Wikileaks: Revealed - Secret Cables That Uncovered Concerns Over Pindling Link To Notorious Swindler
By PACO NUNEZ
Tribune News Editor
AS BAHAMIANS basked in the optimistic aura of newly-won independence, US diplomats were already showing concern about a number of worrying trends developing in the fledgling island nation.
Prominent among these, according to a new round of embassy cables released by Wikileaks, were the relationship between the country’s first Prime Minister and notorious swindler Robert Vesco, as well as claims that early PLP leaders propped up local businessmen as fronts for their own interests.
In 1973, the man Slate.com labelled “the undisputed king of the fugitive financiers,” was wanted in the United States on a number of fraud allegations and was implicated, as part of the Watergate scandal, of funnelling money to disgraced US president Richard Nixon in a bid to evade justice.
Of particular interest to US Embassy staff was a Miami Herald story on August 5, 1973, linking Vesco’s firms in the Bahamas with the purchase of a $450,000 home by Prime Minister Pindling.
According to one cable, the deal involved the sale of Pindling’s previous home and an office “at inflated prices” to firms controlled by a well-known local businessman closely connected to the PLP.
The businessman, according to embassy staff, had risen in a matter of months “from a nobody to owner of several local firms.”
All of the businessman’s acquisitions were financed through Vesco’s Commonwealth Bank, the cable noted.
“According to unconfirmed reports,” the document said, the businessman “was actually fronting for Pindling and other politicians when he bought several businesses.”
The cable added: “Figuring prominently in the sale of Pindling’s home and office building is Colombus Trust and Co, Ltd, a Vesco-controlled company.”
Another cable noted that in replying to questions posed by FNM MP Cleophas Adderley, Pindling said Vesco’s business activities are being conducted “within the confines of the law.”
“Mr Pindling made no comment on whether he thought these activities were detrimental to the country’s reputation. Questions about possible conflict of interest by the PM or his ministers were not answered.
When the subject of the possible extradition of Vesco was raised with Pindling at a press conference in July, another cable notes, “the Prime Minister replied that extradition was a judicial and not a political matter, and that Vesco was being treated as an investor until such time as he was thought otherwise.
“Mr Pindling said he knew Vesco socially. He said Vesco was . . . merely one of a long string of US investors active here. ‘I have no reason to view him in a separate light.’ Unquote.”
Other cables described a Bahamas working its way to independence as already beset by problems resulting from questionable banking practices.
One April cable, entitled: “Banking and corporate activities in the Bahamas damaging to US interests” said the United States is facing a series of “separate but related problems involving the use of Bahamian banks and corporations for illegal and/or questionable activities which are damaging to American interests”.
It mentions banks engaged in “questionable financing or in some cases clearly illegal activities.”
The cable said: “In most cases the persons involved have been Americans. Although the banks’ precarious financial condition has become evident, GOBI (Bahamas government) banking authorities have failed to move in good time to conserve assets because of political payoffs.”
“The second problem is the use of Bahamian banks and shell corporations for illegal stock manipulation and as a means of avoiding US and other stock regulations.
“The most notable example of this is Robert Vesco’s activities and that of IOS before him. Bahamian monetary authorities have declined to cooperate with the SEC and complained that its efforts to conserve the assets of Vesco’s firm constitute interference in Bahamian internal affairs. Again, there is evidence of local political payoffs.”
In an ominous preview of the damaging allegations that would come nearly a decade later, when the Bahamas was accused of being “a nation for sale” to South American drug lords, the cable noted that “one probe of the bank secrecy problem relates to reports the consulate general has received from IRS agents that narcotics traffickers in the US are depositing their profits in Bahamian accounts. Efforts to investigate this have been thwarted by local bank secrecy laws.”
The cable concludes: “Taken together, the problems outlined above are sufficiently damaging to a variety of American interests that the Consulate General believes they merit a systematic study by interested Washington agencies to see what measures may be available to us to protect these interests. It is proposed that a working group be formed by State, Justice, Treasury and the SEC and/or representatives of the Organised Crime Task Force to look into this matter.”
April 09, 2013