Special Report: Dominica Passport Scandal Reveals Iranian Sanctions Busting and PRC Intelligence Focus on the “Third US Border” in the Caribbean

Analysis. By Gregory R. Copley, Editor, GIS/Defense & Foreign Affairs. A deepen-ing corruption scandal involving the sale of passports and citizenship by the Govern-ment of the Commonwealth of Dominica has exposed broader links into Iranian sanc-tions-busting operations and what could be the key covert hub of People’s Republic of China (PRC) intelligence and political action activities aimed at undermining the US po-sition in the Caribbean, the “third US border”.
These three issues seem to be separate but overlapping (and partially interrelated) events which put Dominica at the center of US strategic concerns, for the first time since the country worked closely with the US Ronald Reagan Administration in 1983, in a di-ametrically different cause: the recovery of Grenada after a Cuban-backed coup.
The current scandals finally went public (after developing for several years unnoticed by the media) with an in-depth investigation aired in the US by a CBS’ 60 Minutes program on January 1, 2017, and it also highlighted a deeper pattern of political corruption around the Government of Prime Minister Roosevelt Skerrit (Dominica Labor Party: DLP). The interrelated scandals, which involve major violations of the US Comprehen-sive Iran Sanctions, Accountability, and Divestment Act (CISADA) of 2010, triggered widespread protests by Dominicans at home and abroad — through January and Feb-ruary 2017 — and the Skerrit Government then began attempting to suppress street demonstrations.
A key Dominican figure, a medical doctor who served with the US Army, Dr Samuel Christian, was detained on February 2, 2017, as a suspected agitator against the Skerrit Government1, but released on bail after widespread protests in front of the Police Headquarters in Roseau, the Dominican capital. A key Dominican lawyer, Gabriel Chris-tian2, now practicing in the US, had, days earlier, issued a call for the immediate resig-nation of Prime Minister Skerrit, in the face of the mounting evidence and the 60 Minutes exposé, and this call was supported, not surprisingly, by the principal opposi-tion party, the United Workers Party (UWP), a centrist, pro-US party led by Lennox Lin-ton. Extracts from Defense & Foreign Affairs Special Analysis 2 February 3, 2017 GIS Confidential © 2017 Global Information System, ISSA
The public focus of the scandal — but not the breadth of the strategic activity — was the “Dominica Economic Citizenship Program”, which actually began in 1993, and by which, under Dominican law, foreign citizens could acquire Dominican citizenship for $100,000. The volume of sales of these “citizenships” is now, however, undocumented and no substantive numbers have been revealed, but was of sufficient concern that it could en-sure that the ruling party could call on sufficient numbers of “new citizens” at any time to skew political voting. The sale of diplomatic passports involved substantially larger payments, and most of the funds were diverted away from the Government’s coffers.
Prime Minister Skerrit rejected the claims of misusing the scheme for fraudulent political or financial activities, but, by February 3, 2017, was clearly on the defensive, particularly in light of the sale of a Dominica diplomatic passport [issued March 13, 2015] to Iranian national, Alireza Zibahalat Monfared, 43, who was subsequently arrested in the Domini-can Republic and “extradited” to Iran to face charges there related to skimming funds from the multi-billion dollar sanctions-evading oil sales scheme.3 Monfared was closely associated with Mr Skerrit, so closely, in fact, that it triggered US official concern that Prime Minister Skerrit fitted the definition of knowingly violating the US CISADA ruling, making him liable to US law if he chose to enter the US.
Dr Samuel Christian, just after his arrest, noted on February 2, 2017, that “the banks, locally and internationally, [have] shut down the accounts of the unscrupulous passport industry”, highlighting the reality that the Prime Minister’s primary source of funding was drying up.
Significantly, the Dominican GDP had declined after 2014, and much of the traditional agricultural export sector no longer functioned as it had done in earlier years. The Sker-rit Government had ignored agricultural development, the dominant source of Domini-can employment and exports, and relied instead on funds from the “economic citizen-ship” program.
The 2017 public exposures of the passport scandal, however, were the “tips of the ice-berg” of a web of activities which interrelated corrupt sales of normal and diplomatic Dominican passports, with the funding going mostly into offshore (Singaporean and other) accounts of Dominican politicians; the active participation (or witting knowledge) of Dominican DLP politicians in a very substantial sanctions-busting program to enable the sale internationally of Iranian oil; and the comprehensive support for these actions and for the Skerrit Government by the Government of the PRC in order to build a base of operations to weaken US influence in the Caribbean and to use Caribbean bases — and the ease of entry into North America from Caribbean states — to conduct penetra-tion operations into the US and Canada.
The activities are attached to:
 International money-laundering activities linked to Iran sanction-busting and the for-mer Nigerian Administration of Pres. Goodluck Jonathan through his then-Minister of Petroleum, Diezani Alison-Madueke, who had a Dominican diplomatic passport4;
 Actual Iran sanction-busting operations, utilizing Greek-managed, Dominican-flagged tankers to help Iran avoid international sanctions. It is unclear to what extent the ar-rest of Monfared would have on the use of the Dominican-flagged tankers to run Ira-Extracts from Defense & Foreign Affairs Special Analysis 3 February 3, 2017 GIS Confidential © 2017 Global Information System, ISSA
nian oil, but it was clear that the Iran-Dominica covert arrangement ran more deeply than just Mr Monfared5;
 The complicity of the intelligence services of the PRC, the Ministry of State Security and, it is understood, military intelligence elements and participants from the new (2015) Strategic Support Force element of the People’s Liberation Army (PLA). The PRC maintains a disproportionately-large embassy presence in Dominica, on a hilltop at Morn Daniel, outside Roseau;
 The involvement of Asian and other non-Dominican banks in the diversion of funds to Dominican politicians, particularly Prime Minister Skerrit;
Prime Minister Skerrit’s knowledge of the realities behind the Iran-Dominica-Greece tanker operations became more clear when, a few days after the arrest of Alireza Mon-fared, the Prime Minister traveled to Athens with Lennox Lawrence, Dominica’s non-resident Ambassador to Greece. Amb. Lawrence was responsible for registering the tankers under the Dominican flag, even though most of the 11 tankers of the Ocean Tankers group registered by Dominica were Greek-owned, and stationed in Singapore. Given that the purpose of creating the Dominican-flagged tanker fleet was to transport oil from Venezuela to Dominica — and the fleet was far larger than required to provide petroleum products for Dominica’s 72,000 population — the choice of Singapore for the vessels’ homeporting was questionable. However, Alireza Monfared operated out of Malaysia using the name My Dominica Trade House, and another company registered as “Dominica 1”.6 It seemed clear that the bulk of the Iranian-originating oil in the tank-ers was destined for the PRC.
When the scope of the mis-use of the international banking system was publicized in early January 2017, it was understood that at least two Canadian and one Dominican banks refused any transactions related to the Dominica Economic Citizenship Program, given the implication that it was linked to legally questionable activities.
The rôle of Nigerian officials — particularly former Petroleum Minister Diezani Alison-Madueke — in helping to establish and manage aspects of the global-scale money laundering operations which were critical to the Iranian sanctions-avoidance scheme is not yet fully clear, other than the fact that Mrs Alison-Madueke was herself actively en-gaged in hiding substantial sums of money in at least 15 offshore locations, including the UK, USA, Brazil, and Venezuela.
Where and how the overlapping issues engage the People’s Republic of China is also not yet fully clear, other than the fact that (a) the common link between all the issues is Prime Minister Skerrit, and (b) it is probable that much of the Iranian oil was shipped to Iran. The linkages between the PRC, Iran, Dominica, and Venezuela (bearing in mind that Venezuela provided the rationale for the tanker fleet in the first place, and Prime Minister Skerrit was known to have good relations with Venezuelan officials) have yet to be fully disclosed.
But the PRC has given cover to many of the actions of Prime Minister Skerrit. Signifi-cantly, the PRC’s major contribution to Dominica has been to provide the Police with equipment, and the few infrastructure projects run by the PRC in the Commonwealth Extracts from Defense & Foreign Affairs Special Analysis 4 February 3, 2017 GIS Confidential © 2017 Global Information System, ISSA
have not been popular, given that the PRC — as it does elsewhere in the world — does not hire local workers even at menial levels to undertake the ventures.
Dominica had cut diplomatic relations with the Republic of China (ROC: Taiwan) on March 29, 2004, and established diplomatic ties with the People’s Republic of China. The PRC agreed at that time to give aid worth more than $122-million over six years. The ROC had, in the past, been a major aid provider to Dominica. Prime Minister Skerrit had, just before the announcement, paid a working visit to the PRC, meeting with PRC Foreign Minister Li Zhaoxing who, with Skerrit, signed a joint communiqué on March 23, 2004, on the establishment of diplomatic ties in Beijing. Mr Skerrit also met with PRC Premier Wen Jiabao. This was significant, even then, given that Dominica’s population of 72,000 scarcely warranted high-level attention from Beijing, absent other strategic goals.
Prime Minister Skerrit has also had close relations with a Macau billionaire developer, Ng Lap Seng, who has allegedly been closely tied to PRC intelligence.
Ng and an assistant were arrested in September 2015 on charges that they made false statements about why they brought $4.5-million into the United States from the PRC. He was still engaged in legal action in New York in February 2017 on the charge that he and other PRC businessmen had funneled more than $1-million to pressure diplomats into supporting construction of a UN conference center in Macau, allegedly bribing for-mer United Nations General Assembly president John Ashe and other UN officials. [Ng Lap Seng was also part of a US Democratic Party fund-raising scandal when Bill Clinton was US President, and was mentioned in the Panama Papers.] Mr Ng reportedly was also issued a Dominican diplomatic passport, apparently directly by Prime Minister Skerrit.
The PRC now has a substantial investment in Dominica and in Prime Minister Skerrit, even though it may be now taking measures to insulate itself from the scandals which the Iranian and related passport deals have brought down on the island. Given the size of the PRC’s Dominica base and its engagement in activities in the Caribbean and North America, any action which could bring down Skerrit has implications for Beijing. It seems likely that a UWP Government under Lennox Linton would seriously consider re-versing the Skerrit decision to abandon relations with the Republic of China in favor of Beijing.
What makes Prime Minister Skerrit so vulnerable at present is the reality that Dominica is too small, and too close to the United States geographically, for him to ignore Wash-ington, even though the PRC may have given him a measure of impunity during the eight years of the Barack Obama Presidency which ended on January 20, 2017. The determination of the incoming Donald Trump US Administration to re-examine the Five+one deal with Iran — and to return Iran to the position of adversary — has helped put Dominica back into focus for the US.
The Iranian Government has fed into the restoration of US-Iranian hostility, further guaranteeing that the rôle of Dominica in sanctions-avoidance would gain attention. And this jeopardizes the PRC’s position in the Caribbean and Central America, which had been building quietly during the Obama years. Extracts from Defense & Foreign Affairs Special Analysis 5 February 3, 2017 GIS Confidential © 2017 Global Information System, ISSA
1. Allegedly in connection with a speech he gave at Peebles Park, Dominica, more than a year earli-er, in November 2015. Dr Christian is affiliated with the pro-US Dominica Freedom Party, once led by Prime Minister Dame Eugenia Charles (governed from July 21, 1980-June 14, 1995). As chairman of the regional Organisation of Eastern Caribbean States, Dame Eugenia had invited the US to invade neighboring Grenada in 1983 after an internal power struggle ended in the murder of Prime Minister Maurice Bishop. She became a close ally of US Pres. Ronald Reagan. Dr Christian was Howard University Medical School class of 1984, and then a distinguished US Army Combat Surgeon, retiring with the rank of major.
2. US-educated lawyer (Georgetown and Howard universities) Gabriel Christian, like Dr Samuel Christian (no relation), is a US-Dominican dual national. Gabriel Christian is the General Council for the Maryland, US-based Dominicans in Defense of Democracy movement, which took up the cause of exposing the Skerrit Government.
3. Al Arabiya noted on January 16, 2017, that Monfared was accused of involvement in Iran’s biggest-ever corruption scandal, working alongside “tycoon” Babak Zanjani, who was sentenced to death in 2016 for taking $2.8-billion while helping Iran bypass sanctions. The head of Iran’s international police department, Masoud Rezvani, said that Monfared had been extradited via Havana and Moscow before arriving in Tehran on January 15, 2017. Monfared had various passports and had managed to escape extradition at least once when he was briefly detained in Malaysia. It was un-derstood that Mr Skerrit’s Government arranged for Mr Monfared to be arrested in the Dominican Republic, rather than Dominica, and he was then quickly extradited from there, ultimately back to Iran.
4. The Dominican diplomatic passport of Mrs Diezani Alison-Madueke, number DP0000445, was val-id from May 21, 2015, to May 20, 2020. Mrs Alison-Madueke was also offered a post as Domini-ca’s Trade and Investment Commissioner. She was reportedly in the process of using the diplo-matic passport to leave the UK for Dominica when she was arrested by UK authorities on October 2, 2015. She had been Petroleum Minister in Nigeria until May 2015, and remains a person of in-terest with the Nigerian and UK (and other) governments regarding corruption and money launder-ing issues. In January 2017, it was reported that she had agreed to surrender $153-million of mis-appropriated Nigerian National Petroleum Company (NNPC) funds to the Nigerian Government. She was elected as the first female President of OPEC on November 27, 2014, and in that posi-tion, in particular, became familiar with her Iranian counterparts. It should also be noted that other Caribbean “citizenship through investment” schemes also were patronized by other African nation-als.
5. The tankers were, according to website TheDominica.net, typically around 20 years of age, and all at least were purchased second hand. The vessels along with their International Maritime Organi-zation (IMO) numbers were named as Ocean Concord (9052874), Ocean Emer-ald (9002207), Ocean Gurnard (9123881), Ocean Kite (9129201), Ocean Man-ta (9123867), Ocean Marlin (9126895), Ocean Moray (9123870) Ocean Osprey (9150652), Ocean Princess (8601496), Ocean Seal (9113094), and Ocean Swift (9129213). US authorities were, as of late January 2017, investigating the rôle of the fleet in Iranian sanctions-busting.
6. Prime Minister Skerrit remained in Greece where, in a Skype broadcast from Greece to the people of Dominica, he denied media reports that a criminal investigation had been launched against him by US authorities. In that broadcast, he noted: “Mr Monfared’s diplomatic passport was recalled and cancelled and all official ties with him were severed effective January 20, 2016, upon receiving information that he may be a person of interest to authorities.” He did not say which “authorities”. Mr Skerrit claimed that the allegations against him were political smears by the opposition UWP.