The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

More than 50 Bahamian jobs in the financial services industry are today said to have been lost because of Peter Nygard’s “attacks” on his Lyford Cay neighbour, hedge fund magnate Louis Bacon.

Writing in an open letter published in The Tribune today, Mr Bacon alleged that the sector “suffered as an innocent bystander” when his hedge fund management firm, Moore Capital Management, was forced to switch its business away from CITCO Fund Services (Bahamas).

Moore Capital Management had been the Bahamas-based fund administrator’s main client, and Mr Bacon said the decision to place his hedge fund business elsewhere had resulted in CITCO’s staff being reduced from 65 to just 12 today.

Accusing Mr Nygard of running a “smear campaign” against him, Mr Bacon said the Canadian fashion mogul’s efforts had also served to harm the Bahamas’ reputation among the international financial services industry and wealth second homeowners - two industries heavily relied on by this nation’s economy.

“Unfortunately, in the eyes of many international clients to whom I have had to explain the Bahamian-based attacks on the Internet and in the press, particularly in relation to the bogus allegation that the police were compelled to take action against me, the reputation of the Bahamas as a civil society has been besmirched in the offshore banking world as a direct result of Nygard’s smear campaign,” Mr Bacon wrote.

“As you can imagine, the smear campaign being engineered from the Bahamas against me is also receiving attention in the financial services industry around the world.

“Sadly, it has harmed the reputation of the Bahamas as a place to conduct business at a time when it could be capitalising on the pressures faced by European financial centres to grow business volumes and create employment opportunities for residents.

“Instead of the Bahamas looking like a refuge in the financial storm, it comes across as having its own corrosive tempest, deterring cautious international investors.”

Referring to the specific situation at CITCO, Mr Bacon said Moore Capital Management asked the fund administrator’s Curacao office 15 years ago to open a branch in the Bahamas, so he could domicile his hedge fund management business here.

Explaining the rationale for this move, Mr Bacon wrote: “The business would be closer to my home, the people I wanted to support, and to Nassau, where my business normally held its annual directors’ meeting.”

But, as the alleged Nygard-inspired campaign against him intensified, Mr Bacon said: “Two years ago, as the attacks continued and became more publicised, my main clients and senior managers urged me to reconsider the Bahamas in my company’s fiduciary role with the funds I manage.

“The security and safety of client records, and sanctity of the registrar list, as well as fund accounting, is a sacrosanct obligation in fund administration and, as I was under attack from various powerful antagonists from the Bahamas, it was the prudent thing to move on quietly rather than risk the funds being jeopardised.”

This, according to Mr Bacon, had dire consequences for his fund administrator and the Bahamians who worked for it.

“In winding down CITCO’s fund accounting, administration and share registrar activity for us, their anchor client, the office unfortunately had to retire almost all of their highly-trained employees, causing the office to shrink from 65 Bahamian financial employees to only a dozen today,” Mr Bacon said.

“This action pained me at the time, and it pains me now to have to reveal it, as it is not a fair reflection of the Bahamian financial industry, which has suffered as an innocent bystander.”

Mr Bacon effectively accused Mr Nygard, his neighbour in the wealthy Lyford Cay community, of orchestrating a so-called ‘feud’ with him as a distraction, or camouflage, from the real issue - the unauthorised reclamation of Crown Land and the seabed at Nygard Cay.

“Peter Nygard has long worried that his appropriation of Crown Land, which appears to have been going on for the last 20 years, would be exposed as an injury to the Bahamian people,” Mr Bacon writes.

He added that the “attacks” against himself began the day after a July 21, 2010, letter was sent to Mr Nygard by the then-Ingraham administration, warning that the Government was “not minded” to approve a lease of the reclaimed land. The letter also demanded that Simms Point/Nygard Cay be restored to the size it was when Mr Nygard acquired it in 1984.

“Peter’s success in conflating a neighbour’s ‘tiff’ with his larger issues has meant he has been able to successfully create a smokescreen, distracting the public and Government officials from his..... development activities,” Mr Bacon said.

Calling on an “environmentally conscious” Government to deal with the main issue at hand, Mr Bacon urged it not to do a so-called ‘trade-off’ - grant Mr Nygard the Crown Lease he is seeking in return for the $30 million stem cell research facility he is pledging to build at Nygard Cay.

“I hope the Government does not give any credence to Peter’s attempt to justify 20 years of Crown Land theft by building a $50 million commercial stem cell spa and research hospital within his property,” Mr Bacon writes.

“Obviously, a venture of that sort cannot be housed in a residential property of that size (even if Peter has made it twice as big since he bought it).”

A member of the Coalition to Protect Clifton Bay, Mr Bacon said this organisation had larger issues to deal with than Nygard Cay and its Crown Land reclamation.

“Beyond Nygard Cay, there are more taxing and complicated issues at hand for the Coalition - immediately, the oil issues and fuel bunkering stations at Clifton,” he added.

“Dealing with the declining conch and fisheries population is critical for the future of the Bahamas tourist industry.”