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‘Cabinet is ultimate authority on contracts’

Former Minister of Finance and Premier Paula Cox told Commission of Inquiry lawyer Narinder Hargun repeatedly that while there could be “co-parenting” between ministries and joint interests with major capital projects, there had been no delegation under her watch of responsibility from the Ministry of Works and Engineering for major jobs. However, when it came to a minister opting to disagree with the recommendations of a technical officer, Ms Cox stressed that “Cabinet is the ultimate authority.

“The decision to approve contracts resides with the Cabinet and Cabinet should be provided with the proper information.”

Mr Hargun quizzed Ms Cox about cross-ministerial projects suggesting that expertise surrounding capital projects would naturally fall under the Ministry of Public Works.

“Presumably in relation to issues like contracting with third parties, issues like outsourcing where we look at where the expertise is when there is a joint ministerial project, would one look at which ministry had the expertise to do whatever is required in that particular project.

“For example construction projects — if one ministry would have the expertise to do it internally or deal with professional contractors, professional suppliers and services and the like one would think it would be the Ministry of Works and Engineering.”

Ms Cox responded: “Yes, that would generally be the case.”

He gave the example of the building of a school saying whilst the Ministry of Education would have its input and knowledge, “presumably when it comes to building the school — the actual dealing with third-party contractors, architects, suppliers of materials like concrete and cement — that would be done by the Ministry of Public Works.”

Ms Cox replied: “The Ministry of Public Works would have the institutional capacity but I think you would have to go by the particular project because in some cases there may be a project manager who has the construction expertise.

“Then what you can see is that there would be the liaising and overlap cross ministries even from a legal perspective in terms signing off.”

You would have the Ministry of Public Works with its accounting officers signing off or using the expertise of the technical engineers.”

The commission heard from excerpts of a KPMG advisory, as well as an internal review, that had been commissioned to look into “incidents of concern”.

“The rationale was clearly the fact that we had had Auditor-General reports which showed there were some serious lapses,” Ms Cox said, citing a need to “raise the bar and sharpen the saws”.

Ms Cox, who was responsible as Premier for the Good Governance Acts of 2011 and 2012, said she had seen to it that procedures were tightened once she became Premier in 2010.

“Prior to that, there was less required in terms of when contracts were going to be approved.

“There was a change for more to be disclosed.”

Some proposals were approved by Cabinet even when she as finance minister didn't approve of them, Ms Cox said, noting that “the Premier of the day speaks”. “Then you thrust yourself on the mercy of Cabinet.”

Ms Cox expressed regret that the Office of Project Management and Procurement, which she introduced in 2011, had progressed so little in the years since, telling the commission that she would have been “astounded” at the time.

“Some positions are key, especially when you realise that you can save the Government money and add value by having that control,” she said, lamenting that “it's almost five years and nothing has happened”.

“Governments show by their action or inaction what they think are priorities,” she added.

Ms Cox drew laughter when she remarked that she looked forward to the next Auditor-General's report for the period since the 2012 election, telling the commission: “I don't want to be a cynic, but you could be busy for the next ten years.”

•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

Questioned by commission: former Premier of Bermuda Paula Cox (Photograph by Akil Simmons)
<p>Timeline</p>

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 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.

Day 7

Mr Burgess tells the commission he feels like he is before a “lynch mob”, accusing counsel Narinder Hargun of racist practices and questioning him in a way that “re-enacts slavery”. Mr Burgess also questions the racial make-up of the panel, which is 75 per cent white.

Paula Cox, the former Minister of Finance and Premier, insists under her watch there was no delegation of responsibility from the Ministry of Works and Engineering for major jobs, although there could be “co-parenting” between ministries and joint interests with major capital projects.

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Published October 07, 2016 at 9:00 am (Updated October 07, 2016 at 9:27 am)

‘Cabinet is ultimate authority on contracts’

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