WRONG_WOEID WRONG_WOEID

Bad Business and Foul Politics

The Royal Antiguan HotelBoth major political parties, the Antigua Labour Party (ALP) and the United Progressive Party (UPP) governments have ignored democratic accountability and public opinion to the benefit of entrenched elitist business corporations. 

In terms of economic disempowerment of the masses, nothing much has changed since UPP victory on March 23, 2004, the political spectrum only changed color. Consider The Royal Antiguan Hotel sale on Wednesday September 1, 2004 to Issa Nicholas, Chairman of Crown Plaza Trinidad as one such example. [Antigua & Barbuda Government Newsletter ISSUE NO.91 August 2004]
 
Why did the UPP Government privatize the Royal Antiguan Hotel? Basically from the beginning of the Royal Antiguan Hotel development, and commencement of operation in 1988 everything seems to be shrouded in secrecy.  No one was able to find answers to the many elusive questions, thus increasing distrust in the political system. The government-owned tourism flagship later became mired in controversy ranging from conflict-of-interest to accusation of financial fraud. According to The Organisation for Economic Co-operation and Development (OECD) Integrity in Public Procurement Good Practice from A to Z , public procurement is one activity most prone to corruption since it provides "...multiple opportunities for both public and private actors to divert public funds for private gains"


 
The case of the Royal Antiguan Hotel development provided "multiple opportunities" for private gains. The genesis of this State-Owned Enterprise (SOE) was riddled with the prevalence of  corruption scandals, with unprecedented wealth and power concentrated in the hands of a few. Of particular interest was the setting up of a politically connected business, Deep Bay Development Company [DBDC] for special payments and bribes and to plunder public funds. The major role of DBDC was to act as a clandestine broker between the Antigua & Barbuda government and SACE, Italy's government-backed Export Credit  Agency financiers of the Royal Antiguan Hotel, Heritage Quay, Electricity Transmission Network, and Crabbe's Power Plant. Between 1983 and 1987 these four infrastructural development was funded by SACE: "Between 1983 and 1987, SACE, then Public Body, assured 4 loans made by banks for a total amount of € 84.5 million for the construction of infrastructure at the hands of Italian companies, in particular" [SACE-trade receivables Government of Antigua and Barbuda]
 
Additionally, on September 17, 1996 Antigua & Barbuda  Finance Minister was authorized to borrow more than EC$160,148,296 million from local Financial Institutions for various business "ventures" . Two of these business ventures clearly represents a Conflict of Interest:  the Royal Antiguan Hotel and DBDC were businesses connected to the Patrimonial Regime. These two private businesses , secured government funding for over $EC$20.4 million from paying salaries to "......pay accrued interest to Deep Bay Development  Co. Ltd..." [Loans (Financial Institutions) Act 1996: 9 Antigua Commercial Bank]
 
Although the Antigua & Barbuda government were the primary guarantor of the loan, DBDC was the principal organizer, and collector of the funds. In June 1995 an IMF review assessed the political developer owed SACE more than 40% of the external arrears. Less than a decade previously, a former Diplomat fingered Lester Bird, Leader Emeritus as the "owner" of the Royal Antiguan Hotel. As a consequence of political kickback, bribe and theft , the masses were carrying more than US$200 million of debt burden. [IMF Report No. 95/45 June 1995]

Therefore, tax payers were burdened by debt belonging to the principal "owner" of the Royal Antiguan Hotel, and Director of DBDC former PM Lester Bird! One such local debt owed by DBDC was documented on April 28, 2000 by Devcon International Corp was viewed as Antigua and Barbuda Government responsibility. [Amendment No. 9 to St. John's Dredging and Deep Water Pier Construction Agreement April 28, 2000 Exhibit 10.33]

Debt Forgiveness and Privatization:
 
Decades later, the Italian government of PM Silvio Berlusconi authorized debt forgiveness totaling US$196 million ( 26% of Antigua's GDP). One can argue that Berlusconi saved Antigua & Barbuda from the precipice of economic collapse, the Italian debt was settled for only US$ 14.2 million. However, another dubious manifestation was progressing, this time the sell-off of The Royal Antiguan Hotel. Absent is a recourse systems for stakeholders to challenge such disfavored divestiture!
 
Again, foreign ownership of a prized national public asset was the final insult, the Royal Antiguan Hotel was sold for $18.0 million, an illogical 29% increase. Similar views of divestment were advocated in PM Lester Bird Budget Statement on Monday 31, 2003: "The government intends to finance the deficit by actively pursuing a policy of privatization of publicly held assets. Assets that have been earmarked for sale include the Royal Antiguan Hotel, Newport Holdings and West Indies Oil Company Ltd"
 
A leading example of resistance against privatization was staged by the courageous people of Bolivia against the take over of the municipal water system of Cochabamba, Bolivia's third largest city. The struggle started in 1999 against Aguas del Tunari, culminating in the Water War in Bolivia. The struggles symbolizes resistance against the World Bank and the privateers interest of ownership of electricity, water, and telephone [2000 Cochabamba Protests -Wikipedia]
 
These major privatizations of SOE was of concern to the people of Antigua & Barbuda, since it was no different to the  political sell-off in other Latin American and Caribbean countries. In Antigua there was no popular movement against privatization only remarkable silence! Why? Some have accepted the poverty of the masses and the enrichment of a few with pubic assets as politics as usual. But this is corruption to the core. Our public conscience is completely asleep. In this vein, UPP followed PM Lester Bird 2003 privatization template! During  that era World Bank privatizations of SOE agenda continued in 2004-2005:  "In 2004-2005 62 Developing countries carried out nearly 400 privatization transactions worth US$90 billion" The Royal Antiguan Hotel was a case in point, sold to private interest, now the 275 rooms resorts is closed indefinitely, leaving the economy far worse. Apparently, as in so many instances in the past, government is incapable of enforcing a performance clause.

 
Moreover, the Royal Antiguan Hotel deal was empowered in an arbitrary manner, public dialogue was absent, participatory democracy questionable, there was no recourse . The majority viewed hidden weaknesses, and the invisible hand of influence peddling, behind the covert sell-out. The  World Bank alluded to the Royal Antiguan Hotel divestment as far back as 1992, indicating the ALP government intention to sell due to ALPs "..lengthy record of default" and blaming the external debt on Government's involvement in tourism: "In part, the external debt problem is linked to the Government's direct involvement in the tourism sector..." and that the Government "...is currently considering selling the Royal Antiguan" [World Bank Report No. 10483-AB May 18, 1992 -23- 55]
 
The World Bank agenda is clearly to discourage public investment in the tourism sector, and promote SOE sell-off  is deplorable and shamelss conduct. The underlying cause was not addressed: monies owed to SACE ended up in Government ministers personal offshore bank accounts. The Antigua and Barbuda Treasury was plundered, not for "economic development" but personal gain, plunging Antigua & Barbuda into a morass of poverty! Therein lies the difference between the country's economic failure, hardship versus self-enrichment and self-gratification of politicians!
 
Moreover mismanagement of public funds for private gain, and political complicity are major factors that created  the Royal Antiguan Hotel  chaos, nothing else.  The blame for these  shenanigans rest with Lester Bird, Leader Emeritus, who was Minister of Economic Development, and Prime Minister from 1994 to 2004! And since the upholder is as bad as the thief according to folkloric wisdom, PM Baldwin Spencer's continued policy practice worsen the situation.
 
Part 11 coming....

Kwame Nkosi Romeo

See related stories:

Odious Land Deals - The CCI Group and Foreign Direct Inequity - Part II

Odious Land Deals and Poverty - The ALP in Focus - Part I


Reporting by Caribarena news, publishing by Ofer Shaked.


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16 Comments In This Article   

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@ Observer - civil disobedience

#16 Skyewill » 2014-02-01 04:46

I agree with you 100%. The people seem to be powerless while the country goes to the dogs. You mentioned the Linquist Report and I will Add the Financial services report that implicated Stanford and his involvement in that regulatory body and may also implicate his representatives/part ners in our government. This is the same people who promised transparency. I do not hold them higher then the people and certainly not above myself. I went to school with some of them and I know them, They are legends in their own minds. Our education system needs to teach our children critical thinking, ethics, confidence and self esteem if we are to overcome this hate for self. Like Marley sing emancipate yourself from mental slavery. It is now 6 week before the election is constitutionally due and the announcement is way OVER DUE is really the way we want our democracy to run? Does any human have the right to hold a nation hostage? Is civil disobedience the answer? This to must change.
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Skyewill

@ josephine son » 2014-01-31 11:57

#15 Observer... » 2014-01-31 22:47

I use to say that of the Scarlet Pimpernel. he seems to have fled the seen. I like his writing though. He was thought provoking. pompey writes well also but long winding. I guess you will have to upgrade your intellect my dear. In order to join the clan. reminds me of what Jacqui did in the education system. She just dropped the standard so that she could have more children pass.
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Observer...

Parishman » 2014-01-31 11:52 #5

#14 Observer... » 2014-01-31 21:52

But eventually she had to. Because we the people boycotted every product coming out of South Africa. Even when buying diamonds. We need to form and organize the Antiguan populous. And ours is a lazy people. Stand for nothing. You know I use to admire the PM in opposition. He used to demonstrate every time and even went on hunger strike. Had a sitting at the PM office. That to me was a courageous man. The PM now act more like a dictator. He lost his way in the power of the job.
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Observer...

Parishman » 2014-01-31 11:52 #4

#13 Observer... » 2014-01-31 21:50

To date the Prime Minister has kept the Lindquist report from the public. This is shameful. One more reason why he cannot and doesn’t have the moral authority. Another tool the citizens have is to have citizen disobedience. We need to collectively decide not to go to work on the same day for three days on and off. And stick with the program. I would not encourage anyone to go and demonstrate because I do not think politicians listen. They have to feel the pressure from the employers the businessmen/women. When we fail to go to work. When we start flooding the GG with letters and petitions. All none violent ways of citizen disobedience. Remember the bus boycott in Mississippi I believe it was. The black people there had many form of civil disobedient when they sought their rights. We can take a page out of their struggle and learn from it. We need to take our country back from politicians who believe once elected they are above the law. I demonstrated in the streets in Europe to free Mandela and was teargased. But we saw Maggie saying she would not bend under our pressure .
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Observer...

Parishman » 2014-01-31 11:52 #3

#12 Observer... » 2014-01-31 21:49

What have we seen during the UPP reign. The GG’s office was politically motivated in many instances. Look at the way she treated the ABEC inquiry report. She refused to appoint Sir Gerald Watt back to his post as was recommended by the commissioners. How do you think a judge who was ask to preside over an inquiry would feel if after he did his work honorably and honestly he find out that the PM and the GG did as they saw fit anyway. That was a slap in the face of the judiciary. Therefore our system needs to change. We need to have real independence when it comes to holding the politicians and others in public office accountable. They should not be above the law or they cannot use and abuse the law as they see fit. You cannot use parliament to make law to get your will. Or to victimize someone. Like in the US were they have Public Accounts Committees that are independent we need to demand from out politician that our constitution be changed to establish these institution. Be it that we start petitions and form groups. We need to start somewhere. And sent petitions to the GG to instruct the political directive to act on the will of the people. If we do not organize ourselves not in to political groups but in social groups. LUMP was a good example but they turned political. And then they became irrelevant. Being seen as a witch hunt party of just one political party.
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Observer...

Parishman » 2014-01-31 11:52 #2

#11 Observer... » 2014-01-31 21:48

I have been around in high executive offices and I have witness it. Especially the foreign company bosses really think very low of our politicians. A simple thing like a work permit you have to do something to get it. Whether it is directly or indirectly benefitting the politician. Like sponsoring his basketball team or his pan yard. Or contributing various materials to his election campaign such as printed materials, T Shirt, construction for the podium. These gifts go in the hundreds of thousands of dollars. To get approval for a duty free application, you might get it if you do not want to pay, but the question is when. That is the frustration some investors have to deal with if they do not want to play the game. Meanwhile the politicians make sure their hands are clean. Nothing to point to them. So how we do it. We have to stand up and demand that we get certain institutions in place. What we see now is that if a PM do not want an inquiry it simply will not happen. That needs to change. Another issue we have seen is that the GG also can decide whether or not to hold an investigation. Now this office was to be independent and free of political interference.
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Observer...

Parishman » 2014-01-31 11:52

#10 Observer... » 2014-01-31 21:48

If I may reply to you on that. In 2004 most of us were jubilant when the UPP came in to office on the promise of transparency, accountability and justice. I was one that jumped for joy on the street that very day with others. And given the slate of candidates, so many lawyers, I really looked up and had very high expectations. Looking back many and I mean many of the then supporters are more than disappointed. I even remember on Observer Radio their biggest supporter Winston Derrick taking issue with them. And the lump party leader Mr. Abbott even said he would take down the PM picture from his wall. Scandal after scandal came and the PM refused to follow his own set rule of ‘one strike and you’re out’. To me he then lost any moral authority to point fingers to the alleged corruption during the ALP government. Especially when his own Deputy came to him to advise him that he was offered a bribe to purchase a certain building. Which we now know which building that is and the players. I have charged many times, in dealing with corruption by our elected officials we also need to deal with the businessmen/women who facilitate or entice our politicians in those practices. Greed is human nature and if the price is right most if not all of us are for sale.
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Observer...

NO ALIASES

#9 RAWLSTON POMPEY » 2014-01-31 16:50

My Friend Duncy Bat,

There is " ...ABSOLUTELY NO NEED" to hide behind " ...pseudonyms."

The author writes to " ...Bad Business and Foul Politics."

Rawlston Pompey is NOT qualified, and has no interest in writing on these issues. Besides, he " ...abhors that which he considers " ...GUTTER SNIPE POLITICS."

No associate. Only Romeo known to me, was a gentleman named " ...ROGER ROMEO." He, a former LIAT employee -I as Immigration officer V.C.B.I.A.

Thanks Observer.
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RAWLSTON POMPEY

mombojumbo

#8 josephine son » 2014-01-31 11:57

why can't you guys write a simple article without making it seems like a puzzle to understand what you are trying to say
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josephine son

Very informative piece

#7 Parishman » 2014-01-31 11:52

Kudos writer.....I concur. Question: How can the people (those who are on the same page with stamping out corruption) start action to achieve it? If it means giving my life to stamp out corruption, I am ready. PS: (not that you advocated it)
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Parishman

Duncy Bat » 2014-01-31 09:35

#6 Observer... » 2014-01-31 10:52

Kwame Nkosi Romeo, aka Bombshell
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Observer...

Duncy Bat » 2014-01-31 09:35

#5 Observer... » 2014-01-31 10:43

Kwame Nkosi Romeo, has been writing on CA for some time and he is well known in Antigua. But why would you think Mr. Pompey would hide for writing an opinion piece like this. And we know how Mr. Pompey writes. No Romeo is Romeo and we all know Romeo.
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Observer...

Sound piece #3

#4 Observer... » 2014-01-31 10:31

They stood up for things that we are now enjoying. How you think one nation can get independence from another. These things you have to fight for. When you see even in the USA how black people in the past stood up and fought for freedom and rights, which allow them now to have so many liberties they would never have had were it not for their forefathers. You wonder what is happening to our people. All drunk either by the red lemonade or the blue lemonade. No wonder the UPP said at the jubilation of the 2004 election. Ah fuh we time now. And in that process Antigua suffers. Thanks once again writer for a thoughtful well written opinion piece.
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Observer...

Sound piece #2

#3 Observer... » 2014-01-31 10:29

There is this guy whose name I will not mention. He is from St. Kitts. He is a agriculturist. Has aligned himself with the political establishment and suddenly is in the road construction business and now he is in the ministry of Culture and he is Jack of all trade. The best thing since slice bread as Namba puts it. Has anyone even checked out his background? If he doesn’t have any history in road construction, how then was he able to get the contract to build roads? You need someone with an engineering degree in civil engineering to even understand what he is doing. So you can smell the corruption from far. And no one really kicks up against these things. How the heck can this country progress if we are sitting idly by watching our country being raped? We have become a nation that merely exists. We are not living. We are like walking deaths. I have a beef with that. Because our forefathers were fighters.
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Observer...

Sound piece #1

#2 Observer... » 2014-01-31 10:29

After reading this piece I can only say a sound piece of writing. Indicating both parties corrupt practices. And even though these are mere allegations that are yet to be proven, it shows that we Antiguans are either powerless or just do not care what is happening to our public funds. I have said it many times. When are we going to stand up against corruption? When are we going to put institutions of accountability in placer to keep our elected officials in check? They are all acting as if they are above the law. I have heard that there is a policy that civil servants get a finder’s fee for anything or anyone that they bring to the table. And even when they let’s say save government money they get rewarded. This is absurd. Getting rewarded for doing their job. So I was told when the Italian wrote of the debt, someone made a killer of a commission for saving the government money. To date this agreement has not being brought to parliament, neither the sale of Royal Antiguan. One thing we all know that during construction, many so called prominent people got rich by suddenly being contractors. And the same practices from the past are still going on. No wonder we have the fencing scandal and the sidewalk scandal. And many others where suddenly everyone connected become a contractor or a road builder.
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Observer...

RE: Bad Business and Foul Politics

#1 Duncy Bat » 2014-01-31 09:35

Mr Pompey...I hope this is not you...Using an Alias...
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Duncy Bat

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