At the post-Cab­i­net news con­fer­ence last Thurs­day, my col­league, An­drea Perez-Sobers, asked T&T Prime Min­is­ter Dr Kei­th Row­ley the fol­low­ing ques­tion:

“Do you agree that the lead­er­ship of the CDB (Caribbean De­vel­op­ment Bank) is an in­ter­nal mat­ter to the in­sti­tu­tion that the re­gion­al heads of gov­ern­ment should not be in­volved in?”

Dr Row­ley’s re­sponse to the ques­tion was: “No I don’t agree with that at all. The CDB, as a re­gion­al in­sti­tu­tion, falls to be looked at by the re­gion­al lead­ers.

“As a mat­ter of fact, when I was in Guyana at the last Heads of Gov­ern­ment meet­ing, a sig­nif­i­cant part of our dis­cus­sion had to do with the car­ry­ings-on at the CDB. And if there is any­body who is in­di­cat­ing that the re­gion­al heads have no busi­ness in be­ing con­cerned or be­ing moved by what is hap­pen­ing at the CDB, then they are very wrong.”

An­drea’s ques­tion was based on the BG View com­men­tary in last week’s edi­tion of the Busi­ness Guardian (April 18, 2024), which was head­lined ‘Is CDB lead­er­ship an in­ter­nal mat­ter?’

That com­men­tary quot­ed from a Feb­ru­ary 1, 2024 let­ter from Arnold & Porter, a multi­na­tion­al Amer­i­can law firm, which rep­re­sents the man­age­ment of the CDB in its in­dus­tri­al re­la­tions dis­pute with Dr Hy­gi­nus “Gene” Leon. St Lu­cia-born Dr Leon re­signed as pres­i­dent of the in­sti­tu­tion with im­me­di­ate ef­fect in a le­gal let­ter dat­ed April 21.

Arnold & Porter head­lined its Feb­ru­ary 1 let­ter, which was ad­dressed to the Prime Min­is­ter of St Kitts and Nevis, Dr Ter­rance Drew, ‘In­ter­nal ac­tions of the Caribbean De­vel­op­ment Bank.’

Dr Drew ad­dressed a let­ter on Jan­u­ary 22, 2024, to the cur­rent chair­man of the CDB board of gov­er­nors, Cana­da’s Min­is­ter of In­ter­na­tion­al De­vel­op­ment, Ahmed Hussen, on the is­sue of Dr Leon’s sus­pen­sion.

In his let­ter, Dr Drew point­ed to an ob­vi­ous short­fall in the CDB’s ac­tion against Dr Leon, which was that the role of the Over­sight and As­sur­ance Com­mit­tee (OAC) of the CDB’s board of di­rec­tors was lim­it­ed to mak­ing rec­om­men­da­tions to the board of di­rec­tors. 

Arnold & Porter re­spond­ed to Dr Drew’s let­ter, on be­half of Mr Hussen, the cur­rent chair of the CDB board of gov­er­nors, stat­ing in the last para­graph of its let­ter: “This is an in­ter­nal Bank mat­ter and is not with­in the ju­ris­dic­tion of the OECS Com­mis­sion. There­fore, to main­tain the in­tegri­ty and con­fi­den­tial­i­ty of the in­ves­ti­ga­tion, we rec­om­mend you cease from com­ment­ing on this mat­ter pub­licly and from con­tact­ing the board of gov­er­nors re­gard­ing the in­ves­ti­ga­tion.”

Imag­ine an Amer­i­can law firm, which is be­ing paid by the Caribbean De­vel­op­ment Bank, telling a Caribbean prime min­is­ter that the sus­pen­sion of a not­ed Caribbean econ­o­mist is “an in­ter­nal Bank mat­ter,” and “not with­in the ju­ris­dic­tion” of Caribbean lead­ers.

Imag­ine al­so an Amer­i­can law firm rec­om­mend­ing to the Caribbean prime min­is­ter that he “cease from com­ment­ing on this mat­ter pub­licly and from con­tact­ing the board of gov­er­nors re­gard­ing the in­ves­ti­ga­tion.”

On the is­sue of Amer­i­can law firms re­tained by the man­age­ment of the CDB, it is in­ter­est­ing to note that Dr Leon’s three-page let­ter of res­ig­na­tion dat­ed April 21, con­tains a foot­note that re­veals an ex­change of cor­re­spon­dence be­tween Davis Polk and the St Lu­cian law firm rep­re­sent­ing the for­mer pres­i­dent of the Bank.

That ex­change com­pris­es a let­ter from David Polk dat­ed March 8, 2024, a re­sponse from Dr Leon’s law firm on dat­ed March 19, a let­ter from Davis Polk to Dr Leon’s law firm dat­ed March 21, 2024, and a re­sponse dat­ed March 22.

Davis Polk is note­wor­thy for two rea­sons:

1) It is the Amer­i­can law firm that was re­tained by the In­ter-Amer­i­can De­vel­op­ment Bank’s (IDB) board of gov­er­nors in April 2022 to lead the in­de­pen­dent in­ves­ti­ga­tion in­to al­le­ga­tions made by a whistle­blow­er against the bank’s pres­i­dent, Mauri­cio Claver-Carone. Those al­le­ga­tions in­clude that he con­duct­ed an in­ti­mate re­la­tion­ship with a sub­or­di­nate and that he in­creased the sub­or­di­nate’s salary on sev­er­al oc­ca­sions;

2) Mr Claver-Carone con­tin­ued to serve as the IDB pres­i­dent, dur­ing the in­ves­ti­ga­tion by Davis Polk, un­til he was dis­missed by the IDB’s board of gov­er­nors in the last week of Sep­tem­ber 2022.

That last point is im­por­tant be­cause Dr Leon was sent on “ad­min­is­tra­tive leave” on Jan­u­ary 15, 2024, at the start of the in­ves­ti­ga­tion in­to his con­duct, while Mr Claver-Carone stayed in of­fice dur­ing his in­ves­ti­ga­tion.

What ex­plains the dif­fer­ence in treat­ment?

Dr Leon’s res­ig­na­tion let­ter al­so dis­clos­es that his law firm wrote to the CDB’s board of gov­er­nors on Feb­ru­ary 11, 2024 (that let­ter was de­scribed as reis­sued); on April 1 and April 15.

The let­ter of res­ig­na­tion al­so stat­ed:

“In all of these cir­cum­stances and de­spite our client’s con­tin­ued ef­forts spot­light­ing these breach­es of gov­er­nance and en­cour­ag­ing the Bank to treat him fair­ly, the Bank con­tin­ues to break its own rules, reg­u­la­tions and poli­cies, which were en­shrined to en­sure ‘hon­esty, in­tegri­ty, trans­paren­cy and mu­tu­al re­spect’ in its du­ty to its em­ploy­ees and their pro­tec­tion, cul­mi­nat­ing in the hu­mil­i­at­ing man­ner of his ex­tend­ed leave.

“In all the cir­cum­stances, our client is con­vinced that he will nev­er be treat­ed fair­ly. It is al­so ev­i­dent that the Bank has lost all trust and con­fi­dence in our client by the fail­ure of the board of gov­er­nors to pre­vent the con­tin­ued vi­o­la­tions of its char­ter, poli­cies, rules and reg­u­la­tions with re­gard to its elect­ed pres­i­dent.”

It is clear that one of the rea­sons for Dr Leon’s res­ig­na­tion, per­haps the main rea­son, was “the fail­ure of the board of gov­er­nors to pre­vent the con­tin­ued vi­o­la­tions of its char­ter, poli­cies, rules and reg­u­la­tions with re­gard to its elect­ed pres­i­dent.”

In ef­fect, what Dr Leon is say­ing, in my view, is that the board of gov­er­nors of the CDB, should have stepped in, or stepped up, and as­sert­ed its role as the high­est-rank­ing body of the CDB, one of whose main func­tions is the elec­tion of its pres­i­dent.

In as­sert­ing its role, the CDB’s board of gov­er­nors should have force­ful­ly re­ject­ed the im­per­ti­nence of the Feb­ru­ary 1, 2024 let­ter from Arnold & Porter, that the is­sue of the sus­pen­sion of the CDB pres­i­dent “is an in­ter­nal Bank mat­ter and is not with­in the ju­ris­dic­tion” of the re­gion’s po­lit­i­cal lead­ers.

The CDB’s board of gov­er­nors should have force­ful­ly re­ject­ed that let­ter’s rec­om­men­da­tion to the St Kitts and Nevis Prime Min­is­ter, Dr Ter­rance Drew that he “cease from com­ment­ing on this mat­ter pub­licly and from con­tact­ing the board of gov­er­nors re­gard­ing the in­ves­ti­ga­tion.”

In­stead, the Cari­com chair­man at the time, Guyanese Pres­i­dent Ir­faan Ali ex­pressed the “im­mense con­cern” of the re­gion’s po­lit­i­cal lead­er­ship at the CDB sit­u­a­tion on the last day of the meet­ing of Heads of Gov­ern­ment on Feb­ru­ary 28.

Speak­ing at the news con­fer­ence fol­low­ing the four-day Cari­com sum­mit, Pres­i­dent Ali told re­porters that this “was a mat­ter that was dealt with by heads.

“This is a re­gion­al in­sti­tu­tion and of course when a re­gion­al in­sti­tu­tion is go­ing through any trau­ma or any sit­u­a­tion it is of con­cern for the heads.

“This is of im­mense con­cern for the heads be­cause at the end of the day, our pri­or­i­ty is on the in­sti­tu­tion, en­sur­ing that the in­sti­tu­tion re­mains strong, sta­ble and the cred­i­ble na­ture of the in­sti­tu­tion is kept in­tact.”

Giv­en the ar­gu­ment that the role of the CDB board of gov­er­nors on the is­sue of the sus­pen­sion of Dr Leon was usurped, was Dr Ali’s re­sponse on Feb­ru­ary 28 ad­e­quate?

Was Dr Row­ley’s re­sponse to the ques­tion at the news con­fer­ence, one week ago, ad­e­quate?

Was it enough for Dr Row­ley to af­firm that Cari­com lead­ers are “con­cerned” or “moved” by the “car­ry­ings-on” at the CDB and to dis­agree that the lead­er­ship of the CDB is an in­ter­nal is­sue?