SVG against moves to ‘terminate’ former CDB President

St Vincent and the Grenadines Finance Minister, Camillo Gonsalves, is calling on his fellow governors of the Barbados-based Caribbean Development Bank (CDB) to stop “exposing” the financial institution “to further ridicule and undoubtedly, more litigation” and move on from the “resignation” of its former president, Dr Hyginus “Gene” Leon.

In a May 14, 2024, letter sent to “my fellow members of the CDB Board of Governors,” Gonsalves said that he has been asked to “vote on whether the Caribbean Development Bank should accept the resignation of Dr Hyginus Leon from his position as President of the CDB, or whether he should be terminated as of a date three weeks beyond his resignation letter.”

In the letter, a copy of which has been obtained by the Caribbean Media Corporation (CMC), Gonsalves said that “as Governor for Saint Vincent and the Grenadines” he had received two separate voting forms on “successive days” asking him to vote on the issue.

Last month, lawyers representing Leon, wrote that it was “evident” that the CDB had “lost all trust and confidence in our client by the failure of the Board of Governors to prevent the continued violations of its Charter, policies, rules and regulations with regard to its elected President.

“Our client has therefore made the extremely difficult decision to resign his elected position of the President of the Bank with immediate effect,” the law firm wrote, adding the CDB had until May 4 “to negotiate an amicable separation” indicating also that their correspondence should be viewed “as our client’s pre-action protocol letter” regarding the entire situation.

In the three-page letter, dated April 21, and headlined “Re. Dr Hyginus “Gene” Leon, Resignation and Constructive Dismissal, the St Lucia-based law firm, Fosters, said it would be moving to the courts in Barbados “or any other jurisdiction more appropriate, to enforce our client’s legal and constitutional rights.”

St Lucia’s Prime Minister Phillip J Pierre, speaking in the Parliament last week, blamed a “conspiracy” for the removal of  the St Lucian-born Leon  saying: “I want to put on record St Lucia’s full support for the work that Gene Leon did at the Caribbean Development Bank and to regret that a conspiracy, and I make no bones about it and this is not personal to anybody, to any function to the bank, a conspiracy is what caused  Gene Leon to resign”.

In his letter, Gonsalves noted that the correspondence attached to the voting form he had received regarding whether to vote to accept Leon’s resignation or his termination, notes that “In accordance with Article 33 of the Agreement Establishing the Caribbean Development Bank, for a Proposal to be adopted, replies in favour must be received from Governors representing not less than two-thirds of the total number of governors and not less than three-fourths of the total voting power of the members”.

But Gonsalves, a lawyer, said “this citation of Article 33 and the procedure laid out in the correspondence “do not support the ‘Options’ laid out in the Voting Form.

“The false application of Article 33 to the situation before us leads to a number of absurdities and illogical possibilities: namely that (a) a president cannot resign without ‘permission’ of two-thirds of the Governors; (b) Governors may vote endlessly until a threshold of two-thirds is reached; or a resignation can be held in abeyance for weeks-possibly months-on end, unless Governors by a supermajority decide to accept or reject it.”

Gonsalves wrote “to put it simply, while Article 33 indicates that a two-thirds majority is required to terminate the President, there is no requirement that a two-thirds majority is required to accept a resignation.

“The Secretariat is reading into Article 33, a requirement that does not exist. The Secretariat, or the Board of Governors, have no power under the Agreement Establishing the Caribbean Development Bank to reject or defer a President’s resignation. The attempt to read such a power into the Agreement is misplaced and has led to the absurd daily-voting scenario we now face,” he added.

In his letter, Gonsalves made reference to the laws regarding the election of a CDB president whose term of office “shall be for such a period not exceeding  five years as the Board of Governors may determine.”

He said that the laws allow for his re-election, but that the president shall “cease to to hold office when the Board of Governors so decides by a vote of not less than two-thirds of the total number of governors representing not less than three-fourths of the total voting power of the members”.

Gonsalves said section 1 of Article 33 “clearly deals with the election of the President of the CDB and does not apply to the present issue.

“Just as clearly, Section 2 contemplates termination. Explicitly, it deals with the power of the Board of Governors to cause the President to “cease to hold office”. Section 2 does not-and cannot- suggest that the Board of Governors has the power to force a President to remain unemployed against his will.”

He said in instances where the president resigns, Article 33 (2) does not apply and that “there is no need for the Board of Governors to determine whether the President “should “cease to hold office” because the President, by his own action, has already demitted office.”

Gonsalves said that the “options” placed before the board of governors “would create the incongruous situation of a President who remains in the employ of CDB three weeks after he submitted his resignation-and possibly beyond.

“If we continue to experience electoral stalemates by the Governors, are we to assume that the President remains unemployed, contrary to his resignation letter, until the end of his term? Is he an “Article 33 Zombie” – neither reigned, nor employed, nor terminated-until such time that a supermajority of the Board deems otherwise”.

Gonsalves said that Article 33 “does not invalidate the ability of the President to resign his post. It is ridiculous to suggest that I could,” adding “similarly, it is equally ridiculous that the President of the CDB can formally and explicitly resign his post, only to have that resignation ignored or countermanded three weeks later on the basis of a Board of Governors vote.

“Such a suggestion would be as illogical as it is illegal,” Gonsalves said, noting that “whatever the merits of the claims against Dr Leon, it is fair to say that, at every turn, the Secretariat has attempted to read any procedural  ambiguity or lacuna in a light most hostile to the President.

“Here, however, there is no ambiguity. There is nothing in Article 33 that curtails the President’s ability to resign or demit office,” Gonsalves wrote, adding “to continue to subjecting the Board of Governors to votes on this matter is a blatant subversion of the letter and spirit of the Agreement Establishing the Caribbean Development Bank.

“Let us cease this injudicious manner.  Let us stop exposing the CDB to further ridicule and, undoubtedly more litigation, Let us accept the reality of Dr Leon’s resignation, and move forward to his inevitable settlement and the selection of our next president,” Gonsalves wrote.

Leon is the sixth president of the regional development finance institution. He was elected at a special meeting of the CDB Board of Governors held on January 19, 2021, for a five-year term, and assumed office on May 4, 2021.

Leon had come to the assignment at CDB with 35 years of experience in economics, financial policy development, and executive management, more than 20 of which were spent working with the Washington-based International Monetary Fund (IMF). He had succeeded the Jamaican-born Dr Warren Smith who retired in 2021 after serving as president for 10 years.

In January, the CDB had announced that he had been placed on administrative leave  as “an ongoing administrative process” continued at the region’s premier financial institution. The CDB has remained mum on the circumstances surrounding the decision.

Earlier this month, St Vincent and the Grenadines Prime Minister, Dr Ralph Gonsalves, said “unsuccessful attempts” had been made to impugn the character Leon whom he described as “ a distinguished son of our Caribbean civilisation from St Lucia”.

In a five-page letter sent to the chairman of the CDB Board of Governors, Ahmed Hussen, who is also Canada’s Minister of International Development, Gonsalves wrote the “flimsy” nature of the evidence against Leon presented in the investigator’s report and the “concocted narrative of malfeasance or wrong-doing, lack persuasiveness; there is nothing compelling here.

“Indeed, the evidence, taken at its highest, leaves a reasonable and fair-minded reader, whether in the councils of the Bank or in the taverns across any Caribbean country, with the inescapable conclusion that the President was, from the outset, the victim of a stitch-up job,” the prime minister wrote in his May 2, 2024 letter.