The Positively Jamaican Unmonitored Foundation of Prime Minister Andrew Holness – Did It Factor In The 2020 General Election?
Prime Minister Andrew Holness appeared particularly charitable in 2020.
At the time, through his Positive Jamaica Foundation, he publicly gifted $400,000 (US$2,792) to the Jamaica Social Stock Exchange in January; committed US$3,000 ($429,810) to the Covid- 19 telethon in April of that year; and in that same month, donated $1.5 million (US$10,470) to the Mustard Seed Communities along with care packages to assist with their operations during the pandemic.
Video: Prime Minister Andrew Holness’ Positive Jamaica Foundation donates US$3,000 to the Covid-19 Telethon in April 2020. The foundation of Finance Minister Dr. Nigel Clarke donates as well.
Though Positive Jamaica was established more than a decade ago, financials lodged only in July 2022 at the Companies Office of Jamaica confirm that the majority of its spending came during the period leading up to the September 2020 general election.
Spending totaled around $31 million (US$220,231) in the two years between 2019 and 2020, more than double the approximately $14 million (US$119,993) in cumulative expenditure between 2012-2018, seven years before.
Contributions and income over the same period amounted to about $29 million (US$208,910), roughly equaling the amount earned in the seven previous years.
With the heightened level of income and expenditure having been so close to the election, several political commentators believe the financial dealings of Positive Jamaica and other foundations like it deserve more scrutiny.
“It’s something we need to look at and make recommendations to protect the integrity of the politician and to protect the integrity of the system,” said then Political Ombudsman Mrs. Parchment Brown in an interview in June 2022.
But as it stands, 18º North has found, there is little to no monitoring of these politician-linked foundations, leaving the country’s electoral and governance systems vulnerable to undue influence by unknown donors.
What the Financials Reveal
It was the first time substantive financials had been filed since the foundation’s inception in 2011 even though the law requires that a profit and loss account be filed each year. Prior to July 2022, there were only nil filings on file showing no spending and no income.
The amended filings show that just over half of the approximately $31 million (US$220,231) spent between 2019 and 2020, around $16 million (US$114,825), was listed under the broad heading “Other Philanthropy” while $7 million (US$50,811) went to “Corporate Grants”. The headings are not further defined, however, and it’s not clear as to what those categories of spending entailed.
The other expenditures during the period included around $4 million (US$26,594) for “Planning & Events” and about $900,000 (US$6,658) for “Advertising”. But it’s not clear what exactly was being advertised and what events actually took place.
Newspaper columnist and political commentator Reverend Peter Espeut stated that because of the lack of detail in the financial filings, it’s difficult to determine how money from Positive Jamaica is actually being spent.
“Is it his own sons who he’s giving scholarships to, or his own constituents?” he mused.
Further, because the revenue of the foundation has broad headings like “Cash”, “Charities” and “Corporate”, it’s impossible to know who the donors are or where exactly the money came from.
“It could be that the non-profit is a loophole to allow campaign contributions that fall under the radar,” Rev. Espeut said.
Prime Minister Andrew Holness didn’t respond when asked about the various categories of spending, nor did he answer a question about whether Positive Jamaica was ever used to fund his election campaign.
Why Do Jamaican Politicians Set Up Foundations?
In the United States, former President Donald Trump was fined US$2 million in 2019 after admitting to using charitable funds to boost his 2016 political campaign. A New York state judge ruled that the tax-exempt status of the Donald J. Trump Foundation was abused to further the former president’s political efforts.
In Jamaica, foundations of politicians mostly don’t have tax-exempt status but claim to have charitable missions.
In fact, in a recent analysis of the roughly 60 entities that 18º North found as being linked to elected members of parliament and senators that have completed the first step to becoming a non-profit by registering at the Companies Office, only a handful are registered at the charities authority, Department of Co-operatives and Friendly Societies (DCFS), which would allow them to be tax-exempt.
These non-profits linked to politicians are a relatively unknown feature of Jamaica’s electoral system and therefore receive little scrutiny. Even some of the foremost anti-corruption civil society groups like National Integrity Action and Jamaica Accountability Meter Portal didn’t know much about how they operate.
But these foundations have been around for decades, one of the oldest found being Grenbell Trust Ltd. whose current directors include Mr. Holness and Deputy Prime Minister Dr. Horace Chang. Incorporated back in May 1975, Grenbell’s purpose explicitly states, among other things, to “aid in any elections run by the Jamaica Labour Party [JLP].”
Positive Jamaica Foundation was set up to go towards social projects benefitting residents across inner-city and depressed communities in the nation, according to its company records. Another, set up by Mr. Holness and others in 2000, West Central St. Andrew Trust Ltd., which bears the name of his constituency, is for the “welfare, education and development” of the people there. (Mr. Holness ceased being a director of both organizations in December 2021. However, the notification of this change was only lodged at Companies Office in July 2022.)
Other foundations have also been established by political candidates on both sides of the aisle like The Partnership & Love Foundation set up in 2019 by the PNP’s candidate for Clarendon South Eastern in the 2020 general election, Patricia Duncan Sutherland. There’s also the East Central Scholarship and Welfare Fund Ltd. set up in 2018 belonging to the JLP MP for East Central St. James Edmund Bartlett, who is also the tourism minister.
Both politicians say their foundations were established to meet the needs of their constituents, and the needs are many, especially in a poor country.
But unlike Mrs. Duncan Sutherland, who said money from her foundation doesn’t and “cannot go to the campaign” because her entity is a registered tax-exempt charity, Mr. Bartlett, whose foundation is registered only at Companies Office said “very little” has been used for political purposes, though he later said he didn’t recall saying that. Donations to his foundation are generally not tax-deductible for the donor unlike those to Mrs. Duncan Sutherland’s, which are. However, according to the Tax Administration of Jamaica (TAJ), a foundation like Mr. Bartlett’s that’s unregistered at DCFS may still not have to pay income tax on the donations received if it can show that these donations were purely gifts from the donor with no “material benefit” in return since gifts aren’t considered income. TAJ told 18º North that “material benefit” would have to be determined on a case-by-case basis.
According to several persons familiar with these structures, politicians sometimes set up these foundations to facilitate donors who’d rather support a politician’s charitable causes rather than doling out cash directly to the candidate.
Even so, observers says those activities could help candidates win favor with constituents - another means of securing votes.
“It creates a degree of separation between making a donation for electioneering versus making a donation for a civic good. But the outcome is the same. You enhance the agenda of the individual politician,” said Raymond Pryce, a former People’s National Party Member of Parliament that had put forward a stalled motion years ago to have foundations more closely tracked.
That’s why, he continued, “It is important to closely monitor political foundations to prevent the co-mingling of resources for political gain and so that sources of funds can be transparently identified and audited.”
Campaign Finance Reporting in Jamaica
Political campaigning and election financing in Jamaica is governed by The Representation of the People (Amendment) Act, 2016.
The amendments in 2016 were an attempt to answer longstanding calls from civil society activists about the need for stronger campaign finance laws to combat the possibility that unregulated money within the country’s political system could lead to individuals and groups having unfair influence over the actions of politicians and the awarding of government contracts.
But the Act still falls short, according to critics.
Though candidates and political parties are required to reveal their contributions and contributors to the Electoral Commission of Jamaica (ECJ), the ECJ doesn’t make those names public. Instead, it only reveals the total amounts raised and spent by each candidate and political party and the number of contributions totaling $1 million (US$6,370) and above.
The Act also only requires that candidates and political parties report total contributions and spending within a narrow window. For candidates, it’s between the date the election is announced and 181 days after the campaign period ends, and they can’t spend more than $15 million (US$95,549). At least one prominent civil society activist has been trying to change that and has been calling for reporting and monitoring of political donations year-round.
“The law should be amended. Political parties and candidates should report on a quarterly basis,” said then Executive Director of National Integrity Action, Trevor Munroe, in an interview with 18º North in summer 2022.
Under the existing legal framework, it was revealed by the ECJ after the 2020 general-election reporting period that Prime Minister Holness received over $12 million (US$87,946) in political donations with a little over $8 million (US$57,123) in spending. Mr. Holness didn’t respond when asked what happened to that $4 million that wasn’t spent. He also didn’t respond when asked whether any of the roughly $31 million in expenses by his foundation between 2019-2020 contributed to that $12 million, but there isn’t any evidence to suggest that it did.
Because none of the donors were revealed, 18º North asked the ECJ if Positive Jamaica was a listed contributor to Mr. Holness’ 2020 political campaign or if any other candidate listed a foundation as a donor. The ECJ’s Public Education Officer Daynia Harper responded that, “None of the candidates or parties listed any foundations in their disclosure reports.”
A Lack of Monitoring
Ms. Harper added that while it is okay for these organizations to make donations to the campaigns of politicians within the campaign contribution limits, “it is not within our remit to monitor donations to charities registered to politicians.”
Other agencies of government also said similar like the Office of the Political Ombudsman, which though now disbanded, was responsible for investigating breaches of the Political Code of Conduct that emphasizes transparency and honesty of political parties and their officials.
The Integrity Commission tasked with monitoring the assets of parliamentarians by requiring annual filings listing the income, assets and liabilities of politicians, also indicated that foundations of this sort didn’t fall within its jurisdiction.
“A declarant does not need to declare donations for organisations, including charities, for which they are associated,” the Commission’s Director of Information and Complaints Craig Beresford confirmed via email.
The Department of Co-operatives and Friendly Societies (DCFS) also told 18º North that it holds no authority over the monitoring of these types of foundations unless they’re a registered charity.
Though established for charitable purposes, Positive Jamaica is registered only at the Companies Office of Jamaica, and not at DCFS.
Still, the Companies Office told 18º North that companies with a structure like Positive Jamaica –a company limited by guarantee without share capital - are considered public companies and are therefore required to file annual returns and financial statements there.
The annual returns show the address of the registered office and details of the current directors. The financials are supposed to be certified by an auditor and contain the last balance sheet and a profit and loss account statement. 18º North saw no balance sheet on file for Positive Jamaica Foundation, and Mr. Holness wouldn’t say when asked if the audit of the financial statements was done by himself or an independent accountant.
These non-profit entities registered only at Companies Office can also further circumvent transparency requirements by filing nil financial statements showing zero income and zero expenditure for several years. The Companies Office made clear that, “Nil financial statements are acceptable, and we do not check for accuracy.”
The Tax Administration of Jamaica (TAJ) was equally unconcerned about the veracity of these returns.
It told 18º North that while the TAJ can, it doesn’t routinely crosscheck that returns filed at Companies Office match those filed at the TAJ. It further explained that the administration of income tax is primarily a “self-assessment system” and “it is therefore not possible or practicable to examine all returns that are filed with the authority,” unless there is an audit or an investigation.
This lack of monitoring from all the relevant government entities creates a black hole ripe for exploitation, according to former Political Ombudsman Mrs. Parchment Brown.
“It opens a door for a person who is intending to breach the integrity requirements of the Jamaican law. It provides an opportunity and provides some cover,” she said.
To plug this loophole, Rev. Espeut believes an organization independent of the government should be tasked with the monitoring of these politically-connected organizations, while Mrs. Parchment Brown says the government could add this role to the existing accountability apparatus.
“Once money comes into the hands of a politician or a political organization, even outside of campaign period…there should be an entity… maybe the Integrity Commission is the ideal one – should have that information in the annual report every year,” Mrs. Parchment Brown said.
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