It was an emotional Elliott Mottley who faced the media today to rebut allegations made against him this week by former Prime Minister Owen Arthur, and to refute suggestions that his daughter, Barbados Labour Party (BLP) leader Mia Mottley, was behind a near half-million dollar tax write-off for him back in the mid-1990s.
The matter was first raised by Prime Minister Freundel Stuart when he told a meeting of his Democratic Labour Party at Carlisle House car park, The City on Sunday that the elder Mottley “had two judgments lodged against him for monies due and owing to the Income Tax Department upwards of $1 million. In 1998, I walked in the registry one morning and everyone had frowns on their faces. They were saying that here it is that we have to pay our taxes but yet over $400,000 of that tax obligation was being written off by the Owen Arthur administration”.
Stuart also left the impression that the current BLP leader had something to do with it by by stating that Arthur had denied the request for the write-off, while he called on Mia Mottley, who acted as prime minister in Arthur’s absence from the island, to reveal who was behind the decision.
But it was a clear-the-air explanation by Arthur at a news conference on Monday that angered the 78-year-old prominent Queen’s Counsel and former Member of Parliament, and brought a strong denial from the elder Mottley.
Arthur, who was also Minister of Finance, had contended that Mottley had applied to him for a waiver of income tax arrears which would have required approval by both Cabinet and Parliament. This is believed to have happened in 1995.
The former Prime Minister said he rejected the application on the grounds that Mottley’s daughter, Mia, was part of his Cabinet, and he was surprised when he learned of the tax write-off, which, along with interests and penalties, amounted to more than $1 million.
However, flanked by his attorney Roger Forde, QC, and his sons Warren and Stewart, both lawyers, Mottley this morning told reporters at his Strathclyde law office that Arthur’s claims were “entirely untruthful and misleading”.
“I, Elliott Deighton Mottley, categorically state that at no time did I ever apply to Mr Arthur for a waiver of arrears of income tax which I owed the Inland Revenue Department, as it was then called,” the former Consul General to New York said.
He explained that what he applied for and received from the Minister of Finance was a waiver of the interests and not the penalties or the income tax arrears.
Mottley admitted that he had owed income tax arrears for the years 1987 to 1993, including interests and penalties, and had two judgments against him for $20,587.91 and $1,031.284.37, for which he had made arrangements with the Ministry of Finance to settle.
He provided copies of letters and memoranda of satisfaction exchanged between his lawyers and the Ministry of Finance and Economic Affairs and the Inland Revenue Department as evidence that the minister had waived the interest but not the tax or penalties.
“Let me make it very clear that there was no need for the Cabinet to be involved in my application because it was made under the Income Tax Act and not the Duties, Taxes and Other Payments (Exemption) Act CAP 67B of the Laws of Barbados,” he stressed.
A letter dated March 22, 1996 and signed by June Chandler for the Permanent Secretary and addressed to Mottley’s tax consultant, the late Blair Haynes, stated: “I am to inform you that the Ministry of Finance and Economic Affairs has considered the application and it has been decided that Mr Elliott Mottley, QC, will be allowed a waiver of the interest payable in respect of outstanding income tax on the condition that the outstanding principal and penalty is cleared on or before March 1, 1997.”
A subsequent letter dated March 7, 1998, also signed by Chandler and addressed to Mottley’s attorney Sir Henry Forde, QC, stated that the Minister of Finance had approved an extension of the time given to Mottley to clear his income tax liability and that he was being allowed a waiver of the interest payable.
Other memos revealed that the then Commissioner of Inland Revenue Frank Forde had received various sums of money towards the interest due.
Mottley broke down in tears as he denied that his daughter had a hand in any dubious actions aimed at benefitting him, prompting his son, Warren, to complete the prepared speech.
“I also wish the public to know that at no time during the period 1994 and 1999 did my daughter, Mia Amor Mottley, ever act as Minister of Finance and Economic Affairs of Barbados. Copies of the Official Gazette will corroborate this statement,” Warren read.
The 78-year-old’s attorney Roger Forde, QC, also hinted that Mottley would go after those who repeated “those mischievous and defamatory allegations”, sending the media a clear warning that they could be sued for defamation.
“Arthur’s statements are likely to have further consequences which will certainly extend to others who repeat and republish the untruthful allegations. The public is warned that it is no defence to a claim in defamation to say that ‘I am merely repeating what some other person had said,’” cautioned Forde.
Efforts to reach Stuart proved unsuccessful up until the time of publication, while Arthur promised to comment in due course.