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Union finances

The mystery over just how Pro-Active Construction and the Bermuda Industrial Union have been financing the controversial Berkeley construction project deepened last week.

It is still not known if Pro-Active ever paid the $700,000 premium to Union Assets Holdings Ltd. for the performance bond that the BIU subsidiary holds on the project.

But is now appears that Pro-Active is in debt to UAH after it ran out of cash earlier this year. What no one outside of BIU headquarters or Pro-Active knows is how big the debt is, or where the money came from.

Last week, citing ?common law?, the BIU tried to block any other contractor taking over the project by claiming Union Assets Holdings had a financial claim, not just on the company, but on the project itself.

Twenty four hours later it backed off. Acting Premier Paula Cox and BIU president Derrick Burgess were vague on what concessions, if any, were made to secure the ceasefire.

While there is no doubt that a lot of lawyers could (and probably will) get rich picking over Government and Pro-Active?s dispute, common sense suggests that the Union and its subsidiary was on poor legal ground while making its claim.

Its debt is with Pro-Active, not the Government, which should have no contract with the union over the Berkeley project. If Pro-Active believes it is owed money by Government, then Pro-Active, not the union, needs to deal with that.

But union members ? and the general public ? have the right to ask just what the union?s leadership is up to.

It is one thing to set up a company to provide a bond for the company, especially when the company employs unionised workers. But it may be imprudent to then lend the company more money when it was increasingly obvious that the company would not meet the latest completion date for the project.

Of course, Government let Pro-Active off the hook ? in just one of the many bizarre turns in this ?soap opera? ? by firing the company before it had the chance to overrun the deadline.

That?s another story, but it does not explain the union?s own financial practices.

What if Pro-Active had failed to complete the project and Government had invoked the $6.8 million performance bond? And how did the union then intend to collect the money it had since lent the company?

What is no surprise is that the union has worked so hard to mobilise its members to protest against Pro-Active?s firing.

To be sure, the union has a responsibility to protect its members. But it is now clear that it had a further motive ? it had lent money to the company that it now may fail to collect as the company has lost the contract.

Members of the union should ask the following questions:

How much of the union?s money has been used as capital for Union Asset Holdings?

How much does Pro-Active owe the company and/or the BIU?

If UAH and/or the union is unable to recover the money it is owed by Pro-Active, where does that leave the union?s finances?

What is the current state of the union?s finances?

The last question is relevant because the union has not filed any accounts with the Registrar General, as required by law, since 1999.

That means that no one outside of the union?s own leadership knows how its funds have been spent. And members of the union shouldn?t be happy about that.