Premier Andrew Fahie of the British Virgin Islands (BVI), a semi-autonomous dependency of Britain, went to Miami late last month to close a drug deal with Mexican traffickers, supposedly from the powerful Sinaloa cartel. He boarded their parked private jet to inspect shopping bags filled with $700,000 in cash, payment for allowing massive quantities of Columbian cocaine to move through BVI, the proceeds also to be laundered by BVI’s banks. Then agents of the U. S. Drug Enforcement Administration, the so-called Mexicans in disguise, pounced, putting Fahie and Oleanvine Maynard, his BVI ports director and co-conspirator, in handcuffs.
Maynard called Fahie a “little crook sometimes” who wouldn't hesitate to profit from a plan cooked up with the help of self-proclaimed Lebanese Hezbollah operatives to move massive quantities of cocaine and drug proceeds through the Caribbean island.
Fahie was already facing allegations of widespread corruption back home. Governor John Rankin, Queen Elizabeth II’s titular authority in BVI, was already poised to release an official Commission of Inquiry report into widespread official fraud throughout BVI. After Fahie’s arrest, Rankin revealed that the inquiry concluded that Fahie’s administration had spent millions of dollars on projects linked to Fahie’s political allies in the islands. Indeed, many of the so-called initiatives had been abandoned before completion. Several were found to be “of no public benefit.” Others were “on their face, false.”
BVI only has 30,000 year-round people. But 400,000 companies from the world over – Russian, Brazilian, Zimbabwean, Gabonese, and Equatorial Guinean firms (and concerns from dozens more countries) – are registered there. Numerous buildings in Road Town, the capital, are emblazoned with metal plaques announcing the global headquarters of company after company. BVI specializes in paper entities, in providing a home for concerns that are no more than a typed piece of headed notepaper paid for by this or that friendly oligarch, obstreperous kleptocrat, plutocrat on the run, or pretentious but sleazy entrepreneur.
Many of the Russian oligarchs now on the run have bank holdings in Road Town. Others have ghost companies there. President Robert Mugabe, Zimbabwe’s notoriously corrupt leader for thirty-seven years, stashed his ill-gotten funds there. So did Zambian President Frederick Chiluba (ruled 1991 – 2002) and a host of other African autocratic leaders. The leaked Panama and Pandora papers cited how BVI sheltered a slew of money launderers and other plunderers of public purses. Indeed, this has been BVI’s contribution to global finance for at least forty years. A cabal of lawyers in Road Town facilitates the hiding of the beneficial owners of chains of shadow, but locally incorporated, entities. After the war in Ukraine is over, foreign asset recovery could begin in BVI.
Otherwise, BVI, a collection of four major islands and numerous smaller ones, welcomes tourists and sailors to its turquoise waters and sparkling sand beaches. My family and I have enjoyed many winter visits there, especially to Virgin Gorda, across the local waters from Tortola, where the capital sits. It was truly a paradise before back-to-back hurricanes destroyed some parts of its main islands. But for Russia’s billionaire oligarchs, and possibly for some of Putin’s loot, BVI functions well as a safe and trusted harbor where no one knows --and if they know they do not tell -- who owns what and how much cash is behind the registered companies and in the many local banks that exist solely to hold illicitly earned millions and billions.
Visitors cannot easily glimpse narcotics trafficking in a place like BVI -- unless one is in the business or knows where and how to peer. But Fahie and others presumably have let smugglers from South and Central America use BVI’s airstrips and harbors and moorings to transit cocaine, heroin, and methamphetamines toward Florida. BVI lies east of Puerto Rico and on an easy route toward the Bahamas.
Because of Fahie’s arrest, and because BVI has always had a reputation as a place to perform shady financial acts without fear of exposure, the Crown is now thinking of revoking its autonomy and bringing BVI back under direct British administration. BVIers, especially those in banking and the paper company business, will not welcome direct rule. It will certainly crimp their wide-open style and make it much more difficult for the corporate community to welcome questionable funds with no questions asked. The British Minister for Overseas Territories visited Road Town last week. She will decide shortly to resume direct oversight of the dependency, giving Rankin executive powers. Meanwhile Fahie will go on trial in Miami and his successor, an acting premier, will attempt to salvage remnants of the self-governing autonomy that will now be forfeited.
For Russia’s oligarchs, as for North American tourists, their paradise in the Caribbean is now off-limits, as it might be for narcotics smugglers. But BVI is but a small part of a widespread web of money laundering, drug trafficking, and criminality in the Caribbean sea. Shutting it down will in some definite but limited way curtail the spread of corruption across the globe.
Somehow, the image of placing BVI's financial affairs under the purview of London -- especially Boris Johnson's London -- does not reassure me about financial transparency and the banning of thugs and bandits from laundering ill-gotten gains there.