In March 2002, United Bermuda Party MP Michael Dunkley made allegations of corruption and kickbacks in the BHC, which he described as "the Enron of Bermuda".

He called for an independent inquiry into the Corporation. Health & Family Services Minister Nelson Bascome said there was an internal inquiry going on at the BHC and demanded Mr. Dunkley apologise for his attack.

Days later, the Mid-Ocean News, backing up its story with documentary evidence, revealed that painter Paul Young had been paid $810,000 in the space of seven months by the BHC. Other large payments to contractors were revealed.

In March 2002, then-Premier Jennifer Smith ordered an in-depth investigation to be carried out by Auditor General Larry Dennis and soon afterwards BHC general manager Raymonde Dill was suspended.

More emerged about painter Mr. Young. His wife Dale Place Young was shown to be a close friend of the Premier, having helped her decorate The Laurels when she moved in there, as well as being a Progressive Labour Party trustee.

Mr. Dill and property officer Terrence Smith were both fired by the BHC in August 2002.

Mr. Dennis' report was completed in May 2002 and it sparked a police investigation by the Commercial Crime Unit. Two senior British police officers came over from Scotland Yard ? to give technical advice.

Mr. Dill in an interview with the Bermuda Sun accused Health & Family Services Minister Nelson Bascome of breaking BHC rules.

The former BHC general manager said Mr. Bascome had allocated a $300,000 landscaping contract to a company, Island Construction, that had not even submitted a bid.

Mr. Bascome, who denied having done anything wrong, was relieved of the housing portfolio in a Cabinet reshuffle, but retained his position as Health Minister.

In October 2002, Senator David Burch took over as Housing Minister and in a press conference, he conceded that contractors had indeed been overpaid by the BHC. And he added that Government intended to sue the overcharging contractors.

In November 2002 it emerged that the BHC had paid a contractor $4.2 million for building 12 new condos ? at around twice the going rate, according to one experienced builder.

In July 2003 The Royal Gazette obtained a copy of Mr. Dennis' BHC report which showed two Government MPs had been heavily involved in dealings with the Corporation without disclosing their interests; contractors got away with double-billing and charging what they liked, sometimes double the amounts quoted for jobs; loans were given to clients and BHC officials without being secured or given ministerial permission; policies and procedures were blatantly ignored; and the responsibilities of the board had virtually been abolished.

In his annual report in 2003 Auditor General Mr. Dennis said the former management of the BHC "manipulated and out-manoeuvred" a board that failed to perform its duty.

In 2004, former BHC property manager Terrence Smith appeared for mention in Magistrates' Court, charged with 49 charges of fraud totalling almost $1.4 million.

In 2004 Police Commissioner Smith announced the two-year investigation into the BHC scandal had concluded but he and the DPP's office believed there was insufficient evidence to make further charges. Consultant to the DPP Kulandra Ratneser said if Bermuda's laws were as up to date as those of some other jurisdictions, further charges could probably have been made.

May 6, 2005 the House of Assembly debates a Take Note Motion on the Auditor General's reports of 2002, 2003 and 2004.