As the United Workers Party (UWP) presents its case at its public meeting on Friday evening, more fuel has been added to the party’s “Where De Money Gone” campaign which is expected to be the main talking point at what UWP leader, Lennox Linton, has described as a national assembly.
The campaign’s mission is to get a proper accounting from Prime Minister Roosevelt Skerrit of $1.2 billion dollars of revenue generated under the Citizenship by Investment (CBI) Programme for the 2018-2019 financial year and which Opposition Leader Linton insists should have been included in the 2019-2020 national budget.
Now, with the news that Dominican diplomat at the UN, Ambassador Paolo Zampolli has gone to court in the US in an effort to secure his share of a CBI funded hotel project in Dominica, Linton and others in his party, are raising more questions about who really are the real beneficiaries of Dominica’s CBI funds. Those new questions are expected to be part of the agenda at Friday night’s “billion dollar” meeting.
The facts as we know them in the Zampolli matter:
- Paolo Zampolli, a self-admitted ambassador for Dominica at the UN and a US citizen whose primary business is real estate, has filed a petition in a New York Court to obtain discovery in an arbitration matter involving the the Dominica CBI-funded, Kempenski-branded, hotel project known as Cabrits Resort and Spa Kempinski Dominica.
- On May 7, 2015, Zampolli entered into an agreement with Mohamed Asaria and Range Developments (the developers) concerning the development of the Cabrits Resort and Spa Kempinski Dominica in which both parties agreed that Mr. Zampolli would be paid 5% of the development profit for his role in assisting with the development of that project.
- The respondents in the petition filed by Mr. Zampoli are: Kempinski Hotels, the company behind the Kempinski-brand hotels, Xavier Destribats who oversees operations for Kempinski Hotels in the Americas, Range Developments which led the development and construction of the project, Mohamed Asaria, who has led the project as the leader and founder of Range and is a signatory to the agreement with Zampolli and Kamal Shehada, the development director of Range Developments.
- Zampolli states in a sworn affidavit which forms part of the petition documents, that the project has been fully sold out and that 800 passports under the real estate option of the CBI programme, were issued at a cost of US$225,000 each “which yielded a gross total income of USD$195,000,000.”
- The agreement provides for the fee to be paid upon completion of the project and determined by the closing of accounts which, in turn, is to be determined by the company’s auditors. Range is required to account fully to Zampolli during the course of the project and when the development profit is realized.
- Zampolli maintains that the project has been completed and despite good faith attempts on his part, the respondents have refused to pay him and have provided no financial accounting information regarding the project.
- However, Zampolli claims in his affidavit that distributions from the project in the amount of USD30 million were made to Mr. Asaria and Mr. Shehada from a “Bank of Dominica” account in Geneva, Switzerland.
- In may 2019, Range commenced arbitration proceedings in London, as provided for in the agreement, seeking a declaration that Zampolli’s claim for payment of the 5% fee is premature as he is not entitled to receive any payment until the the project has been completed and the account has been closed.
- Zampolli is seeking the discovery of books, records, financial documents and accounts, and other files or materials and documents that relate to the agreement and the development and construction of the Cabrits Resort & Spa Kempinski Dominica.
- Zampolli claims that without an accurate accounting and discovery concerning the completion of the project, he will not be able to form arbitral claims for his rightful share of the profits and his repeated requests and demands for an accounting and access to the books to determine Project completion, have been rebuffed time and again.
- Zampolli believes that considering the scattered web of foreign bank accounts many of which are vehicles for evasion and fraud in jurisdictions widely known to be tax havens where funds disappear without a trace, that without prompt discovery from respondents at this time, he may likely lose any ability to recover his due share.
Linton is questioning the amount of money which Zamponi in his affidavit, claims was paid out to the two officials of Range Developments (Asarias and Shehada).
“Thirty (30) million US dollars, $81.5 million dollars EC each, a total of 163 million dollars paid from the passport proceeds from the Kempinski project to two officials of Range. That’s according to…the government’s own UN Ambassador, Paolo Zampolli who wants his share and his share…and as I understand it, what he’s looking for, is 7.5 million US dollars as what we would normally refer to here as a finder’s fee. That’s the person who brings the players together and gets the project going,” the Opposition Leader explained.
Based on the figures put forward by Zampolli in the affidavit, Linton suggests that the Range officials and Zampolli between them will receive EC$183 million dollars and points out that while the Kempinski hotel in Dominica has been built, it has put “plenty of our passport money raised by leveraging our sovereignty, in the pockets of outsiders” while a number of local hotels that were functioning well before Maria, have not been able to come back because, according to him, the government has said that it does not have money to help them.
“This arrangement from Range that has given… a few individuals from the outside all of this money, five years ago,… that was before MMCE came into the picture, with this special relationship with Skerrit, it now appears that it is the success of this Kempinski arrangement for certain individuals that resulted in the emergence of the MMCE Skerrit Haiden relationship under the newly-created housing option where rather than put the housing money for public housing into the treasury, they diverted it to some other account,” Linton noted.
Senior Counsel and spokesman for Prime Minister Skerrit, Anthony Astaphan offered this response to Linton’s assertion.
“As far as I am aware, government in no island in the OECS which has a Citizenship by Investment Programme, seeks to control the profits developers make. That was never done under the Freedom Party, the United Workers Party. What they are interested in is… the investment and construction of the project for jobs, taxation etc, etc, etc.”
Astaphan further asserts that in the Zampolli petition, neither the government, nor the attorney general nor any government minister, “ambassador, other than perhaps Zampolli – I don’t know if he is still one- are parties. No allegation is made against the government or n o one in the government. The basis of the claim seems to be a simple breach of a promise to pay a commission.”
But UWP president Isaac Baptiste has challenged Astaphan’s attempt to extricate the government from the Zampolli matter pointing out that the Kempinksi-branded hotel at the Cabrits could not have been undertaken without an agreement between the Government of Dominica and the developers.
“For that to have happened, the government of Dominica went and amended legislation – the National Parks Act – to remove lands from …the Cabrits National Park to give to the developers. To date, we do not know what price they sold it to them, if it was a gift and how many shares the government of Dominica has in that project,” Baptiste stated. “Also, for the project to have taken place, Range Developments and the developers are using our passports under the Citizen by Investment Programme under the investment or real estate option to undertake the project and the government of Dominica agreed to provide them with passports to undertake the project.”
“The question is,” the UWP official continues, “How did the government of Dominica determine the number of passports they must give to the developers to facilitate and realize the project? A good government…a government acting in the interest of the people, would have had to have plans before them and estimates of the project.”