Port Royal actions ‘straightforward fraud’
Actions carried out by the board of trustees of Port Royal Golf Course were “straightforward fraud”, the Commission of Inquiry heard yesterday.
Commission chairman Sir Anthony Evans made the remark after the tribunal heard how the board of trustees paid $10,000 of public money to a company awarded a contract for goods, so the company could in turn pay that money to board of trustees member Delano Bulford as a “finder's fee”.
The board, according to commission lawyer Narinder Hargun, then agreed to ask the company to produce an invoice that did not mention Mr Bulford's name in case the transaction was “frowned upon by the Auditor-General”.
Sir Anthony said: “It's straightforward fraud.”
He asked Mr Hargun on whom the fraud was committed and the lawyer replied: “If it's an inappropriate payment, then it's fraud on the Consolidated Fund [the public purse].”
At the time, Progressive Labour Party MP Zane DeSilva was a member of the Port Royal board; businessman Wendell Brown was its chairman.
In her special report into the Port Royal project in 2014, Auditor-General Heather Jacobs Matthews wrote that the board of trustees authorised and paid $10,000 in excess of the invoiced price to a company, which was awarded a contract for goods.
Ms Matthews stated: “The board of trustees' minutes indicate that this payment was to enable the company to pay a ‘finder's fee' of $10,000 to a board of trustees member. It is not clear what relationship, if any, the board of trustees member had with the company to earn such a payment.”
The redevelopment of Port Royal was one of a number of historic government projects that came under scrutiny at yesterday's hearing; others included the emissions testing centres for TCD, the Heritage Wharf pier at Dockyard and the new Magistrates' Court and police building. The four-person panel heard from Mr Hargun about massive project cost overruns, ministerial interference, failures to follow financial rules by civil servants and lack of Cabinet approval for contracts.
The lawyer spent yesterday setting the stage for a series of witness hearings, due to start today, which will explore the mishandling of public funds from 2010 to 2012, as outlined by the Auditor-General in a damning report that prompted Michael Dunkley, the Premier, to form the Commission of Inquiry. Although some of the projects occurred before the financial years covered in the Auditor's report, Sir Anthony said the commission took the view they were relevant to provide context for what was to follow.
He said the commission also believed it was right to include the airport redevelopment to find out the existing culture within government in relation to complying with financial instructions.
The Government has formally objected to the inclusion of the airport deal and is expected to make a submission to the commission today at 10am, when the hearing resumes at St Theresa's Church Hall in Hamilton.
Yesterday, the panel heard how the Ministry of Works and Engineering was repeatedly “sidelined” when it came to managing capital projects during the years that Ewart Brown was Minister of Tourism and Transport.
Mr Hargun said despite Works and Engineering having the expertise to ensure quality and value for money for the public, major projects were delegated to the Ministry of Tourism and Transport, which had no experience and, in turn, paid external consultants to manage projects and hire contractors.
The lawyer said the result was the Government ceased to have “any control” over those projects and costs spiralled, with no proper checks and balances in place.
The tribunal also heard how one public works minister went against the advice of technical officers on which firm should be contracted to build the Magistrates' Court and police building. Mr Hargun said that minister failed to share the recommendation of the technical officers with Cabinet, instead outlining his own choice, Landmark Lisgar, which was ultimately chosen.
Sir Anthony said in his opening statement that the commission had identified the senior civil servants and ministers responsible for some of the contracts being looked into by the tribunal — but not all had been willing to provide witness statements.
“Each person identified was requested to make a witness statement,” he said, adding that free legal advice was also offered. “A few declined to produce any witness statement before the hearing.”
The commission has the same powers as the Supreme Court to subpoena witnesses and relevant documents. Witnesses can claim the same legal privileges available to them in court.
Sir Anthony said if a witness refused to give evidence or to produce documents, the commission would hear legal submissions on how to proceed.
Referring to such refusals, he said: “To a limited extent, that's already occurred.”
Lawyer Venous Memari is representing members of the Bermuda Public Services Union, including Cabinet secretary Derrick Binns, financial secretary Anthony Manders, Accountant-General Curtis Stovell and permanent secretaries Marc Telemaque, Cherie Whitter and Randy Rochester.
Those attending the hearing in the public gallery for Sir Anthony's opening statement yesterday included Mr DeSilva, Opposition backbencher Walton Brown, BPSU general secretary Ed Ball and Bermuda Industrial Union president Chris Furbert.
• Update: this article was amended at 10.15am to remove an incorrect reference that said Derrick Burgess was the public works minister who went against technical officers' advice regarding the awarding of the Magistrates' Court and police building contract. Narinder Hargun did not name the minister. The Royal Gazette apologises for the error
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