Knock On Wood, The Facts On HARDWOOD HOUSING

Submitted by a frequent BU family member and published unedited.

 

“….Hardwood Housing Factory Inc. is A GOVERNMENT-OWNED company with EGFL holding more than 90% of the shares.” Minister of State, Clyde Mascoll, in a letter dated October 10, 2007 to Opposition Leader, David Thompson, on Prime Minister Owen Arthur’s instructions.

Hardwood Housing Factory Inc. is an example of the BLP’s arrogance and contempt for YOU. It’s a serious matter. You ought to be concerned. Millions of your tax dollars are being spent willy-nilly without accountability. It’s only when the BLP is put under pressure, that you get disclosure.

If David Thompson hadn’t raised the flag by calling for an independent forensic audit at Hardwood Housing Factory, you would’ve never known it’s a GOVERNMENT-OWNED company. All along, citizens were led to believe by Clyde Mascoll that the owner is a “poor little black boy” whom Government was facilitating.

In just one year of operation, Hardwood Housing Factory has gobbled up almost US$2 million of public financing through the Enterprise Growth Fund Ltd (EGFL) – the basis of Government’s ownership. The so-called “owner’s” investment was $100,000 representing “the value of the equipment contributed and his sweat equity”. Source: Indicative Term Sheet dated Nov 9, 2006.

Clyde Mascoll has more explaining to do. He needs to give FULLER CLARIFICATION of the nature of his association with the company. Saying “I hold no office or shareholding in the Hardwood Housing Factory Inc.” doesn’t satisfy legitimate questions which remain unanswered. He needs to explain, for example, why an employee would have reason to tell the CEO “nothing will make me compromise the trust that God, MR. MASCOLL and the Board has placed in me”.

When Mascoll announced the establishment of the low income housing project on September 5, 2006, it is also interesting he chose to use “WE” in talking about the factory instead of “THEY”. There are four instances where this was observed in the Nation story of September 6, 2006. Here are three: “WE are going to meet within the next two months or so with the carpenters and masons, and this is a project for small people…. ” “WE are now in the process of developing, along with the BIDC, a formal arrangement where the necessary financing would be accessed.” “The masons will put down the foundations and WE will then install on the predetermined foundation….” Don’t you find this baffling?

In the Sunday Sun of January 21, 2007, Albert Brandford, who comes across in his writings as a loyal Mascoll lieutenant, wrote the following about Mascoll’s role in Hardwood Housing Factory. “…. HE has been able to CONCEPTUALISE AND EXECUTE a vote-catching Hardwood Housing project, in three months, and which, according to media reports, is on course to deliver houses – acknowledged as one of the island’s most pressing social needs – to many Barbadians, including his own constituents in St Michael North-West.”

Mascoll’s repeated use of “WE” when he announced the project, as well as Brandford’s firm assertion that “HE” (Mascoll) was the one who CONCEPTUALIZED and EXECUTED the project, raises serious questions about Mascoll’s involvement. A Government minister’s job is not to CONCEPTUALIZE and EXECUTE a private business project. His role is to serve the public interest. It is a serious conflict of interest. Interestingly, Mascoll has never challenged Brandford’s description of his active role. Doesn’t it seem inappropriate for a minister of the Crown? Barbadians are interested in hearing THE TRUTH, THE WHOLE TRUTH AND NOTHING BUT THE TRUTH.

THE CREDIBILITY FACTOR

“I look forward to a no-confidence motion tomorrow, Mr. Thompson. I have more credibility than you in Barbados and I will continue to have more credibility than you do….” Clyde Mascoll, Nation, October 15, 2007, speaking about the Hardwood issue, at Perry Gap.

Mascoll is clearly living in a dream world when he speaks about his credibility. Look now at how he puts his foot in his mouth and takes his credibility further below zero. On September 6, 2006, the Nation reported:

Mascoll credited Barbadian Anthony Murrell with the concept, after the latter had supervised the building of 500 houses in Grenada in six months after the devastation caused by Hurricane Ivan.” David Thompson investigated and found the figure of 500 was inaccurate.

Here’s Mascoll’s explanation now. “….the issue of whether he (Murrell) built 500 houses in Grenada or not was “neither here or there” (Mascoll’s words). Source: Nation, October 15, 2007. No, Mascoll! The figure is relevant. It’s what you used to establish the builder’s credentials and to justify the project. Credibility is based on consistency. You cannot be serious about your credibility when you made a definitive statement a year ago and now say it is “neither here or there”. IT MATTERS! If you cannot give and keep your word on a simple issue, it raises questions as to whether Barbadians can seriously take anything you say at all.

TERMS OF ECFL INVESTMENT

For putting money into Hardwood Housing Factory, ECFL established certain requirements which the company must meet. Where certain specified breaches occur, ECFL says it “shall be entitled to demand repayment in full of all outstanding monies due regarding the class ‘A’ shares (covering its investment) and to take such action as may
be deemed necessary to protect its interest”.

Such action would apply, for example, “if any creditor shall take action against the Company to enforce payment of monies due to such creditor.” The evidence suggests Hardwood Housing Factory came close to breaching this requirement. Up to August 28, the company had issued bounced cheques totalling $33,000 for various services.
One cheque, for the sum of $4,262.60, was written to the Comptroller of Customs. Management has acknowledged there were cash flow problems. Could some of Hardwood’s business practices have been contributing to the problem?

HARDWOOD’S BUSINESS PRACTICES

Clyde Mascoll recently told us that Hardwood Housing Factory is a GOVERNMENT-OWNED company. As junior minister of finance, he shares responsibility with his “boss man” – Owen Arthur, the minister of finance – to ensure the sound and proper management of public finances. Back in July, a month before the bank declined to honour the cheques, concerns were expressed about certain business practices. These concerns are documented. It would be interesting to hear what Mascoll has to say about them. Will he say these too are “neither here nor there”?

The charges were as follows:

There were sites where work was taking place but the sales department had neither a record of these sites nor receipts for any monies deposited in the company’s bank account for the said work. There were persons who were being paid by the company for doing work which the company had not record of.

If such allegations were made against any other government-owned entity, it would be enough to justify an official audit of the company. Taxpayers would demand no less. As a government-owned company, Hardwood should not be treated differently. A strong case exists for an independent forensic audit of Hardwood Housing Factory.

A situation also exists where equipment used by the company – truck, stone mixer, bobcat, excavator, generators – are owned by the minority shareholder rather than the company itself. The minority shareholder acquired the equipment through lease arrangements with Simpson Finance and Consolidated Finance and, in turn, leases them to the company. Mascoll said this arrangement results in “savings of approximately $44,000 per month to the company”. He did not give details of how this is achieved.

It is alleged that Hardwood covers the cost of maintaining the equipment. Normally under arrangements of this kind, those costs are borne by the owner of the equipment. Just over a month ago, both finance companies wrote the owner, bringing to his attention that payments were in arrears. One company even mentioned the possibility of repossession if the issue wasn’t promptly resolved.

After one year in business, what does Hardwood Housing Factory have to show? SEVEN HOUSES built in the New Orleans for the Urban Development Commission (UDC). Initially, there were cost overruns of $248,000 on this project but the figure was later revised downwards to $129,000 by the UDC. Draw your conclusion! Mascoll has complained that “THE LACK OF AVAILABILITY OF LAND” to build houses, has hindered Hardwood’s ability to deliver on its promises. It is refreshing that a member of the Owen Arthur administration has finally admitted the folly of the BLP’s land policy of aiding and abetting the sale of Barbadian land to the highest bidder who increasingly is foreign.

In the case of one St Peter land owner who was approached, readiness to make land available for low income housing was tied to Town Planning approval of other lands for “high end development”. Hardwood Housing’s experience shows how much the BLP’s ill-advised land policy is having the effect of forcing middle and low income Barbadians out of the real estate market.

A MODEL EMPLOYER?

As a government-owned company, Hardwood Housing Factory has an obligation to be a model employer. If a government-owned company disrespects workers, doesn’t it send a wrong message to private enterprise? In just one year of operation, here’s are blemishes on Hardwood’s image as an employer.

Charges of sexual misconduct against a manager.

Charges that employees are shouted at and abused.

Employing workers whose immigration status was not in order.

Being accused by the Barbados Workers Union of violating
International Labour Organization Convention 94 regarding fair
practices.

Keeping a dog inside the factory in violation of the Factories Act
and pressuring workers to clean up the mess.

SOLID CASE FOR PROBE

Going by available evidence, a solid case does exist for a probe, including independent forensic audit, of Hardwood Housing Factory. This isn’t only David Thompson’s fight. It’s YOUR fight. Demand accountability from the BLP! Tell Owen Arthur it’s time to demonstrate real leadership instead of running away from calls for accountability.

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