THE Ministry of Finance is "leaning towards a complete whitewash of the whole controversy" in their handling of the Bermuda's Pension Fund Investment Committee (PFIC) "governance review", according to Shadow Attorney General Trevor Moniz, who called for a strong response from Minister of Finance Paula Cox.

"We clearly need a statement from the Minister that there's going to be a forensic review," Mr. Moniz (pictured) said. " Referring to statements made by Assistant Financial Secretary Anthony Manders in yesterday's Royal Gazette, he added: "It's a political issue and the Minister should be dealing with this matter, not some relatively junior civil servant. We are talking about possible corruption by Ministers, and it should be dealt with at a political level. It can't be dealt with by civil servants who answer to those same Ministers.

"We need to be hear from the Minister, who should say 'the buck stops here'. I'm quite disappointed in Ms Cox who, prior to this, has had a much higher reputation than that.

"She should reassure the public that there isn't political sleaze and corruption, by instituting a forensic review. It is clear as crystal from what was said by (consultants Morneau Sobeco partner-in-charge Al Kiel) that they have been asked to perform a review limited to the mechanics of the funds, and if that was not so, the Minister would have said so by now."

"I said from the start that any review had to be a forensic audit of the whole PFIC situation, not this narrowly focused review of the funds under management," said Mr.Moniz.

"If they are not going to do a forensic review, then they're not taking this situation seriously."

Asked by the Royal Gazette whether the review would specifically target the "pay-to-play" allegations, Assistant Financial Secretary Anthony Manders answered some other question than the one asked.

"The funds under management are accounted for," he responded, suggesting that the Ministry already knows the outcome of its review. "The allocation of funds to investment managers are held by an independent custodian, all trades are settled by an independent custodian. The custodian balances are reconciled and are subjected to annual audit."

"The allegations are not that any funds are missing, " protested Mr. Moniz, "and that's not why Calvin White was placed on a 'leave of absence'.

"And it would certainly be preferable if the Ministry had hired people who were truly independent. Morneau Sobeco were paid to do other tasks for the Ministry over a period of years, and can hardly be called independent. I don't know why they selected Canadian consultants.

"It should have been a US consultant who hadn't worked for the Ministry, and who was very familiar with all of the SEC regulations, and would know if Ms Poitevien had broken any of them, or fell foul of the Foreign Corrupt Practices Act."

Mr. Moniz drew a parallel between this projected review and former US Federal Reserve chairman Paul Volcker's review of the United Nations' handling of the Iraq "Oil for Food" programme.

"These reviews are notoriously troublesome, when people are instructed not to go too far in a direction that would embarrass the body being investigated," he said.

"Volcker is highly regarded, but even at the end of that, some of the members of the review team quit, for good reason, because it was effectively a cover-up. As aggressive as the US was, it wasn't prepared to take out Kofi Annan, and Paul Volcker was clearly told to soft-pedal that side of it."

Mr. Kiel told the Mid-Ocean News last week that he knew nothing whatsoever about the "pay-to-play" allegations, but Finance Secretary Donald Scott insisted that "all of the information that was in the public domain was shared with the reviewer.

"As previously stated, the Ministry of Finance is confident that Morneau Sobeco will conduct a fully independent review with complete integrity. For anyone to suggest otherwise does extreme disservice to to dedicated and competent professionals."

Mr. Moniz commented: "No one has cast any doubt on their integrity or dedication. The problem is with the nature of the review they have been asked to do, and they can hardly be called independent."

On Monday, Opposition Leader Dr.Grant Gibbons had also raised serious concerns about the qualitative aspects of the review, and of the consultant's experience with Government.

"What is obviously needed is a forensic review, which would investigate issues of pension management, including 'pay-to-play', conflict of interest and other unethical activities, (and) the consultant chosen has a long-established business relationship with the Ministry of Finance, and therefore, is not sufficiently independent to ensure a completely objective review."

His press release concluded that "should the Finance Minister proceed with the current plan, I fear that the taxpayer will get a bland governance review of performance and procedures, but it will be a complete whitewash of the underlying ethical problems surrounding the Ministry's current pension-fund management".

Responding to questions, the Ministry of Finance reiterated its confidence in Morneau Sobeco, and defined independence in this context to mean free of "political partisanship and bias".

They insisted that "all information in the public domain (was) shared with Morneau Sobeco at the time of the engagement", but didn't identify the "reviewer" with whom they shared the information, or explain why Mr.Kiel said that he knew nothing about the ethics allegations.

A spokesman said that a "governance review was seen as the most appropriate review to conduct at this time, as there is no evidence that there is a need for a forensic audit".

He praised the performance of the PFIC funds, and repeated their confidence in the systems, supposed checks and balances, and procedures for selecting managers. To a question asking if any type of review will specifically target the "pay-to-play" allegations, the governance review was offered as an answer.