Since March, we've been following the case of several hundred retired public officers who been fighting the teachers union and the Public Service Union over the management and control over just under 8 million dollars in backpay. They have a judgement against the unions saying that their Public Sector Workers Trust, which was set up to manage the funds is invalid and unenforceable. They believe that this should force the unions and the Trust to give up management of those funds, but the unions are not budging so easily.
Even though that ruling was handed down in earlier this year, it still hasn't resolved the dispute over these funds. The two sides are locked in litigation, which must now proceed to court ordered mediation.
Here's how the history of this case goes: Back in 1995 to 1997, the Esquivel Administration imposed an increment and wage freeze for all teachers and public officers.
To make it up to them, Prime Minister Manuel Esquivel, gave them 450,000 shares in BTL. The dividends from these shares were supposed to compensate the teachers and the public officers who were affected by the wage freeze.
Fast forward to today, and the Public Sector Workers Trust is in control of the proceeds of those dividends. The retired public officers want them to give up management of the money since the trust has been declared invalid.
They have been making their case to the press for the past few months. So, today, the Unions and the Public Sector Workers Trust hosted a press conference, requesting that they be allowed to give their side as well. All the Trustees, their attorney, and the representatives of the unions had a 1 hour long conversation with the press where they took questions to clarify their position in the dispute.
And the press certainly didn't go easy on them. The first point was whether or not they have the right to keep making decisions about how this money is spent, following the judgement against them. Here are a few of the tough questions they had to answer this afternoon on that topic:
Daniel Ortiz
"Isn't the ruling that this trust deed that you all have drafted invalid?"
Phillip Castillo - Trustee, Public Sector Workers Trust
"That is correct, but at the end of the ruling, the judge said that the status quo is to continue until a new trust deed is operational. That new trust deed has been drafted by us. It is now with the office of the Prime Minister. So, until and unless that is signed, then that will become operational. So we are still in that gray zone basically, where we are operating under the previous trust document, even though, as you rightly said, it was declared null and void. But, the status quo continues."
Alfonso Noble - Editor, Guardian Newspaper
"The Trust is invalid and unenforceable. You, you, you should not even be here because you are here purportedly, and you are sitting here illegally."
Anthony Slyvestre - Attorney for the Trust
"Alfonso, if I may."
Alfonso Noble
"I don't study law, but I read English."
Anthony Slyvestre
"No no, if I may answer that question. The claimants returned to court last week Monday, and this is what they specifically asked the court. They asked that an order be made that unless a proper Trust deed is drawn up that the defendant unions, the trustees, their agents, servants, that they refrain from dealing with the trust funds, including advancing loans to third parties. Hold up, so they asked the court that, and the court did not grant that."
Daniel Ortiz
"Would you reject an interpretation that those bonafide beneficiaries have a judgement in their favor that they are the defined beneficiaries, but the Trust and the Unions maintain management and control over the use of the funds when they should have no say really."
Anthony Sylvestre
"Well you see the thing about it, is that in terms of - and I guess that may be the issue. The way 'trust', as a legal construct, how it operates, is just that. A person, a beneficiary, they don't have day to day say or control of the assets. What happens is that a person or a group of persons are appointed to manage the trust, to ensure that the trust assets, that it does not dissipate, that in fact, it actually improves."
Daniel Ortiz
"Is a consideration that you ladies and gentlemen at the head table have been interpreting the ruling to suit your purposes and continue operations?"
Anthony Sylvestre
"No, Daniel. See, Again, the claimants, they made a specific request of the court. The court did not grant their request. The court did not grant their request because clearly, their interpretation of their position may not necessarily be accurate."
Another point of disagreement between the retired public officers and the Public Sector Workers Trust is their loans program. You'll remember that the claimants interpret that as a direct contravention of the court's ruling. They say that these loans should not be allowed since it is being offered to all public officers, who have not been determined to be the true beneficiaries of the proceeds from the shares. So, from their perspective, the Trust is giving access to the funds to persons who should not be allowed.
The press challenged the head table on that, and here's how that back and forth went.
Phillip Castillo - Trustee, Public Sector Workers Trust
"The loan income from the loan scheme provides up to a quarter of income, funds coming into the trust. So that provides an additional source of trust revenues, and these are the revenues that will be used to fund projects for the beneficiaries. We accept that the beneficiaries are the 95 to 97 cohort, but then, the loans are an investment. The Trust document authorities - in fact, I would say it mandates - that the trustees undertake investments to expand the asset base of the trust. So, the loans are investments being undertaken by trustees. So, based thereon, the loans are to any person who is employed from the public purse."
Daniel Ortiz
"Do you disagree that you are disobeying the judgment of the court in providing these loans to persons who do not fit into that 95-97 cohort?"
Anthony Sylvestre
"No, Daniel. The short answer to your question is no. The Claimants in their latest round of court proceedings, they in fact were asking the court to do that. They were asking the court to do 2 things, 2 significant things, to essentially shut down the trust. That is to say to stop the trustees, the defacto trustees, the current trustees from being able to apply any funds from the trust. And that was not ordered by the court. And secondly, they were asking the court to substitute the present trustees, to have them appoint the trustees in the interim. So essentially, they were asking the court to shutdown the operation of the Trust and to have them, in the interim, regulate and manage the trust. And none of those orders were granted by the court."
Nadia Caliz - Trustee, Public Sector Workers Trust
"Our beneficiaries, the claimants, are of the opinion that the people who borrow from the scheme, its a benefit. A loan is not a benefit if you have to pay it back. Now, when we ventured into some of these project, which are not projects which will give us returns, we have to look for a way to keep the funds growing. That is what we are trying to explain to our beneficiaries, and they keep thinking that we are squandering these funds. No, hence the reason why we make certain that we hire reputable auditors to audit and to prove to this country that we are not doing that. We're safeguarding the funds. We have the same interest like them."
Alfonso Noble
"How many true beneficiaries have benefitted from the Trust?"
Phillip Castillo
"If we define a benefit as a project then the answer is none because we have not yet undertaken projects. There are 2 projects that we were considering."
Alfonso Noble
"But you all are lending out money."
Phillip Castillo
"We are lending out money as investments."
Justice Courtney Abel, in the determination portion of his written judgement says, quote, "It follows from the determinations reached above... that the Unions should be ordered to account to the claimants for their handling of the BTL shares... and be ordered to recover any moneys or funds invested."
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