The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A senior Bahamian banker’s claim for wrongful/unfair dismissal, after he was “caught in the act” dealing with a key figure in world soccer’s bribery scandal, was yesterday rejected for a second time by the judicial system.

The Court of Appeal, in a unanimous verdict, upheld the original Supreme Court judgment while noting that Paul Major’s actions could potentially have resulted in BISX-listed CIBC FirstCaribbean International Bank (Bahamas) suffering “regulatory sanction and criminal liability, as well as civil liability and reputational damage”.

Appeal justice Stella Scott-Crane, in the court’s written ruling, found that the bank was more than justified in terminating Mr Major, then its head of international banking, for breaching its strict policies on dealing with US clients when he collected a $250,000 cheque from Charles “Chuck” Blazer, former general-secretary of soccer’s governing body for North and Central America, and the Caribbean, at New York’s JFK airport in late April/early May 2011.

She agreed with now-retired Supreme Court justice, Keith Thompson, that Mr Major had been “evasive and unhelpful” when questioned by the BISX-listed institution’s US attorneys as they sought to verify the identity of the Bahamian banker who was referred to in the indictment that levied fraud and corruption charges against Mr Blazer in 2015.

Blazer, who pled guilty in a US court to receiving more than $2m in bribes as part of the corruption scandal that engulfed soccer’s world governing body, FIFA, had been a CIBC FirstCaribbean International Bank (Bahamas) client since 2002. Mr Major, who enjoyed a 23-year career with the bank prior to his dismissal, was Blazer’s relationship manager from that time and “handled small matter and large matters” for the American soccer executive.

Prior to his New York trip to meet Mr Blazer and pick-up the fatal cheque, the evidence showed Mr Major was aware of an increasing number of media reports making allegations of corruption/bribery against his client and other members of the region’s governing soccer body. At one point he e-mailed Blazer suggesting he “stay out of the news”.

The New York rendezvous was detailed in the US government’s indictment against Blazer, the contents of which were reported by Tribune Business at the time. It described how a Bahamas banker from FirstCaribbean made a round-trip to New York to collect a $250,000 cheque from Blazer, which was part of a $10m bribe to influence voting on which nation would stage the 2010 soccer World Cup.

The banker then flew back to the Bahamas on May 3, 2011, and deposited the $250,000 into Blazer’s CIBC FirstCaribbean bank account in Nassau, which had been undeclared to the US tax authorities until the Federal Bureau of Investigation (FBI) began its FIFA bribery probe.

Blazer, as part of his subsequent guilty plea, agreed to forfeit 50 per cent of the $1m he had stashed away at CIBC FirstCaribbean International Bank (Bahamas), admitting his “wilfull failure” to report its existence to the US Treasury Department and Internal Revenue Service (IRS) for income tax purposes.

Meanwhile, the Blazer indictment and the reference to the Bahamian CIBC banker, triggered alarm bells at the bank which engaged the international law firm, Mayer Brown, to initiate an investigation. The bank was especially concerned that its policies prohibiting dealing with US clients on American soil had been breached.

Bahamas-based financial institutions have to be ultra careful in dealing with US clients given the global reach of that country’s tax and legal system, and the extreme consequences they could suffer if they fall afoul of it - especially given their reliance on continuing access to the US financial system for clearing transactions.

Justice Scott-Crane, detailing Mr Major’s encounter with CIBC’s two US attorneys, wrote: “He was questioned about several customer accounts for which he was the relationship manager, including Mr Blazer’s Bahamas account referenced in the Indictment.

“The official note of the interview recorded that the appellant [Mr Major] had been shown paragraph 55 of the [Blazer] indictment and had read it, and was directly asked whether he was the ‘bank representative’ referred to.

“The note further recounted that when asked direct questions, and other questions designed to refresh his recollection, he had made various verbal and non-verbal responses, but had never expressly admitted or denied that he was the bank representative involved.”

Six days later, on June 2, 2015, Mr Major was informed in a meeting with then-CIBC managing director, Marie Rodland-Allen, that his New York cheque pick-up had breached the bank’s policy on dealing with US clients and he was to be terminated with immediate effect.

“As clearly appears in CIBC FirstCaribbean’s US person’s policy, such conduct constitutes a violation of US federal and state banking and other laws, and might lead to regulatory sanction and criminal liability, as well as civil liability and reputational damage as CIBC FirstCaribbean (as the policy itself states) is not licensed to conduct banking business in the US,” Appeal justice Scott-Crane found.

“There is no question that this is what was under investigation at the meeting of 28 May, 2015, where the appellant was shown Mr Blazer’s US Indictment, allowed to read it, questioned about its contents and directly asked if he was the ‘bank representative’ involved.

“The evidence in this case also shows that the appellant was aware of the specific matter which was under internal investigation by CIBC FirstCaribbean. As the judge found, his answers to direct questions which were put to him were evasive and unhelpful to the process. He was again given a further opportunity to co-operate with the internal investigation and failed to do so.”

The Court of Appeal found that CIBC had met the Bahamian legal standard for conducting a “fair and reasonable” investigation into Mr Major’s actions, and passed the required threshold to dismiss him. “Rather than co-operating with the investigation and admitting his involvement, the appellant failed to co-operate,” Appeal justice Scott-Crane found.  “As we have said, the situation in which the appellant found himself on May 28, 2015, was akin to his having been caught in the act, albeit years later.”

The Court of Appeal thus upheld the Supreme Court’s verdict in its entirety, and ordered that Mr Major pay CIBC’s legal costs covering two attorneys.