PAC Report Reveals Global Hue, BLDC Issues

July 23, 2012

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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Comments (14)

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  1. Rockfish #2 says:

    Despite the denials by the usual suspects, the truth is emerging, warts and all.

    But the extent of the corruption is shocking!

  2. Pastor Syl Hayward says:

    So, because these things happened in 2008 and 2010, nothing will be done to redress these breaches? Because “corrective steps” are now in place? They didn’t know then that what they were doing was wrong? Is that what the Premier is saying?? Please tell me no!

    • Swing Voter says:

      What will be done to redress breaches? Send a clear message on election day that swing voters all over this island will not tolerate this nonsense any longer. OBA will form the next government, and if they fcuk up then they will have to sit in opposition again….

  3. Sandgrownan says:

    Oh what a surprise! Wonder what else went on….?

  4. Argosy says:

    No surprises here. We all knew what he was up to and she knew also.

  5. Come Correct says:

    I could be wrong but didn’t that new good governance legistlation say that offenders could be charged up to 3 years after the offence? Oh right nothing illegal here, just immoral. 180,000 reasons not to trust a pastor and they all look like this $. (No offence Mrs. Hayward, but people like him give people like you a bad name)

    • Argosy says:

      NO! Not “immoral”.


      That’s OK in her book…..go figure!

  6. Serious says:

    Is there a statute of limitations relating to what should be called crimes? If someone can be arrested for a 12 year old traffic ticket, surely those responsible for the above mentioned actions should be held accountable.
    The new and hastily put together legislation should not offer the offenders protection. Just saying!!!!!!!!!

    • Come Correct says:

      That’s what its there for, so if by chance the oba do get in they don’t take them to court.

  7. Zombie Apocalypse says:

    Cox was the Finance Minister then right, when we were wasting money left right and centre? Paying $48,000 for a $24,000 contract so that insider could enrich themselves? Paying Global Hue millions?

    But, I nearly forgot. She was a powerless “cox in the wheel” at that point. Drawing a salary for being Finance Minister but actually rubber-stamping anything that Ewart wanted, and however dubious.

    And now they pretend the $1.5bn in debt is all due to the recession.

  8. The nitty gritty says:

    Won’t be the first election in the world where the sitting Government fights an election just to keep the opposition from investigating major ‘mismanagement’ over many years.
    You all wonder where the $1,400,000,000 went? Just take the PAC reports and multiply by a thousand.

  9. Edmund Wells says:

    I must be missing something.

    The Deputy Chairman overrules the CEO of BLDC, and delivers a painting contract to a firm owned by the Chairman’s son, at what appears to be highly inflated pricing. The effect of the Deputy Chairman’s actions is to effectively double the cost of the painting contract to the BLDC, including settling legal challenges resulting from his actions.

    The Progressive Labor Party believes that an individual with these moral standards should not only remain a member of the Party, but is an appropriate choice as a candidate for office?

    What else does a voter need to know about the PLP?


  10. wizeazz says:

    Even Lavern is silent on this one.
    No way to spin this
    Now we need to get our money back and has these people step aside.
    Alls quiet on the biu side when hard evidence outweighs plp spin.

  11. navin Johnson says:

    Should also take a look at how Kurron got the hospital contract over Johns Hopkins while you are at it….