St Lucia Opposition Leader Threatens Legal Action Over St Lucia’s CIP

Opposition Leader Allen Chastanet delivered a speech on Sunday evening, primarily focused on the state of St Lucia’s Citizenship by Investment Program (CIP), threatening to take matters to court.

In an open letter to Prime Minister Philip J. Pierre, Chastanet demanded the Prime Minister “take action” and that, otherwise, the UWP would “be left with no other option but to take this matter to the courts and to solicit the support of civil society and the public to prevent further threats to the integrity of our CIP program and our country as a whole.”

The former Prime Minister’s statement comes two weeks after Phillipe Martinez revealed MSR Media would be upgrading Hilaire from co-conspirator to defendant in its RICO lawsuit.

Chastanet urged the Prime Minister to remove Minister of Investment Ernest Hilaire from the cabinet while an investigation is ongoing, to terminate the Citizenship by Investment Unit’s CEO Mc Claude Emmanuel, to replace implicated CIP board members, and to suspend or amend the infrastructure investment option.

Hilaire and Emmanuel have publicly denied the allegations MSR Media brought against them.

Chastanet also demanded that Galaxy suspend all further applications pending an independent audit. Galaxy have also issued a statement distancing itself from Martinez and denying any wrongdoing.

The Opposition Leader expressed concerns about the CIP’s infrastructure option, which he claims “has no enabling legislation to determine how it operates or how it will be regulated.”

He alleged the government launched this option in secret, giving Galaxy sole permission to sell it, and that Hilaire failed to properly explain the program’s operations in a recent address.

Chastanet highlighted claims from MSR Media about a proposed US$50 million prison project in St Kitts involving Galaxy that Galaxy did not complete despite, as he claims, selling US$1 billion worth of shares.

“Prime Minister, you need to consider the possibility whether the so-called infrastructure option may have been deliberately designed to emulate the St Kitts prison fiasco,” he said.

The former Prime Minister also addressed the issue of an escrow account set up in Hong Kong during his administration claiming the CIU, at the time, had complete access to the financial records of the account.

Chastanet’s administration had approved Galaxy as a developer and created the regulations that allowed the developer to establish an escrow account abroad. While Hilaire claimed this created a “Wild West,” Chastanet countered that Hilaire’s statements confirm the government’s ability to monitor the account and that all money collected by Galaxy was accounted for when the new government took over.

However, Chastanet raised questions about a Galaxy hotel development funded by CIP monies. He said the original agreement under his government was US$300,000 per file, but the current administration reduced it to US$200,000.

“Grave legal implications”

Chastanet claimed the government has allocated up to 7,000 files to Galaxy. He demanded to know why the government is allegedly allowing Galaxy to potentially collect “US$1.4 billion for a hotel estimated to cost only US$400 million.”

“These questions need to be answered honestly and immediately,” he said. “If this fiasco is not handled seriously and urgently, it will have grave legal implications that can jeopardize our visa-free arrangements, our correspondent bank agreements, our country’s reputation, and raises worrying concerns about the management of state funds.”

Chastanet warned that St Lucia’s international partners are closely monitoring the situation.

He pointed to recent arrests of Chinese CIP citizens from other Caribbean nations and the UK’s termination of visa-free access for Dominicans as signs of the potential consequences of mismanagement.

In a June 17 statement, Prime Minister Pierre distanced St Lucia from the lawsuit. He said the government is ensuring thorough due diligence in the CIP and that the program benefits the people. He declined to comment further because “the issues that surround St Lucia’s CIP are speculation and accusations” and that “the emphasis has been on St Kitts.”

Pierre reaffirmed he would not comment on the matter further and that the government’s plan to deal with MSR Media’s RICO lawsuit is to “wait for it […] let the chips fall where they have to fall.”