By David Blair,
Chief Foreign Correspondent, The Telegraph
A leading candidate to become the Commonwealth’s secretary general was named by an investigator for receiving almost $1.4 million (£930,000) from an alleged fraud against Antigua’s government, The Telegraph can disclose.
Sir Ronald Sanders, now the Ambassador of Antigua and Barbuda to Washington, apparently received monthly payments of £10,000 while serving as High Commissioner in London, according to a report ordered by his country’s government but never subsequently published.
Sir Ronald’s lawyers said their client had “conducted himself with due propriety” in “all his financial dealings”.
David Cameron and other Commonwealth leaders will choose the club’s next secretary general during a summit in Malta on Friday. Sir Ronald has been nominated by Antigua with the declared support of five other Caribbean countries. His main opponent is Baroness Scotland, a former Labour Attorney General.
Sir Ronald served as High Commissioner to Britain from 1982 until 1987 and then again from 1996 until 2004. Soon after he returned to London, the Queen made him a Companion of the Order of St Michael and St George (CMG). She proceeded to award him a knighthood in June 2002.
Two years later, Antigua’s then government commissioned an investigation by Robert Lindquist, a Canadian forensic accountant, after a routine audit suggested the state was overpaying a loan.
Having received the Lindquist report in 2009, Justin Simon, then Attorney General, denounced a “gigantic conspiracy engineered and effected by persons in high places to rob this country of millions of dollars”.
The Lindquist report named Sir Ronald as a “person of interest” in this alleged fraud which cost Antigua $14 million (£9.3 million) between 1997 and 2006.
During this period, the government made monthly payments of $403,334 to service a $30 million loan from IHI Heavy Industries Ltd, a Japanese company. In fact, the debt only required repayments of $199,740.
Mr Lindquist found that the monthly surplus of $203,594 – amounting to 40 per cent of Antigua’s total revenue from petrol sales tax – was shared between various beneficiaries, apparently including Sir Ronald.
The architect of the alleged fraud was the late Bruce Rappaport, a Swiss banker who previously served as Antigua’s Ambassador to Israel and Russia. Antigua’s government gave him legal power to negotiate all repayment terms with IHI.
Sir Ronald had previously worked for Rappaport, serving as chairman of the Antiguan branch of the Swiss American Bank, then owned by Rappaport.
A fax dated 28 November 1997 appears to show that Rappaport opened an account with the Bank of Bermuda called the “IHI Debt Settlement Co Account”.
The document says that “funds received monthly from the Government of Antigua” amounting to $403,334 were to be used to repay IHI to the tune of $199,740.
As for the surplus, the fax states that “R Sanders” was to receive £10,000 every month.
On the same day, Rappaport wrote to the Bank of Bermuda saying: “So long as the Government is paying $403,334 monthly I agree to pay £10,000 to the above [Sir Ronald] for a period of four years (48 months) only with three months backdated.”
A handwritten addition to the letter says that £30,000 was paid to Sir Ronald on 1 December 1997.
The Lindquist report – which had access to Sir Ronald’s bank records – says that he appeared to receive monthly payments of £10,000 from accounts controlled by Rappaport until July 2003.
Including funds that were channelled through Bellwood Services – a Panamanian company owned by Sir Ronald until 1996 – the Lindquist report says that he appeared to receive a total of $1,398,492 (£933,000).
After the Lindquist report was delivered in 2009, Rappaport repaid $12 million to Antigua’s government. He died in 2010. There is no suggestion that IHI knew of any fraud.
In January 2012, Antigua’s police named Sir Ronald as a “person of interest” in an inquiry they were then conducting into the findings of the Lindquist report.
But on 29 June 2015, Antigua’s police commissioner wrote to Sir Ronald’s lawyers saying this should never have happened, adding: “I hereby confirm that the Royal Police Force of Antigua and Barbuda has no interest in interviewing Sir Ronald Sanders and that there are no current or pending investigations that involve him in any way.”
In response to The Telegraph, Sir Ronald’s lawyers said this letter “conclusively exonerates our client and, as far as he is concerned, represents the end of the matter”.
The lawyers added: “In all his financial dealings, whether involving Mr Rappaport, the Bank of Bermuda, the Government of Antigua and Barbuda or otherwise, our client has conducted himself with due propriety.”
Antigua’s current government has described the Lindquist report as “riddled with hearsay, rumour and conjecture” and the result of a “partisan witch-hunt” launched by a previous administration. Sir Ronald has never been shown the report.
In November 2013, Antigua’s director of public prosecutions declined to press charges against Sir Ronald, saying the allegations against him were “seriously defective” and “disclose no offence”.
This official was a member of the same government that commissioned the Lindquist report. Sir Ronald’s lawyers said that if this administration had “believed there were grounds either to sue or to bring charges against him, it is surely the case that it would have done so”.
Nominating him to be the Commonwealth’s secretary general, Gaston Browne, the prime minister of Antigua, described Sir Ronald, 67, as a “diplomat and a scholar, a man of vision and of practicality, a man of ideals and of ideas”.
Commonwealth leaders will choose the secretary general in a closed session on Friday. The Queen is the formal Head of the Commonwealth and the secretary general traditionally has privileged access to the sovereign.