St. Kitts and Nevis is one of the smallest states within the Western Hemisphere as well as within the Organization of Eastern Caribbean States. The Federation boasts a strong economy but even as it claims success in this aspect, there are serious concerns that its laws do not go far enough to minimize or stamp out corruption and corrupt practices.
Attempts are now being made to remedy that situation through legislative amendments but progress is slow towards completion, especially the Tender and Procurement Legislation, which continues to be a major suggested area of corruption.
For many years, there have been murmurs over the way successive governments have been operating the Tender and Procurement Processes, and whether they have been honouring the parameters of the laws of the land.
With a population of more than 53,000, St. Kitts and Nevis has become one of the fastest growing islands in the Eastern Caribbean in terms of both population and its economy, welcoming nationals from across the Caribbean Community and internationally – as part of the ever popular Citizenship By Investment Programme (CBI/CIP). It is also one of the top cruise destination for visitors, attracting more that one million passengers in 2019 prior to the COVID-19 pandemic.
This meant that changes had to be made to the infrastructure of the islands in order to adequately accommodate the steadily growing influx, and also to modernize the country in order to attract investors and others willing to make St. Kitts and Nevis home – especially through the CBI Programme.
It is for that reason, at least, over the last seven years, the government sought to bolster roads, internet and general public infrastructures. In doing so, the administration spent in excess of EC$100 Million (US$37 million, US$1=EC$2.7) in public sector projects.
While the drive for modernization is welcome, the contracts for some of these projects and the way they were awarded have come under investigation. This is because they were suspected of not passing through the proper channels as outlined in the constitution, nor were they properly advertised to garner the necessary scrutiny and competitive proposals for the works.
Many in the public domain were concerned that only one section of the population were being awarded contracts on a regular basis according to their political affiliation, questioning the Tender and Procurement Processes and the selection of successful bids.
Under the laws of St. Christopher and Nevis, more specifically the Procurement and Contract (Administration) Act Revised 2012, all government contracts and tenders must be advertised, requesting bids from interested persons to undertake the work.
According to the Act, this is done to, among other things, “simplify, clarify, modernize and make transparent procurement by the Government and more particularly to — (a) require public competition in the procurement…(b) foster and encourage broad participation in the procurement process by persons in St. Christopher and Nevis (c) provide for increased public confidence in the Government procurement process by maintaining safeguards to ensure its integrity, fairness, accountability, transparency and good governance and (d) ensure fair and equitable treatment of all persons who participate in the procurement process.
Despite the Act clearly stating that all tenders must be advertised, concerns were raised over the last several years that a number of contracts were “deliberately” awarded without being passed through the necessary legislative process, including failure to advertise for bids.
Details unearthed show that there were indeed breaches of the process, and no one has yet been held accountable. Investigations carried out by CIJN and the reviews by the government revealed that a number of high-paying contracts were “deliberately” awarded without being passed through the tender process and were sole sourced to contractors, in breach of the national legislation.
Highlighting some of the irregularities was Garth Wilkin, Attorney General, to whom some of the breaches were referred for investigations, including those in his office. In acknowledging the breaches, Wilkin disclosed that major contracts awarded between 2015-2022 totaling more EC$20 Million (US$7.4 million) were awarded without any efforts to pass them through the tender process.
Wilkin spoke to an E-Government Contract, the project management for the construction of the Prison, the management of the construction of the new Basseterre High School, awarding of contracts for works in the Agriculture Department, and the Security Services among others that were flagged by the government when they took office in 2022.
In 2015, the then government sought to establish an E-government platform expected to link all government agencies, digitize government information and transform the Information and Communication Technology landscape in the Federation.
That contract was awarded to OPEN Interactive and it has since been the central focus of the probe by the government to highlight what the attorney generally described as corrupt practices.
The Attorney General reported that between 2015-2022, the company received EC$11.7 million (US$4.3 million) at an average of EC$150,000 (US$55,500) per month with not much end result to show for it. He further revealed that the company billed the government an increased maintenance fee over the contracted period.
The former Prime Minister and Finance Minister, who was in office at the time, has rebuffed allegations that it breached the legislation, explaining that the company was reviewed and all due diligence carried out to ensure that it was qualified to deal with the project.
During a radio interview, he explained that the then Attorney General, Vincent Byron had the company vetted and it passed all of the necessary due diligence to obtain the contract and carry out the work.
The current administration placed the OPEN Interactive contract under public scrutiny, including making public the full figure and the scope of work that was supposedly to be completed and fulfilled. That prompted Dr. Harris to blast the government and call for them to stop cherry-picking contracts and give a comprehensive overview of all the contracts that were issued during his administration.
Despite the concern for that project, it is understood that the company undertook major networking and build out of the ICT work for the government, linking all of the ministries of government.
Wilkin in his criticism noted that the legislation speaks for itself when it comes to how contracts should be awarded and government monies spent.
“Madam Speaker, this is not just words” Wilkin said in Parliament. “You created a Procurement Act so that when the government is spending money it is known openly that it is getting value for money. Because you have people who charge $5 for a service and you have some people who charge $2000 for the same service. Let us see what the market says is the value for this service, and let us decide.”
Despite his criticism of the way the contract was awarded, no evidence was provided to show that the company was involved illegally in obtaining the contract but rather it is the public servants carrying out the review who may have failed the process.
In addition, between 2016 and 2022 a security firm was paid EC$10.6 million (US$3.7 million) for services and others were unable to bid for that government project at the time. This second example indicates a trend of high-paying contracts being sole sourced.
A further review of comments made by the Attorney General and Prime Minister under the ongoing prison construction project, where the government has vested interest, a contract was awarded the sum of EC$895,000 (US$331,000) for the supervision of the project without passing through the procurement and tender process.
“A member of this house, directed his Permanent Secretary to sign a contract with Pemberton Design Studio to supervise the prison project at Estridge for the government for a fee of $895,240. No other service providers had opportunity to bid for this contract…No competitive bidding process,” Wilkin told the National Assembly.
He continued: “All of these examples, no procurement process. Within the Act itself, it is a crime to breach the Act. It is a crime to enter into the procurement process without the procurement process being completed.”
That project has been at the center of controversy for the last year after the project was started without much detail being released to the public. The prison project fell under the Alternative Invest Option of the Citizenship By Investment Programme, where 5,500 shares (passports) will be made available to the developer to sell at US$175,000 per passport.
“If we were to look at the new correctional facility, what we were to actually get from that will be hundreds of millions of US dollars multiplied by 2.6, and that will be over a period of three years, whatever it takes for the developer to sell the unit of investment,” Former CEO of the CBI Unit Les Khan said at the time to correct rumours.
Initially, the government launched the project after the country was consistently being criticised for its human rights record surrounding the existing prison which was built in 1840 to accommodate 60 prisoners and now house more than 180. Therefore, there was already an established interest in the project. The CBI passport deal was a new financial impetus.
So what is the process to determine successful bids?
Contractors bidding for work at the Federal level have questioned and complained over the way successful contractors are determined when it comes to bids submitted. Director of Public Works, George Gilbert insisted that with the Tender and Procurement Board, the process is stringent and even tedious at times from when the bids are submitted to when the contracts are awarded.
According to the Gilbert, there are three types of contracts which the government issues for work, beginning with the EC$1-EC$27,000 (US$9,900) contract which is issued at the ministry level where contractors are invited to bid and the contracts are awarded.
That is followed by the EC$27,001 – EC$400,000 (US$148,000) which goes through the same process at the Tender Board level, followed by those over EC$400,000 which are submitted sealed and are then signed off by the Tender Board.
Outlook and Investigations
The true picture of breaches cannot be found in the short term because, as both the Attorney General and Minister of Public Works, Konris Maynard confirmed, a full audit has to be undertaken into the various government departments to get a better understanding of where the breaches took place and how much money was spent.
A forensic audit will be carried out, a process that could take months to determine the full extent of the investigation.
Meanwhile, Dwyer Astaphan, Former Government Minister now Political Commentator, asserted that the issue surrounding the tender process has been one that has been raised time and time again under various administrations. The attorney-at-law noted that the process has historically been “defective” and the issues raised must be solved at some point.
He also reminds that Organization of American States reviewed the existing legislation in St. Kitts and Nevis, and found a number of loopholes. Astaphan confirmed that “Recommendations were made to amend the Act so it can be a more efficient piece of legislation”.
Stamping out corrupt practices
Generally, St. Kitts and Nevis has not come up on the radar of many international corruption monitoring organizations because enough data is not available
However, several entities had flagged the territory for not having proper Anti-Corruption Legislation and Accessing Information and Integrity In Public Life directives to give a proper assessment on corruption within the public sector.
Even though the extent of the breaches have not yet come to light, the government has moved to beef-up legislation to stamp out corruption and corrupt practices through the Office of the Attorney General.
In February, three pieces of legislation – Anti-Corruption, Integrity in Public Life, and Freedom of Information Amendments – were successfully passed in the National Assembly which the government described as the “good governance legislations”. They sought to ensure that the public can hold elected representatives and their public servants accountable.
The Anti-Corruption Legislation will, among other things, establish an office for a Special Prosecutor who will be responsible for overseeing and investigating reported acts of corruption brought to the attention of the office.
“The opaque, clandestine, corrupt style of governance of our recent past has finally come to an end,” Wilkin told the National Assembly as he opened the debate on the legislation, referencing the absence of similar legislation and suspected cases of fraud.
Accessing government information was another challenge that was highlighted by local and international organizations, including media representatives. Freedom House, a monitoring agency, noted in its report on St. Kitts and Nevis that the lack of a proper Freedom of Information Act was a challenge.
The first law was passed in 2018 but it was never operationalized and proved to be a challenge for journalists and others seeking public information.
Even though the amended legislation was passed in Parliament in February 2023, it has not yet been gazetted and operationalized. However, when it does come into effect, the law provides for any person to be able to request public records that do not fall under the privileged category of information.
The Integrity in Public Life, is more a personalized piece of legislation that ensures government officials are not profiting from ill-gotten gain or proceeds from corruption practices.
In a brief comment, AG Wilkin confirmed that the government is in the process of revamping the Tender process with updated legislation that was expected to be tabled in March 2023, but that timeline was missed and it is expected sometime in the near future.
Note: Numerous efforts were made during the research and investigation to gain updated comments from the Attorney General and the Minister of Public Works but were unsuccessful up to publication time.
This project was carried out over a three month period. It warrants a further follow up investigation into the inner workings of the Tender and Procurement Processes, along with the Special Purpose Projects that fall under the Citizenship by Investment Programme.
This is an investigation completed by Jermine Abel for Caribbean Investigative Journalism Network with the support of the International Center for Journalists (ICFJ) as part of the Investigative Journalism Initiative in the Americas.