Fahy: 'I had no control whatsoever over the account' (Update)

Home Affairs Minister Michael Fahy has distanced himself from the Bermuda Political Action Club (BPAC) bank account in the wake of a probe into the JetGate controversy.

Speaking in the Senate today, Mr Fahy criticized the findings of OBA chairman Thad Hollis, who spearheaded the investigation. Specifically, he characterized parts of Mr Hollis' report as inaccurate.

The BPAC account was set up by OBA political consultants Derrick Green and Steven DeCosta to handle the donations totaling $350,000 from seven American businessmen. The donors wired the money sometime after meeting with former Premier Craig Cannonier in the run up to the 2012 election, which the OBA won.

Questions have persisted about whether the donations came tethered to quid pro quo political arrangements; all parties involved have denied such assertions.

Mr Fahy, who was the party's campaign chairman during the last election, said the Senate today he did not open, confirm or have access to the BPAC account. He said he did not know the identity of donors nor did he see or receive bank statements.

"I had no control whatsoever over the account. I was only made aware of the full donation amounts well after the election was over," he said.

He said it was not in his remit to have such knowledge. He said he knew the account would be used to fund a "get-out-the-vote" grassroots campaign.

"I had absolutely no issue with this when I was informed," he said. "This is a normal part of any political campaign. Election campaigns are by their very nature fast moving. There was no secret and no attempt to keep the account secret."

This would appear to contradict the statements of Mr Hollis, who has said he was unaware of the existence of the account for a year-and-a-half while he was the party chairman.

Mr Fahy both downplayed the importance of the account while at the same time trying to distance himself from BPAC, saying: "In a democracy, people are entitled to spend their money to support the party or the political issues that are important to them. Who controls those monies and how they are spent is a matter, first, for the donors and then for the account signatories."

Mr Fahy appears to be taking issue with Mr Hollis' wording where he states in his report that Fahy "confirmed" the BPAC account. He was adamant he did not confirm the bank account, but did say he communicated to Mr Hollis that the Bank of Butterfield called him to confirm Mr Green worked for the OBA and had a valid work permit. For Mr Fahy, that's apparently an important distinction.

While he acknowledged he "orally advised the former chairman by telephone of the fact of the call by the bank and clarified with him the circumstances of the call," the minister also expressed his disappointment that he was not interviewed during Mr Hollis' inquiry.

Multiple messages with Mr Hollis have not been returned this week.

Today I wish to take this opportunity to give a personal explanation to the Senate in relation to a Press statement made by the former OBA Party Chairman on 18th July 2014.  It is regrettable that this statement is inaccurate and creates a certain amount of uncertainty in relation to the role I played in the election campaign of 2012 as regards the opening of a bank account during that campaign at the Bank of Butterfield (“the Bank”). I have hesitated to comment publically on the matter because I took the view that it was an internal party matter. However, given that inaccurate information has now been made public by this report, and is being repeated in the media and has been repeated in another place it is fair and proper that I clarify matters.

Madam President.  The former Chairman says in his statement that “The account was opened with two signatories, Mr. Steven DeCosta and Mr. Derrick Green. When the signatories were attempting to open the account, the Bank of N.T. Butterfield sought confirmation from the Party regarding the opening of the account. Mr. Michael Fahy, the then OBA Campaign Chairman was telephoned and confirmed the account.”

Whilst this quote is partly accurate to the extent that the account was opened with two signatories, I have spoken directly with officials at the Bank who advised me that when Mr. Green and Mr. DeCosta applied to open the account, verification was required as to the background of Mr. Green, since he was a guest worker.  A senior official at the Bank made repeated phone calls to the former Chairman to confirm that Mr. Green had a work permit with the OBA and was still employed with the OBA, since, presumably, this is the information provided to the Bank upon the opening of the account. I have been advised that the then Party Chairman was unreachable.  I was therefore phoned, as an OBA official, in my capacity as OBA Campaign Director, by a senior official at the Bank. I was asked two questions:

Does Mr. Derrick Green work for the OBA?  My reply was “yes.”

Does Mr. Derrick Green hold a valid work permit?  My reply was “yes”.

I was not advised by the Bank as to why I was being asked those questions and the conversation ended. This is not unusual. Banks make enquiries of this sort in relation to business accounts frequently. That was the full extent of my involvement in relation to that account.  Contrary to what has been said in another place, I did not open the account with the Bank and was I unaware that the account would be opened with the Bank.  

On 12th July 2014 I orally advised the former Chairman by telephone of the fact of the call by the Bank and clarified with him the circumstances of the call. Despite my informing him of this fact his statement says that I “confirmed the account.”  This is not accurate.

I subsequently was made aware of the name and the existence of the account by the signatories but I had no involvement with the account.  To my mind, this is an important distinction to make given the overall tone of the former Chairman’s public statement and the allegations and insinuations now being made by some in the community, by members in another place and in the repetition of those inaccurate statements in the media.  

To be crystal clear:

I did not open the account.

I did not “confirm” the account.  

I had no access to the account.

I had no access to the donations made to the account.

 I did not know the identity of the persons who donated to the account.

I did not see or receive bank statements.

In other words, I had no control whatsoever over the account. I was only made aware of the full donation amounts well after the election was over.

 To this day I have no knowledge of all the individual donor’s names or the amounts transferred in or out of the account, other than what I read in the statement by the former Chairman.   The reason for this is that I had no need to know. It was not an OBA account. For further clarity, I did not have access to or knowledge of donations made to any OBA bank accounts either. Again it was not in my remit to have that knowledge.

Madam President, it is important to note that the setting up of the account in Bermuda by Mr. Green and Mr. DeCosta was perfectly proper. It is not in breach of any Bermuda campaign law or, for that matter, in my view, any OBA campaign protocols, which have not previously been identified by the former Chairman.  I was made aware that the account at the Bank was set up to accept donations to support a get out the vote grassroots campaign.  I had absolutely no issue with this when I was informed.  This is a normal part of any political campaign.  Election campaigns are by their very nature fast moving.  There was no secret and no attempt to keep the account secret.

Madam President, the fact is that money is spent during election campaigns. Lots of it. This is all perfectly proper.  In a democracy, people are entitled to spend their money to support the party or the political issues that are important to them.  Who controls those monies and how they are spent is a matter, first, for the donors and, then, for the account signatories. 

Finally Madam President, although I wish to limit this statement to the key facts that I have outlined as to what actually happened when I was phoned by the Bank, it would be remiss if I did not express my personal regret, and advise the Senate, that I was not interviewed during this enquiry.  I was not given an opportunity to review the former Chairman’s statement either to confirm what was concluded or to correct the obvious inaccuracies.  Those are fundamental failures of the rules of natural justice and, as I have said, they are regrettable indeed.

Madam President. I again repeat that there is nothing wrong with persons in charge of a grassroots campaign opening bank accounts and spending money to support a political party and its lawful activities.  My absence of criticisms of other portions of the former Chairman’s statement does not mean that I support or endorse the rest of the statement. I have already brought to the attention of the Executive of the OBA my other concerns but and I shall deal with those internally. I am nonetheless happy to set the record straight about my personal interaction with the Bank.

Thank you Madam President.