GEDCA on 'Havoc': "We gambled and we lost"
by Sonya Artero, KUAM News
Senator Eddie Baza Calvo (R), who chairs the Legislative Committee on Finance, Taxation & Commerce began this morning's oversight hearing by encouraging the Guam Economic Development and Commerce Authority to be transparent in an effort to learn why the very agency whose job is to boost our economy, would entertain investing in such a risky business.
"When it came to collateralization, aside from just a personal guarantee, there should have been some hard assets that were also pledged from [John] Liang to ensure the interest of GEDCA and the people of Guam."
But as it turns out, Comerica now has $800,000 worth of Guam's hard-earned assets. Senator Calvo also wanted to know GEDCA's plans for recouping the $800,000 it lost as a result of producer Liang's failure to pay the loan. As administrator for GEDCA at the time, Gerry Perez stated they approved the guarantee based on three opportunities: to create the capacity for supporting other film projects; to promote investment opportunities by showcasing Guam; and to support the community's interest in making movies locally.
That being said, Perez stated he regrets the outcome, announcing before the Committee, "I regret very much that this honest effort to pursue the opportunities mentioned has generated the controversy that it did and the unintended consequences now before us."
After being turned down for two loans and even before GEDCA approved the venture, that agency's loan management officer, Theresa Guevara, admitted Liang already began shooting on Guam, begging the question why GEDCA would resort to entertaining giving Liang money. "Prior to even getting approved from Comerica or GEDCA, the producer was already here shooting, prior to even getting a commitment from GEDCA," Guevara submitted.
Nonetheless, Guevara said the crew was already here shooting and they only had thirty days to get it all done, which sounds like GEDCA may have rushed to its decision, rather than taking more time to scrutinize the producer's success rate and his net worth.
Here's how the panel responded when Senator Bob Klitzkie (R) posed the key question of whether John Liang would have produced his movie despite the loan being denied? But Senator Calvo wanted answers to whether the $800,000 loss can be salvaged, and if so, what are GEDCA's plans for recouping our loss as well as those who were duped along the way. GEDCA legal counsel, Attorney Arthur Clark told KUAM News, "We have already sent a demand letter to Mr. Liang and there are continuing guarantees by Mr. Liang, Rigel USA and the local company - Guam Motion Pictures," the attorney confirmed. "We're linking the two valuable assets relative to the guarantee that are of course Mr. Liang personally as well as Rigel USA, which we understand owns the rights to several movies Mr. Liang has previously produced."
What's more, Clark says they are not ruling out the possibility of filing suit against the guarantors for full recourse. Senator Adolpho Palacios (D) asked GEDCA to reveal their rate of success when guarantying prior loans. Gerry Perez admitted there were approximately three major loans that defaulted, which include a single major airline entailing several million dollars, and one agricultural venture.
Senator Calvo closed the oversight hearing by alluding that investing in the movie industry was a lesson learned, and that next time, GEDCA should ensure the borrowers have enough hard assets to recover their losses.
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