The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

An MP's brother succeeded where all others failed by resolving a Harbour Island developer's $400,000 tax dispute with the Bahamian government, Tribune Business can reveal.

Court documents obtained by this newspaper disclose that Michael Johnson, brother of Stephen “Hank” Johnson, the central and south Eleuthera MP, was instrumental in resolving a potential liability that had dogged 4M Harbour Island Ltd and its principal, Michael Wiener, for six to eight months prior to his involvement.

An electrician by profession, Michael Johnson was described by Mr Wiener as his "go-to-guy" for removing all obstacles facing his Briland Residences and Marina project. This even extended to tax matters although Ryan Pinder, the former financial services minister and 4M's attorney, would appear to be more qualified to deal with such an issue.

Michael Johnson's role in "liaising with the Government" to solve 4M Harbour Island's tax woes was revealed in a 295-page deposition given by Mr Wiener as part of his ongoing California court battle with Bernard Ross, his former project manager who has a history of convictions and run-ins with US law enforcement.

However the 4M principal vehemently denied, when questioned by Mr Ross' attorneys, that Michael Johnson told him he could use his ties to his MP brother, or the latter's political links, to help resolve the tax dispute in the project's favour.

"Definitely not," Mr Wiener replied, when asked about a man he had described as "primarily...... an electrical contractor" just minutes before, according to the deposition transcript. Yet while Michael Johnson and his company, Mickyle Enterprises, were likely to receive much of the project's electrical work, the 4M principal said he had not personally vetted his ability to perform what was required.

This, Mr Wiener said, would be the task of Bahamas Marine Construction, the development's general or main contractor. Admitting that his relationship with Michael Johnson extended beyond electrical work to a wider "consulting agreement", Mr Wiener effectively admitted that the MP's brother operates as a 'fixer' to solve all problems affecting Briland Residences and Marina's progress.

"He basically does whatever needs to happen," the 4M chief said of Michael Johnson. "If we need to buy water, he'll buy water. If he needs to go to Nassau and make photocopies, he'll go and do that. If he needs to meet people to come over to do engineering work, he'll greet them, host them, show them around."

Disclosing that Michael Johnson's tasks extend to environmental monitoring, and testing for "turbidity" or water discoloration, Mr Wiener added: "It's a 27-acre piece of property and we have about, you know, $5m of equipment sitting on the ground, so he makes sure that there's security there so nothing gets stolen.

"He makes sure -- he makes sure that the property is not used as a dump ground. He helps liaise with local government. He helps liaise with different government agencies of Nassau - administrative works, department of planning, Prime Minister's Office. He's your... he's just basically a go-to guy. I'm not there. He's the only representative I have on the ground since Bernard [Ross] left the island."

Clearly using information provided by their client, Mr Ross' attorneys quickly turned to 4M's tax dispute with the Bahamian government and the issue of whether Michael Johnson represented the developer in resolving the situation.

"He was involved in helping us resolve that dispute," Mr Wiener said of the MP's brother. "I wonder if I signed something that said he was authorised... I don't recall. But he definitely did liaise with the Government to facilitate a resolution of that dispute."

Mr Ross' US attorneys immediately pounced, asking: "How did he get that done? He's an electrician." This produced a sharp riposte from Mr Wiener, who said: "I'm a lawyer but I changed an electrical outlet over the weekend. And so same answer: People have more than one skill."

However, the 4M principal then admitted he had been seeking the "tax refund" for six to eight months without success prior to putting Michael Johnson on the case. "I'm trying to remember who it is now because it's been -- it's been a couple of years," he said of the person who previously sought to resolve the dispute. "I don't know if it was an attorney or a tax consultant. I don't know."

Mr Wiener, though, said he was "completely unaware that Mr Johnson was going to liaise on our behalf" with the Government over the tax liability until informed about it by Mr Ross. Asked whether he accepted the position, the 4M principal confirmed this, and added: "I take help from whoever can help."

The nature of the tax dispute in question is not revealed, although the record of Mr Wiener's deposition refers to a "refund" - indicating that it likely involved Value-Added Tax (VAT), or possibly import duties and Excise Taxes even though these would normally be waived under a development's Heads of Agreement with the Government.

Michael Johnson did not return Tribune Business' call and message seeking comment before press time last night. Similarly, a spokesman for Mr Wiener and 4M Harbour Island Ltd did not provide any statement or comment despite being given an opportunity to do so by this newspaper.

However, one source close to the project, speaking on condition of anonymity, downplayed the contents of Mr Wiener's deposition regarding Michael Johnson and the tax dispute. They argued that many foreign developers were similarly forced to rely on "whoever you trust on the ground" to deal with all obstacles to their investment's success - especially when they were not present.

"These are things that happen elsewhere in The Bahamas," the source said, adding that the deposition transcript provided no evidence of wrongdoing by any of the parties involved.

The deposition's filing with the California courts, though, suggests Mr Ross is seeking to intensify the pressure on Mr Wiener to pay him the allegedly outstanding $1m remaining on the settlement agreement that secured the ex-convict's departure from the Harbour Island project.

The pair agreed a $2.3m deal, with Mr Wiener paying Mr Ross and his wife, Holly, the first $1.319m installment, after their differences over the development’s management became impossible to reconcile. However, the 4M principal halted payment of the remaining $1m on the basis that his former project manager had created more issues and damages than first realised.

Mr Ross then headed to the central California court in a bid to force Mr Wiener to honour the settlement and pay the $1m balance, triggering the ongoing battle between the duo. Yet, in another headache for Mr Wiener, his deposition - and especially the reference to the $400,000 tax dispute settlement and Michael Johnson's involvement - are likely to be seized upon by other opponents of his project.

For Br-Island Responsible Development Association (BIRD), whose second Judicial Review challenge to 4M's construction permits began before the Bahamian Supreme Court in late July 2020, is now seeking an order from the same central California court to force Mr Wiener to give it a deposition.

BIRD, whose members are mainly drawn from a group of Harbour Island homeowners and residents, is using previous affidavit evidence from Mr Ross concerning Michael Johnson's connections to the project as the basis for its application to the California court.

That action, filed in late August 2020, comes as BIRD's previous bid to obtain deposition testimony from Mr Ross directly - something Mr Wiener branded as a "“last-ditch fishing expedition” - goes nowhere fast in the Florida courts.

A source close to 4M told this newspaper: "The sad reality is this is showing their [BIRD's] hand. They're going to continue until they feel they've exhausted every avenue, and have frustrated the project to the point of no return.

"The people hurt most by this are the people of Harbour Island who want jobs and something to do. The whole country needs this to succeed. Who else wants to put money into the ground at this point?"