Published On:Thursday, July 29, 2010

By LARRY SMITH

A BITTER dispute that has been simmering below the surface for years finally exploded this week when police raided the Lyford Cay home of billionaire American financier Louis Bacon, 52, apparently based on a complaint from his neighbour, 66-year-old international fashion mogul Peter Nygard.

Ten armed plainclothes police officers entered Bacon's home just after noon on Monday in search of lethal "ultrasonic weaponry." Although the owners were not present, police handcuffed and body-searched household staff for over three hours, before confiscating a set of industrial loudspeakers.

The speakers were returned the same day.

Although an official police report was promised yesterday, the Tribune was unable to speak to senior officers, including the commissioner, on this matter despite numerous calls.

But Lyford Cay residents are incensed that someone could induce the police to act in this way. According to one e-mail seen by the Tribune, "from the moment we heard of this action by a police team on the property of Mr Bacon, we have vigorously expressed our strong objections and concerns to the highest level in government, and to various levels of police, including the commissioner. We will continue to pursue this matter in the strongest possible way."

The long-range speakers are commercial items used in sports arenas that were legally imported. In the past, Bacon has made numerous complaints about loud music and other noise pollution emanating from the adjacent Nygard property at all times of the day and night.

But this is not just a passing spat between two high-profile investors.

Insiders say there is a wider long-running controversy which has serious implications for the rule of law in the Bahamas, and has raised concerns at the highest levels of government.

"That controversy is the construction of a major resort facility within Lyford Cay on occupied Crown seabed," said a lawyer familiar with the case. "Nygard's relentless expansion over many years has changed the nature of the community. His resort handled numbers of personnel and guests far beyond the carrying capacity of the property, along with heavy traffic, noise and wild parties."

The two protagonists in this dispute couldn't be more opposite to each other.

Nygard is the flamboyant, publicity-seeking chairman of Winnipeg-based Nygard International, which earns a billion dollars a year selling women's clothing.

He emigrated from Finland in the 1950s, and grew up in Canada, where he founded his fashion empire in 1967.

Bacon is from Raleigh, North Carolina and began his career in the 1970s as a clerk on the New York commodity exchanges. In 1989, with a $25,000 inheritance from his mother, he founded Moore Capital Management, a leading hedge fund that now manages over $14 billion. According to press accounts, Bacon is a philanthropist and environmentalist who seeks to maintain a low profile.

Nygard, who has been characterised by some as a "nefarious power in Lyford", bought 3.25 acres at the western tip of the peninsula in 1984. Over the years he has more than doubled the size of the property by dredging the bay and filling the coastline, creating a 250,000-square-foot Mayan-themed resort which was rented out to wealthy vacationers for more than $42,000 a night.

Bacon acquired Point House, on eight acres of land next to the Nygard property, in 1993 as a second home. He is a big supporter of the Bahamas National Trust, the Clifton Heritage Authority, the Lyford Cay Foundation and other local charities. Following the police action Monday, he has put his property up for sale.

Until the Nygard resort burned down last November, advertised facilities included a disco with a 100-person dance floor, a human aquarium, waterslides, movie theatre, two yachts, swimming pools, tennis, volleyball and basketball courts, 10 bedrooms and a helicopter landing pad. Nygard has been seeking government approvals to rebuild the resort.

According to one popular lifestyle website (CS Perspective): "(Nygard) Cay is notoriously known for throwing outrageous parties with a lot of things occurring that should not be repeated."

At one point, Nygard wanted to build a restaurant on nearby Golding Cay, a Bahamas National Trust bird sanctuary, but was turned down by government. He also sought to import exotic animals, add a dolphin enclosure and build a shark tank. Dredge pumps have been used almost continuously for years to move sand from the bay onto the shoreline at the resort.

Over the past two decades, other residents of Lyford Cay have expressed alarm about the construction activities and ongoing operations at Nygard Cay to several government agencies, either individually or through the Lyford Cay Property Owners Association. But the activities have continued unabated.

A July 21 letter from the Office of the Prime Minister, signed by Permanent Secretary David Davis, advised Nygard that the government "is not minded to approve a lease of the accreted land and request that you remove any structures that would have been erected on this land over the years.

"I am further directed to advise that going forward no applications for construction on, or occupation of, the accreted land will be approved by any agencies of the government."

The letter was copied to half a dozen top officials in the Ministries of the Environment and Works & Transport.

Earlier this year, the Canadian Broadcasting Corporation aired an investigative documentary on Nygard Cay, alleging that behind the "larger than life" public image presented through his website and in press releases was another Peter Nygård.

The broadcast painted a negative image of the Bahamas, alleging that Nygard employed people at will, without work permits.

Among the claims featured in the documentary were allegations that Nygard "bullied" employees and implemented a harsh system of punitive fines for on-the-job misdemeanours - such as failing to stop a mosquito biting a guest - which allegedly left at least one worker earning just 87 cents an hour.

The documentary also interviewed former Bahamian cabinet minister Frank Watson: "Some people would not like him," Watson said of his one-time tennis partner. "He is very aggressive and very demanding and some people think he maybe shouldn't have these parties with all of these girls around...He marches to his own drum."

The otherwise restrained Lyford Cay community employs some 2,000 Bahamians and injects an estimated $100 million a year into the economy. This figure includes more than $1.5 million in grants and scholarships funded by the Lyford Cay Foundation.

"As the Lyford Cay community welcomes many visiting heads of state and other dignitaries on private visits, the more than 400 property owners are aware of their responsibility to reflect the best possible image of the Bahamas at all times," said one resident who asked not to be named. "Lyford Cay is well-known worldwide as a prestigious destination and does not have to rely on tourist promotions."

But beyond that, the reputational value of the Lyford Cay community to the Bahamas is incalculable. It is home to some of the world's richest and most powerful individuals, including high-profile industrialists, financiers and politicians.

According to the resident, "Online ads say that the Nygard resort can host events for up to 600 people. But since the property was originally built as a private home, what type of sanitation system is in place to accommodate these numbers? Lack of proper sanitation poses serious health threats to our community and to the environment."

Lyford Cay was developed by Canadian investor E. P. Taylor in 1956 as an upscale residential community on 1100 acres at the southwestern tip of New Providence.