ELLEN’S 2013 BUDGET- A CRONY CAPITALIST’S PLAN TO FURTHER WRECK LIBERIA

Press Statement by 

Jerome J. Verdier, 

Counselor at Law & Chairman of the Erstwhile TRC of Liberia

Frightening Background

At first glance a US$672 million budget for the poorest nation on earth seems an aggressive plan to move the country forward but at closer look the diabolical plan to wreck the nation's economy further is revealed.  Like her popularity and global standing, Liberia has been on a dive since the first year of Ellen's ascendency and the regime has got no new, better plans than "business as usual" to politically stranglehold the country by economically empowering her Sirleaf clan, family members and close relatives, the Sirleaf political inner circle and cronies to reinstate the True Whig Party (TWP) and settlers' hegemony, overthrown after 133 years of absolutism, tyranny, patronage, corruption, elitism, nepotism and patronage that divided the country in the middle and stymied national development, reconciliation and integration for the entire period of the TWP over a century rule.

After a brutal civil war orchestrated by Ellen and company, her regime is reigniting the polarizing divide (native v. settlers) by repeating the poor governance and conflict drivers policies of the past that led to the military coup of April 12, 1980 and subsequent civil wars. Her leadership style and policies run deep: flamboyant and imperial as Taylor; brutal and election rigging as Doe; nepotistic as Tolbert and manipulative, autocratic and an astute adherent to ingrained political culture of patronage like Tubman. 

High Cost of Living-why?

When Ellen took over in 2006, the cost of living was better than it is today not because things were better but because the economy was smaller and there were not as many thieves as there are today and today's thieves are more sophisticated and anxious for gains. Taylor projected a life time tenure ending 2027 while Ellen and her people are more conservative in their projections. 

They believe she will not last as long and with massive international support and acclaim, and the lifting of sanctions on trading in Liberia's natural resources, coupled with massive international budgetary, technical and financial assistance, there is more cash to steal without accountability and transparency. So emboldened they are that the huge presence of the international community doesn't count – it's a race against time! Members of the inner circle and the huge patronage networks are either cronies and stooges, relatives, children, god children, cousins, and privileged associates who either lived in the USA prior to Ellen's ascendency, or have substantial interests or holdings in the USA as citizens, permanent residents or mortgaged property owners in the USA and, by all means, are domiciled in the USA. Under this regime, capital flight is high, corruption is rampantly beyond Ellen's control (and with her acquiescence) is tolerable and understandable. As a consequence, inflation is high, prices of basic commodities are prohibitively expensive with corresponding decline in disposable income and falling standards of living, landing Liberia the "the third poorest nation in the world standing".

Colony of Thieves

Ellen regime understands the language of the international community. All she has to do to protect this vested interest is to pretend not to know what is going on and make empty commitments to fighting corruption at the same time be lukewarm about enacting strong anti-corruption laws and undermine the effective operation of institutions fighting corruption so they exist in name only. 

All her tenure she has busy herself protecting and entrenching this colony of thieves to maintain their stranglehold on the economy of Liberia and exploit it to political advantage when she is no longer on the scene. Also exploited in the master plan is her vast international connections by, in substance, doing nothing effective but loudly speaking the language of the international community: loosely use words like "accountability", "transparency", and lately empty terms like "…much needed economic transformation" and establish more commissions: General Auditing Commission, Anti-Corruption Commission, Law Reform Commission, Judicial Reform Commission, Human Rights Commission, Reconciliation Commission, the Extractive Industry Transparency Initiative (LEITI) etc. 

Ellen's response to these creations is to compromise their independence and where she fails to do so, she ignores their findings and unleashes her surrogates and protégés to, without merit, attack the credibility of these institutions or their leadership to cast doubts on their integrity of  and work. In the same vein, she will create more of such institutions which become leakages in the economy when they are dormant and useless to the advancement of the public good. One advantage she is glad to promote is the opportunity to create jobs for her friends, relatives (and their associates) and thereby extend her already extensive patronage network.      

With all respect to well-meaning and self-respecting, honorable and dignified members of this regime, our leaders today are rebels, the companions of thieves. All of them are lovers of bribes, who demands payoffs; they refuse to defend the cause of the poor or the rights of indigent members of our society or advocate for justice which we all very much know will restore the country and revive it. They are blood-thirsty, having no fear of GOD and indulging barbaric practices of occultism, human sacrifice and idol worship.  They are surrendering the country to the devil. Isaiah 1:23. 

From 2006 to 2012 No Financial Report

Every year the public gets to hear of a budget signed by 'ma Ellen', a signing ceremony is public and a flimsy budget statement is issued just as it has been since 2006 till today. Of what use is the budget to the public when it is shrouded in secrecy without any relationship to previous year budget; there is no budget performance or execution report; no measure of performance or a national evaluation of the budget to indicate which area(s) of the budget program are poorly structured, ineffective (or effective) or duplicitous and a waste of resources as far as achieving the desired program objective is concerned. The only justification for such deliberate lack of proper accounting and transparency is corruption.

Since the last seven years (2005 -2012) this regime has failed to provide financial experts or the National Legislature or the now dead GAC with a certified copy of its bank reconciliation statements. The regime has flatly refused to reconcile its own bank accounts. The reason is simple: bank reconciliation will reveal fraud, theft, corruption on a grandeur scale with wire transfers of millions of dollars to overseas bank accounts not associated with the business of the Government of Liberia (GOL). This is an effective tool for detecting fraud and unauthorized and illegal transactions depleting the accounts (treasury) of GOL, without which government's estimates in the national budget are unreliable and unverifiable. 

Former President Samuel K. Doe in 1987 refused to release bank reconciliation statements of GOL accounts to the IMF when conducting a country assessment at the time. Under pressure for greater accountability, it should come as no surprise if the Ministry of Finance is set on fire as it occurred during Doe's regime to destroy financial records and shield thievery as now nationalized under the regime of Ellen Johnson Sirleaf.

Without doubt, a credible and independent audit of the financial accounts of the GOL over the last seven (7) years (including 2011) will reveal highly questionable and illegal transactions or trading in the financial resources of government by the family members of Ellen, her cronies and special interests in complicity with, knowledge and acquiescence of the Head of State Ellen Johnson Sirleaf herself. Without bank reconciliation, a financial report from the government is unreliable, if not impossible and this regime knowing this as a fact has, on purpose, flatly refused to make any financial report to the people of Liberia since 1996. 

All business people, banks, the IMF, WORLD Bank, international and national partners of the GOL are aware that without bank reconciliation the financial reporting of any entity is unreliable and incomplete or fraudulently stated for selfish reasons unrelated to the business goals. Liberia is perhaps the only country in the world without a record or history of bank reconciliation of all its accounts. Most governments (including the US Government as large as it is) as standard best practice of transparency, accountability and good governance that require reconciliation of government bank accounts daily.

How much is Liberia worth—one dollar?    

To date, no one can say for sure how much Liberia is worth in terms of national accounts-- receipts (revenue) and outlay (expenditure). This is a valuable public information (and asset) that measures the level of accountability, transparency, stewardship of the government and a good governance indicator that the Ellen Regime has failed and neglected to report on since 2006 and this is an impeachable offence amounting to fraud and corruption. For seven years the people of Liberia do not know (and the Ellen Regime has failed to tell the people of Liberia) how much revenue was generated and how much her corrupt government has spent over the years from 2006 to 2012. This is a constitutional duty she has reneged on with the consent and acquiescence of the National Legislature because they too are selfish and greedy beneficiaries and co-conspirators in the wholesale looting of the nation's coffers and resources—RAMPANT CORRUPTION!!

The 1986 Constitution of Liberia, it is worth noting, provides in Article 58 that: 

"The President shall, on the fourth working Monday in January of each year, present the

Administration's legislative program for the ensuing session, and shall once a year report to

the Legislature on the state of the Republic. In presenting the economic condition of the

Republic the report shall cover expenditure as well as income." (EMPHASIS MINE)

Conservative estimates

In the absence of a report from the government for the last seven years, one can rely on conservative estimates of GOL earnings over the period. The Ellen Regime's estimated income has ranged anywhere from US$350 million to US$500 million deriving an average per annum receipts (or revenue) of US$425 million (four hundred twenty-five million united states dollars) for the last seven years aggregating an income of US$2.9 billion (two billion nine hundred seventy-five million united states dollars). This estimate is very conservative not only because it represents the lowest estimates possible but also because it includes domestic revenue generation (primarily taxes) only excluding over US$20 million from oil revenues and advances procured by the national oil company (NOCAL), grants, bilateral and multilateral assistance, budgetary support, loans, and other diverse sources of income including indirect tax revenues, royalties, technical assistance, etc. For example:

1. a) The regime boast of US$16 billion in foreign direct investment over the period and a per capita income upturn of 1/3 or 33.3 percent; what is the gain to government in real terms;
2. b) United States Government US$1 billion in bilateral assistance since 2003 and US$220 million in 2011 alone;
3. c) Forestry revenues from 2008 to 2012 of US$20 Million;
4. d) Foreign assistance of US$425 million in 2010 of which US$230 million is from the US Government;
5. e) Foreign assistance of US$23 million during the 2009/2010 budget cycle and budgetary support for the same period amounting to US$449 million excluding assistance from UNMIL, China, private foundations, UN Agencies, bilateral grants and technical assistance.

Since the incumbency of the Ellen Regime as President (2006 – 2011) and illegitimate head of state (2011- present) her government has accumulate in excess of US$2.9 billion including massive international assistance and goodwill which has been misspent and not utilized to build on formidable institutions that engender meaningful human and economic development; accountability and justice initiatives to undermine the culture impunity and foster national reconciliation, integrity, transparency and accountability in public sector.     

Budget Fundamentals

The Ellen Regime recently announced a 2012/2013 budget of US$672 million United States dollars on the same guiding principles as all other previous budgets –secrecy and lacking in transparency and full disclosure. The budget statement of the Head of State, Ellen Johnson Sirleaf however stated that the budget is designed to avoid "business as usual spending" and announced the budget is also designed to boost "much needed economic transformation the country needs"—mere words no deeds!

The 2012/2013 budget is released without any financial report or budget performance report for the previous 2011/2012 budget period or bank statement reconciliation, which makes one to wonder on what basis the National Legislature enacted this budget without these and many other budget fundamentals unknown. Also, the budget statement announced US$672 expenditure budget without a say on what the supply side or revenue side of the budget is; or what it was for 2011 and the last seven years. This is a financial crime. A budget statement has to be comprehensive and clear. To the contrary, and at its best, this 2012/2013 statement is marginal in information, cloudy, ambiguous and empty in substance of economic planning and management.

Hence, there is no fundamental and accurate basis for this budget when it is not founded on transparency and accountability and lacking in basic national accounting information. A budget is a fundamental tool for development which must account for gross national income or public accounts, and afford a verifiable basis for determining how effective the budget is in implementing the programs needed to redress Liberia's economic, human and social development challenges. The budget, combined with the budget statement of the Head of State Ellen Johnson Sirleaf, is wanting in these fundamentals and represents no change or significant departure from the past characterized by corruption, lack of transparency, lack of accountability, lack of full disclosure, etc. which therefore renders the budget process irresponsible and (its product) unreliable.

For emphasis, the budget is a detailed statement of anticipated revenues (inputs) and expenditure (output) during the fiscal or accounting period that layout the policy and program direction of the nation for the period that must include revenues. The revenue base of the country is a public asset and not the private domain of Ellen and her company.  By announcing just the expenditure side of the budget, the message out is to her cronies, stooge, protégé and partners in corruption that "this is how we are going to distribute the spoils, know where you stand and prepare for another year of looting." A budget statement need not be detailed but must comprehensive and clear.

Instead of announcing basic budget fundamentals the Head of State announced that there will be no "business as usual" and spending is designed to engender "economic transformation". That what we have is business as usual since 1960 is without doubt. But just what is "economic transformation". Prior to the budget announcement, this is the first time that this beautiful but empty term –economic transformation – is used just to play to the gallery and impress the international community that never gets weary of hearing Dr. Ellen Johnson Sirleaf's overly glorified statements on reforms and institution building.    

What is "economic transformation"? What is the program for "economic transformation" and how does it find expression in the budget. Economic transformation is so elaborate a term giving Liberia's socio-economic and political history that we are attracted to it. But judging from that history and that of this regime (Poverty Reduction Strategy, Lift Liberia Up, From Mat to Mattress, Green Revolution, Vision 2027, etc.) it is nothing but empty rhetoric. There is (and has never been) any paradigm shift in the fundamentals of the Liberian economy since over four decades ago, nor is there any plan the public is aware off to support her assertions that the unqualified budget will engender "economic transformation". The economy is still fundamentally founded on the colonial "plantation and concession economic model" which created and sustains the elitism, cronyism, nepotism, patronage and corruption of the privileged (hegemony) class of the past  Dr. Ellen Johnson Sirleaf is so desperate to reinvent and entrench.    

What the budget statement is not saying:

There are several fundamental of the budget presented below that the regime of Dr. Ellen Johnson Sirleaf is keeping secret and has not disclose:

1. 1. Unqualified budget – the budget was left unqualified because the regime is evading the significant disclosure of whether this 2012/2013 but get is balanced, deficit or surplus. This is the very reason no revenue projection is announced because it becomes easy to compare expenditure with revenue and the results will qualify the budget and this is important for several reasons that project both the fiscal, monetary and social economic plan of the government in the sound management of the economy. Sound economic management is not, but corruption is, the goal of Dr. Ellen Johnson Sirleaf's regime.

• • A surplus budget means that the revenues is more than the expenditure which leaves the government with the duty and burden of explaining and planning how it intends to use the surplus. To invest in high social impact programs, create savings for the future, or distributing it among the Ellen clan and host of cronies and thieves; this the regime is not interested in because they believe Liberia is their private property and we are all fools who do not deserve this information. Why should the regime make such declaration now when for the last six years Dr. Ellen Johnson Sirleaf has not made any report and no one dares to ask her to do so. BUT THEY ARE WRONG THE LIBERIAN PEOPLE ARE TOLERANT AND SUPPORTIVE BUT NOT FOOLS. 
• • A deficit budget means that the expenditure is more than the revenue and the government is under obligation to explain how it intends to spend more than it generates or earns in revenues. So where will the money come from to finance the budget for the amount that is in excess of the revenues. Again the regime wants this to remain secret but with such information it means the government will be borrowing and putting the country back into the debt burden trap the country, under the leadership of Dr. Ellen Johnson Sirleaf, has just recovered from. In situation like this, it means also that the government is hiding revenue sources that are not used for the public good but for corrupt purpose like NOCAL and all the money it is secretly getting and spending. Where is it coming from? Is it revenue they are taking in advance when one drop of oil has not been drilled or exported? Secret, secret, secret…secret! 
• • Balanced Budget means that the revenue is equal to the amount spent and that the government will discipline itself and not spend more than what it earns. The implications are that the government will observe very stringent and austere measures that highlight probity and financial integrity in the management of the economy. Each of the three standards of budgeting has economic policy implications that go beyond this document but are important economic management policy information we all should know.  

1. 2. Current Debt Portfolio - the flurry budget statement did not disclose the current debt portfolio, international and domestic, of the government; it did not say how much the government is holding in reserve, how much was brought forward to the new fiscal period as surplus from the previous fiscal year or how much in liability or public debt the government holds. Or whether the government was in red or deficit coming into the new fiscal 2012/13 period. The impact of national debt on the economy, deficit financing or surplus spending, fiscal discipline and the overall performance of the economy cannot be over-emphasized. The Dr. Ellen Johnson Sirleaf Regime takes glory in making empty growth rate pronouncements (projected by Minister Amara Konneh to be 8.8% this year) which raise more questions as above than answers. For international partners anxious to report Liberia as a "success story" under "Ma Ellen" as their darling, it means a lot to them; but to the 4 million Liberians mired in incremental corruption and abject poverty since the her incumbency, it is bluff of marginal significance. How strong are the fundamental of the economy's rising debt burden and substantial leakages through corruption? What are the indicators of growth? Are they measurable, verifiable? How? What are the economic standards or yard stick measuring growth? Is it the yard stick of the 60's or the advanced standards of the 90's and 2000's? Are these economic figures quoted in real terms or are we living utopia or are we repeating history with the same elite (economic hyenas) in power – growth without development? Is the consumer price index considered; or are there allowances for inflation and currency fluctuation which have, in real terms, diminished in value in recent years.

The debt portfolio is yet another valuable information and economic variable that is missing from the public or the budget statement. Its impact on the performance of the budget is undeniably huge. When do we pay the debt, from what source, reasons for incurring the debt, accruing interest, etc. inform national policies on sound economic management, fiscal discipline and "economic transformation". If keeping the public blind to this information this intentional then it is fraud. If it is not intentional then our accounting standards are questionable and commitment to transparency, integrity, fighting corruption and honesty are bogus. I believe it is both!

The fundamentals of the Liberian economy are weakened by unassailing corruption, lack of integrity and probity in the awarding of contracts and concessions overladen with fraud, graft and self-interest in a natural-resource-exporting economy whose handlers are rent seekers and not worthy stewards of the public trust. They seek their own interest without any concerns for the economic and social wellbeing of the vast majority of the population lingering in abject poverty in the abundance of wealth. At this age of our national experience, setting priorities right will mean maximizing social economic development, building local capacity and increasing wealth over short-term, short-sighted and selfish rent seeking and profit-taking by a few which eventually threatens stability and peace. In the same vein, "economic transformation" must essentially mean transforming the economy from a raw material-natural resource exporting venture to an export oriented manufacturing economy that builds on domestic capacity to manage the economy with a concrete ten year program to significantly reduce illiteracy. 

1. 3. New Debts – Valuable information the budget statement failed to mention is the new or future debt portfolio. The Regime intends to borrow this awesome sum of US$80 million this 2012/2013 fiscal period and a record US$701.9 million by 2015 and by the time elections are held for a new government in 2017 Liberia would have inherited a debt burden of   US$2.0 billion considering the advances against future revenues contracted by NOCAL and accrued interests. This means the Ellen Regime would have reinstated 50% of the debt burden previously waived by Liberia's development partners under her rule. We should remember that the "iron lady" was finance minister in the 70's when over 80% of the debt she got waived in 2000's was incurred. Liberia is repeating history. How the international financial system and collaborating partners will loan this corrupt regime that sum of money remains a point of bewilderment. 

Warning, Caution and Appeal

Poor management of the economy, lack of economic opportunities for the growing and vibrant youth population; repeating corruption of the past on a grandeur scale; lack of inclusion and the incendiary isolationist, and elitist policies of the regime that marginalizes the participation and benefits of the vast majority of the people of Liberia in the economic wealth of the country; nepotism and cronyism; and the lack of any sincere, meaningful and inclusive national reconciliation drive, blueprint or program, undermines national healing, genuine and sustainable national  reconciliation, is threatening the peace and stability of the country and driving the country to the brinks of serious conflicts. Peace gains and conflict shock absorbers are gradually eroded by the unpopular and poverty-driven policies of the Ellen Regime which has no legitimate mandate to govern.

Other conflict drivers including poor and improper management of the country's natural and financial resources and the wholesale disposal of traditional and arable lands for non-agriculture purposes are conflict drivers also threatening the peace and security of Liberia in both medium to long term considerations.

 We appeal to the International Community to unburden future generation of Liberians by refusing to extend any new loans to this regime which lacks legitimacy and is saddled in rampant corruption and has demonstrated that the resources of the nation are not benefiting the people of Liberia. Any new loans will further impoverish the people of Liberia.

We further appeal to the United Nations Security Council to reconsider its plans to withdraw the (UN) Peace Keeping Mission (UNMIL) from Liberia at the probable end of Ellen's tenure to a future date beyond 2017 until the fundamental of sustainable peace and security are established in Liberia. Obviously, the building blocks and foundation for a peaceful, stable and reconciled society, rather than been established, has been undermined by the failure of the Ellen Regime to address the root causes of the conflict as contained in the Final Report of the Truth and Reconciliation Commission of Liberia (TRC). 

Instead of redressing these root causes of war and conflicts, the Regime is actuating them; instead of building institutions and instituting policies of good governance and respect for human rights, the regime is undermining them. Without these vital and very fundamental institutions functioning and pursuing reconciliation and building peace the country is more divided than at any other time in our recent history which has not transformed or changed the conflict mentality of Liberians. Liberia, in reality, is an empty shell or cocoon waiting to cave in or breakdown at UNMIL's departure. 

This is an honest appeal to increase and beef up support for comprehensive peace building activities and programs that will enhance reconciliation and strengthen good governance and democratic institutions beyond the mantra of the Ellen Regime for the Liberian people have reached the dead end of her misrule. There is nothing more she can do and nothing more is expected of her.

Dr. Ellen Johnson Sirleaf is aged and tired; seriously compromised and lost the fight against entrenched-interest corruption, while entrenching practices and failed policies of the old defunct True Whig Party (TWP) of patronage, cronyism, nepotism and elitism to which her umbilical cord is inextricably linked.  Whether her misrule is accidental or a historical lesson for Liberians, the UN cannot afford to abandon Liberia at this critical juncture in time. Liberia is a bubble waiting to burst in the premature departure of UNMIL. Dr. Sirleaf by compromising herself lacks the moral and political authority to institute much needed institutional and policy reforms tackle walloping corruption, promote justice and the rule of law.

She is suffering the people of Liberia who are poorer and paying more for basic commodities and the country's staple (rice) for the lowest quality ever in the history of Liberia. This industry is monopolized by Dr. Ellen Sirleaf's cronies and surrogates. People have lost hope and are at a dead end with Ellen and the corruption and insensitivity of government to corruption and the wellbeing of her people.

We urge the United Nations to please reconsider your time line and stimulate vigorous peace building programs to have Liberians talking and dialoguing on all aspects of peace building and reconciliation including establishing guarantees of non-repetition of war and violent conflicts and addressing the implementation of the recommendations of the TRC which without doubt is a long and necessarily imperative process. 

Ellen Sirleaf, it is clear, is no longer in control of government in Liberia. In control is an invisible cartel of family members and relatives, special interest persons, friends and affiliates running the country from behind the scenes as a family affair without accountability to the international community that is resourcing the government and the people of Liberia whose resources they plunder. The head of state lives on stimulants and is only sober half of the 24 hour day period or less many times. She condones corruption (and is perhaps a part of the syndicate) to protect and shield from public scrutiny and probity this class of special interest vested in pillaging the nation in the most sophisticated of ways indicated in this press statement.

CONFLICT PREVENTION IS MORE PREFERABLE AND LESS COSTLY THAN CONFLICT RESOLUTION; CORRESPONDINGLY, PEACE BUILDING IS MORE PREFERABLE AND LESS COSTLY THAN PEACE KEEPING.

             -END-