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Combating Caribbean Corruption

The U.K. government is in the process of assuming direct rule over its Caribbean dependency, the Turks and Caicos Islands. A U.K. Commission of Inquiry found "clear signs of political amorality and immaturity" in the government there. The BBC said chief minister Michael Misick is alleged to have "built up a multi-million dollar fortune since coming to power in 2003." He denies misusing public funds.

Turks and Caicos, a British Overseas Territory whose citizens have U.K. passports, consists of about 40 islands, eight of which are inhabited by a total population of around 30,000. The U.K.'s preliminary report said there was "information in abundance pointing to a high probability of systematic corruption or serious dishonesty" throughout the government. The CIA World Factbook says T&C is a transshipment point for South American narcotics destined for the U.S. and Europe.

The head of the U.K.'s Commission of Inquiry, Sir Robin Auld, hasn't said whether he'll recommend criminal investigations. His final report is due in April.

Reuters said today, "The U.K. will proceed with the seizure of power when a final report is published next month . . . . The decision is the latest effort by [British Prime Minister Gordon Brown], U.S. President Barack Obama and leaders in Germany and France to crack down on offshore financial centers. Turks & Caicos Premier Michael Misick called on the United Nations to intervene on the country?s behalf."

Antigua, another tiny Caribbean destination, was in the news last month. Texan Allen Stanford, accused by the Securities and Exchange Commission of an $8 billion investment fraud, headquartered his offshore bank there since 1996. As in Antigua, offshore financial services are an important part of the Turks and Caicos economy. That raises questions about potential corrupt relationships between officials there and offshore financial operators and others, and whether past violations of the Foreign Corrupt Practices Act and other anti-corruption laws might be found by investigators after the British take direct control of the government.

Stay tuned.
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Full post as published by The FCPA Blog on March 17, 2009 (boomark / email).