The Tribune

LAST WEEK Opposition Leader Philip “Brave” Davis mocked the Minnis administration’s inability to trace $42 million of the $150 million borrowed by the Christie administration for hurricane recovery. Mr Davis had the audacity to call it the “height of incompetence” on the part of the new government for failing to trace these funds.

Did he ever pause for a moment to think that if the money, which was probably a line item in the consolidated fund, had been properly accounted for by his own government as it was spent, no one would now be playing “find the rabbit”?

“Money doesn’t just walk out of the treasury,” said Mr Davis. We agree, someone with authority and a pen in hand had to transfer it from one account to another, but was that transfer to do with hurricane relief? Only the PLP can answer that question. So far Finance Minister Peter Turnquest can only account for $108 million having been spent as it should have been — exclusively on hurricane relief. But what of the remaining $42 million? Was that spent on hurricane related projects? Only the Christie government can answer that question. Mr Turnquest cannot explain this, nor should he be expected to.

This was the failing of a PLP government that seemed not to understand that when a sum of money is borrowed in the name of the Bahamian people for a specific purpose it has to be spent exclusively for that purpose. If unable to do so, the government has to return to the people, give an accounting for what it has spent and explain why the remainder should be diverted to another cause. This is the people’s money they are trifling with. Bahamians would like Mr Davis, who now represents his former government, to step up to the plate and give an explanation for the decisions of a government of which he was once a very large part. Finance Minister Turnquest has done his job. He says he can confirm that $108 million, borrowed by the Christie government, was spent on the projects for which it was earmarked — hurricane relief. But he cannot trace the spending of the remaining $42 million. In other words, he cannot say whether it was spent, as it should have been, exclusively on hurricane recovery. What say you, Mr Davis? The ball is now in your court.

It would seems that persons in the PLP government, either forgot, or did not learn from the angry outburst of the late Sir Jack Hayward when he discovered that his $1 million donated exclusively for hurricane repairs in Freeport in 2005 was diverted to the general fund — none of it finding its way to Freeport.

When Sir Jack, and his late partner Edward St George, decided to donate a million dollars to NEMA for hurricane reconstruction, the two men wrote to Prime Minister Christie on October 12, 2004 informing him of their decision, specifying that 50 per cent of the funds were to be spent in Freeport, and the remaining 50 in west Grand Bahama. The funds were specifically earmarked for “restoring the educational facilities on Grand Bahama” after the hurricane of that year.

When the YMCA, included in Sir Jack’s description as an “educational facility”, was refused help by NEMA – having been told that NEMA had no money in Freeport, but had sent it all to Nassau – the Y returned to Sir Jack for help. Sir Jack phoned to find out what had happened to his Freeport donation, only to be treated with contempt by civil servants. Well, that put the fire to the wick. NEMA, without any reference to the Freeport investors had diverted the Hayward/St George donation to the general fund in Nassau.

The attitude of government agents that they owed Sir Jack no explanation caused Sir Jack to agree with the late Sir Albert Miller, president of the Grand Bahama Port Authority, who bluntly told him: “You were very silly to give that money to the government, you should have earmarked it for what you said and spent it yourselves – see that it gets there yourselves.”

“I think this is one of the biggest scandals the Bahamas had in years,” protested Sir Jack. He said he did not know how much of his and St George’s money had been spent, nor on what it had been spent.

What those handling the money did not seem to realise was that NEMA could have been sued for diverting that money from Freeport to the general account in Nassau. Prime Minister Christie, who had received the donation immediately understood as a lawyer the problem they were facing. He said that they had to make a “special position” for that donation and as the donors wanted it to go to education “government must find a way to oblige them.”

It would be well for all those who handle public money to be reminded of the case of Barclays v Quistclose, 1970, which involved the payment of dividends.

The House of Lords decided that where money, advanced for . a specific purpose, cannot be used for that purpose it takes on the character of a fiduciary trust and there is an implied obligation that the money must be returned to the donor.

The Law Lords said that this principle had been recognised in a series of cases for more than 150 years before the Barclays v Quistclose, 1970 case.

Instead of sitting back with a smug smile on his face, Mr Davis might do himself a favour by trying to help government account for the unexplained $43 million, which was a part of a $150 million loan borrowed by the PLP government on behalf of the Bahamian people for hurricane relief.