By NEIL HARTNELL
Tribune Business Editor
Peter Nygard was yesterday accused of “obstructing justice” by seeking to contact a whistleblower allegedly possessing video footage showing the Canadian fashion mogul’s “political corruption in the Bahamas”.
The claims were contained in a September 16, 2014, letter to the southern New York district court by attorneys acting for Louis Bacon, the hedge fund magnate who is claiming his Lyford Cay neighbour orchestrated a ‘smear campaign’ against him.
The letter, addressed to Judge Denise Cote, alleged that Mr Nygard “had corroborated fears of retaliation” by sending intermediaries to contact the ‘whistleblower’, Stephen Feralio, after it became known that Mr Bacon was seeking access to the video footage.
Attorneys for Mr Nygard on one side, and Mr Bacon and the Save the Bays/Coalition to Protect Clifton environmental group on the other, have been negotiating for several weeks over what material can be made public in their New York court battle.
Yesterday’s letter reveals that Mr Nygard is seeking to prevent public access to Mr Feralio’s testimony that he believes his life is in danger, after effectively ‘betraying’ the Canadian fashion mogul and offering the allegedly incriminating material to his arch enemy, Mr Bacon.
The latter and his attorneys are seeking to prevent Mr Nygard from sealing this material, alleging: “The Nygard companies have not demonstrated any higher values or legitimate countervailing interests to justify denying public access to Feralio’s testimony that he fears Nygard.”
Mr Bacon’s attorneys, Gibson Dunn, said they filed an affidavit sworn by Mr Feralio last month in anticipation that Mr Nygard would attack their relationship with the ‘whistleblower’.
This allegedly came on September 10, when Mr Nygard and his attorneys accused Mr Bacon of ‘buying’ Mr Feralio, his testimony and his materials.
While admitting that Mr Bacon has helped to relocate Mr Feralio to another city, and is aiding him by paying his rent and living costs, the hedge fund billionaire’s attorneys said: “In truth, petitioners responsibly relocated Feralio precisely because he had corroborated fears of retaliation due to Nygard’s public reputation and private acts.
“Following the filing of this action, Nygard confirmed Feralio’s fears, recruiting proxies to contact Feralio in an effort to obstruct justice.”
Gibson and Dunn added that Mr Feralio’s testimony was needed for the court to “adjudicate Nygard’s obstructive efforts”.
Mr Feralio’s fears are laid bare in his August 13, 2014, affidavit, which details his reaction upon learning that Mr Bacon and Save the Bays/the Coalition to Protect Clifton would seek court approval to obtain the hundreds of hours of video files he allegedly possesses.
Detailing these concerns at a May 15, 2014, meeting with Mr Bacon’s attorneys and the billionaire’s private investigator, Jack Palladino, Mr Feralio alleged that he had “serious and legitimate concerns for my and my family’s physical well-being and safety.
“I am aware that Mr Nygard has a history of violent behaviour and fits of rage, and using harassment and financially ruinous litigation to intimidate those who speak out against him,” Mr Feralino said.
“I am so concerned about Mr Nygard’s aggressive tactics that my counsel and I have created forensic duplicates of the hard drives containing the video footage and are storing them in a safe location in New York, so that the video footage remains protected and may be available to this court under all circumstances.”
An affidavit, sworn by Mr Palladino and filed the same day, confirmed Mr Feralino’s fears of retaliation.
“He stated that he feared for his and his family’s safety if Nygard were to learn that he had contacted Mr Bacon or a representative of Mr Bacon about the footage, or if Nygard learns that Mr Feralio may share the footage with Mr Bacon,” Mr Palladino alleged.
“He repeated his concern more than once, even suggesting that Nygard ‘could make it look like a suicide’.”
From a Bahamian perspective, the main interest in the purported hundreds of hours of video footage, which Mr Bacon and Save the Bays want to use to bolster their own legal actions, may come from what it could show about Mr Nygard’s relationship with Bahamian politicians and public officials.
“At this initial meeting, Mr Feralio also informed me that he had evidence of Nygard’s political corruption in the Bahamas,” Mr Palladino alleged.
“Mr Feralio showed me approximately 30 seconds of video footage on his iPad, in which Nygard appeared to be talking on the phone and stating that he (Nygard) can use his influence with certain unidentified politician(s) to achieve some unspecified goal because the politician(s) owe Nygard.”
Mr Palladino conceded it was hard to hear the precise words because of background noise at the place where he met Mr Feralio, but alleged that one of the reasons the latter had split from Mr Nygard was because of his “financial manipulation of Bahamian politics for his own personal gain”.
Mr Palladino alleged that in capturing Mr Nygard’s life on video, Mr Feralio had followed the Canadian fashion mogul 24/7, filming him in the Bahamas and elsewhere, and including meetings “with government officials” and others.
This was backed by the memorandum filed by Mr Bacon/Save the Bays to support their access to the Nygard video.
It alleges: “Mr Feralio filmed Nyg�rd’s meetings with Bahamian Government officials. Nygard’s financial manipulation of Bahamian politics for his own personal gain was a factor that drove Mr Feralio to disassociate himself from Nyg�rd.......
“Indeed, Mr. Feralio shared with petitioners evidence of Mr Nyg�rd’s manipulation of Bahamian Government officials”
The petition alleged that a video produced by Mr Feralio “includes footage of the Bahamian Minister of Labour at Nyg�rd Cay”. It is unclear which Minister of Labour they are referring to, and there is no suggestion that the previous incumbents or current minister have done anything wrong, or have been involved in any way in the Nygard versus Bacon battle.
Still, the Bacon/Save the Bays petition further alleged: “This is proof positive that Mr Feralio was present at, and recorded footage, of Nyg�rd’s interactions with Bahamian officials, just as Mr Feralio stated.
“Thus, as with the defamation lawsuits, it is highly probable, if not certain, that Mr Feralio’s direct knowledge and evidence will aid the Save the Bays Actions, including but not limited to allegations related to Nyg�rd’s illegal expansion activities and his communications with Bahamian officials in relation to those activities.”
Meanwhile, the September 16 letter also alleged that Mr Nygard is pushing to remove from the public domain his “recruitment” of controversial Nation of Islam leader, Louis Farrakhan, “to assist with the smear campaign”.