At the post-Cabinet news conference last Thursday, my colleague, Andrea Perez-Sobers, asked T&T Prime Minister Dr Keith Rowley the following question:
“Do you agree that the leadership of the CDB (Caribbean Development Bank) is an internal matter to the institution that the regional heads of government should not be involved in?”
Dr Rowley’s response to the question was: “No I don’t agree with that at all. The CDB, as a regional institution, falls to be looked at by the regional leaders.
“As a matter of fact, when I was in Guyana at the last Heads of Government meeting, a significant part of our discussion had to do with the carryings-on at the CDB. And if there is anybody who is indicating that the regional heads have no business in being concerned or being moved by what is happening at the CDB, then they are very wrong.”
Andrea’s question was based on the BG View commentary in last week’s edition of the Business Guardian (April 18, 2024), which was headlined ‘Is CDB leadership an internal matter?’
That commentary quoted from a February 1, 2024 letter from Arnold & Porter, a multinational American law firm, which represents the management of the CDB in its industrial relations dispute with Dr Hyginus “Gene” Leon. St Lucia-born Dr Leon resigned as president of the institution with immediate effect in a legal letter dated April 21.
Arnold & Porter headlined its February 1 letter, which was addressed to the Prime Minister of St Kitts and Nevis, Dr Terrance Drew, ‘Internal actions of the Caribbean Development Bank.’
Dr Drew addressed a letter on January 22, 2024, to the current chairman of the CDB board of governors, Canada’s Minister of International Development, Ahmed Hussen, on the issue of Dr Leon’s suspension.
In his letter, Dr Drew pointed to an obvious shortfall in the CDB’s action against Dr Leon, which was that the role of the Oversight and Assurance Committee (OAC) of the CDB’s board of directors was limited to making recommendations to the board of directors.
Arnold & Porter responded to Dr Drew’s letter, on behalf of Mr Hussen, the current chair of the CDB board of governors, stating in the last paragraph of its letter: “This is an internal Bank matter and is not within the jurisdiction of the OECS Commission. Therefore, to maintain the integrity and confidentiality of the investigation, we recommend you cease from commenting on this matter publicly and from contacting the board of governors regarding the investigation.”
Imagine an American law firm, which is being paid by the Caribbean Development Bank, telling a Caribbean prime minister that the suspension of a noted Caribbean economist is “an internal Bank matter,” and “not within the jurisdiction” of Caribbean leaders.
Imagine also an American law firm recommending to the Caribbean prime minister that he “cease from commenting on this matter publicly and from contacting the board of governors regarding the investigation.”
On the issue of American law firms retained by the management of the CDB, it is interesting to note that Dr Leon’s three-page letter of resignation dated April 21, contains a footnote that reveals an exchange of correspondence between Davis Polk and the St Lucian law firm representing the former president of the Bank.
That exchange comprises a letter from David Polk dated March 8, 2024, a response from Dr Leon’s law firm on dated March 19, a letter from Davis Polk to Dr Leon’s law firm dated March 21, 2024, and a response dated March 22.
Davis Polk is noteworthy for two reasons:
1) It is the American law firm that was retained by the Inter-American Development Bank’s (IDB) board of governors in April 2022 to lead the independent investigation into allegations made by a whistleblower against the bank’s president, Mauricio Claver-Carone. Those allegations include that he conducted an intimate relationship with a subordinate and that he increased the subordinate’s salary on several occasions;
2) Mr Claver-Carone continued to serve as the IDB president, during the investigation by Davis Polk, until he was dismissed by the IDB’s board of governors in the last week of September 2022.
That last point is important because Dr Leon was sent on “administrative leave” on January 15, 2024, at the start of the investigation into his conduct, while Mr Claver-Carone stayed in office during his investigation.
What explains the difference in treatment?
Dr Leon’s resignation letter also discloses that his law firm wrote to the CDB’s board of governors on February 11, 2024 (that letter was described as reissued); on April 1 and April 15.
The letter of resignation also stated:
“In all of these circumstances and despite our client’s continued efforts spotlighting these breaches of governance and encouraging the Bank to treat him fairly, the Bank continues to break its own rules, regulations and policies, which were enshrined to ensure ‘honesty, integrity, transparency and mutual respect’ in its duty to its employees and their protection, culminating in the humiliating manner of his extended leave.
“In all the circumstances, our client is convinced that he will never be treated fairly. It is also evident that the Bank has lost all trust and confidence in our client by the failure of the board of governors to prevent the continued violations of its charter, policies, rules and regulations with regard to its elected president.”
It is clear that one of the reasons for Dr Leon’s resignation, perhaps the main reason, was “the failure of the board of governors to prevent the continued violations of its charter, policies, rules and regulations with regard to its elected president.”
In effect, what Dr Leon is saying, in my view, is that the board of governors of the CDB, should have stepped in, or stepped up, and asserted its role as the highest-ranking body of the CDB, one of whose main functions is the election of its president.
In asserting its role, the CDB’s board of governors should have forcefully rejected the impertinence of the February 1, 2024 letter from Arnold & Porter, that the issue of the suspension of the CDB president “is an internal Bank matter and is not within the jurisdiction” of the region’s political leaders.
The CDB’s board of governors should have forcefully rejected that letter’s recommendation to the St Kitts and Nevis Prime Minister, Dr Terrance Drew that he “cease from commenting on this matter publicly and from contacting the board of governors regarding the investigation.”
Instead, the Caricom chairman at the time, Guyanese President Irfaan Ali expressed the “immense concern” of the region’s political leadership at the CDB situation on the last day of the meeting of Heads of Government on February 28.
Speaking at the news conference following the four-day Caricom summit, President Ali told reporters that this “was a matter that was dealt with by heads.
“This is a regional institution and of course when a regional institution is going through any trauma or any situation it is of concern for the heads.
“This is of immense concern for the heads because at the end of the day, our priority is on the institution, ensuring that the institution remains strong, stable and the credible nature of the institution is kept intact.”
Given the argument that the role of the CDB board of governors on the issue of the suspension of Dr Leon was usurped, was Dr Ali’s response on February 28 adequate?
Was Dr Rowley’s response to the question at the news conference, one week ago, adequate?
Was it enough for Dr Rowley to affirm that Caricom leaders are “concerned” or “moved” by the “carryings-on” at the CDB and to disagree that the leadership of the CDB is an internal issue?