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Company donated to PLP after awarded contract

The construction company awarded the $70 million contract to build the Magistrates' Court and police station in Hamilton went on to donate $27,000 to the Progressive Labour Party.

The Commission of Inquiry heard yesterday that Landmark Lisgar, which later changed its name to LLC, made three donations to the PLP between 2008 and 2013, after signing the contract for the Dame Lois Browne-Evans Building in December 2007.

Edmund Lee Matvey, from the company, detailed the donations when he took the stand at the tribunal: $1,000 in 2008, $13,000 in 2011 and $13,000 in 2013. He said the latter two payments both comprised a $10,000 ticket for a table at the PLP's annual banquet and $3,000 for Christmas turkeys.

He said he was not a member of the PLP and his company did not make any donations before 2008.

The police and court building was built between 2008 and 2011, when Derrick Burgess was Minister of Works and Engineering. It was completed in June 2011, well over budget and behind schedule, several months after Ewart Brown stepped down as Premier.

Mr Matvey confirmed in evidence that Vincent Hollinsid, a half-brother of Dr Brown, owned a 20 per cent equity share in Landmark Lisgar and picked up a $6,000-a-month salary. Winters George Burgess, whom Derrick Burgess has described as a close friend and relative, owned a 22 per cent equity stake and was paid $11,000 a month.

The tribunal heard that Mr Matvey and his business partner Arthur Bryan McLeod set up local company Landmark Construction in 2001 and partnered with a Canadian firm called Lisgar Construction on the police and court building “for financial reasons”.

The firm was initially called Landmark Lisgar but problems arose on site, according to Mr Matvey, and the Canadian partners Gino and John Bifolchi were bought out for $1.5 million, after which the company was renamed LLC.

Mr Matvey was the main shareholder of LLC, with 6,100 shares, while 3,900 shares were held by the Paragon Trust, acting on behalf of the Caco Trust. Mr McLeod was CEO and was paid a percentage of the profits. Commission lawyer Narinder Hargun asked Mr Matvey about the involvement of Winters Burgess, who was known as George, and Mr Hollinsid.

The witness said when Lisgar left the court project, LLC was told by its bank it no longer had “enough collateral” for its $1 million overdraft and it also needed to pay off the Canadian partners. “So Bryan and I went to George,” he said. “He came back and said he'd put up his house [as collateral] but he wanted a percentage of the profit and a fixed salary for the job.”

He described a similar arrangement with Mr Hollinsid, who was the island's fire chief until his retirement in April 2013. The bank then approved a $1.5 million loan, Mr Matvey said. Mr Hollinsid did not become a director of the company, he added, but Winters Burgess did “because he demanded it”.

Asked by Mr Hargun to explain when Mr McLeod ceased to be a director of Landmark Lisgar, Mr Matvey said he was a director of Landmark Lisgar and had shares in that company but was not a director of LLC.

Mr McLeod, sitting in the public gallery, gestured a “time out” signal to Mr Matvey from the public gallery as the discussion on shareholders continued and Mr Matvey agreed it should be “time out”.

Earlier, he said of LLC: “After we completed the court building, our reputation was so destroyed we could not carry on. It was closed, it ceased to exist.”

Mr McLeod gave evidence immediately after his business partner. He was asked by Mr Hargun why, in his witness statement to the commission, he said that Mr Hollinsid and Winters Burgess were never shareholders in LLC.

Mr McLeod replied: “I was asked the question whether they were shareholders and they were not.”

Mr Hargun said: “Didn't you think it was worthwhile for the commission to know they have received 42 per cent of the profits?”

Mr McLeod replied: “I was asked a question; I answered the question.”

The first witness at yesterday's hearing was Lawrence Brady, the Government's chief architect, who told how he was increasingly sidelined within government after the police and court building contract was awarded.

Panel member Fiona Luck asked him if the existing structure of government was operating as it should in relation to the management of capital projects. Mr Brady said things worked well until 2008 when they went “a little haywire”.

He described the system between the years 2008 to 2012 as “chaos”, adding: “That's why we are here looking at all this stuff right now.”

He told how Landmark Lisgar sought reimbursement from the Government for a donation it made to the PLP. He said the company put in requests for reimbursements in 2008, which were rejected because of their unusual nature. Mr Brady said the contractor sought reimbursement for “purchasing a car for someone in the construction company”. He added: “There was also payment made to a political party as a donation.”

Mr Hargun asked which party and Mr Brady replied: “To the PLP.”

A third example he gave was a request for payment for accommodation for the contractors. “It was accommodation for staff at a guesthouse, which was somewhat unusual for a client to be paying for accommodation,” he said.

Mr Matvey was later asked by Mr Hargun whether the $1,000 donation to the PLP he had disclosed was the same payment claimed by Landmark Lisgar as part of its reimbursement from the Government.

“It won't have been claimed,” Mr Matvey said. “It shouldn't have been. Obviously, they didn't pay it. We put our claim in. That shouldn't have been with it.”

The commission, which is looking into the misuse of public funds from 2009 to 2012, heard previously that Dennis Lister, when works and engineering minister in 2007, recommended to Cabinet that Landmark Lisgar get the court building contract, rejecting a recommendation from technical officers for a different contractor to be chosen.

Meanwhile, former Cabinet Secretary Donald Scott addressed the commission on efforts to tighten the governance of the civil service. Questioned by chairman Sir Anthony Evans on whether the Office of Project Management and Procurement was up and running after being set up five years ago, Mr Scott emphasised that “change for the better takes a long, long time”.

Mr Lister was due to give evidence yesterday afternoon but did not appear and the tribunal was adjourned until today.

• This story was amended to correct an error that said construction of the police and court building was completed a few months before Ewart Brown stepped down as Premier. In fact, it was completed several months after Dr Brown stepped down.

In the interest of treating the Commission of Inquiry much like continuing court proceedings, The Royal Gazette has taken the decision to disable comments. This is done for the protection legally of both the newspaper and our readers

Lawrence Brady, Government's chief architect, the third from left, takes the stand at this morning's Commission of Inquiry (Photograph by Sam Strangeways)

Day 1

Commission chairman Sir Anthony Evans brands actions carried out by the Port Royal board of trustees as “straightforward fraud”.

The tribunal hears how the board paid $10,000 of public money to a company awarded a contract for goods, so it could in turn pay that money to board of trustees member Delano Bulford as a “finder’s fee”.

It hears how the Ministry of Works and Engineering was repeatedly “sidelined” when it came to managing capital projects during the years that Ewart Brown, the former Premier, was Minister of Tourism and Transport.

Day 2

Dr Brown’s lawyer, Jerome Lynch QC, argues the former Premier needs an additional nine weeks to consider and answer the questions asked of him by the Commission relating to the various capital projects under scrutiny.Derrick Binns, the Cabinet Secretary, is quizzed about two projects from the time he was permanent secretary at the Ministry of Public Works and Engineering: the Heritage Wharf cruise ship pier at Dockyard and the Dame Lois Browne-Evans court and police building in Hamilton.

Paula Cox, the former finance minister, is said to have objected to a proposal by Dr Brown to hire an overseas company as consultants on a $400,000 a year retainer.

Day 3

Marc Telemaque, the former Cabinet Secretary, defends the civil service, which he insists is made up of “good people” working with a “broken system”.

Mr Telemaque is quizzed in connection with the Heritage Wharf project that came in millions of dollars over budget. The tribunal hears how the contract to build two satellite emission testing centres was not put out to public tender, despite Cabinet mandating it should be.

Day 4

Robert Horton, the former Works and Engineering permanent secretary, reveals technical experts and senior civil servants had considerable concern about former minister Derrick Burgess’s actions over planned renovations to the Commercial Court building. Mr Burgess is said to have interfered as he tried to cut costs and provide more opportunities for smaller businesses, but technical officers feared his approach could end up costing the Bermuda Government more money.

Mr Burgess is further said to have presented a “misleading document” to Cabinet, omitting concerns from technical officers, resulting in a contract for the central laboratory worth nearly $1 million being given to Toronto company Concorde Construction. Cherie Whitter, the former Ministry of Tourism and Transport permanent secretary, says Dr Brown made the decision to renew the controversial GlobalHue contract without a public tender, based on the public attention the issue had attracted.

Day 5

Vic Ball, now a One Bermuda Alliance senator, told nobody that his father held a 50 per cent stake in a company he recommended for a $1.4m government project, the commission hears. Mr Ball was working as a principal purchasing and supply officer for the Ministry of Public Works.

Thomasina Hassell, chief financial officer at the Ministry of Public Works, tells the commission a “weakness” exists when it comes to checking that government contracts were put out to tender and Cabinet approval was given before public funds were spent.

Day 6

Edmund Lee Matvey of Landmark Lisgar, the company awarded the contract to build the Dame Lois Browne-Evans police and court building, reveals that the business went on to donate $27,000 to the Progressive Labour Party. Lawrence Brady, the Government’s chief architect, tells the commission that governmental management of major capital projects spun into “chaos” between 2008 and 2012. Donald Scott, the former Cabinet Secretary, answers questions on governance and how spending should be monitored in the civil service, while former public works minister Dennis Lister is absent.

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Published October 05, 2016 at 12:57 pm (Updated October 06, 2016 at 3:42 pm)

Company donated to PLP after awarded contract

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