Antigua and Barbuda: The Cardinal Sin of Democracy Part 2 – Antigua & Barbuda
14 June 2006
Article by Ian Moncrief-Scott for Mondaq.com
It takes time and effort for lies to emerge to the surface. The Government of Antigua & Barbuda had repeatedly officially assured United States Congressmen, the US State Department and the US Embassy in Barbados that the attempted expropriation of Half Moon Bay resort, owned by US investors, would be abandoned. Speaking in the Antigua Sun, 22 May 2006, Hon. Harold Lovell, Minister for Tourism, finally admitted that his Government had expropriated Half Moon Bay Resort early in 2005, claiming it was in an effort to resolve the issue. The Minister stated, "This Government had the land vested in the name of the Crown and we were prepared to withdraw the acquisition if she (Natalia Querard, Managing Director of HMB Holdings Limited, US owners of Half Moon Bay Resort) was prepared to accept the responsibility to have the place developed within a reasonable space of time. But, she felt that withdrawal of the acquisition should be unconditional and we are not prepared to accept that." What the Hon. Lovell omitted to say was that upon failure to live up to the proffered time line, which is controlled by the Government’s efficiency in providing the Company with permits, licenses and general cooperation on numerous issues, the Company would be forced to enter into a joint venture with the Government and/or another developer appointed by the Government. The Hon. Lovell further failed to admit that the Government had demanded a full blanket indemnity from the rightful owners for its Ministers’ actions, past, current, known and yet to be discovered, as a pre-condition to relinquishing the property. He also failed to mention that as a pre-condition to having the property returned to them, the owners had to abandon all legal action and withdraw all claims against the Government, absorbing not only the loss of income plus the cost of maintenance, but also the huge cost of multiple legal actions undertaken to protect their property and interests. Supranational observers will now note that the new "Government in the Sunshine" no longer honours its pre-election pledge of righting the wrongs of the former Administration and has adopted an active policy of investor coercion. Moreover, international investors, reputable lenders and any prospective insurers will not share the perspective of the Government of Antigua & Barbuda that it is prudent policy to complete a process of illegal expropriation in order to "circumvent some of the difficulties" encountered in a purported out-of-Court settlement of the issue. In claiming that it acts in the best interests of the people of Antigua & Barbuda, the Government has now unequivocally placed the nation firmly alongside ignoble countries that plunder private property, such as Cuba, Venezuela, Costa Rica and Zimbabwe. How such policy, which flagrantly breaches international best practice, together with the resultant spiraling legal sums drained from a public purse propped by international supranational benefaction and the deferral of much needed economic benefit, can be construed as being in the interests of Antigua & Barbuda’s people, will be well beyond the belief and tolerance of most observers. To further put Antigua & Barbuda in perspective on the world investment and tourism map it is worth noting that the country has one of the highest per capita debts and a reputation for serious malgovernance, links with organised crime, arms trafficking and international money laundering. That reputation will not be assuaged by expropriating foreign investors’ property or by attempting to coerce investors into risking further sums in a hostile environment. Disturbingly, Antigua & Barbuda risks further harming its international reputation by currently fostering even stronger links with Cuba and Venezuela. The Daily Observer dated 11 May 2006 attributed Bruce Goodwin, Antigua & Barbuda’s Ambassador to Cuba at the end of the 7th meeting of the Antigua Barbuda/Cuba Joint Commission as saying, "Long live Cuba, long live the Cuban revolution." The Paper also reported that the Ambassador also attacked the 46 year old trade and economic sanction by the United States, naming it "cruel, inhumane and illegal." Meanwhile, Antigua has announced that it will become the transshipment point for Venezuelan oil to all the signatories of the PetroCaribe initiative, promoted as a humanitarian relief action by the same Chavez-led regime, which, is now importing "technology and professionals" from Iran. According to the Wall Street Journal’s article, "The Tehran-Caracas Axis," published on 16 January 2006, Mary Anastasia O’Grady also advised that property rights are being abolished and that the Authorities had invaded numerous "unoccupied" apartments in Caracas to hand them over to party faithful, as part of a wider scheme to "equalize" life for Venezuelans. Significantly, Antigua & Barbuda is presently embroiled in a battle with the USA over the Island’s policy as an e-gaming haven. It is claimed that US gamblers wager almost half of the $12 billion a year processed by cyber casinos.
Antigua-based operators are believed to contribute to 25% of this sum. Antigua & Barbuda has convinced the World Trade Organisation that it has adopted international best practice and pleads that the tiny island is being bullied by its massive northern neighbour. Dr. John Ashe, Antigua & Barbuda’s Ambassador to the WTO, claims "the jurisdiction has been leading global efforts to license, regulate, supervise and oversee a robust yet clean and safe gaming industry over the Internet and is the only jurisdiction to take on the United States at the World Trade Organisation and win on this exact issue." However, the US District Court for the District of Columbia disagrees and, in May 2006, indicted two internet gambling operators based in Antigua and Barbuda for offences related to an estimated $250 million of internet gambling wagers. It is significant that within this contradictory mix of actions and representations, the Government of Antigua & Barbuda has finally owned up to committing a cardinal sin of democracy, the expropriation of private property, U.S.-owned private property at that. By doing so, Antigua & Barbuda has now clearly demonstrated and confirmed that it is a stranger to international best practice. It has admitted to reneging on its pledges and has repeatedly misled United States Congressmen, the US State Department and the US Embassy in Barbados. In the meantime, legal actions brought by the owners of the Half Moon Bay Resort against the Government of Antigua are pending hearings before the High Court in Antigua and Her Majesty’s Privy Council in London. In an interview given to the Antigua Sun on 4 May, 2006, Attorney General Justin Simon indicated that he was "not particularly concerned" about their outcome. "I am just waiting for the day," he says. Now that Antigua & Barbuda has declared that it is prepared to use coercion and illegal acts against investors and its official Counsel is not particularly concerned about the outcome, international bodies trying to assist the country shed its unfortunate reputation must be deeply disappointed. Antigua & Barbuda was specifically included on Page 43 of the Sixth Report to Congress on the Operation of the Caribbean Basin Economic Recovery Act, under the heading, Nationalization/Expropriation. "Some U.S. investors have outstanding disputes with the governments of Antigua and St. Kitts concerning expropriated land. They are currently attempting to resolve those disputes within the local legal systems, and ask for occasional advice from the U.S. Government. The U.S. Government has stressed to authorities in both countries its interest in seeing the disputes resolved of its expropriation of US investors property." A more honest, transparent and proper Government of Antigua & Barbuda would have relinquished its hostile position, returned the property to its rightful owners, offered its full positive support for re-development and used these actions as a true and proper demonstration of the adoption of best practice. The United States Government, having been seriously misled by the Government of Antigua & Barbuda, may well choose to invoke the far-reaching consequences of Antigua’s breach of the Caribbean Basin Initiative and strip Antigua and Barbuda of the preferred status which it now enjoys. Cardinal Sin 1 can be found at Mondaq.com