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Friday, Jun 15, 2012 12:45 AM UTC

Jamaica party says it got $1 million from swindler

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Topics: From the Wires,

KINGSTON, Jamaica (AP) — The leadership of Jamaica’s governing party acknowledged Thursday that it received $1 million from a high-profile swindler who defrauded thousands of people across the Caribbean and the United States, but said it doesn’t believe it is obligated to refund a cent.

The People’s National Party said it spent the $1 million it received from David Smith during the 2007 campaign for national elections, but its investigators found no records of another alleged gift of $2 million.

Ruling party chairman Robert Pickersgill said party leaders don’t believe they have to pay back the money to help roughly 6,000 bilked investors recoup their losses with Smith’s Olint investment club because he had not been revealed as a crook at the time the $1 million check was received.

“From a moral standpoint, we do not feel compelled to refund the money,” said Pickersgill, who is also a Cabinet minister in Prime Minister Portia Simpson Miller’s government. “When we got the money, (Olint) was operating as a going entity.”

During the 2007 campaign, Jamaican politicians continued to take Smith’s campaign contributions even though financial regulators had barred Olint from operating in the country. A raid of Olint’s Jamaica offices in mid-2006 had prompted Smith to move his company to the Turks and Caicos Islands, but he remained a large-living and influential figure in his homeland, even sponsoring the popular Jamaica Jazz and Blues Festival in 2008.

The Turks and Caicos Islands Supreme Court said in a confiscation order in late April that Smith allegedly gave roughly $9 million combined in tainted money to both of Jamaica’s major parties and to several prominent Jamaican politicians even as he was defrauding investors of at least $220 million.

The court finding has fed demands for campaign finance reforms in Jamaica, where political parties have no obligation to declare funding sources or campaign expenditures. In Jamaica, as in many other countries across the Caribbean and Latin America, taxpayers have no clue if political contributions are being donated by criminals or by special interests seeking favors or influence.

When the news broke about the alleged Olint contributions about a month ago, Jamaica’s ruling party said it had no record of receiving any money from Smith but promised to conduct an internal probe. On Thursday, it said it conducted an “earnest” and “thorough” investigation.

The opposition Jamaica Labor Party has acknowledged that Smith was a contributor but has still not confirmed that he gave $5 million, as the Turks and Caicos court order states. The Labor Party’s former information minister, Daryl Vaz, earlier acknowledged receiving $50,000 from Smith for his campaign in Portland parish ahead of the 2007 general elections.

On Thursday evening, Labor Party General Secretary Andre Franklin said all Olint donations to party candidates “were accepted in good faith as legal and above board.” He said the party is continuing to review its financial records to determine how much was received from Smith.

Smith was an influential figure in Jamaica who built his investment group by pooling money from investors supposedly for currency trading. Instead of investing the money in trades, Smith used it pay off redemption requests from other investors and funneled money into his personal bank account.

A Florida court last year sentenced Smith to 30 years in prison after he pleaded guilty to 23 counts of wire fraud and money laundering. He was earlier sentenced to 6½ years in the Turks and Caicos Islands, where his assets were frozen.

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David McFadden on Twitter: http://twitter.com/dmcfadd

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