The Tribune

• Christie: $5.5bn deal was ‘dead’ when I left office

• Says principals never produced proof of financing

• Minnis: PLP left oil refinery ‘prepared, ready to go’

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Perry Christie says he is “utterly amazed” that Dr Hubert Minnis would blame his administration for flawed due diligence on the $5.5bn Oban Energies project given that the deal “was dead” when he left office in 2017.

The former PLP leader, in an interview with Tribune Business, said the controversial Grand Bahama oil refinery and storage terminal project “never went anywhere” before his administration was voted out of office on May 2017 because its promoters could not provide proof they had assembled the necessary financing.

He spoke out after Dr Minnis, repeating assertions he made in the House of Assembly late last year, said that while his administration took the blame it was its Christie-led predecessor that failed to conduct the necessary due diligence and proper scrutiny on Oban and the background of its key principals.

The ex-FNM leader said the last Christie administration had left “Oban prepared and ready to go”, and all that was required was the Heads of Agreement to be signed, implying that his mistake was to rely on his predecessor completing the required checks via the Bahamas Investment Authority (BIA) and other government entities.

The two former prime ministers traded blows after Oban emerged into the spotlight once again. Peter Krieger, the project’s former principal and non-executive chairman, last week agreed to be sanctioned and pay fines after being accused of defrauding investors in Oban Energies some $5.2m - more than one-third of the $15m they invested - to finance his lavish lifestyle.

That marked the third such occasion that Krieger has been accused of misappropriating, and misusing, investor monies entrusted to his care, and the second time he has agreed to the imposition of penalties against him “without admitting or denying” the allegations.

The south Florida federal district court now has to determine the appropriate punishment for Mr Krieger, but the episode again raises much questions about the level of scrutiny and background checks applied by the Government for what would have been a major multi-billion dollar investment project seeking significant land, tax and other concessions from the Government and Bahamian people.

Dr Minnis, noting that his House of Assembly comments last year were the first time he has spoken on the matter, said his administration “took all the hits and blows” over the affair because “that’s what responsible leaders do”. He told Tribune Business: “When we came in Oban was prepared and ready to go. We brought it forth.

“Unfortunately, the Government didn’t do their due diligence,” the former prime minister said in relation to his predecessor. “It’s on record, because we were the Government and we brought it forth. We took the responsibility; that’s what leaders do. We brought it forth, and therefore we took the responsibility.”

Asked about the status of Oban’s negotiations with the Government when his administration took office, Dr Minnis said of the project: “It only needed to be signed to my knowledge, and we brought it forth.... We met everything in place; it’s just the fact, unfortunately, that the due diligence was not done properly. However, because we brought it forth, we took responsibility.

“Government is supposed to be continuous. We took the responsibility; that’s what leaders do. You never try to throw others under the bus. We brought it forth because it was completed.”

However, Mr Christie refuted such assertions, stating that when he left office the Oban proposal was “dead” because its promoters could not show they had obtained the financing for a project of $5.5bn magnitude and the Government’s records would have reflected that for the incoming Minnis administration. He added that his recollection had been backed by Khaalis Rolle, who was minister of state for investments in the Prime Minister’s Office at the time.

“My initial view on that is utter amazement that Prime Minister Minnis can say that,” Mr Christie told Tribune Business upon hearing his successor’s position. “We [he and Mr Rolle] were both satisfied that when they made the application to us we requested proof of financial capacity to execute the deal. They were never able to provide proof of financing to us.

“They made one or two efforts, letters that were never satisfactory. They just could not provide proof of financing. That must be the case. When Minnis took over, the records of applications to my government, he could have checked and easily found out that application never went anywhere. It was dead. Dead... They were never able to provide proof of financing. The record should reflect that.”

The Oban deal was halted almost immediately after the early 2018 signing of the project’s Heads of Agreement after this newspaper and other media revealed Mr Krieger’s questionable past along with concerns about the background and experience of other executives.

The Government’s normal practice is for the Bahamas Investment Authority (BIA) and National Economic Council to use Interpol and other established sources to conduct background checks on the principals involved in foreign direct investment (FDI) projects, ensuring they have clean records and no criminal past.

However, under questioning from The Tribune, Krieger confirmed at the time when the Oban Energies’ Heads of Agreement was signed that he had been involved in two earlier lawsuits where he was accused of misusing investor monies. His latest run-in with the Securities & Exchange Commission (SEC) now marks the third such incident.

“From May 2016 through August 2020, Oban Energies, a Florida-based entity managed by Peter D. Krieger, raised approximately $15m from 23 investors,” the US capital markets regulator said in its latest filing. “Investors, some of whom were elderly, were told that their funds would be used to develop an oil refinery and storage facility in The Bahamas.

“In reality, from January 2017 through August 2020, defendant misappropriated approximately $5.2m of investor funds to pay for personal expenses, such as luxury cars, jewellery and vacations.” The SEC added that Krieger, 49, served as “Oban’s manager, ran its day-to-day operations from 2017 through 2018, and maintained exclusive control over Oban’s bank account from January 2017 through August 2020”.

When the Heads of Agreement were signed, questions were also raised about the backgrounds and experience of other Oban executives, including its its president, Satpal Dhunna; senior vice-president, Russell Erickson; and finance chief, Mark Michel. Mr Krieger admitted then that there were “clearly mistakes which need to be clarified” on Oban’s website.

“We did state Mark Michel was managing director, which is not correct,” he conceded. As regards Russell Erickson’s background, he said : “I believe once we have established he has extensive construction experience it will clarify any confusion we may have caused. We have disclosed everything to both governments (PLP and FNM) in order to get their approval. We have been upfront. We have hid nothing from anyone.”