A statement issued last evening by Executive Chairman of the Water and Sewerage Corporation (WSC) Adrian Gibson has left critical questions unanswered, and raised new questions in the controversy surrounding the award of contracts by the corporation.
Public procurement under the Minnis administration has been a controversial topic in recent months, with the leak of WSC documents to the media adding fresh fuel to an already fiery debate about who has benefitted from contracts this term, and the process by which contracts have been sought and awarded.
The award of WSC contracts highlighted in documents obtained by the media last week was mired in controversy not only because of the value of the contracts for the scope of work, but the alleged relationship between Gibson and an attorney involved with one of WSC’s successful bidders – Elite Maintenance Incorporated Limited.
Last Friday, Eyewitness News reported that Gibson stated the contracts “were presented to and approved by board decisions”.
Prime Minister Dr. Hubert Minnis did not respond when questioned Saturday night on the matter – a reaction regarding the people’s business that has been the hallmark of his term, notwithstanding Minnis’ discordant claims of transparent and accountable governance.
Bahamians typically allow political support to overshadow their duty to hold government accountable for its stewardship, but so long as government refuses to be transparent and accountable with the people’s business, the people’s business is not in good or safe hands.
Regard being had to Gibson’s statement, the Bahamian people have the right to know whether the corporation’s executive chairman used his position to have high-value contracts awarded to a company with whom his alleged fiancé was affiliated.
The Bahamian people have the right to know whether a registered officer of Elite Maintenance Incorporated Limited is related to Gibson.
The Bahamian people must also be told the identity of the beneficial owner(s) of Elite Maintenance, given that both Gibson and the WSC’s general manager Elwood Donaldson in separate statements, indicated that an attorney – identified by Donaldson as Alexandria Mackey – was Elite Maintenance’s attorney of record.
Gibson confirmed the authenticity of his October 30, 2020 signed police report obtained by the media, wherein he indicates that his fiance Alexandria Mackey – who bares the same name as the attorney who Donaldson identified as the attorney of record for Elite Maintenance – shared a joint account at Royal Bank of Canada which allegedly received an online transfer of $200 from Apex Underground Utilities.
In the report, Gibson identified Apex as a WSC bidder.
In his statement, Gibson said, “The funds were deposited in December 2018 – on the same day that the tenders were published. I immediately reported it to the bank and to the police. I requested that the bank immediately remove the said funds from the account, which they did and, upon their internal investigation, the bank issued a letter of apology to me – which I still have.”
What the Bahamian people have the right to know is how a bidder seeking a WSC contract came to be in possession of the WSC board chairman’s personal bank account number in the first place.
Left unanswered is what nature of interactions existed between Gibson and the bidder, that an online cash transfer by the bidder to Gibson would have taken place.
The appearance thereof is untenable.
Of all Gibson’s denials relative to documents obtained by the media, he did not deny an alleged personal relationship with Alexandria Mackey.
He also did not explain why the reputed attorney of record for Elite Maintenance – and not the owner or operator thereof – would be listed in WSC service agreement documents as the contractor trading as Elite Maintenance Incorporated Limited.
The administration’s response to questions about public expenditure this term has read like a government seeking to change the definition of transparency from openness about what the people have the right to know, to telling the people only what you want them to know.
Whether it has been in stonewalling Parliament’s Public Accounts Committee; failing to table most of the heads of agreements signed this term; failing to cause agencies to submit audited accounts as required by law; or failing to provide the auditor general with beneficial ownership information for public contracts, the Minnis administration has overseen a period of secrecy never before seen under a Free National Movement (FNM) government.
PRE-ELECTION SPENDING
When shadow finance minister Chester Cooper alerted the country to the government’s failure to comply with Section 11(1) of the Fiscal Responsibility Act, which sets a timeframe for the publication of a pre-election economic and fiscal update, it was not a matter of merely splitting procedural hairs.
Bahamians would no doubt recall that upon assuming office, the Minnis administration made much ado about the amount of money the Christie administration spent in the run-up to the 2017 general election.
In March 2017, then opposition leader Minnis accused the Christie administration of reckless expenditure, saying in a statement, “We have seen them hand out countless government contracts under their control to friends, donors, even families.
“From bizarrely overpriced contracts to friends to put up holiday decorations downtown in Nassau to continuing to pay to clean the streets – yet it’s clear to anyone and everyone the work is not being done. While this government plows ahead with reckless, ill-advised spending, it’s the people that continue to suffer.”
Shortly after assuming office, Minnis said the Christie administration spent approximately $250 million ahead of the election.
Back in October 2017, the administration said in a statement, “The PLP government, we suspect, obtained a resolution to borrow $150 million on hurricane relief but instead diverted $40 million plus of that sum for unauthorized expenditure on any number of things in an ultimately vain effort to buy an election win. And while that money most likely went to their cronies and other wasteful spending, it is the Bahamian people who are now stuck with the bill.”
The administration pledged that it would usher in accountability regarding pre-election spending, and strict adherence to Section 11(1) of the act would have demonstrated that it was true to this pledge.
Section 11(1) states, “The minister shall, not earlier than 30 working days, nor later than 20 working days, before the day appointed as polling day in relation to any general election of members of Parliament, arrange to be published on an official website of the government, a Pre-election Economic and Fiscal Update which shall include the information specified in the third schedule.”
Such reporting is important because it can lend itself to a more mature approach to governance, wherein those who would assume office after an election would no longer be left in the dark beforehand, but could be armed with critical fiscal information to inform relevant and rapid planning and response to the country’s needs.
It also lets the people know exactly where the country stands fiscally versus where the governing party insists it stands; enables the people to measure campaign promises against present realities; and takes away from the incoming government the ability to paint a picture about the state of the treasury that might not be consistent with the facts.
The minister of finance is the prime minister; however, it was his junior minister who responded to the issue.
When State Finance Minister Kwasi Thompson responded on August 26, there were 15 working days left until the general election without the pre-election update being issued – making government in breach of Section 11(1) of the act.
Yet, Thompson said, “The Ministry of Finance is preparing and finalizing the Pre-Election and Fiscal Update for publication online tomorrow, August 27, 2021, in keeping with the legal requirements of the Fiscal Responsibility Act, 2018.”
The report was finally issued yesterday, August 29 – two days after it was promised – which lends credence to the suggestion that the report might not have materialized at all had the opposition not called the country’s attention to the timeframe breach.
The third schedule of the act lays out an extensive list of items that must be included in the pre-election update, such as updated fiscal information including the approval of new spending since the annual budget inclusive of contracts and service projects and policies; net and gross debt for the current year and next three years; and the outstanding stock of arrears for all government entities including showing separately, all new unpaid invoices since the stock of arrears was last reported.
Reporting requirements under the third schedule also include a statement of responsibility signed by the minister, that the report includes all policy decisions with material economic or fiscal implications that the government has made before the day on which the contents of the update were finalized; and all other circumstances with material economic or fiscal implications of which the minister was aware before that day.
In the published update, we took note of one anomaly, wherein on page 15, the third schedule of the act is reprinted, but the wording of Part (b)(iii) of the schedule is different in the published update from what exists in the act.
In the gazetted act, Part (b)(iii) of the schedule calls for a report on “the approval of new spending since the annual budget including contracts and service projects and policies.”
But in the pre-election update, Part (b)(iii) of the act is cited as calling for “the approval of new spending since the annual budget including major investment and service projects and policies.
We question why “contracts” as stated in the act, was changed to “major investment” in the reprint of the pre-election update.
Meantime, the pre-election report contains no defined listing of contracts approved since the 2021/2022 fiscal budget was approved by Parliament in June.
BENEFICIAL OWNERSHIP
It is the duty of government to tell the Bahamian people who it is doing business with, and who is benefitting from public funds through the award of government contracts.
Disclosing the beneficial owners of companies that secure public contracts is essential if government intends to operate within an anti-corruption framework that exists in more than name only.
There is not now, nor has there ever been a law that prohibits government from disclosing to the Bahamian people, the beneficial owners of companies that secure public contracts.
Therefore, if government does not tell the people with whom it does business and who benefits from its contracts funded by taxpayer dollars, it is safe to assume, in our view, that government simply does not want the people to know this information.
The Bahamian people are then left to make up their own minds about why such information is being withheld from them.
On the heels of the tabling of the auditor general’s recent report which gave rise to discussions about government’s disclosure of beneficial ownership, Perspective spoke to former FNM state minister for finance, Zhivargo Laing, who reminded us that telling the Bahamian people who government did business with was “the standard” during his time in office.
In our interview on the subject earlier this month, Laing said, “There is certainly an underlying principle of good governance that says that the business that is done on behalf of the people is in fact the people’s business, and they have every right to know the details of that business.
“Now, where exceptions are made have to do with things like national security matters and so forth. Generally speaking, governments ought to operate on the premise that the business we do is the people’s business, and they are entitled to know as much about that business as they desire.
“So, accountability comes in to play where you are prepared to answer questions the public might have, and transparency comes into play in that you conduct that business in a way that the public can see what was done on their behalf.”
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