Former Bermuda College chairman Jan Spiering said Government blocked its choice for running Stonington Beach hotel and then handed it to John Jefferis in a controversial deal attacked by the Auditor General.

In a hard-hitting report released on Friday, Auditor General Larry Dennis showed how Mr. Jefferis had been allowed to renegotiate the Stonington deal after winning the tender.

Mr. Dennis said the new deal - which doubled the lease, slashed rent, added oceanfront land and two cottages and allowed condominiums to be built and sold - was so different from the original tender that it should have been re-tendered.

Yesterday former Bermuda College chairman Jan Spiering said: “It was taken out of our hands by the then-Minister Paula Cox and taken to the Cabinet to make the decision.

“We had a committee at the time, representatives of the board made recommendations to the Minister and the persons who should take over, which was not Mr. Jefferis.

“At that point I was told our committee was going to be disbanded.

“Obviously we made our recommendations based on our best judgment. Any time you make recommendations like that you are going to be disappointed if it isn't taken further.”

He said a new committee was then set up by Government.

Bermuda Resort Hotels (BRH) had been originally selected by the College to run the hotel in February 2002 when the College made the selection but was replaced by Mr. Jefferis' bid in December 2002.

The hotel was transferred from the Ministry of Education to the Ministry of Tourism and the tendering process began again to avoid the impression of a conflict of interest.

The president of BRH is Billy Griffith, who sat on the College Board of Governors.

Government Sen. Raymond Tannock, who succeeded Mr. Spiering as chairman of the College, refused to comment on the story yesterday and said Tourism Minister Renee Webb was the one to talk to.

He said: “That deal was done by the Tourism Department.”

Ms Webb did not return a call yesterday, but on Friday she called the Auditor General's report erroneous and said she would be making a Ministerial statement about it at the end of the week.

However in the House on Friday, Finance Minister Paula Cox said Government had been scrupulous in ensuring the Stonington Beach tender was handled correctly.

Ms Cox, who was Education Minister until January, 2004, said that a non-political selection committee had been appointed.

Neither the Education Minister, under whose remit Stonington came, nor the Tourism Minister, was included.

She said: “It is a lot of poppycock to say we were interfering with the tendering process.”

Retiring Bermuda College President Michael Orenduff said of the Stonington deal: “The College ceased to have any role after January 2002.

“My remit was to deal with the College. I don't have any comment on what happened after that.”

But last year, when the changes to the lease were revealed by The Royal Gazette, Dr. Orenduff said he was concerned that the new lease created a liability to the College “in the region of a million and a quarter dollars”.

He said: “And since the lease does not require any rent for the first five years, there is no income from which the College can pay these liabilities.

“It is our hope that the Government has some plan to handle this financial liability without using College funds.”