Exclusive: Ashcroft's bank lent millions to disgraced premier
Loans helped fund Turks and Caicos leader's lavish lifestyle; Alarm raised over Tory donor's influence if Cameron wins power
Thursday, 19 November 2009
Companies linked to Lord Ashcroft, the billionaire deputy chairman of the Conservative Party, helped finance the lavish lifestyle of the disgraced prime minister of Turks and Caicos islands, an Independent investigation has found.
Lord Ashcroft's British Caribbean Bank (BCB), which is run locally by his son Andrew, advanced a $5m (£3m) loan to Michael Misick, and a construction company associated with the peer built and funded a beachfront mansion for the premier, who was ousted from power in the British overseas territory in a corruption scandal this year.
PA
Former Tory party treasurer Lord Ashcroft with William and Ffion Hague at the launch of his book, Dirty Politics, Dirty Times in 2005
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Lord Ashcroft, who has given the Conservative Party more than £10m and is playing a pivotal role in its general election campaign, has long been subject to intense scrutiny over his business dealings in nearby Belize, but the extent of his interests in the Turks and Caicos has attracted much less comment. His bank extended loans of more than a third of a billion dollars to finance a development boom on the islands under Mr Misick's rule.
Revelations of the links between the Ashcrofts and the former premier come amid a period of turmoil on the islands. The British Government has assumed direct rule, following a report which found a culture of "political amorality".
And yesterday, a senior Turks and Caicos politician wrote to the Conservative leader David Cameron to demand assurances that Lord Ashcroft will not be in a position to influence the government of the islands should the Tories win the next election and should the peer's ally William Hague take charge at the Foreign Office.
Lord Ashcroft has organised several trips to visit the Turks and Caicos on his private plane for members of the Shadow Cabinet, including the shadow Foreign Secretary William Hague.
The letter says: "Due to his willingness to contribute to both political parties, as well as the small size of our population and economy (only 30,000 citizens and residents), Lord Ashcroft's wealth, and his willingness to use it, has and does give him a level of influence that we feel puts any hope of democracy here at risk."
Direct rule was imposed on the islands in August following an investigation into the Misick administration by a British-appointed commission of inquiry, under Sir Robin Auld. The commission investigated how Mr Misick, who came to power in 2003 with, he claimed, assets of only $50,000, funded a celebrity lifestyle and one of the biggest houses on the island of Providenciales and claimed a net worth of "$80m or $180m" by 2008.
Mr Misick was accused of personally benefiting from improper sales of Crown land by his government and of taking bribes from developers on the islands as the development boom took off. He says he did nothing wrong and has vowed to clear his name, accusing the British of staging a "coup" on the islands.
Lord Ashcroft and his businesses were not accused of any wrongdoing by the commission report.
Transcripts of the hearings held in Turks and Caicos earlier this year revealed that the mansion was built on land that the former prime minister says he bought from Lord Ashcroft's company Leeward, negotiating with the head of the peer's former construction company, Johnston.
Mr Misick received a $5m loan from BCB in spring 2007 as he was building his mansion, on top of a $4.7m loan from a company he said was associated with Johnston which he used to pay for the construction. Confusion over the exact ownership structures of these companies, and the relationship between them, led to testy exchanges when the premier gave evidence.
"To my knowledge Leeward Limited is owned by the Ashcroft [sic]. Alan Forester [sic, referring to Allan Forrest] has been CEO of Johnston, Leeward Limited for a long time. When I bought the property I was dealing with Alan Forester, Leeward Limited, Johnstons," the then Prime Minister said.
Alex Milne, cross-examining, said: "You are premier of this overseas territory. Did you not wish to know who it was you were doing business with? Is this such an obscure or such an opaque society that you never know who it is who you are doing business with because nobody is prepared to put their own names on company documents?"
LisaRaye McCoy, the US actress whom Mr Misick married in 2006, revealed the extent of her husband's friendship with Andrew Ashcroft in her testimony to the inquiry.
"Michael would make a phone call to maybe Andrew or whomever at the bank, and I can't see them letting it be $50,000 in arrears and not having some type of commitment," she said, when confronted with an overdraft on her own account at British Caribbean Bank.
Asked whether Lord Ashcroft would "make provision" for the premier at the bank, she replied "Yes", and when further asked how she could be sure the two men are friends, she replied: "He has been to the house several times and we have been out to eat and we have met at Nikki Beach."
Lord Ashcroft's financing for the former prime minister came amid a period of rapid expansion for BCB (then called Belize Bank TCI), which boasted of organising some of the biggest loans ever advanced on the islands for development projects. The bank's operating income jumped from $3.3m in 2002-03 to $10.8m in 2006-07. A year later, the bank's UK-listed parent company was saying: "Belize Bank TCI's rapid expansion has provided a significant contribution to the increase in operating profits of [the financial services division]. Belize Bank TCI's loan portfolio of $363m at March 31, 2008 has made the bank the largest lender in TCI."
Lord Ashcroft has been a major figure in the political and economic life of several Central American and Caribbean countries since the 1980s. The peer made his fortune in the security business, through buying and selling companies, ultimately selling the firm ADT to Tyco International of the US for $5.6bn, but he has long had numerous other business interests around the world.
He took citizenship in Belize, having fallen in love with the country as a child when his father, a diplomat, was posted there by the Foreign Office. His extensive business interests there have attracted political controversy in the past but his move to the Turks and Caicos has been little discussed. And by 1996 he had also become a Belonger, or citizen, of the territory, establishing a school on the island of Providenciales.
Now the peer's businesses face potentially significant tax increases as the country's interim government seeks to deal with a budget crisis caused by the collapse of the development boom.
Sir Robin's commission of inquiry was established after the Commons Foreign Affairs Select Committee was inundated with letters of complaint from islanders who said that development in the Turks and Caicos was causing environmental damage, political corruption was rampant, and dissenters faced economic reprisals if they spoke out.
One of the local leaders who corresponded with the committee has this week sent a letter to Mr Cameron urging him to maintain direct rule for as long as it takes to repair the political system. Shaun Malcolm, former chairman of the PDM, the political party that was in opposition during Mr Misick's premiership, asked for "tangible safeguards" to keep Lord Ashcroft away from policy on Turks and Caicos.
In the letter, which was also copied to members of the Foreign Affairs Select Committee, Mr Malcolm said he had become alarmed by reports of the close relationship between Lord Ashcroft and Mr Hague, who stands to become Foreign Secretary in a Conservative government.
"We respectfully ask for your assurances that you will work with us to make certain that the Turks and Caicos will continue on its path towards good governance without being influenced by your [vice-chairman] should you form the next government in Britain."
Last night Lord Ashcroft declined an opportunity to respond. In the UK, Lord Ashcroft is one of the Conservative Party's biggest donors and has used his money to fund a highly targeted campaign to win key marginal constituencies for the party. Mr Hague nominated him for a peerage when he was leader of the Conservative party at the turn of the decade, and the appointment was approved with the understanding that he would take up permanent residence in the UK. Lord Ashcroft has never publicly acknowledged fulfilling that promise, although Mr Hague said this month that he had now done so.
As well as political donations, largely channelled through a consulting firm called Bearwood, which is controlled by the peer, Lord Ashcroft has extended tens of thousands of pounds-worth of free travel on his private jet, owned by another Ashcroft company, Flying Lion.
He and Mr Hague travelled to Turks and Caicos on the peer's private jet in spring 2007, also taking in Brazil, the Falkland islands, Iceland, Panama and Belize, and other Conservative politicians have also been taken to the islands. Andrew Mitchell, shadow Secretary of State for Overseas Development, visited the country at Lord Ashcroft's expense later in 2007, and Michael Ancram, then a member of the Shadow Cabinet, and the Tory MP Mark Simmonds both made the trip in 2004.
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