As the controversy rages over the call by Leader of the Opposition, Lennox Linton, for the proper accounting of funds generated by Dominica’s Citizenship by Investment (CBI) Programme, the emergence of an additional access option is adding fuel to the fire.
During his budget response in parliament on July 30, Linton pointed out that the 226 million dollars in revenue from the CBI Programme for the 2018-2019 financial year which was reported in the 2019-2020 budget, fell far short of the 1.291 billion dollars, which, by his calculation, should have been earned – a difference of 1.065 billion dollars.
“How did we end up with only $226.0 million, over one billion dollars less?” the Opposition Leader asked.
Linton was immediately hit by a barrage of criticism from Dominica Labour Party (DLP) operatives, government ministers, Prime Minister Skerrit himself and even private developer of CBI-funded Jungle Bay Resort, Sam Raphael, who all contended that the premise of US$50,000.00 per passport on which the Leader of the Opposition based his calculation, was grossly inaccurate. The calculations from some of his critics put the cost per application, as low as US$8,750 because of the family package deals offered under the real estate option.
Linton’s response was that this argument gives the impression that everyone who applied for Dominican citizenship in 2018-2019, did so under the real estate option through a family package deal and that no single persons purchased US$100,000 passports under the Economic Diversification Fund (EDF) option during that period.
To qualify for citizenship under the EDF option of the Dominica Citizenship by Investment programme, the required contribution amounts range from USD 100,000 to USD 200,000, depending on the number of dependants included in the application. To qualify for citizenship under the real estate option, an applicant must purchase authorized real estate to the minimum value of USD 200,000. Under this option, other applicable fees range from USD 25,000 for the main applicant, to a maximum of USD 70,000, depending on the number of dependants.
In a radio interview on Thursday August 8, 2019, Prime minister Skerrit brought an unexpected perspective to the debate when he revealed that most of the CBI funds during the period in question, were obtained under another component of the CBI programme called the housing option which he said, operates “somewhat like the Fund [EDF] option.” This option was introduced in 2016 following the devastation caused in Petite Savanne, by Tropical Storm Erika the year before.
“In respect to the housing, there was a special dispensation. So, it is not under the real estate. It is treated somewhat like the Fund option. So, the fees applicable to the housing are the fees applicable if you were to invest in the government’s direct monetary option,” the prime minister explained. “We do not have the human resources required to implement that project so we were introduced to this developer [Montreal Management Consultants]… and we felt as a government, that this would be in the interest of the country.”
He went on to say that the housing programme is now Dominica’s premier CBI option and indicated that it is more popular than the EDF (direct cash) option..
“If we did not have the housing programme and if we only had the range and the Mariott [projects under the real estate option], you would see a dramatic number in terms of revenue for the government because now, the housing programme is doing better than the Fund [EDF] option,” the prime minister explained. “If we did not have this project and we had this agent [Montreal Management Consultants] selling for Dominica, all this money would have been part of revenue in the Consolidated Fund but what you have where the real estate and the housing is concerned, these monies go into the development. Therefore, it cannot be part of revenue”
Skerrit further explained that without the specially-dispensed housing programme, all of the CBI revenue would go to the State and would therefore, form part of the estimates on the Public Sector Investment Programme.
“And you do not see provisions made for any of the housing. Had we included this in the estimates, the budget would not be $1 billion dollars; it would be about 2 billion dollars, 2.2 billion dollars.” the prime minister revealed.
Linton was quick to point out that this budget amount which Skerrit mentioned, corresponds with his own assertion that over a billion dollars of CBI revenue have not been accounted for.
“The prime minister has admitted that he…made a decision that kept out of the public revenue, over one billion dollars of monies that came in from the Citizenship by Investment Programme through the housing option that he has created,” Linton points out.” We have no accounting for this money. We do not know what amount of that money was spent on housing and how much of it remains, if any at all.”
He said Dominicans need to have that accounting and added that the fact that the prime minister has kept that money outside of the Treasury and the Consolidated Fund, has to be a cause of concern for the people of Dominica “because it appears that it is the prime minister and the developer that he chose for those housing projects, that are spending that money.”
Linton says he does not believe that the housing option funds are put into an escrow account as indicated by Prime Minister Skerrit, and maintains that escrow accounts are only applicable for the real estate option where applicants are required to invest in real estate projects such as hotels.
“So, I’m saying that if you’re building houses for the state with money coming from the sale of Dominican citizenship which is public money, there is no rhyme or reason why that money should not be in the Consolidated Fund and is spent from the Consolidated Fund on what we commonly refer to as the Public Sector Investment Project [Programme],” he declared.
“Why are these homes being built in Bellevue and elsewhere by Anthony Haiden of Montreal Management Company outside the Public Sector Investment Programme? Why?” Linton asked, adding, “The only reason for that is because it is a clever way of keeping public funds under the private control of Mr. Skerrit. That is corruption 101 and we have to deal with it.”
It is unclear what proportion of the CBI funds generated under the Dominica CBI housing option, goes to the developer (MMCE) and what proportion to the state.
MMCE’s CEO Anthony Haiden has told the Investment Migration Insider that he is contractually unable to disclose the particulars, but that he can confirm that the distributions exceed MMCE’s cost of construction.