BRIDGETOWN, Barbados--Late Prime Minister David Thompson's law firm received a whopping Bds$3.3 million in legal and retainer fees from CLICO International Life Insurance Limited (CIL), but the fees were actually destined for former CLICO executive chairman Leroy Parris.
This was among the explosive revelations of the Deloitte Canada-led forensic audit into the operations of the insurance company and its financial relationship to the parent company – CLICO Holdings Barbados Limited (CHBL) – and other members of the local CLICO empire.
"On January 16, 2009, a payment for Bds$3.333 [million] was made to the law firm Thompson & Associates by CIL.
"We examined the invoice from Thompson & Associates dated December 2008, which described four different legal matters in detail and the fees or retainers for each. The invoice was approved by Mr Leroy Parris as chairman," a report from CIL's judicial manager stated.
But a copy of the forensic audit document obtained by the Midweek Nation said the money, which was moved a year after Thompson became Prime Minister, was "actually to the benefit of Mr Leroy Parris . . . and related to partial payment of a 'gratuity'".
The judicial manager noted that while there was a submission for a contract, which obligated the company to pay Parris a Bds$10 million gratuity, the forensic auditors could not find the contract anywhere.
"We have not seen a copy of the letter dated December 5, 2002, referenced in the employment contract," the document stated.
"As of the date of this report, we have not had the opportunity to ask either Mr Parris or Thompson & Associates about the circumstances or timing of this payment and the creation of the invoice," the document noted.
In other bombshell revelations, the forensic auditors showed that CLICO International Life Insurance was the cash cow of the local CLICO group, providing millions in financial support to investments and loans, pay top executives, purchase a private jet, finance construction at the University of the West Indies Cave Hill Campus, bankroll sugar estates and purchase land.
Millions of dollars were also funnelled to the now-collapsed parent company CL Financial in Trinidad and Tobago and CLICO operations in the Eastern Caribbean.
The information was captured in a detailed investigation of major inter-company transactions going as far back as 2003.
"CIL also funded approximately Bds$2.1 million relating to Mr Parris' annual bonuses in the years 2003 to 2008.
"We reviewed Mr Parris' employment contract which indicated his entitlement to receive an annual bonus of Bds$300,000 per year between 2003 and 2007, increasing to Bds$600,000 per year in 2008.
"We also reviewed supporting documents for payments such as cheque copies and vendor histories from the accounting system.
"These payments were made by CIL on behalf of CHBL to different associates and related companies of Mr Parris, such as David Thompson, Thompson & Associates, Branlee Consulting Services Inc., PFS, as well as payments to Antigua Commercial Bank.
"Some of the documents we reviewed showed that the releases of funds by CIL were made based on directions from Mr Parris that were acted upon by executive management, such as Mr [Terrence] Thornhill."
As at March 31, 2011, CLICO Holdings owes the life insurance company Bds$155 million and is the biggest receivable on CIL's books – ballooning from Bds$8.5 million at January 1, 2003.
Under the heading Loans For Funding Of Operational And Capital Costs, it was established that between 2007 and 2009, the leasing of a corporate jet cost CLICO Holdings Barbados Limited almost Bds$10 million.
"The minutes of the directors on August 15, 2007 noted that Mr Parris said that he made the decision to purchase a Lear jet for the CLICO group.
"In this regard, CHBL had entered into a seven-year lease agreement with a monthly payment of US$71 000."
Other money transactions discovered during the audit showed that CIL "also provided funds to clear property taxes amounting to Bds$4.3 million" and to pay Bds$2 million in legal fees to Thompson & Associates related to the sale of Caribbean Commercial Bank.
"Based on the invoice, the legal fees were determined as four per cent of the sale price of US$25 400 000," it added.
In a Press statement released Tuesday, the judicial manager said it still had its sights on finding a buyer for the CIL operations by mid-year.
It also noted that recommendations had been presented to the court following its forensic audit.
"The judicial manager wishes to assure policyholders that all efforts are being made to expedite the process of transferring of CIL's business to a qualified investor and that it will continue to provide updates as key milestones in this process are achieved." (Barbados Midweek Nation)
