ST. GEORGE?S, Grenada ? Grenada?s Prime Minister has told islanders that he will be vindicated over allegations by former journalist David Marchant that he took a $500,000 pay-off.

Prime Minister Keith Mitchell on Wednesday accused the opposition of fanning the story that appeared on April 30 in Mr. Marchant?s OffshoreAlert newsletter, which alleged that the Caribbean nation?s leader accepted the money for appointing a German-born man to a diplomatic position.

In a national broadcast, Mr. Mitchell said former trade counsellor Eric E. Resteiner offered to cover travel expenses for Mr. Mitchell?s delegation on a promotional and investment tour of France, Austria, Liechtenstein, Switzerland and Kuwait in 2000.

?They have accused me without evidence, they have tried me in public without evidence,? Mr. Mitchell said in the national broadcast. ?Now, they seek to sentence and crucify me.?

His office said yesterday a lawsuit would be filed next week in Grenada against OffshoreAlert, which Mr. Marchant founded after working as a business reporter in Bermuda for and the Bermuda Sun.

The government has maintained that it is common for trade counsellors and ambassadors to provide financial support to help in travel and investment promotion abroad.

?It is the practice for international agencies, such as the World Bank, to provide cash to public officers and ministers when they travel on official business,? said Mr. Mitchell, who won a third term last year.

?I can assure you with the utmost confidence, fellow citizens, that your prime minister will be vindicated,? he said.

Resteiner, who was not paid by the government for his position as trade counsellor, gave Mitchell around US$15,000 for the trip without hope of personal benefit or repayment, a government spokeswoman Nancy McGuire said yesterday.

Opposition party leaders called this explanation ludicrous.

?This is ridiculous,? said Tillman Thomas, leader of the opposition party National Democratic Congress, said yesterday. ?It?s like hiring someone to work for you, and that person turns around and pays the employer.?

Mr. Marchant has said he stands by his article.

?I?m comfortable that I?ve done a fair and accurate job in the article,? he said. ?The article is extremely fair.?

Marchant said the allegation was made by Resteiner?s former security chief, American Timothy Lee Bass, who said he had recorded videotape of Mitchell receiving a briefcase of money at Resteiner?s home in Switzerland in 2000.

Resteiner was appointed in 1999 and his appointment was revoked in 2001. In February, he was arrested in Singapore for extradition to the United States.

Federal prosecutors in Boston said Resteiner, who previously lived in the Bahamas, was indicted in March on charges of wire fraud, mail fraud and money laundering.

The indictment alleged that Resteiner and four other men created a high-yield international bank trading scheme that preyed on fellow members of the Boston-based Church of Christ, Scientist. They allegedly scammed church members and others out of more than US$30 million.

His case is being prosecuted in Massachusetts because many investors live there.

@EDITRULE:

With a file from AP