Ashcroft & Belize: 'The only thing he respects is dollars'

For years Michael Ashcroft's business interests have dominated a tiny Central American state. But now the tide is turning against him. Stephen Foley tests the mood in Belize City

"Lord Ashcroft? I can tell you about Lord Ashcroft. Let me tell you all about that man." The question ignites Stanley Thomas, an energetic taxi driver, who hulks his giant frame across the road, from where he'd been touting for business in the blazing sun of grimy, downtown Belize City. "We Belizeans are wise. We are not stupid any more. We are not the same people we were 20 years ago. We are wising up every day and we are very proud of what our prime minister is doing."

If there is one subject that excites passions in Belize, it is the subject of the secretive Tory peer, who has been a dominant presence in the little Central American country for over two decades.

Now, in the middle of a poisonous row with a prime minister whose political campaigns he once funded, and with swirling questions over his relationship with the country's telecoms industry, his influence on the Belize economy and its politicians is being debated more furiously than ever. "He is disrespecting the people, because he only respects the dollar bill," Mr Thomas continues, warming to the theme. "Our last government gave him the impression that he was beyond the law and, if he doesn't get his own way, it is a problem for everybody.

It was, in part, a reaction to Lord Ashcroft's power in the country that helped Dean Barrow to his landslide victory in the elections last year, on a broader wave of revulsion at the previous administration's fiscal incompetence and corruption. Mr Barrow's nationalisation of the country's major telecoms company, Telemedia, in August was portrayed as a means of crushing the peer – and it passed through parliament with barely a squeak of opposition. The 58-year-old trial lawyer, the country's first black premier, who used to represent Lord Ashcroft in court before their falling out, is confident in the popularity of the move.

A straw poll on the streets and beaches of Belize suggests that Mr Barrow's barrage of revelations and allegations is wearing on the peer's reputation here.

It is not a universal view, of course. Jon Vals, tall, lanky, missing several teeth, is selling souvenirs near Belize City's market square, dominated by the tatty headquarters of the Ashcroft-owned Belize Bank. "He done a lot for us people, made a lot of jobs for the poor, and spent a lot of money here." Mr Vals is sceptical about the government's claims Lord Ashcroft is soaking money from the country. "This country has no money for him to take out. He's got more money than the government's got."

The views are diverse, but everyone has one: from the waiter at a tourist restaurant ("He was good to start with, but now, ouch."), to the salon owner, braiding a little girl's hair ("He brings jobs, and the jobs situation in Belize is not so good right now."), to the teenage cook ("He's just a man who owns a lot of shit in Belize.").

For sale. The sign is hanging on a tree on the edge of a partially submerged island, off Caye Caulker, one of the paradisiacal destinations around the barrier reef, to which tourists are ferried from Belize City. At the marina in town, billboards declare: "Buy your own island."

But, for your average business billionaire, why stop at just an island? Lord Ashcroft has been buying and selling assets in Belize for so long, and with such large sums, that the locals sometimes say he owns the whole country. He first came here as a child, when his father was posted to the country by the Foreign Office, when it was still British Honduras. It was a fixed idyll in a peripatetic childhood, and the young Michael Ashcroft vowed to return. If home is where the heart is, he has declared, then Belize is home. He has citizenship here, as well as in Britain and the nearby Turks and Caicos Islands.

He parlayed a fortune built up in the security business – culminating in the $5.6bn sale of his firm, ADT, to a US conglomerate – into various interests in Belize over the years. They have included property development, the citrus-growing industry, ship registration and, most controversially, telecom. But his fortune here is based, first and foremost, on Belize Bank, the country's largest, which he bought in 1987.

It is substantially larger than its nearest rival, controlling about 40 per cent of the market. It is the first commercial enterprise that a visitor to the country encounters on passing through customs, as a Belize Bank teller invites you to swap US dollars for Belize currency. There's a fixed exchange rate and both can be used in the country. The bank's position means it holds the purse strings for many of the country's most important business and development projects, and that gives the peer instant political power.

Downtown, in Belize City, the Ashcroft-owned Radisson hotel is probably the most luxurious building in the country, sitting on the waterfront with spectacular views of the Caribbean. It is a powerful symbol of his wealth and his presence. His own house is next door; he and his family, and their visitors, can pop between the two via a private gate that opens up on to the Radisson pool.

The government buildings in the capital, 50 miles away in Belmopan, safe from the hurricanes that periodically threaten the coast, are functional by comparison, although the architectural echoes of Mayan temples give a modest flourish. It was in the country's 31-member parliament that Mr Barrow launched his most scathing attack yet on Lord Ashcroft during the nationalisation debate. That was when he accused the Briton of being "predatory" and subjecting the former colony to "new-age slavery", and vowed: "There will be no more suffering of this one man's campaign to subjugate an entire nation to his will."

Almost two months on, Mr Barrow is not easing off. In an open-neck, blue-striped shirt and navy slacks, reclining on the sofa of his office in Belmopan, he cheerfully declares that he expects that Lord Ashcroft and his business, political and media allies will try to destroy him – but that he is trying to act in the best interests of the country.

"This sense of Lord Ashcroft's, that he can pretty much call all the shots, and that national governments must simply allow him to have his way – that's colonialism. I first met him in the Eighties when he said he was interested in helping Belize. We actually – silly us – thought he was talking about being philanthropic more than anything else. But he was certainly not a knight in shining armour."

If anything, the vilification of Lord Ashcroft is being stepped up because now Mr Barrow plans to pursue the country's other telecoms firm, SpeedNet. In the teeth of repeated denials by the peer's allies, the prime minister says that Ashcroft-related trusts control SpeedNet, too. The government has been following a complex paper trail that leads to trust companies controlled by the peer's long-time lieutenant, Mel Flores, according to Mr Barrow and several of his allies. Mr Flores is described as a "financial consultant" in documents filed by Lord Ashcroft's companies at the London Stock Exchange, and he has sat on several of the peer's boards.

Lord Ashcroft's spokesman, Alan Kilkenny, in the UK denies the allegations coming out of the government and accused the prime minister of telling lies. And after repeating his mantra that, despite all the innuendo in Belize, the peer has no economic interest in telecoms in the country, Mr Kilkenny asked: "But how do you prove a negative?"

Between the byzantine network of Caribbean trusts set and the viciously polarised atmosphere of the local politics, truth is something of an elusive concept in Belize. Telemedia's ownership has been shrouded in mystery for years. Lord Ashcroft controlled it earlier this decade, before a US entrepreneur called Jeffrey Prosser became a major shareholder. Financial difficulties caused a reshuffle in the middle of the decade, and it was claimed earlier this year that a previously unknown charitable trust is in fact now the controlling shareholder.

What is known is that Lord Ashcroft's long-time business associate Philip Osborne sat on the board of Telemedia, and the peer helped to negotiate a controversial 2005 agreement between Telemedia and the then government, which put taxpayer guarantees behind Telemedia's profitability– a sweetheart deal Mr Barrow has repudiated.

Lord Ashcroft continued to act on the company's behalf right up until the two men fell out irrevocably this year, the prime minister claims. And the ultimate beneficiaries of the Hayward Charitable Trust, which says it controlled 70 per cent of the company until nationalisation and which is now fighting for compensation, remain stubbornly obscure. The trust has said only that, once it has paid off (unexplained) debts, it plans to pay out to (unspecified) charitable causes.

Even the government minister seen as most sympathetic to Lord Ashcroft finds his secrecy regrettable. "He never articulated any of that," says Wilfred Elrington, the laconic foreign minister. "He never said, this is for widows and this is for orphans. I think it would have been helpful if he had been able to do that."

Talking to The Independent in New York after attending the UN General Assembly last month, Mr Elrington said he considered the prime minister's accusations of colonialism to be well-reasoned. "Small countries that have had the colonial experience tend to defer to people who come from developed countries, and Lord Ashcroft was given a royal reception in Belize," he said.

"The English who went out into the colonies became disdainful of the locals. They assumed the posture of the aristocracy. I don't think Lord Ashcroft was of that disposition, he is not stuffy, he has no airs, he is not puffed up. He is respectful of talent. But I think there was a measure of, shall we say, irrational exuberance on the part of local politicians.

"The whole situation is unfortunate. I don't blame him as much as I blame the previous administration for treating him in such a liberal way. There is a perception he was accorded advantages not given to other enterprises. It is not that anybody wants to persecute him, we just don't believe he should be more equal than others."

How has Lord Ashcroft been reading the political runes in Belize? He and his representatives refused to talk about the issue with The Independent, but there are clues in the reports of his holding company, BCB Holdings, which is listed on the Alternative Investment Market in London. A year ago, the company was called BB Holdings, after Belize Bank. The group lends more in the Turks and Caicos Islands now, and is also shifting its focus to Trinidad and Tobago, where its shares have just begun trading on the local stock exchange there, too.

The footnotes to the accounts reveal that BCB believes it is owed $18.3m by the Belizean government, in two separate disputes over loan guarantees issued by the previous government. The new chief executive, Lyndon Guiseppi – installed last year because of his experience in banking in Trinidad – provides the only managerial reference to the feud with Mr Barrow. "Going forward, we will continue to seek opportunities to grow the US dollar earnings of BCB outside of Belize and Turks and Caicos," he writes. "The current Belize economic and political environment continues to present significant challenges but we will persevere with our key financial objectives."

Lord Ashcroft was not in Belize last weekend. His yacht has not been spotted for a while at the private quay erected by the Radisson hotel, according to the hotel staff member manning it. The blinds were down at the Ashcroft home, locked behind white security gates, and there was no one on the deck above the second floor, where guests can gaze out into the ocean.

The peer's Belizean residence is just a short stroll from the central bank. Or it would be, were Belize City not too dangerous to venture out on foot at night, now the gang and drug violence has compounded the poverty to make the streets unsafe.

"I have no intention of going to a funeral," says Alan Slusher, insisting on driving the distance to a Turkish-owned restaurant adjacent to the bank. Mr Slusher is firmly in the prime minister's camp in the battle against Lord Ashcroft, although he has served both parties in the past. A former central bank governor, he is now its chairman and Mr Barrow's financial adviser, having returned from stints at the Caribbean Development Bank and the World Bank.

Mr Slusher and Lord Ashcroft have tussled in the past over Belize Bank's interpretation of the local laws, and both men are clearly hard-charging negotiators, throwing everything at each other. He recounts how Lord Ashcroft told him at one point: "I'm going to tie you up in court for years." The central banker, though, won his battle by threatening to tell the public that he was "worried" about the health of the bank – effectively threatening to cause a run on the bank.

Now Mr Slusher is involved in the telecoms battle, too, having been appointed to the nationalised Telemedia board. The agreements signed between SpeedNet, Telemedia and the old government are only now coming into focus.

"There are so many companies and trusts associated with Ashcroft, and they keep churning around, so you never know who owns what. We are trying to get answers that make sense."

Mr Slusher thinks – hopes – that Lord Ashcroft's days of making outsize profits in Belize may be coming to a close because of the outcry generated over the telecoms agreements. "It is not just the present government that is taking a different attitude towards him, but the general population, too, because of what has been revealed.

"He's very personable, and he's a sharp businessman. I just don't like what he is doing. I think he is raping my country. But then, my country did lie down and take its panties off..."

£875m

Annual GDP of Belize

£1.1bn

Net worth of Lord Ashcroft

Stephen Foley, The Independent's US business editor, was named Business Journalist of the Year in the 2009 British Press Awards