Monday, March 12, 2012
The Looting of Haiti Teleco by Mary O'Grady
A federal bribery case in Miami may shed light on how a well-connected U.S. firm operated during the Aristide years.
The slaying of a former director of the Haitian Central Bank in Port-au-Prince last week might at first seem like a random event in a violent country. But the shooting of Venel Joseph at the wheel of his car looks more like a hit job. It comes just days after the Miami Herald reported that Joseph's son, Patrick Joseph, is a key witness in a federal bribery case in Miami involving alleged kickbacks paid by American telecom companies to Haitian officials. The younger Joseph, according to Herald sources, has fingered former Haitian President Jean Bertrand Aristide as one of those officials.
The indictment doesn't name Mr. Aristide. But the Herald reported that lawyers familiar with the case said that an unnamed individual in the document—"Official B"—is "indeed the ex-president." The Justice Department alleged in court that "Official B" and Patrick Joseph, who is a former director general of the government telecom monopoly Haiti Teleco, received kickbacks from U.S. companies in exchange for favorable pricing when terminating calls in Haiti. Mr. Joseph has pleaded guilty to taking bribes and is cooperating with Justice, according to the Herald article.
It is a case that ought to interest Americans, and not only because it means Mr. Aristide—who was, according to a detailed lawsuit filed by Haiti in civil court in South Florida in 2005, a notoriously corrupt strongman—might be brought to justice. That would be a step toward ending impunity in Haiti, which in turn would be good for political stability and for U.S. security interests in the hemisphere. Mr. Aristide's American lawyer, Ira Kurzban, told the Herald that there is "not one shred of evidence" against his client in the indictment.
But for Americans there may be another even more important reason to pay attention: It is possible that by getting to the bottom of how Haiti Teleco operated during the Aristide years, investigators will finally uncover the details of the arrangement that Fusion Telecommunications—run by former Democratic Party Finance Chairman Marvin Rosen with Joseph P. Kennedy II and numerous influential Democrats on the board—had in Haiti during the Clinton years. That would be edifying, given how Bill Clinton inexplicably tolerated Mr. Aristide's despotism even after the U.S. had restored him to power in 1994.
Back in those days, Haitians working for Teleco whispered to me of an alleged kickback scheme. Teleco was one of the few sources of hard currency for the country and they charged that the deal between Fusion and Mr. Aristide meant that the company was being looted. They claimed that Fusion had an office inside Teleco, was getting access to the Teleco network at a big discount, and was paying Mr. Aristide in return.
But there was no transparency at Teleco, and these brave patriots were afraid to go public with what they knew. It was only after Mr. Aristide was pushed from power by a popular revolt in February 2004 that the interim government could confirm that the company had been cleaned out.
In the fall of 2004 I was approached by Michael Jewett, a former telecom executive at New Jersey-based IDT. He alleged that he had been fired from the company for objecting to a bribery scheme similar to the one that had been described to me by Haitians regarding Fusion. He had filed a wrongful dismissal case that alleged that he was told to put payments in an offshore account for the benefit of Mr. Aristide. Federal Communications Commission records proved that Teleco had indeed given IDT a 66% discount to the official rate, but Mr. Jewett was never able to prove that Mr. Aristide was the beneficiary of the offshore account. IDT denied wrongdoing and eventually settled with him out of court.
That case prompted me to ask the FCC for copies of Fusion's contracts. I was told that the file had disappeared from its record room. When the FCC asked carriers to send duplicates, Fusion said hurricanes had destroyed many of its records, and it produced only one document. Then it went to court to block me from seeing it. I used the Freedom of Information Act to prevail and learned that in 1999 Teleco had given Fusion a rate of 12 cents per minute when the official rate was 50 cents.
Joseph P. Kennedy II wrote in a letter published by the Journal that he was "not aware" of any wrongdoing on the part of Fusion. The company has long maintained its innocence, and it has not been charged. But the Justice Department now alleges in its indictment that other companies that received discounts paid kickbacks to get them.
Patrick Joseph could be the best hope that Haitians have of getting to the truth about Mr. Aristide and his American business partners. But sources say the former Teleco executive still has relatives in Haiti. If he fears for them, he could clam up. That would be one explanation for his father's murder.