February 21, 2009 / 5:38 AM / 11 years ago

Stanford's charges could derail $1 billion Caribbean project

CRABS PENINSULA, Antigua (Reuters) - The tranquil, reef-fringed isle off Antigua’s north coast sustains mangroves, deer and a rare duck species — along with ambitions for one of the Caribbean’s biggest development projects.

But the U.S. investigation into Texas billionaire Allen Stanford and his Antiguan-based bank could deal a fatal blow to the estimated $1 billion (697 million pound) plan that has dangled near death several times since surfacing in 1998.

Stanford, a 58-year-old financier and sports tycoon with a knighthood bestowed by the tiny Caribbean nation of Antigua and Barbuda, faces fraud charges centred around $8 billion managed by his Antiguan affiliate, Stanford International Bank Ltd.

The probe casts into uncertainty his investments and projects stretching from Texas to Latin America and the Caribbean, including a long-sought bid to turn ecologically sensitive Guiana Island into a playground for the ultra-rich.

Guiana is Antigua’s largest offshore island and one of the most pristine and ecologically important tracts of land in a country already bestowed with some of the world’s finest beaches. At 8 sq km (5 sq miles), it’s almost two percent of the nation.

“Stanford had a number of projects that he’s been trying to get through the regulatory process, and that was clearly the biggest,” Winston Derrick, publisher of the island’s Daily Observer newspaper, said in an interview. “He has been trying to get a commitment out of the government to do this project.”

Home to the endangered West Indian Whistling duck, the island of cactus, thorn bush, mangrove and rocks has a colourful, if chequered, history.

Until 1997, its only inhabitants were a Welsh couple — Taffy and Bonnie Bufton, who lived off rainwater filtered through rocks, a flock of sheep and fallow deer for about 30 years, rebuffing the government’s offer of $500,000 to sell the land.

The isolation ended when Taffy Bufton shot and wounded the brother of then-Prime Minister Lester Bird in a land dispute in December 1997. They were promptly removed by the government, clearing the way for development.

Bird sold the land a year later to Malaysian entrepreneur Tan Kay Hock for about $5 million to build an ambitious “Asian Village” of luxury Asian-style hotels, a casino, marinas, a golf course, a shopping centre and a conference facility.

But the 1998 Asian financial crisis intervened. Tan only produced about $1 million and failed to develop the land, Antiguan officials say.


Bird turned to his close ally, Antigua’s most famous Texan, who agreed to transform the island into a luxury resort region studded with multimillion dollar homes, a mega-yacht marina, an 18-hole golf course and exclusive restaurants.

But he didn’t get far. Bird’s Antigua Labour Party lost power in 2004 and the United Progressive Party (UPP) swept elections with a manifesto that included opposition to the Guiana Island Development Project.

Within a year, the UPP shifted gears, giving a green light to Stanford to buy the land for around $20 million, saying the economic benefits — including nearly 2,000 jobs over the first three years — justified the switch. The agreement, involving transferring the deed from Tan, didn’t last long.

The brash American soon ran afoul of Prime Minister Baldwin Spencer in a series of missteps in 2006 and 2007 that began with a visit to the leader’s hometown and chief political constituency, Gray’s Farm — a poor, crime-infested area.

Joined by an opposition politician, Stanford held a news conference expressing shock at the area’s poverty and proposed using his own money to spruce it up.

Antigua’s prime minister accused Stanford of meddling in Antiguan politics, blasting the American as “haughty, arrogant and obnoxious.” The green light to develop Guiana Island, he said, had turned red.

A later apology from Stanford failed to mend fences.

After 20 years in Antigua where he acquired citizenship, Stanford appeared to have lost the ear of the government and moved his primary home to St. Croix in the U.S. Virgin Islands, and put in place plans for a regional headquarters there.

Before the U.S. charges, most believed Stanford was biding time ahead of general elections scheduled for March 12. A win by Stanford’s old political allies, the Labour Party, was widely expected to revive his plans for Guiana Island.

That was before Tuesday when the U.S. Securities and Exchange Commission charged Stanford, two colleagues and three of his companies with “massive, ongoing fraud.” Some Antiguans now question whether the project go forward without Stanford’s financial and political muscle.

“Absolutely not,” said Eli Fuller, who runs eco-tourism company Adventure Antigua and has led opposition to the project for years. “Before the charges, the project was on hold pending the outcome of the election in March. But given what’s happened, that’s all changing.”

email: jason.szep@thomsonreuters.com

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