| Funding ambiguity still haunts Cameron |
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After five months of avoidance Belize Bank’s chairman Phillip Johnson, has reluctantly handed back $10 million (US) to Belize’s Minister of Foreign Affairs and Attorney General, Wilfred “Sedi” Elrington. In what is a humiliating climb down for the bank’s owner, former Tory Party chairman Lord Michael Ashcroft, it closes yet another murky chapter of his financial dealings in this tiny Central American country. The cave in by Lord Ashcroft’s bank is being hailed as a significant victory for the Belmopan government and further complicates David Cameron’s promise to offer complete transparency in how the Conservatives are funded. For Ashcroft is still one of the biggest Tory Party funders and although his donations don't technically break any parliamentary rules, they are at best murky, carried out through a complex web of subsidiaries that can be ultimately traced back to his extensive business interests in Belize. This latest dispute does nothing to clarify Ashcroft’s reputation for financial obfuscation. At the centre of the dispute is $10 (US) million transferred from Hugo Chavez’s Venezuela to the government of Belize that ended up in the coffers of Ashcroft’s Belize Bank. The bank argues that this money is repayment of a government-guaranteed debt; however, following a change of administration in Belize earlier this year, the current government said Belize Bank had no right to keep the cash and sued for its return. The story hinges on a private hospital being development by Universal Health Services (UHS), which received early financial backing from the then government of the day and from Belize Bank. By December 2004, according to the Ministry of Finance, UHS owed Belize Bank nearly $8 (US) million and the then prime minister, Said Musa, agreed to guarantee repayment of all UHS's debt to Belize Bank, however, this guarantee was never disclosed publicly and his cabinet was never informed. As UHS’s debts continued to mount further funds were advanced amounting to more than $10 (US) million by 2007. This debt guarantee for what was a private hospital was a massive millstone for a country with only a health budget of just over $40 (US) million. Guarantees of this size should have had the approval of the National Assembly, this was never sought. As the existence of the loan became public, pressure mounted to block the government making any repayments to Belize Bank on the grounds it was an unconstitutional guarantee. While this dispute was boiling on, a $10 (US) million Venezuelan gift to the Belize government for the “construction and repair of housing”, somehow managed to find its way into a Belize Bank account on the Turks and Caicos Islands. Only when Said Musa’s government was swept from power back in February, did Venezuela begin asking the new government for an account of what happened to their gift. It transpired the money had never been spent on improving housing, but had been languishing in the vaults of Belize Bank prompting the Belizean central bank to demand its return. Only now after being dragged through the courts and even a warrant issued for the arrest of Chairman Philip Johnson has it paid up.
How much UK tax Lord Ashcroft pays remains a mystery.
October 1. |