The story of FIB remains cloudy - but one of the main diggers-out of fact is David Marchant at his website at www.offshorebusiness.com. At that website, Marchant has posted copies of various documents that give a degree of understanding of what has been going on.

In October 2000, at the height of the mess (or what was then thought to be its height), the Grenada Government announced its plan to rescue the bank, described as "the island's premier offshore financial institution by Belgrafix.com, which collates reports from newspapers such as Grenada Today.

Michael Creft, the original person responsible for offshore banking licences appears to have been sidelined and all government comment on this topic now emanates from senior ministers. Garvey Louison, a senior civil servant is no longer at FIB, despite his considerable relevant experience. He was Grenada's Acting Director of Audit until has appointment as Accountant General in October 1995 and subsequently became Director General of Finance. Rumour circulating on Grenada is that he was removed from FIB because he declined to sign off legal fees. One newspaper report in Grenada quotes unconfirmed reports that a lawyer had promised the government to help raise the necessary funds to repay depositors and to ensure a re-capitalisation plan. WMLR has spoken with sources close to the bank who confirm that plan. But, according to rumour in Grenada, Louison declined to pay continuing legal fees out of rapidly diminishing cash reserves. It must be remembered that Louison was appointed in a position akin to an administrator and it is probable that there was no power to exceed reserves.

It may be entirely co-incidental, but in July 1999, there was trouble between The Grenadian Government and another bank - the Grenada Bank of Commerce. A former Director General of Finance (DG-F) in the Grenada Ministry of Finance was on the Board of GBC, and there was a plan for him to be replaced by Louison, the current DG-F. The incumbent was at that time refusing to give way, alleging irregularities that he wanted to see sorted out before he would leave.

Louison was replaced at FIB by Errol Thomas, a former attorney general. But he seems to have no function in relation to FIB2000 (a new bank).

Subsequently, Finance Minister Anthony Boatswain outlined the plan to rectify the situation - it is difficult to decide if it is daring or foolhardy, or just a refusal to recognise the obvious.

To try to sort out the mess, the government has given a Class 1 banking licence to a new company called First International Bank of Grenada 2000, which we will call FIB2000. FIB2000's licence contains a condition that it will within a reasonable period of time cause all legitimate depositors to receive at least their legitimate deposits paid to FIB. The government intends, says Boatswain, to "vigorously pursue the investigation surrounding the partial collapse of First International Bank." It needs to because he admitted that the losses amount to at least Grenada Dollars 150m.

In addition, the government intends to appoint a National Drug Crime and Money Laundering Committee, to appoint a Money Laundering Committee as provided for in the Money Laundering (Prevention) Act 1999, to provide training for the staff of the department that supervises offshore banking, to establish a bank supervision department with the function of ensuring proper capitalisation of banks and defaulters given a reasonable time to comply and if they do not "face the prospect of having their licences revoked" and to separate promotion from regulation within GIFSA.

The Recovery Plan for FIB was outlined by Mr Boatswain:

- After he satisfied himself that it was properly capitalised, the Finance Minister has granted a Class 1 banking license to FIB2000 upon condition that it

1) repay to legitimate investors with FIB to receive either their legitimate deposits or to give to them upon terms to be agreed (and backed by a Certificate of Deposit lawfully issued by the licensee of such security) security for the amount

2) moneys paid by to or by order of the depositor may be taken into account

3) that the directors of FIB2000 are directly involved in the management of the bank and to ensure proper internal supervision

4) to appoint a qualified accountant to ensure proper records are at all times kept.

Readers are reminded of the letter sent by FIB offering depositors the chance to swap deposits for shares and that one of the problems highlighted in that letter was the issue of certificates of deposit that were not backed by anything very much. It is a disturbing commentary on the regulatory regime that it is an express term of a banking licence that the directors be actively involved in the business - seeming to imply that this is not a normal part of the regulatory requirements.

However, even allowing for the new scheme, all is not rosy.

Within six weeks, Boatswain was under pressure, blaming a whispering campaign over the importing of agricultural products. There are rumours that there are now plans for a civil action alleging fraud on the part of individual government ministers.

Part of the background to the expected claims is a memo obtained by Offshore Alert which purports to be from FIB Director Robert Skirving (named in the Louison letter) to Brink/Zeigler suggesting they obtain another Class 1 Banking Licence in Grenada - and says that the new bank could be called something like "First Bank of the Caribbean so that it could use the First Bank nickname."

One of those seemingly implicated is Prime Minister Mitchell, who was apparently willing to allow an FBI search warrant to be executed but then changed his mind. Following an exchange of correspondence between the US Attorney's office and Grenada's DPP, the Americans set out what was described as "overwhelming evidence of fraud and money laundering" against FIB and Brink/Zeigler, says Offshore Alert. The FBI never gained access yet in Mitchell was reported as saying that the FBI had investigated FIB and had cleared them. Indeed, in at a press conference given in July he said that the government had invited the FBI to examine FIB and at the time he was quoted in Grenada Today as saying "whilst investigation continues we received initial communiqué. We had not received any indication as to any illegality on the part of the bank at this particular time." That comment may now seem to be without merit.

And the slurs continue because Brink/Zeigler has said that he made political contributions, resulting in politicians on all sides (except one as of early November) denying any payments.

It gets worse for FIB and those associated with it. Depositors on the trail of the money obtained a court order in Grenada freezing some 373 million Grenada dollars. Then they got another one in London in September. 15 defendants are named, reports Offshore Alert, and claims that some 37 financial institutions around the world were examined and orders obtained against several. Some were hole in the wall operations (in international banking terms) but others were significant - American Express Bank Ltd (USA), Bank of Montreal (Canada), Dominion Bank (Canada), Lloyds TSB (UK) and Citibank and Bank of New York.

Meanwhile, other parts of what has been consistently denied to have been a pyramid have fallen to be questioned elsewhere and in Indianapolis, Wellington Bank and Trust Limited, formed in Grenada in 1998 by John E Brinker Jr and Gary J Bentz is linked to the FIB debacle. Victims have reported being promised returns of at least 100% per annum and it is estimated that at least USD10m was handed over. One of the schemes was a "preferred stock program." Interestingly, one Cincinnati newspaper report about the Indianapolis cases, published in October 2000, refers to FIB and says that it was "known colloquially as First Bank in the Caribbean." Yet "investments" were being made in around spring and early summer 1999, suggesting that the Skirving memo referred to above might not have been quite the novelty that it appears.

Brinker and Bentz started Wellington Bank and Trust Limited with no previous experience of banking. Indeed, there is a fascinating coincidence - Brink was a bankrupt in Oregon and after discharge went to Grenada and formed FIB. Brinker was bankrupt, too, and after discharge formed Wellington Bank and Trust - in Grenada.

And questions must be asked about FIB2000. Amazingly, given that the entire mess is in substantial part due to the opacity of the ownership and management of the various connected financial services business, neither ownership nor the names of officers of FIB2000 have been made public. One of the more colourful commentators in Grenada claims that the whole thing is backed by G-77 - which Brink/Zeigler denies is his but with which he has undeniable connections in Uganda.

Which brings us back to the top of this story. The Ugandan corporation that has, according to the IDIC website, taken over IDIC (which incidentally sees no reason to meet the liabilities to FIB's depositors) is apparently called Union Capital Fund. In a cod press release dated 6 December 2000, written in the style of an interview with Brink/Zeigler, he says "what better way to defend IDIC's viability and to vindicate myself than to become personally involved," said the man who makes a habit of claiming non-involvement. For example, the "release" describes him as "an international consultant and contracted spokesman." No responsibility for management there, then.

Brink/Zeigler says on the IDIC site "it gives me a deep sense of satisfaction to now have the opportunity to have a close working involvement with IDIC being the vehicle to make financially whole all the depositors in First Bank and its client institutions."

In September 2000, there was an e-mail list operating on one of the web services that offer such facilities. Many considered that this was little more than a way for Brink/Zeigler to continue a line of communication. This feeling was contributed to by the fact that Brink/Zeigler did not write to the list directly but, it was claimed, did so through the list organiser. The list organiser suddenly closed the list after WMLR posted a message to it. The message did not appear. It outlined possible recovery steps that those who had lost money might like to consider.

Having lost that line of communication, and being barred from the FIB's website (which was by that time again working and seemingly inviting custom), Brink/Zeigler needed some other way of promoting his cause. He began to use the IDIC website. He posted an open letter to Garvey Louison accusing him of refusing to return phone calls with "those who have arranged a significant line of credit against one of the bank's major assets." Notably, he does not say what that asset is - and so far as WMLR is aware, at that time Louison had not identified any significant asset, much less one that was capable of being used to, as Brink/Zeigler claimed, "liquidate more than 50% of the total liabilities to depositors." He went on to claim "in other words, the bank could already be back in business, current on all its obligations."

Brink/Zeigler had such a wholehearted belief in the truth of this statement that he did not go to Grenada to press his case. Instead, he remained in Uganda taking pot shots at Louison. For example "I have learned that of the asset items you disparaged, there has already been independent confirmation of several amounting to approximately US$5bn" (he meant milliard).

Brink/Zeigler's letters, including what purports to be a response to the Louison letter currently appear on the IDIC website at www.idic-ec.org.

We tried to speak to Lawrence Jones, the London barrister referred to in our earlier article. Our e-mail to him was replied to by someone else, who said that Mr Jones had been taken ill in early December but expected to agree to meet us in early January 2001. The name in the e-mail was Barclay Butler - the CEO at FIB when Louison was appointed David Marchant tells WMLR.

There are those who will view the latest position in Grenada with a sense of dread; and déjà vu. What is disturbing is that the Grenadian government seem to be backing the same horse, or its close sibling, to try to win back the reputation that it has already lost for them. Any gambler that keeps backing the same runner in the hope that this time it will be OK is a loser who will never learn and, professional gamblers say, will never win.

The tragedy for Grenada is that now reputable banks will be very wary of going there and very wary of having any dealings with any financial services business based there.

But the question arises whether the stage is set for a similar PR disaster for Uganda. The Ministry of Finance, which is heavily involved in the counter-money laundering project announced recently has been renamed the Ministry of Finance, Planning and Economic Development. This mixing of duties may create the conflict that was caused by a similar mix of duties in Grenada, with Michael Creft becoming both developer of business and supervisor of it, placing him in a position where there was an inherent conflict of interest.

Uganda's biggest task, by its own admission (www.finance.go.ug) is poverty reduction. It is hugely dependent on agriculture, and agriculture is both a fickle and a high maintenance mistress. Uganda therefore needs to ramp up inward investment and, like most poor countries, is in competition with a history of activity in manufacturing. Uganda is worried about fighting crossing the borders from countries such as Congo. With a largely under-educated population, it has little hope of attracting high tech or service industries. So someone who is prepared to start to develop a fledgling financial services industry will, inevitably appear a God-send.

But like most countries struggling to convert their economies, Uganda has to be cautious not to take a poison pill. It is plain that that was what happened in Grenada and to use Africa as a base to launch another assault on other people's money is becoming attractive given the conflict and poverty across much of the continent.