By Brian Ellsworth and William James
MIAMI (Reuters) -The British Virgin Islands should have its constitution suspended, its elected government dissolved and effectively be ruled from London, according to a highly critical report into governance in the British overseas territory released on Friday.
Queen Elizabeth's representative on the island, Governor John Rankin, had ordered the inquiry in 2021 to investigate "the corruption, abuse of office, and other serious dishonesty" in the territory's governance.
Its report found that millions of dollars of state funds were spent each year by politicians and ministries without proper process, along with serious dishonesty in relation to sales of public property and widespread abuse of appointments.
The report is not directly linked to the arrest in Miami on Thursday of the islands' elected premier, Andrew Fahie, on charges of money laundering and conspiring to import cocaine. But British Foreign Secretary Liz Truss said the arrest demonstrated the importance of the inquiry.
The investigation was led by British judge Gary Hickinbottom.
"He has concluded with a particularly heavy heart that unless the most drastic and urgent steps are taken, the current situation with elected officials deliberately ignoring the tenets of good governance will go on indefinitely," Rankin told a news conference.
"He notes that the people of the BVI deserve better, and that the UK government owes them an obligation to protect them from such abuses and assist them to achieve their aspirations for self-government as a modern democratic state."
Any decision to suspend parts of the constitution would fall to London, which said it was sending a minister to the BVI before announcing a plan next week.
In a statement, Truss said the report "shows clearly that substantial legislative and constitutional change is required".
But the Islands' acting premier, Natalio Wheatley, said a suspension of the constitution was not necessary.
The report said principles of good governance had been ignored throughout Fahie's administration, witnesses had been afraid to come forward and government disclosures had been "shambolic".
"With limited exceptions, in terms of governance... the people of the BVI have been badly served in recent years. Very badly indeed," the executive summary said.
If London accepts the inquiry's central recommendation, one of more than 40 in the 946-page report, Rankin - a career British diplomat - would take over the day-to-day running of the BVI.
Rankin is appointed by the queen on advice from the British government, and in normal times his role would be small.
Hickinbottom recommended that the new administrative arrangement should last two years, but also that ministerial government should resume as soon as practicable.
(Reporting by Brian Ellsworth and William James and Zarrin Ahmed; writing by William James; Editing by Kevin Liffey)