An international business leader last night warned Premier Ewart Brown’s threat to suspend dealings with Governor Sir John Vereker jeopardises Bermuda’s blue chip reputation as a financial jurisdiction.

Cheryl Packwood was speaking after Dr. Brown’s comments from last Friday made headlines in The Times and The Daily Mail, which sell a combined three million copies per day in the UK.

Ms Packwood — the CEO of Bermuda International Business Association — said the Island’s position as a premier financial jurisdiction was based on political and economic stability.

She said Dr. Brown risked undermining that stability by threatening to halt co-operation with Sir John in a televised broadcast over allegations of corruption at Bermuda Housing Corporation.

As news of the Premier’s statement spread to London this week, The Times and The Daily Mail both ran articles claiming the Island is “in the grip of a constitutional crisis”.

“Britain’s oldest colony in crisis,” was The Daily Mail headline yesterday, while The Times reported on Tuesday: “Governor faces revolt on paradise isle.”

Reacting last night, Ms Packwood said: “Bermuda has grown to be a premier financial jurisdiction. We have a blue chip reputation which is based on political and economic stability rivalled by very few jurisdictions.

“We have put in place sound financial legislation and regulations. However, we require a stable government and economy to back this up.

“Any perceived threat to our stability such as the Premier’s comments regarding suspension of relations with the Governor’s office jeopardises Bermuda’s reputation as a secure financial jurisdiction for international business.”

The Chamber of Commerce reported no effects on business on the Island so far.

“The sun still rose this morning; cruise ships still came in; business visitors are still coming into the Island,” said president Philip Barnett last night.

Last Friday, the Premier vowed to suspend dealings with Sir John unless the Governor ordered a Police investigation into the leaking of confidential Police documents detailing alleged corruption at BHC.

Earlier that day, The Royal Gazette’s sister paper The Mid-Ocean News ran a story centring on the allegations.

The documents reportedly revealed that Dr. Brown, former Premier Dame Jennifer Smith and former Ministers Nelson Bascome, Renée Webb and Arthur Hodgson were all investigated by fraud squad officers looking into the BHC allegations.

When the investigation finished three years ago, then Acting Director of Public Prosecutions Kulandra Ratneser said many of those investigated could only be accused of bad ethics. He also said some of the people investigated escaped prosecution due to Bermuda’s antiquated corruption laws.

The Times article suggested one solution could be to “wait a few months” until Sir John steps down in October to be replaced by Richard Gozney.

The Daily Mail’s website report focussed on Dr. Brown’s comments and demands from Public Safety Minister David Burch yesterday for the Governor to “relinquish his constitutional powers over the Police”.

Barbados-based Caribbean News also reported yesterday how Police officers raided the offices of the Bermuda Broadcasting Company on Monday night as part of an investigation into the leaking of the files.

Dr. Brown’s comments have also been a hot topic on a number of internet blogs originating in Bermuda.

Under the headline Diverting Focus, IMHO.bm commented: “In a response that would make a 2 year old proud, Dr. Brown throws out a very public temper tantrum laced with threats for the Governor himself. . . . So while Dr. Brown is jumping up and down screaming bloody blue murder, I’d also like to take the time out and exactly explain his involvement in this scandal.”

Politics.bm stated: “The media can’t lose sight of the core of this scandal: The allegations must be answered.”

Finance Minister Paula Cox said: “A few weeks ago the Government hosted the Caribbean Customs Council. In fact, just on Friday last, the Bermuda Charter was signed in Bermuda.

“This Bermuda Charter puts Bermuda firmly on the map in terms of waging war against money-laundering and terrorism financing. Bermuda was amongst 80-plus other Financial Investigation Units from around the world that was a participating FIU at this auspicious gathering of the distinguished Annual Egmont 15th Plenary, that met last week in Bermuda.

“On Monday morning I spoke at the opening at the 2007 Compliance Summit held at the FSP and then later at lunchtime gave the keynote address at the Bermuda PLUS Conference.

“No one need doubt the commitment across the board by this Government to being in the vanguard to protect Bermuda’s stature and reputation internationally. In fact to further attest to this, the Premier and I will be travelling imminently to represent Bermuda and to liaise with opinion leaders and policymakers on the world stage.

“I dare say that the Premier, because of his concern of what could potentially be done to Bermuda’s international reputation, wanted swift and decisive action taken, so that the rule of law and justice was seen to be done. To this end, the Premier enlisted the Governor’s assistance and prior to the broadcast had written to the Governor.

“While I cannot presume to speak for the Premier on his more specific dialogue with the Governor, Cabinet was certainly apprised of the Governor’s response and the apparent meeting of the minds, that there would be full investigation to the circumstances of official documents that were inappropriately put into the public domain.”