Barrett

The former chief executive officer of the National Health Fund (NHF), Rae Barrett, is insisting that he did nothing untoward to warrant his dismissal from the NHF.

Responding to media reports for the first time since the issue came to light, Barrett said he had nothing to do with the appointment of Marksman to provide security for himself and the NHF. Barrett has been chairman of Marksman for 20 years.

Cabinet recommendation

According to Barrett, it was Cabinet that recommended that security be provided for all directors of the Jamaica Urban Transit Company (JUTC) as well as for the staff of the NHF, as JUTC meetings were sometimes held there.

"This was done and it was agreed that NHF would arrange for the security on my person and at the NHF offices and the JUTC would reimburse the NHF for my security. The NHF was billing JUTC which has made payments," he explained in a lengthy statement.

The security contingent was reduced in August and the arrangements ceased at the beginning of the month.

In relation to award of the contract to manage the pension of NHF staff, Barrett said two companies made bids for the contract - Capital and Credit Merchant Bank and the National Commercial Bank (NCB) - but only Capital and Credit made a submission.

NCB did not make a submission. The operations review committee of the board awarded the contract to Capital and Credit Merchant Bank.

Ryland Campbell, who chairs the NHF board, is also the chairman of Capital and Credit Merchant Bank.

Statement by R. D. Barrett re dismissal as NHF CEO

STATEMENT BY RAPHAEL D. BARRETT October 28th 2008

This statement has been prepared to respond to allegations and statements in the media regarding my dismissal as CEO of the National Health Fund.

1. The circumstances surrounding my dismissal are unclear given the termination letter from the Board, which does not indicate any cause, and the statements being made by the Minister of Health suggesting “issues”.

2. During the past few weeks, in a meeting called by the Minister of Health on Tuesday October 14th, he brought to attention his concern with questions from a journalist regarding the provision and payment of security for myself. He expressed the view that the nature of the questions caused him to believe the information was leaked from the NHF Board and went on to say that if the Board was having internal problems they should come to him, the Minister, to resolve them as this was also one of his skills

NHF INVESTMENT POLICY

3. The Minister also indicated at that meeting that with a new administration in place there was concern about the investments of NHF funds and there was need for a diversification of these investments.

4. The Minister asked that the Chairman summon an emergency meeting of the Board that week and give him as response as he had to report to The Cabinet the following Tuesday. An emergency meeting of the Board was scheduled for Thursday morning, October 16th.

5. The Minister announced that Mr. Daniel Dawes had been appointed Deputy Chairman of the NHF Board.

6. At the regularly scheduled meeting of the Operations Review Committee on the following day, October 15th, the committee Chairman – Mayor Milton Brown – and Board Deputy Chairman - Mr Dawes - were in attendance.

7. At that meeting the Investment Policy was discussed as it was a main topic for the emergency Board meeting to be held the following day. The directors reviewed the policy document which they had brought to the meeting and expressed the view that a paragraph titled Concentration of Investments must have been breached as no more than 20% of the investment funds should be placed in any single institution. It was pointed out to the directors that the paragraph stated no more than 20% of NHF funds should be invested in any institution, and, investment in any should not exceed 20% of its capital base.

8. It was pointed out that all NHF investments have been made in GOJ securities only, which are purchased through primary dealers of which Capital & Credit Securities Ltd. was one.

9. The Agenda for the emergency meeting convened on Thursday October 16th had three items – a review of the Investment Policy, appointment of an Investment Committee and Security.

10. Copies of the NHF Investment Policy were tabled for all members. It was pointed out that the policy document tabled at the meeting differed from that reviewed the previous day and the assertion made, by some members, that the policy document may have been deliberately altered as the paragraph on Concentration of Investments was missing. I suggested to the Board that I obtain a copy of the policy sent to the Ministry of Finance for approval which could be used to resolve the issue.

11. On Tuesday, October 21st, we obtained information from the Ministry of Finance that ‘our records indicates that a draft Investment Policy was received … sometime during 2004/05. We have located a copy of comments on the Policy … dated April 28, 2005 … We have been unable to locate any response from you arising from the comments that were prepared.’

12. A check on our correspondence file indicates the following:

􀂾 In October 2004 we wrote the Minister of Health seeking approval of our Investment policy in accordance with Section 12 of the NHF Act

􀂾 In May 2005 we received a response from the Ministry with the comments from the Ministry of Finance dated April 28, 2005

􀂾 In July 2005 we wrote the Ministry of Health seeking approval of a revised investment policy which had taken into account the comments of the Ministry of Finance.

13. The comments of the Ministry of Finance had reference to the paragraph on Concentration of Investments and so this was replaced by a table indicating limits on the investment portfolio mix.

14. When this current Board was convened in April 2008 members were given copies of all NHF policies. The Investment Policy document given in April 2008 was the original draft prepared. This was done in error for which I take full responsibility.

15. In view of paragraph 8 hereof, it should be noted that the investments breached neither the original nor revised investment policies.

PENSION ADMINISTRATION CONTRACT

16. Another issue that has been raised is in relation to the award of a contract for Pension Administration to Capital & Credit.

17. The NHF has been seeking to establish a pension plan as all employees are on continuous and not term employment contracts.

18. In 2005 we determined that we need a staff complement of 50 persons to have a viable pension plan to meet the expenses required under the FSC regulations.

19. In 2008 we had a staff complement of 50 and so work resumed on implementing a pension Plan.

20. Proposals for the administration of the Plan in accordance with the FSC regulations were sought from 4 entities based on advice obtained from the market.

21. The proposals were gathered over a period of time and in 2 instances – Capital & Credit and NCB – they were asked to submit their proposals by May 26th.

22. NCB did not submit a proposal and Capital & Credit submitted on May 30th.

23. The proposals were evaluated by an evaluation committee of the management and I carried a recommendation from them to the NHF Board meeting of July 9th 2008.

24. The Chairman directed ‘that the document be withdrawn … and that the procurement committee under the chairmanship of Mr Dawes reviews and advises the Board.’ (minute 981).

25. The Procurement Committee met on July 21, 2008 and Action Items based on Mr. Dawes requests for clarification were determined.

26. Action Item #2 was ‘whether the proposal that was submitted after the deadline should have been rejected …’.

27. By letter of August 8, 2008 Mr Dawes confirmed his review of the minutes of the Procurement Committee meeting and the list of action items and granted approval for the selection of Capital & Credit to provide pension administration services.

28. At the September NHF Board meeting, Mr. Dawes reported to the Board his approval. On the recommendation of the Operations Review Committee, the Board appointed me, the CEO, as a Sponsor Trustee for the proposed Pension Plan as we had been told that the contract needed to be signed by a Trustee as it was not a contract with the NHF. I was appointed Trustee to expedite the contract.

CEO SECURITY

29. The final issue I am aware of is in regard to the provision of security for me. After the execution of the JUTC Chairman, Mr. Douglas Chambers, on Friday June 27th 2008, it was indicated by the responsible Minister, and restated at the Cabinet on Monday June 30th 2008, that security must be placed on all JUTC directors and senior management personnel.

30. The Minister of Security was asked if the Police could assist and he indicated they did not have the resources readily available.

31. My entire day, June 30th, was taken up with JUTC affairs and so I did not go the NHF offices until the following day, July 1st.

32. On my arrival on July 1st, it was indicated to me by the Senior Management of the NHF that there was concern for my safety and that of my family given the JUTC incident and another issue related to the NHF. They also indicated that there was concern amongst the staff for safety at the NHF office as JUTC meetings were sometimes held there.

33. I indicated to the management the concern expressed by The Cabinet and asked that they discuss the matter with the Security Officer for the JUTC. I also agreed that I would abide by whatever decisions were arrived at.

34. This was done and it was agreed that NHF would arrange for the security on my person and at the NHF offices and the JUTC would reimburse the NHF for my security. The NHF has billing JUTC which has made payments.

35. This arrangement was started on July 1st 2008.

36. The company used to provide the security was Marksman Ltd. where I have been Chairman for over 20 years. Security was provided for my person and home. Note, I had nothing to do with the appointment of this company.

37. Personal security ceased at the end of August 2008 on my instructions.

38. Home security was reduced at the end of August 2008 on my instructions. 39. Home security ceased in October 2008 on my instructions.

In summary, I would like to make 3 comments:

􀂾 As a CEO I delegate authority. I accept full responsibility for the actions of the organisation I am privileged to lead.

􀂾 On Sunday evening, October 26, the three members of the Board that met with me gave me the option of resignation or dismissal. I did not resign as the NHF has done nothing untoward to give cause for my resignation.

􀂾 This apparent witch-hunt is surprising and unfortunate as I have said to the Minister, a former trade unionist, and those Board members present that if they wish me to leave the NHF a mutually acceptable parting of the ways could be agreed. I am proud of the NHF which, since October 1999, I have helped to shape and develop as an institution to serve the people of Jamaica. rdb rev1