ICO orders fresh search for fronting case records
A quango has been ordered to search again for records it holds about a $1.5 million house that the Government acquired for free after it was obtained by non-Bermudians through the illegal practice of fronting.
Information Commissioner Gitanjali Gutierrez said in a decision due to be published tomorrow that she was not satisfied that the Bermuda Housing Corporation carried out a reasonable search for paperwork about Laughing Waters, a waterfront property in Southampton, in response to a public access to information request from The Royal Gazette.
Cabinet minister Lieutenant-Colonel David Burch told Parliament in 2010 that the cottage on Middle Road became the property of the BHC after the expatriates who bought it agreed to hand it over in exchange for not facing prosecution for using a Bermudian “front” to illegally buy it.
The former owners also agreed to put down a $10,000 deposit and pay $4,500-a-month rent to live there.
The deal came about after the Government amended the Bermuda Immigration and Protection Act to protect land for locals, making fronting an offence under new regulations.
Colonel Burch did not name the expatriates involved or the Bermudian law firm that acted as trustee in the purchase of Laughing Waters. The law firm was not fined or penalised for its involvement.
The former owners moved out in 2016, and the house was sold for $1.5 million by the Government the following year. The Gazette asked the BHC in 2021 for all records it held on Laughing Waters, including about its acquisition and sale.
The public authority released several records, including the rental lease with the former owners and the completion statement from the 2017 sale. The BHC’s information officer said names were redacted on the instructions of lawyers.
The Gazette asked Ms Gutierrez to review the response from the public authority.
She found that it was right not to name the former owners of Laughing Waters, as well as the person who bought the house in 2017 and a property manager, as this was personal information.
She wrote: “The invitation to settle matters relating to fronting outside of the court setting was … a resource-saving and efficiency measure by the Government.
“The Government successfully avoided the legal costs associated with lengthy adjudication, while also acquiring a high-end property for subsequent benefit to the Bermuda public.
“Disclosure of the former owners’ names is more likely to undermine these public interests by discouraging voluntary compliance and the efficient acquisition of benefits for the Bermuda public.
“Disclosure of the names of the buyers and the property manager would not further the public interest in enforcement of the amendments, because nothing in the records indicate they were involved in evading the legal requirements.”
However, Ms Gutierrez concluded that the BHC did not conduct a reasonable search for the records asked for by the Gazette.
She said the quango did not explain to her its understanding of what was being sought and may have “unnecessarily limited the scope of the request”.
The information commissioner ordered the BHC to “conduct a reasonable search” and issue a decision by January 18 on whether to disclose any more records.