The Government of The Bahamas - Led by The Minister of Foreign Affairs, the Hon. Fred Mitchell Failed Policy on Haiti

It was never clear whether Minister Mitchell was making foreign policy on Haiti or carrying out the wishes of Prime Minister Christie

THE BAHAMAS GOVERNMENT’S HAITI POLICY A MISERABLE FAILURE

STRAIGH UP TALK
March 11,2004

If success is measured by achieving one’s objective, then clearly the government’s Haiti policy was a failure.  The government, led by the Minister of Foreign Affairs, the Hon. Fred Mitchell, sought to address the problem in Haiti by supporting the presidency of Mr. Jean Bertran Aristide, securing international aid and ending the political impasse between President Aristide and Haitian opposition forces. 

All of these were laudable objectives; however, none was achieved.  In the end, Haiti’s instability worsened, President Aristide fled Haiti for the Central African Republic, no international aid was forthcoming and Haitian opposition forces rejected all efforts to bring them together with President Aristide.  The Bahamas Government was not alone in this failure; it shared it with CARICOM. 

It is clear that the international community, particularly the USA, Canada and France “dissed” The Bahamas and CARICOM in the Haiti situation.  Not only were they “dissed” they were also deceived.  Prime Minister Christie and his CARICOM colleagues were led to believe that the US, Canada and France supported their agenda in Haiti when in fact those countries had an agenda of their own.  CARICOM’s Haiti policy called for Aristide to remain president and be provided with international aid, the policy of the three developed countries was to remove Aristide.  In the end, Caricom had its say but the superpowers had their way.

Why did the government’s, and by extension CARICOM’s, Haiti policy fail?  There were several reasons, which include the following:

*       Their diagnosis of the real problem in Haiti was at best unclear and at worst non-existent;

*       They failed to realize that an entrenched mistrust between Haitian political factions was the principal reason for the instability in Haiti and that President Aristide was a major cause of that mistrust;

*       They ignored years of signals from the international community that it was not prepared to further support the Aristide regime and in fact considered it untrustworthy;

*       They assumed an arrogant posture in the international community that failed to give proper consideration to the interests and wishes of those who could most effectively assist Haiti, that is the USA, Canada and France;

*       They overestimated their own power and importance in the Haitian dilemma, failing to realize that they had nothing to offer any of the parties in the Haitian conflict that would persuade them to act differently than they had been acting for decades;

*       There was no genuine strategic plan to deal with the Haitian problem and certainly not one with any contingencies to account for the failure that was realized; and

*       They ignored the sentiments of the peoples of their territories in dealing with the Haitian crisis, most particularly the people of Haiti.

 

Understandably, Prime Minister Christie, Minister Mitchell and CARICOM leaders are disappointed and even embarrassed.  They should be.  What was done to them by the Americans, Canadians and French was unflattering to say the least.  What must they do now?  One thing they should do is to take the advice of former Prime Minister of Australia, Robert Hawk, who gave a speech at a Commonwealth Heads of Government Meeting in Nassau in the 1985.  His essential message to his colleague heads of government was, “know the limits of your power”.

The fact is that Haiti is still in turmoil and Aristide is out of the country.  CARCOM can neither bring peace to Haiti nor restore Aristide to power.  Recognizing Mr. Aristide as president of Haiti will not stabilize Haiti or return him to power.  The reality is that the same countries that “dissed” CARICOM are the same countries needed to assist Haiti, that is, the USA, Canada and France.  Additionally, CARICOM countries, most particularly The Bahamas, continue to have needs that can only be met if they have wholesome relationships with these developed nations, especially the USA.  If CARICOM reacts to spite these countries it will further prolong Haiti’s unfortunate situation and jeopardize the economic, social and political prospects of its member states.

CARICOM leaders are between a rock and a hard place.  On the one hand they want to assert their independence in the community of states and on the other they must regard their dependence on those who are obviously more equal than they are.  What should they do?  Going back to the drawing board would be good start.

WHOSE POLICY WAS IT ANY WAYS?

Long before CARICOM entered the picture The Hon. Fred Mitchell seemed to be leading a charge to address the Haitian crisis.  His efforts were laudable indeed, even if somewhat misguided.  In fact, the determination with which Mr. Mitchell pursued this matter left many wondering whether addressing the Haitian situation was his personal policy or that of the government.

Foreign policy is the exclusive domain of the head of government or state of a country, in our case the Prime Minister.  The Minister of Foreign Affairs is Prime Minister’s chief emissary or diplomat.  He does not make foreign policy; he carries it out.  It was never clear whether Minister Mitchell was making foreign policy on Haiti or carrying out the wishes of Prime Minister Christie.  As he departed for his many Haitian missions he was seen entering airlines waving goodbye like a Prime Minister off to do his chief executive duties.

On his return from those missions he was seen disembarking airplanes like the chief of state returning to his domestic duties.  He would give briefings at the VIP lounge as if he was acting on his own behalf.  Even when the Prime Minister was involved, it appeared as if he were accompanying the Minister as opposed to the other way around.

One should not begrudge the media savvy, ambitious Minister of Foreign Affairs, especially if his Prime Minister has no issue with what he does.  However, protocol is a facility established to maintain order in a state.

One must question the protocol of the Minister Mitchell’s approach to his office in the Haiti matter.  A Minister of Foreign Affairs receives his charge from the Prime Minister and on executing that charge owes the Prime Minister the courtesy of being briefed first on his return from any mission given him by the Prime Minister.

The people should be informed of what the minister has done but not before the people’s principal leader, the Prime Minister.  One thing is certain, the only things allowed in a government are the things the chief allows.

WHERE WAS PRIME MINISTER OWEN ARTHUR?

Many curious things happened over the last several weeks in the Haiti dilemma.  The most curious of all to me was the absence form the CARICOM effort of Prime Minister Owen Arthur of Barbados.

Prime Minister P. J. Patterson is CARICOM’s present chairman but Prime Minister Arthur is perhaps CARICOM’s most widely respected leader in the international community.  His seniority and intellectual prowess has made him a voice much listened to among world leaders.

Why was Prime Minister Arthur so noticeably absent from CARICOM’s efforts?  Why was he not apart of the charge to support President Aristide?  Mine is only speculation but I suspect that Prime Minister Arthur, ever prudent, had long determined that Mr. Aristide was not salvageable and that those that sought to save him would end up with egg on their faces.  So said, so done.

The Bahamas Trade and Industry Minister, Leslie Miller says that The Government may Very Well Approve All Three Proposals to Lay Liquefied Natural Gas (LNG) Pipelines between The Bahamas and Florida

Minister Leslie Miller said he is "absolutely" satisfied that all of the environmental concerns raised regarding the proposed LNG projects have been addressed

Bahamas Gov't Closing Pipeline Deal

By Candia Dames

candiadames@hotmail.com

Nassau, The Bahamas

08/03/2004

Environmentalists fighting three projects to lay liquefied natural gas pipelines between The Bahamas and Florida appear to be losing that battle, with Trade and Industry Minister Leslie Miller saying Sunday that the government may very well approve all three proposals.

Minister Miller told the Bahama Journal that the AES Corporation continues to lead the race for The Bahamas Government's approval for its project, with a heads of agreement nearly finalized.

Two other companies - Tractebel and El Paso - are also moving close to convincing authorities to give them the go-ahead, the Minister said.

Minister Miller said he is "absolutely" satisfied that all of the environmental concerns raised regarding these projects have been addressed.

He also said that international professionals have already determined that the projects would pose no significant threat to the environment.

But it was recently reported in the Florida press that Tractebel, a Belgian company, was facing fines from the Florida Department of Environmental Protection for scraping, crushing or dislodging 29 corals while taking samples of the ocean in preparation for its LNG project.

Minister Miller said Minister of Health and Environment Dr. Marcus Bethel and officials at the Bahamas Environment Science and Technology Commission [BEST] have been working hard to address environmental issues raised in relation to the three proposals before the government.

But BEST Commission Chairman Keod Smith continues to be against approving any LNG project in The Bahamas, saying that the legislative framework is not yet in place.

Minister Miller on Sunday pointed out that the benefits that such projects would bring to the Bahamian people would be significant.

For each project, Minister Miller said, the government would get between $5 million and $10 million for the initial license.

In year one of any of one of the projects, the government would get $10.8 million in various fees; in year five, that figures is expected to double; in year 10, it is expected to increase to $30 million; and by year 15, the government should be getting $40 million to $50 million from a company operating an LNG facility in The Bahamas, Minister Miller said.

Meanwhile, the AES Corporation has secured a partnership with Repsol, Europe's fifth-biggest oil company, to supply liquefied natural gas for what is says will be a $700 million project.

The companies expect to officially announce the deal shortly, according to AES Project Director Aaron Samson.

Minister Miller told the Bahama Journal that the arrangement between AES and Repsol strengthens the LNG proposal.

No company produces the LNG as well as sells it, Minister Miller explained.

Mr. Samson said Friday that while the approval is preventing his company from moving forward, he is satisfied that AES will soon get the necessary permits.

When asked whether the new partnership with Repsol was an indication that AES was facing financial instability, Mr. Samson said that was certainly not the case.

"We're not a producer of LNG," he explained.  "We never purported to be a producer of LNG.  We never pretended that we'd be doing this thing alone."

Mr. Samson said the partnership with Repsol will not impact the proposal before the government in any way and that relevant government authorities have already been informed about this development.

He said Repsol would transport the LNG via ships from Trinidad to the AES site at Ocean Cay, near Bimini.  The LNG would then be turned to the gaseous form and sent through a pipeline to South Florida.

While AES awaits final approval, it continues to carry out "environmental remediation" at Ocean Cay, Mr. Samson said.

The AES pipeline, which would run from Ocean Cay, would deliver natural gas to markets in Florida, as would the other two pipelines being proposed.

The Haitian Situation in The Bahamas - Part 1

The Bahamas Haitian Situation ‐ Part 1

By Apostle Cedric Moss
March 4, 2004

For several months I have been contemplating offering my thoughts on the Haitian situation in our country.  Prompted by the climatic events in Haiti this past week that resulted in President Jean Bertrand Aristide's resignation, I today I begin in earnest part one of a three part series.

More than talk

As I followed local news coverage of the events unfolding in Haiti, I was particularly moved by Dr. Eugene Newry's request for prayer for the strife-torn nation of Haiti.  Although Dr. Newry is the Bahamian Ambassador to Haiti, he seems to recognize that beyond diplomatic talk, the real need of the Haitian people is for divine intervention through prayer to Almighty God.  I agree with him.  Therefore, we who are followers of Christ should take heart that while governments talk and exercise human diplomacy; we can exercise divine diplomacy in prayer.

Balancing Two Concerns

For reasons that are obvious, a major concern in The Bahamas about the chaos in Haiti is that thousands of Haitians will come here with the hope of finding good fortune and a better life.  However, we must have an additional concern.  We must also be concerned about the plight of our brothers and sisters in Haiti, not just the effect that the situation there can potentially have on us.

I know it is easy to misunderstand my point so I will restate it: I am not saying that we must not be concerned about the potential additional strain that further amounts of Haitian immigrants will have on public services in our small country.  We obviously must be concerned because our resources are limited.  However, if our concern stops at the point of ourselves and does not take into account the grim circumstances faced by our Haitian brothers and sisters, we would be selfish.  So we must balance these two concerns.

A Major Challenge

The reality is that even if there was a way to prevent further illegal immigration from Haiti to The Bahamas, the existing number of Haitians already here (speculated by some to be as high as 60,000) presents us with one of the most significant national challenges we face.  This challenge cannot be wished away or talked away.  It is here and our best option is to try to deal with it proactively.

As I listen to some Bahamians propose solutions to the problem of Haitians residing illegally in The Bahamas it is becoming clearer to me that many of them do not realize how serious and far gone the problem is.  Therefore, their solutions are no real solution.  In addition, some of the so-called solutions are illegal and/or inhumane.

Our Day of Reckoning

In my view, although it is the lot of the present government to deal with the Haitian situation, successive governments of The Bahamas have to take collective responsibility for the state of affairs.  While it would be naive to minimize the task of effectively combating the problem of illegal immigration of Haitians to The Bahamas, I believe much more could have been done.  By this I do not mean more rounding up and repatriations since this strategy by itself is no real solution.

In addition to successive governments falling short, we are Bahamians in general must take responsibility.  Many among us took and still take economic advantage of our Haitian brothers and sisters and exploit them economically as modern day indentured servants, thereby contributing to the situation we now face.  The tragedy is that now many of these same exploiters are speaking the loudest and shouting, "Send them home!"  But it's a bit too late.  Our day of reckoning has come. 

Preview of Next Week

Now that the government in Haiti is in further limbo, the prospects of our government getting the much talked about treaty that covers repatriation, among other things, signed any time soon is not that great.  But what if they did get the treaty signed immediately?  What would it produce?  Join me next week when I will analyze the much talked about treaty and at the same time answer these questions.

Apostle Cedric Moss serves as Senior Pastor at Kingdom Life World Outreach Centre.  Comments and feedback may be directed to: apostle@kingdom-life.org

The Haitian Situation in The Bahamas - Part 2>>>

The Haitian Situation in The Bahamas - Part 3>>>

A Call For The Bahamas To Be Included on A Watch List for Copyright Infringement

The Motion Pictures Association of America MPAA says that Bahamian copyright law is in violation of international law and is harmful to the U.S. film industry 

The Bahamas government is attempting to amend the necessary legislation to ensure that no sanctions are imposed on The Bahamas

Copyright Blacklist Threat

By Candia Dames

candiadames@hotmail.com

Nassau, The Bahamas

04/03/2004

The Motion Pictures Association of America has recommended that the U.S. Trade Representative (USTR) place The Bahamas on a watch list for copyright infringement that could lead to the U.S. government imposing sanctions.

The MPAA argues that Bahamian copyright law is in violation of international law and is harmful to the U.S. film industry.

If The Bahamas moves from its present position on the USTR priority watch list to the priority foreign country list, this could mean withdrawal from The Bahamas of the benefits of the Caribbean Basin Initiative (CBI), Minister of Financial Services and Investments Allyson Maynard Gibson said in the House of Assembly Wednesday.

The Minister, who was speaking on a bill to amend the Copyright Act, noted that getting on the priority foreign country list is the "last thing in the world The Bahamas would want."

The USTR first placed The Bahamas on its watch list in 2002 and in 2003 moved The Bahamas to the priority watch list, which indicates that it believes that The Bahamas was not acting in good faith to resolve the problem.  At present, there are 11 countries on the priority watch list.

The CBI allows a wide range of products grown and manufactured in the English-speaking Caribbean duty free entry to the U.S. market.  In 2001, The Bahamas' total exports to the United States stood at approximately $154.2 million.

The government is attempting to amend the necessary legislation to ensure that no sanctions are imposed on The Bahamas.

The Copyright Act, which was passed in 1998, provides for the creation of a system of compulsory licenses which enabled the sole cable operator in The Bahamas, Cable Bahamas, to offer premium channels to the Bahamian public, and pay royalties into a special fund.

But U.S. copyright owners have accused Cable Bahamas of stealing their signals.

 The Copyright Royalty Tribunal has on its accounts some $934,917.92 in copyright fees from Cable Bahamas, but there have been no claims to the Tribunal, Minister Gibson said.

She said failure to narrow the scope of the compulsory license, as is the intention of a bill to amend the Copyright Act, could also have a negative impact on tourism in that it is possible that the U.S. could respond by withdrawing the pre-clearance benefits both tourists and Bahamians have come to enjoy.

Minister Gibson added that inadequate remuneration for the compulsory licensing of free-over-the-air broadcasts is a concern for the Americans, particularly with respect to uses by hotels and other commercial enterprises.  Under the present Act, cable operators are required to provide "equitable remuneration" for their transmissions.

But the USTR determined that the rates are too low.

Minister Gibson pointed to the difficulty regional cable providers face in trying to secure U.S. cable programming in English.

"A number of premium cable providers in the U.S. had over a number of years seemed to be unwilling to negotiate to allow their U.S. based channels to be broadcast in The Bahamas and other English speaking Caribbean countries," she explained.  "They offered instead their Latin channels, which happen to be in Spanish, for broadcast in The Bahamas."

Brendan Paddick, CEO of Cable Bahamas, told the Bahama Journal in an earlier interview that Caribbean nations have a lot of problems entering into agreements with many U.S. networks.

"Despite our efforts to enter into agreements and to pay them on a basis similar to what cable companies in the U.S. pay them, these companies essentially refuse to enter into licensing agreements with Cable Bahamas," Mr. Paddick said.  "[They claim] it would be too expensive for them to secure rights for many of the Caribbean nations...to pay for their programmes."

Minister Gibson told parliament Wednesday that, "Our legal advisors and international legal opinion are of the view that compulsory licensing is allowed under current international agreements.

"The government is satisfied that the compulsory license as provided for in the current legislation is allowed under international law."

She explained that, "It should be noted that the U.S. does not argue that compulsory licenses are not allowed under international law, it rather argues that such international law does not allow the compulsory licensing of encrypted signals."

While appreciating the argument made by the U.S. for the protection of the rights of the copyright holders, she said the most important issue for the government is to ensure that the Bahamian public is able to obtain quality cable programming in English.

"It is my understanding that this is why the government agreed to a compromise with the U.S. government," Minister Gibson said.  "Under this compromise, The Bahamas agreed to narrow the scope of the compulsory license provided for in the Copyright Act and to begin consultations with U.S. copyright owners on increased remuneration for the compulsory licensing and to amend its royalty rate structure."

The U.S. government, meanwhile, undertook to encourage U.S. copyright owners to enter into good faith negotiations with Cable Bahamas to provide voluntary licensing on commercial terms.

"It is also likely that the former government considered the investment of the numerous Bahamians and pension funds in the only licensed cable provider," she noted.

Norman's Cay, Exuma Land Deal

Norman's Cay Exumas Bahamas "Sweet Deal" 

By Candia Dames

Candiadames@hotmail.com

Nassau, The Bahamas

03/03/2004

The Progressive Liberal Party Government is set to honour what is being called a "sweet deal" with a group of local and foreign investors to control the vast majority of land on Norman's Cay, in the Exumas.

But former Member of Parliament for Exuma George Smith is seeking to discourage the government from allowing the investors to exercise their option on a conditional purchase lease for the more than 400 acres of land, which he says is valued at around $60 million.

The deal was agreed to in principal shortly before the general elections of 2002.

The property was part of the controversial cay that was vested in the Treasurer after it was confiscated from Medellin cartel drug kingpin Carlos Lehder, who arrived on Normon's Cay in the late 1970's and began purchasing large pieces of property.

Lehder's operation figured prominently in the famous Commission of Inquiry into drug trafficking in The Bahamas during the 1980's.  He is serving a long prison term in the United States for drug trafficking between South America and the United States.

It was revealed in the Commission of Inquiry that he built a 3,300-foot airport runway, protected by radar, bodyguards and attack dogs and controlled Norman's Cay for several years.

During the Commission of Inquiry, Mr. Smith's integrity also came into question.  He was appointed chairman of the Hotel Corporation, which generated some controversy at the time when Prime Minister Perry Christie announced it.

Mr. Smith, whose constituency included Norman's Cay, believes it is wrong for the government to give the land to the investors simply because of the infrastructural and touristic development they plan to bring to The Bahamas.

Mr. Smith said in an interview with the Bahama Journal Tuesday he is concerned about the deal that investors - who include attorney James Cole - got approval under the FNM administration in March 2002.

"Some time after the May 2, 2002 elections it was brought to my attention that the previous government less than two months before the elections agreed to surrender all of the land that was vested in the Treasurer that was Mr. Lehder's property at Norman's Cay," Mr. Smith said.

"I felt that this was unfair to those individuals who stayed at Norman's Cay who were not afforded the opportunity to acquire the land to extend their businesses."

Mr. Smith added, "I was surprised that other people who may have an interest in doing other touristic undertakings were denied an opportunity to purchase the land.  I think to have given the land to any one single entity was unfair, unnecessary and borders on being immoral.

"Land in the Exuma Cays is fetching a premium price.  I encourage the government to revisit this matter while remaining reasonably fair to [the investors in question.]

Others who are concerned about the deal reportedly believe that Mr. Cole and his group will end up with $60 million in land after investing less than half of that value and what they intend to do will in fact become a real estate development.

But Mr. Cole was unavailable Tuesday to comment on these reports.  His assistant said he is out of the country for another week and would probably be able to comment then.

The Journal has learnt that Mr. Cole is involved with the Amanresorts team, which is seeking to develop a $25 million tourist development at Norman's Cay.

Amanresorts owns luxurious resorts all over the world and provides five-star service to guests with three employees per room.  In agreeing to the deal in principal, the former government reportedly saw it as a good way to drum up more Family Island investments and fuel greater economic prosperity for residents of the Exumas.

After satisfying the terms of the conditional purchase lease agreement, the group will be granted the right to purchase the "breath-taking" property for an undisclosed price.

Minister of Financial Services and Investments Allyson Maynard Gibson said Tuesday that the present administration wants to send the right message to investors that it is committed to honouring the commitments made by the past administration.

"The style of negotiations and the economic focus of administrations change from administration to administration," she noted.

But Minister Gibson added, "It is fair to say that it is unlikely that this administration would have come to the same economic terms as did the former administration.  However, as Minister responsible for investments, I want to emphasize that the commitment made by the former administration will be honoured."

Norman's Cay is one of the most beautiful cays in the Exumas and is located 36 miles from Nassau and 210 miles off the Florida coast.  Mr. Smith, who said that more Bahamians should have the opportunity to own the land in question, believes that this would be the "moral" thing to do.

The Lending Practices of Banks in The Bahamas Investigated

Bahamian Bankers Attack Politicians

Local Bahamian Bankers Attack Politicians

Candia Dames

candiadames@hotmail.com

Nassau, The Bahamas

26/02/2004

Local bankers are questioning the motives of some members of parliament who wish to delve into the lending practices of banks in The Bahamas.

 

One leading banker said that it is clear that some parliamentarians have had their share of personal problems with financial institutions and may not be objective in their investigations.

 

But some parliamentarians insist that banks have been "getting away with murder" as it relates to consumer rights and there needs to be better legislation to provide more consumer protection.

 

These MP's believe that the contracts that govern banking business are skewed in favour of the banks to the disadvantage of the consumer.

 

Malcolm Adderley, the Member of Parliament for Elizabeth who chairs a newly-formed parliamentary committee to look into lending practices of banks, believes that contracts that govern home mortgages should allow for mortgage holders to have more rights when they have built up significant equity.

 

He said that it cannot be right for persons who may have missed a few mortgage payments to lose the entire property to the banks and be cheated on the equity value of the property.

 

But the bankers are said to be concerned that the image some MP's have of lending institutions is tainted.

 

Mr. Adderley, who brought the private member's bill to the House of Assembly to establish the committee, told the Journal Wednesday that while he could not speak to the credit worthiness of all committee members, he was confident that an objective group had been assembled.

 

The other four committee members are Pleasant Bridgewater, MP for Marco City; Ken Russell, MP for High Rock; Robert Sweeting, MP for South Abaco; and Sidney Stubbs, MP for Holy Cross.

 

There was concern within parliament Wednesday that one member, Mr. Stubbs, along with Mount Moriah MP Keod Smith set the wrong tone for the work of the committee when they sought to link respectable bankers to criminal activity a week earlier.

 

"We want to redress a heinous crime that has been perpetrated for many years by those who were almost unconscionable, those who made millions and millions of dollars from one piece of property," Mr. Stubbs said. "The time has come to stop it."

 

Mr. Smith, meanwhile, said the banks are close to being legitimized criminal institutions.

 

The bankers will meet with Central Bank Governor Julian Francis to discuss parliament's intention to establish the committee and the issues surrounding its members' work, the Journal has learnt.

 

The bankers have also pinpointed other members of parliament who are not a part of the committee who have been in default of loans, or turned down for credit.

 

Mr. Adderley, the committee chairman, said he believes that those members who will be looking at the lending practices have the highest level of integrity.

 

"I don't feel that members of the committee would allow their personal experiences with any financial institution to interfere with their public and professional duty to conduct a proper investigation of the issues at hand", he said.  "In fact, I don't think it would be fair for one to prejudice any members of the committee unless the banks can show a personal bias on behalf of the committee."

 

Mr. Adderley added, "Some of us have to take the brunt.  Most of us in leadership positions sometimes tend to talk about these things but have no intention of taking a serious step in the right direction."

 

He said that going up against powerful financial institutions will not be easy.

 

But he added, "I would have thought that corporate citizens and government corporations who sincerely have the interest of the people at heart would have no reason to fear in respect to investigations into matters that have been of great concern to people for as long as anyone can remember.

 

"I personally don't feel that leaders of the people have any choice in matters that fundamentally affect their lives despite the perception that they might be going up against tremendous odds in the form of institutions that have tremendous economic power and influence."

 

Mr. Adderley added that the committee will not seek to go witch hunting.

 

"It merely seeks to discover information that hitherto is merely speculative in order to make objective and frank recommendations to parliament," he said.

 

The committee, which planned to hold its first meeting today, has been established "to examine, investigate and assess the policy of banking institutions with respect to mortgage lending and practices with a view to offering legislative protection for consumers."

Philip Galanis, Progressive Liberal Party (PLP) Senator was an Equal Partner in Island Fresh Dairy Ltd

Island Fresh Dairy requested 100 acres of government land be deeded and conveyed directly to it

The company, Island Fresh Dairy Limited, requested the lease of an additional 3,500 acres of land, located South of Spring City between Marsh Harbour and Cherokee Sound, Abaco, estimated to be worth $30.4 million

Abaco Land Deal Exposed

By Candia Dames

candiadames@hotmail.com

Nassau, The Bahamas

25/02/2004

Documents obtained in a Bahama Journal investigation show that Progressive Liberal Party Senator Philip Galanis was an equal partner in a company that requested 100 acres of government land be deeded and conveyed directly to it.

But Mr. Galanis, an accountant, told the Journal last night that he no longer has any interest in the company.  The Senator made it clear that there was nothing unethical about his actions, particularly since he is not a member of the Cabinet.

He said that it is not unusual for lawyers and accountants to be named as shareholders in the companies that they are helping to set up.

The company, Island Fresh Dairy Limited, requested the lease of an additional 3,500 acres of land, located South of Spring City between Marsh Harbour and Cherokee Sound, Abaco, estimated to be worth $30.4 million.

The deal was outlined in a letter to Gary Sawyer, president of the company.  That letter, dated July 29, 2003, was signed by then Bahamas Agricultural and Industrial Corporation Chairman Sidney Stubbs.

Regarding the company's request for land, Mr. Stubbs wrote, "I would like to confirm to you that in principal, this objective can be achieved."

He also wrote, "In order for you to proceed with this project and for us to provide you with a formal definite commitment from BAIC including specific terms for this venture, we would invite you to formally submit the aforementioned business plan and feasibility study for our consideration.  We look forward to working with you on this venture."

At his party's national convention last November, Prime Minister Perry Christie announced that the company was about to carry out a major investment involving Bahamian and American partners in Abaco.

"This major farm initiative is projected to provide dairy products both for the local and export markets," the prime minister said.

A letter from Galanis & Co., dated August 7, 2003, to company principals, shows where the firm billed the company as follows:  incorporation fee, $2,000; engagement fee $50,000: expense retainer, $25,000; business plan fee $30,000; and miscellaneous expenses, $1,000 for a total of $108,000.

Mr. Galanis said last night that he would be interested in seeing this breakdown as he could not recall whether it was in fact accurate given that he deals with many transactions.

But he did say the $108,000 did not represent professional fees.

The letter states that the total works out to $18,000 per shareholder.  Galanis & Co. instructed that the funds be wired through a New York Bank, Bank One International Corporation, for further credit to Scotiabank Bahamas Limited.

The business plan itself, dated September 2003, lists Mr. Galanis as a founding member of Island Fresh Dairy Ltd., with a 14.167 percent shareholding.

Other principals included Gary Sawyer, who has a 14.166 percent shareholding.

The remaining founders listed are Michael Albury (14.166 percent); Robert Malone (14.167 percent); David P. Sumrall (14.167 percent)- Marcus B. Peperzak (14.167 percent) and BAIC (15 percent).

BAIC reportedly would be entitled to 15 percent of the profits as a result of the transfer of the land to the company.

But Mr. Galanis said as far as he knew, that transfer never took place.  He said it was also not unusual for a government agency to gain ownership in a company through the transfer of land.

The executive summary of Island Fresh Dairy business plan said, "The Bahamian government, including the prime minister, is enthusiastically supportive of the project, and is prepared to extend assistance.  BAIC has offered to deed IFD with 3,800 acres of high quality crop land with excellent water resources on Great Abaco Island."

A letter, dated September 16, 2003, written to the attention of Gary Sawyer, from James H. Newbold, the government appointed assessor, valued the land at $30.4 million.

The foreign investor Marcus B. Peperzak and David P. Sumrall, along with the other investors were proposing to put $1,050,000 cash into the project, according to documents obtained in the Journal investigation.

Among the list of professionals listed as providing advice to Island Fresh Dairy are attorney Neville K. Adderley, who is also noted in the document as being the Chairman of The Bahamas Development Bank.

The Island Fresh Dairy business plan said that the board has discussed two possible strategies for investor liquidity.  These options are: "Based on the growth projections for the domestic Bahamas market, Island Fresh Dairy believes we will reach output capacity within our second year of operation.  We can continue to supply the local market at our capped output, or put into place an expansion plan, which could expand the existing farm or create a second operation.  In order to do so we would need to raise additional capital.  The ideal platform to do this would be launching an IPO through the Bahamas Securities Exchange."

It added that, "The second exit strategy would be to sell the business.  Island Fresh Dairy's presence in The Bahamian market will dramatically impact the existing import brands' market share and they will want to explore avenues to recoup that share.  The combination of high forage output land, a state of the art dairy operation, and the ability to produce and ship at a significantly lower cost, will make Island Fresh Dairy a most attractive take over target."

As the Journal was carrying out its investigation, the Free National Movement was also uncovering the facts of the deal.

The party sought to link the resignation of Edison Key from the Senate to the Island Fresh Dairy Farm deal.

"With the resignation of Edison Key from the Senate and from the PLP, it has become apparent that an undisclosed grievance is the strong suggestion that influence-peddling and conflict of interest is rife in the government of Prime Minister Perry Christie.

Bahamians are also now satisfied that one of the problems affecting the Christie PLP government is their apparent inability or unwillingness to make their actions live up to their word."

But Mr. Galanis warned that, "The FNM ought to be very careful about the statements that they make because they may find that will end up with a lawsuit for libel."

"They are trying to spread lies and spread political mischief," Mr. Galanis said.  "They are grasping for straws."