Part 2

West Indies Oil Company (WIOC): The Genesis of Economic Plunder

By Kwame Nkosi Romeo

In Part 1, I discussed the alliance of the West Indies Oil Company (WIOC) and the Antigua Labour Party (ALP) government. In particular, WIOC privileges and never-ending monopolies—the self-interest of the few that lowered the country into the abyss of despair. 

Part 2 Bruce Rappaport brings to light the joint owners of WIOC and my hypothesis: these owners benefitted from the sale of WIOC. A continuous tradition supports ALP's unfavorable agenda of creative enrichment, land misappropriation, and collecting fewer taxes while extorting consumers at the pump.

Part 11

Between 2002 and 2004, in the waning years of Prime Minister Lester Bird's regime, the Bird-Rappaport WIOC collaboration imported petroleum products valuing CIF US$182,223,000 m. The amount of barrels of oil (bbl) is estimated to be 4,706,325 m bbl. (164,591,085 imp gal). This joint oil enterprise added 300 acres of undeveloped public land for real estate ventures called Friars Hill Development Company. 

A real estate undertaking that built high-end homes for European customers selling for US$250,000 to 400,000, completing twenty-eight in phase one of the project. As Bird's regime corruption and embezzlement persisted, the crucial election in 2004 signaled the end of Bird's political leadership roles. (Island Economies Part 111 Antigua & Barbuda Investing In Paradise) 

On March 23, 2004 election, the United Progressive Party (UPP) defeated the ALP, closing the political chapter related to Bird's patrimonial politics that lasted more than five decades. Despite Bird's loss, business arrangements with WIOC and Bird never changed. 

The undisclosed agreement between the WIOC and Bird continued; this was made known by the U.S. Senate's Permanent Subcommittee Investigations in 2000. That highlighted that Rappaport's interest in WIOC was 50%, and a Bird family member secretly owned the other half. (All Is Clouded by Desire: Global Banking, Money Laundering, and International Organized Crime by Constance A Weaver and Alan A Block)

Consequently, Gaston Browne defeated the aging Bird to become the Opposition Leader in 2012. The downfall of Bird was a new threat to the UPP government and the era of generational change before the 2014 election. ALP won the election on June 13, 2014; Prime Minister Gaston Browne renewed the policy of creative enrichment, WIOC, and land dispossession even more unfettered than in the past.

Beginning with the US$54 million for equity and funding provided by two investors, PDV Caribe Venezuela, US$24m, and Fancy Bridge (H.K.) China US$30m.

US$30m claimed to be the value of WIOC 75% shares, or 330,300 of the 440,400: 25% and 24% to the respective investors total of 161,847. And the remaining 26% or 85,878 shares to Antigua and Barbuda. This 26% plus the previous 25% share amount to 51% or 195,978 majority ownership. Still, there is 82,575 or 25% share not allocated.

Who benefited from the WIOC deal? Indeed, not the people, but the trustee and political influence. The public must demand WIOC contract transparency and financial statements.

PDV Caribe Venezuela gains from the crafty low share cost of the US$30 m investment and interest fees on their scheming funding of US$24m. Undoubtedly, these funds in the chosen bank elicit unique gifts to those in power. (Antigua-Barbuda and Venezuela agree on terms for West Indies Oil Company -MyVue News February 24, 2015)

This calculated deception is Browne's continual lie about purchasing WIOC in the people's interest and promising 120 jobs, at the same time brazenly decreasing the undeveloped 280 acres of land to 130 acres and, in another month, aim to divest 10% of WIOC government shares:

"At least 280 of it is undeveloped, stretching from Friars Hill to Mckinnon's- lands that will be passed on to the people of Antigua and Barbuda" (Antigua and Barbuda acquires majority ownership of West Indies Oil Company - MyVue April 2, 2015)

After that statement, Browne's notorious land grab plan and the evil motive were transparent in the Antigua Budget Statement 2017: "..include a 200-acre property and sold 49 percent of the shares for approximately US$30 million, while holding on to 130 acres of residential land separately." It is another corruptible transaction since the land belongs to the state and falls infamously short of the 300 acres' original figure. 

Undoubtedly, the US$30 m WIOC payment and land were divided equally between joint owners Bird-Rappaport. During the ALP era, the government's 25% share was a sham, a deception revealed by Rappaport! This whole WIOC deal was a willful heist with puzzling outcomes! Rappaport's legal representative, Moriel Matalon of Gorntksy & Co., may be able to give details about the WIOC sale!

  

Browne never attempted to change the ingrained tradition regarding lack of transparency and accountability. Between 2015 & 2019, 15,202,000 million (m) bbl (531,649,146 imp. gal) of petroleum were imported into Antigua and Barbuda but with a low value to the nation. WIOC increasing capacity to 1.7 m bbl did not make a difference since much less revenue is collected, and a foul stench emanates from the deal, maybe as putrid as ICIJ Luanda Leaks.

According to the U.S. Energy Information Administration (EIA), between 2015 and 2019, WIOC imports of U.S. Petroleum products totaled 15 202 000 million (m) bbl. 

Two thousand fifteen imports amount to 6,166,000 m bbl (215,639,299m imp gal) but collected the appalling low throughput levy of US$1,985,134m (EC$5,359,862 m). The lawful levy of US$0.037 (EC$0.10) per imp gal is being ignored, or was it linked to trade misinvoicing?

 Between 2015 and 2019 15,202,000m bbl (531,649,146 imp gal) throughput levy paid by WIOC amounts to US$4,468,724 m (EC$12,065,555m), shortchanging the treasury by US$15,221,985 (EC$41,099,360 m). 

In any case, the biggest ripoff is at the pump in furtherance of shareholders' benefit and a political ripoff. When calculated in U.S. gallons, the bbl, as mentioned above, amounts to 638,484,000 m U.S. gallons for the amount of US$23,647,555 (EC$63,848,400 m)

Not to mention, from 2019 up to April 2020, WIOC imported 4,416,000 m (154,437,751 m imp. gal) barrels of kerosene-type jet Fuel (KTJF), with 2019 totaling 4,134,000m barrels or 93.6%. This massive KTJF procurement was the precursor to capitalizing on a joint jet fuel agreement signed on March 5, 2020, with Rubis, the French multinational fuel supply company. 

Did the monies go into the pockets of the executive crooks?

As stated in the Antigua and Barbuda Budget Statement 2020:

"Between 2015 and 2019, WIOC paid $39 million in corporate taxes and $26.8 million in dividends, giving a total yield of EC$65.8 million."

During the same period, monies spent on oil imports add up to US$1,217,654,000 b and cannot justify paltry dividends of US$9,925,926 m (EC$26.8m) in addition to the throughput tax of US$4,468,724m collected from WIOC for the wretched total of US$14,394,650 m (EC$38,865,555). As against the corporate tax of US$14.4m (EC$39m) paid to the government. 

Compared to the ALP concessionary giveaway in 2018, US$122,476,593 m of Oil represents a substantial difference of US$108,081,943 m more than the taxes of US$14,394,650m collected from WIOC 2015-2019.

What amount of consumption tax, throughput levy, and duties did the Customs & Excise Division collect from WIOC 2015-2019, and on what CIF and barrels of oil?

Browne touts a corruption-free government, but scrutiny by the World Bank (W.B.) contradicts that anti-corruption lie. The 2017 W.B. Government Effectiveness Indicators measured -2.5 (worst) to 2.5 (best), and the Worldwide Governance Indicator (WGI) on Control of Corruption graded Antigua and Barbuda 0.0.

ALP dishonesty affects the livelihood of the struggling masses masked by the mockumay prosperity of the so-called GDP and GDP per capita as a barometer of wealth.

 

Two Noble economists, Laureate, scrutinized the national income component of the GDP: Simon Kuznets and Joseph E. Stieglitz. Both oppose the GDP formula since it ignores the well-being of humanity and environmental sustainability as regards livelihood improvement. 

Kuznets was clear concerning the GDP and its link to social progress: "The welfare of a nation can, therefore, scarcely be inferred from a measurement of national income as defined by the GDP."

What is more, Stieglitz's reasoning exposes the failing GDP: "GDP statistics were introduced to measure market economic activity. But, they are increasingly thought of as a measure of societal well-being, which they are not" (Commission on the Measurement of Economic Performance and Social Progress - Professor Joseph E. Stieglitz)

Progress for workers was depressing under the ALP government in contrast to GDP and GDP averages between 1981- 2004, 4.75% and US$7,577, respectively. The disparity between economic growth and the condition of the people exposed deteriorating circumstances and a deepening crisis of inequality and rising poverty.

Those problems are interchangeable with the 2015 -2019—2020 Budget, revealing an average GDP of 5.0% and GDP per capita of US$20,000. On the other hand, people's income never improved, only worsened with Browne abolishing PIT while increasing the Revenue Recovery Charge (RRC) from $10 to $13. Instantly, this taxing of consumption crushed the UPP minimum wage earners' gain. A minimum wage increase took 27 years, moving the hourly rate from $6.00 to $7.50 on January 2, 2008, and the $8.20 was approved in May 2014.

Browne acknowledges the GDP per capita inaccuracy in the 2018 Budget Statement: "I am aware that the per capita income is uneven, and my government will tackle the problem of the skewed income distribution."

The Gini coefficient gives an in-depth view of Browne's skewed income distribution. What is the Gini coefficient? The Gini coefficient measures the distribution of incomes across income percentiles. The coefficient ranges from 0 (0%) to 1 (100%), with 0 representing perfect equality and 1 representing perfect inequality.

Antigua and Barbuda's economy of inequality resulted in the erosion of living standards, corroborated by The Global Wealth Databook 2019- Credit Suisse reporting Antigua and Barbuda's Gini coefficient as 82.3%, far worse than Haiti's 80.1%. Antigua and Barbuda ranks second in the Organization of Eastern Caribbean States (OECS) and third in CARICOM as an unequal society. Antigua and Barbuda's Gini coefficient increased by as much as 41.68%.

Appropriately, the IMF ended its flawed practice of taxing consumption. Kristalina Georgieva, the managing director of IMF, now campaigns for taxing the wealthy to close the gap between rich and poor: Progressive taxation is a critical component of effective fiscal policy. At the top of the income distribution, our research shows that marginal tax rates can be raised without sacrificing economic growth. (IMF Blog January 7, 2020)

Present-day urgency demands the absolute National Emancipation of mind and behavior to bring about a new reality of a better standard of living and quality of life. Emancipation and social reconstruction are essential to liberate the nation of ALP from residual Colonial demons of economic oppression and political dictatorship. 

Vote to exorcise the Spirit of Wickedness!

 

Changes will come

When it's too harsh to resist

-Bombshell