Was BVI Airways deal a Ponzi scheme?- Auditor General’s Report
Regarding the two aircraft to be purchased by BVI Airways, the Operator parties initially intended to use the Bae Avro RJ 85 aircraft configured for dual-class.
However, on page 18 No. 57 of the report, Auditor General Ms Sonia M. Webster noted that the Operator parties “opted to acquire two marginally larger Bae Avro RJ 100 jets (with the same seating configuration) from Tronosjet of Prince Edward Island, Canada. Both aircraft were slightly over two decades old and had recently been retired from Swiss Air’s fleet.”
Stop the runway expansion- Operator parties
When things were not going their way, including the Dr D. Orlando Smith Administration’s failure to produce a Letter of Credit, the Operator parties flooded Dr Smith with a stream of unsolicited proposals for additional public financial support and for “compensation for perceived losses”.
On page 27 No. 158 of the report, the Operator parties “alleged that the planned runway expansion served as a disincentive to their prospective investors and used this as a basis for seeking additional public financial assistance in February 2017 in the form of a loan guarantee for $10 million, and compensation for lost revenues. This was rejected by the Government.”
Email pressure from Operator parties
According to the report, pressure continued to be placed on former Premier Smith in the form of a plethora of emails.
The report shows on page 27 No. 163 who were the Operator parties that sought to pressure the Government into providing more public funding. They included:
“i. 25 April 2017 from Weisman – Providing that the Government covers our costs for the next 30 days we are prepared to work with you to find interim and long term solution.
ii. 8 May 2017 from Weisman – The Government should make a short term payment of $350,000 to us while loan (line of credit) details are being worked out;
iii. 15 May 2017 from Bradley – Now is a good time for the Government to buy a significant stake in the venture, offer belongers vouchers for the first year and postpone the airport expansion;
iv. 6 July 2017 from Bradley – We have a lender for $7.65 million and need the Government to guarantee. In the next 7 – 10 days either we find acceptable terms together and reach an agreement or we will be forced to lay off local staff and purse other options on the table. The balance will then be determined by the US legal system.
v. 5 September 2017 from Weisman – We are in discussions with several potential investors to provide capital. They have all requested various levels of support from the Government.
vi. 23 October 2017 from Bradley – There is one last lender/investor who is willing to fund us but it will require some form of guarantee from the BVI Government in order to proceed.”
How dare you ask for information???
After public pressure and no flights, no plane and no way forward, the Financial Secretary on May 17, 2017, wrote to the Operator parties requesting information about their companies.
“This drew a response that was defiant and accusatory with flagrant refusals to provide much of the information and unsubstantiated claims that other such information had already been provided,” according to page 29, No. 170 of the report.
Another red flag for the taxpayers appeared on page 30 No. 179 of the report where it stated: “Despite signing the addendum and receiving the full $7.2 million from the Government, the operator parties continued to complain about the Letter of Credit breach in correspondence throughout the venture in a manner that suggested that the Government was still in default.”
Up to 2017; however, the Operator parties did not show any evidence of their promised $6.M investment.
Editor’s Note: This is the fourth 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
Article 2: BVI Airways report: Was the VI Government scammed?
Article 3: Ex FS Neil M. Smith under fire; Conflict of interest role- BVI Airways Report
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24 Responses to “Was BVI Airways deal a Ponzi scheme?- Auditor General’s Report”
NEAL WHY DIDN'T YOU CALL THE POLICE. AND CALL YOUR AUDITOR AND INSPECTOR GENERALS? My young niece. Honestly, would have ran to her parents or me at the sign of the first email. Every red flag should have gone off Neal. I would not have given a damn if I lost my job as long as I knew I did the right thing and preserved my reputation and protected the country in the long run. This is like those hackers who take and hold your data hostage in exchange for
ridiculous amount in bitcoins. But worst....you knew the criminals and trusted them and they held the country hostage. If this doesn't tell my people in the BVI how your.leaders are viewed bu expats among you and how you dont matter I dont know what else will. This is why the penalty for both sides must be strong enough to send a message.
thank you
Dr. Smith. I am truly ashamed of u and how u ran the country. U will go down in history as the worst premeir. Marlon neef to put back the sewerage money too.