The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

US government criticisms have dealt “a tremendous blow” to the Bahamas’ prospects of attracting increased foreign direct investment (FDI) at a time when this nation most needs it, the Democratic National Alliance’s (DNA) leader said yesterday.

Branville McCartney told Tribune Business that the Us State Department’s report on the Bahamas’ investment climate, particularly its concerns over a lack of transparency and “undue interference” in the bidding process for government contracts, represented a “turn off” for potential investors.

The DNA leader said his own Halsbury Chambers law firm had received reports from clients who had been deterred from investing in the Bahamas, either because of crime fears or demands by ‘influence peddlers’ for corrupt payments.

And Mr McCartney “absolutely” agreed that such practices involving government procurement were increasing the burden on Bahamian taxpayers and exacerbating the Government’s fiscal woes, as they prevented it achieving ‘value for money’.

The DNA leader said the main message from the US State Department’s report to the Christie administration was: “Get your act together and stop doing foolishness.”

He told Tribune Business: “For the US to issue a statement in that regard, it must be bad. It must be bad.

“Anyone can see that is a tremendous blow to investors, foreign investors, and a tremendous blow to those who have invested as well, as questions are being asked.

“At a time when the economy is in dire straits, when we should be going out there attracting foreign investment to our shores, we are hit by this report, which tells us: Get your Act together and stop doing fool.”

Mr McCartney added: “That hits us when we need foreign investment, people to come and help build this economy.

“This is a turn off and very frustrating. You as a businessman hear that, it indicates there is cronyism, nepotism and corruption.”

The US State Department’s 2014 Investment Climate report contained little that was new, or was not known, to most Bahamians. The concerns raised over the government’s procurement processes, for example, have figured repeatedly in Tribune Business over the past 15 years.

The report said the US Embassy in Nassau had “over the last year received several complaints from US companies alleging a lack of transparency and undue government interference with bidding and procurement processes” involving public sector contracts.

Neither the companies nor the contracts involved were named, which would have been news, making it harder to determine whether the concerns were genuine.

However, they fit into the general perceptions many harbour regarding the Government procurement process, believing it is non-transparent, open to arbitrary and unknown influences (political and financial), and often involving the awarding of contracts to persons with the right family and political connections.

Mr McCartney said he and his law firm have had direct experience of such concerns, telling Tribune Business: “We’ve had persons who wanted to invest in the Bahamas, but said that crime has, understandable, turned them away.

“We’ve also had instances where persons come and say: ‘Listen, what are these guys into?’ They’ve got to put money in certain people’s hands, so that their report or proposal lands on the right person’s desk.

“They say that every time they go to these fellas, they want certain things, and they’ve got to put money in the hands of certain persons to ensure the file reaches the minister’s desk.”

Such a ‘pay to play’ cycle was a deterrent to most legitimate investors, Mr McCartney said, with many saying “forget it. We’re not getting involved in that type of business”.

The DNA leader said such practices hurt every Bahamian, as deterred investors meant less business for hotels, banks, restaurants and taxi drivers.

The Bahamas and taxpayers also lost out of well-qualified, well-financed bidders lost interest in bidding on government contracts due to concerns the process would be unfair, rigged or lack transparency. This directly prevents the Government getting ‘value for money’ - something especially vital at this point in the country’s fiscal condition.

Mr McCartney suggested the US report was intended to send a not-so-subtle signal to the Government that it needed to ‘clean up its act’.

He added that its contents had “embarrassed” not just the Government but all Bahamians regardless of political affiliation, and said: “I cry shame, damn shame, on them.”

“We have persons that get into the political arena broke as the day is long and leave as multi-millionaires. How does that happen?” Mr McCartney asked.

“That report will tell you. They go into government for the wrong reasons, not to serve the country and benefit the country, but to benefit themselves. We have to change that as a people.”

Mr McCartney called on the Prime Minister to address the issue, and send a message to the international community, by ensuring that persons who failed to pay their taxes and bills did not hold public office.

Arguing that Mr Christie had “skirted around the issue” when he responded to the US State Department’s report this week, the DNA leader said he needed to show via action that the Bahamas was an accountable, transparent nation.

“The foolishness this government has done in the last two-and-a-half years, in any developed country they would have been out a long time ago,” Mr McCartney told Tribune Business. “We are appearing not as a Third World country, but a Fourth World country.”