Financial Administration Act… The act says you can borrow on an overdraft, it says you can do it by law or by resolution, the period of the overdraft is 12 months. That’s what the act says,” Thomas said on WE FM’s “2020 Manifesto”.
Thomas also noted that after Friday made his claim in Parliament on Feb. 4, on Feb. 6, the prime minister spoke for four hours and did not address the issue; neither did Minister of Finance Camillo Gonsalves, as he wrapped up the Budget Debate that day.
“So, in my mind, I took it to mean that they were letting this — see if this could fly under the radar,” Thomas said, adding that in his columns, he said that, for him, the biggest outtake from the budget was Friday’s allegation.
“And I also said that if what the opposition leader was saying is true, it meant that the government was engaged in an illegality,” Thomas said, adding that he also noted what the law said.
Thomas who was a candidate for the ULP in the 2015 election but resigned from the party last October, said that he considers Senator Julian Francis, who is Minister of Works and General Secretary of the ULP, to be the best political whip ever in St. Vincent and the Grenadines.
“The man knows how to respond. But he’s off,” Thomas said, adding that Francis conflates a private citizen’s and a government’s overdraft at a commercial bank.
“That is not the same thing. Because a bank may decide to let [a private citizen] run over on the overdraft because they may say, ‘Okay, [the private citizen may come in with his salary next week and he may cover that.’”
But Thomas said that the government’s overdraft, as reflected in Section 44 and 45 of the Finance Administration Act “is not a relationship between the bank and the government, fundamentally.
“It is a relationship between the government and the law.”
Section 44 of the law speaks to “Authorisation of debt” and says:
“No money shall be raised on the credit of the Government except under the authority of this or another Act of Parliament or of a resolution of the House of Assembly.”
Meanwhile, section 45, which addresses “Short-term borrowing”, says:
“The Minister may. in a financial year, when authorised by resolution of the House of Assembly, borrow money to meet current requirements from a bank or other financial institution by means of advances to an amount not exceeding in the aggregate the sum specified in the resolution.”
“The law says that you have 12 months within which to do overdraft. The law says it’s a fluctuating overdraft and, therefore, the overdraft is not a loan. The overdraft cannot willy nilly be turned into a loan because the law does not say that.”
“… Well, let me just say, as well, that I have spoken to financial people, [and] all of them to a man and I’ve spoken to people in St. Vincent and I spoke to people across the region, all of them to a man says that in strict accounting financial terms, an overdraft is not a loan. It’s not a loan. I hope you understand what I’m saying…
“So I don’t just talk because I want to talk and I didn’t say anything because I want to beat up on the ULP,” Thomas said, adding that he is a Vincentian and is concerned.
He noted a statement that the Ministry of Finance issued last Thursday and added that the prime minister, in his radio comments, said every government has done as the ULP administration has.
“This is why on matters of judicial review, every time I sue the government, I beat them. Because they say, ‘Oh, everybody has done it.’ … Guess what? The fact that everybody was doing it does not make it right; does not mean that it conforms to the law.
“If you want turn an overdraft into a loan, you have to get the authority to do it. So the relationship that you have with the bank which says, ‘Oh, I could just talk to the bank and turn it into a loan’, that is not what the law says.”
Thomas said that while he did not want to make a political point.
“I don’t want to beat up on nobody,” he said, noting that in 2001, it was because of the best practice projections of the ULP administration that the British readily gave debt forgiveness to SVG, although it had refused to do so under the New Democratic Party government.
“So I’m not beating up on anybody. But listen, I spent 10 years in university. I hear people talk all kind of foolishness, ‘He ain’t know nothing about economics’, ‘He ain’t know nothing about finance’.
“I have a master’s degree in political economy — a master’s degree. I did the same regression analysis like everybody else. In law school, I did a number of finance and banking classes. So I’m not just talking off the top of my head. Because people see me walking around with a short pants on a sandal and a dashiki sometimes or t-shirt in all of my simplicity, they think, well, this man don’t know nothing or think that I am just a blowhard. But I don’t just talk like that. I don’t wanna beat nobody. I don’t have no political axe to grind,” Thomas said.
On the question of why he did not intervene in the debate and say that the government had broken the law, Thomas said:
“… when I go to Parliament and I sit on that chair, I don’t think that I am ULP. I think that I’m the people’s representative. They put me there to serve as speaker and I try to be as honest, as balanced, as straightforward as I can get.”
He also responded to the prime minister comments about the authorised overdraft limit.
“The numbers are not what’s fundamental…. What is fundamental is that each year, you have a limit. And if you ever go over that limit, you are breaking the law in the same way that PM admitted during the October 2019 debate that when the government went over the $25 million limit on the special warrants, it was not a hanging offence.
“But whether it is a hanging offence, or it’s a reprimand and discharge, the fact of the matter is, when you go over the special warrants limit, you’re breaking the law. When you go over the limit as is authorised in the resolution, you’re breaking the law,” Thomas said.
On Monday, at a press conference, the prime minister restated his government’s position that it had done nothing wrong in relation to the use of the overdraft.