Originally: Aristide’s Past Deserves More Intense Scrutiny

June 3, 2005

When Michael Jewett was fired in 2003 from the Newark, New Jersey-based telecom giant IDT, he filed a wrongful dismissal complaint against the company. Mr. Jewett alleged that he was let go because he questioned both the legality and the ethics of a telecom deal — which he was asked to facilitate — between former Haitian President Jean Bertrand Aristide and his employer.

The legal action is still not settled but a motion to unseal critical information in the case could be helpful, if it succeeds, to Haitian democrats who want to have former Haitian President Jean Bertrand Aristide brought to justice for what they allege were his frequently corrupt practices.

Holding Mr. Aristide accountable has importance for U.S. security interests and the future of Haiti itself, where per capita gross domestic product was a miserable $338 in 2002. Though a popular revolt drove him into exile in February 2004, violent support for the onetime priest continues and is badly damaging the country’s efforts toward economic development. If he has committed crimes and is indicted and convicted, it would signal to Haitians that public officials can be held liable. It might also quiet the violence that plagues the country.

Haiti’s pro-Aristide gangs are still on the prowl. Last year they launched “Operation Baghdad” with Iraqi chaos as the template for terror. U.N. peacekeepers and Haitians have since managed to pacify much of the country, but killing and kidnapping persist in certain neighborhoods in Port-au-Prince. Close observers say that the thugs hope that by spreading fear and misery they can persuade Haitians to call home the authoritarian Aristide.

Haitian officials report that within the past three weeks a Russian, an Indian and a Canadian were all kidnapped. A week ago a U.S. government van carrying personnel between embassy buildings was sprayed with bullets. The U.S. advised all nonessential embassy personnel to leave the country. On Wednesday a French consul was gunned down near the Port-au-Prince airport.

This is preventing a Haitian recovery. Yet violent supporters of Mr. Aristide are not likely to be vanquished until his power is neutralized through a thorough investigation of the accusations against him and prosecution, if warranted. Two areas of interest are suspicions of improper influence over Haiti’s monopoly telephone company, Teleco, and possible connections with Haitians convicted of drug trafficking crimes.

Under something called the International Settlements Policy (ISP), the U.S. Federal Communications Commission negotiates settlement rates paid by U.S. telecoms to countries with state-owned monopoly telephone systems. ISP countries in the Third World often demand relatively high settlement rates because of their capital needs and lack of economies of scale. But because their telecom systems are under political control, they also can be centers of corruption.

In 2003 Haiti was an ISP country, but Mr. Jewett alleges that Mr. Aristide approved a settlement rate below the official ISP rate for calls terminated by IDT. If true this would have given IDT an advantage over carriers paying the official rate.

Until now Mr. Jewett’s allegations couldn’t be substantiated because a magistrate in U.S. District Court in New Jersey had sealed the rate that IDT secured from Teleco, on the grounds that it was a “trade secret.”

But court papers filed by Mr. Jewett’s attorney argue that FCC law mandates that deals between U.S. carriers and ISP countries are a matter of public record and cannot be exempted on competition grounds. Mr. Jewett’s attorney has therefore filed a motion to have the agreement on price between IDT and Haiti unsealed. If IDT did get a privileged rate it will certainly raise questions about the circumstances. Phone calls to IDT were not returned.

As I reported here in October 2004, Mr. Jewett alleges that in September 2003 his boss, IDT’s Executive Vice President for International Business Development Jack Lerer, explained to him what had been negotiated with Mr. Aristide. “IDT Telecom would deposit the settlement dollars from terminating traffic in Haiti through Teleco Haiti to an offshore account set up on behalf of President Aristide by Mount Salem, [a holding company] headquartered in the Turks and Caicos Islands,” the amended complaint says. Mr. Jewett also claims that he was instructed to “keep the terms of the transaction confidential.”

Mr. Jewett contends that IDT’s efforts to have the reference to Mount Salem in his original complaint sealed suggest that such an account set up for deposits did indeed exist.

If Mr. Aristide did make a deal with IDT it would not be the first time he has involved himself directly with Teleco. President George H. W. Bush released frozen Haitian assets held in the U.S. to him in the early 1990s, after he had been exiled by a military coup. The big income earner for Haiti was the long distance telephone revenues. Christopher Caldwell reported in the American Spectator in 1994 that Mr. Aristide “raised hackles at the Latin America division of AT&T by ordering the proceeds from Haiti’s international phone traffic moved to a numbered Panamanian account.”

As I reported here, in Jan. 2001, Fusion Telecom, headed by former Democratic Party finance chairman Marvin Rosen, with Joseph P. Kennedy II then on its board, became a big player in Haiti after Mr. Aristide returned to power. Fusion also maintained that its long distance service to Haiti was a corporate secret even though FCC regulations state otherwise. My reports that Fusion was offering to terminate calls there at a rate well below the official settlement rate have not been challenged.

Telecom deals are not the only matters under scrutiny. Since Mr. Aristide’s departure, a handful of officials who were in his government, including high-level police officers, have been indicted and convicted in Florida courts for crimes related to narcotics trafficking. His chief of anti-narcotics and the former Port-au-Prince airport police chief are still awaiting trial. These cases also raise questions about what Mr. Aristide knew and when he knew it.

Haiti will try to hold presidential elections later this year. But the likelihood that they can be pulled off without the fear and intimidation tactics of diehard Aristide supporters will remain remote as long as he is able to guide his efforts at a comeback from his sanctuary in South Africa. Given the investment the U.S. has already made in trying to bring peace and justice to Haiti, a greater effort by the Bush administration to investigate the former strongman’s past would seem to be well justified.