Open Mike: Bermuda Housing Trust

Another chance to talk about a topic of your choice.

First comment sets the subject for debate. If you ask a question, be sure to give your own thoughts too, even if it's in a subsequent comment.

Update: Tiger Bay asks "Should Bermuda Housing Trust publish its financial statements and submit to an audit?"

Comments

[Tiger Bay on 31.08.05 at 08:17]

Should Bermuda Housing Trust publish its financial statements and submit to an audit?

Affordable housing is a major issue in Bermuda: Gov is throwing large sums into stopgap measures like manfactured wooden houses with little real planning, the Southside housing has been handled clumsily, and recent Housing Trust recent rent increases seem draconian.

Bermuda Housing Trust is either a charity or a government agency - it certainly is Government controlled through its board of apporintees. Both types of organisations must make filings of their financial position. In the name of transparency, the Trust must do so. They have no credibility and are not to be considered trustworthy otherwise. What's the big secret?

[Better Change on 31.08.05 at 08:46]

The trust is private therefore does not have to reveal its financial status.

[Cancundreaming on 31.08.05 at 08:58]

It seems like the BHT has received a legal opinion and are sticking to their guns. On the face of it, they seem to be in the right, legally speaking.

I'm all for accountability, and the concept of an auditor, but i don't think he can audit an organization merely because he feels he can or should be able too. He has to work within the confines of the law. If the law doesn't give him the authority to audit the BHT, either purposefully, or if it's merely a loophole, either way, too bad.

[on 31.08.05 at 09:00]

While it could be argued that given its status as a trust the BHT may very well be afforded certain protections from disclosure of information, however, because its operates in the public domain, solicits funds from public and private sources and is a charitable organisation should it not have an obligation to provide financial statements (whether audited or prepared by management) to its donors?

[Tiger Bay on 31.08.05 at 09:00]

Ah yes, the old "unethical but not illegal" loophole. Seems familiar.

[Cancundreaming on 31.08.05 at 09:08]

"Both types of organizations must make filings of their financial position. In the name of transparency, the Trust must do so."

Well this seems like your opinion. Your opinion doesn't matter any more so then my opinion. I can kinda see where this discussion will go.... "They should do this, and/or that" But at the end of the day all that matters is if the BHT is following the law.

If you don't like the law, or think it's a bad law, then you petition the Government of the day to change it. But you can't expect any organization to follow imaginary laws.

Question to someone in the know... Has the BHT ever submitted their financial records to the government auditor? If they haven't it would seem to strengthen their position.

[Cancundreaming on 31.08.05 at 09:15]

Tiger Bay,

"Ah yes, the old "unethical but not illegal" loophole. Seems familiar"",

I don't want to over post or whatever, but i just wanted to say you absolutely off the mark.

No one's claiming, well i guess you are, but very few people are claiming that not submitting their records to the government auditor is inherently unethically. Especially since the BHT has stated they've been audited be one of the big four firms for the last 12 years.

There are very few situations where following the law is unethically, this is certainly not one of them.

[Pitts Bay on 31.08.05 at 09:42]

I am not sure of the status of the BHT. It appears to be charitable, but I am not sure where its funding comes from. If they "solicit funds from the public" then they are required to be registered under the Charities Act, and accordingly file accounts. If they do not solicit funds from the public, then there is no need to file with the Registrar General.

Do they receive public funds from the Government? If so, then they should be accountable. It should be a condition attached to any donation of public funds to a private entity that they disclose their financial information (which should be made public, since they are OUR funds after all).

As an aside, if they are not a Registered Charity (and they do not appear on the 2005 List), and gifts are received in BD$, I doubt that the relevent stamp duty is paid, or that specific applications are made for exemption - I stand to be corrected on this one.

[Big Bad Wolf ^..^ on 31.08.05 at 09:49]

I think all quangoes annual reports are tabled in the House.The public scrutiny is confined to Mps either doing their elected jobs or tossing the report onto the stack infront of them. If tax payers money is involved in funding quangoes then full accountability should logically follow concerning how those funds are spent or used. A line entry of a gross dispersement in the annual Government budget just won't cut it either!

[jake on 31.08.05 at 09:54]

There is nothin unethical in their stance. I understand it to be simply that they do not want to become another political football. The reality is that they are already locked into a political battle as the UBP seek to win another empty point.

The members of that committee are honest people seeking an honest solution, but not the type to be bullied by Barritt. He would have done better to seek to help, rather than begin by calling the increases draconian, Are they? To my knowledge many of the increases still leave the rents far below market value, and within the reach of the residents. Where that is not the case we should seek workable solutions.

That said, I would support the publication of the existing audits. I would hate to see more good names trashed by the witch hunt that has become the UBP and the swift unethical moniker.

Unless you have data to show something unethical Tiger, you should withdraw that statement.

[Craig on 31.08.05 at 10:17]

I tend to agree with Jake on this one - I would support the publication of the audits though I'm not sure of the legalities involved. From the way the Auditor General's comments were reported - there seems to be a grey area here.

I also don't like the trend that seems to make everything a political football. If there is nothing to hide (and no-one outside the BHT can really say at this point), why resist publication?

[slick on 31.08.05 at 10:23]

With all of the "ethical but not illegal" shenanigans that have gone on with Government related organizations such as the BHC, the only conclusion that you can reach by the trust's unwillingness to make its financials public, is that this is yet another financial black hole. This is a trust essentially formed to assist the people of Bermuda and whose trustees are apponted by Government. Clearly it is a government related organization. I suppose the trustees can legally hide behind the veil of the trust but it doesn't make the PLP look good. Governments that seem intent on hiding information that legitimately should be public inevitably trip up. The PLP seems intent on discrediting itself at an ever increasing rate. I'm not a lawyer but it would be interesting to see the trust deed and who is listed as beneficiaries of the trust. If Barritt goes ahead with his lawsuit, it could be very interesting.

By the way Jake, to hide behind the defence that the UBP is playing politics on this issue is pretty lame. Of course they are playing politics, they're a political party!! The PLP only has itself to blame that this has become larger than life political issue. They have done nothing for the past 7 years with housing and have allowed this issue to become a crisis. Be honest Jake, at the root of this problem is major PLP incompetence.

[Cancundreaming on 31.08.05 at 10:44]

slick,

It would be nice if we discuss an issue without someone slamming on the brakes and leading the topic into a UBP vs PLP argument, or a UBP and/or PLP rant. I mean we've only done that 150 million times already.

Pitts Bay,

From my understanding of what I’ve read in the RG, the BHT does not need to be registered under the Charities Act because it us registered under its own act. That negates the need and requirement that the BHT registers itself under the CA. Their arguments goes on the say that no where in the laws outlining the auditors’ responsibilities and duties does it require or allow the auditor to audit the BHT.

"Do they receive public funds from the Government? If so, then they should be accountable"

I believe they do receive funding from the government. I think you're throwing the word accountable out there because it sounds nice, but I don't think that's exactly the issue.

I believe there is a direct line to the people of Bermuda. BHT -> Board of Directors -> Cabinet Minister -> Cabinet -> MPs of Bermuda -> People of Bermuda. (not sure if I got that right)

Your issue is whether the auditor should be placed within this sphere of accountability. That's a valid argument, but one that you need to take up with the government of the day, you can't blame the BHT for not following rules that don't exist.

[Tiger Bay on 31.08.05 at 10:49]

I am not sure I would count Alex Scott as having a direct line to the people of Bermuda! The Housing Trust situation is yet another example where a "public service" is being isolated from public accountability.

Again, what's the big secret?

[on 31.08.05 at 10:52]

Cancun,
So its ok for your friend jake to suggest that the reason why the BHT accounts are being kept from the public is because the UBP are making a political issue out of this matter but it not ok for me to suggest that the PLP have made a political mess of this issue and only have themselves to blame.

Give me a break.

[Tiger Bay on 31.08.05 at 11:11]

The Housing Trust situation is borne of the "unethical but not illegal" attitude of the PLP Government.

Splitting hairs to avoid taking a firm stand for the right thing. Buying time in the hope the public will forget and move on.

The talk about transparency and public access to information is only talk; time after time Government resists all efforts to shed light on the workings of our public services. At best this obscures poor leardership and undermines accountability. At worst it leads to situations like Ewart Brown's alleged pay-to-play activities and BHC's weak contracting.

Government positions the Auditor as their enemy, when in fact he's the citizens' best friend.

[jake on 31.08.05 at 11:34]

I have no problem with your comments involving the PLP, slick. This is a political issue BECAUSE the UBP made it one. I am happy to debate the merits of the two parties as well. Again.

I do have problem with you and Tiger casting a negative light over people who are volunteering their time to sit on one of these boards, where you cannot even allege any wrongdoing.

For the record, I agree that the records should be published as a matter of good policy, but I object to putting people on trial with allegations of unethical behaviour where there is nothing to suggest as much.

It is highly improper of you to do so. They are not part of the BHC, they simply have a similar name.

It is as if I said every company with the name Bermuda in it is probably linked. Obviously they are not, and therefore have no obligation to lift any veil of suspicion on them - none exists, except in your conspiratorial mind.

The very real problem with your approach to these issues is that good people with good reputations will not want to come forward to serve in any capacity because of the inevitable mud people will carelessly sling. Where, as in the pension debacle, there are clear questions needing to be asked, it is fair. Here, where there is no prima facie case to answer, it is not.

For the legal trust question, trusts can have charitable purposes, as opposed to named beneficiaries, so there may be none to rally.

The way to resolve this is to present the logical case for presentation: to market the good job being done; to highlight the real challenges in balancing the objectives of the trust with the economic realities of the market; and to bring closure to a political storm in a tea cup.

Legal action is not warranted here and would be a waste of money. If we all want to use some money to win political points, let's donate the money toward fixing up the houses up there and fight over who takes the credit.

[Tiger Bay on 31.08.05 at 11:49]

Hi Jake: I hope my comment above clarified my position. I am not calling BHT unethical. I do contend that their refusal to submit to independent review (ie an audit) is misguided and creates an atmosphere where inefficient operations and corruption can occur. They are a public service. If Government believes in "public access to information" why won't they provide it? What's the big secret?

[jake on 31.08.05 at 12:05]

Thank you, I think that does clarify your position.

I would clarify that they are audited by a big three auditor, and have been for 12 years with no problems.

I think the issue is sharing the audits with the public or the Auditor General.

I think that is a fair request.

It angers me to no end that we have a Premier who refuses to have allegations in the pensions investigated, as they are calling into question all the work being done by good people.

I introduce you again to the two sides of the PLP. BHT is not on the bad side, and not withstanding my disappointment with Paula Cox's position, neither is she. She is being politically strategic in leaving it for the Premier to resolve, so let's hope it ushers in his departure and Browns pretentions to the crown with him.

Oh Elizabeth, where is Walsingham when you need him?

[Pitts Bay on 31.08.05 at 12:32]

Cancundreaming

The BHT Act is not a private act, but a Public Act. - Bit different

However, unless there was a specific provision of the Act exempting them from compyling with the Charities Act, then my view is that they have no choice. I note however that the BHT Act provides that they shall have the power, "to raise money for the Trust by means of fetes, bazaars, appeals, balls, concerts, and similar fund raising schemes". Just because they have the power, does not mean they are exempt from the Charities Act. They are however, at Section 10, exempt from tax of any kind, including stamp duty.

The Charities Act at Section 7(1) says:

No person or body of persons, except for a charitable organisation registered under Section 4 shall (a) solicit members of the public for; or (b) receive from any member of the public in any public place, a donation for any charitable or for any professed purpose which is otherwise benevolent." It further provides that anyone who contravenes this commits an offence (6 mths or $2000 or both).

The BHT Act provides that "The Trust shall keep proper accounts relating to the finances of the Trust and its activities which accounts shall be audited to the satisfaction of the Governor"

The Auditor General is appointed by the Governor.

While there may be some changes to interpretations about whom must be satisfied (there may be a provision that the minister must be satisfied now instead of the Governor), assuming that it is the Governor who must be satisfied as to the audit, it is surely within his remit to have the Auditor General review these audited statements for him.

Anyone else have further thoughts on this?

[jake on 31.08.05 at 13:12]

I am not sure that a reporting relationship to the Governor means that the Auditor General has the right to demand the audit. If the Trust submits its audits to Government House then the requirement is satisfied. I can only see a problem if the Governor maintains that a Big 3 Audit is not to his satisfaction - a very difficult position to adopt seeing as though the same big 3 Audits meet the test for Insurance regulations and every other audit requirement.

I wonder of the Governor would even want to fight that position - if he has the audits and they are fine, what is his motivation?

On the issue of cost, it makes sense to use the Auditor General since he is free, but I would be concerned that he is less than objective at this point having demanded the audit in the press. Very strange position for someone meant to be independent.

As they are guided by their own Act, it is hard to see how the Charities Act applies to them. Does it fill in the blanks where their own act is silent? That may be stretching it a bit. If the framers wanted provisions in there, they could have put them in there. They have the rules they have.

Again, is it worth the money to fight about it or can we just build some houses here?

[Adjustah on 31.08.05 at 13:13]

Jake,

Forget Walsingham, I think we're stuck with Melchett and Baldrick.

[SmokingGun on 31.08.05 at 13:25]

"It angers me to no end that we have a Premier who refuses to have allegations in the pensions investigated, as they are calling into question all the work being done by good people." Posted by Jake.

And that pretty much sums it up for why most people have little confidence in our current government Jake. It really is a shame that given an opportunity to show transparency and good faith our Premier literally undermines everyone else's good efforts. Maybe it is just a matter of "unethical but not illegal", if so fine, take one on the chin. Unfortunately as it stands it begs the question, is there something more to it and is it something that needs to stay hidden?

[Bermudian in Limeyland on 31.08.05 at 13:42]

Having an audit of the accounts will not answer many of the questions that are being sought unless you believe that the accounts that are prepared by the Trust are actually wrong. The inherent act of auditing the accounts will not change the situation for those who now face greater rents.

What people actually want is for the accounts to be made public? Having the accounts audited will serve to ensure that any published accounts are a true and fair representation of the trust, but they will not rectify or alter the underlying business of the trust.

As a charity or public trust of any description I think that the case for the accounts being the public interest is very strong.

It is also worth noting that given the Auditor General's limitations in auditing the various government departments effectively, exactly what miracles is Mr. Barritt hoping that the audit of the Trust will achieve.

[Big Bad Wolf ^..^ on 31.08.05 at 14:25]

I think by all the arguments in this thread.Open financial reporting would take care of all the uncertainty.

[slick on 31.08.05 at 14:34]

Ah Jake my friend, you dodge the question of the PLP's complete and utter failure to deal with the housing issue. You lawyers and your legal niceties!! Their lack of action on this issue is a complete disaster. It is time for you to accept that fact. Or maybe you think they have done a good job?

The BHC is doing a charitable public job, the trustees are appointed by Government and yet the whole operation is completely shrouded in secrecy (except for the rent increases).

The trustees may be a completely honourable crew. Who knows? They wont give us enough information to make a valid judgement. In fact I don't even know who the trustees are except for one of them. Maybe you can give us more information? All I know is that they are part of a crew that has brought us the BHC scandal, Coco Beach Hotel, pay-to-play and the Berkeley Institute fiasco. My mum always said be careful of the company that you keep. With no other information we can only judge them by the company that they are keeping. If they want to preserve their reputation then they should open up not hide behind legal juggling.

[slick on 31.08.05 at 14:37]

Q: Why does any public charitable body refuse to provide financial information on their operation?

A: Duh, because they have something to hide!!

[Cancundreaming on 31.08.05 at 14:44]

Q: Why does slick not recognize the BHC is not the BHT.

A: He's not so much looking to engage him or herself in the discussion as he/she is looking for an opportunity to be a bit snotty. Duh!

[slick on 31.08.05 at 15:05]

Cancun,
Come again!! Interesting use of double negatives. Oh you think that I believe that the BHC and BHT are one and the same! BHC of course is a QUANGO created by the Government to build low income housing but laterly became a way for certain individuals to rip off Bermuda in an unethical but not illegal way.

The BHT, I believe was created by the late Roddy Ferguson as a private initiative to build low income housing for individuals on fixed incomes. He raised funds from the private sector but also used funds from the Bermuda Foundation, a charitable trust set up by I believe the Vallis family. As Mr. Ferguson aged and could no longer handle the trust , he unfortunately transferred the control of it to the Bermuda Government who slipped it under the purview of the BHC. So the BHT and BHC are related.

Nah I don't know the difference between the two!!

[Pitts Bay on 31.08.05 at 15:27]

"Should Bermuda Housing Trust publish its financial statements and submit to an audit?"

At the end of the day, if we disregard any particular legal interpretations, and stick to TB's question, then if public funds support the BHT, then there should be published audited financials. However, as Bermudian in Limeyland (and others) have pointed out, having sight of the audited financials will not change anything or reveal the workings of the BHT. That is just numbers.

The financials are currently audited. The issue is simply whether they should be public. If there is public funding, then yes, they should be. That is different than whether they are required to be as a matter of law.

[jake on 31.08.05 at 15:41]

Slick,

I would engage you, but what would be the point? I have made my position clear, issue by issue. If the best you can do is say that they are guilty by implication, then there really is nothing to debate.

For the record, they are audited by reputable auditors and are trying to discharge their duty. If there is a dispute it is over the economic course of action they are taking. They can in no way be castigated for any Government capital project. To suggest such demonostrates your lack of objectivity and insight.

But hey, throwing mud at innocent people with no basis is ok for you. Or is it...unethical?

[Tiger Bay on 31.08.05 at 15:45]

or merely badly chosen etiquette?

[Pitts Bay on 31.08.05 at 15:57]

Slick

The BHT Act is not a private act, it is a public act, so I doubt it was established by Roddy personally. He may well have been instrumental in the governance etc, but as it is a public act of the legislature, it is closer to the concept of a Quango than you may think.

The initial funding of 500 pounds came out of the public treasury, not Roddy's pocket. There may well have been funding from Private sources, but I am not aware of that.

[Uncle Elvis on 31.08.05 at 21:43]

First off, the question _I'M_ asking isn't "should they or shouldn't they", it's:
"Why AREN'T they?"

As for the double negative thing, it's not. The negatives are referring to two different things. Two different verbs. "Can" and "are". Double negatives are when two point to the same verb or a negative points to a verb which points to a noun, as in "I ain't got nobody" or "That guy ain't not got nothing." Which is a triple negative... which makes my mind go a little bit wonky.

Wow, I explained that badly. Sorry about that. Hope SOME of it came across *grin*

[PRman on 01.09.05 at 00:16]

here it is again...

Quote-----------------------
........".The very real problem with your approach to these issues is that good people with good reputations will not want to come forward to serve in any capacity because of the inevitable mud people will carelessly sling. "
--------------------------

Let me say that good people with good reputations dont mind being held accountable, and especially when they are serving the public interest, which is what they are doing with this government funded trust. If they want anonimity, or dont want tobe in the public eye then they should not be sitting on such a trust.

Nothing breeds lack of trust in any relationship more than one party not knowing whats going on
in the other. It might be bad news, and it often is, thats the challenge of trying to make things work. So lets hear the bad news, and then get on with it, hopefuly we will see the good news and the success of developing some affordable housing for those that are in such terrible need.

So trustees, fulfill your responsibilities serving the public interest and publish your accounts. We can only presume the worst if you dont.

As an individual that actively sits on a public/private funded board I highly recommend it.

[slick on 01.09.05 at 15:02]

Lat's summarize what we have learnt:

1. BHT was created by a public act of parliament;

2. It was initially funded with GBP500 by the Bermuda Government;

3. The trust originally operated independently of Government but later was handed over to them.

4. As a result, trustees are now appointed by the Government.

5. The day-to-day operation of the BHT was handed over to the BHC.(those people who brought us the $800,000 paint job)

6. The accounts of the trust are audited.

7. The auditors do not provide opinions on value for money but only that the accounts have integrity and approvals have followed generally accepted accounting principles.

7. The trustees by all accounts are honourable individuals but for some strange reason are unwilling to release the accounts to the public.

Sounds to me like Larry Dennis and John Barritt have a pretty strong case. As the saying goes, "if it looks like a duck and quacks like a duck then it must be a duck." But this is the new Bermuda where logic does not always hold sway.

[jake on 01.09.05 at 16:05]

You are not stupid slick.

The reason they don't want to reveal the accounts is because they are unwilling to participate in yet another useless political exercise.

I may disagree with the decision, but I understand it completely.

PR Man, numerous people avoid public service because of unwarranted attacks in the press. Everything is a conspiracy for many of the people on this post. Until we learn to be more discriminating in our approach to criticism, we will continue to have mediocre people serving us. That refers to both parties.

[SmokingGun on 01.09.05 at 16:45]

Jake, as the saying goes, "it's often easier to beg forgiveness than to ask permission." Our leaders seem to be doing neither. It would enhance their credibilty to have a policy of openess and should anyone wish to see where their tax money is going then just show them. An added benefit is it might piss off their detractors as well if they've got a semi-decent plan in place that can be verified.

[PRman on 01.09.05 at 19:14]

The reason they don't want to reveal the accounts is because they are unwilling to participate in yet another useless political exercise.

hardly useless my friend. If you understand the concept of accountability, then it all makes perfect sense.

Perhaps we need a freedom of information act that would aply to Government departments, funded projects, and affiliated government funded events.

Have a look at the canadian headdlines of the last two years as it refers to innapropriate government spending. ie (ad scandal).

there's a lesson for business and government on being accountable and open to the public.

[Shree Cents on 18.10.05 at 07:51]

This has only become a topic since MP. John Barritt anf the U.B.P. made it a political issue after the Trust attempted to raise it's rents for the first time since even before the P.L.P. Government was formed in 1998. The Trust has contuined to maintain a number of units being rented at an average of approximately $350 a month for at least 7-8 years despite rapidly escalating building and maintenance costs. It has has already been estabilished that

1.The Trust is audited every year by one of the "Big Three" frims.

2.The Trust has made it clear that anyone geniuenly interested in assisting them financially can review all their financial statements - which are current by the way. Why should they open their books to a bunch of political mischief makers.

3. Larry Dennis or no one else has ever requested to see their books in the past. The Trust has built Ferguson Park since 1998 and the cost and detail of the project have already been the subject of questions from the opposition in the House of Assembly. Where was the Auditor and all the interest in the Trust and it's financial position pre the P.L.P. Government?

4. The trust is now preparing to build another 100 units for seniors on property donated to them by BLDC at Rockaway. It is my understanding that most of the funds are already in place thanks to a number of investors who have looked at their books and have been sastified enough to assit them with the project.

5. No Slick the BHC and BHT are not one in the same. The BHT does not receive public funding and the BHC is paid by the Trust to manage their growing number of properties that had become to much for the Trust, made up of dedicated volunteers to handle. By the way when the P.L.P. government took over many of the properties were in dire need of maintenence.

In closing I have to agree with Jake slinging mud at the innocent people who make up the trust serves no one. Maybe if all of those with opinions got together and offered to help the Trust.....maybe paint a building or something as oppose to slinging mud we would all be better off.