A Rogues’ Gallery of Scoundrels, Fugi­tives and Tax Cheats

The Star (St. Lucia) - - COMMENT - By Rick Wayne

Over a year ago we fea­tured promi­nently in the STAR our dis­com­fort with the Cit­i­zen­ship by In­vest­ment Pro­gram. Typ­i­cally, we were al­most alone in our ef­fort to un­der­score the risks in­volved. The day's House op­po­si­tion was as silent on the mat­ter as were the rest of the me­dia. (See Due Dili­gence Be­gins At Home . . . on page 6 in this is­sue.) To be al­to­gether fair, hav­ing read the Lewis re­port en­ti­tled ‘Es­tab­lish­ment of a Global Res­i­dence and Cit­i­zen­ship Pro­gram,' the As­so­ci­a­tion of Man­age­ment Con­sul­tants (St. Lu­cia) Inc did put for­ward a num­ber of rat­tling ques­tions, among them: “Do the ben­e­fits out­weigh the risks?”

While dish­ing out ful­some praise for a re­port seem­ingly well put to­gether, the AMCS sug­gested pos­si­ble haz­ards seemed to have been glossed over, “cre­at­ing the im­pres­sion that po­ten­tial risks can eas­ily be man­aged by en­gag­ing an ap­pro­pri­ate third-party to un­der­take due dili­gence. Ar­tic­u­la­tion and treat­ment of these risks also seem eu­phemistic in some cases.”

Ref­er­enc­ing the fol­low­ing from the re­port—“For im­mi­grant in­vestors look­ing for greater ease of travel, an exit strat­egy or tax plan­ning op­tions, com­pe­ti­tion be­comes a greater fac­tor”—the con­sul­tants de­clared it “rea­son­able to spec­u­late it re­ferred to per­sons who cur­rently find it dif­fi­cult to travel to cer­tain coun­tries; per­sons who have an ur­gent need to exit their own coun­try or res­i­dence; and others who wish to en­gage in tax avoid­ance.”

AMCS was not re­as­sured by what the re­port stated about “rep­utable third-party ser­vice providers with rel­e­vant ex­pe­ri­ence, who have the re­sources and the equip­ment to screen for ties to neg­a­tive ref­er­ences . . . at rea­son­able cost.” The above seemed “to re­flect the gen­eral theme of the re­port: that any per­ceived risks can be suc­cess­fully ad­dressed by en­gag­ing a third-party en­tity to scru­ti­nize ap­pli­cants”— hardly re­as­sur­ing.

In Jan­uary 2016 Saint Lu­cians learned the then govern­ment had launched its CIP in Dubai. The group's chair­man ex­plained that that was where the money was. In ef­fect, if the mountain wouldn't come to Muham­mad then Muham­mad had to go to the mountain. Last Sun­day the CBS pro­gram 60 Min­utes fea­tured a seg­ment en­ti­tled Pass­ports For

Sale. This is how it opened, with cor­re­spon­dent Steve Kroft:

“If you have been think­ing about leav­ing the United States, mov­ing to an­other coun­try and chang­ing your na­tion­al­ity, it's never been eas­ier to do . . . Pass­ports have be­come just an­other com­mod­ity to be bought and sold on the in­ter­na­tional mar­ket. All you need is money and a will­ing­ness to con­trib­ute a few hun­dred thou­sand dol­lars to the trea­sury of a cash­starved coun­try, or ac­quire a piece of real es­tate there.

“It's called cit­i­zen­ship by in­vest­ment and it's be­come a $2 bil­lion in­dus­try built around peo­ple look­ing for a change of scenery or a change of pass­port, a new life or maybe a new iden­tity, a get­away from the rat race, or per­haps an es­cape from an ex-spouse or In­ter­pol. In any event, it's brought in huge amounts of rev­enue for the sell­ers and at­tracted among the buy­ers a rogues' gallery of scoundrels, fugi­tives, tax cheats and pos­si­bly much worse.” Kroft spoke on-cam­era with op­po­si­tion MP Len­nox Lin­ton who con­firmed that all it cost to be­come a cit­i­zen of his na­tive Do­minica was $100,000 “and you don't even have to come to Do­minica to get the cit­i­zen­ship. You pay the money wher­ever you are.”

“Sorta just mail order cit­i­zen­ship?” asked Kroft.

“Sort of,” Lin­ton replied. “Some­thing like that.”

Also ap­pear­ing on last Sun­day's 60 Min­utes was Chris Kalin, chair­man of Hen­ley & Part­ners, a con­sul­ta­tion com­pany with of­fices in Zurich. Kroft in­tro­duced him as “the man who more or less in­vented the busi­ness.” Kalin said he helped coun­tries set up their pro­grams, re­write their cit­i­zen­ship laws and re­cruit peo­ple of means look­ing for a sec­ond, third, or fourth pass­port that Kalin con­sid­ered “just an­other travel ac­ces­sory.”

A cit­i­zen of Switzer­land who re­sides in Dubai, Kalin ad­mit­ted on-cam­era he car­ried twelve for­eign “pass­ports of con­ve­nience.” When Kroft sug­gested pass­ports of con­ve­nience must cost a lot, Kalin said: “Yes, ab­so­lutely. It's for wealthy peo­ple, of course. Of­ten these wealthy cus­tomers come from po­lit­i­cally prob­lem­atic coun­tries where their pass­ports don't work very well, mak­ing it dif­fi­cult for them to get where they want to go.”

As for back­ground checks, Kalin seemed fairly cer­tain his ver­i­fi­ca­tion pro­grams worked. On the other hand, Kroft pointed out, the only way to iden­tify peo­ple who have pur­chased St. Kitts cit­i­zen­ship is “if they hap­pen to turn up on a list of in­ter­na­tional fugi­tives or get in trou­ble with the law, and St. Kitts and Ne­vis has more than its share for two sleepy lit­tle is­lands. Its pass­port hold­ers in­clude a Cana­dian penny stock ma­nip­u­la­tor, a Rus­sian wanted for bribery, a Kazak wanted for em­bez­zle­ment, two Ukra­ni­ans sus­pected of brib­ing a U.N. of­fi­cial and two Chi­nese women wanted for fi­nan­cial crimes.”

Kalin's re­ac­tion: “I think it's no se­cret that these is­lands have made de­ci­sions that are not al­ways op­ti­mal.”

“What about crooks?” Kroft prod­ded.

“It goes all the way down to crooks, yeah, ab­so­lutely,” said Kalin. “And it tended for some time to at­tract quite a few peo­ple that I would never let into the coun­try. But I'm not the govern­ment of St. Kitts,” he chuck­led.

“But you set up the pro­gram,” Kroft re­minded him.

“Well,” Kalin shot back, “we helped set up the pro­gram. But you know, as it is, ad­vis­ers ad­vise, min­is­ters de­cide.”

Un­til 2014, Peter Vin­cent was the top le­gal ad­viser for U.S. Im­mi­gra­tion and Cus­toms En­force­ment, a part of Home­land Se­cu­rity, which he says is well aware of the vul­ner­a­bil­i­ties. Ad­di­tion­ally, that the per­son in line to take over Home­land Se­cu­rity, Gen­eral John F. Kelly, had “ex­pressed con­cern in a re­port last year that ‘cash for pass­port pro­grams could be ex­ploited by crim­i­nals, ter­ror­ists or other ne­far­i­ous ac­tors.' ”

“In my opin­ion,” Vin­cent told Kroft, “the global com­mu­nity has es­tab­lished a very ef­fec­tive global se­cu­rity ar­chi­tec­ture to pre­vent ter­ror­ist at­tacks. I see these cash for cit­i­zen­ship pro­grams as a gap­ing hole in that se­cu­rity ar­chi­tec­ture.”

He said the pro­gram was nev­er­the­less mul­ti­ply­ing across the Caribbean, with Do­minica, Gre­nada, Saint Lu­cia and An­tigua all com­pet­ing with St. Kitts for cus­tomers and badly needed cash—cus­tomers from such places as Syria, Iran, Libya, Pak­istan. Mean­while, there's DSH—at the heart of which is Saint Lu­cia's “pass­ports for cash” pro­gram set up by the Kenny An­thony ad­min­is­tra­tion. In­ter­est­ing to note, shortly be­fore his party was re­elected to of­fice, An­thony had ex­pressed con­cern about Saint Lu­cia's cit­i­zen­ship laws, which he thought “need tight­en­ing.” As for the Cit­i­zen­ship by In­vest­ment Pro­gram, An­thony stated that “a Labour govern­ment would be ve­he­mently against it.”

Prime Min­is­ter Allen Chas­tanet, mean­while, has em­braced the CIP with some mod­i­fi­ca­tions, mainly “to make Saint Lu­cia more com­pet­i­tive.” More on that next is­sue!

Gen­eral John F. Kelly, who is slated to be Don­ald Trump’s Home­land Se­cu­rity Chief, ‘ex­pressed con­cern in a re­port last year that cash for pass­port pro­grams could be ex­ploited by ter­ror­ists, crim­i­nals, and other ne­far­i­ous ac­tors.’ - Peter Vin­cent, for­mer top le­gal ad­vi­sor for U.S. Im­mi­gra­tion and Cus­toms En­force­ment (on 60 Min­utes).

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