Creft Sings on PM Mitchell
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Michael Creft |
"I brought all the monies that I collected from these people to the Prime Minister at Mt. Royal"
Former Grenada offshore regulator, Michael Creft is sticking to his story that he handed over EC$50, 000.00 in cash to Prime Minister, Dr. Keith Mitchell to help fund his 1999 re-election after the ruling New National Party (NNP) collapsed following the sudden and dramatic resignation of Foreign Affairs Minister, Dr. Raphael Fletcher.
In brief remarks made to GRENADA TODAY, Creft admitted making the startling revelation to a U.S court hearing in Oregon that was dealing with a criminal case involving four former First International Bank of Grenada (FIBG) officials who were convicted and sentenced to jail terms.
He said that apart from Prime Minister Mitchell, he also handed over $25, 000 in cash to Tony Joseph, the then Treasurer of the ruling party.
Creft indicated that he had spoken the truth about the monetary transaction and anyone who is in doubt about his testimony should contact Prime Minister Mitchell.
"I did what I did with the full knowledge of the Prime Minister. I was asked to solicit funds from these people to help with the re-election of Dr. Mitchell and I did exactly what I was told to do", he told this newspaper.
"I brought all the monies that I collected from these people to the Prime Minister at Mt. Royal. I did not personally benefit from any of the funds that I collected for the (1999) campaign. I was merely doing a job for the Prime Minister", he said.
Creft declined to make any further statement on the issue on instructions from his attorney.
Following are excerpts from the Oregon court hearing in which Creft gave graphic details of the money collected from First Bank for NNP's re-election in 1999:
First Bank was licensed by the Grenadian government and operated out of two physical facilities in that country during its existence.
The first location was a small office on the second floor of a suburban shopping mall. As the Bank grew, it moved to the second floor of a downtown office building in St. George's, Grenada.
Offshore banking is a lucrative industry for many Caribbean countries, and Grenada had just passed legislation permitting this type of activity when this scheme began.
An offshore bank is one which does not have a retail office that accepts deposits and cashes cheques, but instead handles transactions with persons and entities from outside Grenada.
Indeed, First Bank was the first offshore bank to be licensed and begin operations in Grenada.
Michael Creft was the Grenadian government's chief regulator for offshore banks throughout the Bank's existence. He ran an entity called the Grenada International Financial Services Agency (GIFSA).
He testified in a Rule 15 deposition in Portland, Oregon, in December 2006. His testimony shows that First Bank never attempted to operate legitimately, but instead corrupted even the minimal regulation which Grenada sought to enforce.
In order to gain some assurance of the viability of offshore banks, Grenada required two things. First, banks had to meet capitalization requirements. Second, they had to obtain audits from a qualified accounting firm during each year of their existence.
First Bank never met either of these requirements. As its initial capitalization, First Bank purported to post a $20 million ruby.
Creft testified that he asked to actually see the ruby, but promises to produce it were never kept. In addition, First Bank went to great lengths to avoid having an audit.
The answer to how First Bank continued in existence over nearly three years, despite never coming into compliance with governing regulations, is simple: money.
Creft testified that his own failure to crack down on the Bank was influenced by the flow of cash that went from First Bank to government officials, including himself.
A chronology of those payments, contrasted to government regulatory efforts, is illuminating:
¥ By late 1998, Creft was "suspicious" of the Bank because it was not producing audits. When Creft asked for an explanation of the Bank's finances, he received a November 27, 1998, letter from Brink which claimed billion dollar earnings that Creft described as "unrealistic."
Almost immediately, however, Crefi began soliciting money from the Bank for, according to him, the Prime Minister's re-election.
¥ He received an initial payment of $100,000 (Eastern Caribbean currency). The payment was facilitated by defendant (Rita) Regale. Creft distributed this money as follows:
¥ He delivered $25,000 in cash to Tony Joseph, who was the Treasurer of (the New National Party) and a member of the Board of GIFSA.
¥ He delivered $50,000 in cash to Prime Minster Dr. Keith Mitchell.
¥ He claims to have used the remainder for paying campaign and political party expenses.
¥ All these transactions took place in cash, and no records were either created or maintained of the transactions.
¥ During the same period of time, Creft reported receiving:
¥ $15,000 from David Springer, defendant (Larry) Barnabe's partner.
¥ $10,000 from David Rowe, owner of a sub-bank.
¥ $10,000 directly from defendant Barnabe.
¥ Following the election, Creft received an additional $10,000 from Brink, delivered to him by (David) Springer.
¥ Immediately after the election, on February 10, 1999, Creft wrote a letter responding to an inquiry from the FBI (Federal Bureau of Investigation) in which he stated that the bank was in good standing and in compliance with the law.
During his deposition, he admitted the letter was not true, and that he had been "influenced" to write it by the receipt of the money discussed above.
¥ On February 12, 1999, Creft wrote a letter to a journalist who was investigating the Bank, stating that the Bank was operating "wholly within the law."
He admitted that his letter was not true. Two days later, Brink added $500 to a certificate of deposit Creft opened at the Bank.
¥ On February 23, 1999, Creft submitted an affidavit in United States District Court in connection with a libel suit filed by First Bank against the journalist.
Creft admitted the affidavit was false in that it stated that there had been no complaints and that the money he received from Barnabe and others influences him to sign the false affidavit.
¥ On March 12, 1999, Creft wrote a letter to the Bank asking questions about its operations; on March 15, Brink responded. On March 18, the Bank agreed to loan Creft $112,000 (although ultimately the loan was not funded). No further action was taken on Creft's concerns.
¥ On July 27, 1999, six sub-banks were licensed. The persons who participated in that decisions included Tony Joseph and Rupert Agostini.
¥ On October 11, 1999, Creft wrote a letter to the Bank notifying the Bank that the accountant who had prepared its financial statement had lost his license, and directing the Bank to find a credible auditor.
On November 12, 1999, the Bank paid $2,708 (EC) to repair Creft's car. On November 24, Creft attended a meeting regarding the Bank's failure to complete audits. Still no action was taken.
In addition to these payments, the Bank also paid substantial funds to the Government of Grenada.
Each bank, including the sub-banks, paid $50,000 for its initial license and $35,000 per year in fees. In addition, FIBG paid $337,000 in fines to the government for its tardy reports.
All this money, of course, came directly from depositors who thought their money was being invested.
