Jamaica PM Blames Contract For Bank Governor`s Dismissal

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CaribWorldNews, KINGSTON, Jamaica, Weds. Nov. 4, 2009: Jamaica Prime Minister, Bruce Golding, yesterday claimed a highly questionable salary and top fringe benefits are to be blamed for the dismissal and not resignation of the  Governor of the Bank of Jamaica.

In an address to the House on Tuesday, Golding claimed his government `found (it) unacceptable, embarrassing and repugnant the interpretation and application of certain provisions of the governor`s contract of employment` and fired the bank head.

Bank Governor Derick Latibeaudiere was released from his duties late last week.  Golding said Latibeudiere was being paid $38 million a year, far more than the chairman of the US Federal Reserve. He blamed former Minister of Finance, Dr. Omar Davies for offering Latibeudiere such `a strange contract` which also allowed for a fully furnished and maintained official residence and where one was not provided the bank was responsible to make unlimited rental and maintenance payments:

In addition to his basic salary, Golding said the former governor was provided with a fully maintained motor car, reimbursement for `all fair and reasonable` entertainment expenses for official purposes, group medical and life insurance coverage, all benefits under the Bank`s pension scheme and all other benefits, both present and future, that are enjoyed by permanent employees of the Bank.
`The Governor thus enjoyed the generous terms of a specific contract while retaining all the benefits and privileges of a non-contracted service worker,` he told the House.

But he said it was in relation to housing that the contract was most absurd.

`The contract states that the governor shall be provided with a fully furnished and fully maintained official residence inclusive of household and gardening staff and unlimited expenses for telephone, electricity and water,` he said. `It further states that in the event that an official residence is not provided, the Governor shall be paid rent for the premises he occupies based on the average rental value as determined by two independent valuations. The contract requires that new valuations must be done every two years and the appropriate adjustments made. In addition, the Bank is required to pay the full cost of maintaining the residence. It sets no limits on the amount that can be paid for either rent or maintenance.`

In 1998, the BoJ, according to Golding, purchased a house at 15 Bracknell Avenue in upscale St. Andrew as an official residence for the Governor at a cost of J$22 million. The Board had budgeted J$35 million to cover the cost of acquiring, refurbishing and furnishing a suitable residence.

By December of that year, the governor reportedly suggested that the house be sold and advised the Board that moving into the residence generated no real benefit to him personally.

One year later at a meeting of the Board on December 2,1999, the governor reiterated that he was not keen to occupy the house for various reasons, noting the likely cost of refurbishment, claimed the PM.

But at a Board meeting on March 29th 2000, the Board accepted a recommendation of the Human Resource Development Sub-Committee that since the house had remained dormant, it should be sold, leased or rented.

Refurbishing work commenced in December 2000 and was completed in April 2002 at a cost of J$11.33 million. With furnishings amounting to J$7.04 million, the total expenditure on the property came to J$40.37 million.

At a caucus of Board members on February 6th 2003 from which the governor recused himself, it was agreed that the property would be offered for sale to the governor who had expressed an interest in purchasing it. The property was offered to him at a price of J$42 million but he declined the offer and a decision was made to dispose of it on the open market. The property was subsequently sold in November 2003 for J$40.48 million.

In the absence or non-occupation of an official residence, therefore, the Bank`s contractual obligations reverted to paying the governor rent and maintenance for the house that he occupied.

As at September 2008, the governor owned and occupied a residence in one section of St. Andrew. The assessed rental value was J$2,551,500 per annum and the annual maintenance cost was J$5,900,000 – a combined total of J$8,451,500 per annum.

`The government considers these arrangements to be unconscionable, especially at a time when the country is undergoing such severe financial stress, when public sector workers have had to be denied their planned 7 percent wage increase, when the government has not been able to meet the demand of nurses for reclassification,` added the PM.

He said that a new contract of employment with more appropriate terms will be designed for the engagement of the new Governor of the Bank.

Brian Wynter, a former deputy central bank governor and a former head of the Financial Services Commission is to assume the post of governor on December 1.

Senior deputy governor, Audrey Anderson is now acting as governor.

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