Former ministers distributed bus and taxi permits like candy

POSTED: 10/6/14 12:18 PM

St. Maarten – Moratoriums on economic licenses “appear to be lifted by ministers in a subjective manner” the PricewaterhouseCoopers integrity report observes. Minister of Tourism and Economic Affairs Ted Richardson has, in the past half year, lifted moratoriums on bars and restaurants, car rentals and casinos. It also appears that former Ministers Franklin Meyers and Romeo Pantophlet issued between them 161 taxi licenses and 52 bus permits to specific individuals at the end of their term in government in 2012 and 2013 respectively.

In February, the moratorium for bars and restaurants was lifted because “the government wants to stimulate entrepreneurship and the economic growth of St. Maarten,” the PWC-consultants write in their report.

In June, the ideas for amendments to the casino policy came to life in email correspondence between members of Minister Richardson’s cabinet. It states amongst others, “The cabinet of our minister would like to adjust / amend the casino policy, in the way it would be possible to establish a casino in a restricted area (for instance at the airport after the clearance area), where only travelers enter the casino and not the people that are not traveling. Could you please draft an amended policy that we can discuss tomorrow with our minister?”

The PWC-consultants concluded from the correspondence that it appears “that policy amendments may be “instructed” rather than consulting the policy department for their opinion.” This shows, according to the report, “the high level of influence the minister holds and the ease with which existing policy may be adjusted to fit a minister’s preference.”

The PWC-researchers found no justification for the plan to grant more casino licenses. On the contrary, one senior official indicated that allowing casinos at the airport and the harbor “would likely increase competition for existing casinos.” An official at the ministry of finance told the researchers: “All casinos have losses.”

The researchers received a variety of answers to their questions about the amount of money the casinos own the government. “The total amount remains unclear, but one senior ministry of finance official mentioned that the casinos owe close to 20 million guilders in fees and taxes to the government.”

Two years ago a minister lifted the moratorium for two more watersports business licenses. In 2012, Romeo Pantophlet was minister of Tourism and Economic Affairs. The PWC-report notes that the policy department gave a negative advice but the minister granted the licenses as gifts “to an individual who helped campaign for the minister.”

An official also reported to the PWC-researchers that the individual that received the license “also received a copy of the advice from the minister, and was notified they would receive the license before the department heads were notified that the minister had decided to grant the license.”

When a moratorium is lifted this needs to be made public, but that seldom happens. One civil servant told the researchers “that the minister usually already has instructed who the additional licenses go to.”

One such case deals with a minister (presumably former Justice Minister Roland Duncan) who lifted a moratorium to request two additional licenses to operate brothels. The minister instructed the department whom the licenses should go to. “One reportedly went to a close relative,” the report states. “Multiple sources, including government officials and brothel owners confirmed that the minister granted a license for a brothel to a close relative when the moratorium was lifted. The other license that was granted went to a company that is allegedly affiliated with a former minister, according to a ministry of justice official and open source media reports.”

Another mess is the granting of public transportation licenses. Several sources told the PWC-researchers that these licenses are granted “based on the minister’s instruction and not through a normal queue of applicants.” The researchers found no publicly available criteria for this process.

One civil servant at the Ministry of Tourism, Economic Affairs, Transport and Telecommunication said that applicants may not be granted a license “either because there is a moratorium of because they are not on the minister’s instruction list.”

Another civil servant said that there are more than 400 active public transportation licenses, and more than 500 pending requests.

The PWC-report confirms that successive ministers of Tourism, Economic Affairs, Transport and Telecommunication have abused their discretion in the license field. The PWC-researchers obtained documents showing that between May 2012 and May 2013 ministers issued at least four memos to the secretaries-general asking for 161 taxi permits and 52 bus permits to be processed for specific individuals.

A footnote in the report states that the memos were issued between May 8, 2012 and May 21, 2013. The date of May 8 falls shortly after the infamous calypso coup that brought down the first Wescot-Williams cabinet. The outgoing minister with authority over bus and taxi licenses at that time was Franklin Meyers. In May 2013, the second Wescot-Williams cabinet fell and this time the memo must have come from Minister Romeo Pantophlet, who sent the following text to his department: “Herewith, you are kindly informed to proceed with the processing of the attached ‘revised’ list of taxi and bus permit requests.”

While the PWC-researchers asked for all memos and instructions issued by ministers related to public transportation licenses since 10-10-10, they only received the four memos dated between May 2012 and May 2013.

The researchers found that between May 2012 and May 2013, 142 taxi licenses and 53 bus licenses were granted. Here is another finding: approximately 87 percent of taxi licenses and 68 percent of bus licenses were awarded to names contained within the four memos the researchers obtained.

No wonder civil servants told the researchers that these licenses are distributed like candy when a minister’s term comes to an end, even though the ceiling for the maximum number of cab and bus drivers that could make a reasonable income this way has been reached a long time ago.

The PWC-researchers recommend the creation of a national decree that outlines a minister’s authority for lifting a moratorium and that stipulates that licenses must be granted according to a queue. The researchers furthermore recommend publishing a roster of bus and taxi license holders and holders of other economic licenses.

 

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