Foreign Affairs defends decision to spend $1.1M on spacious units in Guatemala City.
Norma Greenaway, Ottawa Citizen: February 14, 1999
The apartment complex lived up to its name — the Premiere Club. Spacious and secure with magnificent vistas. Three swimming pools. Two tennis courts and two squash courts. A gym and a clubhouse. In short, an oasis within steamy, crime-infested Guatemala City. No wonder administration personnel at the Canadian Embassy there recommended purchasing three apartments — at $255,000 U.S. each — in the Premiere Club in 1995 as part of the Department of Foreign Affairs’ plan to ditch expensive, leased space in favour of buying properties in various capitals.
It looked like a done deal until an official from Ottawa arrived on the scene in early 1995. Joanna Gualtieri, a portfolio manager in Foreign Affairs’ Bureau of Physical Resources, balked after seeing the complex, which was still under construction, and studying floorplans. In a Jan. 23, 1995, memo to her Ottawa boss Frank Townson and embassy administrators, she said the apartments were too large and extravagant and that more suitable, secure and less costly housing was available.
“It appears the Premiere Club is, in fact, marketing a lifestyle — one that will attract and appeal to wealthy, affluent Guatemalans,” she wrote. “Suffice to say that the issue is not whether the units adequately meet our requirement but, rather, whether the units simply exceed what could reasonably be defended as appropriate housing.”
Within days of her memo arriving in Ottawa, the Premiere Club purchases were abandoned and Ms. Gualtieri was instructed to find more suitable, cost-effective housing.
She identified six properties, a mix of houses and apartment units, that would meet the embassy’s requirements. One house was eventually purchased for $168,000 U.S., but no action was taken on the other suggestions, all with pricetags lower than the Premiere Club.
Instead, 26 months after rejecting the Premiere Club as too lavish, the government bought three in March 1997 for almost $1.1 million Cdn.
Foreign Affairs defends the Guatemala purchases, but offers no direct explanation as to why units deemed too lavish in 1995 were acceptable in 1997.
James Fox, who was ambassador to Guatemala when the purchases were aborted, refuses comment, although the documents show he favoured searching for more reasonable accommodation. Daniel Livermore, ambassador when the purchases were made, has also declined public comment.
Department spokesman Valerie Noftle says the three units were considered a good buy and a good investment because their value on the market has increased steadily in the last two years. She says they provide secure housing with protected outdoor space in a high-crime city. Security guards are part of the gated complex, meaning the government doesn’t have to provide and finance 24-hour guards, she adds.
Ms. Noftle says the annual cost of housing diplomats in Guatemala has been reduced to $112,000 a year from $325,000 a year since 1995 because there are fewer rental properties and lower security costs. She also says the apartments conform to Treasury Board guidelines; documents show they do not. A 1995 memo from Christal Becker, an architect in the Bureau of Physical Resources, put the size of the apartments at 186 square metres, at least 40 square metres larger than Treasury Board provisions for a unit that contains three bedrooms and a den, or family room.
The documents show that soon after the Premiere Club purchases were cancelled early in January 1995, Ambassador Fox, who according to Ms. Gualtieri’s notes took a keen interest in the project, was told by Mr. Townson that he could proceed with the purchase of at least four units identified by Ms. Gualtieri.
But the documents also indicate some Guatemala-based diplomats were upset at the last-minute decision to ditch the Premiere apartments in favour of less spacious, cheaper options in less convenient and less secure zones.
A March 2, 1995, memo from Christine Brassard, administration officer at the embassy, suggests the degree of the unhappiness after the Premiere purchases were aborted.
She wrote that Ms. Gualtieri had essentially pulled the plug on the Premiere Club purchases after only “three working days in the country.”
Ms. Brassard concludes Ms. Gualtieri and headquarters had put price above other considerations, including security, access to recreational and other facilities and investment value.
In a Telex to Mr. Fox, Mr. Townson acknowledged the staff’s concern about a “perceived downgrading in the accommodation being provided.” But he added; “The fiscal realities with which the government is faced demand that every effort be made to reduce expenditures wherever possible.”
Ms. Gualtieri’s notes say Mr. Fox was dealing with a “full-fledged mutiny” by Canadian staff unhappy with the new housing proposals and that he was not getting the support and direction he wanted from Ottawa.
On March 8, Ms. Gualtieri says Mr. Fox told her he was at the “end of how far he will go” with the housing project, that he had “stuck his head (out) and got it cut off.”
Part of the problem, the documents indicate, was confusion over who had final authority to order the purchases, the ambassador or the bureaucrats in Ottawa.
In the end, all purchases were put on hold, pending development of a new strategy.
The new strategy — 26 months later — turned out to be purchasing the once-rejected Premiere Club apartments.
Copyright Ottawa Citizen 1999