Gerald Simons — foreman of the jury that convicted Terrence Smith of defrauding the Bermuda Housing Corporation — was biased due to political and family links, Smith's lawyer has claimed.

Valerie Dill, the BHC chairman at the time of the crime and a witness in the trial, is Mr. Simons' half sister.

According to Smith's lawyer, Patrick O'Connor QC, that means his impartiality as a juror could have been compromised.

Furthermore, Mr. O'Connor QC argued in the Court of Appeal, businessman Mr. Simons is a former United Bermuda Party Minister with political links to Michael Dunkley of that party.

Smith once claimed to have been persecuted by Mr. Dunkley on racial grounds, and holds him responsible for triggering the Police inquiry into the BHC that led to his conviction. Again, argued Mr. O'Connor, this could have led to bias on the part of Mr. Simons.

Smith was convicted last March of siphoning off more than $1.2 million in taxpayers' money from the BHC, which provides housing for the needy.

He abused his former position as a Property Officer to authorise fraudulent overpayments to a carpenter who passed the "profits" back to him.

He was found guilty after a 19-day trial, and jailed for eight years, but is now appealing for the conviction to be quashed.

On Tuesday, the Court of Appeal heard preliminary arguments on the point regarding Mr. Simons in order to decide whether a full 12-point appeal should be heard. Mr. O'Connor described it as being "by far the strongest ground" to be relied upon. Yesterday, the court allowed him to proceed to full argument on the Simons point along with two technical points on the admissibility of evidence.

Mr. O'Connor directed the court's attention to comments that Mr. Simons made when the jury panel was being selected. Mr. Simons told the court that Mrs. Dill is his half-sister.

Asked about his relationship to Mrs. Dill and the fact that she was to be a prosecution witness, Mr. Simons said, "I know her very well," adding that he "sympathised with her over her plight."

He said he did not know whether this would affect his judgment. Neither prosecutor Kulandra Ratneser nor defence lawyer Larry Scott objected to him, and he was later chosen by the other 11 members of the jury to be its foreman.

Mr. O'Connor also read a "victim impact statement" from Mrs. Dill, which was considered by the judge who sentenced Smith. He said it demonstrated the "very considerable emotional suffering" she endured as a result of the fraud.

He also pointed to comments made by Smith when Mrs. Dill and other BHC members quizzed him in April 2002 — a time when concerns about financial irregularities had arisen. A transcript of this interview was considered by the trial jury as part of the evidence. In it, Smith, who is black, claimed allegations against him were racially motivated and that he experienced racism in his Tee Street, Devonshire, neighbourhood.

"I've been going through hell with the neighbours in the area, and I know for a fact that Mr. Michael Dunkley, when he found out that a black boy was going in that neighbourhood, he wanted to buy the house," he said.

Mr. O'Connor described this as an "impassioned" attack on Mr. Dunkley, who is white and the current leader of the United Bermuda Party. In a sworn statement to be considered by the Court of Appeal, Smith claimed the investigation into the BHC affair was the result of allegations made in Parliament by Mr. Dunkley.

Smith also said that Mr. Simons was a Cabinet Minister in the UBP Government before the PLP took power in 1998, and that he registered concerns about him being a juror with his lawyer Larry Scott — but Mr. Scott did not convey them to the court.

Mr. O'Connor told the Court of Appeal: "The juror has a political connection with a strong instigator of this investigation leading to this prosecution. He has a political association with a person attacked by the defendant in an exhibited interview as persecuting him on racial grounds."

He claimed there was "a real risk of actual conscious bias" on the part of Mr. Simons due to these factors or "a real risk of actual unconscious bias at the very least."

Mr. Ratneser, who is opposing the appeal, rejected the bias claims. He said it was his view that Mr. Simons' relationship to Mrs. Dill did not affect his judgment — with jurors in Bermuda frequently linked to those involved in cases through blood, marriage or association.

Mr. Ratneser pointed out that Mr. Simons was not a member of a UBP Government at the time of the trial, and there is no evidence he was a member of any political party at that time.

Mr. Simons is currently Chief Executive Officer of Argus Insurance. The prosecutor dismissed the idea that Mr. Dunkley was responsible for sparking the Police probe into the BHC affair — telling the court it was in fact a complaint by the Auditor General that kicked it off.

He labelled the racism claims about Mr. Dunkley as "hearsay" with no relevance to the appeal — asking how they could have affected Mr. Simons anyway.

He remarked: "This is an attempt to draw politics into this case. This has nothing to do with politics whatsoever."

And he concluded: "In this case the prosecutor, the judge and defence counsel, knowing all the facts, did not think after that statement (from Mr. Simons) that there would be any bias. That is the end of the matter."

The three judges comprising the court will rule on the appeal at a later date. Mr. O'Connor indicated that he will oppose a retrial if it is upheld. He explained this is because Smith — "a model prisoner" — may be freed from jail as early as next November if he gets parole after serving one third of his eight-year sentence.