By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The $2.3m paid to the son of ex-prime minister Perry Christie’s top policy adviser at the Baha Mar dispute’s peak “reeks of impropriety”, one of Sarkis Izmirlian’s former directors argued yesterday.

Dionisio D’Aguilar, who sat on the Board under Baha Mar’s original developer, told Tribune Business that “the first question everyone wants to know is what happened to this $2.3m” and whether the payments influenced how the then-Christie administration handled the battle between Mr Izmirlian and his former Chinese partners.

The $2.3m was paid by China Construction America (CCA), Baha Mar’s main contractor, in a series of installments to Notarc Management Group between December 2014 and January 2016. Notarc’s chief executive is Leslie Bethel, son of Sir Baltron Bethel, senior policy adviser to Mr Christie and among the then-government’s leading officials working on the Baha Mar dispute.

The payments were said to be in return for Notarc helping CCA to establish operations in Panama and Latin America, and to bid on construction projects in that region. When Tribune Business first revealed the details in November 2022, both Sir Baltron and his son denied any impropriety or that the monies influenced the former’s stance towards the dispute and his advice to the then-Government and its actions.

This position was repeated yesterday by Fred Mitchell, minister of foreign affairs and the PLP’s chairman, in a video message delivered from the Commonwealth Heads of Government meeting in Samoa where he argued there was “no evidence” of any corruption involving Bahamian officials relating to the Baha Mar dispute.

However, Judge Andrew Borrok, in a 74-page verdict unveiled by the New York State Supreme Court on Friday, ruled that CCA sought to “curry favour” with the Christie administration through the payments to Notarc as the “evidence establishes” they were designed to “gain access” to Sir Baltron and key government decision-makers. He also pointed to other documents showing a close relationship between the Bethels and CCA.

Mr D’Aguilar, noting that “you don’t often get judges to use the words ‘curry favour’”, said yesterday: “The evidence is that the Government ultimately sided with the party that breached the contract and ultimately stole Baha Mar through fraudulent means. That doesn’t reflect kindly on our government.

“Then you have the question ringing in Bahamian minds: Why did the Government side with the Chinese? The fact you had this $2.3m paid to the son of the Prime Minister’s closest adviser is troubling. It reeks of impropriety. The reason given for the payments was that in some way Mr [Leslie] Bethel was providing consulting advice to CCA on a project in Panama. That begs the question: What does he know about a project in Panama?”

Tribune Business understands that Leslie Bethel’s Notarc business partner, Dion Leslie Bowe, has extensive contacts in Panama and has been based in the Central American nation. This newspaper reported almost two years ago on findings that the $2.3m was paid “through” Mr Bowe, who is a Bahamian.

However, Mr D’Aguilar, who was minister of tourism and aviation under the former Minnis administration, reiterated: “The first question everybody wants to know is what happened to this $2.3m and did that in any way influence the outcome of the decision” by the Christie administration to side with CCA and Baha Mar’s financier, the China Export-Import Bank, against Mr Izmirlian.

Mr Mitchell, in his latest bid to downplay and dismiss the New York court’s verdict and its significance, echoed the CCA line by blaming Mr Izmirlian for the project’s failure and unsuccessful Chapter 11 bankruptcy protection bid, which was followed by receivership in The Bahamas and the Cable Beach mega resort’s eventual sale to current owner, Chow Tai Fook Enterprises (CTFE).

Describing the judgment as “a side story”, he added: “It is unfortunate we have an investor, having lost his investment largely out of his own hand, now seeking to ascribe blame to others.” Mr Mitchell asserted that Mr Izmirlian had twice defaulted on repayments to Baha Mar’s financiers - the first to Scotiabank, which funded the purchase of the Wyndham, Radisson and Crystal Palace casino, and then China Export-Import Bank.

Asserting that it was Mr Izmirlian himself who introduced the corruption allegations via his trial statements, Mr Mitchell said: “Then, lastly, all of the salacious stuff that came out of the developer’s statements that there was collusion with corrupt Bahamian officials, there is no evidence of that either.

“I want you to be very careful and sceptical about anything that arises from that quarter on this matter. Bottom line: The Bahamas government has no liabilities which arise out of this, and lastly the investment itself, Baha Mar, the hotels, are safe and functioning in the country.” Mr Mitchell is correct in that the New York ruling does not mean Mr Izmirlian can, or will ever, reclaim Baha Mar’s ownership.  

Sir Baltron earlier this week declined to comment on Judge Borrok’s ruling, and the findings involving himself and his son, when contacted by this newspaper. “The defendants actively worked to curry favour with the Bahamian government and behind the back of Baha Mar,” the New York judge ruled in reference to CCA, adding that this was another way it had breached its investors’ agreement with Mr Izmirlian.

“Through the end of 2014 to the beginning of 2016, the CSCEC Bahamas Board member had CCA Bahamas pay the consulting company, Notarc, belonging to Leslie Bethel, son of Sir Baltron Bethel, a senior advisor to the Bahamian Prime Minister, approximately $2.3m, purportedly for consulting services related to business opportunities in Panama,” Judge Borrok confirmed.

CSCEC is China State Construction and Engineering Corporation, CCA’s parent, which is also owned by the Beijing government. “The record evidence establishes, at the very least, that the defendants relied on their business relationship with Leslie Bethel to gain access to Sir Baltron Bethel and, by extension, the Bahamian government,” the judge concluded.

Judge Borrok also noted the relationship between Daniel Liu, CCA’s senior vice-president, and the Bethels. “For example, while CCA Bahamas was in negotiations with the Bahamian government over a Heads of Agreement in relation to the British Colonial development, Mr Liu forwarded an e-mail communication from Sir Baltron Bethel to his son, Leslie Bethel,” he wrote in his verdict.

“Mr Liu confirmed in his deposition testimony that he did so because he was ‘looking for help’ from Leslie Bethel, and wanted Leslie Bethel to speak with his father, Sir Baltron Bethel, about proposed edits made by Sir Baltron Bethel to the Heads of Agreement.

“Leslie Bethel reassured Mr Liu that ‘Sir B is one of CCA’s biggest supporters’ and promised to provide further help with the defendants’ interactions with the Bahamian government. Mr Liu reciprocated the sentiment, saying: ‘I am sure about Sir Baltron and yourself as our best friend’.”

Sir Baltron, in November 2022, said he had acted “with complete integrity and objectivity” on the Government’s behalf in helping to resolve the Baha Mar controversy, and there was no connection or interaction between himself and Notarc “at that time”. Leslie Bethel, meanwhile, asserted that claims of anything untoward over the $2.4m payments were “political mischief”, and that they were “unrelated” to anything to do with Baha Mar.

Vehemently denying that the Notarc payments represented any form of financial impropriety, undue influence or conflict of interest, Sir Baltron said: “I dealt simply with the facts [on Baha Mar] and certainly was not aware of any dealings with Notarc. I had no interaction with Notarc at that time. I don’t see the connection at all. I certainly did everything [involving Baha Mar] with complete integrity and objectivity in that matter.”

Leslie Bethel added: “You have clearly articulated what the commercial relationship was or is or had been with CCA. It was for services unrelated to Baha Mar; it was for services related to activities we remain engaged in down in Latin America.

“The agreement between Notarc, our Latin American division and CCA was for commercial matters unrelated to Baha Mar. It’s that simple. There’s nothing further to comment on. The Baha Mar situation is much larger than any one of us as entities or individuals.

“We pride ourselves in doing professional work. We have been in business for many decades, and will continue to engage in sound business and continue to invest in business activity across the region as we have been doing.”

Details of the payments to Notarc were revealed in a report commissioned by Mr Izmirlian, and his BML Properties vehicle, to back their allegation that CCA “misused” $54m provided to “accelerate” construction work at Baha Mar to completion.

The report by Paul Pocalyko, a certified financial forensics and fraud examiner with the HKA advisory firm, reveals the Notarc payments were made between December 2014 and January 2016. This was a 14-month period that covered the growing dispute between Mr Izmirlian and CCA that resulted in Baha Mar’s missed March 27, 2015, construction completion deadline, the subsequent Chapter 11 filing and court battle, and the original developer’s ouster.

“On September 9, 2014, CCA Bahamas entered into a Memorandum of Understanding with Notarc Management Group S. A. with the stated purpose of Notarc providing bidding opportunities throughout South America, Central America, Panama and The Bahamas,” Mr Pocalyko wrote.

“Despite the purpose stated in the document, defendants (CCA executives) maintain that Notarc did not provide services to CCA Bahamas in connection with the project, but rather was engaged solely by a separate CCA affiliate, CCA Panama, to assist in operations in Panama and Latin America.

“However, between December 2014 and January 2016, CCA Bahamas (not CCA Panama) made approximately $2.4m in payments to Notarc, and during the December 2014 through April 2015 period alone CCA Bahamas paid approximately $612,000 to Notarc. It is therefore my opinion that CCA Bahamas’ financial activities are indistinguishable from, and interchangeable with, CCA’s financial activities.”

The report broke down the $2.4m in to every single payment made by CCA Bahamas to Notarc over that 14-month period. They ranged in size from $7,164 to as high as $685,030, the latter of which was paid on October 30, 2015.

Notarc’s website describes the company as “a global advisory, investment and management consulting firm headquartered in The Americas, with worldwide offices and subsidiaries in The Bahamas, US, Panama, UK, Europe and the Middle East”.