By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A furious legal battle has erupted over a Bahamian payment provider’s $3.473m damages claim for “unlawful political and/or improper patronage” interference that led to the online boating fees portal’s closure.

Omni Financial Group and its two affiliates have teamed with Peter Maury, the Association of Bahamas Marinas (ABM) president, to launch a “breach of contract” and defamation claim against the Government over the alleged “irreparable damage” suffered from Ministry of Finance assertions that fees collected from foreign boaters via the SeaZPass portal were not being paid to the Public Treasury as required.

Harvey Morris, director and principal shareholder of Omni and its affiliates, Transfer Solutions Providers and Omni FlashCash, said in a November 28, 2024, affidavit that the accounting firm hired to examine the fees collected by the payment provider on the Government’s behalf had confirmed no monies were missing and it had found “reconciling items” to explain the final $43,664 difference.

Pointing out that Omni’s own records showed it had collected $4.493m in gross foreign yacht charter and cruising permit fees during the portal’s near two-year existence, he argued that Deloitte & Touche’s findings effectively refuted previous assertions by Simon Wilson, the Ministry of Finance’s financial secretary, that sums ranging from $1m to as high as $5m had not been passed to the Government.

Arguing that Mr Wilson’s comments “have negatively impacted Omni’s ability to function as a going entity, and have caused injury to long-standing relationships, some of which date back 15 years”, Mr Morris and the payment provider also claimed that the ten-year agreement with the Ministry of Finance to provide the boating fee collection portal “remains in effect to-date” because the Government never properly terminated it (see other article on Page 1B).

The $3.473m damages claim covers the $3.35m costs incurred by Omni in developing the portal, plus the $122,500 in commission income due to it under the contract’s first two years. However, legal documents seen by Tribune Business show that, had the ten-year deal run its course, some $58m from cruising permit and the 4 percent yacht charter fees was forecast to be collected, with total commissions standing at $1.908m.

However, the Government defendants, named as the minister of finance, then-minister of transport and housing and the Attorney General, are vehemently denying the Omni and ABM allegations and on November 28, 2024, launched their own counter-claim for “breach of contract”.

The Government is asserting that Omni and the ABM failed to live up to their pledge “to reinvest 10 percent of what they collected for the improvement of navigational aids, infrastructure and training”. And, as the second element of its ‘breach of contract’ counter, it is also arguing that the duo “failed to satisfy the conditions as agreed” for remitting the $4.494m that SeaZPass collected on the Port Department’s behalf.

Besides claiming that reporting on what SeaZPass was collecting was “sporadic”, the Government alleged that despite repeated requests Omni and the ABM never gave it “access to the back end or the end process of the online solution”. 

As a result, the Port Department never interacted directly with the foreign boaters applying for, and paying, the 4 percent charter fee and the cruising permits. This, the Government is arguing, made it difficult to match fee payments to the relevant application, which resulted in delays to permit issuance.

“Due to the sporadic timeline in receiving financial data, the [Port] Department was unable to process applications in a timely manner and to provide licences to applicants promptly,” the Government is alleging. “The submission of financial data was not supported with the relevant applications. As a result, this created an additional issue with the reconciliation of funds and certainty in relation to the nature of some funds.

“Further, there was a significant number of cases for refund of fees submitted on the SeaZPass website. Investigation into these matters was lengthy due to the total reliance on the third party, Omni and the ABM, to report the customer’s complaint.”

The Government is also slamming Omni and the ABM’s allegations of defamation as “unfounded and baseless”, while making similar allegations of its own against Mr Maury, who is acting in his capacity as ABM trustee in the lawsuit. It added that it will produce these purported defamatory statements should the case ever make it to trial. 

The legal battle, though, with its claims of “political” and “patronage” reasons for why the Ministry of Finance demanded on October 7, 2022, that SeaZPass be shut down has broken out at a particularly sensitive time for the Government given that it is grappling with the fall-out from the US indictment accusing 11 Bahamians - including three law enforcement officers - of participating in a drug trafficking and corruption conspiracy.

And it also places the spotlight back on two contract awards, the subject of previous political controversy, which were intended to replace the portal offered by Omni and the ABM. Valued at a collective $6.75m, these are the contracts awarded to DigieSoft Technologies to develop an alternative boating fee portal plus the bid won by Adolpha Maritime Group for the nationwide provision of maritime navigational aids.

Omni, in its statement of claim, alleged that the public attacks against it “were part of a deliberate and malicious plot to injure the claimants while publicly obfuscating the unlawful political and/or improper and unlawful patronage involving the Government of The Bahamas and the recipient of the fruits of its illegal breach of contract”.

While providing no evidence or assertions to back its claims, Omni nevertheless pledged that “the truth of the said impropriety will be revealed in the discovery process” leading up to a Supreme Court trial. Numerous questions were previously raised over why the Government was committing millions of taxpayer dollars to fund the DigieSoft contract when Omni and the ABM had already provided a solution at no upfront cost.

Meanwhile, Mr Morris and Omni asserted that Deloitte & Touche’s investigation has confirmed that there was no justification for Mr Wilson and the Ministry of Finance to, on October 7, 2024, demand that they “disable the SeaZPass portal on the basis that there were outstanding funds due to the Government”.

The SeaZPass portal had been in operation for almost two years up to that point, having launched in December 2020, and Mr Morris said the Ministry of Finance was unable to produce a statement or specify how much money was outstanding when asked.

“Omni has never received a query for outstanding funds or an incorrect settlement amount from the Port Department or Ministry of Finance,” he added. “During the period of negotiations, our attempts to reach an amicable resolution with the Ministry of Finance were thwarted as the Ministry of Finance was unable or unwilling to provide any statements or details on the amounts paid in, save for the October 22, 2022, report.”

Reiterating that a gross $4.493m in cruising permit and yacht charter fees were collected via SeaZPass, which was less than the $5m maximum stated to be missing by Mr Wilson, the Omni chief asserted that “the full amount, less any fees and bank charges, has been repatriated to the Government”.

“There is an ongoing audit being conducted by Deloitte & Touche of the funds collected by SeaZPass,” Omni asserted in its claim. “Based on the results to-date, which covers 90 percent of the collections, there is a nominal difference of $43,664 or 1 percent which indicates an error on the DigiPay side.”

DigiPay is the Government’s own online public services payment portal, which SeaZPass was linked to for much of its existence. Omni’s own records showed it had collected a net $4.331m compared to DigiPay’s $4.287m.

Mr Morris drew on his latest September 2024 communication with Deloitte & Touche, in which the accounting firm said it had found “reconciling items” to explain the final $43,664 difference between Omni’s own records and the Government’s for what had been collected via SeaZPass.

In a September 18, 2024, e-mail to Grevie Neymour at Deloitte & Touche, he asked: “Can you please confirm that you have already identified which invoices that are missing from the DigiPay system as Omni has reported $43,664 higher than the Government.” The Omni chief also asked for confirmation that the Government had received the $4.214m in fees shown in the payment provider’s records.

Ms Neymour replied one week later on September 23, 2024, stating: “Yes, I can confirm that we, Deloitte, have identified reconciling items that would account for the difference of $43,664..... The Government of The Bahamas will respond to you directly advising of the total amount received with reference to SeaZPass.”

Omni and the ABM, denying that they had ever breached the SeaZPass contract, reiterated: “The amounts claimed to be outstanding were settled in the normal course of business. Prior to the actions of the Ministry of Finance and its representatives, Omni was a well-known brand in the financial services sector having been recognised locally as a pioneer in the provision of transfer services.

“During the preceding period, the Government of The Bahamas had turned to Omni on multiple occasions to develop and implement several unique banking solutions. The unwarranted cessation of Omni/ABM services has caused irreparable damage to Omni and the ABM’s brands. The announcements in the public domain..., which were untrue, have severely hampered Omni/ABM brands.”