Italians Say Former Administration "Responsible for Serious Negligence"

The Observer, December 22, 1996

glowing news item on ZIZ Radio and Television on 5 August 1985 described the arrival of a hydrofoil which was "as advanced and as well-equipped as any currently afloat," and was to be "the flagship of an eventual fleet of five such hydrofoils which will introduce a luxurious inter-island ferry service to the Caribbean."

Eleven years later, the Italian Government has requested that sworn testimony be taken from former Prime Minister Dr. Kennedy Simmonds and former Attorney General Tapley Seaton in what their legal papers describe as "a hearing related to a penal proceeding concerning only Italian citizens and that Mr. Simmons [sic] and Mr. Seaton are regarded only as witnesses." Simmonds wondered why "if the Italian people wanted help, they didn't just ask for it," pointing out that there was no request for information made before his subpoena arrived on 11 October.

Back in 1984

The story begins on December 15, 1984, when Nautical Trading (St. Kitts) Ltd. was established in the offices of attorney Terrence Byron. The first nominal directors were Hyacinth Byron and Vincent Byron, staff in the office. The initiators of the project and principals included British businessmen Roger Morgan and Stanley Gunter. This company planned to buy hydrofoils from Italy and to operate them between the islands of the Eastern Caribbean. Terry Byron said that he soon washed his hands of the affair "because I didn't like the way they were doing business." The other two Byrons formally resigned as directors on January 4, 1986.

On March 4, 1985, a contract for the purchase of three hydrofoils was signed between Nautical Trading and Aliscafi Snav, a shipyard in Messina, Italy. A follow-up agreement dates from January 20, 1986. The financing was arranged by Morgan Grenfall & Co. Ltd. of London, through a consortium of banks in the UK. SACE, the export promotion arm of the Italian government, agreed to guarantee the loan, but insisted that the Government of St. Kitts and Nevis guarantee it as well. The cost of the deal was 40 billion Italian Lira, or over US$25 million.

"We would not have signed [the guarantee] without the guarantee from SACE," Dr. Simmonds explained, "the willingness of the British banks to lend money also gave us confidence." The government saw the signing of the guarantee as " a formality." Simmonds recalled that "we were trying to jumpstart a tourist industry" at the time and this sounded like a reasonable project. The same businessmen also proposed to build a hotel in Frigate Bay.

According to the legal documents filed by the Italian authorities, "the three craft operated for about two months between St. Kitts and Nevis and St. Kitts and St. Maarten." Then, "on the pretext of failure the crafts were taken to Puerto Rico where they disappeared," also in 1986. Simmonds recalls only two hydrofoils arriving here and remembers being told that they were taken to St. Maarten because of a hurricane warning. He asserts that Minister of Tourism Michael Powell, who was the driving force behind the project within government, contacted the men involved and was told that the hydrofoils would be based elsewhere until the hotel was built here. He recounts that they contacted Morgan Grenfall, and eventually Tapley Seaton went to Italy and England to discuss the matter.

Stinging Condemnations From Italy

The documents from Italy paint a different picture from that related by Dr. Simmonds. A 13 November 1995 document asserts that Simmonds was not forthcoming in earlier inquiries by the Italian government. A more detailed report from November 1992 took a harsher tone: "Nobody bothered about this affair either the so-called government of the island State who signed a guarantee of the nation..." Taking an extremely condescending tone, Vice Inspector-General Egone Ratzenberger wrote, "St. Kitts and Nevis is in short a small town council that lives on sugar cane and a less important tourist traffic."

It continued, "The Government of St. Kitts and Nevis is certainly responsible of serious negligence and disconcerting irresponsibility towards our country... The Prime Minister and his friends fundamentally supported the theft of about $40 million towards our country." The report referred to a conversation in which Simmonds "seemed to be embarrassed but not too much" and made "apologies to hope that our government would `give a pardon' for this debt."

A notice from SACE, dated June 28, 1988, refers to Seaton's visit to Italy in June 1987. It stated that he "pointed out that the authorities of St. Kitts agree with the observance of the previous obligations" and referred to "disagreements between the shareholders of Nautical Trading" which led to the planes not being used. Seaton responded to our request for an interview by saying, "I would prefer to await the resolutions of the court before speaking about it."

Simmonds denies any wrongdoing on the part of his government, insisting that they did what they could, but that the Italians "needed to do the primary investigating and we would help." He noted that "the matter has come up at different times over the years, then we would hear nothing." Simmonds also pointed out that debt forgiveness is common for developing nations, and that St. Kitts received no benefit from the planes, though he agreed that "technically you can say we have some financial responsibility." Simmonds maintains that rather than "concentrating on tracking down Nautical Trading, we worked to create other tourist development.

Legal Proceedings

The Federal Government received a letter from the "Judicial Authorities of the Court of Rome" via the Italian Embassy in the Dominican Republic on January 17, 1996. The letter requested assistance in getting testimony from Simmonds and Seaton in regard to a criminal proceeding related to the three hydrofoils. A supplementary request was received on March 27.

Attorney General Delano Bart filed an application ex parte (without notice) and obtained an order from High Court Justice Redhead on June 25 for Simmonds and Seaton to testify. Senior Magistrate Dr. Haynes Blackman was appointed as the Examiner in the case, to take their testimony. Although that order was to be filed within 15 days, that didn't happen until 1 October. Fitzroy Bryant has been represented the government with the assistance of Dahlia Claxton-Morris. On 11 October, summonses were issued to Dr. Simmonds and Tapley Seaton ordering them to appear to testify on November 5. On October 30, the two men received letters from the legal department saying that the Italian prosecutors couldn't come on November 5.

Applications to set aside the order were filed by Terry Byron on behalf of Dr. Simmonds, and by Anthony Gonsalves representing Tapley Seaton on November 13. Karl Hudson-Phillips, QC, Trinidad is their senior council. The applications cite a number of technical grounds on which the original order should be overturned. The hearings before the High Court have begun, but are currently adjourned without a date for continuance.