The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

An ex-prime minister yesterday asserted that a New York judge’s ruling “may just be the tip of the iceberg” involving wrongdoing over Baha Mar’s construction amid calls for a Commission of Inquiry into the affair.

Dr Hubert Minnis, whose administration inherited the just-opened mega resort following Sarkis Izmirlian’s ousting, told Tribune Business that Judge Andrew Borrok’s verdict awarding Baha Mar’s original developer a combined $1.6bn in damages and interest represents “a black eye for The Bahamas”.

Describing the ruling, together with its contents, as “too big” and something this nation “cannot just leave” as if it does not exist, he also voiced scepticism that Prime Minister Philip Davis KC’s promised “review” of Judge Borrok’s findings will result in any meaningful action or reforms.

Mr Davis, in a brief response to Mr Izmirlian’s near-total legal victory, said he had instructed Ryan Pinder KC, the attorney general, to conduct the review but Dr Minnis argued that this was akin to “asking them to investigate themselves”. Mr Davis was deputy prime minister in the Christie administration that dealt with the Baha Mar dispute, while Mr Pinder also served in the same Cabinet but resigned before it erupted.

Branville McCartney, the former Democratic National Alliance (DNA) leader, echoed Dr Minnis yesterday by asserting that the “review” announced by the Prime Minister will “sweep it under the rug” and address none of the questions raised by Judge Borrok’s verdict.

Arguing that Mr Izmirlian “is owed an apology” by the Government and then-Christie administration, Mr McCartney told this newspaper that the matter “warrants an independent Commission of Inquiry” to deliver the answers sought by the Bahamian public and also reassure investors that their projects and capital are safe in this nation.

Tribune Business reported yesterday that the ruling, and way in which it found for Mr Izmirlian and his BML Properties vehicle on all the key points, will again renew questions, scrutiny and doubts over the then-Christie administration’s handling of the Baha Mar dispute and why it so eagerly went all-in to support China Construction America (CCA) while opposing the original developer’s Chapter 11 protection bid.

Key decision-makers in the Baha Mar dispute were tight-lipped yesterday. Former prime minister, Perry Christie, declined to speak on the basis that he had yet to read the 74-page ruling. “I’ve got to read the judgment before I comment on it,” he said.

Similarly, Sir Baltron Bethel, who was Mr Christie’s senior policy adviser and one of the leading officials working on resolving the Baha Mar impasse, also declined to respond. Asked by this newspaper whether he wanted to comment on the judgment’s findings, especially those sections relating to himself and his son, Leslie, he replied: “None whatsoever. I’ve said everything I want to say.”

However, Fred Mitchell, minister of foreign affairs and the PLP’s chairman, sought to largely downplay and dismiss Judge Borrok’s verdict in a message that aimed to reassure party supporters while telling Mr Izmirlian to “suck salt”. 

Urging Bahamians not to accept the judgment at face value, the Fox Hill MP also described corruption-related allegations against Bahamian officials as “almost certainly false” and “irrelevant” to the legal issues at the heart of the dispute. He also branded Mr Izmirlian as a “failed developer”.

Judge Borrok had ruled the “evidence establishes” that $2.3m paid by CCA to Notarc Management Group, a company run by Sir Baltron’s son, Leslie, was designed to “curry favour” and “gain access” to Mr Christie’s senior policy advisor and the Bahamian government when the Baha Mar dispute was at its peak.

However, both Sir Baltron and his son denied to Tribune Business two years ago that the payments influenced the former’s stance towards the dispute and its participants, or his advice to the Government and its actions.

Sir Baltron, who was the Government’s ‘point person’ in dealing with the Baha Mar controversy, said he had acted “with complete integrity and objectivity” on the Government’s behalf and there was no connection or interaction between himself and Notarc “at that time”. Leslie Bethel, meanwhile, asserted that claims of anything untoward over the $2.3m payments were “political mischief”, and they were “unrelated” to Baha Mar.

Dr Minnis, though, was unconvinced. “There really needs to be an independent investigation into who may have received improper payments in the Baha Mar situation,” he told Tribune Business. “There may have been others in the former PLP administration who received such funds. 

“This ruling may just be the tip of the iceberg of what really happened with the building of Baha Mar, and I will have more to say when Parliament convenes. This is too big, this is too big. It’s a black eye for The Bahamas. We cannot just leave it like that.”

Asked whether a Commission of Inquiry into the Baha Mar controversy, and the Christie administration’s handling of it, is justified given the multi-billion dollar project’s significance to the Bahamian economy and involvement of Chinese government-owned entities, Dr Minnis replied: “You hit the nail on the head.”

His position was backed by Mr McCartney, who told this newspaper: “It would seem that Mr Izmirlian is owed an apology first and foremost. I note the Prime Minister said he was going to have the attorney general loo at the judgment or do an inquiry. I think we all know nothing will come out of that. 

“I think something more substantive ought to be done for public consumption as opposed to there being just an inquiry as the Prime Minister suggested. This is such a significant judgment, and has a lot of implications especially where they’ve alluded to fraud being perpetrated in that judgment.

“I think it’s warranted that more than an inquiry be done in this matter. Certainly I think it warrants an independent Commission of Inquiry. The fact the Prime Minister says he’s asked the Prime Minister, that’s sweeping it under the rug. Nothing happens. We’ve seen previously where the Prime Minister has called for inquiries to be done and nothing has been done. This warrants a Commission of Inquiry.”

The Government’s opposition to Mr Izmirlian’s Chapter 11 bankruptcy protection bid was cited as a key reason why the Delaware judge ultimately rejected the case and allowed it to be resolved by the Bahamian judicial system. This contributed to the series of events that ultimately led to the original Baha Mar developer being ousted.

Explaining why a Commission of Inquiry is required, Mr McCartney said: “This really has implications for The Bahamas and future foreign investors. Looking at the judgment, looking at the ruling, determining what the judge has said and alluding to fraud and what have you, I think for The Bahamas’ sale and the sake of those wishing to invest in The Bahamas further, that a Commission of Inquiry be done.

“This will settle the minds of the Bahamian people first and foremost, and secondly of any foreign investor, as this could act as a turn-off for any further investments in this country. The Government ought to do a Commission of Inquiry. Whether that would be politically astute for the PLP, that’s another story, but in the interests of the country a Commission of Inquiry is warranted.”

Mr McCartney said the 2015-2017 controversy surrounding Baha Mar left multiple unanswered questions, including the then-Christie administration’s decision to “switch sides almost overnight” and back CCA and Baha Mar’s financier, the China Export-Import Bank, over Mr Izmirlian. It was critical, he added, to determine whether its actions and decisions worked in the best interests of The Bahamas and its people.

“I think the Bahamian people have the right to know what is the real deal,” the ex-DNA leader said. “Let’s see where it goes. If the Government is serious, and seriously wants the answer to these questions, he would ensure that an independent Commission of Inquiry is done as opposed to sweeping it under the rug. This review by the attorney general is pushing it down the road and hoping Bahamians forget about it.

“This was a huge development. The Bahamian people should get the answers. They ought to know whether or not the things that the then-government did were best for them or otherwise. They ought to know because of the significance of it. The judgment speaks about developments that happened in The Bahamas. It’s for the economy and future development of the country.”

Mr Mitchell, though, argued that the Christie administration’s actions at the time had worked in The Bahamas’ favour because Baha Mar has been open for more than seven years and employing more than 5,000 persons under current owner, Chow Tai Fook Enterprises (CTFE).

“Bahamians should approach with caution and scepticism the recent ruling in the case of the failed Baha Mar developers against China Construction,” Mr Mitchell said. “The judgments in US courts have been known to have a history of being overturned on appeal. 

“One must be careful also on accepting comments and conclusions in a judgment that has nothing to do with the central issues in the case. That is certainly the position with any comments about alleged corruption with Bahamian officials. On the face of it, the comments are irrelevant to the central legal issues and almost certainly false.”

Mr Izmirlian cannot reclaim ownership of Baha Mar as that has long been put beyond doubt. Hitting out at the original developer, Mr Mitchell added: “The facts, as we know it, are that the failed developers defaulted twice on their obligations to pay their bills.

“The first loan was called by Scotiabank. They were then rescued by the China Export-Import Bank through the intervention of the Bahamas Government. The developers defaulted again on their obligations even as they were in good faith negotiations with the Government to rescue the project.

“They, without notice in those good faith negotiations, filed for bankruptcy in the US courts. The US courts declined jurisdiction in favour of The Bahamas,” the PLP chairman added. “The liquidation was a pure and simple case of default on a mortgage, and the property was put up for sale on the open market. It is now a huge success with 5,000 Bahamian workers and a banner year in tourism.

“Because the failed developers didn’t get their way in the Bahamian courts, they ran to the US courts, where they have now found fertile ground.... The Baha Mar project is a success. The judgment is irrelevant to that success and, unfortunately, for them, the failed developers have to suck salt.”