Ed Saunders: Premier should apologise to us

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  • Leroy Bean

    Leroy Bean


Former deputy chairman of the Bermuda Land Development Company Leroy Bean says he is considering taking legal action against the Auditor General unless she issues a public apology for claiming he breached his fiduciary duties to the board.

Auditor General Heather Matthews states in her special report on the misuse of public funds that a consultancy arrangement which netted Mr Bean and then BLDC chairman Ed Saunders $160,000 in fees from the company represented a “fundamental conflict of interest”.

She recommended that the money be repaid and that they face the Public Accounts Committee.

Mr Bean and Mr Saunders have already been grilled by the PAC about their actions.

Both insisted that they had done nothing wrong.

In his written submission, Mr Bean reiterates his position.

“The AG took the hasty view that we had acted improperly, published it, and then this issue was picked up by the press and subsequently appears to have taken on a political life of its own,” he said.

“As a result, I have been the subject of insulting and malicious comments on the various media blog sites and may pursue a claim for defamation of character against the persons responsible in law for publishing such comments.

“I have also considered my position in law as against the Auditor General for publishing such comments in her report and am advised that there may be scope for action to be taken in the event that a public apology is not forthcoming.”

The statement ends: “I have always acted with the best interests of the people of Bermuda at heart. I have worked tirelessly to improve the state of my community. I have done nothing wrong and I categorically disagree with the erroneous labels placed upon my actions in this matter.”

Mr Bean said he and then chairman Ed Saunders were paid to carry out a review of the BLDC.

“The impetus for this review did not emanate from us but from other members of the board,” he said. “The need for such a review arose from the conduct of several senior members of staff at the BLDC (not board members) in 2009 which after inquiry resulted in the resignations of those persons and one senior staff member being placed on probation.

“I was appointed in 2010 and that is the landscape that was already in place.”

Mr Bean said the board wanted a “clear picture of what shape the BLDC was in” but could not trust the information generated by the staff members whose conduct had raised concerns.

“It should be noted that we were not being asked to review the conduct of the board or any of its present employees, and any suggestion that this was a ‘self-inquiry’ would be wholly misplaced.”

He said it was decided that board members would conduct the review to keep costs down and expedite the process.

“It was then suggested that the chairman and I undertake the work and we agreed.”

The statement repeats the pair’s oral testimony that no fees were agreed in the beginning, but that CEO Andrew Swan subsequently suggested they should be paid a “nominal” fee for their services due to the time-consuming nature of the work.

Mr Bean said he and Mr Saunders did not attend the meeting where the decision was taken, although the BLDC by-laws permitted them to vote.

The work was done at a cost “far below” the going rate for an independent consultant.

And when the matter was brought to the attention of the Auditor General, information was “candidly” shared with her.

The statement further says that their actions and that of the board were in accordance with the company by-laws, the Companies Act and the common law.

It argues that the BLDC by-laws allow directors to provide services to the company for money, unless the director is acting as an auditor.

“Those by-laws go on to provide that the interest that any director has in a contract with the BLDC must be declared to the board. Finally, the by-laws provide that a director involved in the contract may even vote on it if he so wishes.”

He added: “We acted honestly and in good faith at all times. Our primary interest was to gather the information we needed to properly manage the BLDC at the minimum amount of cost to the Bermudian taxpayer.”

The statement goes on to say that the “common law” position is that a director “does not breach his fiduciary duty by entering into a contract with a company of which he is a director unless the contract is not on fair terms, is not for the benefit of the company/in its best interests, or if it is for something that is outside the scope of the company’s legitimate business”.

“There is no doubt that in this case the contract saved the Bermudian taxpayer money, effectively gathered the necessary and requested information, and was a fair contract in all of the circumstances.

“It would seem as if the Auditor General’s use of the terms ‘breach of fiduciary duty’ and ‘conflict of interest’ are not applicable to these circumstances.”

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Published May 17, 2012 at 8:00 am (Updated May 17, 2012 at 8:20 am)

Ed Saunders: Premier should apologise to us

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