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|Posted August 4, 2006|
|Americas||/ By Mary Anastasia O'Grady|
|New Jersey and Aristide, Perfect Together|
There has never been a shortage of "off-the-record" allegations that Haiti's Jean-Bertrand Aristide stole liberally from the public purse. But a case being heard in federal court in Newark, N.J. might actually prove it.
It is there that Michael Jewett has alleged that in 2003 his then-employer, politically influential New Jersey-based telecom giant IDT, entered into a shady deal with then-Haitian President Aristide in violation of U.S. law.
In court documents Mr. Jewett claims he was wrongly fired because he objected to the agreement. The deal, as he describes it in his complaint, was also highly unethical because it facilitated the theft of Haiti's telecom revenues - one of the few sources of hard currency for the starving nation.
Mr. Jewett's claim has enough credence that the U.S. Department of Justice has been investigating it, according to his lawyer in court documents. But now federal magistrate judge Mark Falk has issued a blanket protective order prohibiting Mr.Jewett from talking to Justice about whatever IDT deems confidential in the discovery phase of the case. It leaves one wondering what IDT, which did not return phone calls for comment, doesn't want Justice to find out.
This case has implications that go far beyond the rights of the plaintiff. Based on what has already been revealed in the case, it seems quite possible that if he is allowed to tell his story, Mr. Jewett could help Justice get the truth about Mr. Aristide's financial misdeeds, allegedly aided and abetted by IDT and other U.S. corporations during the decade that he controlled the country.
In the past two weeks at least 30 people have died in gang violence in Port-au-Prince and 300 others were forced to flee their homes. The Economist Intelligence Unit reported on Monday that "U.N. representatives fear that the recent attacks in the capital's slums may be designed to exert pressure on [President René] Préval to allow Mr. Aristide to return to Haiti." U.N. peacekeepers may not be the most effective fighting force but they tend to be in the know about who is behind trouble. Their observations support the claim that until Mr. Aristide is convicted and put in jail for his many transgressions - alongside Panama's Manuel Noriega - Haiti cannot begin to stabilize.
The interim government of Gerard Latortue (March 2004-May 2006) compiled a mountain of evidence against Mr. Aristide, alleging the theft of revenues from the telecom monopoly Haiti Teleco. In a civil lawsuit filed in a federal court in Florida in November, Haiti alleged that Mr. Aristide had given foreign carriers preferential settlement rates in return for their agreement to payments in offshore bank accounts belonging to him. This precisely what Mr. Jewett's claim against IDT alleges.
Unfortunately, Haiti has withdrawn its case in Florida, citing troubles with legal fees. The case may be refilled, but until then, the keys to unlocking the wider truth of the Aristide telecom business lie with the Jewett case and the Justice Department.
In the early stages of the case, IDT thought it could avoid scrutiny by claiming that Haiti Teleco deal was a trade secret. In May 2004 it submitted a sworn affidavit saying just that. Judge Falk concurred and permitted the sealing of the pricing agreement in the complaint. But Mr. Jewett's attorney, William Perniciaro, later showed the affidavit to be false by presenting to the Federal Communication Commission regulations that state that the FCC sets a single price for all U.S. carriers doing business with a given foreign monopoly. Mr. Perniciaro also showed that, according to FCC rules, agreements between U.S. carriers and foreign monopoly carriers must be publicly disclosed. Whereupon, IDT agreed to have the price unsealed. What was revealed was a deal that gave IDT access to to the Haiti Teleco network at nine cents a minute, while the FCC's set price was 23 cents a minute. In other words, IDT had broken the law.
What is it that IDT doesn't want the Justice Department to know?
That's bad enough. Now, months later, in barring Mr. Jewett from discussions with Justice, Judge Falk has cited a new IDT affidavit that again claims the Haiti Teleco deal was a trade secret.
In court filings, Mr. Jewett claims that the quid pro quo for the cut-rate price was an IDT agreement to deposit payments in an offshore account called "Mount Salem," for the benefit of Mr. Aristide. This is otherwise known as bribery. The Haitian complaint in Florida also alleged that there was a similarly named offshore account for the benefit of Mr. Aristide.
The federal court in Newark seems to be making discovery of this information also difficult. Mr. Perniciaro, Mr. Jewtt's attorney, was given permission to submit 20 questions to each of the 12 defendants. Since the law stipulates that to prove a whistleblower case, you have to prove the connection between the firing and what the employee alleges went on, Mr. Prtniciaro submitted questions related to the Teleco Haiti deal.
Federal Judge John Lifland ruled that the questions went against his instructions to keep the inquiry narrow and issued an order for Mr. Perniciaro to show why he should not be held in contempt. When the attorney argued the importance of motive in proving his case, Judge Lifland admonished him: "You are on thin ice by going into that, Mr. Perniciaro. It has very little to do with the reason we are here today." Mr. Perniciaro was held in contempt.
Under Judge Falk's gag order, Justice will have a hard time learning more from Mr. Jewett. If the plaintiff speaks to federal investigators he have to keep clear in his mind what he has learned in discovery and what he knew already. It he makes a mistakes, he could be sanctioned in some manner by the court.
Herb Denton, president of Providence Capital, a New York investment firm, has this to say about Mr. Jewett's allegation: "If it is true then one has to ask questions about the dozens of other notoriously corrupt countries throughout the Caribbean, Latin America, and Russia and its former republics where IDT does business."
That suggests one possibility for why IDT doesn't want Justice to know what, under FCC regulations, should be a matter of public record. It doesn't explain, though, why a federal court would want to assist in this effort.
Reprinted from The Wall Street Journal, OPINION, of Friday, August 4, 2006.
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