Labour Has Failed The Nation With British American Insurance

Mr. Eugene Hamilton - People's Action Movement

Mr. Eugene Hamilton – People’s Action Movement

Basseterre, St. Kitts – Nevis
November 22, 2009

At the end of last month the ECCU Monetary Council, which is comprised of the Finance Ministers of the ECCB member governments, issued a communique that contained the findings of an exhaustive pan ““ Caaribbean investigation into the collapse of the regional conglomerate British American Insurance Co. As the entire region is well and painfully aware, this company was but one casualty of a systemic failure in the regulatory mechanism that was exposed with the takeover by the Trinidadian government of CL Financial Holdings. This financial services company was the parent of CLICO, BAICO and many other companies and had a significant interest in other regional companies like CMMB. Like counterparts in the United States the leadership of CL Financial took the money invested by Caribbean workers and risked it in the seemingly lucrative sub ““ prime mortgage market where it waas irretrievably lost.

According to the findings published by the ECCU the loss from British American in the OECS was over $300 million. It was also found that the company in the OECS was controlled by the head office in Trinidad where the decision was made to make the ill ““ fated investment in Florida. What the ECCU did not find was that the local leadership in any OECS country had anything to do with the loss of the investment that was the catalyst for the collapse of the company. In other words, the scurrilous campaign of character assassination for political gain that is being conducted by the Labour Party of Denzil Douglas is nothing but the desperate attempt of a failed regime to distract voters from the pitiable lack of any substantial record to run on after fourteen long years.

The sad story of British American in St. Kitts and Nevis actually began way back in 2003 when Mr. Eugene Hamilton advised the government to make certain legislative changes to strengthen the regulatory framework for insurance in the Federation. The then Finance Minister, Prime Minister Douglas refused. A few years later Prime Minister Douglas welcomed with open arms the fraudster Allen Stanford and his ill gotten and now long gone millions to invest in the Development Bank and in real estate at the airport. Since Stanford has been exposed nothing has been heard about the millions he put into Development Bank nor about the status of his property. These two episodes indicate clearly that the Labour Government failed in its obligation to conduct due diligence into the financial dealings of those they choose to do business with or that do business in the Federation.

If, as the Prime Minister and his acolytes have been repeating, the fault in St. Kitts alone is about Eugene Hamilton why did none of the required annual audits for tax purposes uncover any wrongdoing and why has he not been arrested. Put another way, if Mr. Hamilton was like his Nevis counterpart and not involved in local politics, would the Prime Minister and his Labour government be making their demonstrably deceptive allegations?

The communique indicated the way forward that has been decided upon to try to salvage something for OECS policyholders and implored governments to refrain from making negative statements about the company for the benefit of this delicate effort. Unfortunately for St. Kitts, Prime Minister Douglas has too much to lose to put the interest of benighted policy holders above his own narrow interests. What is worse is that the Prime Minister and his party continue to retard the effort of the ECCU to assist policy holders in the face of the inability of Mr. Hamilton to respond to any of the lies being peddled against him. He is under an order of the court appointed judicial manager to say nothing about the ongoing state of the company and unlike Prime Minister Douglas Mr. Hamilton has respect for the court and obeys its orders. It’s a shame that Prime Minister Douglas is so obviously depending on people’s ignorance of this matter to score political points. After being so long in office he should have been able to do better.

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