Belize Government Ordered to Return Ownership of Telecoms Operator
The Central American country of Belize, known for its paradise-like surroundings, is in a state of chaos again this week with vital telecom services and who runs them still in question. Last week, rioting, looting, violence and vandalism occurred, harming its tourism industry and angering Belizeans as workers shut down all telephone communications in the country -- land lines, cellular and Internet. In February, the Government of Belize (GOB) illegally seized control, from a U.S. investor, of the Belize phone company known as BTL. Originally invited by the government to take over BTL and modernize Belize's telecommunications, the U.S. investor was forced to go to federal court in Miami. In March, the U.S. court ordered the government to restore control to the U.S. investor and the court has now held the Belize Government in contempt.
BTL's workers, the teachers union, university students, the National Trade Union Congress of Belize and the United Democratic Party, the opposition party, have demanded that Prime Minster Said Musa and his government resign. It was Musa who precipitated some of the unrest by illegally seizing control of BTL, which is owned by Belize Telecom Ltd., a subsidiary of U.S.-based Innovative Communication Company.
In late 2003, at the height of telecom innovation, the Belize Government invited Jeffrey Prosser, the president, CEO and chairman of ICC, to buy BTL and modernize and expand its telecom infrastructure. Prosser had a proven track record of improving telecom infrastructures and systems in the U.S. Virgin Islands. It was a match made in heaven, they thought. To date, ICC has invested more than US$60 million in BTL and had BTL spend another US$15 million to improve telecommunications services throughout the country, doing everything the Belize Government requested to modernize the country's telecom systems and more.
On March 11, a U.S. District Court ordered the Belize Government to return control to ICC/Belize Telecom. It did not. On March 31, the court found the Belize Government in contempt of court and later imposed sanctions, including fines of US$50,000 a day. Fines owed are more than US$1 million dollars. The judge said that the Belize Government seemed to want to be "hit over the head with a 2x4" and pointed out that the Government had assets in the U.S. that it was putting at risk through its defiance.
Members of Congress, various departments of the U.S. government and international banking and finance institutions have taken a special interest in this case and are also pressuring the Government of Belize to make amends and honor their agreement with ICC.
Lanny Davis, counsel for ICC and former special counsel to President Clinton and currently partner of Orrick, Herrington and Sutcliffe, LLP, added: "The lawless acts of the Belize Government as found by the U.S. court in Miami send a message to all U.S. Companies -- beware before you invest in Belize unless the Belize government is prepared to follow the rule of law."
Posted to the site on 28th April 2005
