Holness fixed use of charity funds to buy personal asset after Integrity Commission raised questions – Report

The Integrity Commission has raised concerns about the use of charity funds to purchase a multimillion-dollar personal asset for Prime Minister Andrew Holness, who moved to fix the issue in June, nearly four years after the transaction.

"The foregoing raises questions as to whether Holness' alleged use of funds belonging to a charitable foundation to partially fund the acquisition of a personal asset amounts to misappropriation," said Kevon Stephenson, the Director of Investigations at the Integrity Commission, in his report released on Tuesday.

He added that the "source of funding has not been satisfactorily explained."

An investigation by the Financial Investigation Division "is warranted", he said.

His broader probe looked into allegations of illicit enrichment against the Jamaican head of government. 

The asset was a US$94,000 bond purchased by the Prime Minister through NCB Capital Markets (NCBCM) in September 2019.

Initially, Holness claimed that the bond was funded through his personal accounts, including a withdrawal from the now failed brokerage house Stocks and Securities Limited (SSL).

However, discrepancies emerged when the investigator examined his financial records.

But, Stephenson's report details that the funds Holness cited were not fully traceable and raised questions as to whether Holness' personal funds were "comingled" with charity funds.

Only one of two significant transactions from his SSL account, a cheque for US$30,219.18, could be linked to the bond purchase.

An additional US$31,698 was transferred to NCBCM from another account, but this left a shortfall of US$32,107.02, which Stephenson said “was taken from funds apparently belonging to a registered charity, Positive Jamaica Foundation, of which Holness was, at the material time, a director.”

Following enquiries by the commission in June 2024, Holness admitted there was an error and that part of the bond —US$32,107.02 — should have been attributed to the charity.

In a submission on July 16, 2024, Holness argued that NCBCM had "incorrectly assigned" the bond's full value under his name, stating the correct amount was US$61,892.98, not US$94,000. 

But, the investigator questioned Holness' explanation, noting that the bond was documented in Holness' name, with payments and interest accruing to his personal account for nearly four years.

Further findings revealed that the bond proceeds were transferred to Imperium, a company managing Holness' personal assets, on September 22, 2020.

According to Stephenson, these funds, including the portion allegedly belonging to the charity, were reinvested and appropriated by Imperium as part of its assets until when the commission raised the issue in 2024.

“The full proceeds of the US$94,000 bond, inclusive of the US$32,107.02 which is now being said to belong to Positive Jamaica Foundation, were transferred to Imperium and reinvested by that entity,” Stephenson said.

“In other words, the portion allegedly belonging to Positive Jamaica Foundation formed part of Imperium's assets for over three years and was appropriated by that entity as it deemed appropriate.”

NCBCM, which handled the bond transaction, confirmed it had followed written instructions from Holness.

It also stated that Holness received regular account statements clearly indicating the bond's value and interest.

NCBCM officers confirmed the bond was called early and the proceeds were transferred to Imperium, without any adjustments for the alleged misallocation.

An official told the commission that Holness said he gave verbal instructions, which were not followed and resulting in the error. 

When questioned about the funding source for the bond, one NCBCM official initially indicated that it was "undetermined—currently being investigated."

However, an official later submitted a witness statement addressing the matter, noting a telephone meeting with Holness and other officials on June 11, 2024.

“Useful information was received from the client as it relates to the proof of payment which we were able to corroborate on our core system,” the statement said.

It also mentioned that NCBCM “does not act on verbal instructions for bond purchases” and that June 2024 was the first time the bond allocation was questioned.

Stephenson said because the bond was called in and proceeds paid out, there can be no corrections.

"It no longer exists. The actions taken by NCBCM on behalf of Holness on June 24, 2024 were, therefore, based on fresh instructions from him and not a correction."

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