Op-Ed

Betrayal of trust

“A nation can survive its fools, and even the ambitious. But it cannot survive treason from within. An enemy at the gates is less formidable, for he is known and carries his banner openly. But the traitor moves amongst those within the gate freely, his sly whispers rustling through all the alleys, heard in the very halls of government itself.” – Marcus Tullius Cicero

In the two months since they won a landslide victory at the polls, the Progressive Liberal Party (PLP) government has revealed some of the jaw-dropping decisions taken by the former Free National Movement (FNM) government.

Several weeks ago, the public finally learned some of the details of the sweetheart deal that the Minnis administration negotiated and signed regarding the long-term lease of the Town Centre Mall for the new post office. The lease terms were never disclosed during the FNM’s term in office, surreptitiously suppressed from the public like a national state secret.

This week, Bahamians finally learned about the appallingly one-sided agreement that the FNM government signed with Royal Caribbean Cruise Lines (RCCL) regarding the latter’s Paradise Island Crown land lease. Again, the government secreted the terms of that agreement from public sight.

Both transactions beg the critical question of whether the Minnis administration acted in the country’s best interest.

Therefore, this week will Consider This … did these decisions by the Minnis administration represent a betrayal of trust that Bahamians placed in them?

The convoluted RCCL-Paradise Island deal

Many observers now understand why the Minnis administration suppressed the terms of the RCCL-Paradise Island lease agreement.

This week, we learned that Dr. Minnis signed the agreement with RCCL on May 25, 2021 for Crown Land on Paradise Island for RCCL’s Beach Club project. The agreement entitled RCCL to an inordinately long-term lease that could last 150 years. The lease grants the giant cruise line an initial period of 25 years, along with a 25-year renewal option, plus “no less than four additional options, each for a further 25 years.” Therefore, the total lease period granted was 150 years. But it gets worse.

The agreement provides for RCCL to pay the government an annual rental payment of $140,000. Over the initial 25-year lease term, the Treasury will earn a total of $3.5 million in rental income plus a further $350,000 based on VAT at 10 percent. The revenue to the government of $3.85 million every 25 years pales compared to the estimated $26 million that RCCL expects to earn in annual visitor spending from this venture. Assuming that RCCL’s estimates are correct, in the first 25 years, RCCL will generate $650 million compared to $3.85 million that it will pay to the government. But it gets even worse.

The Minnis administration agreed to this potential 150-year lease even though three of the seven Crown land acres involved are the subject of an ongoing Supreme Court battle between the government and Bahamian entrepreneur Toby Smith. Mr. Smith contends that the land was leased to him by an agreement dated January 2020 and is part of a lease he obtained from The Bahamas government before RCCL in May 2020. Therefore, Mr. Smith’s lease was agreed more than a year before former Prime Minister Minnis signed off on RCCL’s deal.

Remember now — this was a prime minister who often professed that he would always put Bahamians first over foreigners.

This Crown Land is surrounded by much confusion over which version of eight different site plans drawn up for RCCL’s project was the correct one. One senior Bahamas government official confirmed the confusion when he queried: “Since we have so many versions of the plan of the location, my question is: ‘Which of the plans is final and approved?’ The final/approved plan is not on the related file at the Department [of Lands & Surveys].” Therefore, there is considerable confusion about which of the site plans are correct for RCCL’s proposed project.

In the final analysis, this is a tremendously terrible, incredibly insulting, and extraordinarily obscene deal for the Bahamian people. In the first 25 years of the lease, assuming that RCCL’s projections are correct, the giant cruise line company will earn 168 times more than The Bahamas government.

Now we are also learning that RCCL has another agreement for three acres of seabed off Paradise Island at an annual rental fee of $3,000– which is $1,000 per acre per annum. Even our underwater property was offered at a bargain-basement price.

It is also interesting to note that RCCL was part of a group negotiating with the Minnis government to take the Grand Lucayan Resort off their hands, as well as with Hutchison Whampoa to redevelop the cruise port in Grand Bahama. It is a well-known fact that the Grand Lucayan was draining Bahamian taxpayers’ money and that the Minnis administration wanted to urgently conclude a deal for its sale. Perhaps there should be a closer examination of the possibility of a nexus between the hurried, and very, very attractive, deal with RCCL for Paradise Island and the Grand Lucayan transaction to ascertain whether the best interests of the Bahamian people were upheld.

We leave it to right-thinking Bahamians to determine whether, in the exercise of his judgment, former Prime Minister Minnis’ actions in this episode constituted a betrayal of trust.

Town Centre Mall Post Office

Another highly questionable decision by the Minnis administration was the exercise of judgment in the lease regarding the Town Centre Mall for the post office.

Recent revelations by the newly elected PLP government have disclosed that the FNM administration entered into a lease agreement with the owners of the Town Centre Mall, including a former FNM Cabinet Minister and then member of Parliament, regarding what was to become the government-owned and managed post office in that facility.

Despite repeated requests by the opposition PLP, the Bahamian people were never informed about the details of the lease terms during the Minnis government’s time in office. We have now learned that the annual lease payment for this facility is approximately $840,000.

To add insult to injury, the lease was written in such a manner to make it financially untenable for the government to terminate the agreement without incurring incredible expense. Hence, the Bahamian people were again saddled with a cleverly crafted contract that costs Bahamians dearly, without an acceptably palatable exit arrangement.

Again, we leave it to right-thinking Bahamians to determine whether, in the exercise of his judgment, former Prime Minister Minnis’ actions in this episode constituted a betrayal of trust.

Unwise decisions

In both instances, the RCCL Crown land deal on Paradise Island and the Towne Centre Mall post office fiasco, the FNM government made unwise decisions regarding the exercise of its authority. Neither of these decisions has benefitted The Bahamas and both have adversely affected us with lost revenue in the RCCL case and excessive expense with the Towne Centre debacle.

How many other inept decisions were taken by this government during its time in office? Only time will tell. Of two things, we can be sure. First, other revelations will most certainly come to light about the former administration’s ineptitude, misuse, and abuse of its office and power. Secondly, we will most certainly learn about the enormous financial burden with which the former administration has saddled the Bahamian people for many years to come.

Only time will expose the full scope and extent of the FNM’s ineptitude and incompetence while in office, and the resulting long-term damage their ill-conceived decisions will do to the future of our nation and its security.

What recourse is there?

Bahamians should justifiably ask: what, if any, recourse is there to address these travesties? What can be done to either correct these bad decisions or avoid them from being repeated? There are several things to consider.

First, any government that takes office, saddled with poorly negotiated agreements, such as the two described above, could seek to renegotiate, and reverse the terms of bad contracts.

Secondly, if the other contracting party is intransigent, the incoming government should stop, review, and cancel such agreements once taking office.

Third, the government could petition our courts to overturn these bad decisions in the national interest.

We are delighted that the current government’s chief spokesman has indicated that the 150-year lease with RCCL will not be allowed to stand. And it should not. No government should tie the hands of successive administrations regarding poorly crafted deals.

Fourth, incumbent administrations should be prohibited by law from entering into substantial agreements within an acceptable timeframe before a general election. Such a prohibition would discourage them from rushing to conclude politically motivated agreements that violate or offend the public trust before a general election.

This could be best achieved by establishing a fixed date for general elections. If a government was prevented from executing “substantial” contracts and agreements, where acceptable contracted amounts would be defined in and limited by law, any agreement executed after the prescribed date could be legally voided following a general election.

Such a law would also have to stipulate that canceled contracts would attach no legal liability to the government for voiding them. Investors, local and foreign, would be placed on notice that if they enter into such agreements, they should be fully aware that, if they are executed outside the prescribed date, they do so at the risk of the agreements being terminated by a new government.

Conclusion

Politicians must realize that they have a tremendous responsibility to inspire public trust. They should also recognize that public trust is extremely fragile and is virtually impossible to restore once shattered.

We have experienced the revolving door of regime changes over the past 20 years because the electorate often believes that those in whom they have placed their trust have betrayed them. And, as the two examples we cited above demonstrate, that belief often proves valid. The best way to reverse the revolving door of constant regime changes is for our leaders to recognize the considerable price they will pay for their betrayal of trust.

When examining these egregious betrayals of trust, one may wish to keep in mind that “treason” is defined as “the crime of betraying a nation or a sovereign by acts considered dangerous to security.” Also worth noting, the key elements that are necessary for an offense to constitute treason are: an obligation of allegiance to the legal order, and intent and action to violate that obligation.

Sadly, judging from the shocking revelations that have surfaced so far, these definitions might prove instructive to a candid discussion of the past administration regarding its betrayal of public trust.

• Philip C. Galanis is the managing partner of HLB Galanis and Co., Chartered Accountants, Forensic & Litigation Support Services. He served 15 years in Parliament. Please send your comments to pgalanis@gmail.com.

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