Claims that he (and consequently the government) mishandled the Citizenship by Investment Programme (CIP) have been denied by Investment Minister Ernest Hilaire.
Hilaire Tuesday presented the CIP 2022/2023 Annual Report to parliament in an attempt to allay concerns.
CIP developer Caribbean Galaxy Real Estate Ltd. and Dr. Hilaire are at the vanguard of accusations of corruption from the Opposition United Workers Party.
These allegations were fueled when Philippe Martinez, Producer of MSR Media, filed a Racketeer Influenced and Corrupt Organizations Act (RICO) lawsuit in the United States against several individuals including two former St Kitts & Nevis Prime Ministers, Caribbean Galaxy, and Mc Claude Emmanuel, the CEO of Saint Lucia’s CIP.
In a report this year, MSR claimed to have documentary evidence that substantiates allegations of corruption and unfair practice in the CIP (these allegations have also been echoed by members of the United Workers Party -UWP).
Additionally, MSR alleges that Caribbean Galaxy undersold its CIP shares as an investor in Saint Lucia and was running a conspiracy to undersell passports.
At Tuesday’s House of Assembly Sitting Hilaire noted that in an address to the nation on June 12 of this year, he addressed the origins of the RICO case.
“As indicated then, we did not know Martinez or have any dealings with him. Martinez filed this RICO Case against Galaxy and its CEO, two former Prime Ministers of St. Kitts, the St. Kitts National Bank, a St. Kitts Escrow Agent and he threw in McClaude Emmanuel, the CEO of our CIP with no basis whatsoever. Martinez has never invested in Saint Lucia and has nothing to do with our CIP. He has a grievance with St Kitts that had nothing to do with Saint Lucia yet he has added McClaude Emmanuel to this case,” Hilaire said.
According to the minister, “He (Martinez) claims that Mr. Emmanuel had knowledge of Galaxy underselling in Saint Lucia and failed to stop it. All of the Defendants are applying to dismiss this RICO case and the judge has asked for the Motions to be filed jointly on 01 November 2024.”
Hilaire added that the RICO lawsuit, which was filed in June of this year, is a civil case rather than a civil one.
“Martinez has called in to local talk shows and together with… the Leader of the Opposition has launched a vicious attack on me. He has launched an attack on Galaxy, a developer he introduced to Saint Lucia and encouraged to invest and undertake a CIP Project and deemed an approved developer,” the minister said.
“He has launched the attack on upstanding lawyers” he added, who are Authorised Agents because they process applications in relation to the Galaxy Project and employees of the CIP Unit.
Hilaire also underlined that the Citizenship by Investment Unit follows the same procedures as it did during the UWP’s tenure in power to evaluate citizenship applications.
Further, he stated that when Opposition Leader Allen Chastanet attacks the Programme, he is attacking a programme he maintained for five years – one which brings significant revenue to the country.
“The processes undertaken by our CIP Unit to verify an applicant for citizenship and to ensure the legal requirements for citizenship are met before issuing a Certificate of Registration are the same and are maintained and undertaken at the highest level of integrity. Anyone who seeks to state otherwise is only seeking to destroy CIP,” Hilaire asserted.
The opposition, nonetheless, posed a series of questions to the Investment Minister Thursday on Facebook.
In its post, the UWP said that the 2022/2023 Annual Report of the CIP which was tabled in parliament on Tuesday, “still didn’t answer the question as to how many citizenships he has given Galaxy and Bemax permission to sell.”
Further, the CIP report which Hilaire presented “shows that the price for the Real Estate Investment option was reduced in December 2022 from US$300,000 to US$200,000 and not under the UWP as Prime Minister Pierre claimed.
Hilaire also did not give an account of the monies that are in the Escrow account.”
In his ministerial speech on Tuesday, Hilaire spoke on the Escrow Account noting that when Galaxy became an approved developer in Saint Lucia in 2019 under the former administration, they agreed to construct the Canelles Resort Project.
“An Escrow Agent was approved by the Board on 21 August 2019… which includes among other things the obligation to hold the proceeds of the Escrow Account in trust for Galaxy and the Investor (that is the Applicant for Citizenship) pursuant to an Escrow Agreement approved by the Board. The guidelines also provided for the Escrow Agent to remit monthly bank statements of the revenue and expenditure of the Escrow Account to the Unit. The Escrow Agent does not hold the money in trust for the Government of Saint Lucia. It is not our money,” Hilaire stated.
Rather, he noted, it is Galaxy’s money from the sale of shares in their development.
“The money is to be used for the construction of the Resort and the developers’ expenses. The Guidelines expressly state that the Escrow Agent must hold the money for and on behalf of the Developer and the Investor and shall release, transfer or otherwise deal with the escrow funds solely as directed in accordance with the terms of the Escrow Agreement,” he said.
The Government of Saint Lucia is not a party to the Escrow Agreement, Hilaire emphasized. The Escrow Agreement is between the developer, the investor and the Escrow Agent. These Guidelines, practices and arrangements were all in place since 2019, under the former administration, Hilaire said, and “we have not changed this.”
The minister said that the suggestion that any passport should be revoked because they were granted illegally is false.
Said Hilaire: “We are not privy to the commercial arrangements between an investor applicant and the developer but what we do know is that the applicant pays the minimum investment amount into the Escrow Account before the Citizenship is granted to the Applicant and that Applicant would have been approved by the due diligence agencies.”
Due diligence fees and government fees are paid by the applicant to the bank account of the Unit at a local bank, he noted.
The bank charges fees to undertake its own due diligence in relation to these funds “and these funds are only cleared when the due diligence of the Bank is satisfactorily complete,” he said.
“The allegation that the bank partakes in any money laundering and is complicit in any illegality is false. This attack on our banking system and our citizens is unwarranted. The Member for Micoud South knows that the money is the money of the developer. This is the process he approved as Minister for the CIP and approved by the Board under his watch,” he said.
“Despite all of this, the Member for Micoud South (Allen Chastanet) contends that he will bring an action to revoke passports and has stated that he will ask Martinez to pay for lawyers to take Saint Lucia to court, Hilaire stated.
Additionally, the minister stated, he has heard false narrative “that we have collected over US$ 1.4 billion and I have stolen the money. Another version is that Galaxy has collected the money, and I am benefitting from it. None of this is true. If they know how to steal US$1.4billion, that’s them. We don’t engage in theft of public funds or any funds and no amounting or manufacturing or repeating lies and false narratives can ever make it true.”
“In my address of June 12, 2024, I provided details of the number of applications received and approvals given and indicated how many were real estate approvals for Galaxy. I wish to provide an update on these figures. From 1 August 2021 to 30 August 2024, we have granted 2,873 approvals of which 1,970 or 69% were real estate for Galaxy. Contrary to what you have heard in publicized interviews and repeated by the Member for Micoud South and the UWP, Saint Lucia has never approved 14,000 applications… and there is no $ 1.4 billion. We have only approved just over 1970 real estate applications for Galaxy,” he added.