Tue | May 26, 2020

EDITORIAL - Gangs of Gordon House should repay Olint cash

Published:Wednesday | December 31, 1969 | 7:00 PM

David Smith has promised to lead American investors to US$128 million of the cash he raked into his Olint Ponzi scheme.

Even if the entire amount is recovered, it is unlikely to be enough to fully reimburse thousands of fleeced investors who received no payout before the collapse of Smith's pyramid. At best, they, mostly Jamaicans, some facing financial ruin, can expect pennies on the dollar.

This newspaper, though, knows of two institutions that did not suffer from the fall of David Smith, except, maybe, for tinges of embarrassment, for having stuffed Smith's stolen cash into their coffers and for being less than aggressive in ensuring that fraudsters of Smith's type are brought to justice.

We refer to the gangs of Gordon House, the Jamaica Labour Party (JLP) and the People's National Party (PNP), the political parties which have alternated in government in Jamaica for more than half a century, usually operated as closed groups, pursuing narrow partisan interests.

parties looked the other way

During the campaign for the 2007 general election, both received financial support from Smith. The PNP, though, says the JLP received more, as though that gives a moral advantage.

The more profound consideration is that both solicited, and accepted, Smith's money at a time when there were already questions about the legitimacy of Olint. Regulators had been in and out of court with Smith, who was accused of operating an unregistered securities business.

It is perhaps fair to recall that the JLP, in Opposition at the time, was not overly concerned with Smith's bona fides, complaining that he was being harassed.

The parties cannot undo their poor judgement of the past. They can, however, change from the vulgarian attitudes that mark them as gangs.

In respect to Olint, they could lead the way in helping the liquidators recoup as much as possible of the money stolen by David Smith by repaying all the funds received for their campaigns. This process should be transparent.

beneficiaries of fraud

It is widely believed that several politicians who invested in Olint were able to cash out before it collapsed. They, too, should repay any returns beyond their principals. To do otherwise would mean they benefited from fraud.

At the same time, justice demands that the Jamaican authorities move with greater speed and purpose in the prosecution of persons who established the elaborate Ponzi frauds, and to refund, in so far as possible, those who were stolen from.

In the United States, for instance, after the collapse of his US$50-billion Ponzi scheme, Bernie Madoff began serving a long prison sentence and trustees were busy attempting to recover assets from persons who had received payouts.

In Jamaica, it has been more than three years since the collapse of Cash Plus and the charging of its principal, Carlos Hill, with fraud. But the trial of Hill and his co-accused has reached nowhere and seems set to meander slowly through the legal system.

In the meantime, the financial clocks of trustees, liquidators and lawyers continue to run, without accounting and with detriment to the likely recovery by investors.

A full and public report on all the issues is urgent.

The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner. To respond to a Gleaner editorial, email us: editor@gleanerjm.com or fax: 922-6223. Responses should be no longer than 400 words. Not all responses will be published.