Former CDB head issues warning on banks future in letter to Governors

The content originally appeared on: Antigua News Room
Leon

CMC-The former president of the Barbados-based Caribbean Development Bank (CDB), Dr Hyginus “Gene” Leon, says if there is no change within the financial institution “the next president may encounter the same challenges”  that he faced during his tenure at the region’s premier financial institution.

In an 11-page letter sent to the Board of Governors, who will open their 54th annual meeting in Canada on Wednesday, Leon, who resigned his position after having been sent on administrative leave in April, said it was also “reasonable to question whether the Board of Governors has been advised appropriately” regarding his situation and “whether the information provided to the investigators and the Board has not been contaminated…”

In his letter, a copy of which has been obtained by the Caribbean Media Corporation (CMC), the St Lucian-born economist is also questioning whether the “information provided…contained misrepresentations and whether the reports presented could stand the test of rigorous analysis?”

In April, lawyers representing Leon, wrote to the bank indicating that it was “evident” that the CDB had “lost all trust and confidence in our client by the failure of the Board of Governors to prevent the continued violations of its Charter, policies, rules and regulations with regard to its elected President.

“Our client has therefore made the extremely difficult decision to resign his elected position of the President of the Bank with immediate effect,” the law firm wrote, adding the CDB had until May 4 “to negotiate an amicable separation” indicating also that their correspondence should be viewed “as our client’s pre-action protocol letter” regarding the entire situation.

In the three-page letter, dated April 21, and headlined “Re. Dr Hyginus “Gene” Leon, Resignation and Constructive Dismissal, the St Lucia-based law firm, Fosters, said it would be moving to the courts in Barbados “or any other jurisdiction more appropriate, to enforce our client’s legal and constitutional rights”.

The CDB has not, if it did respond to the lawyer’s letter, made the contents of its response public, but St Vincent and the Grenadines Finance Minister, Camillo Gonsalves, has called on his fellow governors to stop “exposing” the financial institution “to further ridicule and undoubtedly, more litigation” and move on from the “resignation” of Leon.

In a May 14, 2024, letter sent to “my fellow members of the CDB Board of Governors,” Gonsalves said that he has been asked to “vote on whether the Caribbean Development Bank should accept the resignation of Dr Hyginus Leon from his position as President of the CDB, or whether he should be terminated as of a date three weeks beyond his resignation letter.”

In the letter, a copy of which has been obtained by CMC, Gonsalves said that “as Governor for Saint Vincent and the Grenadines” he had received two separate voting forms on “successive days” asking him to vote on the issue.

But Gonsalves, who is also an attorney, noted that the “options” placed before the Board of Governors “would create the incongruous situation of a President who remains in the employ of CDB three weeks after he submitted his resignation-and possibly beyond.

St Lucia’s Prime Minister Phillip J Pierre has blamed a “conspiracy” for the removal of Leon adding that he wanted to place “ on record  St. Lucia’s full support for the work that Gene Leon did  at the Caribbean Development Bank and to regret  that a conspiracy, and I make no bones about it and this is not personal to anybody, to any function to the bank, a conspiracy is what caused  Gene Leon to resign”.

Last month, during the fourth conference on Small Island Developing States (SIDS) held in Antigua and Barbuda, the country’s Prime Minister, Gaston Browne, told the state-owned ABS radio and television that discussions were taking place for the creation of a development bank catering specifically to the needs of SIDS and that the former CDB president has been engaged as those discussions gain momentum.

When the governors meeting opens in Canada on Wednesday, the bank said its acting president, Isaac Solomon will “highlight the Bank’s future direction in its ongoing thrust to foster resilient prosperity across the Caribbean region”. The opening ceremony will also be addressed by Ahmed Hussen,  the chairman of the Board of Governors and Canada’s Minister of International Development.

In his  June 15 letter to the governors, Leon wrote that he is “unlikely to have the opportunity to engage” them but he wanted to place on record “my appreciation of the trust placed in electing me as the sixth President of this august institution, which I had the pleasure to serve”.

The letter recalled that Leon had outlined four themes to drive the institution during his interview for the post and sought to response to the allegations that had been levied against him resulting in him being sent on administrative leave while the bank carried out its investigation.

For example, the letter makes reference to a “Leadership in Crisis Management”  alleging that the “office of the President created a toxic working environment”.

But Leon wrote “the question is under what conditions could this have occurred. First, a toxic environment could only occur with direct reports (Vice Presidents and Directors).

“This begs the question was the allegation of a toxic environment centered on a leader asking his direct reports to deliver and be accountable?,” Leon wrote, adding that “expecting accountability and high performance from team members is a standard aspect of leadership and management”.

Leon, a former senior IMF official, said that the CDB is mandated to serve the entire region and its populace and that he was “driven to push incessantly and to advocate forcefully for four major initiatives that are essential complements to implementing and benefiting from the Bridgetown Initiative advocated by the Government of Barbados”.

The Bridgetown Initiative is being compared to the Marshall Plan of 1948, when the United States provided more than US$13 billion of foreign aid to help Western Europe recover after World War II.

It is a proposal to reform the world of development finance, particularly how rich countries help poor countries cope with and adapt to climate change. It sets out three key steps including the establishment of a new mechanism, with private-sector backing, to fund climate mitigation and reconstruction after a climate disaster

Regarding the allegation of “Sexism and Ageism,” Leon wrote that “as a leader, I have always viewed my role as one of identifying and nurturing talent and creating opportunities for diligent professionals in their careers, especially in areas that advance the institution’s mandate.

“Yet, during my tenure as President, it became noticeable that women were being labelled as too outspoken, hardworking, or ambitious. These expressions and their implications were in direct contradiction to the Bank’s Gender Policy and Strategy, EDGE principles, and acceptance of the principles of non-discrimination and a safe and fair workplace”.

He wrote that “it is deeply concerning that, as noted by a distinguished regional thought leader, an institution such as the Bank, which is EDGE certified, has moved with haste and arguably hostility to promote sexism and ageism because female colleagues were not aligned in perspective or work ethics with certain members of the senior team.

“It appears also that my attempts to lead in establishing these desired practices were not acceptable,” Leon wrote, adding “it would be disappointing if the region’s premier financial institution and a proponent of the Sustainable Development Goals (SDGs) should be marred by discriminatory conduct”.

The former CDB president also responded to the allegations of “Excessive Travel” noting that “the necessity for expanded travel by the Bank was and remains paramount to advance membership engagements, foster collaborations with strategic partners, and enhance our representation in significant regional and global forums”.

He said like other persons in leadership positions as the president of the CDB he travelled “a lot, but always with a purpose and for advancing the Bank’s business.

“That purpose was announced to the Board of Directors from the start of my presidency,” Leon wrote,” adding that “few would argue that these objectives have not been advanced significantly over the past three years.

“May I submit to Governors, am I being punished for doing more than was deemed doable, or for being overly zealous in advancing the development agenda for the Region?” Leon wrote, insisting that “all travel was purposeful to achieve goals on thought leadership and engagement with shareholders and international shareholders as well as leverage the heightened necessity for strategic presence in a post-pandemic, climate changed-focused global environment”.

Leon said that when other development banks are actively engaged in discussions on shaping the future of the global financial ecosystem “it is imperative for the CDB to assert its presence in these dialogues to advocate effectively fr our region’s interests and priorities.

‘”Within the Bank, I viewed the Office of the President not as a per functionary or ceremonial one, but one that sets the tone and pace of the organisation that I was elected to lead,” he said, adding that his drive and ambition, “often characterised as assertive, were deeply rooted in the conviction that the Bank has a leading role to play in the transformation of the region.

“As President, my driving force was that the Bank should not be merely observing but should be actively shaping the trajectory of our BMC’s (Borrowing member countries) and the region.

“It was imperative that the Bank not only served the needs of its member countries but also stood as the authoritative voice and advocate of the region, while crafting impactful partnerships that drive substantive change”.

Leon said that the imperative for strong leadership cannot be overstated, adding “it cannot be business as usual.

“I believe that it is through decisive, accountable and innovative leadership that we can truly transform our institutions and, by extension,  provide unwavering support to our region,” Leon wrote.

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