The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

An outspoken QC yesterday warned that Crown Land could be the subject of his next Judicial Review action, describing this asset as the Bahamas’ equivalent of “Alaskan oil”.

Fred Smith QC, the Callenders & Co attorney and partner, told Tribune Business that he represented a newly-formed organisation called Crown Land for Bahamians, which was determined to bring greater accountability and transparency to management of this nation’s “largest national resource”.

While not disclosing its members, Mr Smith said Crown Land for Bahamians was exploring whether to seek redress for those who grant applications had either been refused for no reason or not even answered.

And its members were also planning “to test the exercise of discretion” by the Prime Minister by applying for Crown Land themselves - an effort designed to test system integrity.

Mr Smith was speaking after Tribune Business earlier this week revealed that contractor Edward Penn in 2006 paid just $221,000 to the Crown for 7.366 acres of prime real estate on Gladstone Road, only to turn around three months later and mortgage the same property to Bank of the Bahamas for $7 million.

The outspoken QC said the deal “cried out for answers” given the vast gulf between the two dollar figures, and pointed out that the Prime Minister - as the minister responsible for Crown Lands - owed a fiduciary duty to the Bahamian people to manage it in their interests.

He added that, based on the Penn deal, the Government could almost turn every Bahamian family into “overnight millionaires” by granting them cut-price Crown Land that they could then monetise or turn into an asset.

“Crown Land is like oil in Alaska,” Mr Smith told Tribune Business. “It’s a natural resource that every Bahamian should profit from.

“The Prime Minister holds Crown Land in trust for the people of the Bahamas, and he has a fiduciary duty to ensure it is maintained for the public interest, not for individuals’ private interests that can be leveraged into millions of dollars.”

Mr Penn, a long-time Progressive Liberal Party (PLP) received his Crown Land grant under the first Christie administration.

He and his family used the property acquired from the Crown to construct what they intended to be a Home Depot-style retail outlet.

The property was ultimately taken over by Bank of the Bahamas, and is now the site of Phil’s Food Services, the grocery retailer. The latter, though, is one of the 13 ‘bad’ borrowers now transferred to Bahamas Resolve as part of the $100 million Bank of the Bahamas ‘bail out’.

Mr Smith, though, said the difference between mortgage value and Crown grant price, and the chronology of events, meant that there were numerous unanswered questions that the Government needed to resolve.

“This conveyance and mortgage demand answers,” he told Tribune Business. “It cries out for an answer as to what was the true value of that Crown Land. Is it in the hundreds of thousands, or is it in the millions?

“If it’s in the hundreds of thousands, how could Bank of the Bahamas lend $7 million on it? If it’s in the millions of dollars, how could the Prime Minister agree to convey it for a couple hundred of thousands? It cries out for an explanation by the Prime Minister.”

Mr Smith said that if the pricing/structure of the Penn transaction were to be repeated, the Government could potentially turn every Bahamian family into millionaires by granting them cut-price Crown Land.

“There is so much Crown Land in the Bahamas that, based upon this little transaction, every Bahamian could be a millionaire overnight,” he said. “Every Bahamian would have assets to leverage to do all kinds of businesses, or borrow money from the bank to build residential homes.

“For too long, Crown Land has been used as a tool of political patronage. We need transparency, accountability in the whole process of who gets Crown Land, for what purpose and at what price.”

As pointed out by Tribune Business yesterday, the Crown Land grant to Mr Penn and his company is not the first controversy to arise surrounding the management and use of the Government’s substantial landholdings.

Tex Turnquest, the former director of lands and surveys, was forced to resign from his post by ex-Prime Minister Hubert Ingraham when it was revealed that five parcels of Crown Land in Forbes Hill, Exuma, had been granted to his friends and family. Shortly after being granted, they were ‘flipped’ to foreign buyers for significant profits.

The Government is the largest landholder in the Bahamas via the Crown, which owns about 2.518 million acres or 73 per cent of the Bahamas’ total land mass of 3.45 million acres.

As a scattered island nation especially vulnerable to climate change and sea level rises, land is a key economic and social resource whose management and usage is vital to the Bahamas’s social and economic well-being.

And, given the size of its holdings, the Government has to play the lead role, especially in the Out Islands.

Mr Smith, though, recalled how the Baker’s Bay project on Great Guana Cay was able to purchase prime Crown Land on the beach at a price of just $1 per acre.

“That’s what the Heads of Agreement provided for,” he added. “How is it that every foreign developer - Izmirlian, Baker’s Bay and the I-Group - get Crown Land given to them, whereas Bahamians continue to beg for it.

“If we had a Freedom of Information Act, every citizen could find out how much Crown Land exists, where it exists, and we could out what secret deals have been given to foreign developers, political cronies and others who have benefited from this.”

Explaining that the newly-formed advocacy group planned to tackle these issues, Mr Smith added: “I represent Crown Land for Bahamians, which will be setting up a website to invite everyone who has applied for Crown Land to register their date of application, the status of their application, and how long it has been outstanding.

“Those who want transparency can participate in the process holding the Government accountable. They also intend to bring a Judicial Review action for people who have applied for Crown grants and who have not been assessed or verified.

“There are also people going to apply for Crown Land, and who are going to test the exercise of discretion by the Prime Minister on this issue.”

Mr Smith said “hundreds, if not thousands” of Crown Land grant applications are submitted to the Department of Lands and Surveys every year.

“Crown Land is not the private little sinecure of the politicians,” he added. “It is held for the benefit of the people of the Bahamas.”