By Melanius Alphonse
Former Cabinet minister, Richard Frederick, recently posed a number of important questions to Prime Minister Allen Chastanet to explain how Saint Lucia’s citizenship by investment programme (CIP) money has been used, in contrast to the successful and constructive utilisation by St Kitts and Nevis, Antigua and Barbuda and Dominica. In this regard, we ought not to forget that the government of Saint Lucia is also pursuing a residency by investment programme.
What’s more, both programmes operate under a cloud of secrecy like the mafia’s closely held secrets, as if it’s not the business of Saint Lucians to know how many passports are issued, to whom, where the money is held and what the money is used for.
The Citizenship by Investment Act 2015, Disclosure of interest 16, says:
“A member of the Board who is in any way interested in any matter which is under consideration by the Board shall disclose to the Board the fact and nature of his or her interest and shall not take part in and shall be absent from any deliberation or any decision of the Board relating to such matter and such a disclosure must immediately be recorded in the records of the Board.”
Financial year of the Board 19:
“The financial year of the Board begins on the 1st day of April and ends on the 31st day of March in each year or as otherwise determined by the Minister, in writing.”
Budget and plan of action of the Board 20:
“The Board shall, not later than the 31st day of October in each year cause to be prepared and shall adopt and submit to the Minister – (a) a budget with the estimates of its income and expenditure; (b) a plan of action, for the Board in respect of the next financial year.”
Auditor’s report 23:
“An independent auditor appointed under section 22 shall not later than three months after the end of each financial year, submit copies of the audited financial statement of the Board and a report on the financial statement to the Board.”
Annual report 24:
“(1) Not later than three months after the end of each financial year and in accordance with subsection (3), the Board shall submit to the Minister an annual report on the work and activities of the Board for that financial year and the Minister shall not later than three months after the submission lay the same in Parliament.”
Therefore, failure to conform to the relevant law contradicts government claims of transparency and accountability. Moreover, this raises more governance and legal questions.
Even so, is there something to hide? Is the non-disclosure of interests and/or conflict of interest hindering ‘bringing the truth to light’?
The Citizenship by Investment Act makes it very clear, in easy to understand steps, for the prime minister to give details on how CIP money has been used, if at all.
Opposition MP Ernest Hilaire has also raised concerns regarding the use of CIP monies, stating:
“The prime minister is supposed to come to parliament indicating how he is going to use those monies and for parliament to give approval. Parliament has never been informed, either in this year’s budget or last, how those monies were used.”
Additionally, the law has not been changed to permit otherwise, and there are issues of ‘harmonisation’ of the CIP programme, a ‘race to the bottom’, ‘due diligence process’, revocations and ‘administrative difficulties’ for which Prime Minister Chastanet has acknowledged responsibility.
Details of the CIP’s financial success or otherwise are hard to come by, while at the same time ministers of finance are claiming three percent GDP growth with a debt stock estimated at EC$3.2 billion and climbing.
“Our public debt continues to grow as a consequence of deficits from previous Budgets. Although it has grown at a slower rate of 4.9 percent over the preceding three years and translates to a debt/GDP of 68.8 percent we need to place our debt on a sustainable path.” ~ PM Allen Chastanet
In this regard, there is a CIP crisis in the making, to coincide with the economic crisis and the health care crisis. A legacy crisis no doubt, amplified by weak fiscal policy, low productivity, a dysfunctional public administration and the instability of government.
To answer the prevailing question of the day, CIP has not helped Saint Lucia improve its social and economic situation, product and service markets, and neither has it helped buttress the island’s capital market’s medium to long term traction to achieve higher GDP growth and simultaneously service its debts.
Importantly, there is the need to strengthen financial sector legislative and regulatory frameworks that prioritize transparency, accountability and best practices in due diligence, to safeguard against money laundering, terrorism and tax evasion.
With little to show, there has been much discussion about CIP against the background that it has not advanced the lives of Saint Lucians in general and whether the programme has jeopardised the reputation and/or undermined the security of the country.
Philip J Pierre, political leader of the Saint Lucia Labour Party (SLP) and leader of the opposition, reacting to the US State Department’s 2018 annual International Narcotics Control Strategy Report (INCSR) said:
“Our worse fears on the CIP have been realized. We warned the government not to interfere with the CIP programme as conceived by the Saint Lucia Labour Party, now according to the US State Department the entire programme may be in jeopardy.”
The SLP has pledged to review every citizenship granted by the current government under the CIP:
“Without any hesitation, when the Labour Party resumes office, we will reinstate the net worth requirement and will undertake another due diligence assessment on each and every application granted under the UWP, with our promise to revoke any passports of applicants, who do not meet the $3 million net worth requirement or do not meet the strict due diligence requirements which Saint Lucians expect. Applicants applying for citizenship in St Lucia should be warned that when the SLP is returned to office, we will also demand that all citizens who did not donate the full contribution amount of US$200,000, will be compelled to top up the contribution that they made at the time of becoming citizens.
“For the sanctity of our citizenship, we do not tolerate any applicants who do not meet the first-class standard that we expect from individuals seeking citizenship in Saint Lucia.”