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Financial Services ‘Burial’ Fears Over E-Mail Leaking

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A financial services practitioner has warned that the industry suffered an “Easter burial” due to the disclosure of private e-mails in Parliament, branding the move “a Category 5 hurricane”.

Paul Moss, president of Dominion Management Services, said the decision by Cabinet ministers and MPs to reveal confidential financial information belonging to the Save the Bays activist group undermined the Bahamas’ very foundations.

Apart from attacking fundamental rights granted under the Bahamian constitution, Mr Moss said the actions by Jerome Fitzgerald and others were a “gross betrayal” of the privacy that the financial services industry has been built on.

He urged Prime Minister Perry Christie to force the Minister of Education to divulge the source of the Save the Bays e-mails, adding that it had “better be” one of those who received the messages.

If it was not, Mr Moss, one of the few Bahamian ‘owners’ in the international financial services industry, warned there would be “far-reaching implications” for this nation’s clients.

“This goes so counter to what our country’s foundation is built on that if, in fact, Jerome Fitzgerald and any other MP has seen fit to bring private information into the public domain, this has far-reaching implications for the country,” Mr Moss told Tribune Business.

“This country has built an industry on privacy, and that is being grossly betrayed. When the international community sees there’s no distinction between the Government and abuses of power, we’re going to have a difficult time sustaining that [financial services] business when really it’s already contracting.”

With tourism set to experience ever-increasing competitive pressures from Cuba’s opening to the US, Mr Moss said the Bahamas could ill-afford to undermine its struggling ‘second economic pillar’.

“It’s ironic that we talk about the resurrection of Christ at Easter, but this could be the burial of the financial services sector,” he told Tribune Business. “This is a jurisdiction that boasts itself, and holds itself out, to have the protection of privacy, which is embedded in the constitution.

“The only thing I can say is that these guys are a total embarrassment in the flippant way they engage. This industry is already on life support, and some would say it’s comatose. It’s crazy. It’s embarrassing.”

Mr Moss pointed out that the constitution’s Article 15 (c) provides “protection for the privacy of his [a Bahamian’s] home and other property”. And Article 21 (1) also states that “no person shall be subjected to the search of his person or his property, or the entry by others on his premises”.

The Bahamian financial services industry relies heavily on ‘privacy’ and ‘confidentiality’ of clients’ financial affairs as a key selling point.

Any suggestion that this confidentiality could be jeopardised, especially by a sitting Government, could result in major clients electing to switch their assets and business to a jurisdiction they believe will better protect their privacy.

Many of the Bahamas’ high net worth individual clients reside in nations that suffer from high crime levels, or frequent social and political turbulence, and they could have their personal safety endangered by the leak of sensitive personal data.

Mr Moss expressed concern over claims made by Richard Lightbourn, the FNM MP for Montagu, and others that the Save the Bays e-mails were obtained through the National Intelligence Agency (NIA).

This agency has no basis in law, as an Act to provide legal cover for its activities has yet to be brought to Parliament. Should the NIA be the source, Mr Moss said it would be a gross legal violation and abuse of state power.

“That will be tantamount to a Category 5 hurricane and earthquake that we’ve never seen before,” Mr Moss replied, when asked about the impact if the NIA connection was correct.

“The Prime Minister ought to make Jerome Fitzgerald state his source, and this source had better be a known source who received the information and gave it to him.

“We have to get out in front of this. He [Mr Fitzgerald] has to say he got it from someone CC’d on that e-mail, not the apparatus of the state,’ he added.

“A PR exercise needs to be there from the Government’s point of view, and to make it legal the Prime Minister needs to make the Minister of Education state exactly who gave it to him.

“If it’s not someone copied in on that e-mail, it’s going to have far-reaching implications for clients of financial services in the Bahamas.”

While Save the Bays members, hedge fund billionaire, Louis Bacon, and Fred Smith QC have already warned that the e-mail disclosure will compromise the financial services industry by spooking clients, Mr Moss is the first independent practitioner to openly express his fears.

“It’s a pillar and foundation of our financial services industry,” he reiterated. “Privacy is a fundamental human right.

“These are fundamental rights. There’s no way we can amend them and take them out of the constitution. This is a breach that’s been done in the name of politics. I’m not sure what the fall-out will be.”

Since the latest Nygard/Bacon allegations broke, the Government and its members have sought to portray Save the Bays as a political organisation operating under the guise of environmental activists.

They have also tried to imply that it is ‘a front’ for the Free National Movement (FNM), and that foreign money is financing a campaign to “destabilise” the sovereign Bahamian government.

Leslie Miller, during his mid-year Budget debate contribution, read out in the House of Assembly the alleged salaries being paid to Save the Bays members, which ranged from $90,000 to $250,000 per year.

Lakeisha Strachan, an attorney with the law firm representing the Save the Bays plaintiffs, Harry B Sands, Lobosky & Company, alleged in a March 18 affidavit that it was “clear” Mr Miller had seen a confidential document that “only a handful of people would have been legitimately privy to”.

The following day, Fred Mitchell, minister of foreign affairs and immigration, accused Louis Bacon of spending millions of dollars to “destabilise” the Christie administration.

Mr Fitzgerald, the minister of education, science and technology, then read out a private e-mail exchange between Save the Bays members and attorneys that was discussing a planned advertisement the group was preparing to take out.

“As with the financial records, only a handful of people would have had access to the above e-mail chain, and nobody was entitled to make it public,” Ms Strachan alleged.

“It is apparent, therefore, that there has been a leak of confidential and/or private documents relating to Save the Bays and its directors.”

Mr Moss said that “as a student of history”, he believed the issues raised by the Nygard/Bacon dispute are “much bigger” than those dealt with in the 1984 Commission of Inquiry’s drug-related investigation.

He instead likened the situation to the 1950s-1960s probe into casino gambling, which dragged in “the whole apparatus of Government”.

Mr Moss told Tribune Business: “Questions have come up about this whole Nygard/Bacon issue from clients already.

“They are trying to understand what operations we have in this country when political leaders are, at best, talked about in matters that are unbecoming.

“When I travel and speak to people, I try to speak on issues that help our Bahamas, but lately we have to deflect and deal with how some politicians may or may not be engaged in corruption, and investments such as Baha Mar.”

Comments

themessenger 5 years, 6 months ago

Hello Birdie dear, has the penny dropped yet?

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Economist 5 years, 6 months ago

This is a very telling story. I agree that it has just about put the final nail into the coffin of our financial services industry.

Kind of reminds me of when The Bahamas had most (90%) of the Captive insurance Industry. We played the fool with immigration and Bingo Bermuda and Cayman have 95% of the industry and all the investment that followed.

By the way the Captive Insurance companies also needed good financial services which is partly why we lost some of that industry.

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asiseeit 5 years, 6 months ago

I wonder what else they know, who else have they been watching, I do not trust the government of The Bahamas. This whole affair is an utter disgrace. Have they been collecting OUR financial records?

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birdiestrachan 5 years, 6 months ago

Plain old crap. The point is Mr Fitzgerald never said that much. Only the good lord knows who all the out spoke QC has following his lead and who he is paying to talk and wright crap. STB started this whole big mess and now they are trying to blame every one they can . Now the educated FNM can not grasp the play . but the :D: and "E" students can. Now do you all know what grade Bullard and the other fellow has. because they out played those fellows big time. Pintard can testify to that.

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birdiestrachan 5 years, 6 months ago

Try to remember it was you all Papa who killed and buried the Financial service .industry. Now there seems to be money like dirty going around. and for a small price Persons will wright or say what ever. Including what you will pay them to say.

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Economist 5 years, 6 months ago

Birdie, the death of our financial services has been a long one.

You need to go back to the early seventies when we allowed Robert Vesco to set up a bank. We got much bad publicity for harbouring someone who had ripped off a $100 million fund called IOS.

The during that decade we ran the Captive Insurance Industry out of the country.

In the eighties our banks were allowed to deposit large sums of drug money and got a very bad reputation for drugs. Read the Commission of Inquiry to get a flavour.

For the next 30 years we continued to employ incompetent people in the Banks Supervision Department of the Central Bank. They failed to do proper inspections and in one case allowed the accountant for a Trust Company to also do the audit. Oh, did I say that a notorious Drug Lord from Columbia ran over $10 million through that same Trust Company.

By 2000 the rest of the world was correct in saying that we were out of control.

It has taken us 45 years but I think that we have finally killed the one industry that paid Bahamians good salaries.

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