Swan says Govt to blame for Sovereign affair

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  • UBP leader Kim Swan

    UBP leader Kim Swan

Government is to blame for an expensive legal battle involving the Sovereign Group which now threatens the livelihoods of the company’s principals.

That is according to United Bermuda Party leader Kim Swan who has called for Government to be held to account for its role in the dispute which has resulted in it having to pay out $2.75 million in tax payers’ money at the end of 2009 to settle with Bermuda Aviation Services (BAS) for breaching the company’s exclusive rights to offer private jet services at the airport until 2014. The Ministry of Transport gave Sovereign permission to provide the same service.

In the latest twist to the saga, Premier Paula Cox, in her capacity as Finance Minister, sued businessman and director of Sovereign Ground Services Steven Daniels, his wife Lejoy Marie Daniels and a number of his companies but the Ministry of Finance did not reveal the reasons why, when asked by this newspaper.

Mr Daniels built Sovereign’s private jet terminal at the LF Wade International Airport which is believed to have cost around $1 million. The building sat redundant since February 2010 prior to be taken over and run by Universal Aviation Bermuda in a $1 million settlement for its long-term lease.

“If Sovereign are in breach, to what extent is the government at fault?” said Mr Swan.

“This is after Government came to the House of Assembly and announced that they had awarded Universal Aviation the contract to operate the private jet facility but Universal had to pay Sovereign Flight in excess of $1 million for their equity. Now Government has launched a barrage of law suits to recover the money.”

Mr Swan said that what concerned him the most was that Government didn’t seem interested in getting to the bottom of the problem.

He said that the Ministry of Transport, which at the time came under former Premier Ewart Brown, was at fault for allowing Sovereign to go ahead with its service and building in the first place, as well as the company for doing so, in contravention of BAS’s exclusive rights.

“Step back and look at this matter of how Government issues an illegal contract/concession to a group of businessman,” he said.

“The competitor Bermuda Aviation Services cites a breach in their exclusive agreement, sues Government and wins the case which costs Government millions but gets them clear of the exclusive agreement.

“These proceedings put the Government and Sovereign agreement on ice and in the mean time Sovereign then falls out of favour with Government and their operation never reopens.

“When government finally resolves matters with BAS and the coast clears, Government looks at another entity to operate the private jet facility as the way has been paved by Sovereign Flight Support who seem to be made as the ultimate sacrificial lambs.

“Sovereign are not without any blame for their plight and should be counter-suing Government and unearthing the truth behind this tangled ball of confusion.

“The truth is that the Government’s Ministry of Transport headed by Cabinet Minister Ewart Brown started this fiasco that cost the tax payers millions of dollars and we need to have appropriate authorities focused on Government’s part in this nightmare.”

Mr Swan said that one of the stumbling blocks to resolving the issue was a lack of financial resources needed by Sovereign to counter-sue Government.

“They would not be the first to have encountered this frustrating situation,” he said. “Many have found that it is financially impossible to fight a legal battle against Government unless you have deep pockets.

“By government taking writs out against the Sovereign principals which threatens their existence and households it ensures government holds the upper hand in protecting the wrong it committed in these acts.”

Mr Swan said that one way of guarding against any future wrong-doing was to make the Human Rights Commission independent of Government, similar to the office of the Auditor General and to broaden that mandate to allow the public to have access to legal assistance to support legitimate cases where the public interest has been ill-served by Government.

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Published Oct 19, 2011 at 8:16 am (Updated Oct 19, 2011 at 8:13 am)

Swan says Govt to blame for Sovereign affair

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