Young Man’s View: Bob’s Lucrative Partnership Poses Questions On Ethics

Thursday 20th, November 2014 / 08:33 Published by

adrian-gibsonYet again, the Bank of the Bahamas’ (BOB) corporate governance is requiring more scrutiny with the bank’s partnership with the Brickell Management Group, the management company for Venetian West, which is a gated community development purportedly headed by Island Luck owner Sebas Bastian. According to representatives of the management company, their partnership with the Bank of the Bahamas (BOB) will result in that credit facility providing an “exclusive” financing package for potential buyers.

Whilst one cannot argue with the fact that Venetian West is a vehicle for development in the country and whilst one recognizes that the construction industry needs such activity, the issue that is most bothersome is the appearance that there is too comfortable a relationship between the development—which is known to be a major investment of one of the main players in the numbers industry—and a troubled bank whose ethics and business practices is under intense public scrutiny. On the face of it, the very appearance of the multimillion dollar partnership between the Brickell Management Group and BOB is certain to raise eyebrows!

There have already been a number of questions raised about the BOB’s portfolio. There have been a number of questions about the numbers of persons who have defaulted on commercial/personal loans and tremendous public annoyance at the use of public funds to bail-out the BOB. Now, it seems as if a cozy relationship has been established—relatively quickly—with the numbers industry. It raises the question—since this has been rolled out so rapidly—as to whether there is an existent quid pro quo or whether there had been negotiations ongoing between the development and the bank prior to the passage of the new gaming legislation? One wants to know.

So here, we have a scenario where this construction project—which is fairly advanced—has partnered with the BOB and questions about how this deal came about—particularly since legislation legalizing gaming was just passed—have not been answered. This can now be coupled with the questions about Resolve Bahamas, an entity which is shrouded in secrecy and has purportedly been formed to absorb BOB’s bad loans. It can only add insult to injury where it appears that BOB is in bed with an industry that has yet to prove its legitimacy and where certain operators have not yet—as far as the public knows—paid outstanding fines and fees. So, how then could the BOB find itself in a position to finance such a multimillion dollar project? Would that not be putting the cart before the horse?

I smell a rat. It stinks. And, obviously this is a story worth following.

As I said last week, the BOB fiasco should result in immediate firings. Heads should roll at the BOB, starting with most—if not all—of the board and a large number of the upper managerial staff. Frankly, the entire board should be dismissed and re-appointed. That said, the only mitigating circumstance would be if the management and directors of the board were instructed by powers greater than themselves to bypass normal banking requirements.

What’s more, I ask once again: Does any member of the Christie Cabinet owe the BOB large sums of monies, either approaching or eclipsing one million dollars, but has been unable to repay that bank and has therefore possibly contributed to the malaise we see today?

There needs to be an independent, national probe into the wheeling and dealing of the BOB, with the intended purpose of verifying its legitimacy and adherence to best practices. The damage to the bank’s integrity and reputational standing has been notable. To enter into such a partnership, before the issues concerning gaming is resolved and the operators who have been selected for licenses by government are announced, is another example of an unbelievably premature decision.

NHI Rollback?

It appears that PM Perry Christie recently made comments that are indicative of a plan to deviate from the comprehensive national health insurance scheme that was planned and touted during the 2012 general election campaign.

According to the PM, the implementation method is yet to be decided. Here’s the thing, it has long been stated that NHI would be launched in January 2016, but yet—13 months beforehand—the implementation method has not been resolved. Hmmmmm!

James Cercone, a consultant with Sanigest International, the Government’s Costa Rican NHI advisers, told a Bahamas Institute of Chartered Accountants (BICA) conference that the scheme aimed to cure “a dysfunctional market” for healthcare services. While the PM has set 2016 as the target launch date, even Mr Cercone said NHI was “unlikely to achieve the transformation” sought unless the Government first strengthened existing healthcare infrastructure. Since Mr Christie has proposed that the government is considering rolling out the National Health Insurance (NHI) scheme in a three-phase process that will ultimately create a package costing more than $600 million annually, I’m wondering how this will be funded when one considers our current economic standing.

The Prime Minister has stated that his government has three options, noting that: “stage I is about $350-$360 million. Stage II will take us to just over $500 million, and Stage III is about just over $600 million.

NHI can be beneficial to the public, particularly since 2013 estimates show that some 102,000 Bahamians – between 25-33 per cent of the population – lacked private health insurance. Bahamians are either uninsured or underinsured and the onset of VAT will cause even more Bahamians to be unable to afford their insurance premiums, particularly since VAT will be applied to those payments. What’s more, what cost burden will the proposed NHI scheme impose on the Bahamian economy and business community?

Some are already seeing NHI has a harebrained, pork-barrelled scheme that, combined with the application of VAT, would be simply unaffordable.

It appears that the government could be finding that yet another plank of its election platform may have to be abandoned.

And so, if the full roll-out of NHI is not feasible, what will the government likely do? It’s likely that—considering the recent public disclaimers—something could be thrown together and called NHI. This “something” may entail a combining of the current national prescription drug plan with a catastrophic healthcare plan and referring to that as NHI. Notably, a catastrophic healthcare plan would deal with illnesses that could be financially devastating for Bahamians but could be actuarially predicted, for example, kidney failure, cancer, major trauma, heart disease, perhaps joint replacement and possibly congenital defects. One could simply review the hospital’s/clinic’s statistics and arrive at an understanding for the estimated year-over-year numbers of patients in each category.

I highly doubt that, as beneficial as it could potentially be, a full roll out of NHI could happen in an economy that is, frankly, not robust enough to support and sustain it!

Attempt to scapegoat the FNM

It seems that the Constitutional Referendum may never happen, since the Christie administration appears intent on throwing the Opposition under the bus having read the tea leaves and apparently concluding that it is unlikely—at this juncture—that the constitutional reform bills will be passed in a public vote.

One could discern—from the PM’s comments this week—that the government is seeking to abandon the vote by using whatever excuse allows them to save face. It appears that the Prime Minister is seeking to suggest that the vote requires total unanimity between government and Opposition and has suggested that they are waiting for resolution of the FNM’s leadership issue. It appears that the thought is to see what the FNM and its leadership does after the leadership runoff on November 21st and, if they cannot attain a unanimous vote, prorogue Parliament.

Though the governing party seems to want an absolute buy-in, the PLP has the majority of members in the House/Senate and can pass these Bills without a single Opposition vote. That said, does the government think that if brought to the public, the referendum would fail? Do they believe that it would be representative of a second consecutive referendum loss and therefore amount to a tacit vote of no confidence in the government which should lend to demands for an immediate general election?

I think that amounts to nothing short of an attempt to score cheap political brownie points when it is suggested that the Christie administration is so concerned about the democratic process within the Opposition that it will delay critical parts of their own agenda in preference to seeing to it that there are smooth and undisturbed internal elections within the FNM.

How can prorogation happen when there are hundreds of unanswered questions put forth by the Opposition that will simply die once the House is prorogued? Does this demonstrate any regard for democracy?

The tragic death of Dr Myles Munroe and members of his pastoral/church team and on Renward Wells

On Sunday evening, the shocking and unbelievable was confirmed. This week, our nation has lost a great man, whose invaluable teachings and books have impacted and helped to mould people and leaders around the world. Moreover, the BFM family has lost a cadre of well-meaning Bahamians.

On Saturday, November 1st, I sat a few tables over from Dr Myles at Poop Deck West, where he and his wife were also having dinner.

R.I.P. Dr Myles and all the souls of the dearly departed; prayers are extended to all the families of the nine men and women who perished in Sunday’s tragic plane crash.

As an aside, I note that I am utterly disgusted that Renward Wells, in a cheap and most unfortunate attempt, has sought to justify his actions under the cloak of Dr Myles’ death. I am utterly disgusted by that and I think that many Bahamians have now lost what little confidence and respect they had for him. Sir, simply explain what you did and/or who told you to do so, simply be honest with the Bahamian public and leave Dr Myles out of it. Do the right thing, sir….whatever that may be!

Adrian Gibson

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