THE CARIBBEAN resort planned by Slovak financial groups Istrokapital and J&T was massive in scope – a €400 million playground for rich jetsetters in the Turks and Caicos Islands (TCI), featuring two hotels, 75 villas, 130 condominiums, a golf course and a private harbour for 80 boats.
Equally generous was the support that the developers enjoyed from Michael Misick, the former premier of the tiny British overseas territory. Misick not only flew on private jets owned by Istrokapital boss Mário Hoffman, but also pitched Hoffman’s plans to his cabinet, and secured permanent resident status for the Slovak investor.
But the party is finally over, thanks to a Commission of Inquiry set up by the UK Home Office to investigate graft in the TCI. Following lurid testimony at public hearings, Misick abdicated as leader of his party, the PNP, and on March 23 resigned as premier.
The Commission's final report is due in April, and is expected to be damning.
And based on reporting by the Sme daily, the Anti-Corruption Unit of the Slovak police has opened an investigation into possible bribery of public officials, and intends to call Hoffman to give testimony. “On the basis of instructions from the Special Prosecutor's Office, an investigation is underway. At the moment we are taking steps that we will not comment on,” said police spokeswoman Andrea Polačiková.
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Allegations of corruption have dogged Misick since he came to power in 2003, especially over how Istrokapital-controlled firm Devco managed to secure 86 percent of the land on tiny Salt Cay island, much of it on a sweetheart lease from the Misick cabinet.
Testimony before the Commission finally gave substance to the rumours. When Hoffman wrote to Misick in 2006 to express his interest in building a golf course on Salt Cay, for example, Misick submitted the letter the following day to his cabinet. The TCI ministers agreed to it immediately, even though Hoffman had not even said what he was willing to pay for the Crown land he required.
The cabinet later agreed to lease Hoffman 238 acres for 99 years at an annual rate of a dollar per acre. At the time, the ministers had before them an audit they themselves had ordered valuing the property at almost $8 million – over 300 times the cumulative value of the lease.
“The decision [by the cabinet] shows at best a reckless disregard for public finances as well as possibly raising other concerns,” declared an audit by Deloitte.
When the TCI government's own planning commission rejected a proposal by Devco to build a dock on Salt Cay, fearing damage to the marine environment, Misick intervened and secured a new meeting of the commission – and a new verdict approving the dock, which is key to Devco’s project. The chairman of the planning commission subsequently quit, citing pressure from Misick and the cabinet to break the law.
And when Hoffman wanted permanent resident status, it was Misick who submitted his application to cabinet and secured its approval.
“It seems, Mr Premier, that when it comes to Mr Hoffman, every deal goes his way,” said Alex Milne, the senior counsel to the Commission, who led the hearings.
As Milne proceeded to show, Hoffman’s relationship with Misick was not just based on personal sympathies. Hoffman’s partner in the company set up to build the golf course is Chal Misick, the premier's brother.
A few months after Hoffman secured planning permission for the golf course, Misick got a $6 million loan from J&T Banka in Prague. The loan was secured by Chal Misick’s shares in the golf course company, meaning that if the premier defaults, J&T will end up with a stake in a project it is already financing.
So far, Misick has not paid anything on the loan, just as he has paid almost nothing on the other $14 million in debt he carries.
“I would suggest, Mr Premier, that this raises questions, very broad questions, about how you got these loans, and whether in fact they are really loans at all,” said Milne.
“That’s your opinion,” replied Misick.
J&T Banka submitted a letter to the Commission on January 12 declaring that the loan to Misick had been a standard one. “The fact the loan was granted to a so-called politically exposed person was handled in compliance with the law of the European Union and the internal rules of J&T Banka.”
The same bank issued exclusive Centurion credit cards to Misick and other members of his cabinet and close entourage, on which they rang up millions of dollars in bills. The card was created by American Express for the super-rich, and comes with minimum spending requirements, generally about $250,000 a year.
According to the documents Misick gave the Commission, he has spent $1.7 million on his Centurion card so far, although 12 months of records were missing. The Commission thus pegged his probable spending at $2.5 million.
The Commission also found that Hoffman had donated $100,000 in late 2006 to the party Misick leads, the PNP. “In your view, did the payment of $100,000 to the ruling party smooth the progress of those (Salt Cay) developments (through the cabinet)?” Milne asked Deputy Premier Floyd Hall. “No” was the answer.
In earlier questioning, Misick had admitted that such gifts were commonly used for personal ends. “The purpose of a political donation in the Turks and Caicos is to assist the person receiving it with his or her political ambitions, but also to use at your discretion, because you use your personal money to advance your political ambition.”
“What is in the least bit political about that?” Milne asked. “What is the difference between that and a bribe?”
“You are obviously not a Caribbean politician,” Misick replied.
In the end, Milne had the last word. “The provision of the golf course to Mr Hoffman is the clearest possible case of the exploitation of the power of his office by the premier for personal gain,” he said in his final submission. “It is, in a word, corrupt.”
Hoffman refused to answer questions about his relationship with Misick. “I find myself pained not by the statements of Mr Misick, but by the fact that a ‘journalist’ like you is given space in the Slovak media,” he wrote.
Misick did not deny having good personal relations with Hoffman, and has consistently said the Salt Cay project will benefit the entire Turks and Caicos.
Other cabinet members were also on good terms with the Slovak financier. Deputy Premier Hall told the Commission that a year ago he and Misick had visited Slovakia as Hoffman’s guests, and had flown on Hoffman’s private jet to watch a car race in Dubai.
This warm relationship may be in danger, however. Misick told the Commission he believed the Salt Cay project was “probably dead” due to the global economic crisis.
The news may be no better for J&T. Misick admitted he had no money to pay off the $7.2 million he owes the bank when his loan falls due this April. “I will definitely want to renegotiate it,” he said. “I’m in the middle of a divorce.”
30. Mar 2009 at 0:00 | Tom Nicholson