OBA: No proof where $350k went
The OBA has no clear idea what happened to $350,000 donated by a group of businessman to a party-linked campaign group.
Thad Hollis, the party chairman made the admission yesterday, and also he said the inquiry had “discovered in the course of this investigation other matters of equal concern.”
But he added he had been blocked from investigating these because he had been ordered to look only at the donation by US tycoon Nathan Landow and other American businessmen.
The report identified Home Affairs Minister Michael Fahy as being aware of the account, opened prior to the 2012 general election.
The account's signatories were US-based political consultant Derrick Green and Stephen DeCosta, a business associate of former Premier Craig Cannonier, both of whom were said to have a commercial relationship with Mr Landow.
“This account was not authorised by the established protocols of the OBA, which requires all accounts, campaign, branch and region, to be authorised by the executive and must have at least one member of the Executive — chairman, deputy or treasurer — as an authorised signatory,” Mr Hollis said.
“From the evidence provided to me I am unable to ascertain if any funds were paid to other parties, other than what was shown to me — to pay for the grassroots campaign. I am unable to pierce beyond the Bermuda Political Action Club account.
“From the $350,000, approximately $348,000 was withdrawn from the account.
“Tertiary accounts are beyond the purview of this investigation and personal accounts are not available to this form of inquiry.”
And Mr Hollis said: “According to documents shown to me and presented, money was spent on campaign-related activities.
“However, it should be noted these accounts are unaudited and rely on the veracity of Mr Green and Mr DeCosta.”
The report said: “There were withdrawals made from the account in large denominations.
“I was shown a printout of these withdrawals that were large withdrawals that were reportedly made to pay the grassroots campaign workers who were working for Mr DeCosta and Mr Green. All withdrawals required both signatories to sign.”
And Mr Hollis added: “Evidence as to inappropriate use of donors' contributions, or finding that potential overseas investors were made promises of a preferred status, has been limited and has had to rely upon the veracity of persons that many have an interest in preserving their reputations and only provided limited information.”
The report said: “The evidence presented shows a scope of work performed by Messrs DeCosta, Green and their teams during the months leading up to the election in 2012.”
It added: “Both signatories have represented that these withdrawals were used to pay for the campaign efforts.
“Going beyond the withdrawals from the account, I am not able to ascertain, based upon the evidence presented to me, that the funds were utilised for anything other than what has been presented.”
But his report said the investigation had found instances “that could lead to allegations of wrongdoing.”
And he singled out the solicitation of campaign donations unknown to the OBA executive and “poor controls on expenditures, leading to allegations as to who actually received the money.”
Mr Hollis added that commercial relationships with a donor who was interested in building a development in Bermuda and meetings with Mr Landow, including a private trip to discuss development on the Island, and “lack of transparency” about the purpose of the trip all risked allegations of wrongdoing.
But he said that an account where the agents are also signatories was “not good practice” and removed any controls on spending to reassure donors their money is being spent properly.
Mr Hollis added: “The campaign was managed and run by Mr Michael Fahy. As chairman, I was not directly involved in the campaign, by design and it appears now by intent.”
Mr Hollis said the grassroots campaign coordinated with Sen. Fahy on “certain initiatives”, including “constituency drops, signage and the team on the ground. These were paid persons led by the two paid OBA political consultants, Mr DeCosta and Mr Green.”
The report said that — when the account was opened at the Bank of Butterfield — Sen. Fahy “was telephoned and confirmed the account.”
Mr Hollis also looked at why Mr Landow and business associates decided to donate to the OBA campaign — and if there were any “expectations fostered.”
He said: “It is of concern that Mr Derrick Green did not make known to the party executive that he had the relationship with Mr Landow and Bermuda, LLC.
“While this may or many not have had an impact on his role as the political consultant to the OBA, it is of utmost concern that, if Mr Landow was exploring development opportunities in Bermuda and Mr Green had a commercial relationship with him, was there any conflict of interest between the OBA, the Government and Mr Green?”
And he added: “At the very least, without full disclosure, it give's the party's opponents the opportunity to claim that party political ties were being leveraged for personal benefit.
“If Mr Green had made a full disclosure to the party, actions would have been taken to mitigate and the party would not be in the situation where it felt it necessary to conduct an investigation.”
The report, which was expected to be released two months ago, was unveiled yesterday — the last day of the current House of Assembly session, which means it cannot be raised on the floor of Parliament until later this year.