The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The US government has warned that election campaign financing in The Bahamas remains wide open to abuse that exposes this nation’s governance to “corruption and foreign influence”.

The Biden administration’s State Department, in its just-released annual Investment Climate Statement on The Bahamas, added that the Public Disclosures Act was an inadequate mechanism for casting a spotlight on politicians’ personal finances because that latest declarations have neither been published not independently vetted.

“The Public Disclosure Act requires senior public officials, including Senators and members of Parliament, to declare their assets, income and liabilities annually. For the 2021 deadline, the Government gave extensions to all who were late to comply,” the report said. 

“The Government did not publish a summary of the individual declarations, and there was no independent verification of the information submitted. The campaign finance system remains largely unregulated with few safeguards against quid pro quo donations, creating a vulnerability to corruption and foreign influence.”

The Bahamas has experienced several episodes where foreign residents with questionable motives have openly declared they made donations with the expectation of receiving something in return from a newly-elected government. For example, Peter Nygard, now facing sex trafficking and abuse charges in both Canada and the US, bragged about making a donation - said to be $5m - to the PLP’s 2012 campaign.

There were suggestions that the fallen fashion tycoon had expected his illegal Nygard Cay land grab, where land had been reclaimed from the sea without permission, would be legitimised and approved after-the-fact by the former Christie administration until this was blocked in the courts by Save the Bays.

And, before that, Paradise Island resident Mohammed Harajchi donated to the PLP’s 2002 campaign with the seeming expectation that the banking licence for his Suisse Security Bank & Trust would be restored if the party won (it was not). But, with no disclosure or transparency-related campaign finance laws or other limits in place, all political parties remain open to the “influence” referred to in the US report.

Many of the concerns detailed in the US Investment Climate Statement are repeated on an annual basis. And while many Bahamians will likely argue that the US should first address its own political and other woes first, rather than pointing the finger at other countries, this does not mean the issues raised are any less important.

Noting the concerns raised over the seeming lack of transparency over the former Minnis administration’s COVID-related spending, the US report said: “The current [Davis] administration has accused the former administration of inappropriate spending and misappropriation of millions of dollars, particularly during the state of emergency issued due to the COVID-19 pandemic.

“The Emergency Powers (COVID-19) Regulations, passed in March 2020, granted widespread powers to the Government during the state of the emergency. For example, the legislation allowed the Government to bypass normal spending rules and procurement processes, although it did require the Government to present Parliament with reports of contracts and pandemic-related funding within six weeks of the expiration of the state of emergency.

“Despite the state of emergency expiring and being extended several times throughout 2020 and 2021, the former administration failed to report. The Emergency Power regulations expired for the final time without extension in October 2021,” it continued.

“The new administration has called into question several contracts awarded to companies and individuals by the former administration under the Emergency Powers regulations and has ordered forensic audits of government ministries and agencies. Initial findings suggest significant misappropriation of funds. The former administration admitted it failed to report but denies allegations of corruption.”

The US State Department report fails to identify the “initial findings” it is referring to. While probes into the National Food Distribution Task Force and Bahamas Health Travel Visa found issues of poor record-keeping, lack of processes and procedures, and actions and decisions that were not in accordance with best practice, neither provided any hard evidence that taxpayers had been defrauded or government funds abused, misappropriated or siphoned off.

However, the Investment Climate Statement’s contents indicate it was prepared several months before Adrian Gibson, the former Water & Sewerage Corporation executive chairman, was charged before the courts with several corruption-related offences to which he has pleaded not guilty.

Noting the controversy over the Public Procurement Act’s implementation, the US report said: “In September 2021, the Government enacted the Public Procurement Act which overhauls the administration of government contracts to improve transparency and accountability.

“Senior government officials have called for the legislation to be amended to reflect government capabilities and strengthened with new regulations. Though functional, most agencies with large procurement budgets do not utilise the existing e-procurement portal or registry. Senior officials purport that the existing e-procurement portal requires modernisation to improve functionality.”

Michael Pintard, the Opposition’s leader, has frequently charged that the Davis administration is violating this law through not having disclosed a single contract award, and to whom and for what amount, since it took office on September 16.

The Government, though, has retorted that the Act was rushed and ill-thought through, arguing that regulations and guidelines were lacking, and that multiple things need to be put in place for it to function properly. It is also contending that the legislation has increased bureaucracy and red tape.

“The Government’s laws to combat corruption by public officials have been inconsistently applied,” the US report said. “The law provides criminal penalties for corruption, and the Government generally implemented the law effectively when applied.

“However, there was limited enforcement of conflicts of interest related to government contracts and isolated reports of officials engaging in corrupt practices, including accepting small-scale ‘bribes of convenience’. The political system is plagued by reports of corruption, including allegations directing contracts to political supporters and providing favourable treatment to wealthy or politically-connected individuals.”