The St Lucia airport project corruption probe – Part 3

1
Antonio Assenza: "Minister Guy Joseph did what they said.”

By Melanius Alphonse
Caribbean News Now associate editor
melanius@caribbeannewsnow.com

CASTRIES, St Lucia — The story so far: In 2014, the then Saint Lucia Labour Party (SLP) government of Saint Lucia submitted a formal request to the US Justice Department for assistance in its ongoing investigation into an alleged corrupt agreement between a South Florida businessman Antonio Assenza and Saint Lucia government officials in connection with a planned US$157 million redevelopment project for Hewonarra International Airport (HIA) and whether the existence of any such corrupt agreement had any implications for Assenza and/or any of the companies associated with him under the Foreign Corrupt Practices Act.

The timing of the alleged corrupt agreement is believed to have occurred between mid-2007 and March 2008.

The companies associated with Assenza included MasTec, Inc., a publicly traded company on the New York Stock Exchange (NYSE) located in Coral Gables, Florida; GlobeTec Construction, LLC, located in Deerfield Beach, Florida, of which MasTec initially owned 51 percent. During the quarter ended September 30, 200,7 MasTec’s ownership increased from 51 percent to 64 percent and in the quarter ended December 31, 2007, its ownership increased to 96 percent. It acquired the remaining 4 percent of GlobeTec in March 2008.

Assenza has been president of GlobeTec since its inception in September 2003. The timing of MasTec’s purchase of 100 percent of GlobeTec coincided with Assenza’s initial and growing involvement with the government of Saint Lucia.

On March 27, 2008, Assenza incorporated Papaya Holdings Limited in Saint Lucia, with Assenza as president and Saint Lucia businessman, Andre Edgar, as vice president, with Assenza owning 800 shares and Edgar and his wife Margaret 200 shares.

On May 14, 2008, Assenza incorporated Asphalt & Mining (St Lucia) Company Limited (A&MSL) in Saint Lucia with Assenza as president and Edgar as vice president, with Assenza owning 75 shares; Domingo Moya 20 shares; and Papaya Holdings 5 shares.

He later incorporated other companies in Saint Lucia and in all companies Assenza was the majority shareholder, president and director. The ultimate client of all companies was the government of Saint Lucia, then led by former prime minister, Stephenson King of the United Workers Party (UWP). The UWP was defeated in the general election of November 2011 by the SLP led by former prime minister, Dr Kenny Anthony.

In September 2012, MasTec’s board of directors approved the sale of GlobeTec to be completed on or before September 30, 2013, and effective August 31, 2013, MasTec sold GlobeTec for nominal consideration.

It appears likely that the assets of GlobeTec included the assets of A&MSL. When King gave a ‘direct award’ (no-bid) roads contract of US$12 million to A&MSL in October 2008, A&MSL agreed to provide financing for the road projects at a rate of 5.5 percent per year and the payments to A&MSL were to be amortized over a five-year period. In order to obtain financing, A&MSL entered into a factoring arrangement with AIC Capital Market Brokers Ltd located in Trinidad.

Neither the MasTec nor the GlobeTec websites gave any disclosure of Assenza’s 79 percent ownership (89 percent in 2010) of A&MSL. Instead, A&MSL was disclosed as a third party client of GlobeTec.

Projects awarded to Assenza incorporated companies by the government of Saint Lucia:

2008

• May: With National Development Corporation (NDC), a state-owned agency, the construction of hotel on a 39 acre property known as Anse De Sable

• October: The direct award up to a limit of US$12 million for road construction

• December: With Saint Lucia Air and Sea Ports Authority (SLASPA), the terminal building at HIA for value up to US$157 million

2009

• February: With SLASPA, new fixed based operation (FBO) at HIA for US$2.2 million

• March: With SLASPA, proposal for a public/private partnership for the casino in La Place Caranage

• April: With SLASPA, negotiations with Royal Caribbean International (RCI) for the Castries Waterfront

• April: With SLASPA, provide a design-build proposal for the FBO fuel farm project

• June: With SLASPA, provide an alternate petroleum service for airport and related business initiatives

• July: With SLASPA, public/private initiatives for fuel storage and distribution and sale of petroleum products

• July: With SLASPA, re-establishment of a feed mill at the existing location at Port Vieux Fort

The only project that succeeded was the three road construction projects only because A&MSL sub-contracted the work to local contractors.

According to Sean Matthew, who was the CEO/general manager of SLASPA, “[Guy] Joseph [the UWP member of parliament for Castries South East, and minister for communications, works, transport and public utilities] put Assenza into this [the petroleum] company” and “Joseph gave this project [fuel storage]) to Assenza’.

Another government official, Allison Jean, PS Works, stated, “A&MSL was brought in by Minister Joseph, I first heard of them around May/June 2008. No documents exist in the ministry to support the direct awards for A&MSL in 2008.”

SLASPA and Matthew were centrally involved with the Assenza projects and the government of Saint Lucia, in particular ministers Joseph and Allen Chastanet (then tourism minister, now prime minister). Matthew, in concert with Ben Emmanuel, a senior director of SLASPA, have responded to hand-written questions, face-to-face meetings and the production of SLASPA documents that included access to all SLASPA emails.

However, during this process, Matthew had been cautious given his position (and suspected knowledge) as CEO of SLASPA.

Matthew had been informed of the telephone records of calls between government ministers with Assenza and Edgar but he remained silent about his own calls to Assenza and Edgar. It was later discovered that he had also made telephone calls to both Assenza and Edgar during the year 2009.

Notwithstanding a great many calls made by Joseph, Chastanet and Matthew to Assenza and Edgar, Matthew admitted that “ministers ought not to have discussions with the bidders”.

By November 2008 King, Joseph and other public officials have already been involved with Assenza. Earlier in June 2008 the NDC had agreed to a joint venture involving the construction of a flagship hotel on 39 acres of land and in October 2008, King gave Assenza a US$12 million ‘direct award’ for road works at a time when the financial statements of A&MSL as of December 31, 2008, reported equity is less than US$1 million.

When asked if Joseph ever stated that he was having telephone conversations with Assenza and/or Edgar on the subject of HIA, Matthew said, “He never indicated that to anyone of us.”

Asked when Joseph was advised that A&MSL was in last place in the initial tender process for the HIA redevelopment, Matthew stated, “The evaluation was completed by end of July and on August 21 there was a presentation to Cabinet that gave the results of the RFP [Request for Proposals]. However, when I prepare and issue a report with recommendations to Council members, a copy also goes to the minister usually a few days before the meeting. Also, Mr Oswald Augustin was the deputy chairman of the UWP and information was always available to him.”

Matthew went on to describe Joseph’s reaction to the third place finish of A&MSL: “The results were not what he expected. In terms of general demeanour, he does not want to approve anything that did not include A&MSL. There was always the indication that unless A&MSL is a part of it, he would not approve it. There was always pressure on me…”

A document exists that suggests the involvement of both Chastanet and Joseph with the A&MSL proposal. On September 23, 2009, Chastanet’s secretary emailed Matthew’s secretary to forward “information which Senator Chastanet has just reviewed” and in the second paragraph she stated: “I understand that Minister Guy Joseph is providing more details with regards to the proposal from Asphalt & Mining (Saint Lucia).”

By September 2009, the first and second place bidders are out and A&MSL is sole bidder.

On January 20, 2010, at a SLASPA Council meeting, SLASPA agreed to recommend A&MSL and its US$24 million interest free loan offer and, on January 21, 2010, Cabinet agreed and King wrote to Matthew giving approval to proceed with A&MSL. Also on January 21, 2010, both Assenza and Jorge Fonte, vice president of GlobeTec, were present in Saint Lucia.

However, according to the SLP government, the US$24 million loan was not a bona fide offer but rather its purpose was to create a means whereby SLASPA had to make A&MSL the winner of the RFP process, even though Matthew and others at SLASPA had questions about the ability of A&MSL to offer the US$24 million as an interest free loan.

In summary, SLASPA consistently rejected Assenza and A&MSL but King, Joseph and/or the Cabinet repeatedly directed SLASPA to continue with Assenza:

1. October 2009, after SLASPA decided to stop the RFP process, the UWP Cabinet instructed SLASPA to resume the RFP process.

2. May 2010, after SLASPA gave A&MSL a deadline, the UWP Cabinet told SLASPA to continue with the “preferred bidder” being A&MSL.

3. June 2010, SLASPA rejected A&MSL’s latest financial proposal and decided to close the current procurement process but King and Joseph directed SLASPA to continue with Assenza.

Matthew was asked why Assenza was so favourably positioned. “I have no direct knowledge of any money, agreement or favours changing hands. We asked ourselves internally the same question… the words are ‘persistence and pressure’ to describe their impact on our situation,” he responded.

Emmanuel added: “I am asking the same question.”

On March 12, 2010, told Assenza and his banker that “SLASPA doesn’t make the decision – the Cabinet does”.

Allison Jean stated: “Guy Joseph’s office when he was minister was across from my office and Assenza, Fonte, Andre Edgar and others would take over his office, once I found Assenza sitting in his chair. Joseph did what they said.”

On November 1, 2011, Deutsche Bank said it was unable to move forward with the financing with the A&MSL consortium.

Part 1: St Lucia airport corruption allegations attract US media attention

Part 2: More details emerge in St Lucia airport corruption probe

Stay tuned for Part 4

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