The impact of the revelation that a foreign company bribed a member of the board of the Bahamas Electricity Corporation (BEC) over a decade ago goes far beyond bad publicity for our country.
While this matter raises fundamental issues with respect to our nation's reputation and the way we do business, the impact is much greater on the ground.
As BEC customers, we have paid hand over fist, sacrificed to keep the lights on and made hard decisions about whether we could afford luxuries outside of exorbitant power bills for years.
Bahamians have propped up a failing BEC as successive governments have promised belief, but have yet to deliver.
Now we learn that a French company bribed an unnamed "BEC board member" to supply us with what former Minister of Public Works Bradley Roberts has said was a subpar product that drained millions of dollars from the struggling corporation.
On December 22, the U.S. Department of Justice reported that French power company Alstom SA had agreed to pay $772 million to resolve allegations that it bribed high-ranking foreign government officials for lucrative projects.
Federal prosecutors said Alstom falsified its records and paid tens of millions of dollars in bribes for help in obtaining more than $4 billion in projects in countries including Indonesia, Saudi Arabia, Egypt and The Bahamas.
The revelation comes as horrible news for Bahamian consumers who are pained by the rising cost of living.
It coincides with the rollout of value-added tax (VAT). It reminds us that bad decisions and reported corruption have left us in a dreaded position.
What worries us even more is that we fear the reported bribe taker may get off scot-free, and we will never know the extent of corruption that might have surrounded the deal in question.
We have many examples of promised probes and inquiries that have gone nowhere.
Most recently, promised probes into the National Insurance Board, the Public Hospitals Authority, the Bahamas Telecommunications Company sale, and even the letter of intent signing by former Parliamentary Secretary Renward Wells in July 2014 have all led to one thing: Nothing.
Admittedly, the allegations of corruption in the award of a contract to Alstom SA (also known at the time as ADD) have very serious implications that go beyond our borders.
Thus far, this matter has been driven by outside influences that will be watching how it is dealt with. It is an issue that comes out of the U.S. court and the U.S. authorities know the name of the so-called bribe taker.
Attorney General Allyson Maynard-Gibson has already formally requested information from American officials on the matter.
Prime Minister Perry Christie said the government expects to have answers soon and they will be made available to the public.
Layers
While the question on the minds of many people is who was bribed, there are multiple layers to this matter.
Another key question is why did the Cabinet of The Bahamas reject a decision of the board of BEC, headed at the time by J. Barrie Farrington, to award the generator contract in question to the Korean firm Hanjung.
This is not the first time this question has come up, although it is now of greater importance given the bombshell revelation in the plea agreement.
In a communication in the House of Assembly on May 14, 2003, then Minister of Public Works Bradley Roberts said that in October 2002, the board of directors of BEC concluded that based upon the evaluation of its consultants, there was little to separate the two contractors that were selected from the list of bidders, namely Alstom and Hanjung.
According to Roberts, following the request of board members as to the performance of the two contractors in other jurisdictions, the consultants advised that after four utilities were consulted in relation to Hanjung, it was discovered that there were no liquidated damages and the company had a record of good performance with no delays.
As it related to Alstom, it was discovered the "company has a record of unsatisfactory performance; there were liquidated damages and contract delays in Mauritius, Honduras, Peru, Freeport and Nassau."
Roberts told the House at the time: "The board of directors at its meeting held on November 13, 2000, gave its approval for the contract to be awarded to Hanjung.
"Subsequently, at a meeting of the board held on November 29, 2000, the board unanimously reconfirmed its original decision to award the contract for a DA-12 generator to Hanjung.
"At an extraordinary meeting of BEC's board on February 28, 2001, it was noted that subsequent to the meeting, directors and management were summoned to Cabinet at which meeting the selection of Hanjung was discussed.
"As a result of the discussions, and for reasons that were deemed to be in the best interest of the country, it was decided to award the contract to ABB/Alstom."
Roberts added, "Mr. Speaker, I am advised that two senior members of the board resigned as a result of the then administration's refusal to accept the recommendation of the board, which was unanimous that the contract be awarded to Hanjung.
"One of the board members, I'm advised, later reversed his position; the other did not."
It is already in the public domain that Vincent D'Aguilar resigned over the matter.
This is significant.
D'Aguilar was an electrical engineer and a former official at BEC with a clear understanding of matters connected to the award of that contract.
National Review understands that there were others on the board who also contemplated resigning.
This was confirmed by attorney Brian Moree, who was a board member.
"I think there were other members of the board who were considering doing the same thing (resigning)," he said on Friday.
"It was ultimately resolved on the basis that the shareholder of the corporation, which is the government, had the prerogative to make the decision and that is what happened to the best of my recollection."
Surprise
In 2003, Roberts said in the House, "The Bahamian people need to ascertain by some legal mechanism of inquiry as to the bona-fide reason why a decision was taken to purchase a DA-12 generator from the same supplier, after the turbulent, expensive and poor performance of the DA-11 generator, which caused much suffering for the people of New Providence and Paradise Island."
He added, "...the DA-12 generator is 10 months behind its commissioning date, resulting in additional fuel costs to the Bahamian taxpayers of $14 million."
Roberts said in 2003 he hoped his revelations on the Alstom matter had "finally put to rest the cause and effect of the power outages to date".
While our stomachs should turn at the allegation of a traitor in our midst who corruptly benefited by helping Alstom to swing the deal, we should also be sickened for other reasons.
The true cost of the $300,000 bribe is yet unknown.
Nearly 12 years after he blew the whistle on this matter, Roberts told National Review, "The major thing is not the bribe.
"The major thing is to let the public know how much those two generators caused the Bahamian people in pain and suffering when it (dealing with Alstom) could have been cut off with engine number 11, and gone to another manufacturer to limit the damage as the board had recommended."
To date, there are still questions over why the Cabinet rejected the board's decision.
Former Deputy Prime Minister Frank Watson told The Tribune the bids were sent to the Inter-American Development Bank (IDB) for an evaluation.
He said the bank was satisfied that Alstom should win the bid.
Speaking to National Review yesterday, Watson added, "The IDB evaluated the bid. They were not opposed to the action Cabinet was considering."
But he said it would not be appropriate for him to discuss Cabinet matters.
"It was a Cabinet decision," Watson said.
"If anyone could speak to the decision I would prefer it being the prime minister or the former prime minister."
But the only thing former Prime Minister Hubert Ingraham was prepared to say on the matter when we contacted him was that it should be turned over to police for a full investigation.
Watson noted that the plea agreement did not point to the alleged bribe taker being a member of the Cabinet, but a member of the board of BEC.
Pressed on why the Cabinet rejected the board's recommendation, he said, "I know what happened, but I don't know that I should speak to it.
"I don't think it had anything to do with anyone (in Cabinet) taking anything.
"I don't know anyone in Cabinet would have been involved in any collusion. I didn't see any evidence of it."
While Cabinet ministers are bound by Cabinet secrecy, there is a national imperative for an explanation on this particular issue.
Secret Cabinet papers would likely prove instrumental in piecing together the elements of this particular puzzle.
Watson said the Bahamas government could easily get the name of the person who was allegedly paid off.
Moree admitted that he was "surprised" to learn that a decision was made to reject the unanimous decision of the board.
"I think the important point from the board is to remember that the board fully, I think unanimously, voted in favor of awarding the contract to the South Korean company," he said.
"And then that decision of the board was not implemented and another decision was made. So I think from the point of view of the board, it was a little surprising at the time, but that is my recollection of what occurred."
The fact that the board voted unanimously and that decision was rejected by a higher power leaves confusion over the bribe taker being identified as a member of the BEC board.
Apart from Farrington, D'Aguilar and Moree, other board members were Philip Beneby, Loretta Butler-Turner, Sharon Brown, William McDonald and Wendy Warren.
There is no evidence to suggest that they have been anything but committed and professional in the roles they played.
As the public awaits answers on this whole affair, we also wait a full assessment of the true cost of the Alstom deal.
Click here to read more at The Nassau Guardian
