Turks and Caicos Islands: an economic free-for-all amidst corruption

On the second part of his series on the crisis at Turks and Caicos Islands for London’s Independent newspaper, Stephen Foley uncovers how the islands became the preferred hang-out for the rich and famous.

It could could have been a scene from the dying days of empire, generations ago: the indigenous people of a colonial outpost, taking to the streets to demand the end of a British “occupation” of their country.

But this is a 21st-century scene, in the modern-day Turks and Caicos Islands (TCI). Hundreds of “Belongers”, proud citizens of the Caribbean archipelago, marched through the downtown area of its largest island, Providenciales, just a few weeks ago to protest a British regime that they damned as incompetent, high-handed and callous.

Gordon Wetherell, an affable British Governor nearing the end of a long diplomatic career that had seen him garden-partying in the ambassadorial mansions of Ghana and Ethiopia, has suddenly found himself hands-on ruler of an economically depressed and volatile territory. And on that day last month, one placard-waving demonstrator had pasted his face alongside those of Hitler and Hugo Chavez. It’s fair to say that nine months after the British Foreign Office suspended local government and imposed direct rule here in the TCI, things are not going according to plan.

Many Britons would be hard pressed to point out the Turks and Caicos Islands on a map, but they have been under the protection of the British crown since 1962. About 160 sq miles-worth of them poke out of the Caribbean, east of Cuba, boasting coral reefs and 200 miles of barely developed beaches – barely developed that is until a building boom that stoked the local economy for the last decade.

A charismatic Prime Minister, a former estate agent named Michael Misick, had a vision of the country as a hangout for the rich and the famous, and contrived to live by example. He wooed developers with cut-price sales of Crown land, partied at the luxury hotel complexes they built, each more extravagant than the last, and even took a Hollywood starlet for his wife.

But behind the economic free-for-all was a culture of corruption, according to Sir Robin Auld, a British appeals court judge flown in to conduct a commission of inquiry. Sir Robin said the Prime Minister and several of his ministers took bribes from developers and enriched themselves through suspicious land deals, and recommended prosecutions and an array of reforms to the way the country is run.

Most explosively, he also recommended a temporary suspension of parliamentary democracy. Direct rule from Whitehall was duly imposed last August. The British expected to be welcomed as saviours, delivering islanders from a cabal of corrupt local politicians who had gorged themselves on the fruits of a development boom across these paradisical islands and left their country effectively bankrupt.

But if there were hopes for a new beginning and a quick resurgence, these have been dashed by cold economic realities.

At 6pm on a warm spring Friday, a full-blown banking crisis erupted. TCI Bank, the only institution owned by indigenous islanders, was put into liquidation, amid souring loans and the defection of some of its large depositors. Customers who rushed to its offices were told they could not get at their savings. Stanley Lightbourne, who is the chairman of the TCI’s banking regulator, the Financial Services Commission, warned them that at least some of their money was gone. The TCI has no deposit insurance.

Whereas big nations such as the UK have used government money to save their banks, pump-prime their economies and mitigate the effects of the global recession, the TCI is having to do the opposite. Civil servants will have their pay cut by 10 per cent. Public spending is being slashed and taxes put up. And even then, according to the Governor’s budget statement last week, the finances are still spiralling downwards. The end-of-year deficit was six times higher than forecast. A $79m (£55m) loan that has been six months in the planning is being used to pay a mountain of old bills and to fund the costs of the corruption investigation; more will have to be borrowed, but no one knows yet from where.

In a statement announcing the loan, shortly after publication of the latest budget, the Ministry of Finance said: “Although this is good news for many businesses in the country, the new loans will not be sufficient to pay all creditors. It will provide a small breathing space and enable the Government to assess future funding options to close the budget deficit and reduce the burden of national debt.”

The financial crisis threatens to impact on the process of bringing to justice those who were at least partly responsible for TCI’s current travails. Helen Garlick, the special corruption prosecutor whose job it is to try and unravel the corruption allegations against the country’s leading politicians, is lobbying publicly for additional funds or loan guarantees from Whitehall, and Sir Robin has also returned to the fray. In a letter to the Foreign Office, he warned that the TCI’s economy is “deteriorating” and that its politics cannot quickly be “cleansed”.

“All or most of the troubles the Governor faces in trying to restore the territory to good order, efficient governance and financial health – and the increasing chorus of challenge to his conduct of the territory’s affairs – flow from the British Government’s failure to provide urgently needed financial support.

“This state of affairs follows decades of the Foreign Office’s stewardship, or lack of it, in the exercise of its ultimate constitutional responsibility for the probity and efficiency of the territory’s governance. The Foreign Office now has direct control, yet seemingly considers that that does not carry with it financial responsibility to lift its charge out of the administrative and financial mire into which it has allowed it to fall.”

Doug Parnell is leader of the political party that used to be in opposition to Mr Misick, and is also a prime mover behind the demonstration last month. He says: “We marched for our democracy, we marched for the rights of people to decide the future of their country, how the constitution is made up, the makeup of who votes in the country, we marched for transparency in government, we marched against the high rates of crime and joblessness in the country.” He warns now that any attempt to delay elections beyond the official deadline of July 2011 will make the TCI “ungovernable”.

He believes the British have gone too far in their ambitions, which include shifting the economy away from high-end tourism, introducing VAT, and – most infuriating to Belongers, who make up barely 7,000 of the archipelago’s 25,000-plus residents – extending the franchise to non-citizens. The British should stick to cleaning up corruption, Mr Parnell told The Independent – and, by the way, they should have come here in August with money. He plucks a figure out of the air: £400m. “The Governor said in January that the country is open for business, but people need to know the government is not going to go under. We cannot afford to have all our institutions just fail. They need to put in a considerable amount of money.”

They call Gilley’s Bar the TCI’s “lower house of parliament”. It is the airport watering hole, where politically minded locals go to sup Turk’s Head beer and to debate ferociously the political stories of the hour. Its clientele of cabbies and businessmen tend to be supporters of Mr Misick’s party; “Gilley” is Galmo Williams, the party stalwart who briefly succeeded Mr Misick as Prime Minister.

A reporter’s gentle question – “What do you think of British rule” – rouses Thomas Ewing to rise from his stool and shout the question across the bar. A negative, and sometimes expletive, chorus comes back. “Since the overthrow of the legitimate government of the day, the economy has tanked, and they are making all of us pay for the alleged misdeeds of a few,” says “Papa” Howie, a construction firm boss. Wilbert Handfield chimes in, saying “The British cannot free themselves of the charge that they were responsible, too, under a previous Governor,” he said.

“The British have decided that we are no longer politically independent, but they have decided that we are still financially independent,” concludes “Papa” Howie. “But we are being run by diplomats. They are going to get paid anyway.”

Not everyone is disillusioned or distancing themselves from the British, of course. Shaun Malcolm, a former chairman of the opposition party and now a contributor to The TCI Journal, has travelled to the UK to urge British politicians to maintain direct rule until prosecutions have been secured and anti-corruption reforms fully implemented.

But many early supporters of direct rule are becoming disillusioned. A repeated criticism of the interim government is that it is trying to overlay a big-country bureaucracy on a small community where doing business has always been about personal relationships. Similarly, it is trying to apply standards of political behaviour expected in large democracies to a country where party affiliations are often dictated by family, and whose politicians are expected to deliver gifts to their supporters, such as hams at Christmas.

Stanley Hartling, who owns the luxurious Regent Palms complex on Grace Bay, arrived in the TCI in the Nineties. He is worried for the future.

He, too, fears that the Foreign Office is overreaching in its hope for top- to-toe reform. The result is that developments have been stalled for almost a year, leaving construction firms idle.

“Business people are not going to wait three or four years, they are going to look elsewhere,” he says.

“The reality is we all want to see the commission of inquiry’s full mandate filled out. But what I’m hoping is that we are being pragmatic about the resources we have and where we are employing them. There’s a balance to be struck between perfection of the inquiry and the true, immediate needs of the country.”

The article appeared at http://www.independent.co.uk/news/world/americas/turks-and–caicos-islands-an-economic-freeforall-that-veiled-a-culture-of-corruptionn-1987491.html

3 thoughts on “Turks and Caicos Islands: an economic free-for-all amidst corruption

  1. I have a few problems with The Independent’s story. It is the first mainstream news report on the islands’ post colonial condition. I give credit to The Independent there, even though it took a year. But The Independent missed quite a few things. You are welcomed to see my site linked here for my commentary on this story.
    BTW: Thank you Repeating Islands for your diligence in keeping the world informed on this matter. Chris


    Re: Reply “ Consultative forum got it right”
    My learned colleague, Mr. George Missick wrote an article in the Turks and Caicos Weekly news (Nov. 20-26, 2010) entitled, “ Consultative forum gets it wrong”.
    I accept Mr. Missick as a learned colleague and most able lawyer, but with respect, I must reply and state not only that Mr. Missick got it wrong, but why so.
    Mr. Missick’s letter opens with these words:-
    “ The Consultative forum got it totally wrong last month when it rejected the Judicial Salary Bill which made provisions to improve the independence of the judiciary by ensuring the independence of the judiciary ensuring judges’ security of tenure and doing away with having judges working under contracts.”
    I shall start with my own history and move forward in my reply.
    A. The Lloyd Rodney affair in which I was Counsel is illustrative of compromise within the justice system in the Turks and Caicos Islands.
    B. The renewal of Sir Frederick “sleepy” Smith’s contract after the finding in Mr. Rodney’s favour by then Governor Bradley at a time after Mr. Rodney had won his case in the Court of Appeal and when Sir Frederick had been found to have sat in conflict of interest in the Cable and Wireless public interest case is indicative of executive compromise of the justice system in the Turks and Caicos Islands.
    C. Advocating tenure in a small jurisdiction when only two or three Supreme Court Justices exist and two to three Magistrates are present is indicative of flawed reasoning.
    The argument against tenure in outline is that the jurisdiction has not shown itself sufficiently mature to be insulated against nepotism, narrow-minded judicial bias and favoritism from the Bench. I was asked earlier this year by Transparency International to express my views on whether or not the judiciary in the TCI was corrupt. I replied that it had been very much so in the past, and I cited the “Rodney Affair” along with what I termed our “2003 George Bush election case”. I stopped short of saying that the present Justices in our Supreme Court and at the Magisterial level are corrupt. I do not perceive them to be corrupt.
    The answer to the case against tenure might be posed by a set of questions:-
    i) How does one in a small jurisdiction ( i.e., by small I mean a jurisdiction with less than six High Court justices, and a total population of less than one hundred thousand persons) ensure that a life tenured Judge does not become entrenched in factional and/or partisan interests in our small community? N.B. We are currently at roughly half the hundred thousand population level and half the number of justices, to warrant any serious consideration of life tenure. I base my observation on the very nature of life in a small society, where there is a greater risk of intimacy and personal knowledge in a small than in a large society.
    ii) How does one in any timely way rid the justice system of a corrupt or compromised Judge, when such person is tenured for life in a small community?
    iii) What great advantage is there in not having a Judge on contract for three to five years renewable, over having a life tenured Judge?

    In response to the last question, in practice, the Judge does not readily find himself ruling against the Government, and most justices are very loath ever to find against the executive. The more important point is that a small jurisdiction such as ours is, in practice, very susceptible to manipulation by the executive and influence from the community. I cite in support Terence Donegan’s cases for his client United Bank International Limited v. Christopher Turner( Governor – sued in his personal capacity) and Edward Brooks ( Financial Secretary) and David Geoffrey Lang (Attorney General) – consolidated case numbers 28 of 1984 and 10 of 1985, as illustrative, as with the “Rodney Affair”, of administrative manipulation and malice orchestrated at the highest level. Then Chief Justice John Charles Fieldsend, a well respected Jurist and man of the highest integrity ( note: Madzambamuto v. Lardner-Burke – (1978) 3 WLR 1229 which case saw Fieldsend dissenting against the Rhodesian Court of Appeal’s majority decision that Ian Smith’s unilateral declaration of independence was lawful) found in Donegan’s favour. Donegan again won the cases before the Court of Appeal. Donegan’s taxed costs were in the region of $80,000. A Commission of Inquiry headed by Louis Bloom-Cooper then used one Commission of Inquiry headed by Bloom-Cooper to recommend a second Commission of Inquiry headed by Bloom-Cooper, and not having anything in statute or common law to charge Donegan with, the second Commission headed by the same ‘independent’ Louis Bloom -Cooper made a supposedly ‘independent’ Commission finding which eventually served to oust Donegan from the jurisdiction. The $80,000 or more taxed costs were never paid to the victorious litigant. The issue here is not what personal feelings one may have had for or against Donegan and his actions, but the issue is manifest administrative manipulation, want of a process that equated to true administrative independence, want of fairness and an ultimate failure in the due process of law in the Turks and Caicos Islands. The non-payment of the justly won costs itself is an indictment against responsible administrative conduct. Subsequent to Donegan’s case, the 1988 Constitution placed a “Donegan clause” in it, thus making it unconstitutional to sue the Governor by way of an inserted section 5 (5) ouster clause. In fairness, I have not found a similar clause in the 2006 Constitution. The practical result is that the executive, to the extent that it may surreptitiously influence the judiciary, does so in any event if a Governor so motivated confronts a weak Judge or is facilitated by a compromised administrative order. Some Governors are more blatant than others in this type of conduct, but some actually do leave the Judges alone to do their independent judicial job. There is absolutely no guarantee that such executive interference will not occur with a tenured Judge. The advantage with having a non-tenured Judge, as was the case with Chief Justice Kipling Douglas, who I sued in his personal capacity, is that when a person must be ousted for misconduct and misbehavior, as Lloyd Rodney and myself contended when we petitioned for the Chief Justice’s removal, is that a bad Judge can be made to leave despite a facilitative Governor’s opposition. Thus the Turks and Caicos Islands are not burdened for life with an incompetent or compromised Judge. John Charles Fieldsend was a man of honour and an outstanding jurist, internationally respected throughout the Commonwealth for his jurisprudential learning and unquestionable integrity. I well recall him asking me as a relatively young lawyer if it was not boring for me appearing only before him in the Supreme Court ( i.e., at the time we had only one Supreme Court Judge, who was also the Chief Justice). I graciously replied that it was not a problem for me when appearing before a Judge of his caliber. Despite my compliment, he had sensed that the small TCI jurisdiction did need judicial change and variation. He left of his own volition and did not seek to renew his contract. This example of a Justice of high caliber finding against the executive at the highest level belies the suggestion that judges not tenured for life cannot be truly independent. But, it takes persons of stature and significant judicial learning coupled with courage and integrity (regardless of tenure or non-tenure) – human mettle is not determined by mere contractual or tenured designations.
    Again, with full respect for my colleague, Mr. George Missick, I express myself in the strongest terms that I see far more sense in having a contracted Judge do his three or five years service then potentially be renewed if demonstrably a competent, fair, independent and able jurist. The risk of life tenure is that with merely two or three High Court justices, the Turks and Caicos Islands will again run the risk of being lumbered with another Smith or Douglas or other compromised judge. With tenure, heaven help us all, since we may have to live for an eternity with any appointed unworthy Justice.
    Mr. Misick goes on to say:-
    “ I would go as far as deeming this practice of a “contract judge” unconstitutional and contend that it should be corrected forthwith”.
    There is more hubris here than constitutional reasoning. It is the Constitution that designates how a judge is to be appointed, and the following of that constitutional route for appointment, with respect, does not render the appointment unconstitutional. Under section 82 of the 2006 Constitution the Judicial Services Commission advises the Governor who appoints the Judges. Section 74 confers tenure of office subject in practice to contractual obligations.

    Mr. Misick observes that “There is hardly ever a long list of persons applying for the position of a judge due to the amount of work and with personal sacrifice that comes with the appointment.” Again, I differ. Historically, the paltry sum of some $50,000 paid Chief Justice Kipling Douglas most definitely did not attract a person of the necessary caliber worthy for the job. Even the government of the day called for his resignation. There is not a shortage of persons willing to do the job; there is only shortage of talent when the remuneration is not sufficient or adequate to attract judicial talent to the TCI. May I make my points directly to Governor Wetherell and the Secretary of State in London, by reference to the following points:-
    1. The West Indies Act, 1962 expressly provides:-

    “8, The Secretary of State may-

    (a) from time to time make, to the government of
    any colony to which section five of this Act applies,
    being a government whose resources are, in his
    opinion, insufficient to enable it to defray its
    administrative expenses, grants of such amounts
    as he may, with the approval of the Treasury,
    Clearly, the TCI Treasury is presently depleted, and Her Majesty’s Government under section 9 tells us where the money is to come from:-
    “9. The expenses incurred under the last foregoing section
    by the Secretary of State shall be defrayed out of moneys
    provided by Parliament, and any increase attributable to
    an Order in Council under this Act in sums payable under
    any other enactment out of moneys so provided or out
    of the Consolidated Fund of the United Kingdom shall be
    paid out of moneys so provided or out of that Fund, as
    the case may be.”
    2. However, the legal duties go further. The TCI is subject to the provisions of the European Court of Human Rights. Her Majesty’s Government is a signatory to the European Convention on Human Rights and as such has extended the Convention’s provision to the dependent territory of the Turks and Caicos Islands. In that regard I believe that the Secretary of State has to accept that the law as it is applied under the Convention must be adhered to by the contracting parties. The point is that if Judges of substance are required, and when the legal system enshrines certain fundamental rights, then the quantitative requirements for financing must be made, and hopefully with those financial allocations the qualitative requirement to attract able jurists will be met. There should be no legislative choices of opportunity costs when it comes to funding the justice system.

    There is the case of Zimmerman and Steiner v. Switzerland, 8737/79 [1983] ECHR 9 (13 July 1983) in which the state pleaded constraint of resources, and the court observed:-
    “29. The Court would point out in the first place that the
    Convention places a duty on the Contracting States to organise their
    legal systems so as to allow the courts to comply with the
    requirements of Article 6 § 1 (art. 6-1) including that of trial
    within a “reasonable time”. Nonetheless, a temporary backlog of
    business does not involve liability on the part of the Contracting
    States provided that they take, with the requisite promptness,
    remedial action to deal with an exceptional situation of this kind
    (see the above-mentioned Buchholz judgment, Series A no. 42, p. 16,
    § 51, and the Foti and others judgment of 10 December 1982, Series A
    no. 56, p. 21, § 61).”
    The proviso is that there is no violation if “… with the requisite promptness,
    remedial action to deal with an exceptional situation of this kind…” is taken. Now, as a lawyer I have had repeatedly to sue the Supreme Court before the state accepted the responsibility to pay debts due me in a timely way. It seems reasonable then to suggest that since the legal system is itself experiencing constraints of finances, this does not exonerate the state’s duty to organise the legal system so as to allow the court to comply with the duty attendant to the Constitution’s provision to pay at the public expense. No doubt the “reasonable time” consideration runs conjunctively with such a provision, and Her Majesty’s Government ought to take far more seriously the upholding of the law, when the state itself is seeking to inflict the full force of the law, at the highest levels, against persons accused of serious crimes and corruption.
    3. The ECHR case of Artico v. Italy ( ECHR – no. 6694/74, 13 May 1980 ) acknowledges the right to legal defence at the public expense as a guarantee of rights that are not theoretical or illusory. It therefore seems to me that it does become illusory to expect persons, not just lawyers relative to Article 6 of the European Convention on Human Rights, but others to wait for prolonged periods for their finances, because it is a collective injustice relative to sections 8 and 9 of the West Indies Act, 1962 not to make a constructive proactive financial response to the acknowledged financial shortfalls. That is the law, not because I say so, but because the Fundamental Rights section of our Constitution so states, as do the legal stipulations imposed on the Secretary of State. Likewise, when judicial fairness is required as a central legal tenet, then the financial resources in the court system should be made readily available to all hard working Magistrates, Judges, court staff and even lawyers who serve the public interest with legal aided defence work. It is ridiculous not to have had money for purchasing photocopying paper or copy cartridges for the Supreme Court and Her Majesty’s Government be seen as having discharged its duty for the “economic…advancement…” of the territory.

    4. The foregoing three legal provisions arise in the context of a central duty imposed on Her Majesty’s Government relative to Article 73 of the United Nations Charter:-

    “Members of the United Nations which have or assume responsibilities for the administration of territories whose peoples have not yet attained a full measure of self-government recognize the principle that the interests of the inhabitants of these territories are paramount, and accept as a sacred trust the obligation to promote to the utmost, within the system of international peace and security established by the present Charter, the well-being of the inhabitants of these territories, and, to this end:
    a. to ensure, with due respect for the culture of the peoples concerned, their political, economic, social, and educational advancement,* their just treatment, and their protection against abuses;
    b. to develop self-government, to take due account of the political aspirations of the peoples, and to assist them in the progressive development of their free political institutions, according to the particular circumstances of each territory and its peoples and their varying stages of advancement;
    c. to further international peace and security;
    d. to promote constructive measures of development, to encourage research, and to co-operate with one another and, when and where appropriate, with specialized international bodies with a view to the practical achievement of the social, economic, and scientific purposes set forth in this Article; and
    e. to transmit regularly to the Secretary-General, for informational purposes, subject to such limitation as security and constitutional considerations may require, statistical and other information of a technical nature relating to economic, social, and educational conditions in the territories for which they are respectively responsible other than those territories to which Chapters XII and XIII apply.”
    • ( my emphasis of “ their political, economic, social, and educational advancement,” since the political responsibility runs conjunctively with the economic duty)
    Mr. Missick, a truly independent judiciary is not a factor that can be weighed in a vacuum, nor in some non-contextual apolitical manner, bearing no reference to the realities within the society relative to the Constitution’s operation and lawful duties imposed on high authorities. I have cited the instance of a highly independent John Charles Fieldsend, which definitely belies the suggestion that judicial independence cannot be obtained from a “contract judge”. It obviously does not automatically follow that a Judge tenured for life will inevitably be independent or competent. How, pray tell, do we get rid of the bad Judges when they are life tenured in a small jurisdiction? What incentive does a laggard Judge have to perform to high judicial standards once he is safely tenured and ensconced in a small society such as the TCI?
    Until the jurisdiction matures, expands and grows, there is no genuine case to be made for judicial tenure for life. The Governor here has an open invitation, as head of government, and also as Her Majesty’s Government’s representative, to address these matters in any suitable public forum for further public edification, since clear legal duties do arise which manifestly have not been addressed by the Governor and the Secretary of State, by reference to the West Indies Act 1962. Unless the Governor dissents in the face of the written law, I so submit. I also respectfully recommend at this stage of our jurisprudential development that we do not have tenured judges.
    Courtenay Barnett is a graduate of London University. His areas of study were economics, political science and international law. He has been a practising lawyer in the Turks and Caicos Islands for almost twenty five years. He has been arrested for defending his views, has faced a death threat and a threat of arson on his home. He has argued many public interest and human rights cases.

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