Lucerne finance minister testifies in opera house funding case

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  • Swiss visitors: Marcel Schwerzmann (left), the finance minister of the canton of Lucerne and Karl Reichmuth, of Rutli (Photo by Mark Tatem)

    Swiss visitors: Marcel Schwerzmann (left), the finance minister of the canton of Lucerne and Karl Reichmuth, of Rutli (Photo by Mark Tatem)

The Minister of Finance for Lucerne was in Bermuda’s Supreme Court’s commercial litigation suite yesterday testifying in a $100 million lawsuit, pitting a Swiss arts foundation against Butterfield Trust Bermuda Limited (BTB), as the case entered its second week.

Pharmaceutical billionaire and philanthropist Christof Engelhorn’s Bermuda-based Art 1 Trust was providing the money for a proposed state-of-the-art musical theatre, Salle Modulable. The trust’s BTB trustee, and a former minister in the Progressive Labour Party Government, Patrice Minors, stopped the funding. Now Salle Modulable Foundation is in court seeking the reinstitution of the $100 million in funding they say was committed for their project.

Chief Justice Ian Kawaley, presiding over the case, unusually for this jurisdiction, is wearing a business suit and not his traditional wig and gown. The multi-person legal teams are also wearing business attire in this court room.

The Lucerne Finance Minister Marcel Schwerzmann, whose first language is Swiss German, gave evidence in English, but with a translator — in Bermuda especially for this trial — on hand. Mr Schwerzmann required translations for English colloquialisms and multiple-part questions, but he translated some legislation and parts of documents into English for the court.

A former Swiss Consul Leo Betschart was also in court to observe the proceedings. Consul between 1983 and 2005, he had been an executive chef in two major hotels before teaching culinary arts at the Bermuda College. Also observing the action yesterday was former Art 1 Trust trustee for BTB Graham Jack, Bermuda-based director of the Art Mentor Foundation Robert Stewart, and Rutli Stiftung’s chairman Karl Reichmuth. Rutli was an intermediary organisation sitting between Stiftung Salle Modulable and the Art 1 Trust.

Mark Cran QC, who is representing the Bank, questioned Mr Schwerzmann vigorously about funding for the Salle Modulable operations and maintenance.

The Finance Minister stated: “We had a difficulty with Salle Modulable — we had the money to construct the building, but not money for operations and maintenance.”

Mr Cran asked Mr Schwerzmann about statements he had made that the city and canton of Lucerne would not give further funding for the operations and maintenance of Salle Modulable than 20.2 million Swiss francs. This, he said, left a ‘funding gap’ of 11.3 million Swiss francs.

The Finance Minister told the court: “We can reallocate funds from one organisation to another organisation.” He said there was revenue from a National Lottery of about 20 million Swiss francs that could be used for the arts, culture and sports. “You can spend this without asking Parliament,” he said.

There was also an ageing theatre in Lucerne that needed major renovations which received Government funding. If the role played in the community of that theatre was moved to the new Salle Modulable, then that funding could also be reallocated to the new facility, he said. “We (the canton) pay 70 percent of the money and the city pays 30 percent of that money,” he said. It was used for operational costs and for “small maintenance”.

Mr Schwerzmann said: “My function as Finance Minister is, I told them to recalculate — have new ideas, to make it cheaper. We said only the canton will not advance any more money — we were not willing to discuss about that until we had better calculations.”

The result was, he said: “The first time I’ve seen a construction project so well calculated.”

The case continued with a discussion of the costs of construction, and a funding gap between the 120 Million Swiss francs from the Art 1 Foundation and the final price tag for building the facility. Mr Cran, who is with the Attride-­Stirling & Woloniecki law firm, also raised the issue of the plebiscite with Mr Schwerzmann, where the people of Lucerne were to asked whether they supported the building of the new opera house in their community. He also questioned the Finance Minister about a document drafted by the Foundation detailing the project and whether it was a feasibility study, a business plan or designed to appeal to the voting public for the plebiscite.

A feasibility study is an important part of the case, because of the question of whether it is a condition, and if so, if that condition was met, for the gift of 120 million Swiss francs from the Art 1 Trust to Salle Modulable.

Mr Schwerzmann told the court: “In Switzerland, if the public doesn’t know what the vote is about exactly, then they will say no. The whole document has a lot of important information that would be helpful to the public to decide — the quality of the document is very, very good.”

The case is expected to continue for another five weeks.

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Published Nov 19, 2013 at 8:00 am (Updated Nov 19, 2013 at 1:44 pm)

Lucerne finance minister testifies in opera house funding case

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