By RASHAD ROLLE
Tribune Staff Reporter
WHEN a whistleblower partnering with a local firm to provide water services to Eleuthera residents alleged that “improper and dangerous materials” were being used to line tanks, Water & Sewerage Corporation’s General Manger Glen Laville dismissed the concerns and never shared them with the board of directors, auditor EY found during its audit of the corporation.
The Eleuthera Naval Base storage tanks were to store water that would readily be supplied to residents of Eleuthera.
The tanks were supposed to be completed in December 2014 for $1.4m, although the contract was never tendered.
“Instead, it was awarded to Treasure Coast Development and Construction (TCC), an entity owned by one Glenn Lowe,” WSC Chairman Adrian Gibson said in Parliament yesterday, before he tabled the audit. “TCC was involved in a joint venture with a US-based company, SRT Solutions, a company which EY said actually ‘had the expertise to perform the tank lining and refurbishment’.”
Although $730k has been spent on the project so far, three of the four tanks remain inoperable, according to EY.
Mr Laville received an email from a whistleblower connected to SRT Solutions in 2014 alleging that TCC was “attempting to use improper and dangerous materials to line the tanks.” But, EY said, “GM Laville dismissed the allegations as convoluted and instructed Deputy General Manager Robert Deal to simply review documentation from Mr Lowe.”
“Up to this point, TCC had already been paid approximately $360k and suffered numerous project delays,” EY said. “When asked why he didn’t require Internal Control & Compliance to perform an investigation into the allegations, GM Laville stated he didn’t consider it necessary. WSC management never notified the (board of directors) of the allegations.”
EY said WSC’s management could not recall who recommended TCC for the contract or “how they knew that these works were necessary”.
Mr Gibson in Parliament said the dangerous materials allegedly used “could have caused injury and/or death to the people of Eleuthera”.
He said the whistleblower has been deported twice. He also stressed that the health of the residents of Eleuthera “has not and will not be placed at risk, because the tanks in question was never placed into service”.
EY also reported that TCC’s owner, Mr Lowe, “bragged about having personal connections with former DPM Davis.”
And despite the WSC’s board terminating its contract with the vendor because of its “repeated failures and missed deadlines”, it was revealed during a board meeting discussing their decision that the “ministry has requested that we give consideration to rescinding the termination letter”.
The report said: “Further, EY identified emails from Mr Lowe to former DPM Davis pleading with him to instruct WSC to withdraw its termination letter in March 2017. A meeting was held between the Ministry of Works, TCC and WSC in March 2017. Although GM Laville claimed he could not recall the outcome of the meeting, EY observed evidence that WSC extended a final opportunity to TCC to complete the project by the end of May 2017. TCC was unable to meet the deadline and WSC is currently seeking options to call the performance bond.”
EY said that TCC “continued to receive funding for the project, including a $112k advance payment in May 2016, two years after the awarding of the contract” despite numerous project delays and allegations.
In addition, EY has highlighted conflicts of interest at WSC, revealing that Deputy General Manager Robert Deal and Assistant General Manager Cyprian Gibson failed to disclose their business relationships with Exuma & Ragged Island MP Chester Cooper, even as the companies for which they were shareholders conducted business with the corporation.
“EY identified a conflict of interest whereby Assistant General Manager Cyprian Gibson, DGM Deal and the owners of a WSC vendor, Chester Cooper, are shareholders together in IEHL, a real estate holding company,” EY said. “Mr Cooper is an owner of BAF Global Group Limited and its subsidiary, Cash N Go, which provides bill collection services to WSC. Cash N Go has been a vendor for WSC since 2013 and has been paid approximately $150k to date.
“IEHL is a real estate holding company that was formed in 1997 and has a loan from Mr Cooper’s company, BAF, with an outstanding balance of approximately $430k. Both AGM Gibson and DGM Deal are guarantors on the loan. Further, IEHL is the entity developing a subdivision down as Southern Dreams in New Providence.”
EY said it had evidence that WSC installed a new water water main for the Southern Dreams subdivision in 2013 for $32k.
“Additionally,” the firm said, “EY observed email communications in July 2015 whereby IEHL engaged a WSC vendor, Apex Underground Utilities, to perform construction-related services for the Southern Dreams subdivision. The proposal for the works is addressed to AGM Gibson, who negotiated with the vendor on IEHL’s behalf.
“Although IEHL was formed prior to the engagement of Cash N Go as a vendor by WSC, neither DGM Deal nor AGM Gibson disclosed their business relationship with Mr Cooper to HR or their supervisors. Mr Deal did advise GM Laville of his ownership interest in IEHL in 2013 when internal approvals for the works to be completed at Southern Dreams were being discussed but never disclosed Mr Cooper as a shareholder.”
EY said it discovered documentation suggesting Mr Gibson was involved with Mr Cooper and BAF on another entity, Navy Lion Investments, a developer of the subdivision McAllen Estates.
Mr Gibson performed administrative duties on behalf of the entity, including “negotiating with WSC contractor (Sentinel Drilling) on behalf of Navy Lion for construction services,” EY reported, adding that McAllen Estates received a “new water main in 2013 at a cost of $13k to WSC”.
Elsewhere, EY highlighted communication showing government officials intervening in the day-to-day operations of the corporation in questionable ways.
In one case, Mr Davis instructed officials to pay $3.5k to Wellington Brown of Ocean Development International Contractors.
In an interview with EY, Mr Deal said: “Mr Brown was sent to WSC by DPM Davis to be given any work that was available.
“Mr Deal further said that the quality of Mr Brown’s work was not up to par but WSC felt that they had to continue to engage Mr Brown due to DPM Davis’ requests.”
In another instance, EY highlighted an email from WSC’s Deputy Chair, Audley Hanna, who said in an email to former Prime Minister Perry Christie and Mr Davis that they needed to “deal with these FNM cronies in Water & Sewerage.” Mr Hanna was the contractor involved in the controversial Bahamas Agricultural & Marine Science Institute dorm that burned down after he failed to secure insurance for the building.
In another instance, EY highlighted former WSC Chairman Leslie Miller mentioning the then upcoming election in his rationale for awarding a contract to Island Site Development (ISD) despite objections from the Caribbean Development Bank (CDB).
The matter concerned a construction project to improve water supply infrastructure in South Andros, EY said.
The project was sought under the loan programme the WSC has with the bank.
In August 11, 2016, CDB wrote a letter objecting to ISD receiving the contract, saying it did not satisfy qualification requirements.
The bank recommended that the contract go instead to the lowest evaluated bidder that satisfied qualification criteria.
However, in a subsequent letter, Mr Miller said: “Please be advised that the government of The Bahamas is completely satisfied with the works done by ISD and their financial viability. Therefore, we are not in agreement with your decision to reverse awarding the contract to them and hereby request the ‘no objection’ to the award of the contract to ISD be given as directed by the board. As you might be aware, this is the election season in The Bahamas and we are seeking to ensure that the economic pie is shared among all deserving contractors and in this case, it is ISD.”
The CDB subsequently responded with a “no objection” to the contract being awarded to ISD.
In another instance of interference, EY highlighted an email from former Progressive Liberal Party (PLP) and WSC Chairman Bradley Roberts in 2012 in which he advised WSC’s management team to stop disconnecting the services of people in Abaco because “there (was) a bye-election currently underway” in that constituency.