ANTHONY Pierre, the former head of the now defunct Credit Union Supervisory Unit (CUSU), yesterday testified that he was warned on several occasions about secret scholarships, falsified property valuation reports and other financial impropriety taking place at the Hindu Credit Union (HCU) years before the credit union's eventual collapse.
The warnings came from an anonymous whistleblower who purported to be a member of the HCU board of directors.
Pierre told of the whistleblower's warnings yesterday as he took the witness stand at the Commission of Enquiry into the collapse of CL Financial and the Hindu Credit Union (HCU) at the Winsure Building, Richmond Street, in Port of Spain.
The CUSU was established in an effort to have the supervision of all financial operations of cooperative societies removed from under the Ministry of Labour and handed over to the Ministry of Finance.
However, legislation was never put in place to legitimise the CUSU.
The supervision of credit unions was and is still handled by the Commissioner of Co-operative Development.
Apart from the warnings of financial impropriety the whistleblower also told that the Commissioner of Co-operative Development was "a waste of time" and facilitated the HCU's president Harry Harnarine.
"I spoke with him (the whistleblower) and I said to him, 'Well you know we (the CUSU) are not the authority that governs the legislation of credit unions, we are just an experimental group working on policy positions' and he said 'Yes I am aware of that but the Commissioner (of Co-operative Development) is a waste of time'," Pierre said.
Pierre said he raised the concerns with the Permanent Secretary of the Finance Ministry and also former minister in the Ministry of Finance, Conrad Enill.
However, because the whistleblower refused to come forward and reveal his identity the matter was dropped, Pierre said.
Pierre said since 1992 the government as a result of a report from the Inter-American Development Bank (IDB) decided to strengthen the supervision of cooperative societies.
Twenty years later and the legislation still has not been enforced, Pierre said.
Pierre blamed "turf war" among Government agencies over who should be responsible for the co-operatives and the protests by the members of the cooperative movement themselves, lead by the Co-operative Credit Union League of Trinidad and Tobago for the delay.
Asked by the enquiry's commissioner Sir Anthony Colman about what he felt were the reasons for the delay in the legislation, Pierre said:
"There were several matters. One the movement, the members of the credit union sector themselves revisited the attempt to legislate. Also substantial was there was some contention between the various departments of government in terms of who should be responsible."
Political instability which resulted in four general elections between 1995 and 2002 was also blamed for the uncertainty with the CUSU, Pierre said.
Pierre said having four different administrations in such a short space of time lead to CUSU confusion.
Pierre was the second of two witnesses to take the stand yesterday.
The first witness was former permanent secretary of the Ministry of Finance Vishnu Dhanpaul.
Dhanpaul was one of three Permanent Secretaries who were at the Ministry of Finance at the time when the HCU approached the State for financial assistance.
Dhanpaul said the Ministry of Finance was at one point considering purchasing two properties owned by the HCU at the cost of $41 million as a way of correcting the credit union's liquidity issues.
He denied that former prime minister Patrick Manning handed a note to then Finance Minister Karen Nunez-Tesheira requesting that she handle the HCU crisis.
Meetings between officials from the Ministry of Finance and their counterparts at the HCU were not minuted, Dhanpaul said. He said it was an oversight.
The enquiry continues today with the testimony of Harnarine.