Political fronting: A cesspool of ministerial corruption

By Victor Poyotte

On Tuesday, June 16, 2020, I listened to the MBC news report presented by Miguel Fevrier about disgruntled employees of a privately run pre-school, First Step Pre-school, located in Coolie Town. The details of the report had a familiar ring of yet another case of seeming ministerial corruption, which I describe as ‘political fronting’: the practice of government ministers using private citizens, usually close relatives, to operate ostensibly, phony businesses (often unregistered) secretly on their behalf.

The purpose of this article is: (i) to share my experience as a victim of political fronting; (ii) to highlight the motivation of government ministers involved in the practice and the implications for the person fronting for the minister; and (iii) to make recommendations to reduce the incidence of political fronting.

The victim’s experience

During the last three years, there have been several well-publicized cases of corruption involving ministers along with their relatives and/or close associates. For example, there is the case of the Caribbean Hospitality and Tourism Training Institute (CHTTI) leasing a building from the Institute for Training, Management and Consultancy Services (INTRAMACS).

The public may recall that in that case, CHTTI leased a building from INTRAMACS to conduct hospitality training. Sometime during that period, a popular television Talk Show Host displayed signatures on a company document and alleged that CHTTI was owned by an associate of a government minister. To date, the minister in question is yet to refute the allegation made by the Talk Show Host and the case, as with many others, appears to be on the back burner for now.

In any event, political fronting may impact unsuspecting individuals or businesses that fall victim to similar forms of corrupt activities in the following manner:

• They may be deceived into believing that the Political Fronter is carrying out a legitimate business and is acting in his/her personal capacity;
• They may be deprived of much needed operational revenue when the Political Fronter fails to meet his or her financial obligations such as payment of rent and settlement of utility bills;
• They may accumulate unwanted debt as a result of the failure by the Political Fronter to act responsibly and honestly;
• They may be forced to incur additional expenses in order to obtain legal and other types of professional advice in order to seek redress to recover loss revenue; and
• They may be forced to absorb the cost associated with unpaid utility bills in order to move ahead with their business.

Benefits to the minister

By engaging in the practice of political fronting, the  minister stands to benefit in the following ways:

• He or she is able to secure a shield from the implications of uncovered shady activity which may have been intended to benefit himself or herself;
• The minister and the fronting individual usually conduct transactions between themselves in cash, thereby leaving no recorded trace;
• The Political Fronter bears all of the operational risks associated with the business including fraudulent activity;
• The minister is able to conceal taxable income from the Inland Revenue Department (IRD) and other bodies like the Integrity Commission.

Implications for the person fronting

The implications for the Political Fronter are as follows:

• The sometimes, unsuspecting persons, though happy to be employed may well be engaged in facilitating the fraudulent activity;
• The Political Fronter is usually undertaking all the operational risks of the business;
• He or she provides a shield for the minister from liability arising from any illegality or unethical issues arising from the operation of the business.

Implications for employees of First Start Pre-School

For the employees of the First Start Pre-School, there are long-lasting implications:

• If the statements made by the employees were accurate, then all employees of the First Start Pre-School would have been wrongly deprived of five percent of their wages since the commencement of their employment;
• There would be a loss of pension benefits arising from the non-payment of the employees’ contributions deducted from wages to the National Insurance Corporation (NIC) by the employer;
• Loss of pension benefits arising from the non-payment of the employer’s contribution to the NIC;
• No trade union representation if employees are not satisfied with the decision taken by the ghost employer.

Implications for the national interest

Political fronting has several implications for the national interest of Saint Lucia, including:

• Deprivation of contributions to the NIC;
• Institutionalization of an unwanted culture of political corruption;
• The exploitation of school administration personnel, who believe they are engaged in legitimate entrepreneurial development; and
• Contravention of Section 51 of the Labour Act No. 37 of 2006 for unauthorized deductions while in gainful employment.

Combating ministerial corruption

In 2000, the Commonweal Secretariat published a book entitled, “Promoting Good Governance,” in which it highlighted key principles, practices and perspectives of public sector management. One of the objectives of good governance identified by the author is “combating of corruption,” described as the abuse of public office or public trust for private gain. More specifically, the book defines corruption as the unlawful conduct of public officials (i.e. both officers and politicians) acting in the course of their employment.

In the last four years, Saint Lucia has seen a significant increase in allegations of ministerial corruption to the extent that political fronting now appears to be endemic among the current crop of government ministers. There seems to be a blatant disregard for the opinion of citizens regarding the lack of transparency in the granting of contracts and the number of direct awards issued to a single preferred contractor.

In my next article, I will focus on the United Nations Convention Against Corruption (UNCAC), and the efforts by the United Nations Convention Office for Drug and Crimes (UNODC), to reduce various types of corruption in member states.