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Finance Minister says no rules broken with special account for signing bonus

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Guyana’s Minister of Finance, Winston Jordan, has defended the deposit of an US$18M ‘signing bonus’ into a special account at the Bank of Guyana, as ‘standard practice,’ saying “we are not breaking any rule.”

Mr. Jordan defended the transaction in an exclusive interview with OilNOW on Monday, following mounting criticisms of the government’s handling of the transaction, including the fact that the money was not placed into the Consolidated Fund (Treasury) – a possible violation of Article 216 of the Constitution of Guyana.

The Finance Minister insists however, “when the money becomes public money, (that is when) it goes into the Consolidated Fund.”

He told OilNOW, “the decision to put money in the account is because it’s identified for a specific purpose.”

The Finance Minister explained that when money is placed into the Consolidated Fund, it becomes a part of the ‘pool’ of resources in the treasury.

According to Mr. Jordan, the only impact of placing the money in the Consolidated Fund would be a reduction in the annual deficit.

“Since you already got a deficit of $60B, if you put in US$18M, which is G$3.6B, all it does is reduces the deficit,” he said.

Mr. Jordan said by putting the ExxonMobil money in a special account, “you have it available for the special purpose for which it was intended, which is to help with our situation with Venezuela.”

According to the Guyana Finance Minister, “Its assistance given and we the government decided it would be identified for this purpose.”

He was adamant “it’s not easy to go to the world court, it requires significant funding and this is part of the assistance that is going to be made available.”

Mr. Jordan was at the time drawing reference to a claim by Venezuela to large swaths of Guyana’s land and maritime territory which seems set to end up at the International Court of Justice (ICJ). This is expected to cost Guyana significant sums in legal fees and the government has said the signing bonus – which ExxonMobil has since confirmed to be US$18M – will be used for this purpose.

“We did pay a US$18M signing bonus” – Exxon Country Manager

The Finance Minister told OilNOW, “I think the important thing is to understand…whenever the decision is being made to use the money for the purpose we intend the money will first go into Consolidated Fund, a supplementary budget will then be brought to this House for approval then the money will go back out.”

The Finance Minister was adamant, “this is not new” as he dismissed “all this talk about illegal.”

In fact, Mr. Jordan said, “We (currently) have several accounts at Bank of Guyana.”

Speaking to the standard nature of the transactions, the Finance Minister related that when loans are obtained from “multi-lateral banks, they require you to open a special account into which they will put the money.”

Responding to criticisms that the 2018 and 2017 Budget were misrepresented because the monies received from ExxonMobil had not been reflected in the Estimates, Minister Jordan insists this will be done, “when its used, when it is used.”

He cited as an example the need for the hiring of a consultant at a cost of US$1M. According to Mr. Jordan, when this is done, the US$1M for the consultancy will be transferred from the special account at the bank of Guyana to the Consolidated Fund “and the money passes out.”

The Finance Minister said this was the same practice that obtained in the management of the Petrocaribe oil for rice deal that Guyana had shared with Venezuela.

Pressed further on why Guyana did not press for a larger signing bonus and to identify the negotiators, Minister Jordan said he would be unable to say, since he was not a part of the negotiating team or process.

The payment of the signing bonus was made public this past week when a leaked correspondence between the Ministry of Finance and the Bank of Guyana surfaced, illustrating a Government diktat calling for the setting up of the special account.

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