EXCLUSIVE by GARETH FINIGHAN
of Mid Ocean News Bermuda
ALLEGATIONS that Bermuda Housing Corporation funds were used to part-pay for the
construction of Premier Ewart Brown's private home have been backed up by fresh
financial papers, including bank statements and copies of cheques, leaked to the
The documents reveal that the BHC made a $400,000 payment to Bermuda Composite
Construction (BCC)- the firm hired to build Dr. Brown's $1.5-million luxury
mansion in 2000 after the Premier refused to pay for any cost overruns on his
new home. The final cost of the project was $1.9 million.
The BHC funds were used to pay off vendors and sub-contractors owed money
following the completion of Dr. Brown's house.
BCC bank statements reveal that the company, which was part-owned and managed by
Progressive Labour Party candidate Zane DeSilva, was only paid around $1.5
million by the Premier the cost of the original contract for his residence
on AP Owen Road ¿ even though the cost of construction rose by an additional
$422,000 due to overruns.
The documents also reveal that BCC was expecting to show a $434,000 overrun on a
BHC contract it had secured at Southside to convert 20 buildings on the US base
into homes. According to former BHC general manager Raymonde Dill, the reason
for the overrun was because expenses incurred through the construction of the
Premier's residence were tacked onto the BHC contract.
Mr. Dill made the allegations during an August 2002 interview with detectives
investigating widespread corruption at the Government-funded quango, which is
believed to have cost taxpayers around $8 million through inflated payments to
BCC was incorporated in May 2000 by Mr. DeSilva and former PLP MP Arthur
Pitcher, along with business partners Kevin Bean-Walls and Leon Williams.
Within weeks of setting up, the new firm had secured two major contracts which
it ran simultaneously ¿- the $4 million BHC project at Southside and the
construction of Dr. Brown's home in Smith's, which was originally priced at
around $1.45 million.
Work on the Premier's property began in the summer of 2000 and the Southside
project got under way in November of that year.
Bank statements for the company show that by the end of 2000, BHC had paid the
contractor around $380,000. By the end of 2001, that figure had risen to more
than $2.5 million.
The statements also show that BCC suffered severe cashflow problems and was
almost permanently overdrawn to the tune of hundreds of thousands of dollars and
soon ran into financial difficulties. Early in 2001 it arranged a $500,000
overdraft with the Bank of Bermuda, borrowed against the Southside project.
According to BCC documents, the company carried out a financial overview. in
December 2001 shortly after work on Dr. Brown's house had been completed. The
overview noted that, although the Brown contract was complete, BCC was still
owed $422,470 for work on the property. This included "additional works"
totalling $332,470, plus $30,000 to install a security system and an estimated
$60,000 for any future work.
The overview also shows that BCC was anticipating making an overrun of $434,000
on the Southside project, which was due to be completed early in 2002. Although
it expected to be paid a further $1.5 million by BHC, other debts meant that the
profit margin was slashed. The company, in fact, received a further $1.7 million
from BHC throughout 2002, with a final cheque for $229,000 being presented in
October of that year once the Southside project was completed.
However, the company remained overdrawn by several hundred thousand dollars and
Dr. Brown repeatedly refused to pay the outstanding $422,470 that BCC claimed he
owed through cost overruns on his project which BCC then tacked onto the
In October 2002 ¿ nearly a year after work on the property had finished ¿ the
Premier told The Royal Gazette he had been overcharged by $200,000 and there
were also "major quality issues" with the work. Bank statements reveal that the
Premier did subsequently pay BCC another $50,000 in November 2002.
The bank statements show that there was no futher activity on the account for
almost another year and the company had effectively ceased operating,despite
being overdrawn by more than $200,000 and faced with creditor bills totalling
But in the autumn of 2003, BCC made three deposits into its account totalling
$422,000 ¿ the same value that it claimed it was owed by Dr. Brown. BHC paid the
company $200,000 in October and made another payment for the same amount a few
weeks later. Another construction company made a payment of $22,000 at the same
A flurry of cheques, written out by Mr. DeSilva and made payable to a number of
BCC creditors was then paid out from the account throughout the course of
November and December, effectively clearing the account. The company went out of
business shortly afterwards.
As reported by the Mid-Ocean News in June, detectives investigating the BHC
scandal interviewed former BHC general manager Raymonde Dill in August 2002. A
summary of the interview was later drawn up by Det. Insp. Robin Sherwood, and
was included in the dossier on the inquiry leaked to the Mid-Ocean News.
It is not known whether detectives were able to review BCC's bank statements
during the course of their inquiry. But in one internal memorandum, Det. Insp.
Sherwood said that "monies were mixed from the BHC Southside project and the new
house for Dr. Brown at 21 AP Owen Road".
"Documents seized to date seem to support this ¿ it is unclear if Dr. Brown has
direct knowledge of this but what is clear is the house was built and paid for
under Fair Market Value," Det. Insp. Sherwood added.
"BCC was due to commence work on the Southside project and a separate contract
at 29 AP Owen Road. The second contract was with Dr. Ewart Brown ¿ Minister for
Transport. Both projects were using the unique building methods and were to run
simultaneously. However, due to planning delays at Planning, the Southside
project was delayed, however the work at 29 AP Owen Road commenced.
"Dill was initially reluctant to award such a large job to a relatively
inexperienced team. He was in fact initially happy with Zane DeSilva joining the
team as he felt he had previous experience with large projects through his other
"Dill states that he found it disturbing that both properties and contracts were
being built by the same company.
"There was ill-feeling between partners in BCC ¿ Pitcher and DeSilva versus
Williams and Bean-Walls. Although BCC had not legally split, Williams and
Bean-Walls moved away and formed a new company, Hibiscus Construction.
"There continued to be problems with the Southside project. It became apparent
that Zane DeSilva was heavily involved ¿ Coloron Management Ltd. and Delta
Developers, both underlying companies belonging to Zane DeSilva, became involved
in site management at Southside, thereby increasing his overall involvement and
payments with the project.
"The Southside project began to have cash flow problems and Zane DeSilva
attended the office of the BHC GM [Raymonde Dill]. He was looking for $800,000
to solve the problems. These problems involved the 29 AP Owen Road as well as
the Southside project.
"Dill referred to the documents which relate to the financial overview of BCC as
of 14 December 2001. He indicates that the outstanding costs for 29 AP Owen Road
¿ some $422K ¿ was 'buried' in the Southside project, resulting in that project
being $430K overdrawn."
"Minister (Nelson) Bascome telephoned Dill after he (Dill) had refused to pay
any further monies to DeSilva and BCC. A meeting was set up at BHC.
"Minister Bascome telephoned and changed the meeting from the BHC offices to his
Ministerial office. When Dill arrived, he found Zane DeSilva and the Minister
present. The meeting concerned the cash flow problems of BCC. Dill was told or
persuaded to release $300K, which was part of the 'hold back' on the Southside
project. (The release of the hold back and the awarding of the Hard/Soft
landscape appear to meet the cash flow problem of the $800K).
"The hard and soft landscaping for the Southside project (value of approximately
$350K) was between Derosa Excavation and Island Construction. Dill, in his
capacity as General Manager of BHC, had made the decision to award the contract
to Derosa Construction and he had made this fact known to Zane DeSilva. Minister
Bascome instructed that the contract be awarded to Island Construction, of which
Zane DeSilva is the principal shareholder.
"Zane DeSilva would often go directly to Minister Bascome and bypass the correct
route through BHC. If there was a delay in cutting a check, Dill would receive a
call from Minister Bascome instructing payment to be made to DeSilva."
The allegations presented to detectives were partly corroborated in interviews
with Mr. DeSilva's business partner Kevin Bean-Walls.
When asked about the reported $400,000 shortfall at BCC, Mr. Bean-Walls replied:
"I know of the $400,000 and the $30,000 security system at AP Owen Road but I do
not know how that came about because I did not have privy to BCC books."
According to a police summary of those interviews, the part-owner of BCC told
officers that, "when BCC ran into trouble at Southside, Zane DeSilva saw a
clause in the contract that he thought could get R. Dill BHC to pay for houses".
The summary went on: "He [DeSilva] wanted Williams and Bean-Walls to say that
the contract was amended to say that owners will supply fixtures, windows,
plumbing, electrical and fitting, but contract did not say this.
"Was pressured by Ewart Brown, Renee Webb, Nelson Bascome . . . to let Pitcher
and DeSilva do the Southside project.
"At one point during dispute with DeSilva 'I am head nigger in charge of
Bermuda. F**k Raymonde Dill, I will take care of Raymonde Dill'."
Calls by the Mid-Ocean News to the Bermuda Housing Corporation were not returned
by press time last night. http://www.theroyalgazette.com/siftology.royalgazette/Article/article.jsp?sectionId7&articleId}7c39130030185
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