Statement Vincent Vanderpool Wallace Former Minister of Tourism & Aviation December 14, 2012

Response to Allegations of Contract Irregularities

A summary of a report of alleged irregularities pertaining to two contracts at the Ministry of Tourism & Aviation (MOTA), and the engagement of a chief marketing officer during my tenure as Minister were read in the House of Assembly by the current Minister of Tourism on Wednesday past.

Seven months ago the Ministry of Tourism was formally invited to interview and audit the accounts of the companies involved in these allegations. The summary report presented contained no input from the principals of the three companies in question nor was there any attempt to accept the invitation to audit their accounts. While I am grateful that the report was tabled finally after many long months, this approach to an investigation is grossly and inherently unfair.

According to the tabled summary of the report, there are four allegations involving the Minister with regard to these contracts. 1. Allegation: There was direct involvement by the Minister with the TMA, ICON and DSO 360 Agreements.

Essentially all contracts are brought to the Minister’s attention. This allegation accuses the Minister of doing his job. The Minister was involved in the review of more than fifty contracts during his tenure as has been the practice with all Ministers of Tourism before him. The Minister is fully authorized to sign any and all contracts related to tourism promotion. Were he not involved in these areas he would be accused of negligence.

It is clear that these three contracts were cherry picked to serve the purposes of individuals intent on creating a cloud of innuendo.

2.Allegation: There were irregularities with the review and approval of TMA and ICON agreements at the Ministry.

On the advice of a former director of the consulting firm Booz Allen, and in order to improve our tourism competitiveness during the Great Recession, her report recommended, among other strategies: The need to hire a Chief Marketing Officer; the need to utilize multiple specialty agencies to develop our marketing; the need to identify a company to provide an online booking solution for all hotels in The Bahamas; and the need to train and develop our staff to be more competitive in tourism marketing.

Those recommendations led to the identification and hiring of TMA and a Chief Marketing Officer in a contract signed by the then Permanent Secretary on July 31st. 2010 after a month long review.

Icon International is a subsidiary of a $14 billion publicly traded global marketing services company with such current and former clients as BMW, Subaru and Atlantis, and has been a vendor to the Ministry of Tourism for more than a decade. The firm was not selected by the Minister but through a formal bidding process which saved the Ministry $1.3 million in the first exercise!

3.Allegation: There was a relationship by the former Minister with related parties of TMA, Icon and DSO360.

I have been in the marketing and promotion of tourism business for 34 years before I became Minister of Tourism. It would be strange indeed if I had not made the acquaintance of stand outs in the industry.

The current Director General likewise knows leading persons in the industry. If “relationship” means that the vendor is known to the individual before an agreement is signed with them, then the Director General and many other senior executives of the Ministry of Tourism have relationships with many vendors whom they recommended to the then Permanent Secretary for the many, many more contracts she executed during my tenure as Minister.

4.There is potential litigation arising from the matter that should be addressed.

Two potential areas of litigation were referred in the tabled report. The first is the possibility of TMA suing the Ministry of Tourism for breach of contract. That is a matter for those two parties to resolve. I am accused of resisting the rescinding of the TMA contract. I questioned the rescission because it was based on the company’s structure. As there were many other contracts signed with neither the Minister nor the then Permanent Secretary ever knowing or meeting the principals of the companies nor knowing the structures of the companies involved – this request appeared dubious and selective.

The second potential area of litigation related to a $15 million contract with Icon. Both the then Permanent Secretary and the current Director General know that the contract was only an option, not an obligation, and with no penalty if not exercised. They both know that it arose to cover additional funds that they themselves requested for Our Lucaya. The terms of the contract were never exercised so there is no obligation and no penalty.

Conclusion:

These allegations which became politicized arose also out of a struggle within the Ministry of Tourism between those wishing to move The Bahamas into the new world of tourism promotion and those clinging to the past who sought to exercise rigid control of marketing often costing Bahamian taxpayers unnecessary millions. The important work of modernizing the marketing and promotion of our tourism product must continue in the best interest of Bahamians and our tourism product.