The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Parliament’s Public Accounts Committee (PAC) will next week launch a probe to “get to the bottom” of the controversy surrounding whether hotelier Philip Ruffin still owes the Government a multi-million dollar sum in unpaid casino taxes.

K P Turnquest, the Opposition’s deputy leader and a PAC member, told Tribune Business that the Committee would “issue a request for information” on the matter next week.

“It’s obvious that something’s amiss because the Auditor General’s report says these taxes are outstanding,” Mr Turnquest told Tribune Business. “Unless those funds have been received and not applied, somebody is misleading the Bahamian people.”

Mr Ruffin, in a statement issued on Wednesday by his Bahamian attorneys, Davis & Co, vehemently denied that he owed any outstanding casino taxes to the Public Treasury.

This, though, contradicts the findings of the Government’s own auditor and Ministry of Finance officials, with the former’s 2013-204 fiscal year report stating that the former Crystal Palace Casino owner still owes a $7.277 million bill. Their findings were also backed by Obie Wilchcombe, minister of tourism, who has responsibility for gaming.

Asked by Tribune Business whether the issue was appropriate for PAC investigation, Mr Turnquest replied: “You’ve taken the words right out of my mouth.

“I had discussions with one of my colleagues on the Public Accounts Committee this morning for exactly that purpose.

“We ought to inquire of both Mr Ruffin and the Financial Secretary as to the status of those taxes. We’re going to issue the request for information next week, and get to the bottom of it.”

Mr Turnquest said it was “incredibly important” that the Government make every effort to ensure it collected every cent due to it in taxes, especially given its strained financial position and ever-increasing $6.5 billion national debt.

“We’ll make that inquiry to make sure Mr Ruffin is correct and that the funds have been received and applied,” he added.

“If Mr Ruffin is saying that the funds have been collected and paid over, there are two problems on the face of it - either the accounting system of the Treasury is woefully inadequate, or there is something very wrong.”

Mr Turnquest’s decision to place the situation before the PAC was backed by fellow FNM MP, Loretta Butler-Turner, who yesterday said the Committee and Opposition should have jumped on the matter much sooner.

She argued that the PAC should have seized on the Auditor General’s report of 2011-2012, which was published in 2014, and showed Mr Ruffin’s Bahamian interests as owing casino taxes from that time.

“It should be put before the PAC,” Ms Butler-Turner told Tribune Business. “I hate to be critical, but at this stage we have not done our job. This is something the PAC should have been looking into since 2012.

“Thank God the Auditor General has done his job. The Public Accounts Committee should be in the front line of inquiries to find out whether, and how much, Mr Ruffin owes this country.

“If he does, they’ve got to get the people’s money. We need the money, because the Bahamian people are being taxed into extinction.”

The PAC, which is the only Parliamentary committee majority-controlled by the Opposition, acts as the ‘watchdog’ for how the Government is spending the Bahamian people’s money.

Mr Ruffin, via the statement issued by his attorneys, slammed Mr Wilchcombe for suggesting taxes were still due, and urged him to “desist” from this position.

The hotelier, who previously owned the Wyndham and Nassau Beach Resorts, plus the Crystal Palace Casino, reiterated his position that $12.1 million in outstanding gaming taxes were paid when the properties were sold to Baha Mar in 2005.

Mr Ruffin, through Davis & Co, said all taxes owed by his Bahamian interests were paid off at the time of the Baha Mar sale, using a portion of the purchase price paid by the Izmirlian family.

Mr Wilchcombe, though, stuck to his guns, telling the House of Assembly on Wednesday under questioning from Mrs Butler-Turner that Mr Ruffin’s interests still owe outstanding casino taxes.

The controversy was sparked after Tribune Business exclusively revealed earlier this month how the Auditor-General’s report for the 2013-2014 fiscal year showed the Government had revised upwards its estimates of the hotelier’s outstanding casino taxes.

The Auditor General’s report disclosed that the sum owed by Mr Ruffin had increased by $2.147 million, from $5.13 million to $7.277 million, as a result of a “review” by the Government’s own Revenue and Tax Departments.

The increased sum came after Prime Minister Perry Christie’s assertion in the House of Assembly on October 8, 2014, that the Auditor General’s 2011-2012 fiscal year report was incorrect on the billionaire’s outstanding tax balance.

The Prime Minister backed Mr Ruffin’s position that the outstanding casino tax balance had been settled when he sold the Wyndham and Crystal Palace casino to Sarkis Izmirlian and Baha Mar.

Mrs Butler-Turner, though, said the Prime Minister sat silently in the House of Assembly on Wednesday night and said nothing, even when Mr Wilchcombe contradicted his statements of two years ago.

“Last night, the Prime Minister sat there and did not say a word about it,” she said.

The Opposition’s interest in the matter has been sparked by Mr Ruffin’s close personal and professional relationships with Prime Minster Perry Christie and Deputy Prime Minister Philip Davis.

He is a former client of the pair when they were in private practice, the latter heading the legal team that handed the Baha Mar sale, and has maintained close ties to both men and the Bahamas, frequently visiting this nation even though he no longer has any investments here.

Mr Turnquest yesterday described as “an incredible statement” the admission by Mr Ruffin, in Wednesday’s release, that his Bahamian resort interests owed almost $17 million in taxes, bills and contributions to a variety of Government agencies and the hotel industry pension funds when they were sold to Baha Mar.

While casino taxes accounted for almost 75 per cent of the $16.815 million total, Mr Ruffin’s Cable Beach interests also owed $1.677 million in outstanding National Insurance Board (NIB) contributions; $625,204 in real property taxes; $379,722 in hotel licensing fees; and $392,331 and $51,000 owed to the Bahamas Telecommunications Company (BTC) and Water and Sewerage Corporation.

The FNM’s deputy leader said the issue highlighted the Government’s ‘double standards’ in how it treated tax debts owed by foreign versus Bahamian-owned companies, and the absence of “any significant attempt” to collect from the former.

Tribune Business reported on Wednesday how debts such as those run up by Mr Ruffin’s companies effectively become a burden on the rest of society, and Mr Turnquest said: “I couldn’t say it better.”

He added that debts such as those left behind by Driftwood (Freeport) and its Royal Oasis ownership “deprive the Bahamian people” of much-needed revenues at a time when their tax burden has increased considerably.

“It’s unacceptable that they [foreign developers] can continue to rack up these debts, obviously with the intent of walking away if things don’t go as anticipated, and leave us holding the bag. This is not the way this is supposed to work,” Mr Turnquest told Tribune Business of the Royal Oasis and the $51 million-plus in outstanding casino taxes left by former operators.

“There’s got to be some way of us recouping that money. We ought to be able to collect that.

“We understand the special treatment we have to afford foreign investors, but they ought to receive no special consideration or advantage over Bahamian investors. It’s the Bahamian investor that contributes much more to the overall community and its sustainable development.”