How Ashcroft became the banker to paradise

For some on the Turks and Caicos Islands, the White House or, to give it its real name, Belview Villa, has come to epitomise an era of excess that has left the British-controlled territory mired in $56m (£34m) of debt and its owner facing allegations of corruption and having presided, in the words of a British judge, over an administration defined by its “political amorality and immaturity”.

It is a description that Michael Ashcroft ? peer of the realm, Tory donor and powerbroker in a David Cameron government after the next general election ? would want nothing to do with.

But the Conservative Party deputy chairman was named in evidence by Mr Misick to a judge investigating the governance of the islands. He said the Lord Ashcroft’s bank loaned $5 million to the former Prime Minister. This claim is totally denied by Lord Ashcroft.

Many people would be hard-pressed to point out the Turks and Caicos Islands on a map. 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.

For years, the TCI, as the islands are known, were a barely touched outpost of the British Empire. First colonised by the Spanish in the 16th century, they were seized by the British in 1799 and ruled as part of the Bahamas. In 1973, when the Bahamas gained independence, TCI became a self-governing territory with power ceded by Westminster to an elected assembly.

While other Caribbean islands steamed ahead to develop their tourist infrastructure, for years after independence TCI remained a backwater. To stand on the beach at Grace Bay in Providenciales, 12 miles of powdery sand and twinkling ocean, is to marvel that it remained untouched for so long.

Everything changed in the early Nineties when foreign developers came to the islands with plans to transform TCI, only a 90-minute flight from Miami, into a playground for rich Americans. Celebrities from Keith Richards and Sir Paul McCartney to Donna Karan and Bruce Willis have all been enticed by the islands.

In the process TCI premier Michael Misick was transformed from a local estate agent with assets of $50,000 when he came to power in 2003 to an international jet-setter with a beachside mansion, a private jet leased through his government, and an American starlet, LisaRaye McCoy, for a wife. By the time he separated from McCoy last year, he was boasting his wealth could be as much as $180m, with some $20m in undeclared loans from local and foreign companies and from members of his government. Asked why he was paid more than the British prime minister, Mr Misick said: “I have done more for the Turks and Caicos than Gordon Brown has done for England.”

All of this went unreported in Britain ? still TCI’s colonial overlords ? until a routine visit to the islands by the House of Commons foreign affairs committee in 2008 as part of a review of Britain’s 14 remaining overseas territories. What the MPs found they later described as a “climate of fear”. Individuals expressed “great concern” about being seen to be talking to the parliamentarians, and some refused to meet them altogether.

One of the few who was prepared to speak in public was the then opposition leader Floyd Seymour. He told the MPs that within a year of coming to power, Mr Misick had bought $2.3m of property without a mortgage. Mr Seymour alleged that other ministers, who were so hard up they had driven borrowed cars before entering government, also now had multi-million dollar homes.

Their subsequent damning report forced ministers back at the Foreign Office in London to set up an independent commission of inquiry under the appeals court judge Sir Robin Auld. He travelled to TCI and heard evidence that swathes of government land had been sold off on the cheap and passed to tourism developers in exchange for political donations, millions of dollars in loans which appear, allegedly, to have no repayment schedules, and sleeping partnerships in multi-million dollar developments.

In his final report, Sir Robin described a culture of “political amorality and immaturity” and referred Mr Misick and other ministers for possible prosecution.

“It appears in the main to have consisted of bribery by overseas developers or other interests of ministers and/or public officers so as to secure Crown land on favourable terms, coupled with government approval for its commercial development,” he wrote.

There is no suggestion that Lord Ashcroft or his companies were connected in any way to the alleged bribery and corrupt property deals for which Mr Misick is now being investigated. Like other members of the monied elite that flocked to TCI during the boom years, the peer and his son, Andrew, who runs his father’s bank in TCI, naturally came into contact with politicians including Mr Misick. This was referred to in the Auld hearings.

Lord Ashcroft woke up to the opportunities in TCI in the Nineties. He became a “Belonger” ? what the TCI calls their citizens ? and set about building a business empire. His British Caribbean Bank (BCB) boasts of being the fastest-growing bank in the country on the back of the unprecedented development boom, for which it had advanced $363m in loans by last year.

Lord Ashcroft has been a benefactor to his host society, in 1993 setting up a school to be named after him on land he bought in an area called Leeward. This is the north-eastern tip of Providenciales, which the locals know as Ashcroft country.

Today, Leeward is a place that feels as if the clocks have stopped. The area is studded with mansions, many with private boat docks, but much of the area is still brush, and many plots lay undeveloped. A marina sits largely empty. Work on an artificial island, created using sand dredged from the marina and attracting the ire of local environmentalists, has stopped, barely begun.

A minute away from the 85-pupil primary school, to which Lord Ashcroft has contributed almost £500,000 over the years, sits an immaculate little white building that is headquarters for the BCB. Upstairs in the same building is Johnston, a construction firm that until 1999 used to be owned by Lord Ashcroft’s main holding company, and Leeward Limited, which the former Prime Minister gave evidence that he believed was a property firm associated with the peer.

This is also the part of the island where Mr Misick’s “White House” sits.

Belview Villa was built on land that the former prime minister says he bought from Leeward Limited, negotiating the deal with Allan Forrest, chief executive officer of Johnston.

Mr Misick received a $5m loan from BCB in spring 2007 as he was building the mansion, on top of a $4.7m loan from a company he said he believed was associated with Johnston, which he used to pay for the construction. There is no suggestion that these loans do not have proper repayment schedules on a normal commercial basis.

Confusion over the exact ownership structures of these companies, and the relationship between them, led to testy exchanges when the premier gave evidence to the Auld inquiry.

“To my knowledge Leeward Limited is owned by the Ashcroft [sic]. Alan Forester [sic, referring to Allan Forrest] has been CEO of Johnston, Leeward Limited for a long time. When I bought the property I was dealing with Alan Forester, Leeward Limited, Johnstons,” the prime minister said.

There was no one at home at the “White House” when The Independent called; and there were few people a short walk away at the Nikki Beach resort. This giant hotel, apartment and nightclub complex was financed by BCB in what the bank said was one of the largest syndicated loans ever in the country. It has gone bankrupt now; and Lord Ashcroft’s long-standing financial director, Peter Gaze, was appointed as receiver.

Nikki Beach is where Lord Ashcroft’s 31-year-old son Andrew has a suite. “Loves living in the Turks and Caicos Islands,” is his latest Twitter update. “Life on the islands is paradise,” he says on his MySpace page. On Facebook, he is pictured against the backdrop of a sandy beach, cigar in hand.

LisaRaye Misick told the Auld hearings that Andrew Ashcroft was a friend and personal banker to her husband. “Michael would make a phone call to maybe Andrew or whomever at the bank, and I can’t see them letting it be $50,000 in arrears and not having some type of commitment,” she said, when confronted with an overdraft on her own account at BCB.

Asked whether Mr Ashcroft would “make provision” for the premier at the bank, she replied yes, and when further asked how she can be sure the two men are friends, she replied: “He has been to the house several times and we have been out to eat and we have met at Nikki Beach.”

Ashcroft Jr is BCB’s managing director. “After an initial period in the Belize Bank head office, Mr Ashcroft transferred to Turks and Caicos,” the company says. “He is a graduate in International Business and has a Professional Diploma in Financial Services Management from an affiliate of the University of Manchester. He is also The Honorary Consul for Panama in Belize and a Vice Chairman of International Young Democrat Union”, a Conservative political grouping.

Friends say he works 12-hour days, and his Twitter feed suggests he works hard enough to live for the weekend (“Friday… means beach parties this weekend” and “The weekend has arrived!!!!”).

“My biggest passion in life is travelling,” Andrew Ashcroft writes on his MySpace page. “I like to see other cultures and how others live. I want to travel to every country in the world before I die. I also like the beach and water sports. I live on the beach so I enjoy going for a swim after work. It is refreshing.” He lists his favourite television programmes as The Sopranos and the World Series of Poker, his favourite movies include Get Shorty. For his heroes he has listed only one: “My dad”.

A portrait of the Queen is the first thing that visitors see when they walk into the offices of the Crown-appointed Governor of the TCI, in the capital Grand Turk. A copy of The Legal Status of British Dependent Territories is in the reception area, on top of a pile of magazines that include Heat and Glamour. This is the country’s temporary seat of power. Mr Misick resigned in March, as it became clear that Sir Robin’s inquiry would conclude there was evidence of serious corruption in Government in Turks and Caicos, but the judge turned out to be even more damning than that: he argued that the problems ran so deep that the only course of action was to abolish the government entirely and replace it with direct rule by the British. Mr Misick called it a “coup” and a return to colonial times, but on 14 August, 2009, the Foreign Office ordered the suspension of the constitution.

For better or worse, it has fallen to a team of Whitehall’s finest technocrats to pick up the pieces.

Gordon Wetherell, the new Governor, is now faced with a full-blown financial crisis in the country. The corruption scandal comes on top of the effects of the global recession and the credit crunch, which has left the international jet set nursing huge losses, and the costs of two hurricanes last year, which caused widespread damage in Grand Turk.

The country has $56m in unpaid bills, the equivalent of almost six months revenue, and it is struggling to refinance its debts.

Mark Capes, the Governor’s chief executive, says he is looking for ways to cut spending and raise more in taxes. Around the table at the Governor’s offices, he explains that it has taken time to unravel the state of the country’s finances. “We haven’t got the resources for a quick fix, but we are moving quickly,” he said. “Our immediate priority, the issue that dominates our every day, is getting the government finances into order and trying to get a balanced budget.”

One thing is for sure, the islands’ businesses are going to be on the hook for more tax. The businessmen that came here in wave after wave since the mid-Nineties may suddenly find the Turks and Caicos are a less lucrative place to set up shop.

Mr Capes wraps up an interview with The Independent to race to join a conference call with the Foreign Office staff in London, who will ultimately sign off on any new arrangements.

It is a government department which is likely to have a new boss after the next election. The man in charge could be the current shadow Foreign Secretary William Hague ? a freind of Mr Ashcroft.

“That is Michael Ashcroft ? successful, generous, great fun, utterly incorrigible. It is to the horror of some people in the world that Michael Ashcroft at 60 is one of the worst people in the world to have as your enemy. But it is to the enormous satisfaction and pleasure of all of us here tonight that he is one of the best people in the world to have as your friend. And on that basis I ask you to join me in a toast ? to Michael.”

William Hague gave the toast at Lord Ashcroft’s 60th birthday bash at London’s Grosvenor House in 2006, and the pair have been firm friends since Mr Hague was leading the Tories between 1997 and 2001. He had appointed Michael Ashcroft to be the party’s Treasurer, in charge of fund-raising, and went on to nominate him for a peerage.

The elevation to the Lords was only finally granted in 2000, on a promise that he would become resident in the UK for tax purposes, rather than being based in any of the Caribbean tax havens. It was a promise that he has never publicly confirmed. Conservative politicians, including David Cameron, have said that the entire matter is a private one between the peer and the Inland Revenue.

It was only last month that Mr Hague was able to tell the BBC: “My conclusion, having asked him, is that he fulfilled the obligations that were imposed on him at the time that he became a peer.”

The links between Mr Hague and Lord Ashcroft are close. According to the House of Commons register of interests the peer funded a recent trip for the shadow Foreign Secretary to the US to meet diplomats there, and accompanied him to some meetings, sparking speculation in Westminster that he might even be in line for a diplomatic job under the Tories. A mammoth overseas trip by Mr Hague in spring 2007, which was funded by Lord Ashcroft’s company Flying Lion, took in both of the peer’s Caribbean bases, Belize and TCI, as well as the Falkland Islands, Panama, Brazil and Iceland.

In his book, Dirty Politics, Dirty Times, Lord Ashcroft writes that he has given well over £10m to the Conservative Party and suspects he is its biggest donor of all time ? although the fact that donations once did not have to be disclosed means he cannot be sure.

BCB has extended loans worth more than a third of a billion dollars to finance the development of the TCI, and the peer is seen as an important figure in the islands. The prospect of an Ashcroft-funded Conservative victory in the UK has led the former chairman of one of the main political parties wrote this week to David Cameron asking for a promise that direct rule would not be prematurely abandoned, before the political immaturity identified by Sir Robin Auld had been eradicated. “A quick move away from direct rule before safeguards are established will once again give Lord Ashcroft and his family disproportionate influence in our small territory,” he said.

Michael Ashcroft and The Independent

Following yesterday’s article in The Independent about Lord Ashcroft and the Turk and Caicos islands, we were contacted yesterday evening by lawyers acting for the peer.

They made the following points:

* Lord Ashcroft did not attempt to buy influence in the Turks and Caicos islands by lending money.

* The Johnston construction company alleged in the article to be “associated with” Lord Ashcroft had been sold off in a management by-out in 1999 and he has no economic interest in the company.

* Neither Lord Ashcroft nor any company associated with him lent money to the Turks and Caicos Prime Minister Michael Misick.

* It follows, they said, that the allegation that Lord Ashcroft indirectly funded and built Mr Misick’s mansion was “completely unfounded”.

* Neither Lord Ashcroft nor any company associated with him has lent money to Michael Misick to fund a lavish lifestyle, or for his private or personal use.

* They describe Sean Malcolm as a marginal political figure who has never held a democratically elected position.

View full article here


VN:F [1.9.22_1171]
Rating: 0.0/10 (0 votes cast)

Tags: , , , , , , , , , , , , , , , , , , ,

Ezine Article Board

Author:

This author has published 5774 articles so far.

Comments are closed