June 16, 2009

A British governor will take over daily rule for at least two years in the restoration of a colonial-style government and the constitution of the group of Caribbean islands will be suspended after allegations were heard of systematic corruption involving current and past politicians and a widespread culture of fear.

At the heart of the row is Michael Misick, the former prime minister, who allegedly built up a multi-million-dollar fortune after being elected in 2003 through a series of loans from banks and deals with property developers for land owned by the Crown.

Gordon Wetherell, the British governor, will take executive and legislative authority from the House of Assembly and a series of police investigations will begin into allegations of skulduggery in business and nepotism.

The islands, at the southern tip of the Bahamas chain, lure some 300,000 tourists a year to the sandy beaches and coral reefs, and have long served as a tropical playground for celebrities such as Keith Richards and Bruce Willis.

But a nine-month inquiry chaired by Sir Robin Auld, a retired judge, was established in January after a Commons committee visited the island to investigate "good governance" and reported that a culture of fear existed among the islands' 30,000 residents. It heard that Mr Misick was transformed from local solicitor to international jet-setter in five years at the helm of government. Mr Misick resigned in March after Sir Robin published a highly critical interim report.

One of the star witnesses in the inquiry was Mr Misick's estranged wife, LisaRaye McCoy, an American actress. She alleged that the premier had wooed her with Rolls-Royces, private jets and champagne in a lifestyle far beyond his modest salary as a prime minister. More damagingly, the former model alleged that she earned hundreds of thousands of pounds for promotional activities for the islands' tourist board - a department that came under Mr Misick's remit.

The inquiry also heard that allegations that publicly-owned Crown land had been acquired and sold on for profit to developers.

The former premier, who has condemned the move to strip the territory of its independence, was seeking a ruling at the High Court in London that the suspension of the constitution – and with it the right to a trial by jury – violated human rights.

Mario Hoffman and Cem Kinay, two of the biggest investors in the islands, are also challenging the return to direct rule, and will learn today if an attempt to expunge allegations from the inquiry report using the courts in Grand Turk, the capital, has been successful.

A £62 million luxury resort and hotel development in Salt Cay, an undeveloped island, featured prominently at the public hearings. Work has ground to halt on the site amid the legal uncertainties of the transfer of power.

Mr Hoffman, a Slovak banker, complained that his investment in the complex has been jeopardised by the inquiry. "The commission has never asked me any questions about or sought any clarification of the evidence I have presented to them," he said.

Georgia Dunn, a local resident, made a series of objections over Mr Hoffman to the Auld inquiry. A descendant of the original planters on the island, she owns a lease on Salt Cay and does not want to make way for the new property.

The current prime minister, Galmo Williams, petitioned the governor last week for a general election in October. The governor rejected the request and made clear that the push for direct rule would not be derailed.

www.telegraph.co.uk/news/worldnews/centralamericaand

thecaribbean/turksandcaicosislands/5545270/Britain-to-ta

ke-over-Turks-and-Caicos-Islands-following-corruption-allegations.html