The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Baha Mar's main contractor asked the son of Perry Christie's top policy adviser to intervene when his father proposed changing The Pointe's Heads of Agreement over how many Bahamian construction workers would be employed.

E-mails tabled in the New York State Supreme Court on Friday reveal that Daniel Liu, China Construction America (CCA) Bahamas senior vice-president, made an urgent request for help within days of Sir Baltron Bethel altering the agreement's wording to make clear that The Pointe's 70:30 labour ratio in favour of Bahamians applied to construction workers only.

The documents, filed as part of Sarkis Izmirlian's $2.25bn fraud and breach of contract claim against the Chinese state-owned contractor over Baha Mar's failure, disclose that the person he reached out to for help was Sir Baltron's son, Leslie.

He advised that the issue was "politically problematic for the Prime Minister", given the Government's stance about ensuring Bahamians must come first in all areas of life - especially on job and economic opportunities. He suggested that, rather than focus on labour ratios, CCA instead stipulate "a dollar amount" that would be awarded to Bahamian contractors and assert it would hire more locals than had been engaged at Baha Mar.

Mr Bethel later described his father as "one of CCA's biggest supporters", adding that there were "others" in the Cabinet "who might not see things the same as OPM (Office of the Prime Minister)" where Sir Baltron worked as Mr Christie's senior policy adviser and, ultimately, as the Government's lead in resolving the Baha Mar dispute that ultimately led to Mr Izmirlian's ouster as developer/owner.

Tribune Business previously revealed that how CCA paid $2.4m to Mr Bethel's company, Notarc Management Group, and threw business its way at the Baha Mar dispute's peak. Sir Baltron, though, denied to this newspaper that CCA’s payments influenced his stance towards the controversy and its participants, or his advice to the Government and its actions, after Mr Izmirlian filed for Chapter 11 bankruptcy protection in summer 2015.

The latest disclosures, though, shed fresh light on the links between Sir Baltron, his son and CCA. They will also raise questions as to whether Mr Bethel should have intervened by providing advice to the Chinese state-owned contractor in a matter involving his father given how close his family ties were to a then-key government official.

The e-mail chain covers a week-long period between May 13-21, 2015, a period which coincides with Baha Mar hurtling towards insolvency and its Chapter 11 bankruptcy protection filing at end-June 2021. They prove that Sir Baltron, and the Christie administration, were pursuing parallel or twin tracks simultaneously - trying to act as impartial arbitrators, or mediators, in the Baha Mar dispute while at the same time negotiating with CCA over The Pointe.

Other revelations also indicate that CCA sought to exploit the Christie administration's desire to have Baha Mar fully open, and operational, before May 2017 knowing that its general election changes would likely hinge on several thousand Bahamians being employed by the Cable Beach mega resort.

Mr Liu, in a July 6, 2017, e-mail to fellow CCA executives Tiger Wu and Dawei Wang, as well as the contractor's ultimate boss, Ning Yuan, wrote: "We should take advantage of the Bahamas government. If the Government, Export-Import Bank of China and CCA join forces, we can turn passive into active." This is being interpreted by Mr Izmirlian and his legal team as evidence of CCA's desire to oust Baha Mar's original developer at any price.

The issue of how many Bahamian contractors and construction workers were employed at The Pointe, a $200m development now featuring the Margaritaville resort, condo hotel, parking lot, retail, office and other amenities, was a long-running controversy amid work that largely took place under the Minnis administration.

There were frequent complaints that Bahamians were largely being excluded from work they could perform by a Chinese-dominated workforce that Beijing insists accompanies its capital investments wherever they are located. Numerous calls were made for the Department of Labour to investigate whether CCA was breaching the project Heads of Agreement, and denying contractors and their employees much-needed income.

However, the documents obtained by Mr Izmirlian during the legal discover process for his own claim, reveal that CCA was so insistent on a majority Chinese workforce that it threatened to "downsize" The Pointe project unless it got its way.

This was triggered by Sir Baltron's May 13, 2015, e-mail to Mr Liu and CCA's Bahamian attorney, Lourey Smith at McKinney, Bancroft & Hughes. "I refer to your May 7 e-mail and your suggested language relating to the 70:30 ratio of Bahamian to non-Bahamian labour," Sir Baltron told Mr Liu. "This ratio applies only to persons employed in construction."

He then proposed altering the draft Heads of Agreement text to reflect this, amending a version that stipulated the same 70:30 ratio in favour of Bahamian workers was also to apply to operations staff and management. Sir Baltron's version confirmed that Bahamian sub-contractors "will perform at least 40 percent of the construction work", and be included as part of the 70:30 split.

Yet Mr Christie's senior policy adviser crossed out language that included operations and management staff in this ratio. This provoked fury from Mr Liu and CCA, with the former writing: "It's impossible for us to employ 70 percent Bahamian construction workers on the project because that only leaves 30 percent left as Chinese construction workers.

"If we have 400 Chinese workers that means we'd have to employ over 900 Bahamians. Then employ a further 500 permanent staff to run the hotel. For a start we won't need 1,300 people to build this project and, second, why are the permanent staff being excluded or described differently from construction workers........ Jobs are jobs, right?"

CCA argued that "the super structure and shell and base build, large MEP (mechanical, engineering and plumbing" were construction skills "most Bahamians do not possess", indicating that the fit-out of The Pointe's retail stores was more appropriate for locals.

Mr Liu justified the contractor's stance by pointing to American and Mexican workers engaged on Baha Mar's multi-storey car park and Atlantis' MEP works, respectively, and added: "I think there is a misunderstanding at Cabinet level as to what's possible on our project re: labour and also what's available in the local work pool."

The person he provided all this information to on May 16, 2015, was Sir Baltron's son, Leslie. Mr Liu reiterated: "Our problem is we cannot hit the 70/30 [ratio]. We can sub-contract 40 percent work to locals, which is double Baha Mar's commitment. My headquarters will not approve it; the 70/30 ratio.

"I drafted a revision which I think should work to include operation, training, management in the ratio. But Sir Baltron crossed out. So we are caught in [between a] rock and hard place. Because we cannot agree the Heads of Agreement, it [has] already impacted starting schedule. No Heads of Agreement, we cannot get work permits and material cleared from Customs.

"We [have] postponed our ground opening (originally by 6/1) till Heads of Agreement agreed, and considering downsizing the development. I am afraid it will hit to [the] press soon. I believe this is not what the Prime Minister want. Can you help?"

Mr Bethel replied three days later, saying he would "like to assist" but that himself and Notarc wanted to charge CCA for help with the contractor's "advice and interaction with The Bahamas". And he suggested: "We need to talk.... this is politically problematic for the Prime Minister. My suggestion is we reference a dollar amount to be awarded to local contractors and state also that, unlike Baha Mar, the Hilton project will employ mostly Bahamian labour."

Sir Baltron's son then e-mailed two days later, on May 21, 2015, to reassure Mr Liu and CCA that his father was one of the contractor's biggest supporters within the Christie administration. "I think Sir B (Sir Baltron) is one of CCA's biggest supporters.... There are others at Cabinet who might not see things the same as OPM (Office of the Prime Minister). Proceed as you deem best with the Prime Minister.... happy to assist you further if necessary."

Mr Liu replied the very same day. "I am sure about Sir Baltron and yourself as our best friend. But we are between rock and hard place. It needs to be resolved quickly, it is hurting CCA and government now."

Mr Izmirlian and his legal team, though, had no doubts about what this e-mail exchange and other evidence meant. "CCA interfered further with the project, to Baha Mar Properties' detriment, through its improper efforts to influence Bahamian government officials, including Sir Baltron Bethel, through Notarc Management Group, whose chief executive is Sir Baltron’s son, Leslie Bethel.

"CCA’s interference culminated in its conspiracy with China Export-Import Bank to oust Baha Mar Properties from the project. Sir Baltron suggested 'Izmirlian out' and obtaining a new owner, but it should 'come from bank and not government'; CCA co-ordinating separate meetings with Sir Baltron; [and] suggesting 'join[ing] forces' with the government and China Export-Import Bank to push out Baha Mar Properties."

The latter reference is to a July 6, 2015, e-mail written by Mr Liu to his fellow executives shortly after Baha Mar and Mr Izmirlian had filed for Chapter 11 bankruptcy protection. Noting the Government's threat to reclaim Crown Land and other assets granted to the project, as well as refusing to recognise the Chapter 11 process, he wrote: "The key is the attitude of the Export-Import Bank of China. The Government is in a hurry now.

"A good development is that local public opinion agrees that Sarkis has problems. Filing Chapter 11 in the US is an evasion of debt. The two tactics, reclaiming the land and not recognising the Chapter 11, were fatal blows to Baha Mar. We should take advantage of the Bahamas government. If the Government, Export-Import Bank of China and CCA join forces, we can turn passive into active."

CCA, though, vehemently denied that there was anything improper about its relationship with Mr Bethel and Notarc. "Baha Mar Properties asserts on the first page of its motion that 'CCA paid illegal kickbacks to the family of Bahamian officials to protect CCA’s position'. Again, this assertion is not accompanied by a citation to any evidence because there is no such evidence," it said, hitting back at Mr Izmirlian and his corporate vehicle.

"Throughout discovery, Baha Mar Properties has implied some sort of impropriety in CCA Bahamas payments to a consulting company called Notarc Management Group, a Panamanian-based entity that was co-founded by Leslie Bethel, the son of a Bahamian official. Defendants engaged Notarc to help establish a CCA Panama office and to otherwise explore construction projects throughout Latin America and the Caribbean.

"The invoices from Notarc show legitimate payments, many of which were made in 2016 and were reimbursable expenses that Notarc incurred on behalf of CCA Bahamas in connection with work in Panama. Ironically, while Baha Mar Properties attempts to create some impropriety in CCA Bahamas' relationship with Notarc, Baha Mar itself retained Notarc in or around 2012 (two years before CCA Bahamas did) to perform 'market research' and other work specifically in connection with the project, using project funds to pay Notarc. Leslie Bethel also worked from 2006-2008 as a “business development consultant” for Baha Mar Development Corporation, Baha Mar's predecessor entity that was controlled by Mr Izmirlian."