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R 061910Z NOV 09
FM AMEMBASSY BELMOPAN
TO SECSTATE WASHDC 2109
INFO WHA CENTRAL AMERICA COLLECTIVE

UNCLAS BELMOPAN 000411 
 
 
DEPT FOR WHA/CEN (JENNIFER VANTRUMP) 
 
E.O. 12958: N/A 
TAGS: PGOV BH
SUBJECT: FINANCIAL WOES AT THE BELIZE CITY COUNCIL 
 
REF: (A) BELMOPAN 96, (B) BELMOPAN 238 
 
 
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Summary 
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¶1.  During the last week of September, the Belize City Council 
(CitCo) became embroiled in two financial and political crises. 
These situations have emanated from charges levied against the Mayor 
and members of the financial staff, and from demonstrations by 
workers and sanitation companies for payments the Council owes them. 
 The present UDP administration was elected in February on a 
platform which promised to combat corruption and implement greater 
transparency.  Even so, efforts to prosecute members of the previous 
PUP Administration for corruption have proven unsuccessful (refs A 
and B). The allegations of financial mismanagement against Mayor 
Zenida Moya-Flowers represent the first time that criminal charges 
have been levied against a member of the sitting administration. 
Allegations of nepotism and financial mismanagement also plagued 
Mayor Moya in the run up to March 2009 municipal elections.  At the 
same time, the cash strapped Belize City Council was finally 
confronted with public demonstrations against the continued 
non-payment to sanitation companies and workers in Belize City.  End 
summary. 
 
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Unaccounted funds at Belize City Council 
---------------------------------------- 
 
¶2. In July 2009, Patrick Tillet, the Financial Controller of Belize 
City Council appointed by the Central Government, reported financial 
irregularities concerning unaccounted funds at CitCo.  Allegations 
against the Mayor were made by Mr. Tillet in connection with an 
estimated BZ $20,000 (US $10,000) which were not properly accounted 
for at CitCo during April 2009.  Since then, a special investigation 
by the Office of the Auditor General has confirmed the unaccounted 
funds for April, as well as an estimated total of BZ $275,000 (US 
$137,500) for the period January to April 2009.  At the time, Mayor 
Moya-Flowers explained that the funds were not missing, but were 
used to pay for emergency services obtained by the City Council in a 
process termed "under depositing."  However, the Office of the Prime 
Minster then forwarded the Auditor General's report to the Director 
of Public Prosecutions (DPP) for consideration and action. 
 
¶3. On October 1, Mayor Zenida Moya-Flowers, Kiran Vanjani (City 
Administrator), and Duane Davis (Director of Finance) were charged 
with 22 counts of "uttering upon false documents," and with two 
additional counts of failing to comply with accounting regulations 
of the City Council.  Kiran Budhrani (Assistant Financial 
Administrator) was charged with two counts of failure to comply with 
accounting regulations of the City Council.  The charges do not 
relate to the BZ $275,000 in unaccounted funds, but to 22 false 
receipts for gas, amounting to a total of BZ $1,540 (US $770).  The 
DPP's Office claims the investigation is ongoing, and that further 
charges may still be placed. 
 
¶4. The first UDP official to be held publicly accountable for 
missing funds by the Administration, Mayor Moya claims that the 
charges are a result of political victimization, due to internal UDP 
conflicts between her and Prime Minister Dean Barrow.  Moya's legal 
representation has challenged the constitutionality of the amended 
City Council Act of December 2008, along with its implementing 
Statutory Instrument of January 2009.  Under the amended Act, 
Central Government was given oversight of the financial 
administration of the Belize City Council.  This included the 
appointment of the Financial Controller for the City Council, 
Patrick Tillett, by the Minister of Local Government.  The amended 
Act also provides that any Council payments which exceed BZ $50 
cannot be received in cash, and need to be authorized by Central 
Government or an appointed representative.  Contravention of the Act 
may result in a fine not exceeding one thousand dollars, 
imprisonment for a term not exceeding one year, or both.  As an 
indictable offence, the case has been remanded to the Supreme Court 
and has been adjourned until November 5, 2009. 
 
¶5. As a result of the present allegations against the Mayor, other 
Council members have distanced themselves from her.  Although the 
Mayor claims political victimization, the UDP is not alone in its 
public criticism of political leaders. In a press release issued on 
October 5, the PUP strongly condemned the Mayor's management of 
CitCo funds and called for her immediate leave of absence in light 
of the charges. 
 
¶6. On October 3, Mayor Moya's derogatory comments to the media about 
the Prime Minister and implications that he had subverted justice, 
resulted in her removal from the National Party Council of the UDP. 
She may face further disciplinary sanctions to be determined by the 
Central Executive of the UDP.  The Central Executive met on October 
17 and decided that the issue of disciplinary action will go back to 
the National Party Council which will appoint an Ethics Committee to 
consider the case against the Mayor.  If the Party Council does form 
charges against the Mayor, she will be permitted to offer a defense. 
 On October 20, the Mayor retaliated by filing a claim in the 
Supreme Court which challenges her removal from the National Party 
Council and calls for the decision to be declared null and void.  An 
injunction has also been filed to halt the appointment of the Ethics 
Committee.  The Mayor has chosen prominent PUP lawyers to represent 
her. 
 
¶7. This is not the first allegation of financial mismanagement 
brought against the Mayor.  In February 2009, the media reported BZ 
$250,000 (US 125,000) was paid by the City Council to Silvino Moya's 
trucking company for garbage collection services.  Silvino Moya is 
Mayor Moya's brother. Despite the allegation of nepotism, no 
investigations were undertaken and the matter remains unresolved. 
Additionally, fresh allegations are surfacing that between March 
2006 and February 2008, the Mayor was overpaid by approximately BZ 
$69,000 (US $34,500).  Another allegation is that during the same 
period, discounts and write-offs towards the payments of trade 
license fees by select businesses valued over BZ $400,000 (US 
200,000) are unaccounted for at the City Council. 
 
¶8. City Councilor Leila Peyrefitte claims that the BZ $400,000 (US 
200,000)) related to incentives and trade-offs offered to businesses 
operating in the City's jurisdiction in exchange for non-payment of 
trade license fees.  She has noted that the practice of granting 
these incentives to businesses was done with the knowledge of the 
Council's Trade License Board and other Council members; however, 
the practice is not allowed by the law.  Peyrefitte has denied media 
allegations that her family's business benefitted from the Council's 
practice and has initiated a libel suit against the media house. 
 
¶9. Other high profile cases of financial mismanagement and public 
corruption have come up during the year, unrelated to CitCo.  In 
July, a treasury clerk was charged with the theft of BZ $291,022.36 
(US $145,511.18) from the Government of Belize Pension between 
September 1, 2007 and May 2009.  Also in July 2009, an employee of 
the Belize Border Management Agency was charged with six counts of 
theft of BZ $13,750.50 (US $6875.25), which was apparently stolen 
from their office at Belize's western border.  Finally, a Public 
Commission of Inquiry is soon expected to commence looking into 
allegations of financial mismanagement, which arose in June 2009, at 
the Karl Huesner Memorial Hospital (KHMH) in Belize City.  The 
Commission's work has been delayed pending the completion of a full 
audit of the hospital's finances by the Auditor General's 
department.   In none of these cases has a UDP-appointed official 
yet been held accountable. 
 
--------------------------------------------- ------- 
Belize City Council accumulated debt for sanitation services 
--------------------------------------------- ------- 
 
¶10.  On September 28, workers from Belize Maintenance Limited (BML) 
engaged in a formal demonstration against the cash-strapped Belize 
City Council to demand the payment of money owed by CitCo to the 
sanitation company.  BML has been unable to pay the wages of 
sanitation workers as a result of CitCo's non-payment. 
 
¶11.  Belize City Council has traditionally suffered from a chronic 
shortage of funds.  As of September 2009, the total debt owing to 
BML is BZ $2.7 million.  This includes a BZ $1.2 million (US 
$600,000) of debt that was inherited from the previous Council, as 
well as a BZ $1.5 million (US $850,000) debt that has been amassed 
by the current City Council. 
 
¶12.  BML claimed that it had not been paid since June 19, 
approximately 10 weeks.  As a consequence of non-payment, BML laid 
off 150 workers, retaining only 30 individuals.  The Council also 
has outstanding debts to another sanitation company, Belize Waste 
Control (BWC).  In July 2009, BWC requested and obtained a final 
court judgment against the Belize City Council.  The judgment was 
delivered as a result of failure by Citco to make payments of BZ 
$1.5 million (US $750,000) for an arbitration judgment issued in 
mid-2005 in favor of BWC.  Under the recent judgment, an agreement 
was drafted for payments of $10,000 a week to be made by the Council 
towards the BZ $2 million (US $1 million) owed as of July 2009.  The 
media reports that the Council currently owes BWC BZ $1.2 million 
(US $600,000). 
 
¶13.  During the week of September 28, City Councilor Phillip 
Willoughby, and the two sanitation companies held negotiations. 
Willoughby offered solutions that included selling certain assets 
owned by the Council and nationalizing the sanitation services. 
These proposals proved unsuccessful because CitCo was not in a 
financial position to provide an acceptable amount for partial 
payment of the monies owed, and Willoughby's proposals were mocked 
in the media.  In the meantime, garbage collection in Belize City 
was delayed by two weeks.  The standoff ended on October 8, with a 
temporary solution.  The Council agreed to pay BML BZ $70,000 to 
allow that company to resume operations on October 9, with the 
remaining funds to be paid by December 2009 from revenues it expects 
to collect.  In the interim, the GOB Cabinet has appointed a 
subcommittee to investigate the matter of sanitation services 
provided to the Council, in order to develop a long term solution. 
The subcommittee members include Hon. Wilfred Elrington, Hon. John 
Saldivar, Hon. Patrick Faber, Hon. Anthony "Boots" Martinez, and 
Hon. Melvin Hulse. 
 
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Comments 
-------- 
 
¶14.  Public opinion concerning Mayor Moya-Flowers remains highly 
divided.  The Mayor has a charismatic personality and continues to 
maintain popularity with a large portion of the public.  These 
factions question the Prime Minister's motives for targeting the 
Mayor, especially in light of recent political scandals such as 
KHMH.  Others are unsympathetic to the Mayor and believe that she is 
responsible for mismanaging the affairs of the City Council.  As 
such, they believe that she should be disciplined by the party, as 
well as face criminal charges.  Since her fate within the party will 
be decided by the Ethics Committee, which will be composed of party 
loyalists, it does not appear that the Mayor will receive a 
favorable outcome.  However, she has challenged her expulsion by 
speaking publicly about her desire to be involved in national 
politics, as well as through the injunction which has been filed in 
the courts. 
 
¶15.  Whether in support of the Mayor or against her, the Belizean 
public is widely disillusioned about the GOB's ability to 
successfully prosecute cases of corruption and financial 
mismanagement.  While the current Administration came to power on an 
anti-corruption platform, this is the first time that it has 
attempted to hold any public officials accountable for an act of 
alleged corruption.  Even when the current Government attempted to 
hold members of the previous Administration accountable for 
allegedly stealing public funds, they proved unsuccessful (refs A 
and B).  The fact that the GOB has chosen this as their first real 
stand against corruption in the party has many looking cynically 
upon the events because the Mayor was only officially charged with 
BZ $1,540 (US $770) in false receipts for gas. This seems a rather 
petty charge in comparison to the much larger amounts of unaccounted 
public funds. 
 
¶16.  On the issue of the sanitation problems, public opinion 
supports the sanitation workers and companies.  During the 
demonstrations, the workers were supported by the Leader of the 
Opposition, the Belize Workers Union, the National Trade Union 
Congress, and a past Councilor.  In addition to public outrage, the 
PUP was also critical of CitCo's handling of the matter, and 
rejected the proposals to sell the Council's assets and to 
nationalize the sanitation services as possible solutions.  In light 
of all of the recent events surrounding CitCo, if the Mayor is held 
accountable for the missing funds, it will be a huge step for the 
GOB in their fight against corruption and will instill greater 
confidence in the Administration.  End comment. 
 
THUMMALAPALLY