Ghosts of filings past

Prime Minister Dr Andrew Holness’ income and assets were under scrutiny by anti-corruption authorities from at least 2017, as investigators questioned the source of funds behind his net worth, which rose from $350,000 in 1998 to almost $160 million in 2019, court documents reveal.

Those details, including Holness’ investments in failed unregulated schemes such as Olint and Cash Plus, are among the material that Holness unsuccessfully tried to have struck from an affidavit in a judicial review case he brought against the Integrity Commission (IC) and two of its senior officials – Craig Beresford, director of information and complaints, and Kevon Stephenson, director of investigation.

The details come at a politically charged moment as Holness is in the midst of an election campaign, seeking to lead the Jamaica Labour Party to a third consecutive term in office. Polls are expected by September.

While Holness’ filings up to 2020 – including those featured in the documents filed in court – are certified, the prime minister sought to strike out at least 12 paragraphs and accompanying exhibits from Beresford’s affidavit, claiming they were “an abuse of process, scandalous, frivolous and vexatious”.

Holness’ lawsuit seeks to challenge the commission’s inconclusive investigation into alleged illicit enrichment arising from his 2021 income declaration, which remains uncertified. Holness and three affiliated entities – Imperium Holdings Limited, Positive Media Solutions, and the Positive Jamaica Foundation – are the claimants.

Holness has denied any wrongdoing and accused the IC and its officials of conducting an unfair probe.

Beresford’s affidavit, which was filed in March, offers the public a rare glimpse into the workings of the commission and the circumstances behind the delays in certifying Holness’ declarations after he became prime minister for a second time in 2016.

Treated unfairly

The IC official contended that the prime minister opened the door to the documents when he asserted that all his declarations from 1997 to 2020 had been certified. The IC team believes that the assertion implicitly suggests that Holness’ 2021 declaration was treated unfairly.

“A factual rebuttal indicating that there were, in fact, issues with the earlier declarations must also be relevant,” the IC defendants said in opposing the strikeout application.

Last Thursday, a Supreme Court judge agreed but also handed a win to Holness by ordering the commission to disclose certain documents, if they exist, prepared by three named investigators who worked on the probe.

The commission argued that the investigation extended beyond the 2021 income filing and instead examined whether there were reasonable grounds to suspect illicit enrichment.

“The assessment of such an offence cannot be confined to a single year, as dealings with an asset may span multiple years,” the affidavit stated.

According to Beresford, then acting Director of Information and Complaints Joy Powell had, in January 2019, referred her findings on Holness’ statutory declarations to the IC for further action. This led to the initiation of an investigation and a subsequent report on Holness’ declarations.

In a January 2019 letter to the Integrity Commission, Powell flagged significant concerns about Holness’ declarations between 1998 and 2016. She noted that while his assets “increased substantially over the years and especially over the period 2009 [to] 2012”, several issues required “further investigations/clarification”.

Powell said letters were sent to Holness seeking clarity, but “the responses received … were not sufficient to adequately satisfy the concerns that were raised.”

She added that under the new Integrity Commission structure in 2018, Holness was again asked to respond to unanswered queries by June of that year, but despite a request for and receiving an extension to October 15, 2018, there were no responses at the time when she wrote the letter.

Closely monitored

Powell and then acting director of investigations, David Grey, also submitted a report on Holness’ income filings. They stated, among other things, that “changes in Holness’ net worth’ over the years were closely monitored”. They said a special investigation into Holness’ declaration for 2005-2016 was conducted by an external investigator after officials observed an “inordinate increase in wealth”.

The two officials indicated that Holness eventually submitted a 36-page financial journal to the Integrity Commission in April 2019, detailing his business activities, investments, assets, and liabilities dating back to 1998.

The document, which was accompanied by attachments, disclosed “multiple businesses and accompanying investments, assets and income which were not previously declared”, and was accepted by the commission as “additional records and explanations supplied by the prime minister”.

Holness disclosed multiple businesses, investments, and personal loans – including taxi operations, a finance company, and deposits in failed unregulated investment schemes CashPlus and Olint – that he said generated millions in income between 1998 and 2011. The commission noted that Holness explained that three of the ventures – two taxi operations and a loan company – were to support his constituency activities and were not declared as they were not considered a part of his asset base.

Source of funding for ... real estate

“We have no choice but to reject that opinion, as reliance is being sought on the income earned and assets at the disposal of the entities. These assets have either been sold or made further investments in an effort to substantiate assets now in his possession,” wrote Powell and Grey. They also had questions about the source of funding for several pieces of real estate.

They concluded the Holness’ submissions revealed several omissions related to declared income, company ownership, alternative investments, and personal loans and those gaps affected statutory declarations spanning 1998 to 2016, including some years for which Holness’ filings were cleared.

Beresford said when the current director of Investigation took office in 2020, the issues remained unresolved, prompting a request for an updated financial analysis. In June 2021, an updated analysis was submitted , and it showed that Holness’ net worth had increased from $350,473.66 in June 1998 to $159,949,000.89 in December 2019.

A note in the analysis said Holness’ net worth increased by approximately $76.5 million between 2006 and 2009, including $23.7 million in 2006 attributed to an Olint investment. It stated that “there was no evidence of the source of funds” used for that investment. Another $48.5-million increase occurred between 2016 and 2019.

Beresford said that while reviewing Holness’ 2020 statutory declaration, it was discovered that he failed to disclose his directorship and shareholding in Imperium, later confirmed as a holding company for his assets following the closure of St Lucia incorporated ADMAT. He said he also asked Holness to submit financial statements for ADMAT.

Holness complied and Beresford said the 2019 and 2020 declarations were certified and published in December 2021.

The IC began examining Holness’ 2021 declaration in August 2022.

Beresford said third-party verification checks revealed possible non-disclosures, including “some irregularities” with an account at First Global Bank.

He said the Information and Complaints Committee reviewed the 2021 declaration on September 22, 2022, and referred it for further investigation. While no deliberate omission was found, Holness was invited to amend the declaration, which he did.

Beresford said the examination of the 2021 filings resumed in February 2023, and Holness was asked to provide more details on related investments and financial assets.

In March 2023, the director said third-party financial checks to confirm source of funds for Imperium’s assets revealed “multiple high-value transfers” from Green Emerald Trading Limited, among others to Positive Media and then to Imperium. Beresford said the transfers were flagged based on the reported income for Imperium and Positive Media, and the nature of their operations.

On April 21, 2023, the findings were presented to the commissioners of the IC, who agreed the matter should be referred for further investigation to confirm the source of funds, determine Holness’ true net worth, and assess possible breaches of the Corruption Prevention Act. Holness was formally notified on April 26, 2023.

Beresford’s affidavit also revealed concerns about Imperium’s financial statements, which were deemed “not in keeping” with International Financial Reporting Standards. Beresford said the accountant was referred to the Public Accountancy Board and the Institute of Chartered Accountants of Jamaica “for having represented that they were so prepared”.

An internal committee authorised Beresford to provide a statement requested by the police Fraud Squad. On May 2, 2023, the Holness matter was formally referred to the director of investigation for a probe to determine whether the illicit enrichment provision of the law was breached.

“Holness was given several opportunities to correct his statutory declaration upon identification of omissions. The matter of the source of funds concerning the claimant companies with respect to Holness’ statutory declaration for 2021 remains outstanding. Once the source of funds is confirmed, the examination of the declaration can be concluded,” Beresford said.

He added: “There is no attempt to stir up the public’s sentiment against Holness or embarrass him in any way. My only interest is to faithfully discharge the mandate of the Integrity Commission.”

In a report released last September, Director of Investigation Stephenson flagged alleged discrepancies in Holness’ 2021 filings and transactions exceeding $470 million linked to companies associated with him. Stephenson said he could not conclude on illicit enrichment because Holness refused to provide the requested information on his expenses.

The IC referred the matter to the Financial Investigations Division, whose June appointment of chartered accountant Dennis Chung as head sparked controversy. Chung’s qualifications and public comments casting doubt on aspects of the probe were criticised by civil society groups and the parliamentary opposition.

The prime minister has challenged suggestions about being informed of issues concerning source of funds that may have delayed the examination of his 2021 statutory declaration.

“I was not told that there is an issue with the source of my funds or the funds of the [entities also suing the IC],” he said, adding that he does not recall “being advised of any unresolved concerns or questions by Beresford” or the other defendants.

Holness said he complied with his legal obligations to provide information, though he questioned the request for an additional expenditure statement in May 2024, months before the probe’s completion.

“The defendants knew that the request for income and expenditure pursuant to Section 47 of the ICA was a ploy to continue the illegal and unfair investigation and knew that if they communicated to the public that I refused to submit information, the public’s sentiment would be stirred up against me.”

He said it is “false and/or misleading” to suggest he refused to submit the information as it ignores his right to legal representation, and “there was no response to the legal objection” from his lawyers.

Holness also said he was not given certain figures, including an amount determined to be disproportionate to his income, to trigger the provision of an explanation.

He stated that he was also unaware of concerns about a specific sum of $1.93 million before the investigation report was published last September.

Director of Investigations Kevon Stephenson has argued that the $1.9 million figure cited in the probe was not a definitive sum requiring explanation under the Corruption Prevention Act. Instead, he said, it was a “ prima facie unexplained growth for 2022”, and that “without the missing information, that was not enough to conclude that Holness’ assets were disproportionate to his lawful earnings”.

Holness has pushed back against that explanation, saying he was unaware of that sum until the report was published. He added that he believed an interview with investigators was to explain the alleged disparity, not to “facilitate the mathematical calculation of the sum that required explanation.”

In an April affidavit responding to Beresford, Holness denied any irregularities with his First Global Bank accounts.

The October judicial review hearing triggered by Holness’ lawsuit is now in doubt as the judge last week, on request by Holness’ team, halted the proceedings until an appeal is heard on the disclosure and strike-out rulings.

Justice Althea Jarrett granted Holness and his co-claimants permission to appeal after Holness’ legal team raised several issues concerning the scope of disclosure in judicial review matters. The court acknowledged that guidance from the appellate court would assist in clarifying the proper course in disclosure applications, the parties have said.

editorial@gleanerjm.com