Minister Burgess 'was not consulted' on fees

WEDNESDAY, FEB. 1: Former Public Works Minister Derrick Burgess says he was not consulted on $160,000 worth of consultancy fees paid to the two senior board members of the Bermuda Land Development Company (BLDC).

And he resisted calls for the former chairman and deputy chairman of the BLDC to pay the cash back to the company.

Mr Burgess said that it was the responsibility of the board to decide on whether consultancy fees were appropriate or not.

He added: “It’s not in my remit, it’s in the remit of the company. The board doesn’t have to tell me, or any other minister. They don’t need approval from ministers.”

“I don’t know why there is all this fuss when there has been nothing done wrong. If it’s not wrong, it’s right. The board made a decision — that’s within their rights. If they pay the money back, it’s like admitting they have done something wrong.”

Mr Burgess was speaking after a special report by Auditor General Heather Jacobs Matthews said the payments to the former board chairman and deputy chairman represented “a fundamental conflict of interest”.

Inefficiencies

Ms Jacobs Matthews — backed by Finance Minister and Premier Paula Cox — called for the money to be repaid to the company.

Mr Burgess said: “When some reports were shown to me, I saw some inefficiencies there [at the BLDC]. I instructed the deputy chairman and the chairman to investigate — they did and gave a 16-page report.

“As far as the consultancy agreement goes, no one asked me if I knew if there was a consultancy agreement.”

Mr Burgess also asked the two men to manage the company from September to early December 2010 as the chief executive officer was off ill.

Mr Burgess added that he first heard of the consultancy arrangement with the chairman and deputy chairman from Premier and Finance Minister Paula Cox.

He said: “When I found out, I went back to the deputy chairman and chairman and told them ‘you need to check that what you have done is legal in the bye-laws of the company’. They got the opinion it was legal in the bye-laws and under the Companies Act of 1981.”

Mr Burgess added that an audit of the arrangement by accountancy firm KPMG and a legal opinion from law firm Trott & Duncan both concluded that the arrangement was legal and within the powers of the board.

Mr Burgess criticized comments circulating in the community questioning the qualifications of Mr Bean, a pastor and community activist, for the role of BLDC deputy chairman and to carry out a review of BLDC operations.

Former deputy chairman of the BLDC Leroy Bean has been selected as the PLP candidate for St George’s South, although this is subject to confirmation by a central party committee.

Mr Burgess said: “Every time a certain section of the public does something, people have to question their ability. He was deputy chairman of the board and I wouldn’t question his ability or his integrity. This is where all this has got personal.”

The probe by Ms Jacobs Matthews found that more than $160,000 had been paid to the chairman and deputy chairman by the end of December 2010 — and that nearly $78,400 of that had not been formally approved by the board.

She added that Ms Cox moved the BLDC to the Environment Minister’s portfolio in April last year. A month later, a special meeting of the company disbanded the board and appointed a new one.

Ms Jacobs Matthews’ report said: “The Premier/Minister of Finance is to be commended for taking prompt action in these matters once brought to her attention by the Auditor General.

“However, despite the current board’s reported action to recover the consultancy fees, at the date of this report, the amount remains unpaid. Equally disturbing is the fact that no one has been held accountable for these breaches.”