Nib: The Real Lesson
By PACO NUNEZ
Tribune News Editor
AMID all the sound and fury of the ongoing the National
Insurance Board saga, one voice rang true last week – that of former BEC
chairman Fred Gottlieb.
He reminded us that while undeniably
entertaining, the public spat between NIB director Algernon Cargill and the
newly appointed chairman Gregory Moss has some actual value beyond its qualities
as political soap opera.
In response to claims by Mr Moss that he ran up more than
$240,000 in charges on his corporate credit card over three years, Mr Cargill
denies any wrongdoing and points out that a review found the card was not
misused.
He in turn, alleges the existence of several unexplained
charges on Mr Moss' own NIB card, including some for "large amounts of alcohol
and food" at the Hilton Hotel, despite the chairman being provided with a $125
allowance whenever he is in Nassau.
But, asks Mr Gottlieb, regardless of who is telling the
truth, why does either man – or any other member of the board of directors for
that matter – need a government issued credit card in the first place?
"I served as chairman of several public corporations and,
as such, did not approve credit cards being given to any board member (including
myself) as I deemed it to be unnecessary and undesirable," he said.
According to the hefty affidavit filed by Mr Cargill last
week, the card was approved for use in "business development and conduct of
board business; as well as to execute purchases where credit card payment is
required; and to mitigate against the inherent risk present when in possession
of cash; and for use as and when required as is customary in today's business
environment."
But would it not make more sense, in order to avoid
allegations of misuse of public funds, both valid and false, that such
individuals simply charge work expenses to their own credit cards, with
reimbursement coming after proof they were engaged in legitimate company
business?
Surely, we aren't expected to believe such luminaries of
commerce and industry as Greg Moss and Algernon Cargill can't get a local bank
to extend them credit.
How many other public service chairmen, directors, board
members are currently packing government-issued plastic? At what rate is this
privilege abused with impunity?
"But this is how things are done in the business world
nowadays," some who are more accustomed to the corporate culture, may say. Well
this isn't the business world, it's the Bahamas – which suffers at the moment
from double digit unemployment and severe revenue shortfalls. We are in no
position to let public funds slip away unaccounted for.
The credit card issue is, in fact, only one of several
"undesirable" tendencies brought to light by the Moss-Cargill blame game.
Take for example, NIB's contract for property insurance
with Bahamas First. Mr Cargill's affidavit alleges that during the application
process for a replacement firm, Mr Moss ordered him to award the contract to one
of the bidders, Star General Insurance, despite the fact that this would have
been "improper" because the other contender had yet to issue a proposal.
Mr Cargill claims the Superintendent of Insurance
confirmed "management's concerns to be material".
But how can the scenario alleged even enter the realms
of possibility? Why is the process for selecting a company for a government
contract not enshrined in law?
In the interest of transparency and anti-corruption, why
is it not explicitly illegal for any public servant, right up to the prime
minister, to arbitrarily choose the beneficiary of such a contract?
There is also the matter of Kenuth's Electric, which it
is claimed received around $8 million worth of contracts from NIB.
Mr Cargill denies he is a friend and former colleague of
the owner and asserts he was "not involved" in the decision-making process.
But questions of nepotism aside, why, under any
circumstances, should it be possible for one company to benefit to such a great
extent from a government department, to the virtual exclusion of the rest of the
industry?
Mr Cargill's affidavit notes that during the renovation
of NIB Headquarters beginning in 2009, the project manager recommended that "due
to the specificity of electrical work required, NIB not engage a variety of
electricians for various projects so as not to compromise the environment and to
be able to determine which company was at fault" should anything go wrong.
All well and good, but in such extraordinary
circumstances, the Minister for National Insurance should be required to bring
the matter before the Cabinet – or better yet Parliament, so the public can know
how its money is being spent.
The construction of the Fresh Creek Clinic furnishes a
similar example.
Mr Cargill's affidavit alleges Mr Moss accused the
director of intervening in a contract to award it to his cousin.
Saying the discussion to award the contract to HEW
Construction came from the quality surveyor, not him, Mr Cargill claims the
contractor being replaced was thought to lack the requisite building experience,
was said to have asked other contractors to share NIB jobs so he could "receive
a portion of the contract proceeds" and had been accused of requesting
"kickbacks".
The affidavit also claims Mr Moss ordered that the
notice dismissing the first contractor "be rescinded".
The immediate question that springs to mind is, if a
contractor is suspected of illegal behaviour while on a government job, why is
it not public service policy to report it to the police for investigation?
Such decisions could then be made on the basis of
evidence instead of hearsay, and would be much more resistant to outside
interference of the kind alleged.
Frequent interference is the essence of Mr Cargill's
complaints against his new chairman.
For example, he claims Mr Moss directed him to surrender
his full authority, including control of human resources, to newly appointed
senior vice president Cecile Bethel.
Mr Cargill notes that "due to the sensitivity of HR
matters" it is established corporate practice "to ensure that the executives who
have legated authority for HR matters continue to exercise those functions while
the CEO is out of office, to avoid anyone seeking to advance separate causes
with the temporary authority held."
He asserts that Mr Moss attempted to direct him "in an
operational area with respect to the management of NIB, without any support for
the National Insurance Act or regulations and with total disregard for my
position as director and CEO of the National Insurance Board."
He adds that Mr Moss "sought to control personally the
day-to-day operations of NIB."
But, he points out, "My role as director and CEO of NIB,
pursuant to Section 40 (1) of the National Insurance Act, provides that I shall
be the chief executive officer of the board."
It does indeed, but the Act obviously needs amending so
as to be more specific about what this means.
Better yet, the distinct roles of all CEOs and chairmen
across the public service should be clearly defined and delineated in law, to
avoid any future confusion.
In particular, because they tend to be political
appointees, board members and chairmen should be barred from assuming any
functional role, confining themselves to oversight and broad policy
formation.
This would perhaps bring an end to the "we reach"
attitude that seems to crop up on these boards whenever the government changes
hands. Mr Cargill goes on to accuse Mr Moss of:
• Ordering that they switch offices and advising a staff
member to "contract an interior decorator to ensure the former director's
office, now occupied by the chairman, is decorated at a standard befitting of a
minister."
• Seeking to have a $42,000 energy study of NIB's
properties conducted by a newly formed Grand Bahama company of his choice, when
a recent study of the same kind has cost the Board only $3,000.
• Pushing NIB to invest $10 million in a private
venture, against the advice of management, by saying Cabinet ministers Ryan
Pinder, Khaalis Rolle, Michael Halkitis and Prime Minister Perry Christie
himself wanted it approved.
Whether valid or not in the particular case of Mr Moss,
do these allegations not epitomise the behaviour of far too many whose positions
see them straddle the line between politics and the public service in this
country?
"Constant experience shows us that every man invested
with power is apt to abuse it, and to carry his authority as far as it will go,"
Montesquieu wrote.
Whether or not anyone at the top of NIB fits this model
is now for a court to decide. But the real lesson of Cargill vs Moss is
precisely the existence of a grey area at the top which facilitates favouritism
and corruption, and encourages all manner of overreaching and self
importance.
If anything productive is to come of this argument, it
will be a greater understanding not only that vague laws and lax regulations
have nourished a continuous squabble for power and
influence at the top of our public institutions, but also that at the end of the
day, the average citizen is the only real victim of this state of a affairs.
On the off chance Prime Minister Christie might be
inclined to address the situation in a meaningful way, a fun place to start
would be a public review of all cars, drivers, credit cards, expense accounts
and other perks and privileges enjoyed by chairmen, directors and general
managers in the government's employ.
What do you think?
Email questions or comments to pnunez@tribunemedia.net,
or join the conversation at www.tribune242.com/opinion/insight
December 10, 2012
