Government's probe into the running of public pension funds misses the point says Opposition Leader Dr. Grant Gibbons by not tackling alleged pay-to-play activities.

He said Finance Minister Paula Cox's governance review will only cover procedures and performance and could result in a bland whitewash.

Public Funds Investment Committee chairman Chairman Calvin White was suspended recently after revelations he organised a fundraising golf day for the PLP and invited 47 money managers in the US vying for Government business.

The pay-to-play allegations first surfaced after it was revealed that Government's pension funds consultant Ms Tina Byles Poitevien arranged a fundraiser lunch for Transport Minister Ewart Brown in Washington in 2002 with guests paying $2,500 towards Dr. Brown's 2003 personal General Election fund.

It is alleged guests were all current or potential money managers or stockbrokers of the Bermuda Government pension funds.

Dr. Gibbons told The Royal Gazette: “What is obviously needed is a forensic review which would investigate issues of pension mismanagement, including pay-to-play, conflict of interest and other unethical activities.

In an interview with the Mid-Ocean News last week, Al Kiel, partner in charge of the Morneau Sobeco governance review, admitted he was unaware of the pay-to-play and other ethical questions surrounding management of the Government pension funds.

Dr. Gibbons said: “This suggests the Minister did not direct Morneau Sobeco to investigate these issues. In fact, Mr. Kiel was explicit in indicating the difference between a forensic audit and a governance review.”

Mr. Kiel said his mandate was governance review rather than a forensic audit which was generally the result of allegations of wrongdoing and might involve misappropriation of assets and illegal things.

Dr. Gibbons said Mr. Kiel is familiar with Bermuda pension-fund management but his previous involvement compromises his review's objectivity.

“I worked with Mr. Kiel when he was a consultant to the Ministry of Finance in 1997-98 on the National Pension Scheme legislation.

“He was the director of pension advisory services for Deloitte & Touche at that time, and did a good job. He continued to advise the PLP Government and Ministry of Finance after 1998 and as recently as 2003.

“But Mr. Kiel, and his current firm Morneau Sobeco, is not the best choice for the review because of this long-standing business relationship with the Ministry of Finance.

“The only way to obtain any kind of completely objective review - governance or forensic - is to engage a qualified consultant without a previous or ongoing connection to the Ministry of Finance.

“Should the Finance Minister proceed with the current plan, I fear 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.”