NEW LAW RE­VIVES ROCHAMEL!

MP Guy Joseph lifts lid off un­dead con­tro­versy!

The Star (St. Lucia) - - FRONT PAGE - By Rick Wayne

Just when it seemed we’d heard the last of the fa­mous Rochamel-Fren­well de­ba­cle, with its still unan­swered sev­eral ques­tions, the is­sue came in for much com­ment on Tues­day this week, fol­low­ing an­other protest walk-out since the June 6, 2016 gen­eral elec­tions by the op­po­si­tion Saint Lu­cia Labour Party led by the MP for Cas­tries East, Philip J. Pierre. Prime Min­is­ter Allen Chas­tanet hav­ing in­tro­duced the Crown Pro­ceed­ings Act, Guy Joseph, the MP for South­east Cas­tries, took the floor. Ad­dress­ing the Speaker, he said: “I sup­port this bill be­cause I am fear­less. I know our laws are not retroac­tive. Still I want it known that from here on we will deal with those who abuse pub­lic of­fice.” He said the day’s amend­ment proved his govern­ment col­leagues (some of whom had been ac­cused of var­i­ous abuses by the pre­vi­ous ad­min­is­tra­tion), re­ally had noth­ing them­selves to fear. He then cited the Ram­sa­hoye In­quiry that had re­sulted from a 1997 ar­range­ment be­tween the Kenny An­thony govern­ment and two for­eign ho­tel de­vel­op­ers. The mat­ter forms a ma­jor part of my book Lapses & In­fe­lic­i­ties which in­cludes the fol­low­ing.

With Kenny An­thony and his le­gal rep­re­sen­ta­tive An­thony Astaphan in at­ten­dance, the Ram­sa­hoye in­quiry opened with the fol­low­ing dec­la­ra­tion by its chair­man: “There is one thing I want the pub­lic to know and it is that the for­mer prime min­is­ter is not in the dock of a civil or crim­i­nal court. This is an in­quiry. The for­mer prime min­is­ter was re­spon­si­ble for mak­ing the de­vel­op­ment agree­ment by which he hoped there would be a new re­sort for Saint Lu­cia. He was an elected prime min­is­ter with the com­mand of a ma­jor­ity in par­lia­ment and he had the au­thor­ity to set about this kind of busi­ness. The Com­mis­sion of In­quiry is lim­ited to in­ves­ti­gat­ing whether the govern­ment of Saint Lu­cia suf­fered any loss by the in­tro­duc­tion of Fren­well into the trans­ac­tion and the events there­after.”

As if to leave no room for mis­un­der­stand­ing, Ram­sa­hoye re­peated him­self: “This in­quiry is not lit­i­ga­tion. No­body is charged. We are not a court and do not have the au­thor­ity to pass judg­ment on any­one. We are here only to in­quire into the facts and mat­ters stated in our terms of ref­er­ence. If we ex­press an opin­ion at the end of the day as to whether there are breaches of civil or crim­i­nal rules, we will be care­ful not to say any­thing that would of­fend the char­ac­ter, credit or rep­u­ta­tion of any­one, un­less they are given an op­por­tu­nity to speak be­fore we speak.”

Di­rectly ad­dress­ing Kenny An­thony’s le­gal rep­re­sen­ta­tive, Ram­sa­hoye said: “Mr. Astaphan, you will see that in the one mat­ter that con­cerns your client—the sum of US$17 mil­lion paid to the Royal Mer­chant Bank of Trinidad and Tobago—we are to in­quire into the govern­ment’s fi­nan­cial in­volve­ment. Let me know if there is any­thing you want from us. The truth is that the for­mer prime min­is­ter was the re­spon­si­ble min­is­ter and is in the best po­si­tion to tell us what hap­pened when he sought to have that project go ahead in Saint Lu­cia. If there is any help you can give, or if you want any­thing from the com­mis­sion that would help you bet­ter rep­re­sent your client— re­mem­ber­ing your client is not on trial—I would be happy if you let me know.”

Astaphan had an im­me­di­ate con­cern: “We re­ceived three bun­dles of doc­u­ments from coun­sel for the com­mis­sion. They do not con­tain any al­le­ga­tions. We have this morn­ing re­ceived two statu­tory dec­la­ra­tions from the RBTT that say they have noth­ing, no doc­u­ments, no rec­ol­lec­tion. Yet Dr An­thony is be­ing in­formed by the sec­re­tary to the com­mis­sion that he is to be re­garded as im­pli­cated and as a sub­ject of this in­quiry. It seems there is a con­tra­dic­tion, see­ing that Mr. Ar­mour is go­ing to rec­om­mend to the com­mis­sion two things: whether the sum agreed by the govern­ment of Saint Lu­cia was paid un­der the guar­an­tee en­force­able by law or by some other con­trac­tual obli­ga­tion.”

Dis­be­lief was all over Ram­sa­hoye’s coun­te­nance as he said: “Mr. Astaphan, you know very well that whether some­body is im­pli­cated or con­cerned de­pends upon the cir­cum­stances of the case. It de­pends on what in­for­ma­tion we have and what ac­cu­sa­tions are made against a par­tic­u­lar per­son. I’ve said, over and over, that I do not con­sider your client to be in the dock or on trial. The com­mis­sion has not heard all the ev­i­dence in the mat­ter and what they have so far seen, you have. I know your client is con­cerned in the in­quiry be­cause he was the re­spon­si­ble min­is­ter when the events oc­curred. But if you say im­pli­cated, mean­ing he com­mit­ted an of­fense, then the com­mis­sion would take of­fense to that, for we have cer­tainly said no such thing.”

Astaphan was “happy to hear” his client was “not im­pli­cated but merely con­cerned be­cause he was the Min­is­ter of Fi­nance at the time.” Still there was sub­se­quent cause for him to apol­o­gize af­ter he is­sued to re­porters the fol­low­ing state­ment: “In twenty min­utes this morn­ing the com­mis­sion made it clear that to date there is noth­ing on the min­is­ters re­sem­bling ei­ther civil or crim­i­nal re­spon­si­bil­ity or li­a­bil­ity. Most tellingly, Sir Fen­ton Ram­sa­hoye made the telling state­ment this morn­ing that he had read the Rochamel doc­u­ments filed in the high court and came to the con­clu­sion that there was ab­so­lutely noth­ing wrong with the govern­ment, that it should have pur­sued, or was right in pur­su­ing, the guar­an­tees signed by Dr An­thony, a sig­nif­i­cant vin­di­ca­tion, and that the only is­sue may be cal­cu­la­tion of fig­ures which had noth­ing to do with Dr An­thony. So in twenty min­utes the po­lit­i­cal in­tent, what­ever it was, on the part of the present govern­ment ap­pears to have fallen flat.”

At his first op­por­tu­nity, Astaphan ad­dressed the com­mis­sion on the mat­ter of his pub­li­cized state­ment. “I made a mis­take,” he ac­knowl­edged. “I called Mr. Amour and he pointed out to me that the com­mis­sion is most up­set about what I said. I told him what I thought I had heard. Af­ter check­ing the tran­script I re­al­ized it was not what Com­mis­sioner Ram­sa­hoye had said.” He said he was sorry for hav­ing mis­led the pub­lic, even though he didn’t think he had “caused too much dam­age.” He never in­tended to em­bar­rass the com­mis­sion. He thought the com­mis­sioner re­ferred to court doc­u­ments when in fact he had cited “guar­an­tee doc­u­ments” re­lated only to the in­quiry.

Cu­ri­ously, Kenny An­thony—a lawyer by pro­fes­sion—let his rep­re­sen­ta­tive speak for him through­out the in­quiry, even when it seemed Astaphan had not a clue what to say in an­swer to ques­tions about the ne­ces­sity for Fren­well Lim­ited. How­ever, the for­mer prime min­is­ter had much to say af­ter the Ram­sa­hoye Com­mis­sion had sub­mit­ted its report to the gov­er­nor gen­eral. At any rate, much to say about the cost to the tax­payer and about Ram­sa­hoye per­son­ally, none of it flat­ter­ing. As for the 74-page report, An­thony dis­missed it as con­tain­ing “noth­ing new.”

He mis­spoke. The report re­vealed for the very first time that not­with­stand­ing Kenny An­thony’s re­peated con­trary as­ser­tions “the guar­an­tees in the de­vel­op­ment and con­ces­sion agree­ment, the Deed of Guar­an­tee and In­dem­nity and the Put Op­tion agree­ments were never put

be­fore par­lia­ment for ap­proval by res­o­lu­tion.” Con­se­quently, “there was no direct au­thor­ity for money payable un­der the guar­an­tees to be taken out of the Con­sol­i­dated Fund—as is con­tem­plated by sec­tions 41 and 42 of the Fi­nance (Ad­min­is­tra­tion) Act.”

The back story ac­cord­ing the report: In De­cem­ber 2002 the govern­ment of Saint Lu­cia wanted to bor­row US$41 mil­lion from the Royal Mer­chant Bank to meet cap­i­tal ex­pen­di­ture and to pay the debt in­curred by Fren­well Lim­ited. A mo­tion to en­able the money to be bor­rowed was put be­fore par­lia­ment. It was ap­proved by the House of Assem­bly on the mo­tion of Dr Kenny An­thony, the prime min­is­ter and Min­is­ter of Fi­nance, on 17 De­cem­ber 2002. The mo­tion was passed by the Se­nate on 20 De­cem­ber 2002. The mo­tion pre­sented to par­lia­ment in­voked as its au­thor­ity the pro­vi­sions of Sec­tion 39 of the Fi­nance (Ad­min­is­tra­tion) Act, sub­sec­tion 1(a). The rea­son for in­vok­ing the sec­tion was be­cause a part of the US$41 mil­lion was in­tended to meet ex­pen­di­ture on cap­i­tal works which the govern­ment of Saint Lu­cia had un­der­taken. But it was also in­tended that the other part should be used to re­fi­nance govern­ment’s obli­ga­tions in re­spect of the

for­mer Hy­att ho­tel.

“The truth was that the obli­ga­tions which the govern­ment in­tended to meet were the loan monies which Fren­well had bor­rowed and the in­ter­est which the govern­ment was obliged to pay to the Royal Mer­chant Bank un­der the Deed of Guar­an­tee and In­dem­nity and the Put Op­tion agree­ments. It was pre­sumed that the mem­bers of the leg­is­la­ture knew the loan monies were used to sup­port Pi­geon Point Ho­tel Lim­ited. We con­clude that the na­ture of the pro­ceed­ing, by virtue of which the res­o­lu­tion was passed,

were ir­reg­u­lar. But since mem­bers of par­lia­ment must have known the govern­ment was bor­row­ing money to sat­isfy obli­ga­tions it un­der­took in con­nec­tion with the re­sort, the pay­ment—although done through an ir­reg­u­lar pro­ce­dure—was not un­law­ful.”

The com­mis­sion also con­cluded that “the money paid was lost and that the govern­ment and peo­ple of Saint Lu­cia re­ceived noth­ing in re­turn for the money paid to the Royal Mer­chant Bank, even though it was in­tended, by the terms of the de­vel­op­ment and con­ces­sion agree­ment of 17 De­cem­ber 1997, that if in­deed the govern­ment was called upon to pay it would re­ceive a cor­re­spond­ing eq­uity in the ho­tel.”

Also new was this tid­bit: “Af­ter the res­o­lu­tion was passed and the govern­ment as­sumed thereby the au­thor­ity to bor­row US$41 mil­lion from the RBTT, it did so. How­ever, the bank did not pay the US$41 mil­lion to the govern­ment. The bank pur­ported to deal with the sum which it was lend­ing to the govern­ment of Saint Lu­cia in the fol­low­ing man­ner: (a) It de­ducted US$17,092,350 for the debt of Fren­well Lim­ited, com­pris­ing the loans plus in­ter­est; b) It de­ducted a fur­ther US$584,000 for fees; c) It paid the bal­ance US$23,323,000 to the govern­ment.

“Tak­ing into ac­count the An­thony-ne­go­ti­ated re­duc­tion of in­ter­est by US$2.5mil­lion, the report noted, “the to­tal sum that the govern­ment lost was US$14,592,350 to­gether with fees in­cluded in the sum of US$584,000, part of the last men­tioned amount be­ing at­trib­ut­able to that por­tion of the US$41 mil­lion loan which went to set­tle the debt of Fren­well.” As a re­sult of the man­ner in which the trans­ac­tion was done, “the govern­ment had no re­course in eq­uity against Pi­geon Point Ho­tel Lim­ited be­cause it did not as a guar­an­tor pay Pi­geon Point Ho­tel’s debt.” Shock­ingly: “The

govern­ment had no agree­ment whereby the cu­mu­la­tive pref­er­ence shares pur­chased by Fren­well from Pi­geon Point Ho­tel Lim­ited could be claimed by the govern­ment from Fren­well. No shares were passed by Fren­well to the govern­ment and peo­ple of Saint Lu­cia.”

De­tails of the com­pany’s in­cep­tion were heard for the very first time. To quote from the Ram­sa­hoye Report, Fren­well was “al­legedly formed at the re­quest of the govern­ment of Saint Lu­cia as a de­vice to deal with pay­ment of the sum of US$12,750,000 which was the to­tal amount the govern­ment agreed to guar­an­tee un­der the de­vel­op­ment and con­ces­sion agree­ment of 17 De­cem­ber 1997.” In any event, the ne­ces­sity for the Fren­well de­vice was never clearly es­tab­lished, de­spite re­peated ques­tions put to An­thony Astaphan in the pres­ence of his client the for­mer Prime Min­is­ter and Min­is­ter of Fi­nance.

In con­tra­dic­tion of Kenny An­thony’s per­sis­tent as­ser­tion over the years that Saint Lu­cia gained by the Rochamel project (re­named San­dals Grande), which is now a source of in­come and em­ploy­ment for work­ers in Saint Lu­cia and the govern­ment, Ram­sa­hoye ob­served: “It ap­pears to the com­mis­sion that those ben­e­fits would in any event have been gained, and that the mon­e­tary loss suf­fered by the govern­ment and peo­ple of Saint Lu­cia ought not to have oc­curred if ef­forts had been made to pro­tect the govern­ment and peo­ple from un­com­pen­sated loss when it paid the debts of Fren­well Lim­ited.”

More­over: “We did not dis­cern any at­tempt to pro­tect the govern­ment and peo­ple from this loss. The Prime Min­is­ter and Min­is­ter of Fi­nance had the re­spon­si­bil­ity for this trans­ac­tion whereby the money was lost. There was no su­per­vi­sion or con­trol by the govern­ment over the con­struc­tion, equip­ping and man­age­ment of the re­sort. There was no ev­i­dence that high-level pub­lic ser­vants who were en­gaged in the of­fice of Dr An­thony were in­volved in the de­ci­sion-mak­ing process con­cern­ing this trans­ac­tion. All the rel­e­vant doc­u­ments that sup­ported the li­a­bil­ity of the govern­ment and peo­ple of Saint Lu­cia to pay monies in con­nec­tion with the [Hy­att] re­sort were signed by the prime min­is­ter, who in­ter­vened when the in­ter­est charges were thought to be ex­ces­sive, as in­deed they were. The com­mis­sion en­deav­ored with­out suc­cess to get in­for­ma­tion from Mr Gavin French who was the mov­ing fig­ure be­hind the es­tab­lish­ment of the re­sort, but with­out any suc­cess what­so­ever. He gave no state­ment and sup­plied no in­for­ma­tion to the com­mis­sion but we feel he was in a po­si­tion to say why the project failed in the hands of the ho­tel com­pany and how it came about that the govern­ment and peo­ple of Saint Lu­cia were left to carry the bur­den of con­sid­er­able un­com­pen­sated fi­nan­cial loss.”

This was the com­mis­sion’s fi­nal word on the con­tro­versy that be­gan shortly af­ter the Kenny An­thony govern­ment took of­fice in 1997: “We con­sider that the loss which the govern­ment and peo­ple of Saint Lu­cia suf­fered in

this mat­ter was the re­sult of mal­ad­min­is­tra­tion and we would rec­om­mend that where the govern­ment en­ters into con­tracts for the pro­cure­ment of goods and ser­vices, the law reg­u­lat­ing such agree­ments should be strictly fol­lowed. The govern­ment paid money to the Royal Mer­chant Bank of Trinidad and Tobago in the sum of US$14,592,350 for the debts of Fren­well Lim­ited—with which it had no con­trac­tual or other re­la­tion­ship and the money so spent was ir­recov­er­able.”

Among the com­mis­sion’s rec­om­men­da­tions: “There should be no time limit in law for the re­cov­ery of pub­lic funds and ap­pro­pri­ate leg­is­la­tion should be en­acted to re­move any time bar against re­cov­ery. Pub­lic of­fi­cers at the high­est de­part­men­tal level should be in­volved in the ex­e­cut­ing and mon­i­tor­ing of agree­ments made with govern­ment and no li­a­bil­ity of govern­ment should be sanc­tioned with­out the ex­press agree­ment of law of­fi­cers of Saint Lu­cia.” The Crown Pro­ceed­ings Amend­ment ac­cepted by the House on Tues­day, in the ab­sence of the op­po­si­tion, takes care of the first rec­om­men­da­tion—of­fered ini­tially in 2009 but never im­ple­mented un­til now. In all events, the Rochamel-Fren­well mat­ter will not be af­fected by Tues­day’s House de­ci­sion.

Post­script: Dur­ing his ap­pear­ance on TALK two evenings ago, the MP for South­east Cas­tries re­ferred to a most un­usual Cabi­net Con­clu­sion that seemed to give Prime Min­is­ter Kenny An­thony free rein to make govern­ment de­ci­sions with­out nec­es­sar­ily dis­cussing them in ad­vance with his Cabi­net col­leagues!

An­thony Astaphan (left) af­fords Sir Ram­sa­hoye a laugh dur­ing a break in the 2009 in­quiry into the pay­ment of debts owed by Fren­well Lim­ited.

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