A distraction that fell flatWhat really rides on the WSC audit?
Chairman of the Water and Sewerage Corporation (WSC) Adrian Gibson made an astonishing statement while tabling an Ernst & Young (EY) audit of the corporation in the House of Assembly a week ago.
If his statement is accurate, then he ought to have announced at the same time a shakeup of the senior management of WSC.
Gibson said: “The Water and Sewerage Corporation is a harrowing tale, a case study, Mr. Speaker, of mismanagement, gross negligence, malfeasance, corrupt and/or questionable practices, failure to observe and adhere to established protocols, errant and maverick conduct on the part of senior management, complicity, conflict of interest and dereliction of duty.
“One can even go as far as to say some executives have displayed a pattern of dismissive and belligerent behavior, in respect to consecutive boards.”
How could Water and Sewerage move forward with its executives after such a damning statement? The audit points to egregious management of the corporation while Philip Brave Davis, the now opposition leader, was minister responsible for WSC.
Davis has said he is preparing a response. While he answered some initial questions we had about operations at the corporation under his watch, there are more questions to answer.
However, the timing of the tabling of the audit — which the government had a month before revealing it to the public — may have taken away from its impact.
At a time when many Bahamians are looking to the government to answer big questions about a questionable oil refinery deal for Grand Bahama, the audit has turned out to be an interesting aside, as opposed to what Gibson and others in government no doubt wanted it to be — another bombshell on the “corrupt” Progressive Liberal Party.
Gibson’s statement in Parliament that accompanied the audit was a dramatic performance; it was his big moment as chairman.
If the government was hoping the audit would change the national conversation about the controversial Oban deal, it was mistaken, however.
The fact of the matter is telling the Bahamian people about PLP mismanagement of our resources, or making corruption claims or findings, is no longer much of a revelation.
The people voted the PLP out because they believed the party to be corrupt — or certain of its members; they believed that it was mishandling the public purse.
The Minnis administration has continued to re-litigate what the Christie administration did or failed to do.
We’ve seen that play out during the mid-year budget debate that is ongoing in the House of Assembly.
The corruption theme is something the government falls back on often, particularly in light of challenges over its own plans to move The Bahamas forward.
The Water and Sewerage audit was brought to Parliament as the government continued to underscore PLP corruption.
A week before the audit was tabled in Parliament, Prime Minister Dr. Hubert Minnis pointed to “massive corruption” on the part of the PLP.
He did not specifically point to dealings at the Water and Sewerage Corporation, but — as Davis was protesting the characterization of the PLP as corrupt — Minnis advised him that he should stay quiet as the audit was about to be released the following week and he was named in the audit.
The audit highlights alleged abuses while Davis served as minister.
While we believe there are certain aspects of the audit that reflect poorly on Davis as the former minister responsible, the questions in our minds are whether anything rides on these findings, and how much did all of this cost taxpayers?
We were told that the auditors reviewed over 108 pieces of evidence on laptops and tablets, conducted forensic imaging of WSC’s server, collected some 48,600 gigabytes of data and reviewed 50,000 documents in preparation of the report.
Among the irregularities discovered by EY was a $9.6 million contract awarded to Nassau Island Development (NID) for a wastewater treatment plant off Gladstone Road for Baha Mar.
The project was titled the Gladstone Road Waste Water Treatment Plant (GRWWTP).
NID was awarded the contract in May 2013. Auditors discovered that four firms sent bids for the contract, ranging from $31.3 million to $7.4 million.
“The second lowest bid was for $15.1 million, more than double that of NID’s low of $7.4 million,” the audit said.
The audit noted that the project had a completion date of March 2014 but as of the publishing of the report (February 2018), the contractor “abandoned the project”, and “there has not been any progress on the project since September 2016”.
The project ballooned from $9.6 million to $18.3 million, a budget overrun of 91 percent, the audit noted.
Merlene Poitier, a secretary in Davis’ law firm, Davis & Co., holds one share in that company. The other 4,999 shares are held by Anthony L. Ferguson. We still do not know how Davis’ law firm’s secretary came to hold one share.
The company was not registered at his law firm; had it been, there would have been even more questions. When he spoke to us after the audit was tabled, Davis claimed he did not know his secretary had any connection to the company.
“That was something new to me,” he said.
“I spoke with her last night, and she indicated that she was a nominee shareholder in the company.”
We attempted to reach Ferguson to respond to the audit, but had no luck.
Davis told us that the contract in question was a “troubled contract”.
According to the audit, the board of WSC, as well as senior management, recommended on several occasions that the contract with NID be terminated.
Asked why it never was, given that he viewed it as a troubled contract, Davis said, “There are a number of factors that went into it. I will need to refresh my memory on all those factors before I respond to that.”
Gibson told Parliament, “The report demonstrates repeated instances where good sense efforts were overruled.”
He announced that the audit has been turned over to the police.
We wait to see whether anything comes out of any of this, or whether this was an exercise intended to further embarrass the Progressive Liberal Party and its leader.
The Water and Sewerage audit was among the audits the Minnis administration promised upon assuming power.
It said it was important to analyze what it met so it better knows how to proceed in ensuring that its ministries and agencies adhere to the highest standards of management and performance.
Now that we have seen the findings — most of which we have not reported in National Review — we await reporting on how those findings have contributed to new and improved standards at the Water and Sewerage Corporation.
Will anyone be held accountable for the gross malfeasance and corrupt practices Gibson said have been uncovered at the corporation?
And while they are in the business of being transparent and reporting what transpired under the Christie administration, we also expect a full reporting on how much this audit and others are costing taxpayers.