St Lucia PM called on to explain how citizenship money has been used

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Richard Frederick speaking on local television on Thursday night

By Melanius Alphonse
Caribbean News Now associate editor
[email protected]

CASTRIES, St Lucia — Former Cabinet minister, Richard Frederick, has called on Saint Lucia’s prime minister, Allen Chastanet, to explain why not a single project has been executed under the country’s citizenship by investment programme (CIP), now well into its third year of operation.

“We have not executed one single project, not one with CIP funds… somebody name me a project that we have executed or we have implemented or is being implemented using CIP funds… not one,” Frederick said on his weekly show on local television.

In contrasting how such funds have been used in Dominica for the benefit of the population as a whole, Frederick drew extensively from a recent article by Caribbean News Now reporting that the first CIP-financed public housing project in Dominica is nearing completion.

“Have a look at this story folks, it’s right here, let me read excerpts of it very quickly,” Frederick said, reading parts of the article verbatim:

The innovative project in Dominica to provide affordable houses in Bellevue Chopin to house displaced residents of Petite Savanne following Tropical Storm Erika, which has been financed through the country’s citizenship by investment programme (CIP), is on track for the handover of the first completed units at the end of next month.

“This unique and highly successful project illustrates the social benefits that can accrue to the public at large from Dominica’s economic citizenship programme, especially in the aftermath of Hurricane Maria last year and Tropical Storm Erika in 2015,” said project developer, Dr Anthony Haiden, chairman of citizenship consultants Montreal Management Consultants Est (MMCE) Ltd.

The project commenced in January 2017 but prevented from delivering the first 201 housing units in January 2018 as planned, due to the passage of Hurricane Maria on September 18, 2017.

Haiden said that, in planning this project, MMCE paid careful attention to the vulnerabilities of Dominica to weather events and employed suitable technology and best practice in the construction of the new community. For this reason, the project suffered no physical impact as a result of Hurricane Maria.

Since then, construction activities have been fully resumed with the return of the international contractor’s full workforce, although they are still planning to increase their labour on site by an additional 25 percent above that prior to the hurricane within the next few days, bringing the workforce to some 400, including locals.

Approximately 80 percent of the concrete structures are now completed and roofing and interior fitting out is underway. The project is on target to commence handing over the first residences on August 31, 2018.

It is anticipated that over an eight-week period commencing August 31, 91 residential units will be handed over.

A further 102 residences will be handed over commencing late December 2018 and the remaining units in March 2019.

“Folks, you all heard this, are you all listening, are you all hearing this? This is exactly why the Caribbean countries initiated or implemented the economic citizenship programmes, that is exactly why, that is why they initiated it. So, the whole objective of the exercise was to make very much needed money to improve the lives of the citizens of the various countries; that is why it was implemented in the first place. This we just saw in Dominica,” Frederick continued.

The latest video released in relation to the Bellevue Chopin project in Dominica:

He also noted that, in St Kitts and Nevis, CIP money has been used to fund schools, to fund highways, even to give salary increases and pay bonuses to civil servants at Christmas.

“That is what the money is supposed to be used for, but what do we do with ours in Saint Lucia? Somebody tell me; tell me what do we do with ours in Saint Lucia, I want to know… ask Allen Chastanet,” Frederick concluded.

The issue has recently achieved greater prominence following the collapse of the Ritz Carlton project at Black Bay that was supposed to have been financed using CIP money.

Chastanet apparently agreed that funds generated by the developers, Range Developments, from new economic citizens opting for the “donation” option into the National Economic Fund would be lent at two percent interest to Range for construction of the Ritz Carlton resort. However, such an arrangement is unusual in the normal scheme of things in relation to such citizenship programmes and quite possibly illegal under the St Lucia CIP legislation or at the very least should have had parliamentary approval.

Dr Ernest Hilaire speaking to local media on the use of CIP funds

“Why was it illegal?” said Dr Ernest Hilaire, the former head of the CIP in St Lucia when it was first launched by the previous government in January 2016 and now an opposition MP and their spokesman on such matters.

“The CIP legislation says that money that’s brought in via donation goes to the National Economic Fund and parliament has to approve the use of the money that comes into the National Economic Fund. We told the prime minister it was illegal what he was doing… he had to change the law and he had to come to parliament to get approval to use the CIP monies in that way. His response to me – and you can check it in Hansard – was that he is not responding to barking dogs,” he told local media in a separate interview.

Then, when Range wanted to start borrowing the construction funding, this was apparently not forthcoming, leading to the current political controversy over what happened to the money and a multimillion dollar lawsuit threatened by Range to recover its expenses, none of which has been satisfactorily explained by Chastanet except to admit, possibly ill-advisedly in the context of the threatened legal action, that it was all his fault.

Allen Chastanet telling local media that he has other investors “lined up” to take over the Ritz Carlton project

Chastanet further admitted on local television that he had other developers lined up to take over the project from Range, leading to allegations of bad faith on his part.

The situation has also been addressed by Christopher Hunte, host of his Politically Incorrect television show in Saint Lucia, describing it as “another debacle with serious consequences”.

“If what happened here did not even conform to our laws, how much a case do we have before any court or arbitration overseas? Basically, we have been caught with our pants down and the worst part is we pulled down our own pants because we didn’t want to use the proper procedures,” Hunte said.

Christopher Hunte on his Politically Incorrect television show

In 2016, Henley & Partners issued a press release stating that Saint Lucia’s CIP had “risk for Saint Lucia and no benefits”, and that the program then had “fundamental problems” and was “unfortunately not well designed and has a number of issues including structural problems and lack of transparency”, a statement that is now alleged to have been a political motivated attempt by Henley to undermine the credibility of the then administration.

Britain’s parliamentary Digital, Culture, Media and Sport Committee (DCMSC) interim report on disinformation and ‘fake news’ has urged the British government to ensure that the National Crime Agency thoroughly investigates such alleged undermining of democracies in many countries, including a number in the Caribbean, by Henley, along with Cambridge Analytica and Strategic Communications Laboratories (SCL).

According to some local commentators, two years later, the industry dynamics have not distinguished Saint Lucia in the marketplace, except to escalate a race to the bottom.

Chief executive officer of the Citizenship by Investment Unit (CIU), Nestor Alfred, said: “In 2017 and 2018 combined, the program had received 279 applications, of which only 78 had been approved so far. The Saint Lucia program could be considered among the least competitive in the Caribbean… because we are not prepared to issue citizenship to people within 30 days and 40 days. Our vetting process may be one of the most rigorous processes that you can find in this region, some applications have been pending for as much as 260 days.”

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