Credit: YouTube The Passport King who Markets Citizenship for Cash

DONATE Above: Christian Kalin, founder of Henley & Partners, talks about press coverage of the citizenship by investment industry in an April 2018 interview. Credit: YouTube It was supposed to be a lunch, but the Swiss businessman was not eating. As his companions tucked into their pasta, Christian Kalin sipped mineral water. The party had gathered at a restaurant overlooking the golf course in Frigate Bay, on the Caribbean island of St Kitts. Kalin, wiry and softly spoken, was in town to keep an eye on the general election in the former British colony. The date had been set for Jan. 25, 2010. With him was Alexander Nix, the now-notorious founder of Cambridge Analytica. Back then, the bespectacled old Etonian was running the elections division of Strategic Communications Laboratories, known as SCL. Nix was being paid to help secure a fourth term for the country’s Labour prime minister, Denzil Douglas. Kalin wanted to know if Douglas was going to win. He had been offering advice to SCL and its candidate. In the Caribbean, they call Kalin, 46, the passport king – he has transformed a small firm of wealth advisers into the leading player in a US$3 bn global industry. His company, Henley & Partners, tells small countries how to transform passports into cash – a legitimate and legal business. In exchange for donations to a national trust fund, or investments in property, or government bonds, foreign nationals can become citizens of a country in which they have never lived. Henley has made tens of millions of dollars from this trade, and its first big client was the government of St Kitts. And while Nix’s star has fallen, Kalin and his industry are on the up – and finding themselves increasingly under scrutiny. The “golden passports” business is now a pressing concern for European governments and their intelligence agencies. For a few hundred thousand dollars, the right passport, from the right place, can get its owner into almost any country. A sum worth paying for legitimate traders. But also, police fear, for criminals and sanctions-busting businessmen. Faustian Pacts In July, this business, and its roots, was also a concern for British MPs. Members of the digital, culture, media and sport select committee had begun to look at the issue of “fake news”, but they soon found themselves at the epicentre of one of the issues of the age: the tactics, fair and foul, that can be used to sway elections, and potentially undermine democracy. The testimony heard by MPs laid bare the disreputable behaviour of Cambridge Analytica, and its sister company, SCL. In a small section of an 89-page interim report, they described being told there was a “Faustian pact” between Nix and Kalin. A pact created, they were told, to influence the outcome of elections in places where Henley wanted to do business.

Behind a number of SCL’s Caribbean campaigns was the “hidden hand” of Henley, which “arranged for investors to supply the funding for the campaigns”, the report claimed. “In exchange,” MPs alleged, “Henley & Partners would gain exclusive passport rights for that country.” It was quite an accusation. One that Kalin insists is completely untrue. There was no pact, he says, no hidden hand, no payments, no commercial arrangements – and certainly no wrongdoing. “You have the right story,” Kalin told the Guardian. “But you are talking to the wrong people.” For the past five months, the Guardian has been investigating the evolution of this global business – to try to establish what went on between the two men and the two companies back then, and whether this has any bearing on what is happening now. Details from hundreds of emails and internal SCL documents, supported by interviews with key players, have shed new light on their relationship, and the problems that come from a lack of transparency. The findings certainly raise questions about the conduct of elections in the Caribbean. And they reveal the considerable influence exerted by Kalin in the region. Henley’s success story began in 2006, when it was hired on a five-year contract to relaunch the St Kitts citizenship by investment scheme. For every successful application, the firm would collect $20,000. As of today, St Kitts has sold more than 16,000 passports, for as much as $250,000 each. The money was a godsend, coming just after the collapse of sugar exports, a trade that had kept the country afloat after independence. Caribbean passports are valuable because they allow visa-free travel to 130 countries including the UK and many European states – a prize for wealthy elites from Russia, China and the Middle East. When St Kitts signed the accord that removed travel restrictions to Europe in 2009, the number of passport buyers doubled in a year. When British MPs looked into SCL, one of the things they wanted know was who had funded its work on Caribbean elections. Nix seemed to point a finger. He told the committee: “My understanding is that he (Kalin) may well have financed some of the elections or given contributions towards some of the elections” which SCL had worked on. Now the St Kitts Labour Party has come forward. A well-place source, who spoke on condition of anonymity, was adamant the party itself had not paid a penny to SCL. The source assumed Henley was using its connections to find people willing to stump up. “Henley was identifying and approaching persons willing to make donations for the campaign,” the source alleged. “The Labour party were never told who these people were. All we knew was SCL was going to manage the campaign and Kalin’s role was to facilitate the payment. We never really got into who was making the contributions.” In November 2009, sources claim, Nix emailed an estimate for its work on the forthcoming election to Douglas. The sum was about $2.7m, and the message was apparently copied to Kalin, though he cannot recall receiving it. So was Henley facilitating payments and arranging for the bills to be paid? Kalin denies it. “This is rubbish. This whole notion that we raised or organized the financing is misguided,” he said. Kalin insisted there was no coordinated effort by him, or Henley, to raise money for SCL. But he admitted many of his wealthy clients could have donated to the campaign. He recalled meetings where he introduced people to Douglas and SCL, which, he said, he saw as part of his mandate as the then honorary consul for St Kitts in Switzerland. “At that time I had direct interaction with clients. They trusted me. The prime minister trusted me. So I introduced many people to the prime minister. For sure many of them would have gone on to make a donation.” Some of those donations, he says, would have been paid directly to SCL, but not all donors were Henley clients. Kalin says he had nothing to gain by supporting Labour because the passport contract, which was with the government not a political party, had a clause granting Henley another five years if it met certain conditions.