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BPL consultant accused of ‘act of fraud’ in audit

Bahamas Power and Light headquarters.

Bahamas Power and Light headquarters.

By RASHAD ROLLE

Tribune Senior Reporter

rrolle@tribunemedia.net

AN internal audit by Bahamas Power & Light concluded that a consultant who provided makeup services to former BPL chair Darnell Osborne “demonstrated a significant lack of integrity while engaged by BPL” and evidently “committed an act of fraud” against the company, according to the report from the external probe former Prime Minister Dr Hubert Minnis ordered into BPL’s affairs.

The report of FTI Consulting, seen by The Tribune, chronicles the turmoil that resulted in the breakdown of BPL’s board in 2018. However, most of the report focuses on BPL’s procurement practices and takes a critical view of these.

The initial board Dr Minnis appointed was dissolved on August 14, 2018. The dissolution of the board came as the body broke into two factions, with CEO Whitney Heastie, Patrick Rollins and Ferron Bethel on one hand, and chair Mrs Osborne, Nicholas Dean and Nicola Thompson on the other hand.

 FTI’s report, which describes a BPL board that grew dysfunctional for a variety of reasons, does not present a definitive view on which faction was right on many of the various points of dispute. Investigators say they did not attempt to interview Mrs Osborne’s faction as part of the investigation.

 In 2018, former Works Minister Desmond Bannister told reporters he intervened in the management of BPL after learning the institution covered makeup and home security system bills for Mrs Osborne.

 “Regarding the widely reported allegations that Osborne sought inappropriate reimbursement for personal expenses related to makeup and a home security system, Bethel, Heastie and Rollins all reported that while Bannister’s statements may have been technically accurate, the media portrayal was misleading and they did not regard these as significant transgressions,” FTI Consulting said in its report.

“The makeup expenses, all three concurred, were related to BPL public relations events. The expenses might not have been a prudent use of company funds but, according to those interviewed, they were not strictly personal expenses. According to Bethel and Heastie, the makeup bills were related to a public relations consultant that Osborne had hired, whose expenses had not been carefully controlled. In addition to the makeup expenses, Bethel described questionable expenses incurred by this consultant, including the purchases of camera equipment and tents for outdoor events. Rollins said there were suspicions that the consultant may have been making purchases without Osborne’s knowledge in some instances. According to Rollins, any impropriety may have rested more with the consultant than with Osborne. Bethel said that when these expenses came to light, the consultant was the subject of a high degree of suspicion and subsequently either quit or was terminated.”

 FTI Consulting said BPL’s internal audit department found that the consultant, who was engaged on January 8, 2018 for a period of six months, “demonstrated a significant lack of integrity while engaged by BPL” and evidently “committed an act of fraud against BPL” involving an invoice for $55,900 worth of radio equipment from a vendor called Paradise Communications.” The report also noted that (the consultant) “signed and collected the cheque on behalf of the vendor, raising the possibility of vendor collusion with potential ‘kickbacks’.”

 According to the report, shortly after the initial board began to meet, Mr Bannister asked Mr Rollins and Mr Heastie to travel to Finland to meet with Shell, which had been seeking a meeting with Mr Bannister regarding a proposal for an LNG plant.

 “According to Bethel,” the report said, “Osborne was displeased that Bannister had not asked her to go, as she felt that as board chair, she should have been one of the representatives. This perceived slight created friction between Osborne and Bannister that was compounded when Bannister again asked Heastie and Rollins to participate in the aforementioned trip to China for a conference as part of a delegation from the Ministry of Public Works. Bethel said that Osborne approached him about the conference and was ‘incensed’ that she was not informed or asked to attend it. Bethel also reported that Osborne initially refused to approve Heastie and Rollins’ expenses for the trip. Bethel said after this conversation, he called Bannister and asked him to run such decisions past Osborne to prevent the perception that he was undermining or circumventing her. Bannister reportedly agreed.”

 “Heastie provided a similar account but noted that, in his view, the tensions with Osborne were primarily the result of differing views on what was under her purview as board chair. According to Heastie, Osborne wished to be involved in day-to-day executive and operational decisions of the company, such as hiring and termination decisions. Heastie and certain other board members viewed this as contrary to the established division between the board and the executive team and took the position that the board should remain focused on policy and let the executive team carry out the company’s operations.”

 According to the report, Mr Bethel said that by July 2018 there were clear divisions within the board.

 “Bethel, Heastie and Rollins all described an increasingly tense atmosphere among the board, leading to its inability to function normally and ultimately to its dissolution,” the report said.

 The report said BPL board minutes corroborate the view that a home security system was approved for Mrs Osborne. Mr Heastie and Mr Bethel, in interviews with investigators, questioned whether the system was truly necessary.

 “According to the minutes of the September 19, 2017 BPL board meeting, Thompson ‘indicated that there is a need to provide security at the residence of the chairman in light of the recent terminations at BPL, and moved to reimburse Osborne for $2,464 for the installation of security equipment. The motion was seconded by Heastie, according to the minutes. FTI notes that while the minutes indicate that the bill was attached, the version of the meeting minutes reviewed by FTI did not include a copy of this bill.”

 Investigators also secured responses from Mr Heastie, Mr Bethel and Mr Rollins with regard to key statements and letters from Mrs Osborne’s lawyers.

 “While the Clifton Pier contract is discussed in more detail elsewhere in this report,” the report says, “one of Osborne’s allegations pertained to the board’s involvement, specifically that the board did not engage outside counsel to review the deal prior to its signing. In interviews with FTI, neither Heastie nor Bethel recalled Osborne ever requesting that outside counsel review it, although both confirmed that the entire board reviewed it, including Osborne, as well as Bethel, who is a lawyer by trade. Heastie added that it was further reviewed by EY. A review of BPL and BEC board minutes contains no indication that Osborne raised any objections on this issue.”

Comments

SP 3 years, 1 month ago

This reads as though Ms. Osborne had her baskets higher than she could reach, and thought way too much of herself!

She sounds like a self centered, vindictive, pain in the ass. Getting rid of her was Bannister's best move.

JohnDoes 3 years, 1 month ago

Sadly she is, met her in real life, and she is a bit of a snob and a one who doesn't treat others with the same 'respect' that she tries to demand.

tribanon 3 years, 1 month ago

I know her and share your views about her. It's indisputable she genuinely needs a lot of makeup....in fact, too much might not even be enough!

moncurcool 3 years, 1 month ago

This report needs to be thrown in the trash. How could you be engaged to do and investigation and you only speak to one set of parties concerned? This clearly makes the investigators and the report seemingly biased.

ThisIsOurs 3 years, 1 month ago

my thoughts exactly. The report cant be worth the paper its written on. Companies do themselves a huge disservice when they take blood money. Im almost positive its a reputable firm who was given orders not to speak to the "other" people and they complied. Blood money.

The correct thing for them to have done was lay diwn their standards for a professional investigation and if it coukdnt be agreed to,... walk away. Now Minnis gone and people questioning what kinda shoddy work this is and who hire these guys? But I guess I dont have to feed their children

Bahamianbychoice 3 years, 1 month ago

My question is why was Bannister, in his capacity as Minister, sending his friend Rollins and this CEO Heastie to meet with Shell, when they were not the technical persons involved and why is Bannister sending his friend Rollins and Heastie to participate in a conference on behalf of the Min of Works in China...without consulting the Chair and then expecting BPL to pick up the tab. If Osborne has not spoken up she would not be executing her fiduciary responsibility. I am more concerned about happened in Finland to derail the Shell process so badly on something so important to the country, and what then said deals were in turn made in China. Was there reporting as I heard no feedback on this from Bannister, but maybe I missed this. Wasn't this also the time they all visited Macoa....what a time...this is just more smoke and mirrors to take the spotlight off what really has gone down with the purchase of those engines and at the company in general. I find it suspicious that a consulting firm hired to investigate the dismissal of the Directors did not feel it warranted to speak with the former Directors. To me that has red flags all over it...what then was the real scope.

tribanon 3 years, 1 month ago

Your astute comments here raise many interesting questions.

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