The Tribune

By Anthony Howorth

Nassau

Whilst I respect the views of Fred Smith QC, as quoted in your Business edition of August 26, I disagree that any court would require the veil of Baha Mar secrecy to be lifted, particularly as the Constitution protects, in Article 15, the rights and freedoms of others and the public interest.

Why should the public need to know every detail of a deal struck by the receivers, the Government and the Chinese, given that the former’s main concern is to maximise the return to all the creditors? The court is there to protect the public interest as well as the interests of all the parties within the law.

Where in the Constitution is secrecy a crime? An examination of the Constitution and the provisions for executive Government. may be of significance.

It reads: “The Constitution of the Bahamas is the supreme law of the Commonwealth of the Bahamas (subject to such laws as may by passed Parliament that are not inconsistent with the provisions of this constitution).”

Bahamians elected the present executive government, which is established in accordance with the constitution. The constitution provides for the executive authority of the Bahamas to be vested in Her Majesty. (see Article 71.(1)). And by (2) and (3), this executive authority may be exercised by the Governor-General, either directly or through officers subordinated to the Governor-General, or by Parliament conferring functions on persons or authorities other than the Governor-General.

Thus Parliament has the supreme power, subject to the Constitution. Article 72 reads: “(1) There shall be a Cabinet for the Bahamas, which shall have the general direction and control of the Government of the Bahamas, and shall be collectively responsible therefore to Parliament.”

It continues: “(2) The Cabinet shall consist of the Prime Minister and not less than eight other Ministers (of whom one shall be the Attorney-General), as may be appointed in accordance with the provisions of Article 73 of this Constitution”.

Clause 73 provides that not more than three senators may be included in the Cabinet.

Clause 87 provides that no business shall be transacted at any meeting of the Cabinet unless a majority of the members for the time being are present.

It is also noted in Article 86 that the Cabinet shall not be summoned except by the authority of the Prime Minister. We are fortunate that he does summon Cabinet every week. Some Dictators never summon Cabinets in this way.

But what protocols exist, and how does the Cabinet operate?

The only other person at the Cabinet meeting is the Cabinet Secretary. It has been the practice in the Bahamas, no doubt inherited from the British system of Government, that the onus of preparing the agenda for Cabinet meetings falls upon the Cabinet Secretary, who refers to the Prime Minister for instructions.

He may be instructed to call on respective ministers to prepare a Cabinet paper, or ministers may themselves submit papers requesting the Cabinet to approve certain actions. Such requests may be reviewed by the Cabinet Secretary and sent back to the minister for corrections or changes before being added to the Agenda. Thus matters may or may not be discussed at a Cabinet meeting depending on the agenda, and may be deferred.

The Cabinet meetings are confidential. The Cabinet papers are confidential. No Cabinet minister may retain documents presented at Cabinet unless specifically authorised by the Prime Minister, who controls all Cabinet decisions. We are led to believe that Cabinet decisions are unanimous. But, in fact, no vote is taken, and the meetings are more of a discussion to take the views of all the members present. The consensus opinion is recorded by the Cabinet Secretary, and after approval by the Prime Minister, circulated or provided to the Minister in respect of his Cabinet paper for action.

As stated, the Cabinet is collectively responsible to Parliament. In effect, the Prime Minister controls the Cabinet. Is this democracy? Why should secret negotiations be made public? Is it in the interests of the Bahamian people that every detail negotiated on their behalf is made public, when they have elected the Members of Parliament and the Prime Minister to act in their best interests? If they don’t like what is done in their best interests, they can make that known at the next democratically held election and vote in members of Parliament who support their views.

Every minister, as provided for in the various laws and regulations of the Bahamas, may be given power to enact decisions either on his own or, if he considers it appropriate, following a submission to the Cabinet. Thus the wheels of Government move slowly on, or don’t move at all. Too often, Ministers do not take any action, and defer matters to a Cabinet meeting. Too often ministers, including the Prime Minister, do not obey their own laws and regulations. One example is that Government Boards must have their accounts, audited or not, before Parliament every year. There are several cases where this has not occurred, and no Opposition member has complained.

Crown Land applications are another case of the executive not acting in the interests of the Bahamian people. We are told by Fred Smith, QC that more than 30,000 applications for Crown Land grants have never had a formal response by successive governments. He has established a non-profit organisation called Crown Land for Bahamians (CLB), aimed at highlighting the perversion of foreign developers being given Crown Land, whether freehold or under a lease, whereas thousands of Bahamians are not even given the courtesy of a reply to their applications.

Crown Land is held in trust by the state (as property of the Crown), and the Prime Minister alone being the statutory trustee. He may claim that he is holding the land for the benefit of all Bahamians present and future, but is this in fact the case? He may also claim that any decisions are subject to approval by Cabinet. So all ministers are collectively responsible for this situation, and are responsible to Parliament.

That is why the street is demanding transparency. Has Parliament approved all such gifts or grants of leases of Crown Land? If not, why not?

As to Baha Mar, the original grants of Crown Land are obscured by the fact that the Nassau Beach Hotel and the Meridian Hotel were bought by the Hotel Corporation, a government Corporation, or sold direct to the present owners. Other parts of the property were held in other names, and may have been bought with approval of the Investment Board by foreign companies. Certain restrictions and conditions on the use of the land were included.

All or most of the assets of Baha-Mar were charged to another company owned the China Export-Import Bank, a lender and foreign-owned entity. That loan must have been approved by the Investment Board and the Central Bank, as it is repayable in foreign currency.

The bank is the principle creditor in the ongoing receivership/provisional liquidation, both of which are subject to the Supreme Court of the Bahamas. But was the final deal approved by Parliament? Should it not have been so approved? If so, was it made public? If not, why not? To have the details of any action by the receivers/liquidators, taken on behalf of all the creditors made public, is not a decision for Government, but for the receivers.

The Prime Minister says all will be revealed at the appropriate time. Jerome Fitzgerald says certain details will be given next week. The street is saying the devil is in the detail, and the whole deal must be presented to the public.

I question this. The secured creditor placed Baha Mar into receivership, after the court was asked to approve a provisional liquidation.

This is not the first time a hotel has been the subject of foreclosure by a mortgagee. The Lucayan Hotel in Freeport was placed in receivership following the Bahamas Government revoking the casino license, thus making the Hotel economically unsound, and which caused the loss of hundreds of Bahamian jobs.

The receivers failed to find a buyer for the hotel without a casino license. The Grand Bahama Port Authority declined to make an offer, as did Howard Hughes, who spent his last years holed up in the Xanadu Hotel. Negotiations by the receivers with the Government resulted in an agreement for the sale at a big loss for the mortgagee.

At the last minute, the receiver was instructed by the Government to pay a real estate commission to Henry Bowen, an MP who had his own real estate company. Was this all in the interests of the Bahamian people? None of this was made public at that time.

Will a real estate commission be payable on Baha Mar, even though the receivers are soliciting offers direct from the public in a case where the world knows the opportunity to bid for the properties. They also know that any final buyer must also be approved by the Investments Board and the Cabinet, responsible to Parliament in the interests of the Bahamian people

Let’s be patient. Time will tell. An election is due in June 2017, after Baha Mar is supposed to open.