The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The $300,000 bribe paid to secure a Bahamas Electricity Corporation (BEC) deal was yesterday described as a national embarrassment, the DNA’s leader suggesting the revelation gave “credence” to claims this nation was corrupt.

Branville McCartney, who has frequently spoken out against corruption, said Tribune Business’s exclusive revelations were an example of the corruption that “transcends” the Bahamas, costing this nation and its people millions of dollars annually.

This newspaper reported on Tuesday how the French energy giant, Alstom (formerly ABB), admitted as part of a $772 million plea bargain settlement with the US Justice Department that it had bribed an unnamed Bahamian ‘official’ to ensure it won the bid to supply BEC with a slow speed diesel generation unit in 2001.

“That is just one instance of the corruption that transcends throughout the Bahamas and under successive administrations,” Mr McCartney blasted yesterday. “It costs the Bahamian people millions and millions of dollars a year.”

Describing the Alstom ‘confession’ as something that “embarrasses the Bahamas”, the DNA leader added: “It gives credence to persons saying we are a corrupt country. It gives credence to persons saying they can’t do business in this country, because everyone has their hands out. That’s a shame.”

Meanwhile, Bradley Roberts, the PLP chairman, who raised concerns over the Alstom deal when he became minister with responsibility for BEC in 2002, yesterday urged the Government to launch a formal probe into the contract award.

“I am of the view that the Government of the Bahamas should cause an investigation to be launched into the Alstom (former ADD) deal,” he said in a statement.

“The governments of the Bahamas and the US have in place information exchange agreements, so the Attorney General can access the relevant facts and identities of the persons involved under the terms and conditions of this exchange agreement.”

Mr Roberts reiterated that BEC’s Board under the first Ingraham administration had unanimously recommended that the contract be awarded to the South Korean firm, Hanjung, rather than the rival Alstom/ABB bid.

Yet, as Tribune Business has confirmed via other sources in a position to know, the BEC Board recommendation was overturned by the Ingraham Cabinet, which awarded the bid to Alstom.

“It would be very interesting to know what additional and compelling information the Ingraham Cabinet had in its possession that would have driven them to overturn a unanimous board decision,” Mr Roberts said yesterday.

“As the head of the Cabinet between 1999 and 2001, I am very interested in what Hubert Ingraham knows about this contract debacle.”

Frank Watson, the former deputy prime minister who had responsibility for BEC at the time of the ‘bribery’ events detailed in the Alstom plea bargain, said he had no knowledge or suspicions that anything untoward might have been happening.

He told this newspaper on Tuesday that the bids were evaluated by the Inter-American Development Bank (IDB), which was “satisfied” that the Government should go with Alstom/ABB.

Multiple Tribune Business sources, well-placed at the time the diesel generator contract was awarded to Alstom, said wider ‘national interests’ may have influenced the Cabinet’s decision on the bid.

This newspaper was told that by awarding the contract to Alstom, the then-Cabinet hoped to find favour with the Spanish government (multiple contacts said Spanish, even though Alstom is French) who, as a Financial Action Task Force (FATF) member, might then help the Bahamas get off that organisation’s financial services ‘blacklist’.

The ‘blacklisting’ was dominating government policy and attention at the time, and Tribune Business was told that the BEC contract was discussed at the highest levels on a government-to-government basis. The Bahamas was removed from the ‘blacklist’ in 2001, some months after the Alstom/ABB award.

Mr McCartney, meanwhile, said corruption of the kind detailed in the Alstom ‘plea bargain’ only hurt the Bahamian people and taxpayers.

“It’s not only the actual corruption, it’s not only the $300,000 bribe paid, but the effect of it; the millions and millions of dollars it cost to get this deal done,” he added.

Tribune Business revealed on Tuesday that the delay in commissioning Alstom’s DA 12 generator resulted in BEC’s customers (the Bahamian people) incurring an extra $14 million in fuel costs.

“This happens throughout, and is continuing to happen,” Mr McCartney said. “It’s been going on for years. Let’s not fool ourselves. There’s been corruption going on for many years.”

The DNA leader said that, unfortunately, many Bahamians had come to “accept” such practices as the norm, believing mistakenly that it did not impact them.

“To some extent, they have come to accept government being inept and no good,” Mr McCartney added.

He suggested that the costs imposed by corruption were one factor that had led to Value-Added Tax’s (VAT) implementation, warning of a complete absence of accountability surrounding the new tax regime.

Pointing to the Government’s confusion over how much it will cost to restructure BEC (between $5 million to $500 million), and spending on BAMSI, Mr McCartney charged: “These are the persons that are going to be overseeing VAT without a Freedom of Information Act, without a proper Fiscal Responsibilities Act, without a proper Whistleblowers Protection Act, and any mechanisms to provide transparency.”