Caribbean Development Bank's President Removed, Process Begins for Election of New President

The Barbados-based Caribbean Development Bank (CDB) on Sunday confirmed that it had concluded the “internal administrative process” involving its president, Dr Hyginus Leon, and that he “has ceased to hold the office of the President of the Bank”.

In a four-paragraph statement, the CDB said that its board of governors had taken note of the “closure of the internal administrative process” involving the St. Lucia-born economist and that “in accordance with the Agreement Establishing the Caribbean Development Bank, the Vice President (Operations), Isaac Solomon, will continue to exercise the authority and perform the functions of president until a new president is elected”.

It said that “the process for the election of a new president has commenced and the Board of Governors has been invited to submit nominations for the position of the president of the bank by August 26, 2024. It is expected that the election process will conclude in October 2024.”

In April this year, Leon submitted his resignation with “immediate effect” from the regional financial institution after his St. Lucia-based lawyers wrote to the bank indicating Leon is of the opinion that “he will never be treated fairly” after being sent on administrative leave in January.

“It is also evident that the bank has 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 lawyers had given the regional financial institution 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 letter dated April 21, a copy of which has been obtained by the Caribbean Media Corporation, Leon’s lawyers said they would be moving to the courts in Barbados “or any other jurisdiction more appropriate, to enforce our client’s legal and constitutional rights.”

In January, it was disclosed that Leon had been sent on administrative leave until April this year as “an ongoing administrative process” continued at the financial institution. The CDB has continued to remain mum on the circumstances surrounding the decision to send the former International Monetary Fund (IMF) senior official on administrative leave, with Solomon, confirming at a news conference by the bank in February that “there is an internal administrative process involving the president.”

In February, Antigua and Barbuda Prime Minister Gaston Browne, who was attending the Caribbean Community (CARICOM) summit in Guyana, said concerns had been raised about the method used to send Leon on administrative leave. “… at some point we will have to address the issue of the procedures and the fact that subordinates within an institution can literally take disciplinary action against their superior without even consulting with the directors or the governors of the bank.”

In May, St Vincent and the Grenadines Finance Minister, Camillo Gonsalves, called on his fellow CDB governors to stop “exposing” the financial institution “to further ridicule and undoubtedly, more litigation” and move on from the “resignation” of its former president. In a May 14 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 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. 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.

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.

St Lucia’s Prime Minister Phillip J Pierre, speaking in his country’s Parliament in May, blamed a “conspiracy” for the removal of 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”.

Leon is the sixth president of the regional financial 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 headed a team of more than 200 employees and came to the assignment 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 IMF. He succeeded Jamaica-born Dr Warren Smith who retired in 2021 after serving as president for 10 years.

In its brief statement on Sunday, the CDB said that “under the direction of its Board of Governors and Directors, and through the leadership of its management and the efforts of its staff, continues to work fully and effectively together with its member countries and development partners to advance CDB’s mission of reducing poverty and transforming lives through sustainable and resilient development initiatives”.

SOURCE: CMC