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Striping Group: Lease Report A 'Professional Assassination'

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamas Striping Group affiliate yesterday blasted its "professional assassination" over three apartment rental deals with the Ministry of Finance, insisting it did give "value for money".

Atillio Holdings, which chose not to comment when approached by Tribune Business last week, issued a lengthy statement yesterday in which it described itself as "shocked" and suggested it was being made "a scapegoat" for the Ministry of Finance's own internal failings when it came to procurement and payment procedures.

Calling on the Ministry of Finance to "quickly remedy the weaknesses" identified in the report by FTI Consulting, the Bahamian auditing and advisory firm, to prevent other private vendors suffering similar "public embarrassment", Atillio demanded that several sections be retracted to prevent further damage to its corporate name.

In particular, it said it was "perplexed" and "beyond bewildered" that the FTI Consulting report suggested it may have been acting as an unregistered leasing agent/broker - in violation of Bahamian real estate laws - when the Ministry of Finance knew that it owned the three apartments in question some five months before the document's completion.

Atillio released a March 13-14 e-mail exchange between itself, its attorneys, Davis & Company, and acting financial secretary, Marlon Johnson, dealing with differences over outstanding real property tax owed on the three apartments, as proof the Ministry of Finance knew it owned them.

Questioning why this was not passed on to FTI Consultants, which said it was unable to confirm the apartments' ownership, Atillio suggested there may have been ulterior motives behind the report's release through its tabling in the House of Assembly last week.

This theory was also advanced by Michael Halkitis, former minister of state for finance in the last Christie administration, who suggested in a statement on Friday that the report's release - and that of a probe into a $1.46m computer contract awarded by the Ministry - was designed to justify the Government's decision to remove former financial secretary, Simon Wilson.

"In my view, the timing of the release of these findings has less to do with wrongdoing and more to do with an upcoming legal matter between the Government of The Bahamas and one of the individuals and Mr Wilson," Mr Halkitis said.

He added that the computer contract report showed political pressure/influence did not result in its award to a company controlled by Island Game chief executive, Pete Deveaux, even though FTI Consulting confirmed the deal had its origins in a meeting three months' prior that was attended by the web shop boss, Mr Wilson and an unidentified person described as an "elected official" who held ministerial rank in the Christie administration.

Atillio, meanwhile, queried why FTI Consulting, which was working on behalf of the Auditor General's Office to assess the Ministry of Finance's procurement processes and contract awards, failed to interview its executives or request information from itself.

It added that its incorporation as part of Bahamas Striping's diversification strategy, just one month prior to entering into the lease deals with the Ministry of Finance for three Cable Beach-based apartments, was "not unusual".

FTI Consulting, which compared the rental rates offered by Atillio with those for similar properties in the same complexes, Vista Bella and Westward Villas, said the former's appeared to be between 57 percent to 200 percent above market rate, raising questions of "preferential treatment" and "substandard value for money".

Atillio, which said the units were assessed by the Ministry of Finance prior to the lease executions, added that it had agreed to pay all utility costs for the apartments while charging the Ministry of Finance no service fee for doing so. It also agreed to take on responsibility for cleaning the units during the departure/arrival of new consultants.

"We maintain we provided value for money," the Bahamas Striping affiliate argued. "When one considers these facts, it is grossly unfair to make the comparison to a standard online listing while knowingly ignoring all the relating factors that impacts the value proposition. Conversely, it begs the question as to why these facts were not included in the report.

"[Bahamas Striping] does not engage in price gouging, and to make such assertions is not only reckless, but defamatory and egregious. It behooves us that such misleading propositions are being directly and subtly purported without Bahamas being afforded the professional courtesy of dialogue regarding the leases in question.

"This is simply malevolent, and raises the question as to the intent of this report. Without objectivity and clarification of the facts, it is tantamount to professional assassination."

Questioning why it had seemingly been "targeted", Atillio said it had provided the Government with documentary evidence that it owned the three apartments, purchased with help from a Royal Bank of Canada (RBC) mortgage, in the form of conveyances and real property tax payment receipts.

It released an e-mail exchange where Dr Allen Albury, Bahamas Striping's managing director, asked Philip McKenzie, attorney and partner at Davis & Company, to investigate a call from Marlon Johnson, acting financial secretary, who had advised that a total $28,500 in real property tax remained outstanding on the three units.

Mr Albury said a $23,000 payment for Westward Villas "unit five" had cleared a week previously, while the other monies owed were the responsibility of the vendor who sold Atillio the three apartments.

Robert Coakley, a Davis & Co attorney, confirmed that following day that he had obtained the correct sums outstanding from the Department of Inland Revenue (DIR), and that steps were being taken to settle what was owed. He added that the Government has included real property tax set to be levied later in the year in its calculations, producing an inflated figure.

"In summary, we are perplexed [that] having worked with the Ministry of Finance staff, including the acting financial secretary, to ensure transparency after this government took office, and having met all the requirements of the Ministry of Finance under this agreement, why we would be targeted in such a manner," Atillio said.

"When one considers that the Department of Inland Revenue falls under the Ministry of Finance, it is beyond bewildering that the report questions Atillio's ownership of these properties; a fact that can be easily proven by the Ministry whose report so speaks.... To reiterate, if the Ministry of Finance knew Atillio owned the apartments from March 2018, why would the question of ownership arise in an August 2018 report?

"Given the report's flaws, defamatory, reckless and egregious assertions, we are requesting these statements be retracted considering the potential damage to our name, brand and reputation, which we will protect at all cost. We are shocked by the auditor's findings and seek to clear our good name."

Bahamas Striping was founded by Atario Mitchell in 2010 with a $5,000 "self-starter" grant from the Government. He, though, owns just 20 percent of Atillio with the 80 percent majority controlled by Dominic Sturrup, the group's executive vice-president and head of business development.

The group has been an enthusiastic participant in bidding on road, airport and parking lot paving contracts, many of which have been issued by the Government, and has taken a key interest in the Government's formulation of a public-private partnership (PPP) policy.

Bahamas Striping yesterday described the "most noteworthy element" of FTI Consulting's report as the "light it has shed on the lack of developed standards and guidelines which exist in the Ministry of Finance's own procurement policies and procedures, particularly as it relates to leasing agreements".

It added: "We strongly urge the Ministry of Finance to take responsibility for its own institutional failures; what the auditor's report refers to as 'gaps and weaknesses in the procurement policies and procedures'. We will not be made the scapegoat for the root of the problem as identified by its own audit

"External vendors are not to blame for internal problems. Vendors can change but the problems will persist unless the Ministry moves quickly to remedy the weaknesses identified in the auditor's report so as not to leave private companies acting in good faith, and its own hardworking employees, exposed to public embarrassment."

Comments

birdiestrachan 3 weeks ago

The Bahamian story is when Black Folks have money they stole.it . when white folks have money they earned it and they deserve it. I disagree.

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BahamaPundit 2 weeks, 6 days ago

Re: Birdie Sad thing is it often turns out to be true. Wish it wasn't.

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Porcupine 2 weeks, 6 days ago

And we wonder why we can't move forward in this country? Honestly!

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