PAC Report: Use Of Funds For Legal Expenses

June 9, 2014

The Public Accounts Committee [PAC] tabled a report in the House of Assembly on Friday [June 6], relating to the Auditor General’s report, specifically the lawsuit filed in the name of former Premier Dr. Ewart Brown and former Minister Derrick Burgess.

Committee

The bipartisan Committee consisted of Chairman David Burt [PLP], Lovitta Foggo [PLP], Terry Lister [IND], Cole Simons [OBA], Glen Smith [OBA], and Jeff Sousa [OBA].

From September 2013 to May 2014, they held nine meetings with the Auditor General and staff, current and former public officers, and had deliberations amongst the committee.

Auditor General’s Report

The original report from the Auditor General back in December 2011 [PDF/Page 13] said, “In February 2009, two cheques purporting to be payments to the Premier and to the Minister of Works & Engineering were discovered in files of the Ministry of Works & Engineering.

“The cheques were subsequently found to be fabrications of original cheques issued to two vendors. The matter was reported to the Bermuda Police Service [BPS]. An investigation was conducted and it was determined that no charges would be laid.”

The Auditor General’s report said it was brought to their attention that legal action had been initiated in an Ontario Court “on behalf of the former Premier and the Minister of Public Works.”

The report said that invoices for legal work in the amount of $31,287 for the period ended June 30, 2011 were paid, with the Auditor General recommending that “Government financial support for the private legal action” be terminated, and that “appropriate steps should be taken to recover monies already paid to the firm with respect to the action.”

PAC Report

The PAC report tabled last week said, “The main contention was how an action approved by Cabinet for the Government of Bermuda ended up as a lawsuit filed in the name of former Premier Ewart Brown and former Minister Derrick Burgess.”

It continued on to say that PAC “was unable to ascertain precisely by whom or when authorisation was given for the legal action to be filed in the name of former Premier Ewart Brown and former Minister Derrick Burgess [as opposed to the Government of Bermuda].

“The Ministry of Justice, in its response, stated that, ‘the personal action was the only means by which the Government could take action again those responsible for essentially attacking the Government via its Ministers.’ This determination arose from the fact that a Government cannot be a plaintiff in a defamation action.

“Given that the action was filed in the names of former Premier Ewart Brown and former Minister Derrick Burgess, and although Dr. Brown and Mr. Burgess have stated publicly that any proceeds would not have benefited them personally, the PAC was provided with no legal or contractual evidence to support this.

“Though the action may have been for a government purpose, the lack of documentation regarding any potential damages allowed for the possibility for someone to personally benefit from the lawsuit.

“While PAC is not accusing former Premier Ewart Brown and former Minister Derrick Burgess of seeking to profit from this action, there was no documentation provided to PAC or to the Office of the Auditor General that satisfies this dilemma.”

PAC Recommendations

The PAC report added they they take “note of the Auditor General’s recommendation that surcharged funds be paid back, but does not support the recommendation – as the Committee accepts the explanation that Cabinet approved the funds and it was the view of Cabinet that the funding was for a ‘government purpose.”

As far as recommendations, the report said: “PAC recommends that the Government examine amending Financial Instructions to allow for the Cabinet to support a civil action taken on behalf of a Minister against anyone who defames and damages the reputation or credibility of the Minister when he or she is carrying out his or her duties.

“The PAC also recommends that any amendment to Financial Instructions make it clear that any proceeds from any such action revert to the Government of Bermuda.”

Dr. Brown’s Submission

In his written submission, Dr. Brown said, “Yes, the case was filed in Toronto in our personal names. But surely the Auditor General could have taken a few minutes to find out that governments cannot sue for libel, that there was no subterfuge present – that Cabinet of the day discussed this issue and determined that filing suit in the officials’ names was the only strategy left available to the Government.”

Dr. Brown said, “Cheques were fraudulently prepared and placed in Government files; the cheques were ostensibly payable to the sitting Premier and a Minister, and were made out as if those two public officers had received kickbacks from a Government project – very grave offenses. This is a fact.

“Such an egregious attempt to ‘frame’ the Premier of a country as well as a senior minister would have, in other jurisdictions, been treated as a serious and treacherous incident and not brushed off by the Prosecutors of the day. In fact, the issue on the table would have been the effort of the Government to identify the perpetrators, not the issue of who paid for the legal services,” added Dr. Brown.

Mr. Burgess’ Submission

In his written submission, Mr. Burgess said, “The writ was in the name of the Bermuda Government. However, following guidance received from the Canadian lawyers, the writ was put in the individual names of Dr. Brown and Derrick Burgess because in Canada Governments cannot sue for libel.

“It should be noted that no rules or regulations were violated by paying for the defense of myself or the then Premier. There were no violations of Financial Instructions, so there is no legitimacy in the request of the Auditor General that we repay monies used for legal representation of the Office.”

“It would appear that the Auditor General has vindicated the perpetrators. The architect of this crime remains free having never been brought to justice. On the other hand, the victims of the crime are suffering twofold at the hands of the perpetrators and at the hands of the Auditor General,” added Mr. Burgess.

The PAC Report & submissions from Dr Brown and Mr Burgess are below [PDF here]

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Comments (4)

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  1. BETTTY TRUMP says:

    “PAC recommends that the Government examine amending Financial Instructions to allow for the Cabinet to support a civil action taken on behalf of a Minister against anyone who defames and damages the reputation or credibility of the Minister when he or she is carrying out his or her duties.”

    “The PAC also recommends that any amendment to Financial Instructions make it clear that any proceeds from any such action revert to the Government of Bermuda.”

    Excellent recommendations by PAC. This should have been in place years and years ago. Every government Minister should have some legal representation when a case directly is set up to defame them.

    • BETTTY TRUMP says:

      The matter suggest that government protocols are not clear, and often need to be tighten up, more so updated as well.

  2. Funds?….no….that is public purse…..you have no understanding when you say funds you imply intended use….they …those dollars are not funds….they are not funds to utilise for personal use…this is the problem with plp….they cannot perceive money that does not belong to them….they figure if the money is there and they have the check book let’s spend it,we ….the people require more resonsible people in charge of our money….that is why you are no longer in charge of our money.

  3. Need Peace says:

    It was probably ok with you when the former Premier Cannoniere was fixing to use these “funds” To sue Opposition Leader Bean and Shadow Minister Burt inna! There are always two sets of rules thank God we have law!