Alarms and Allegations

James Gaskell Commentary:
Former Premier of Nevis, Hon. J.W. Parry and his Nevis Reformation Party (NRP) colleagues have, over the past weeks held three or four Town Hall meetings of the usual kind of ‘Vote for my party at the upcoming Federal Election’ but, with a difference, extremely serious allegations of criminal conduct have been leveled at a member of the NIA, and perhaps at several of them. Mr. Parry & Co. say that they have the evidence. They say, in broad terms, that US$1.5 million was sent from Iraq to a bank in St. Kitts Nevis for the credit of an account held in the name of a Nevis registered private Company whose sole directors (and perhaps sole owners) were a Government Minister and his wife.

They say that the Bank sent it back whence it came. It was then rewired to a different Bank also within the Federation, again for the credit of the Minister’s Company. Their case is that this money was for the sale of 10 acres of land, belonging to the Nevis Housing & Land Development Corporation (NHLDC) situate at Potworks in Nevis, near the MUA.

I have not seen any evidence and I neither adopt the allegations nor refute them. However there are certain principles which may lie behind alleged conduct of this nature, which the public should be aware of.

The allegations made are highly defamatory. It is difficult to see why Mr. Parry would have made them unless he was sure that he had evidence showing the truth of his claims, with which he could defend defamation action. Hardcore NRP will believe what Mr. Parry says, without seeing any evidence. Hardcore CCM will know that there is nothing in it, and that it is just another NRP attempt at pre-election mudslinging. We cannot leave it at that. We need to know whether there is nothing in the allegations and our CCM Government is fit to govern, or that the claims are true, and the Minister and others are so compromised that they should leave office forthwith.

Money laundering and conversion are alleged. What is money laundering and does it matter to us? It is the attempt to disguise the proceeds of illegal activity so that they appear to come from legitimate sources or activities. The proceeds of many crimes, for example, financial fraud, illegal arms sales, drug trafficking, foreign official corruption, terrorist financing can be associated with money laundering. The US Authorities lead the fight to prevent this activity and they expect all decent Governments of the world to give their fullest support. They issue guidance and instructions to their own and foreign banks, which they back up with sanctions and penalties. If our banks wish to do business in US Dollars and with the US, they require a US correspondent bank. That US bank may be told to sever its relationship with our bank if it has been engaged in money laundering.

Our country has to trade with the US so it is essential that our banks implement the anti money laundering compliance system. This, for us, is a question of economic survival. Huge penalties can be imposed on US banks. One example: 2010 Wachovia Bank. For failure to institute appropriate risk based monitoring of foreign correspondent banking customers there was a US$370 million penalty. In the guidance issued to banks (including ours) there are, what are called ‘Red Flag’ occasions. A bank is required to monitor all its customers accounts.

Any of the following (and certain other events) should ‘raise a Red Flag’, meaning that the bank must make further investigations and report:

• Sudden high volume of unexplained activity
• Transactions involving senior political figures
• Round sum transactions (eg US$10,000, $50,000, $500,000)
• Transaction not in line with customers stated purpose of the account and/or nature of the business
• Customer attempts to bribe or threaten employee, in order to circumvent reporting requirements
• Wire transfers to and from countries known for or linked to terrorist activities, e.g. Middle East countries
• Wiring of funds without normal identification information

If a Red Flag is raised the receiving bank may decide to return the money whence it came. It may issue a blocking report. It may also issue a ‘Suspicious Activity Report (SAR). It will not reveal whether it has or has not taken this step. The SAR will end up with the US Authorities.

We understand from our Prime Minister that a report has been made to the Financial Intelligence Unit (FIU) and that the banks concerned are carrying out their own investigations. The FIU may wish to hire a top outside forensic accountant. These persons are skilled in tracing money and in court proceedings. I am told that Canada may have the best, perhaps because our banks often have Canadian parent companies, and our law has a common base.

We also understand from a gentleman whom I shall call Mr. Cata Flam, that the Nevis Cabinet authorized one Minister to advise the Iraqui payer to send the US$1.5 million to the account of another Minister’s company. Mr. Flam helpfully added that that other Minister was not at that meeting, indeed that he was in England on official business. I gather that, as one might expect, the FIU is closely connected to the police. This being so, one might find suspicious minded policemen seeking interviews with all concerned.

The police will know the law. They may remember the definition of ‘conversion’:
‘Every person who … having either solely or jointly with any other person received any property for or on account of any other person, fraudulently converts to his own use or benefit, or the use or benefit of any other person the property or any part thereof or the proceeds thereof shall be guilty …”

They will also remember the section dealing with accessories and abettors:
‘Every person who knowingly and wilfully aids, abets, counsels, procures or commands the commission of an offence under this Act shall be liable to be dealt with, indicted, tried and punished as a principal offender’.

Conversion deals with usurping owners rights, ie an action to appropriate to oneself or another someone else’s property without the consent or authority of the owner.

In the present alleged situation, if there was no lawful authority given to the Iraqui to remit the US$1.5 million to the Minister’s Company’s account, then why is that not prima facie evidence of conversion of that sum?

The Minister might be able to persuade the police that this was a perfectly normal transaction and all the money was going straight to the NHLDC’s account. Or he may say, as Mr. Flam seems to suggest, that he was away and knew nothing about it. Mr. Flam and the other Ministers may be asked how it was that they knew the account number and banking details of the Minister’s Company.

They will have to say why it was necessary to send the funds where they ended up, rather than to our Treasury or the account of the NHLDC. And how was it that they thought they had lawful authority to do so? Was any written submission made to Cabinet to this end? What advice was given by the Legal Adviser? Have there been other occasions of sale of Crown Lands where remittances have gone to the Minister’s Company or elsewhere rather than to a Crown account? Or is this the first time? How can the Minister or any of his colleagues think that it is proper or unimpeachable conduct for his Company to receive the purchase money for sale of State assets? After all the land belongs to all of us.

Essentially the bona fides and integrity of the Minister concerned have been damaged if not destroyed by these allegations. In the UK or nearer to home ,Trinidad, Jamaica, Barbados, were there to be similar events, the Minister would be under huge pressure from the Press, his opponents and his colleagues to resign or make an explanatory statement to Parliament. I have no idea how he could in those countries explain it away. Here in Nevis all Ministers appear to carry on as if nothing has happened. Sorry, but this cannot continue.

Although there is a presumption of innocence we need full, comprehensive, believable statements from the Ministers involved showing why they thought it lawful, and how it was lawful, for this US$1.5 million to be sent and received as alleged. If they cannot do this they have to resign. Why? Because, in the absence of any statement refuting the allegations, we cannot trust them. The allegations are just too serious going to the heart of fitness to serve as our representatives. The allegations do not come from an ordinary citizen like your correspondent. They come from the ex Premier and the current Prime Minister.

There is no point of standard Opposition criticism of members of Government as incompetent, or lazy, or statements that they should do the work. They simply must not be there in Government unless they can show us that their integrity is untarnished. Without a resolution of this matter in their favour none of those involved can possibly submit themselves as nominees for a seat in the Federal Parliament.

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