by Larry Smith
By impunity we mean the exemption from punishment for acts that undermine the ethical foundations of our society, or that misuse public goods for private gain. The kind of bad role modelling our leaders are so fond of, and which many believe contributes to the rising crime rate.
Bahamians are no better or worse at this universal pastime than other nationalities, we hasten to add. But the difference lies in the fact that we seem to have no will whatsoever to impose consequences on our elites when they abuse power or engage in corrupt activities.
In America over the last two decades more than 20,000 public officials and private individuals have been convicted of corruption crimes. And a few years ago, British parliamentarians who ripped off public money by claiming false expenses had to resign, and many were jailed.
Long-serving German Chancellor Helmut Kohl was disgraced over secret campaign donations. In 2011 French president Jacques Chirac was convicted of embezzling public funds, and the following year former Italian prime minister Silvio Berlusconi was convicted of tax fraud. Their exalted positions did not save them from disrepute.
In the Bahamas, only one minor case has ever been brought under the Prevention of Bribery Act - that of MP Wilbert Moss in 1989. Prior to that there was the 1984 Commission of Inquiry into drug trafficking, when international pressure led to the resignation of a few law enforcement officers and politicians, the prosecution of some small fry for perjury, and firing of a magistrate for collusion. Those at the top, however, continued in power for years afterwards.
In 2014, we heard from US judicial sources about a so far unnamed Bahamian official who received hundreds of thousands of dollars during the last Ingraham administration to ensure that a multi-million-dollar BEC contract went to a particular bidder. The attorney-general says the matter is still under investigation.
The common or garden variety corruption and cronyism that regularly occurs here barely raises the eyebrows of most people. The more important point is that the political class doesn’t have to worry about being destroyed, humiliated or ostracised for their unsavoury activities.
That’s because no serious investigations are likely to be launched into such activities, and it’s a safe bet that there wouldn’t be any serious consequences if investigations were to be launched.
Perhaps the best example - the scandal to end all scandals some say - is the implosion of the Bank of the Bahamas, which is owned 65 per cent by the government as well as by more than 3,000 private shareholders.
The bank blames its problems with “troubled loans” on the 2008 financial crisis. And the government recently transferred $100M in bad loans to a special purpose vehicle called Bahamas Resolve, which is supposed to be sorting them out under the direction of former Central Bank governor James Smith.
According to BoB’s 2014 annual report, "This transaction allowed the bank to become compliant with key ratios for both Central Bank of The Bahamas and international standards for capital requirements“ - meaning they weren’t compliant before.
In late 2013, the Punch published an extensive list of loans reportedly made by BoB to politicians and their cronies. Former managing director Paul McWeeney threatened to sue the newspaper, but nothing has been filed, and McWeeney has since been gracefully retired.
But at the time, he complained bitterly about “breach of confidentiality" and reported his concerns to the police and the data protection commissioner. The bank insisted it operated according to “well-regulated banking practices and standards" and denied any political involvement in the granting of loans.
However, a 2012 letter from Governor Wendy Craigg disclosed that Central Bank inspectors had found “that a large measure of the basic tenets of industry sound credit practices are either missing, not evident, or compromised" within BoB.
The response was to have the police search the home of FNM chairman Darron Cash and seize his computers to investigate an alleged leak of files. At the time, Cash’s wife worked in the bank’s human resources department. She was later fired in what her husband called an "unjustified and politically motivated witch hunt and scapegoating exercise.”
Bank of the Bahamas lost $3.5 million in 2013. Hundreds of millions of dollars were given in unsecured loans and multi-million-dollar overdrafts to politicians and their cronies. And in 2013 the bank reported almost $70 million in losses. This translated into a 50 per cent cut in shareholder value, and it was clear that the bank was headed towards insolvency.
So late last year, $200M of National Insurance Board funds were moved from Commonwealth Bank and deposited in BoB to help prop it up. And the $30M that NIB had invested in BoB to buy 15 per cent of its shares is now worth much less. This is the pension money of ordinary Bahamians that we are talking about.
Ultimately, the Ministry of Finance is responsible for overseeing BoB. From 2007 to 2012 the Minister of Finance was Hubert Ingraham. Since then Prime Minister Perry Christie has held the finance portfolio. And last year Christie misled the public by declaring that Bank of The Bahamas was "sound and strong.”
Lately, more information about loans to political cronies has been disclosed. This has included the news that PLP MP Leslie Miller (who can’t even pay his electricity bills) was able to borrow $22 million, and Christie’s friend Edward Penn was given a Crown land grant for a paltry sum which he immediately translated into a $7 million loan from BoB. No doubt, there is more to come.
Meanwhile, the opposition FNM has been unusually quiet as this scandal has unfolded over many months. A request for a select committee to investigate the bank has been put on the House of Assembly order paper, but it has yet to be moved. A select committee could establish rules to deal with the vexing issues of malfeasance without destroying the bank, observers say.
The Post Office Savings Bank is another cookie jar for cronies. Constituted as a “thrift bank” for small savers, the auditor-general recently revealed an amazing level of fraud at the POSB, attributed to “significant internal control weaknesses”. Even though by law account balances and credit advances are not to exceed $6,000, some account holders were able to withdraw hundreds of thousands over an extended period.
Of course, these account holders have not been not identified, but the Ministry of Transport says it has asked the police to investigate. That was over a month ago and there has been no fallout yet from this gigantic rip-off.
It appears to most reasonable observers that there are no effective controls to prevent financial misdealing in any part of the public sector. And neither the governing party nor the opposition appears to be unduly concerned about these political scams. They are certainly not making a serious effort to control them.
The BoB revelations have provided much fodder for folks on social media (where most Bahamians get their news these days), and this has resulted in an apparent campaign of intimidation by pro-government spokespeople.
As an example, one poster on Facebook had the temerity to repeat information about Edward Penn’s Crown land grant and subsequent BoB loan that was already in the public domain. He was faced with an immediate threat from Sharmie Farrington-Austin, who besides being his ‘friend’ is also the data protection commissioner.
"I would be very careful in disseminating private personal f inancial information derived from private business financial transaction...be sure you can pass the public interest test...especially since you are not the media,” she scolded. "Persons can save themselves a lot of time and read the laws of this land, because I don’t fear doing my job."
Just for the record, the data protection commissioner is not the official internet censor. The Data Protection Act controls how personal information is used by organisations, businesses or the government. It is not a means to stifle public debate or to censor political opinions on social media.
Personal data refers to names, addresses, contact information, employment history, medical conditions, convictions, credit history and the like. The law applies to the people who process this type of data in organisations, businesses or the government. There is a difference between official information and personal data.
But now we have the data protection commissioner - a minor public servant - trolling Facebook to threaten folks who dare to talk about the shenanigans that our political elites and cronies get up to. What’s next - an extension of Fox Hill Prison for Facebook criminals?
Closely related to the impunity of our political elites and cronies is the way in which our laws are often flouted by the government when it comes to development proposals.
Blackbeard’s Cay (formerly Balmoral Island) is a prime example. It was being developed as a 'dolphin encounter’ attraction when the environmental group, reEarth, filed for judicial review, arguing that the government had breached the Marine Mammals Protection Act as well as the Planning and Subdivisions Act.
The Supreme Court ruled in favour of reEarth in July of last year, ordering that the development be closed, the dolphins removed and the land returned to its legally permitted use and condition. To date, this has not happened. In fact, Blackbeard’s Cay continues to operate and market itself to cruise passengers.
As lawyer Leandra Esfakis put it: "When the prime minister and his minister of agriculture decided to issue approvals to Blackbeard’s Cay without observing the legal process, they broke the laws...for reasons best known to themselves.
"The Supreme Court quashed those approvals, which means they are not in effect. The government did not do right in the first place, when it broke the law. It is not doing right in the second place, by ignoring the court’s order. This amounts to contempt of court."
So let’s ask ourselves, Esfakis continued, If our government cared about liability to the Bahamian people, why did it allow BoB (the Broke Bank of the Bahamas) to mismanage $100M of the people’s money? Why has it put $200M more of the people’s NIB money into a bank rocked by corruption? Does the government care about good governance?
Impunity is promoted by our inability to hold political leaders - of all colours - accountable for their actions. The solution is to step up, speak up, and vote them out. If we do not do this, we will experience an endless slide towards the abyss.