Smuggling

True Smuggling Story.
There is an explanation why Anguilla slopes from the cliffs on the north coast to the low lands on the south facing St Maarten. The story goes that over the past hundreds of years Anguillians have smuggled their goods into Anguilla, landing them on the beaches late at night. The constant pounding of cars, fridges, stoves, bathroom fittings, and building steel, landing on the beaches of the south has hammered that coast into the water, until it is now much lower than the north coast. I do not know how true that story is.

I have written about Sandy Hill Bay before. I did not tell you my story then. I will do so now. On the night of 27 March 2006 I was sitting on a verandah at Sandy Hill Bay. I know the date because I looked up the invitation in my diary just now. It was after dinner, about 10:00 pm. It was a dark and moonless night. My host caught my attention and pointed out to the bay. He showed me that there was a light flashing on the beach right up close to the sea. He told me that it had happened every moonless night for the past 30 years at least. He said that the following morning he had even once found a package of liquor floating in the sea where it had been lost in the dark. He then showed me the dark shape of a boat in the water approaching the flashing light on the beach. In less than a minute their business was over. The boat sped away from the beach. It was obviously a very small package, probably drugs. He showed me the lights of the car turning around on the beach. We looked as the car appeared to be stuck in the sand. I asked him if he had reported these incidents to the police. He told me had had done so in the past, but the police never came to investigate, so he did not bother any more.

I borrowed his telephone. I called the Valley Police Station. I got a young male officer. I asked him to put me on to the most senior officer in charge at the Station at that time of night. He told me it was a lady police sergeant, but she was not available. She was out on a report. He asked if he could assist. I had no intention of making a report to a constable. He probably did not have a vehicle to come to investigate. To ask him to come would be to ask him to leave Police Headquarters unmanned late at night. He asked me for my name. I refused to give it to him. I asked him for the name of the Superintendent on duty at night. He told me the name of a Superintendent. He gave me his cell phone number. I called the number. It did not ring busy, it appeared to me to be turned off. I got a recording of the officer’s voice telling me to leave a message.

I was amazed. Here was a package, probably of cocaine, being landed late at night on a beach in Anguilla. There was no senior officer I could make such a serious complaint to. All I could find was a young constable, not the sort of officer you could tell such a story to. There was nothing to do. I put down the phone. I watched as the car became unstuck from the sand after ten more minutes. I observed that, one by one, three more sets of car lights were lit up further up the road leading to Sandy Hill Bay. The four sets of lights set of at high speed up the road and disappeared into the dark. And, this has been going on for 30 years without an investigation, far less an arrest. Come on! Who is in charge here? You can imagine the crazy thoughts that flashed through my mind. Were the police unavailable because they were all busy driving back to The Valley from Sandy Hill Bay? I realized that it must have been a very serious package to have warranted three sets of look-out and security cars! All I hoped was that they could not trace the call.

The moral of the story is that if you see a boat of drug smugglers landing product on Anguilla, there is no point in contacting the Police Station. They are either too young and inexperienced to be given such a burden, or, if they are senior officers, their telephones are turned off. The conclusion is that we cannot depend on our police force to investigate a serious crime in Anguilla. No Anguillian believes otherwise.

Criminal Investigators

How My Crime Was Investigated.
Have you been a recent victim of a serious crime? If so, were you satisfied with the way the authorities handled it? If you were not, would you be willing to share your interpretation of your interaction with out law enforcement officers with us?

I have been reading and hearing of some really serious assaults that have taken place in Anguilla over the first three months of this year. I have heard of the almost hopelessly ineffective police investigations that have ensued. I have heard of offenders suspected of multiple assaults on women in their beds at night being released on bail to continue their predatory behaviour. I have wondered that no one has been speaking out.

The readers of this Blog are not particularly interested in interfering in any on-going police investigation. We are concerned about a different issue. What is the state of readiness of our law officers to protect us from the rising wave of crime that we face here in Anguilla? How they reacted to your incident will be revealing to us. Your experience may prepare us for what might befall us next. Sharing your experience, especially if it was not an entirely satisfactory one, with the public might even have the salutary effect of making those in authority who should be aware of what is going on stand up and pay attention. This last is probably a forlorn hope, I know, but we can try.

I am going to start off by posting a couple of my true stories over the next few days. I hope to post some of yours subsequently.

Send me an email, or telephone me at my listed number, and I will consider your story for a post, with such names and details as you decide.

Public Involvement

Public Involvement.

I am concerned that there are many issues of integrity in public life and good governance out there that I am missing. I would like to invite you, my concerned readers, to contribute your ideas. Is there a matter involving a question of integrity or good governance that you wish someone would look into? Is there an issue that has been concerning you for some time now? Why not try emailing me in confidence? I will make an enquiry and get back to you. If I publish the story it will be in a way that does not involve you. I will not publish it at all if you do not want me to do so. Let me hear from you.

Constitutional Reform

Constitutional Reform.

It was an honour and a privilege to have been invited by the Members of the House of Assembly to lead them through the Report of the Constitutional and Electoral Reform Commission delivered to the Governor in August 2005. There was a total of three sessions held at the Limestone Bay café during the month of March. Each of the three sessions lasted half a day. The discussion was lively, energetic, and friendly, with much give and take. At the end of the process, I can say with certainty that the members know what the issues are.

The members of the House now have the self-imposed obligation to go to their constituents throughout the island and seek their views. The team from London is coming for a first visit in just over three months. There is not much time left. The British team will want to know what Anguilla wants by way of reform. We must be prepared to answer in a sensible way. The Commissioners have consulted the public, but now the London team will want to know from government and members of the House what are the wishes of the Anguillians. The members of the House have promised that they will hold a series of public meetings in all the political constituencies of the island with a view to consulting with the people prior to meeting with the team from London.

In all this work, it will be important to bear two overriding factors in mind. I am concerned that there is a small but vocal group of persons with an agenda of their own. Maybe they have their own political ambitions. My fear is that they are intent on sabotaging the process of reform. It will require determination and self-confidence on the part of all Anguillians to ward off any coming assault on the reform process.

The second important factor is that when the members of the House meet with their constituents they have an obligation to remember that they are there to seek the views of the public. The Anguillian negotiating team will draw strength in London from knowing that they are carrying the demands of the Anguillian public to Whitehall. No one is particularly interested in knowing, for example, what Don Mitchell or Kenneth Harrigan thinks about an optimum size for the House of Assembly. Each one of us is entitled to our views. But, those are not the important views. It is the consensus view that emerges from the series of public meetings that is the only important one. I am looking forward to hearing soon that the public meetings are about to begin.

NICA

NICA Revisited.

It has now been some three weeks since I completed a series of posts on the status of NICA. Three of the problems highlighted in the series were, one, the fact that the company has been struck off the Register of Companies and technically no longer exists, two, that there have been no audited accounts or auditor’s report shared with the shareholders for over the past 15 years, and, three, that there is a need for an annual general meeting at which the shareholders can receive an up to date report on the status of company and, if necessary, vote on a motion to wind up the company and to distribute its assets among the shareholders, assuming the directors have in the meantime put the company back on the Register.

A recent search indicates that the company is still struck off the Register. It is not so difficult to have the company put back on. The longer the situation remains as is, the more concerned we must become that the directors have abandoned the company’s work.

So far as the audit is concerned, I have ascertained from KPMG that they were ready, willing and able to perform the audit as mandated by the shareholders. The audit is not an optional thing. It is a statutory requirement. The law demands it. Any meeting of the shareholders called by the directors without an up to date audit will be a fraudulent meeting in my view. The directors have not informed us whether they have proceeded to make the necessary arrangements with the auditors. We are waiting to hear.

Calvert Carty, the Chairman of the Board, has told me that he is anxious to hold an AGM. He wants to discuss with the shareholders a proposal to develop the Lockrum's property. When the Board is ready to call an AGM, I urge them to put on the Agenda a draft resolution to wind up the company. I do not think the shareholders want to hear more plans to do a development. I may be wrong. Let the shareholders decide.

Education

Guest Editorial: Anguilla’s Failing Education System.

Anyone who is familiar the education systems of the West Indies would agree with me that Anguilla’s is one of the worst. It is a despair to me that we are turning out year after year a bunch of uneducated, indisciplined, unemployable young men. There are a few bright and welcome exceptions, but, they remain exceptions. One of my readers has contributed this essay, which I am happy to publish as a guest editorial:

Caribbean Net News recently carried a good article on the need to focus on child protection for youth at risk. A team came to Anguilla to research the issue of child protection, and assist with the development and implementation of action plans to strengthen the services for children. These people have now come and gone in Anguilla, and we have heard nothing of their conclusions and recommendations.

"Youth at risk" means if we don't deal with them in primary school, we get to deal with them after they murder shop keepers in Little Dix. Unfortunately, a decision has been taken at the highest level to deal with the symptoms instead of the problems. All claims to the contrary are lies, like transparency at Social Security. Look at what our leaders do, not what they say.

The bright star in this mess is the WISE programme at the Cottage Hospital. Even with the increased budget, it is vastly underfunded, and unable to accommodate the hundreds of young people who need its services.

The Place 2 Be has a truly excellent programme for helping primary school children deal with problems. They, too, come and gone in Anguilla. They trained 15 teachers. An excellent start, but only a beginning. This programme has been put on the same shelf with the constitutional review and the coroner's report on the police officer who drove into the court house.

All what they left behind is a Minister who offers the excuse that he's on a learning curve. A minister of education is not expected to be an expert in educational psychology and the intricacies of classroom techniques, any more than the administrator of the Health Authority has to be a brain surgeon. His job is to listen to the advice of those who have spent a lifetime learning specialised skills, and work with these experts to bring better services to the people. Even a minister who works a four day week should have time to tell the Permanent Secretary, "OK - let's go for it!" What we are lacking is leadership.

New Technology

Blogging.

Several persons have told me that they are having a problem figuring out how to navigate the Blog. It turns out they were not reading the instructions that appear at the top of each post. This is a common problem. I thought that it might be helpful if I posted the following basic lesson in how we usually deal with new technology. It does not matter if you have the volume turned off. The audio is in Swedish, but there are sub-titles:

Sugar Transhipment

Sugar Transhipment.

For years we in Anguilla have been puzzled and curious as to how we became a sugar exporting country. I have made a number of posts on the subject. Now, Paul Sjiem Fat, the CEO of Anguilla Capital Corporation has responded with detailed information that I am happy to publish as a guest editorial. He calls it:

OCT-EU Preferential Sugar Trade: With regard to the end of the processed sugar exports from Anguilla, please note that the EU did not "put a stop" to any sugar trade between the EU and its Overseas Countries and Territories. In fact, the yearly OCT sugar quota is alive and well and the 28.000 metric ton overall OCT allotment will continue in its present form until the end of 2008 at which point it will be gradually reduced by 7.000 metric tons per year until 2011.

What did happen, however, was the following. A complaint against the EU was filed in the arbitration tribunal of the World Trade Organization (WTO) by Brazil and a few other countries about four years ago. This complaint stated that due to the very high sugar subsidies in the EU combined with unusually high import tariffs, third country sugar producers were being unfairly "locked out" of the EU's sugar markets.

Two years ago the WTO's arbitration tribunal ruled in favor of the parties that filed the original complaint (Brazil et al) and the EU was given a period of two years to dismantle its long standing subsidized sugar market regime. The OCT sugar processing trade had since its inception been an "arbitrage" game.

OCT based companies such as Anguilla Capital Corporation in Anguilla and others in Aruba and Curacao, sourced sugar at a low price in the global market and then shipped it to an OCT in order to subsequently ship to the EU (after nominal processing -- 'grinding, milling etc') and still make a decent return on their capital employed.

In accordance with the WTO's ruling the first thing that the EU did in order to dismantle its long standing subsidized sugar regime was forcibly lower their internal market prices. This, of course, created an "uneconomic" scenario for most, if not all, of the OCT based sugar processing export firms. In addition, another long standing agreement with the so called ACP group of countries involving raw sugar (not white refined as in our case) was also not renewed.

Mind you that of all the ACP countries that shipped raw sugar to the EU under a yearly quota, few if any had any natural competitive advantages in producing this sugar quota. For instance, you know St. Kitts better than me, and the mere fact that the island would have to import manpower from Guyana in order to harvest their cane crop shows how "unnatural" this arrangement was to begin with.

So, in short, the EU did not "stop" the OCT-EU processed sugar export trade at all. Rather, under irrevocable orders from the WTO the EU's internal sugar market prices were cut by almost 50% in less than eighteen months which in effect rendered the entire trade "uneconomical" in all of the OCT's. And, to add insult to injury, for the past thirty years world sugar prices (i.e., our 'raw material price') had been at historical lows (at times as low as US$ 175.-- per metric ton of white refined sugar). However, due to the fact that global energy prices increased by as much as they did over the past 24-30 months the viability of cane derived ethanol all of a sudden increased world market sugar prices by more than 200% which, in effect, was the last nail in the coffin that ended this trade in "all of the EU's OCT's."

Herbert Richardson

Herbert Richardson.

I had invited you to let me know if you knew if there was any person who deserved to be commended for his or her ethics and integrity. We now have another nomination that none of us who knows him will refuse to second:

I would like to add to the integrity list. Herbert Richardson of the Waterswamp/North Hill Road is a humble, respectful, decent and caring person. He is always willing to help, going the extra mile for people. Sometimes it even appears as though he is being taken advantage of. Herbert can be trusted with young people. He is never out of order, always so jovial.

Don’t hesitate to share with us the name of any other person in Anguilla, preferably in public life, and the reason why in your view he or she should be commended for integrity and decency.

Exile

Back in 1968 the British government expelled all the inhabitants of the Chagos Islands in the Indian Ocean to Mauritius. They wanted to give the Americans a military base on Diego Garcia and the Americans wanted no people living around the base. Chagos is more than one hundred miles from Diego Garcia. In the year 2000, the High Court in England gave the islanders the right to go back home. They began returning home. Then, in 2004 the government used “executive power” to overturn the court order and to ban the return of the islanders to their ancestral home. The islanders went back to the High Court, and the court held the government’s action was illegal. The British government has appealed to the Court of Appeal. The court is now considering its decision which should come quite soon.

What is of relevance to us in Anguilla is that the government’s lawyer has argued that none of us who live in British Overseas Territories has a right of abode which “cannot be removed by Her Majesty”. You can read all about it in the Times Newspaper here.

One of the readers of this Blog has submitted the following comment, which I publish as a guest editorial.

Guest Editorial: The Coming Exile.

The British government’s lawyer has argued in the Court of Appeal that with the flourish of a ministerial pen, the busybodies in London may yet evict the lot of us! This has come as a shock to all the citizens of the Anguilla, the Falkland Islands, Bermuda and any of the other 11 territories under British sovereignty.

This goes a step further than taking my house, with appropriate compensation, because it's in the way of the airport runway expansion. Teacher George and Hubert have been going on about this for years, about how the British want to drive us back into slavery, take our lands and houses and force us to become homeless beggers in Europe. I hate to give aid and comfort to their quest to mislead the people. But, it seems there may be some truth in what they have been saying.

I believe various human rights conventions, perhaps starting with that signed in 1945 in connection with the founding of the United Nations, prohibits people from being exiled from their own country.

But what do I know, a simple islander?

What do you, the readers, think? Does the British government in this day and age have the right to rely on ancient common law precepts more consonant with the concept of the divine right of kings to rule? Or, do you think, as I do, that the court will put the government sharply into its place?

I can tell you that, if the court does not do it, one of the first Constitutional amendments that we must insist on is a provision that has the Queen acknowledging in our Constitution that she claims no right in future to evict the people from this island. The courts have ruled since the Statute of Westminster that once such a concession is made, neither the British government nor Parliament can go back and take it away.

ANTIL

ANTIL.

Only a raging toothache kept me away from West End on Tuesday evening. Members of Antil had earlier announced a meeting on Tuesday evening at 7:30 pm to discuss the Cap Juluca proposed acquisition. Cap Juluca’s present owner, Dion Friedland, has just published a release saying that the last thing he has in mind is a sale to Antil. He is very happy with the purchaser he has found. We all agree that Anguillians must ensure that the heights of the economy are retained in local hands. Antil proposes to ensure this process continues by acquiring Cap Juluca whether the present owner wants to sell to them or not.

This is not an ethical issue. What is, is that several of the principals in Antil are government advisers and civil servants. Government has to approve an alien owning land in Anguilla. Government usually acts on the advice of its professional advisers. Why is it that Antil causes a queasy feeling in my stomach every time I hear about it?

I would very much have liked to have been present to learn what Antil is all about. What about you? Was any reader of this Blog present at the meeting in West End? What were your impressions? Is my instinctive reaction wrong and misguided? Can you elucidate?

Public Accounts Committee

Guest Editorial: PAC.

The failure of the Hon Hubert Huges and the Hon Eddison Baird, Anguilla's two Opposition members in the House of Assembly, and other members of the Opposition over the past 25 years to establish a functioning Public Accounts Committee continues to cause comment among my correspondents. Today’s guest editorial revolves around the existence of “slush funds”. These are funds that are not earmarked for any specific purpose. They can be misused, and often are. There is no way for an Auditor to complain about them, as the House of Assembly created the fund without saying what it was supposed to be for. Only an active and vibrant PAC would have the standing to summon officers of the Ministry of Finance and to question them, on oath if possible, about the way the funds were actually spent. In suitable cases, disciplinary proceedings would follow. In others, there would be political consequences for mis-spending:

Slush Funds: There's an article in the Royal Gazette a few days ago about the Government of Bermuda paying a claim to the widow of a man who died in prison, after he begged for seven hours to see a doctor. This led me to wonder where in our budget we hide the cost of claims.

I find line 352 in the recurrent budget of the Ministry of Home Affairs, "Grants and Contributions," which was $3,720,000 in 2005 budget estimate. I do not have a newer set of the Estimates. This appears to be a slush fund from which all manner of secret payments can be made. No accepted accounting practice in the real world outside of government allows such a large amount to be listed without being further broken down. With neither a functioning opposition nor Public Accounts Committee, and an Auditor who has neither voice nor balls, it would appear that the Chief Minister has a free hand to conceal a number of matters which, in a normal democratic society, would be the business of the people.

Who got the $3.7 million? Did you get any of it? I didn't.

Sugar Transhipment

Guest Editorial: Sugar Transhipment 2.

In a recent issue of the Light Newspaper, Teacher George published a story about the sugar flow from the shell factory having ceased. We have all in Anguilla contemplated with some amusement and not a little amazement the very idea that Anguilla could be a sugar exporter to Europe, when even St Kitts has lost its market there. I have received a couple of comments by email. I published one a few days ago as a guest editorial. Today, I publish another one:

The way things often happen in Anguilla, Paul Sjiem Fat's container traffic will be way down, Teacher George will make a comment like, "Is it true that the EU has stopped the sugar transhipment?" and Eddie will get up in the House and say he heard the EU has stopped the sugar transhipment. So I haven't paid much attention to these stories until today, when I was able to confirm that, indeed, there is some kind of problem.

Several years ago the shell factory was surrounded by countless police, who then raided the place. Sjiem Fat had hired a couple of young men who had been in trouble with the law, and the police were looking for evidence. They found nothing.

Some time thereafter there was a raid on Sjiem Fat's office, which is upstairs the Fair Play Complex. They were looking for evidence of money laundering on the part of Sjiem Fat's mysterious Israeli partner. It would be interesting to learn what the outcome was. It may be related to Sjiem Fat's current problem, whatever that may be.

Ascension Island

Ascension Island.

One of our overseas readers who follows events in the British Overseas Territories closely sent the following story. It is taken from a release over Radio Saint FM on St Helena. It is about Ascension Island. It is a pretty barren looking island in the mid-Atlantic. The total population is just over 1,000 persons. The story concerns six of the seven Councillors resigning in protest over negotiations with the British Foreign and Commonwealth Office. The story is important to us in Anguilla because it shows that no matter how small you are, you can kick up a stink that is heard all over the world, if only you have the testicular fortitude to do so:

During the last week six Councillors on Ascension Island have resigned from their posts. Five have resigned within the last 24 hours. One resigned before the visit from FCO consisting of Hugh Philpott and Karen Moran, the others resigned today. The indicative reason for the resignations today were statements made by the FCO delegation. As it currently stands, Ascension Island is without an elected body to represent the islands inhabitants. A joint statement from the Councillors will be issued in the early part of next week.

A press release from the Ascension Island Government this afternoon said that:
“The Island Council held discussions with FCO Officials, Hugh Philpott, (Deputy Head OTD), Karen Moran, (St Helena and Dependencies Desk Officer) and Summiya Ahmad, (Support Officer) who visited Ascension Island from 14-15 March. The main areas of discussion were the housing and business policies. The Island Administrator also joined the lively sessions with the Island Council, which were chaired by HE the Governor. The main focus of the discussion was a draft housing policy, which was produced by the Island Council in 2006.

The visitors also met representatives from some of the Employer Organisations and the US and UK Base Commanders during their two day visit. The participants made some good progress. The Island Council agreed to draft a paper on certain aspects of the discussion on housing policy and send it to the visiting team when back in London. This will be put to FCO Ministers in order to finalise the policies discussed.”

The Administrator of Ascension, Mr Michael Hill said this evening that it was regrettable that the Councillors had resigned but he said that he would not comment on the reason for the walkout as it would be up to the Councillors to give the reasons for the resignations. However, he confirmed that the letters of resignation received contained reasons for the action taken. As the Ascension Island Council now cannot form a quorum new elections – in some form have to be forthcoming. The Attorney General for St Helena and Ascension Island, Ken Baddon, said this evening that “today’s events have raised constitutional issues that will be resolved over the next few weeks”.

After talking to Councillors on Ascension Island, the reason for their resignations is that the democracy on the Island does not work and is used as a cover for introducing un-democratic decisions and policies."

ANGLEC

ANGLEC.

Anglec is one of our most important public utility companies. It manufactures and supplies all electricity to the homeowners and businesses of Anguilla. I recently received the following complaint about Anglec’s disconnection policy relating to rental properties:

Anglec seems to have to strange policy regarding collecting outstanding monies. If you, as a householder/owner, are delinquent in paying your monthly bills, you are disconnected until these payments are forthcoming (including re-connection fee). On the other hand, if a tenant is renting your property, quite often he/she is allowed to run up bills of any amount and then disappear, leaving the owner to pay Anlgec. Until these bills are paid, the company will not give the owner power, so the property cannot be rented or used by said owner. It seems Anglec is putting the onus on the owner to see that bills are paid. Why not disconnect the property (as would happen if the owner were using the property himself) until these bills are duly paid? Often the owner does not have a contract with Anglec but rather the tenant contracted to pay for the electricity used. In Anguilla, everybody knows who owns what, and Anglec seems to think that they will squeeze the money from the owners. I know of three instances where this has happened. In one instance, the company was asked to disconnect the power by owners and did so, but the tenant then asked to have it reconnected because she had a baby. The company reconnected. Unfortunately, no written requests were made. That tenant is now long gone and the owner is stuck with the bill of seven hundred dollars.

I asked Anglec if they would care to comment. Neil McConnie is the General Manager of Anglec. Mr McConnie responded as follows:

Anglec’s policy is fairly clear regarding disconnections for non payment of electricity bills. I shall attempt to explain this below:-

All accounts are either in the name of the owner or occupier who contracted the Utility to provide an electricity supply to the premises. If a disconnection becomes necessary because the owner or occupier has not settled the bill in the given period, the account qualifies for disconnection. Very often however, the following circumstances arise.

(a) The owner leaves the account in his/her name whilst the building is tenanted and the tenant pays the bill.

(b) The owner leaves the account in his/her name and requests that the bills should be sent to the address in care of the tenant and the tenant pays the bill.

(c) The account is transferred in the name of the tenant and if the tenant defaults the account in disconnected leaving the premises without electricity if the tenant absconds or is unwilling or unable to pay. In this case, the service deposit is applied against the outstanding bill.

In the case mentioned in the complainant’s e-mail, where the owner’s account was disconnected and the tenant requested a reconnection which was facilitated by Anglec, this process is unusual unless it was a life threatening situation.

I would be pleased to discuss this matter with him/her so that further investigation can be undertaken.

Sugar Transhipment

Guest Editorial: Sugar Transhipment.

As everyone in Anguilla knows, we are now a major player in the sugar trade. Anguilla, which has not had a cane field for over one hundred years, is exporting sugar to Europe. The idiocy of it all is so stunning that we have sat looking on in utter amazement. The following story was sent to me by a guest editor. I could not refrain from publishing it:

On page 3 of the 9 March "Light Newspaper" there is a story about transhipment.

Any article which attempts to discuss aluminium and sugar transhipment as a common "device" is going to contain errors. There are several basic and important differences.

We do not know why the sugar volume is down. It is important to recall that the trade is seasonal. Also, Anguilla has a small quota that we can't exceed.

There is no duty on products which originate in the OTs and are shipped to the EU. The reason sugar needs to be processed is to qualify it as an Anguillian product. The rules are well defined; it is not enough to simply re-package the sugar.

Aluminium (and motor vehicles) falls under completely different transhipment rules. These commodities are limited to manufactured products, and exclude sugar, rice and agricultural products. Aluminium is manufactured from bauxite; unprocessed raw materials such as bauxite and other ores are excluded, since they are not "manufactured."

The EU duty on aluminium is 6%. When transhipped through an OT, duty must be paid in the OT at a rate no less than that normally payable in the EU. George must be mistaken about Anguilla offering a cut rate on duty.

Anguilla has never transhipped rice. Montserrat did, before their facility was destroyed by the volcano. It has not been thought profitable to replace the factory, or to engage in similar activity in Anguilla.

Expats

Guest Editorial: Expats.

I have received the following contribution for posting. I wonder what the views of the Anguillian readers of this Blog are. It would be good to hear them.

Observing your blog I note there are a number of commissions, boards, and advisory groups appointed by government. Without exception, they are filled exclusively by Anguillian’s. For many years this has worked well. No haste, no waste. Today however, it’s a whole new ballgame and as Coville says, “things are a changing fast.”

Unfortunately, Anguilla doesn’t have time to measure twice and cut once.

Would guess expats account for 6-8% of the islands population. This is not a big number but certainly, not insignificant. A lot of these people have been here a long time, are citizens or belongers, and Anguilla is their home. Many retired from executive and professional positions or previously owned businesses. You must admit, within that group, there is a wealth of knowledge, experience, and expertise.

Heretofore, the philosophy has been, it’s our country and we run it. And that has worked well for forty years. Today however, the winds of change are blowing hard and the challenges facing government are the most perilous ever. Wouldn’t a new idea, fresh approach, or second opinion be helpful?

Why doesn’t government take advantage of this valuable human resource and invite some of these talented expats to participate? They are stakeholders and would take great pride being part of the process that helps navigate Anguilla through troubled waters.

Something worth thinking about. . .

Don’t hesitate to click on the word “Comments” below, and post a comment. If you click on “Anonymous” before you send the post, it will be completely anonymous to anyone who accesses the site, and anonymous to me as well.

Rodney Rey

Rodney M Rey.

I challenged you, my readers, to come up with persons in public life who demonstrate in everything they say and do a commitment to ethics and integrity. We now have the first of what, I hope, will be many submissions. It concerns our own Rodney Rey. This is what my contributor had to say:

Ahh, Rodney Rey!

As Principal of ALHCS, he was in my opinion the Principal with the most integrity and of high moral standard. He was the one Principal who could be relied upon. His word was true. His language was cordial. He did not avoid conflict. He once sent me home because my skirt was too short to teach. And he was right.

Now he's back in my corner as a PS Education and he has that aura of integrity still. He is always friendly, cordial, reasonable and straight. He makes me want to perform up to his high standard. Isn't that just what a superior should do, inspire you to go just that extra mile because you know he does the same?

Selling Land

Selling Land.

This post is a follow-on from the one posted yesterday. The second problem relating to land in Anguilla has to do with the refusal of Anguillians to lease their land. We all know that it is better for our families and descendents if we lease rather than sell. There will be something coming back in a few years time. Everyone is selling, no one is leasing. What to do?

Anguillians have to be persuaded to lease their land. How to do it? Especially when everyone keeps saying that no foreigner wants to take a leasehold interest, they all want to buy. It is not true, of course. It is just what everyone says.

First, government can introduce a heavy tax on the purchase price of land that is sold. Make the seller pay a 15% stamp duty. At the moment only the purchaser pays, and then only a 5% stamp duty. Keep the stamp duty for purchasers, but increase it. Make it higher, much higher. Let leases continue to be free of tax to the landlord. A 15% tax on sellers will be a deterrent.

Second, government can mount a campaign to persuade Anguillians to stop selling land. It is a matter of education. It does not take much. If no land was selling in Anguilla, those foreigners who want a piece of the Rock will soon become accustomed to leasehold interests. If all a foreigner can get is a 15 or a 25 year lease, then that is what will be available. The problem only arises if exceptions are made for a favoured few.

Third, as part of the education campaign, Anguillians can soon become aware that a lease can be as good as a sale when it comes to raising money from the lease of land. We don’t have to lease or rent for monthly or annual payments. We can negotiate for all the lease money to be paid up front. That way, we get the full value on the day the lease is signed so we can use the money as we want. A lawyer can easily prepare a lease that so provides.

As part of the education campaign, we have to stop talking about leasing, since it is so unpopular. As everyone wants to sell, we have to learn to start talking about selling a 10 year lease, or selling a 20 year lease. If you go to London today and you want to buy a flat in Mayfair or in Marble Arch it will cost you a good sum of money. Those are choice areas. Just like Anguilla is. When you buy such a flat, you are paying not less than ₤5 million for a three bedroom flat. And, you are not getting any freehold. You are not getting more than 15 years. Better learn to like it. There is no flat for sale in Marble Arch or Mayfair for more than 15 years. And, none is for less than ₤5 million. There are families in London that have been selling the same flats for two hundred years, and they still own the freehold. They consider us the height of idiots for selling the freehold. They laugh at us. We deserve it.

Fronting Land

Fronting Land.

It seems to me that there are two hot current issues relating to land in Anguilla. They are fronting land, and selling land. Let us look at them one by one.

The first issue, fronting land, arises out of the increasing number of stories that are being brought to me about two particular lawyers who are assisting foreigners with fronting. The deal often works this way. A foreigner comes to the lawyer and says he wants advice and assistance in buying a piece of land. He has agreed a price with the owner. What is the tax? The lawyer says he knows a way it can be done with a big saving in government taxes. The client says he is interested. The lawyer then tells the client the way to do it is to let the lawyer form a company for the client. The lawyer and one or two of his friends will be the shareholders and directors of the company. They promise to carry out the instructions of the client. The client will pay for the land, but the land will be put in the company’s name. That way, the client will be saved the heavy Aliens Landholding Licence tax. The client asks if the lawyer is sure that this is legal. The lawyer promises the client that it is completely legal. The client is delighted that the Anguilla government is so stupid. He goes along with the scheme.

Of course it is not legal. It is a sham transaction. It is a fraud on the revenue of Anguilla. The court will strike it down in a moment if a case was brought. Any case brought by the Attorney General for the forfeiture of such land to the government will inevitably succeed. Any lawyer doing this type of transaction deserves to be locked up. That is the penalty for this offence provided by the law. The law office secretary or other person acting as trustee will go to jail as well as pay a heavy fine.

Not least of the client’s problems is that when the client dies, the lawyer and his friends will more likely than not cheat the client’s estate out of the property. If the lawyer is a crook, there is no saying what he will not do. Especially if he thinks he can get away with it.

It is not as if there is no way for government to solve the problem and stop this fraud. It is amazing to me that government ministers sit and gape at the problem and act as if they are helpless. There are several obvious steps government should be taking.

First, government has to go on the media and say that they will not allow it. They will severely punish any Anguillian or foreigner using this stratagem to get around the tax and the regulations. No Anguillian or, even more so, no foreigner, wants to be in conflict with the government. Foreigners are particularly sensitive. Such an announcement will result in quite a few coming clean. It is not as if this is an expensive or difficult step to take.

Second, we need government to go on the media and announce that any foreigner found holding land in this way will be declared “persona non grata”. They will be declared a prohibited immigrant and refused permission to visit the island ever again. That will put the fear of God into them and result in even the cockroaches among them coming clean. The truth is most of them are not cockroaches. They have simply been misled by the bad legal advice they got. Best of all, this step does not cost government one dime.

Third, we need government to announce on the media that any foreigner using this mechanism will be proceeded against in court, and their lands taken away and forfeited. They might be given a grace period to come clean and pay all their taxes and obtain their licence. This will squeeze the last of the probably unwitting fraudsters out of the background. And, Radio Anguilla is free of cost for ministers to use.

To really ensure this fraud comes to an end, we need a small amendment to the law. The Act which calls for foreigners to be licensed and to pay a tax needs to have a small section added. This will call for the directors of every company owning land in Anguilla to file an affidavit in the Registry of Companies every year stating on oath that no foreigner holds any interest of any kind in the land owned by the company or in the shares of the company, except such that is revealed in the affidavit. There will be a heavy penalty for not filing the annual affidavit in time. That is not all. No Anguillian wants to go to jail for ten years for swearing a false affidavit. The Anguillians who are fronting will quickly refuse to hold the shares in trust any longer. This will result in the last of the rats coming out of their holes.

Finally, government has to call on the Bar Association to back up its initiative to bring an end to fronting by members of the legal profession. The majority of lawyers would welcome this. A couple of seminars by appropriate persons from the Attorney-General's Chambers, on the consequences likely to flow from their discovering any lawyer engaging in this activity, will be bound to have a salutory effect.

So long as government continues to turn a blind eye to this type of wrong-doing it will continue to flourish.

Ethics and Integrity

Ethics and Integrity.

My wife has asked me if it is not time that I write a story about a person who demonstrates ethics and integrity in public life. Why only publish negative stories, she asked. Well, I can only publish stories that I know. If any of the readers of this Blog knows a story about a person in public life who demonstrates in everything he or she does a commitment to ethics and integrity, please let me know. I would be delighted to publish such a story.

Constitutional Reform

The following article appeared recently in Caribbean Net News. It is of interest to those of us concerned about advancing the process of Constitutional reform in Anguilla. It is important because it gives us an idea of what can be done in our negotiations with the Foreign and Commonwealth Office:

BVI Chief Minister says 95 percent of constitutional aims achieved

Published on Thursday, March 1, 2007

ROAD TOWN, BVI: Chief Minister of the British Virgin Islands, Dr Orlando Smith, speaking from London at the end of the fourth round of constitutional talks, said the Territory's negotiating team has achieved 95% of the proposals for a modern constitution for the people of the BVI.

“We fought vigorously in the interest of the people because we knew it would be difficult, but it was the people’s wishes and we fought for their desires,” the Chief Minister said.

The new constitution will include a Human Rights Charter which the Chief Minister said his team is particularly proud of as this means for the first time BVIslanders are accorded full constitutional rights.

On the issue of the BVI having a Cabinet system of Government, the Chief Minister said that while the BVI team recognised that the Governor should still be a member of the Cabinet, the United Kingdom team agreed that there should be a sharing of responsibility.

“We have obtained concession in ensuring that the setting of the agenda of the Cabinet (currently Executive Council) is no longer the province of the Governor alone. It has now been agreed that the Premier should also set the agenda of the Cabinet, and the exercise of this power is not subject to the veto of the Governor or any other person,” the Chief Minister reported.

The Chief Minister said he is satisfied with the decision that there will be a sharing in responsibilities in external affairs and internal security through the establishment of a National Security Council. This Council will comprise senior Government members, as well as the Governor, who will oversee all matters relating to the police and security.

“For the first time, the BVI Government will have a direct say in how the Territory is policed and the Governor will be obliged to act on the advice of the Council,” the Chief Minister said.

On the issue of a sixth ministry, the Chief Minister said, “The UK shares our view that the growing population of the BVI means that the Constitution should allow for this position to be created in the future.”

Lord Triesman, who headed the United Kingdom delegation at the fourth round of talks, and the FCO Minister responsible for the Overseas Territories, congratulated the Chief Minister and his delegation on their determination to secure the best deal for their people, while retaining the links to the UK of which we are all proud."

Outstanding Warrants

Outstanding Warrants.

The following article recently appeared in the Cayman Observer. I have been trying to find out whether Anguilla has a similar problem. I have not been successful. Perhaps, someone who knows could let us know? It is important because the existence of a large number of outstanding warrants means that it is the police and not the court that decides who goes to prison and who does not. That situation is a cause for concern. It tends to corrupt our system of justice:

Police target outstanding warrants

Grand Cayman (28 February 2007) - The Royal Cayman Islands Police Service (RCIPS) has assigned four officers to focus on clearing a backlog of about 1,200 warrants and witness summonses held by the court.

Warrants are currently held for a variety of offences such as failing to appear in court to answer charges or pay fines. In the last week, 60 witness summonses and eight warrants have been executed.

Commissioner of Police Stuart Kernohan explained the reason for the crackdown. "The community wants to see punishments that fit the crime and they want to know that the court system is being respected.

"In addition, fines can only really be credible sentencing options if they are enforced properly. Hopefully, the knowledge that offenders will be pursued if they fail to pay will encourage them to obey the rules and pay up," he said.

The officers involved will be working over the next few weeks to execute all the outstanding warrants and bring people before the court.

"Some people may think that they need not worry about minor offences as no one will check on them, but that is not the case," Kernohan said.

"Respect for the court means enforcing all the orders of the court - no matter what the crime or penalty. How can we effectively tackle the big things if we ignore the little things?"

The police are requesting that anyone who may have an outstanding warrant or needs to pay a fine to contact their local police station or the court as soon as possible or face being arrested.

The police reported that on 22 February, the first day of the operation, five people were taken to court on various warrants: for failing to appear to answer burglary charges; for failing to appear to answer charges of assault causing actual bodily harm and carrying an offensive weapon; for breaching a community service order; for failing to pay a $750 fine; and for failing to pay a speeding ticket.

Constitutional Reform

The following written question and answer recently appeared in Hansard. It is of interest to us in the Overseas Territories, as it shows us the progress that has been made in other islands, and the kinds of reforms that we may expect from our negotiations with the Foreign and Commonwealth Office:

Lindsay Hoyle (Chorley, Labour) | Hansard source

To ask the Secretary of State for Foreign and Commonwealth Affairs what powers were transferred to overseas territories in each of the last two years; and what further transfers are under discussion.

Geoff Hoon (Minister of State (Europe), Foreign & Commonwealth Office) | Hansard source

On 9 August 2006, a new constitution for the Turks and Caicos Islands came into force. This transferred the following powers to the territory:

the local House of Assembly may increase the number of elected members of the House and increase the number of Ministers proportionately;

the Premier may nominate one extra nominated member of the House of Assembly;

responsibility for international financial services other than regulation transferred from the Governor to local Ministers;

a new Advisory National Security Council may consider and make non-binding recommendations to the Governor on external affairs, defence, internal security, the regulation of international financial services and the exercise of emergency powers (matters which remain the Governor's special responsibility); the local Cabinet may do the same;

an enlarged Public Service Commission and a new Judicial Service Commission may give advice to the Governor on public service and judicial appointments respectively, which would be binding unless the Governor were instructed otherwise by the Secretary of State; and

the Governor must appoint the Cabinet Secretary on the advice of the Premier and the Governor must consult the Premier before appointing anyone to the office of Attorney-General.

On 2 January 2007, a new constitution for Gibraltar came into force. This transferred to local Ministers executive responsibility for all matters other than those expressly reserved to the Governor, namely external affairs, defence, internal security including the police and certain public service matters. It also established a Public Service Commission, a Specified Appointments Commission and a Judicial Service Commission, each having executive powers subject only to an exceptional power of veto by the Governor. It also established an independent police authority for Gibraltar, with power for the local legislature to prescribe its functions; the police authority has power to advise the Governor on the appointment of the commissioner of police, subject to an exceptional power of veto by the Governor. As regards locally enacted legislation, the new constitution limits the circumstances in which the Governor may not assent to bills and removes the power of the Secretary of State to disallow laws.

No other new overseas territory constitutions have come into force during the last two years. Constitutional reform negotiations are currently in train with the British Virgin Islands, Montserrat and the Cayman Islands, but these are confidential to the parties at this stage.

ALHCS Board of Governors

Albena Lake-Hodge Comprehensive School Board of Governors. The ALHC School is the sole secondary school on the island. It is owned and operated by the government of Anguilla. Its principal is Mrs Ingrid Lake. She has her senior management team to help her in running the two campuses of the school. They are advised by a Board of Governors.

The Board consists of:

. Elvet Hughes, Chairman

. Keesha Webster

. Pastor Cecil Richardson

. Pastor John Gumbs

. Leslie Richardson

. Ingrid Lake

. Maria Webster

. Anita Brooks

They are paid a monthly stipend of EC$450.00. They meet mostly once a month, sometimes twice, and very rarely three times. They are responsible for some school spending, maintenance, behavioural problems, etc. There are two subcommittees, namely the Financial Committee and the Student Services Committee.

The Financial Committee keeps track of spending, obtaining school supplies and the like. Major spending and salaries are dealt with by Ministry.

The Student Services Committee usually visits the school when there are behavioural problems. They meet with the students and parents to discuss. They are consulted and make a decision on suspension questions. In one month, the Student Services Committee may be called for 10 meetings, maybe more. At times it becomes so hectic that they go in pairs.

The Board of Governors may be considered successful for what it does. From the members on the Board they obtain free spiritual, educational, legal and financial advice. The meetings are very hectic, especially for the Student Services Committee, and the stipend only suffices for gasoline. Membership should be considered it as voluntary service.

Blogging

Blogging.

Someone asked me recently how the Blog was going. My answer was that it received fewer than one hundred visits a day. On reflection, that was not a complete answer. Site Meter, which provides the counter that you see at the foot of the right-hand column on the screen, sends me an analysis each week. You may be interested in what it reveals. Last Sunday, part of the report was:

                  Corruption-free Anguilla                  

                    -- Site Summary ---                     

          Visits

            Total ........................ 4,490            

            Average per Day ................. 89            

            Average Visit Length .......... 6:37            

            This Week ...................... 624            

          Page Views

            Total ....................... 15,054            

            Average per Day ................ 260            

            Average per Visit .............. 2.9            

            This Week .................... 1,823            

What that means was that when the total number of visits since the Blog began was 4,490, there was an average of 89 persons visiting each day. On average, each visitor stayed for 6 minutes and 37 seconds. That week, there had been 624 visitors to the site.

Site Meter gives a lengthy score of the visits hour by hour, which I shall not reproduce. Suffice it to say that those 4,490 visitors read a total of 15,054 pages. On average, 260 pages were read each day. Each visitor went to an average of 2.9 pages. That may mean that about 100 persons visit the Blog each week, read the new post, and re-visit two others. It may also mean that most readers visit only twice a week and read the three post that have been made since their last visit, in which case there are about 300 of you out there regularly reading the Blog.

The busiest times for visits over the week (over any 2 hour period) was after dinner when there were 69 out of the 624 visits. Joint second was in the early morning, before work, and during the lunch period, when there were 66 visits on each occasion.

Thank all of you who visit, and especially those who fearlessly go onto “Comments” and leave your anonymous comment on what you read.

NICA 12

NICA 12.

We have spent the past two weeks looking at the 2003 Thomas Report into the performance of the Board of Directors of the National Investment Company of Anguilla Ltd. What is of concern is the suspicion that rises in us that nothing has changed with the present Board of Directors. We worry about a number of matters.

The Board may not be meeting on a regular basis.

Proper record-keeping might not have become the norm.

We have to hope that the present Chairman, Calvert Carty, has learned from the mistakes made by Kennedy Hodge and George Kentish and is not handling all the company’s affairs personally.

We have to hope that he is not acting unilaterally.

We hope that he holds proper meetings with his co-directors.

The Board must sign off on all major decisions.

He must ensure that all decisions of the Board are minuted, and the minutes carefully preserved.

We have reason to worry. Important company activities are being missed.

The lease with Anguilla Rums has long run out. It has never been renewed.

The book store has closed shop without a whisper of explanation.

The office is shut with no explanation published in the press.

The company failed to file its annual returns in the Registry of Companies.

It was again struck off the Register in January 2007. No one in the company has told us if the company has been restored to the Register.

No audited accounts have yet been presented to the shareholders.

The Annual General Meeting is long overdue and has not been called. It would be an outrage to call an AGM now without presenting the missing Audits.

Is the company still stuck in the amateurism and unprofessionalism that were criticised by Mr Thomas? Are the same mistakes being made?

The question must be asked, is it not time to wind up this company? Should not a liquidator sell its assets at the best available price? Should the liquidator not then pay any bills and distribute the net proceeds to the shareholders? Can we agree that it is time to bring NICA’s misery to an end?

NICA 11

NICA 11.

The Thomas Report was filed in August 2006 in a High Court suit brought by two shareholders against the National Investment Company of Anguilla Ltd in the year 2006. The Report reveals a sorry picture of management deficiencies over an extended period of time. We have been looking at some of them over the past ten posts. Mr Thomas sets out his conclusions at the final pages 51-53 of his Report.

He finds that the Board of Directors failed collectively in their fiduciary duty to manage the business to the standard that is expected of a public company. He finds the evidence of this compelling. This is so particularly in the areas of accounting, investment, record keeping, and the filing of audited financial statements.

He complains at the culture of getting the job done at its cheapest, irrespective of the consequential effects to the overall management of the company. He finds that the Board’s gravest error of judgment was the failure to employ competent, experienced and trained staff. The termination of Audain & Associates who had been providing accounting services, without finding a competent replacement, was most damaging. The result was a complete breakdown of internal control procedures, and the impossibility of having the financial records audited.

Mr Thomas considers that the decision not to pay the Directors of NICA, while well-intentioned, may have contributed to the inertia or a peculiar pattern of behaviour of some Directors. He describes the approach of NICA’s management as more reflective of a charitable organization. There, the members provide their services on a voluntary basis. In a public company, Board members are paid, and the requisite performance demanded.

He found the approach of Kennedy Hodge to the management of the business to be reckless and unorthodox. Mr Hodge’s explanations were, in his view, far-fetched, contradictory, unconvincing, petty, and bizarre. He found the decision of George Kentish to enter into a partnership with Mr Hodge and NICA most regrettable. Transactions of this nature, though well-intentioned, will always be subject to the utmost scrutiny. They should be strongly resisted. He found no evidence of impropriety on Mr Kentish’s part. But, as Chairman of the Board, his decision to participate in the disbursement of funds was unwise and not in keeping with best accounting practices. The advice given to the Board by Marcel Fahie, in relation to Mr Hodge’s offer to manage NICA, he finds inappropriate. He finds that all of the Directors should take responsibility for the failure of the Board to meet on a consistent basis, and to monitor the activities or inactivity of some members.

It is on the whole a damming report. The question is, what to do next?

NICA 10

NICA 10.

In October 1998, Kennedy Hodge was the duly appointed Manager of the National Investment Company of Anguilla Ltd. He made a recommendation to the Board to invest in the shares of a subsidiary of Motorola. It was a company known as Iridium World Communications Ltd. The Board agreed. The investment was made.

As a result of a lawsuit brought against NICA in the year 2006 by two of its shareholders, Avondale Thomas, a chartered accountant of Antigua, was appointed to carry out an investigation into the way the Board of Directors was managing NICA. We take up the story of the Iridium investment from pages 48-50 of the Thomas Report filed in the High Court in August 2006 as a result of the litigation.

It was a bold investment. Iridium was highly visible on the international stock markets, the telecommunications industry, and investors worldwide. It was well known because it was venturing into parts unknown. Its ideas were pioneering in nature. It was a high-risk stock. The technology required to do what Iridium wanted was unproven. The cost involved and the ability of the company to raise the funds required was uncertain. Investing in this stock was an obvious risk. Established investors were extremely nervous about buying these shares.

NICA was not without professional advice in this matter. Its brokers, Salomon Smith Barney, warned the company not to invest beyond a certain level in such shares. Salomon Smith Barney sent at least two letters to the Board warning them of the risk and expressing concern about NICA’s intention to invest in high risk companies.

Mr Hodge was a trained electronics engineer. He recommended otherwise. The Board was willing to take the risk. They authorized Mr Hodge to invest US$110,775.00, or some EC$300,000.00, in Iridium. The share price began to fall. NICA did not sell, but held on to the investment until it was entirely lost.

In an interview with Mr Thomas, Mr Hodge told him that he had also purchased Iridium shares for himself. He had sold his shares when the price began to fall, and had been able to save part of his investment. He had not sold the NICA shares. George Kentish, NICA’s Chairman, told Mr Thomas that he had also invested in Iridium and lost his investment.

Mr Thomas describes this as the biggest loss in the history of NICA so far as investments are concerned. The company could have avoided the loss. In its prospectus offer, the company had promised that it would employ competent and experienced persons. In this case, NICA did employ competent brokers in the form of Salomon Smith Barney, but they ignored their advice. Mr Thomas concludes that the Directors must take responsibility for the loss of EC$300,000.00 which resulted from the Iridium share purchase.

NICA 9

NICA 9.

Kennedy Hodge was a member of the Board of Directors of the National Investment Company of Anguilla Ltd. The company was without a manager in the year 1996. Mr Hodge wrote a letter dated January 1996 to the Board offering to manage NICA himself. He submitted his offer again by letter dated 22 October 1997. There is nothing intrinsically wrong in a member of a Board of Directors being also a Manager. However, care must be taken to avoid any conflict of interest and to properly document transactions to permit an audit of them.

As a result of a lawsuit brought in the High Court of Anguilla, Avondale Thomas was appointed to carry out an investigation into the way in which the Board of Directors was managing the affairs of NICA. Mr Thomas filed his Report in August 2003. Mr Thomas considers the circumstances of Mr Hodge’s employment at pages 38-47 of his Report.

The Board permitted Mr Hodge to function as NICA’s Manager at least from the time of his first letter in 1996. He may have been in the position as early as the year 1993 as he claims. Neither NICA nor Mr Hodge prepared any documentation to formalize the relationship. There was initially no agreement for payment to Mr Hodge for his services. He was working on NICA business on a voluntary basis. In 1998, the Board appointed one of its members, Marcel Fahie, to look at Mr Hodge’s proposal and to make recommendations to the Board. Mr Fahie prepared a report dated 8 March 1998. He recommended that Mr Hodge be officially taken on as manager at a salary of EC$36,000.00 per year with 25% in profit-related bonuses, and an inducement compensation of up to 30,000 shares in each year at a discounted price of EC$.20 cents, provided agreed profit targets were achieved. The Board accepted the recommendation to employ Mr Hodge, but rejected the idea of the inducement compensation of discounted shares.

The problem is that Mr Thomas found that, long before his remuneration was agreed by a recorded Board decision, Mr Hodge was making payments to himself. He prepared the vouchers and the cheques for his own payment. He signed some of these cheques along with another Board member. Others were signed by two Board members. Mr Thomas points out that as a beneficiary of the payments, it was inappropriate for Mr Hodge to have signed any cheques for payment to himself. There is no indication in the company records how it was agreed what payments should be made to Mr Hodge. Nor was there any record produced to Mr Thomas of who on the Board agreed to the payments. Mr Hodge told Mr Thomas that at one point he had to stop paying himself because of rumours circulating in Anguilla about him. However, he then decided that he needed to start paying himself again, because his family felt that he was being taken advantage of. Again, there is no documentation showing the company authorizing a resumption of payment.

Mr Thomas does not doubt that Mr Hodge genuinely thought that the payments to himself were properly authorized by the Board. The problem is that Mr Hodge did not take sufficient care to ensure that he was relieved of accusations of conflict of interest. He did not ensure that the Board’s decisions, if any, were properly documented and the minutes placed in a proper file. The result is that there is no record of Board approval of what now appears to be questionable decisions that he took on behalf of the company.

NICA 8

NICA 8.

As a result of a law suit brought against the National Investment Company of Anguilla Ltd in the year 2003 by Bob Rogers and Carlyle Rogers, the High Court appointed a chartered accountant, Avondale Thomas, to carry out an investigation into the company’s affairs and to report to the Court. The Thomas Report was filed in the High Court and copies made available in August 2003. We are looking at pages 31-38 of the Report where Mr Thomas deals with an investment in Jem Homes Inc.

Kennedy Hodge was a member of the Board of Directors of NICA. The Board appointed him additionally to be the manager of NICA. With the approval of the Board, Mr Hodge proceeded to make investments of the company’s funds. Some of those investments were profitable. One of the worst of them was in Jem Homes. Jem Homes was supposed to design and build homes for NICA to develop a housing project on the Gibbons Estate lands.

Jem Homes was a foreign company. At a minimum, Mr Thomas points out, some due diligence should have been done on it. Instead, the Board relied on what the representatives of Jem Homes told them. The documentation in NICA’s files do not make it clear if NICA was investing in shares in Jem Homes or in the work product of Jem Homes. The Board should have had a legal opinion on the investment. There was none. The lawyer should have vetted the investment contract before it was signed, and advised the Board. Nothing of the sort was done.

Mr Thomas reports that no trace of the cheques drawn to pay for this investment could be found in NICA’s records. He managed to obtain a copy from the company’s bank. No documentation could be found concerning the investment. It is erroneously shown in the 1998 financial statements as a Salomon Smith Barney investment. It was only the fact that the debit appeared in the company’s bank statements that brought the transaction to light. Some of the Directors were unaware of the investment. They were not aware of the loss. Mr Hodge told Mr Thomas the money was paid to invest in shares in Gem Homes. The share certificate relating to this investment was not available. There were no receipts or documentation to allow an audit of the transaction. The only documentation relating to it was brought to Mr Thomas when he asked for it.

When asked by Mr Thomas if he had informed the Directors of the loss of the company’s investment, Mr Hodge replied that they were aware but things were left to him generally to manage. When asked if he did not think that such a serious loss should have been brought to the Board and a formal report of the circumstances surrounding the loss placed in the records, he replied that he had been burdened with the affairs of the company, and that even his family was upset with him because he was the only Director of NICA giving full attention to NICA.

Mr Thomas reports that the documentation given to him by Mr Hodge revealed that the investment in Jem Homes had been blindly and recklessly made. The company bought a pig in a poke. The preliminary work which should have preceded the investment was not carried out. He comes to this conclusion because the sum of $50,000.00 was paid before any design details of the proposed houses were received. When the design details of the proposed houses were delivered, Mr Hodge discovered that they were entirely unsuitable for the proposed development. Not that he consulted any other director or any engineer, architect, or contractor.

Additionally, Mr Hodge had a conflict of interest. He had also invested his personal funds in Jem Homes. It was disturbing to Mr Thomas that he was never able to find any evidence of NICA’s investment in Jem Homes. The only evidence of any investment is the bank instruction to pay Jem Homes. There is no document showing if NICA was investing in shares or in the product supplied by Jem Homes. There is no document to show any relationship whatsoever between NICA and Jem Homes.

Jem Homes went bankrupt within a few months after NICA’s investment was made. The loss was US$50,000.00. Mr Hodge had sought the Board’s approval to put another $50,000.00 into the investment, but the Board put its foot down and refused. Otherwise, the loss would have been US$100,000.00. Mr Thomas concludes that it is alarming that public funds could have been administered in such a nonchalant way. That is saying the least!