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by Neil Jones
Basic Crime
Donville Inniss has been charged, convicted, and sentenced in the USA for using his office as Minister of Government to influence the award of an insurance contract by the Barbados Investment and Development Corporation (BIDC) to the Insurance Corporation of Barbados Ltd. (ICBL) in 2015 and 2016, in contravention of the Prevention of Corruption Act – Barbados (1929) (POCA). He has been convicted of receiving money in the USA which was deemed to be proceeds of said bribery (money laundering).
It is my considered opinion that this case should have thoroughly examined a few basic issues.
1. What was the role of the Minister of Industry over the awarding of contracts at BIDC?
2. What was the process of selection of insurers for the BIDC during the period 2015/2017?
3. An examination of the POCA in relation to this case?
4. An examination of relationship between ICBL and Inniss outside of these two payments.
5. What was the purpose of the money received?
6. What about payments to other Ministers in Barbados?
BIDC Internal Review of the Issues
Note that there was a change in Government of Barbados as of May 25, 2018. The Barbados Labour Party won all 30 seats in Parliament. The Democratic Labour Party had served as the Government for the period 2008-2018. As usual the transition of power was seamless and without any dispute. A new Minister of Industry took office by June 01, 2018 and a new Board of Directors of BIDC was in place shortly thereafter (June 2018). Inniss was arrested in Tampa, FL on August 03, 2018.
On August 08, 2018, the management of the BIDC investigated and prepared a detailed report on the Insurance Tender Process Report for the period 2015 to 2018. This report clearly outlined the process for selecting insurance brokers and insurers for the BIDC. The process was entirely transparent and at no stage did it involve the Minister Inniss.
Barbadian Law
BIDC Act
This case did not have any serious engagement on Barbadian law except where both sides agreed to expert witness on the POCA. One basic question to be asked is, “can or how can a Minister of the Crown influence the issuance of contracts in a state-owned agency – namely the BIDC?” The answer resides in an analysis of the Barbados Investment and Development Act. The Act is very specific in the role of the Minister with respect to the BIDC. Fundamentally the Minister appoints the Board of Directors and gives instructions of a general and policy nature to the Board. At 2013 the Board of Directors comprised 9 persons appointed by the Minister. 3 of the 9 persons were there by virtue of their offices with non-Governmental entities or as a Permanent Secretary.
It is important to note that the practice and convention in Barbados is for all members of the Board of State-Owned Enterprises (eg BIDC) be approved by the Cabinet prior to any instruments of appointment being signed by relevant Minister and issued to said Directors.
his is in keeping with the principle of collective responsibility that governs Cabinet Government in Westminster-styled parliamentary democracies. All Ministers are there bound to support and follow the decisions of the Cabinet once they remain a member. A Minister who fails to follow such conventions may be dismissed from the Cabinet. It is also to be noted that any changes to the Boards are to be approved by the Cabinet prior to execution.
Given the fact that a Minister of Industry cannot legally give an instruction to the BIDC Board or management regarding the issuance of any contracts, it is in my opinion, a major error that there was no discussion throughout this trial as to the legal role of the Minister with respect to the BIDC. Furthermore, there was no evidence presented as to how, when and where the Minister influenced the BIDC Board in awarding the said contracts.
BIDC Board Minutes
Minutes of the Board of Directors of the BIDC for the period February – July 2018 and supporting documents from Management clearly reveals the process for selecting insurance brokers and insurers.
Nothing in said minutes or any other documents indicate or even hint at any Ministerial interference in the decisions of the Board or management. These minutes and reports were made available by the prosecutors and seemed to have been either ignored or misunderstood by defence counsel. The jury did not benefit from such evidence.
Likewise, interviews conducted by the Barbados Police Force (in the presence of FBI agents) with the CEO, Legal Officer and Director of Finance of the BIDC all explained the process for selecting insurers and the factors that influenced their decisions. Once again no one implicated the Minister in these decisions. Jury did not benefit from this evidence either.
BIDC Insurance
Consequential to the arrest of Inniss in the USA on August 3, 2018, the new BIDC Board investigated the issuance of the 2015-2017 insurance contracts of the BIDC and said report was completed and submitted by management to the Board on August 08, 2018. This report outlined how transparent the process for insurers was and it pointed to no interference by the Minister in the process. Prior to 2009, the ICBL held the entire insurance portfolio of the BIDC (1.57 million sq ft of buildings) – approximately 30 years. At its meeting on December 10, 2008, the Board of BIDC appointed Lynch Insurance Brokers as its brokers for the 2009/2010 insurance policy year.
The decision was then taken to share the insurance portfolio between ICBL – 60 per cent, Consumers Guarantee Insurance (CGI) – 25 per cent and Guardian General Insurance – 15 per cent. This arrangement continued until 2013/2014 when adjustments were made to the carriers with ICBL – 50 per cent, Consumers Guarantee Insurance (CGI) – 30per cent and Trident Insurance – 20 per cent with CGM Brokers and Lynch Brokers being co-brokers for the policy. Prior to 2008, the ICBL held 100 per cent of the BIDC portfolio.
At the meeting of the Board of BIDC held on March 18, 2015, in considering a recommendation to renew the insurance policy for 2015/2016 in the same proportions as for the previous year, the Board raised concerns that the BIDC may be contravening the Financial Management and Audit Act Cap 5 by expending more than BDS $100,000 on one service (brokerage) without first having publicly tendered. The Board then directed management to tender for said brokerage services and to request that the then insurers extend current coverage for a further 3 months pending a decision on brokerage services.
Over the weekend of April 11, 2015, the BIDC ran an advertisement in the Barbados newspapers seeking expressions of interest in brokerage services. A meeting was held with prospective brokers on April 21, 2015, to discuss the requested tender. Deadline for submitting quotations was May 04, 2015. 9 out of the 13 registered brokers in Barbados submitted proposals. At its meeting of June 22, 2015, the Board of BIDC decided to award brokerage services to CGM Gallagher and Sentry Brokerage Services and the insurance coverage to ICBL – 70 per cent and CGI – 30 per cent.
Differences between Management recommendations and Board decisions
The recommendation to the Board at its June 2015 meetings was for the brokerage services to be shared between Lynch and Sentry Insurance Brokers (as one team) and CGM Brokers.
The Board felt that CGM Gallagher Brokers offered the lowest all risk quotation and as a current broker, was best suited to be lead broker. Sentry was added as co-brokers to CGM. Should anyone not accept the offer then Lynch Brokers would be next in line as broker.
Why was ICBL share increased from 50 per cent to
70 per cent in 2015
Around July 2015 Trident Insurance Ltd raised concerns that they were not awarded any of the BIDC portfolio for the year 2015/2016. The BIDC Board indicated that they had concerns over Trident’s ability to fulfill its obligations in event of a catastrophe, being aware that Trident had recently obtained a significant amount of additional business from other Government entities and hence may be overexposed in the domestic market and that ICBL was the only A-rated company that offered to provide the coverage of 100 per cent of
the BIDC portfolio.
They also advised that CGI who are larger and in better financial health than Trident, was offered to take a larger portion of the BIDC portfolio but declined due to other risks that they had taken on at that time.
Whilst the Board would have wished to offer more insurance business to a domestically owned and controlled business, it felt that given time, cost, and risk factors, it had no choice but remove Trident Insurance’s 20 per cent and to extend 70 per cent of the business to ICBL who had been a very good service provider over the years. The 2015 contract was awarded for two years (2015 – 2017) provided there was no change in premiums over the period.
It is therefore NOT factual that the Minister caused the insurance contract to be issued or renewed. It is also factual that the BIDC Board approved the contract for 2016/2017
at the same meeting when they approved the contract for 2015/2016, providing that there was no increase in premiums for the 2016/2017 contract.
The jury was given the impression that the Minister influenced contracts in 2015 and again in 2016. No meetings were held by the BIDC in 2016 to discuss insurances. It is also factual that the premiums for property insurance decreased from 2015/16 FY and subsequently, when compared with previous years. The jury did not benefit from said information.
It is also a fact that whilst the trial spoke to the Minister influencing insurance contracts at BIDC, premiums mentioned only related to that of property insurance. The BIDC purchased additional insurances from the ICBL at said time as that of property insurance.
The jury never benefitted from such information. It is also factual that the BIDC did not negotiate any insurances directly with insurers but entirely via their insurance brokers. One should note that the new Chairman of BIDC appointed in June 2018 by the new BLP Government was Mr. John Rocheford, who at the time was also Chairman of CGM Gallagher – the principal insurance broker for BIDC.
2017 Contract and beyond
To the best of my knowledge, around March 2017, the BIDC Board of Directors, acting on recommendations of Management and brokers decided that the 2017/2018 contract for insurance coverage should be awarded to ICBL 55 per cent and CGI 45 per cent with CGM Gallagher as lead broker. The same Minister Inniss was Minister of Industry then. I am advised that the established procedures for selecting brokers and insurers for 2018/2020 were followed resulting in ICBL and CGI being the insurers again.
Campaign Finance/Political Donations
This trial never heard that there are no campaign finance laws in Barbados. This may be due to they not being advised that these two payments from ICBL to Inniss were political contributions and not any inducements for issuance of contracts.
Evidence of Inniss receiving other political contributions into his US bank account in the USA and also via friends in the USA, were not produced at trial even though available to both sides. Due in part to pre-trial motions, the jury never benefitted from or was there any discussions on other monies received from ICBL by Inniss during the same period.
Several cheques were issued to third parties for several politically related projects including, educational, sports and cultural activities in the St. James South constituency. One noticeable project was the refurbishment of the public lawn tennis Court at St. James for which ICBL paid $22,000.
Also absent from any discussions was the fact that ICBL had an established policy of not paying monies directly to politicians but to charities, companies or third parties on
behalf of politicians in Barbados. Materials provided in the discovery showed several payments made by ICBL to other Ministers/politicians.
These should have been entered into evidence and used by the defence to counteract claims of complex financial transactions and/or bribery. According to documents provided by the FBI, the ICBL also made contributions to politicians of both the Democratic Labour Party, the Barbados Labour Party and other local politicians [BT note – politicians were named].
Instructive was the fact that upon receipt of a request for donations from the . . . Constituency Council [BT note – constituency was named] in July 2015, Mr. Goulbourne Alleyne who testified at the trial and who was VP of ICBL, never admitted that based on internal (ICBL) notes, he,
Alleyne, clearly stated that $5000 was to be paid to the Constituency Council.
Mr. Alleyne testified at trial and in my opinion, no serious questions to expose ICBL relations with politicians and how payments were made were addressed. It was a serious error on the part of then attorneys, that Mr. Alleyne’s and ICBL habit of payments to politicians and to the use of third parties to receive such payments were not exposed to the jury. More importantly, was the evidence in fact that said politicians were not aware
of what was being stated about said donations via internal memos of ICBL.
It is also very instructive that Kumante Millar, the then Finance Officer of ICBL, admitted under oath at the trial that it was her who created the term Consultancy fee and the “fake” invoice upon which Inniss was prosecuted. As a professional, she should have been sanctioned for her role. Instead, she was given a non-prosecutorial agreement with the US Dept of Justice. Her credibility should have been frontally addressed by then defence counsel – but it was not.
Barbados Authority
Discovery materials showed that these two transactions were reported to the Financial Intelligence Unit (FIU) in 2016 by ICBL, namely Juanita Thorington-Powlett (Director) and John Wright (Chairman). The FIU is the competent authority in Barbados to investigate suspicious financial transactions involving persons in Barbados. Prosecutors did not provide any information regarding the findings of this investigation by the FIU and despite demands of the defendant, the defence counsel did not raise any concerns or queries on this with the Court. Once again, a disregard for Barbados law.
Defence Witnesses
A list of individuals who he felt could be material to his defence. This suggestion and detailed list were not accepted by defence counsel. This, I consider, to truly be an error, resulting in no defence witnesses being interviewed or called.
Evidence not challenged
FBI agents testified that Inniss was desperate for monies to settle a debt with David Stier ($75,000) and to pay his son’s tuition bill at College in Tampa. Discovery material (emails) provided ample evidence as to why the loan of $75k was not settled earlier. Inniss was being blackmailed on matters regarding David Stier’s clients in Canada and Stier was advised that loan repayments were being tied to this issue being resolved as Inniss was not prepared to incur any legal expenses in Canada or elsewhere because of Stier’s clients.
As at trial only 2k of the loan was settled in cash. The issue of availability of US $ was also raised in correspondence to Stier. None of this was addressed by defence counsel and the jury was left to infer that defendant was desperate for money. With respect to son’s college expenses, as a US citizen his son’s tuition was approximately $6k per annum. Not a large amount.
The US Government sought copies of defendant’s bank statements from First Caribbean International Bank (FCIB) in Barbados for the period 2015-2017. Not sure if this information was formally presented by the bank. However, the defendant did voluntarily provide to defence counsel his bank statements from FCIB for the period of 2015 – 2016 which showed that at no point in time was the defendant facing financial hardships. Additional bank statements from other banks could have been provided to further evidence the defendants financial health. Instead, the jury was left to infer that defendant took monies because he was broke and facing financial hardships.
It is regrettable that the media in Barbados sought to sensationalize this serious matter without providing any investigative work of their own.
To date, no reports of interviews with the former Chairman (Benson Straker) or Deputy Chairman of BIDC (Junior Allsopp) were carried. Not even a comment from John Rocheford, the Chair of CGM Gallagher and now BIDC Chairman.
The more I review this case, the more I am convinced that not only did Inniss not commit a crime but that no crime occurred. I am still awaiting evidence of how, when and where ICBL and Inniss discussed BIDC insurance contracts and how Inniss either promised to or influenced said contracts. It is a sad case of seemingly enthusiastic persecution of a black politician from a third world country by the powerful US Government, aided and abetted by weak legal counsel in the USA.
Neil Jones is a concerned citizen with intimate knowledge of the Donville Inniss case and the administrative affairs
of the ICBL and BIDC. He provided Barbados TODAY
with copies of minutes of board meetings, copies
of internal BIDC memos, as well as a copy of a cheque
paid towards a constituency.
