A Presidential Challenge

By Dr. Selwyn R. Cudjoe
December 01, 2010

Dr. Selwyn R. CudjoeWhat does the president of a country do when he is asked to break the law? He responds firmly and comes down on the side of the law knowing that political leaders are always more concerned about gaining partisan advantage than respecting the laws they were elected to uphold. The Cabinet of Trinidad and Tobago has sent a letter to the President of the Republic demanding that he revokes the appointments of the non-executive directors of the Central Bank before their respective terms expire.

He should not do it. If he does he would be breaking the law of the land. It is not the example he wishes to set for the nation. [Full disclosure: I am a member of the Board.]

In 1997, after the United National Congress (UNC) and the National Alliance for Reconstruction (NAR) formed the government, Winston Dookeran was appointed Governor of the Central Bank. He served until Governor Ewart Williams was appointed to replace him. In 2001, the Board consisted of Randolph King, Permanent Secretary, Winston Thompson, Patrick Watson, Raymond Ottley and Kamal Mankee.

In 2002 PNM won the elections. The members of the Board remained in place until their terms expired. In so doing PNM merely followed established precedence: a newly elected government waits until a director’s term of office expires and then replaces him/her with a person of their choice.

In May 2010 the UNC-led coalition won the election. Its first order of business was to call for the resignations of the directors of all Boards. Among its many objectives was to replace the directors of the Central Bank Board and the Securities and Exchange Committee which is led Deborah Thomas-Felix. This proposed course of action led Thomas-Felix to write the President a strong letter about the illegality of his proposed action. Presently, the SEC is unable to function because its Board does not have the necessary quorum.

The Central Bank’s Board is approaching a similar dilemma. Section 7 of the Central Bank Act provides that the President shall appoint the Governor, the Deputy Governors and the other directors of the bank. Under Section 12 of the Act the President may terminate the appointment of the Governor, the deputy governors or any director if she or he becomes of unsound mind, bankrupt, imprisoned; is convicted of dishonesty; guilty of misconduct in relation to his duties and is absent from two consecutive meetings without leave granted by the Board.

Nothing in the Act contemplates the revocation of a member’s appointment when a new political party is elected to office. There are three major reasons for this: the Board stands as an independent institution in the society; nationally and internationally, the economic stability of a country depends on its monetary and fiscal policies; and the assurance that its policies are informed by economic consideration rather than the demands of party politics.

When one government replaces another it is imperative that the Central Bank remains and seen as being stable. Continuity must be its watch word. The international community does not care who is elected to government. It is concerned about the Bank’s independence; the stability of its financial systems; the integrity of its judiciary; and a corporate governance structure that passes international muster. The international community wants to be assured that the money it invests in our country is safe and our courts honor contracts that are made?

When David Cameron and the Conservatives won the recent election in England it did many things such as leveling the most severe cuts in the British economy since World War II. It did not touch the directorship of the Bank of England. The Bank was concerned with the effect government spending would have on demand and whether such actions would lead to a diminishing of investors’ confidence. Cameron was smart enough to let the bank do what it does best: that is, regulate the economy.

When President Barark Obama was elected president of the United States he did not touch the Federal Reserve Board, the U.S. Central Bank, or its Ben Bernanke, its chairman, although the country was undergoing its worst recession since 1929. Not only did he work hand in hand with Bernanke, a Republican who was appointed by President George Bush, another Republican, to stabilize the nation’s economy, he also selected him for another term of office. President Obama recognized that to rescue a faltering economy he needed an independent Central Bank. He also knew that once they were elected, the Governor and the directors could not be removed from office because of their policy views.

A few Saturdays ago the Minister of Finance asserted that because the country voted “change” the Prime Minister can do what she wishes, including removing the directors of the Central Bank and the SEC and presumably the Chairman of the latter institution. Could this also mean that he soon would be asking for the revocation of the governor’s appointment? Yet, in this uncertainty one does not hear the voices of Transparency International or the Bankers whose concern cannot only be the bottom line.

The independence of the Central Bank and the stability of the financial system are especially important now that the government may have to go to the international market to obtain loans to inject into CLICO and other entities. Recently Paul Krugman (New York Times, November 26) reminded his readers of the tragedy that befell the Irish economy after the politicians, in cahoots with the bankers, destabilized the economy leading to tremendous pressure on the nation’s credit worthiness.

If the President yields to the illegal acts he may be setting the stage to commit further illegal acts. Both the President and the Chief Justice assumed their positions because of political acts. Once they were appointed to public offices their terms of office were dictated by the law of the land which no political party could circumvent because it disagrees with the fact that they (President and Chief Justice) were appointed by another political party.

The President has no choice but to reject the illegal moves the Prime Minister and her Cabinet are asking him to undertake. If he succumbs to their pressure the revocation of his and the CJ’s appointment could open up the floodgates to other illegal acts. His failure to be resolute will only set the stage of entrenching a tyrannical government which is not what Trinidadians and Tobagonians voted for in May 2010.

11 thoughts on “A Presidential Challenge”

  1. If ‘the board stands as an independent institution in the society’ how did Dr Cudjoe, a highly publicised supporter of the PNM get appointed? Where was his independence during his anti-UNC campaign & his ‘countdown to Panday’s political oblivion’? Why was he selected & had to be subsequently trained in the ‘world of economics & money’ at taxpayers expense? Is he now writing for ‘continued supper & 1st class airfares’ at taxpayers expense or has he resigned as yet?

    1. Good Point Emen. Political appointments go when the government changes. You do your song and dance for some food and when the time come you pack your jahjee bundle and go quietly. It is the dignified approach… But sometimes the perks are too much to go quietly so a big burrahha is made with the hope that the government will keep doling out money for someone who spoke against them.

      1. This is why Trinidad remains a third world country. At least appreciate or address the point that is being made and put aside the partisan acidic commentary. Does Prof Cudjoe have a legitimate point or not? Ask what is best for Trinidad and Tobago not the PNM or the PP.

  2. Just because Cameron and Obama kept members of the board does not mean it is right. Bernake and King have both been shown to be members of a global elite fighting to avoid the banking industry taking the loses it should and instead transferring banking debt to citizens and future citizens. Why should we let the Trinidad Central Bank, and the CLico debacle do the same thing here and to our citizens?

  3. Come on Dr. Cudjoe, do the honorable thing and resign. You live in the USA. You should know how it works. New administration, new appointees.Besides, your appointment to the Board of the Central bank was political,inappropriate and a reward for loyalty.Avoid the humiliation of prolonging this matter. Your appointment ends early with the call of an early election.

  4. i lost respect for that man eat a food man you have no right to talk for the black man you sellout

  5. Emen, Dylan, TMan and ANN I have news for all of you – we still live in a democracy. I know that the PPP interpret that to mean that since the people voted for them overwhelmingly, they now have the power to do anything they want. No,No, no thgat aint so, if it were that way then it would be a waste of time to call ourselves a democracy. Kamla, through the encouragement of her guru Sat changed the ‘Culture’ ministry to ‘Multiculturism’ I hate and despise that term but i respect their authority to do it. I hated the change of the national merit award from ‘Trinity’ to whatever it is today (I never liked the word Trinity in the first place) but I respected the process that was used to get there. Now, you guys are saying that Queen K and Dooks can compel the President to get rid of a Board because they dont like the Board? Is that democracy? In a democracy we must respect LAW and ORDER even when our opinions differ. While I understand Queen K disillusionment with her name appearing on secret wiretapping, she should be the first to recognise thatwe live in a different kind of world now. We do not have to bow to royalty if we dont want to, in the get rich quick world of today, the privileged are the most fragrant violators of decency and lawlessness. We therefore, should not be deterred by ‘titles’ before doing the right thing, and whether one be a private or admiral we all stand equal under the law. Less than that is NOT democracy.

  6. “Among its many objectives was to replace the directors of the Central Bank Board and the Securities and Exchange Committee which is led Deborah Thomas-Felix. This proposed course of action led Thomas-Felix to write the President a strong letter about the illegality of his proposed action.”

    The Minister of Finance needs a team of people with whom he can work with, obviously Ms. Cox do not fit that description. By the way did the SIA inform Debs in advance of her intended departure???

  7. What you all are addressing is purely political affinity and has nothing to do with law, competence or autonomy. This body of chosen individuals who were contracted to serve a specific term must be allowed to complete their term of office unless their performance falls within the published ‘reasons to fire’. It is expected that these individuals are first and foremost competent financial and civic minded people who understand that they are there to represent Trinidad and Tobago’s financial health and NOT the political directorate of the government in power. The expressions as stated above are political sentiments not sound opinions.

    1. Kian said “It is expected that these individuals are first and foremost competent financial and civic minded people who understand that they are there to represent Trinidad and Tobago’s financial health and NOT the political directorate of the government in power”

      The government in power is accountable to the people who place them in power. Ultimately the government is responsible for the financial health of the nation, not individuals Kian. Individuals are small time players in the economic process. Governments are place there to ensure proper fiscal management. What are the financial qualifications of Dr. Cudjoe for his position in the board of directors? The government have to ask these questions, who is BEST qualified to bring the right advice and make the decisions for nationals. That my friend is where the rubber hits the road….. Change is a necessary part of growth.

      1. Khem, in a democracy the govt does not always control every single agency, some by design function best without political interventiopns.

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