BVI Airways report: Was the VI Government scammed?
The question asked by many is, was the Virgin Islands (VI) Government scammed out of $7.2M in taxpayers' money?
Demand for a letter of credit
What was surprising to note, is that besides the taxpayers' cash investment of over $7M upfront, the Operator parties; Jerry D. Willoughby, Lester S. Hyman and the gang, demanded from Government a ‘letter of credit’.
In other words, taxpayers must put up the security for a 'letter of credit' from a bank so the Operator parties would have access to additional funds.
The Operator parties promised in the initial agreement with the then Dr D. Orlando Smith regime, to invest some $6M of their own funds into the BVI Airways deal, however, throughout the report, it does not show that they had invested a dime in the project.
Instead, the parties demanded of the Virgin Islands (VI) Government not only $7.2M, but a letter of credit secured by the Government for additional funds.
No letter of credit no deal- Operator parties
On page 9, Sec (iii), of the Auditor General Report, it stated: “the Operator parties may terminate immediately without prior notice, if the Government fails to provide a letter of credit… Where termination occurs, the Government will be responsible for and indemnify and hold the operator parties harmless for all reasonable cost and expenses in connection with the termination.”
The report further stated on page 9, Sec (ix) in the implementation provisions that, “BVI Airways to have sole discretion to determine flights schedules, airfares, aircraft selection, staffing and airport services including (without limitation) counter space, office space and check-in support.”
BVI Airways run things; Government second class
The agreement was so one-sided against the people of the VI, that on page 9, Sec (xiv), it stated: “the government to guarantee to BVI Airways an annual return on investment of at least 20%”.
That section went on to say in addition as per (xv), the VI Government was to, “abate Airport Authority fees charges or levies including landing fees, navigation charges, storages fees, fuel taxes and surcharges and make improvements to airport facilities and services.”
Nothing in it for taxpayers
What was another scam for VI taxpayers over the BVI Airways deal in the final Financing Provisions according to the Auditor General on page 10 No. 41 of the report, was that “the initial proposal for the Government to share in the profits was not included."
"Instead, the Government’s only return on the investment would be repayment of the guaranteed amount which was contingent on available funds after other provisions were satisfied,” the report noted.
Editor’s Note: This is the second of 5 articles breaking down the Auditor General’s Report on the Government‘s Financing of BVI Airways’ Direct Flights to Miami.
Article 1: A tale of corruption, deception, no regard for Cabinet decisions: BVI Airways Report
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37 Responses to “BVI Airways report: Was the VI Government scammed? ”
The VI governing structure is flawed. Supposedly there are three separate branches, ie, Legislative, Executive and Judicial. However, in all practicality, there are only two. The the Executive and Legislative branches are one; there is little to no daylight between both branches. Further, due to the flawed West Minister system some elected members lacking in experience are given responsibility for function(s) that they don’t know their a..s from a hole in the ground or pulled from fowl about, ie, finance, tourism, public works.........etc. Nonetheless, the flawed West Minister system needs
tweaking. Did the full Cabinet vote on this award? Or was a unilateral action taken by the MoF? Another flaw on appropriation pops to mind.
O&M budget authorized, the HOA should be engaged with any expenditures over a minimum dollar value, ie, $100K. This will require the HOA to meet more than an infrequently, ie, at least once a week. This will bring clarity, transparency, fiduciary responsibility, public engagement........etc.
G###### is a fraud. Needs investigated. Why no concerns for George Lloyd? Doesn’t care about us blacks. Only for self promotion on Twitter. Disgraceful. And his puppet Mick.