The Public Accounts Committee [PAC] report tabled on Friday [July 20] revealed a number of occurrences including the fact that BLDC Deputy Chairman removed the painting company for one owned by the Chairman’s son, that Global Hue tried to “destroy the career” of a Bermudian veteran tourism officer, and that financial instructions were not adhered to in both matters.
In January 2012, Auditor General Heather Jacobs Matthews issued a Special Report on the “Misuse of Public Funds,” which revealed that former Chairman [Ed Saunders] and Deputy Chairman [Pastor Leroy Bean] of the Board of Directors of the Bermuda Land Development Company Ltd [BLDC] entered into a consultancy arrangement with the Company while they served on the Company’s Board.
This arrangement resulted in them being paid $160,000 in consultancy fees, which the Auditor General called a “fundamental conflict of interest.” The PAC report said they the committee “supports the Auditor General’s recommendation that the funds paid under the consultancy be refunded to the Company forthwith.”
The PAC investigation revealed that the BLDC had engaged and signed a painting contract [valued at $24,897.50] with an assigned painting contractor. The BLDC’s Deputy Chairman then instructed the BLDC CEO to terminate that contract, and give the contract to a painting company operated by the son of the BLDC’s Chairman.
The report went to say that the CEO refused on principle but was over-ruled and the contract switch was consummated. The subsequent, switched, contract with the BLDC Chairman’s son was for $31,630 [$6,730 more than the original contract].
In addition, the report says that payments made under this second painting contract showed a request for another finish coat which caused an additional payment of $6,600, for a final contract cost for this switched painting contract of $38,230.
The report also said that the original contractor filed suit against BLDC and that there was a June 2011 out-of-court settlement with the BLDC agreeing to pay $9,500 including $1,000 in legal costs. The report said that this brought the total cost for the project to $47,730 which was $22,832.50 more [92% more] than the originally assigned contract.
The PAC report said that anecdotes like these caused the PAC to question whether the BLDC Chairman and BLDC Deputy Chairman were acting “honestly and in good faith.”
The PAC report also said that the incident of granting the painting contract to the company operated by the BLDC Chairman’s son “contravened financial Instructions, the tenets of fairness and good governance, and was a clear misuse of taxpayer’s money”.
The PAC report also covered aspects of the GlobalHue Advertising Agency, an American firm which was selected to manage Bermuda’s tourism marketing.
The report said the CEO of Global Hue wrote a “shockingly strident and totally unprofessional letter directly to the Premier/Minister of Tourism & Transport containing insulting personal attacks on the Director of Sales and Marketing, thereby short circuiting the Director of Tourism and the Ministry Permanent Secretary.”
“The direct access to the Premier/Minister of Tourism & Transport [Dr Ewart Brown] gave Global Hue the licence to ignore established protocols,” said the PAC report.
The PAC report continued on to say that: “Evidence presented to your committee showed that civil servants responsibilities were over-ridden by the Premier and Tourism & Transport Minister and Global Hue.
“The evidence also showed that Financial Instructions were not adhered to. Under these circumstances value for money from the public purse was not likely achievable”
Premier and Finance Minister Paula Cox commented on the report saying: “The events being reported on in this particular report, the provision of tourism advertising by the BDOT and operations and governance of the BLDC, occurred in 2008 and 2010 respectively…”
“Therefore it is important to note the changes and corrective steps taken to address any deficiencies noted in the recent PAC Report.”
The full PAC report is below [PDF here] click Fullscreen for greater clarity:
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