Burgess defends his role with BLDC
Testifying in front of the Public Accounts Committee about his time overseeing the Bermuda Land Development Corporation, Derrick Burgess insisted he had done nothing wrong.
The former Public Works Minister gave a spirited defence of his actions at the BLDC and took Heather Jacob-Matthews, the Auditor General, to task for her report on the misuse of public funds.
He insisted he was within his rights to give operational directives to the BLDC without putting those directives in writing, and was critical of Ms Jacob-Matthews for not contacting him while she was compiling her report.
The PAC is focusing on paid consultancy work done by Ed Saunders and Leroy Bean when they were the BLDC Chairman and Deputy Chairman respectively. The pair netted $160,000 after being instructed by Mr Burgess to review the company’s operations.
In her report the Auditor General described the arrangement as a “fundamental conflict of interest” and also noted that Finance Minister Paula Cox, a shareholder of the company, had not been notified of the arrangement with the directors as required by law.
In his capacity as Public Works Minister, Mr Burgess was also a statutory shareholder of BLDC. Defending his role, he told the committee that it “was in his remit to issue operational directives to the BLDC”, not necessarily in writing as set out by the legislation that created the BLDC.
When pressed by PAC Chairman ET (Bob) Richards on the law which specifies “every directive has to be in writing and put before the House of Assembly”, Mr Burgess replied: “You are taking that literally, there is a difference when it comes to operational directives.
“If a roof needed painting I don’t have to put that in writing, and further more neither of us were in the House when that Bill was enacted in 1996, it was before my time and yours.
“The Board had the power to spend hundreds of thousands of dollars without telling me, but I have to write for a new lawnmower. I’m not trying to be disrespectful, I’ve run hotels and a union and I never had to put orders in writing.”
When asked by Mr Richards for his response to previous testimony, given in April, that Mr Saunders and Mr Bean said the “consultancy agreement came about as a result of his instructions”, Mr Burgess disagreed.
“I instructed them to carry out an investigation not as consultants. I had nothing to do with any consultancy agreement. The first I heard about it was from the Premier,” he said.
Mr Saunders and Mr Bean insisted in April that they had done nothing wrong and that their actions were directed by Mr Burgess.
Mr Saunders testified that the request was made orally initially, but later put in writing. Under further questioning he said he did not have a copy of written instructions from the Minister.
But the Auditor General noted that the only written evidence her office could find was a letter written by the Permanent Secretary in early 2011, and the work had started in 2010.
Other members of Public Accounts Committee include Auditor General Heather Jacobs -Matthews, Cole Simons, Patricia Gordon-Pamplin, Lovita Foggo, Terry Lister and Clarke Somner.
As he testified yesterday, Mr Burgess took issue with the Auditor General, who was sitting a few feet away from him.
“She never bothered to call while writing her reports,” he said. “I got Trott and Duncan to do a report and they found no instance of wrongdoing. Another report was also carried out by KPMG and found the same, no wrong doing, everything was done within the by-laws that govern the BLDC.”
When asked by Mr Richards “if in hindsight the two BLDC representatives were being paid fees by the board represented a conflict of interest”, Mr Burgess replied: “I can’t change the by-laws by myself, and my opinion doesn’t change anything.
“I was never called by anyone, or by the Auditor General, and she wrote all this stuff about me.”
Ms Matthews responded by saying she was a “qualified accountant who uses professional judgement”.
Mr Burgess smiled and replied: “Well I understand that clearly. But you’re not getting two bites of the cherry when you could have asked me yourself. I respect your role, but I never once received any reports on the BLDC from you.”
When asked by Terry Lister to state why the BLDC Chairman and Deputy Chairman were not removed at the shareholders request, Mr Burgess said: “I believe in due process. I asked for a legal opinion on their actions and there was no evidence of wrongdoing.
“I would never fire someone for that. I told you I wanted to come here because they all wrote about me and they never asked me anything.”
The next witness was Stuart Minors, who was hired by the BLDC in 1997 as an accountant and systems manager. He said he was responsible for “monitoring the collection of accounts receivables but not the actual collection.”
When asked by Mr Lister how the BLDC was able to function with the CEO out sick, with no CFO and one other senior post vacant, Mr Minors replied: “As best it could sir.” Members of the public attending the meeting at the St Paul AME Church Centennial hall laughed out loud.
Mr Martin said he resigned in 2010 and stressed that he “did not reveal why he resigned” when he did.
When asked if he had a closing statement, he said: “No one asked me about the Chairman’s assertion that I was shown favouritism when I purchased a BLDC home allegedly with a ten percent discount on purchase.
“To say that I got the house because of who my spouse is (Minister Patrice Minors), I purchased the house before I was married,” said Mr Minors.
Board member Leroy Robinson was the next witness and said he was a BLDC director during the period under review.
He said he couldn’t understand why “BLDC rents would be in arrears for some tenants for more than two years”.
“I didn’t understand why or how there could be $2.4 million in arrears. Two years without paying rent is just not practical, it just doesn’t happen in my world,” he said.
“I felt when I got there the BLDC was in a mess, there were executives driving in at 10am or 11am everyday. The company is called a development company and they haven’t developed anything for years, all they’re doing is collecting rent.”
On the issue of consultants, Mr Robinson said: “There was never a decision to hire Mr Saunders and Mr Bean as consultants, period.”
PAC Chairman Mr Richards thanked him and members of the public for attending what he described as a “very important process in the operation of democracy”. He said the next meeting will be announced in due course.