Submission from Charles Laurence, Turks
and Caicos Islands
THE TURKS AND CAICOS ISLANDS, BWI:
DEVELOPMENT AND CORRUPTION ON SALT CAY
Salt Cay is the smallest settled island in the
TCI. Population 63. It covers about 2.5 square miles. It has a
pristine beach making up the north coast of an island shaped like
an arrow head, with the point to the south. The island is known
as the History Island: probably the best preserved, least developed
Caribbean plantation community left. It was a hugely profitable
centre of the Bermudan salt trade, founded in the 1680s. It boasts
a number of historic treasures: The unique Bermudan White House
plantation house of the Dunn family which still owns it; the restored
Brown House plantation; the Government House now owned by the
TCI National Trust; the stone walls, canals, engineering works
and windmills of the plantation salt beds. The island also has
a pristine reef. For many years the plan under HMG had been to
preserve this character while carefully planning economic projects.
It is now the subject of one of the most ambitious
developments of the archipelago. This is widely believed to have
been conducted within the pattern of corruption now prevalent
on the islands. The developers have acquired all the land they
demanded through corrupt use of compulsory purchase of property
and requisition orders for leased Crown Land, making substantial
payments to PM Michael Misick and his ministers. They have also
circumvented all government procedure for planning and development
control through the same channels.
When I visited the Building and Planning departments
last year to peruse their records, there were entries for every
known project from new sheds to cottages, but not a line about
a project which will cover almost half the usable land mass! This
was while the coraling of Crown Land for the development was at
its height. Legal channels were clearly being circumvented.
The developers are a Slovakian consortium: they
have registered Salt Cay DevCo Ltd for their TCI project. They
are based on Providenciales with an on-island manager in Stefan
Kral. The entrepreneur and chief investor is Mario Hoffman.
This is the project (bear in mind the size of
the island): 320 hectares of land; 130 condominiums; 75 luxury
beach front residences, $7 million-up; an 18-hole golf course;
five restaurants; two sports centres; a spa; a marina for 80 ocean-going
yachts; conversion of the "puddle-jumper" airstrip to
accommodate Lear jets; barracks for Chinese construction workers
and then immigrant service labour; jetty for deep water access;
paved highway to replace unpaved track from jetty to project.
Construction of power station with monopoly of energy production
for whole island; construction of water desalination plant. Estimated
cost, $600 million.
Misick has cast this as a "green"
project of sustainable tourist development. Examples of corrupt
dealings. 1) a local entrepreneur—American with a "belonger"
partner—had built two new villas for sale near North Beach;
Misick forced sale to DevCo through threats of compulsory purchase.
2) The Windmills Plantation, a small scale luxury hideaway and
the only development on the key asset of North Beach: owners resisted
sale so Misick facilitated requisition of neighbouring lots while
DevCo announced that they would destroy their business with encroaching
buildings, cut off access through DevCo's private property, and
deny monopoly electrical power. The owners sold. 3) Crown leases
held by belongers for family housing needs requisitioned in exchange
for small payments and alternative lots created around the rubbish
dump and existing power plant.
Kral and Hoffman have flatly told dissenters
on the island that they now control all development, building
and planning permits.
Company background; Hoffman and his associates
are "gangster capitals" from the era of privatization
of the economies of the old Soviet bloc. Hoffman owns and operates
a holding company/bank called Istrokapital, holding 95%. It is
based in Bratislava but has recently been registered offshore
in Cyprus. The other two partners are Penta and J and T. Local
media lists Hoffman as worth $750 million, with one partner, Peter
Kellner as the richest man in Czech Rep/Slovakia at about $7.5
billion. All are secretive and little is written about them.
A Czech contact tells me: Hoffman was the first
registered stockbroker in free Czechoslovakia and made his money
through the system of "privatisation vouchers". Government
granted these to stakeholders in state-owned enterprises: Hoffman
and his ilk bought them up pennies-on-the-pound, using strong
arm tactics when necessary. His first coup was privatizing the
national post office, developing it into a mail-order business.
Penta, meanwhile, acquired the national steel works.
My contact writes: "All three are known
to have considerable political clout and willingness to use physical
muscle to take over companies that resist. Of the three, Istrokapital
is believed to have the strongest ties to the underworld and is
known to draw its muscle (literally) from former officers of the
Slovak intelligence service, particularly those who were implicated
in the 1995 kidnapping of the Slovak president's son."
There is also suspicion that all three businesses
are conduits for Russian money and used as fronts for money laundering.
This makes sense for their operation in Salt Cay—invest
funny money and sell legitimate property. Misick is also working
with Russian entrepreneurs on other projects.
It is remarkable how little of this is known
in the TCI.
Opposition politicians and the odd dissenting
lawyer tell me that the money should be easily traced through
the local branches of off-shore banks by forensic accountants
empowered by a Royal Commission. The moneys paid illegally to
government ministers and officials are believed to have been channelled
through these banks to accounts in Florida. I have also heard
that Misick and other ministers have been paid in Miami property.
Development records should equally be found
through the offices of prominent lawyers on the islands who have,
perhaps innocently, been involved in processing deeds, Crown leases
and so on. You know, of course, about the burning of the court
records on Grand Turk. The lawyers have inevitably been ensnared
by fees out of all proportion to their expectations before the
development boom.
All this adds up to a gross violation of good
governance. I am sure you recall the imposition of direct rule
from Whitehall though the Governor's office in 1986 when a former
PM, Norman Saunders, was "busted" in Miami for involvement
in the cocaine trade. I first saw these island while covering
that extraordinary story for the Daily Telegraph. I have kept
in touch with them ever since. Last year, I bought a cottage on
Salt Cay which I am now renovating. This would in theory give
me an interest in seeing the development proceed, raising property
values, rather than the other way around as the rule of law is
enforced. But my involvement in reporting corruption and violation
of proper authority lies outside my financial interest, just as
I used to report in London while owning a house there!
The Salt Cay reaction: It is very important
to bear in mind that the belonger families which remain are in
favour of development. To them it is an opportunity to gain financially
from an island which has only existed through the sweat and very
considerable pain of their forebears. I believe that the white
expats who to this day own most of the capital and business enterprises
understand this and accept the belongers' vote. It is particularly
sad that they are being shortchanged.
There is currently a crisis, however, which
has stripped the scales from many an eye. As part of the package
illegally agreed between Misick and DevCo, the company is to cut
an access channel to their proposed marina through the Caribbean
reef, the western beach of the island and Victoria Street which
is the main thoroughfare linking the North and South Settlements
of Balfour Town. Incredibly, there is no plan to build a bridge.
The access channel will cut the island in two, making the traditional
way of life no longer sustainable and killing the community once
and for all. A construction barge appeared off-shore in the week
of May 11 to sink exploratory piles.
The population has woken to the fact that DevCo
always intended to see the existing island destroyed in order
to become a lot for their upscale, European-orientated, strictly-private
island.
So now all—belongers and expats—are
opposed to the access channel and seek means to impose an injunction.
It is clear that emergency intervention with
the Governor's existing and proper authority is necessary. Salt
Cay is a potentially priceless long term asset to the future of
TCI within BWI and HMG's plans for economic viability. But it
faces destruction for the illegal gain of local Ministers and
undesirable investors.
The recent history of the Salt Cay development
plan will also provide vital evidence for a Royal Commission should
you determine one to be necessary. I will be very happy to co-operate
with such a Commission and hope that you will be able to forward
this material.
As a last point, I will of course be continuing
my reporting of this story, and believe it will make a considerable
splash in the near future.
22 May 2008
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