Category: Legal

Antigua and Barbuda: Caribbean Rabid Dog Of Expropriation Bites At Stanford Assets

Emboldened by a new interpretation of public use by the UK Privy Council in the matter of the Half Moon Bay Resort, a US owned private property, expropriated by the Government of Antigua & Barbuda, the Attorney General of Antigua, Justin Simon, did not hesitate to seize the lands of master Ponzi fraudster, R. Allen Stanford within days of Stanford’s indictment in the U.S.

At the time of the UK Privy Council ruling, grave concern was expressed about the dangerous precedent of allowing the determination of what is “public use” to be placed in the hands of individuals in power.

In the case of Half Moon Bay, its owners have had to take the Government of Antigua and, specifically, its Attorney General to court twice to commence the legally prescribed process of compensation for the expropriated property. Two and a half years later, the process of valuation of the property, which should have preceded any act of Parliament allowing the use of eminent domain, is now stalled in expectation of a decision to be handed down by an Assessment Board, where two out of the three members are appointed by the Government of Antigua.

With regard to Stanford’s property, AG Simon has personally valued Stanford’s assets at US$200 to 800 million – a conveniently wide range to accommodate a number of opportunities and players.

For a long time, the Government of Antigua & Barbuda has attempted to use expropriation of US-owned properties to solve its own financial problems. During the Lester Bird administration, the then Prime Minister proposed to balance the national budget by the resale of the Half Moon Bay Resort (See Budget Speech 2003). Today, Stanford’s properties apparently offer similar opportunities for resolving a basket-full of issues.

In that regard, AG Simon has already tipped his hand by declaring that public use would now be extended to the payment of “severance” allegedly due to the former employees of Stanford entities on Antigua.

This, of course, sets up a conflict of rightful claims of international creditors and liquidators against those of Stanford’s Antiguan employees. However, what Simon has failed to take into consideration, is that Stanford amassed his fortune through monumental fraud and international money laundering.

If Stanford’s ex-employees were to now gain financial benefits in the form of severance from the Government’s seizure of Stanford’s assets, they would be considered personal beneficiaries of fraud and international money laundering and, as such, would be subject to the appropriate sanctions on a personal level.

Moreover, these financial benefits would accrue as a direct result of expropriation of US-owned assets, which would prohibit US agencies from providing aid and other assistance to Antigua. Other serious penalties include the cancellation and refusal of US visas.

So, whilst the World Bank and IMF have neatly side-stepped the issue, the US Trade Representative is charged with ensuring that US interests are properly protected, especially when expropriation of US assets are involved and there is no doubt that Stanford’s victims will be turning their attention in that direction.

In stark contrast to the above and as a reminder of how matters should be properly dealt with, a nearby Caribbean jurisdiction has rediscovered its way to demonstrating adherence to proper international standards.

The Government of the Bahamas, mimicking what has appeared to be the fail-safe example of Antigua, thought it could get away with taking property from one private entity in order to benefit another private entity, using the wrongful veil of public use.

The landowners argued that the Government of The Bahamas fraudulently and unconstitutionally used the Acquisition of Land Act to forcibly take the privately-owned land of Bahamian citizens for the sole purpose of benefiting another individual entity.

It took a logical regional judge to re-define the boundaries of right and wrong.

Supreme Court Justice Cheryl Albury ruled that the Government of The Bahamas agreed to benefit the Albany project by forcibly acquiring the land of the eight property owners in the South Western New Providence.

She granted the declaration sought by the landowners that the Acquisition of Land Act was intended to allow the acquisition of private property by the Government only for its own, i.e. the public’s use and that payment for the acquisition must therefore be made from public revenue or a statutory company.

Justice Albury ruled that any other purpose or third-party arrangement constitutes a fraud on the Act and that all actions taken pursuant thereto are legally void.

Nevertheless, given the Government’s physical taking of the land in March 2007 and mindful that any compulsory acquisition of private property by the government without “prompt and adequate compensation” is contrary to the provision of the Act and in breach of the country’s Constitution, the Judge further granted a declaration that the owners are entitled to immediate payment for their land at fair market value “in addition to their entitlement to the statutory uplifts provided for under the Act as compensation for [their] land being compulsorily acquired and possessed by the [government] without adequate prior or any compensation.”

She ordered that the government immediately pay this compensatory sum “as the court may assess as due from the defendant in the circumstances.”

Furthermore, Justice Albury made a declaration that in default of an immediate payment “of adequate compensation as may be determined by the court in accordance with the provision of the act”, the landowners are entitled to immediate possession of their respective properties.

Similar legal constraints are imposed by the laws and statutes in Antigua & Barbuda.

Should Justice Albury’s decision be allowed to stand it will be interesting to see whether the Government of Antigua can afford all the lands it has “acquired”.

With regard to Half Moon Bay, Minister of Finance Harold Lovell has already stated that “not a penny will be paid… from the Treasury” and with Stanford’s assets, third-party candidates have already taken over certain business ventures.

Will these assets have to be relinquished, or will Antigua find yet another “lender” willing to play the game?

With The Bahamas leading by example and Antigua continuing its unchecked raids on private property, attention of regulators, liquidators and prosecutors must remain focused on Antigua until proper international standards are not only put into legislation but are seen and known to be working.

Signing a Tax Information Exchange Agreement with Ireland does not mean that Antigua has suddenly developed transparency and best practise. It is window-dressing, expedient to both signatories.

Antigua, the rabid dog of expropriation, thinks it is untouchable. So did R. Allen Stanford.