NIB Report - Former Chairman Gregory Moss

March 22, 2013 Mr.
Marco Rolle Permanent Secretary MINISTRY OF LABOUR AND NATIONAL INSURANCE Poinciana Hill Complex Meeting Street P.O. Box N-3915 Nassau, N.P., The Bahamas Dear Mr. Rolle, RE: TERMS OF FORENSIC ENGAGEMENT BETWEEN THE MINISTRY OF LABOUR AND NATIONAL INSURANCE (the Ministry) AND GRANT THORNTON (Affidavit Filed by Algernon M. Cargill dated November 27, 2012) At your request and in accordance with the terms of our engagement letter dated November 30, 2012, we have performed certain forensic procedures under your direction in order to investigate the contents of the Affidavit dated November 27, 2012, signed by Mr. Algernon M. Cargill and filed with the Supreme Court of The Commonwealth of The Bahamas, to determine if the allegations involving Mr. Gregory Moss are factual and supported by documentation. At the conclusion of our forensic engagement, we will produce a written investigation report, based on the relevant evidence. This forensic engagement was performed in accordance with the International Standard on Related Services applicable to agreed-upon procedures engagements and the terms of this engagement, and we have indicated so in this report. The procedures performed do not constitute either an audit or review made in accordance with International Standards on Auditing or International Standards on Review Engagements and consequently, no assurance has been expressed. The Ministry has been provided with our findings as a result of procedures performed in this Factual Finding Report.
PRIVATE & CONFIDENTIAL 5/6/2013 3:57 PM
1. AFFIDAVIT OF ALGERNON MARSHIEL CARGILL
ALLEGATION 1.1 - (i.) in Affidavit
The very first communication I received from Gregory Moss was a memorandum dated July 19, 2012, that included a revised Agenda for the Board of Directors meeting to be held on July 19, 2012. This memorandum included a resolution revoking the Spending Authority of any and all Directors and Executives of NIB, save and except in respect of payment of employees, utilities and other business expenses in the normal course of business of NIB. The Financial Controller expressed her concern in writing that this resolution in effect made management powerless in executing its day-to-day functions and prepared a response to this resolution where management
sought some relief and obtained approval to pay only emergency expenses up to $50,000 and certain other expenses for contracts already negotiated. The effect of this resolution is that management was in a state of bewilderment and confusion as there remains no clear direction as to the role of management and the role and authority of the Chairman of the Board of Directors. A copy of the said memorandum is now produced and shown to me to be exhibited hereto marked "AMC-13".
PROCEDURES PERFORMED
(See APPENDIX A - Specific Procedures)
KEY FINDING a) In any organization the Chief Executive Officer (CEO) reports to the Board of Directors, and the Chairman of The Board is the person who leads the Board of Directors (i.e. decision makers). Additionally, the Chairman is seen as a key figure in corporations, often being responsible for driving the long-range vision of the organization. In the case of NIB, the Director is in fact NIBs CEO and he should report to the Board of Directors. Grant Thornton believes however, that the NIB Act should be amended to clearly state the reporting lines regarding the Director, the Board of Directors and the Chairman.
Additionally, the Chairman can therefore REVISE the agenda for a Board Meeting that has been put forward by the Director of NIB. Simply put, excluding the Minister, the Chairman of the NIBs Board should be the most senior representative at NIB.
b) A resolution was passed unanimously by the Board of Directors on July 25, 2012 revoking all previous spending authority and mandates and authorizing the Chairman to approve expenses up to $50,000 between sittings of the Board of Directors and required to report to the Board any and all expenditures at the first sitting thereafter. 2 PRIVATE & CONFIDENTIAL 5/6/2013 3:57 PM
1. AFFIDAVIT OF ALGERNON MARSHIEL CARGILL (continued)
ALLEGATION 1.1 - (i.) in Affidavit (continued)
FINDINGS
a) Grant Thornton viewed a Notice of the fifth regular meeting of The Board of Directors of the National Insurance Board for a meeting on July 25, 2012. Grant Thornton noted discussions by the Board on the need for the resolution. It was determined that the Director would come back with a resolution to spell out what was considered Other business expenses in the normal course of business of The National Insurance Board.
The resolution was passed unanimously by the Board of Directors on July 25, 2012, as follows:
"Be it resolved that all resolutions heretofore passed by the Board of Directors in respect of the spending authority and spending mandate of any and all Directors and Executives of the National Insurance Board (save and except in respect of the payment of employees, utilities and other business expenses in the normal course of business of the National Insurance Board) are hereby revoked with immediate effect and that subject to any further resolution of the Board, the Chairman in hereby empowered to authorize and approve such spending as in his discretion are required as a matter of urgency between sittings of the Board to the maximum sum of Fifty Thousand Dollars ($50,000) and is required to report to the Board at the first sitting thereafter any and all such expenditures so authorized and approved by him." NIB 2012 5TH (REGULAR) MEETING OF THE BOARD OF DIRECTORS OF THE NATIONAL INSURANCE BOARD 4.0 SPENDING AUTHORITY EXECUTIVES AND SPENDING MANDATE OF NIB
4.1.9
Following the discussion, members were satisfied with the explanation given for proposing to put such a resolution in place, and therefore on a motion made by Mr. Jayson Moxey, seconded by Mr. Philip Beneby and unanimously carried, the following resolution was adopted: Be it resolved that all resolutions heretofore passed by the Board of Directors in respect of the spending authority and spending mandate of any and all Directors and Executives of the National Insurance Board (save and except in respect of the payment of employees, utilities and other business expenses in the normal course of business of the National Insurance Board) are hereby revoked with immediate effect and that subject to any further resolution of the Board, the Chairman is hereby empowered to authorize and approve such spending as in his discretion are required as a matter of urgency between sittings of the Board to the maximum sum of Fifty Thousand Dollars ($50,000) and is required to report to the Board at the first sitting thereafter any and all such expenditures so authorized and approved by him.
ALLEGATION 1.1 - (i.) in Affidavit (continued) 4.1.6 The Chairman added that he wished to make it clear that there was no attempt being made to cast aspersions on anyone, but rather just an oversight mechanism that is being put in place. The Director stated that while there was clarity on payment of employees salaries and utilities he needed more clarification on what constitutes other business expenses in the normal course of business The Chairman invited the Director to meet with his financial persons for the purpose of putting together a resolution as to what items would fall in the category of normal course of business and the same can be circulated to the Board for approval.
4.1.7
4.1.8
b) We interviewed Mr. Gregory Moss at Grant Thorntons office on February 7, 2013. He was asked to respond to each allegation in the Affidavit filed by Mr. Algernon Cargill, dated November 28, 2012. Here are the relevant excerpts from that interview: 13. GM said that at the first board meeting, they were going through various issues and came across some contracts and AC said that he would deal with them because he had a delegated authority to bind NIB to any contract for up to $100K without the consent of the Board and would attend to those contracts because they were within his delegated authority. GM said that he asked AC how did he have such authority. GM said that AC replied that the power was given to him based on the Statute. ACs claim to a delegated authority to spend up to $100,000 was denied by GM and the other members of the Board. GM said that in the meeting, the Board resolved to remove any such authority. GM said that was the purpose of the Resolution. Grant Thornton asked GM if he was aware of the letter from the NIB Financial Controller that sought to introduce the definition of what fell under other business expenses. GM said that when the Board passed the resolution to remove that alleged delegated authority from AG it also vested GM, as Chairman with the authority to bind NIB to any contract for up to $50,000 on condition that he must report any such contracts to the Board at its next sitting. As a part of that resolution the Board also vested the Executive Management with the right to enter into any contracts in the normal course of business and either at that meeting or another meeting the Board vested AC, as Director, with an authority identical to that of the Chairman except that it could only be used in emergencies. c) On July 26, 2012, an email is sent by Mr. Cargill to Executive Management with the Subject Line: Board of Directors Resolution - Executive Approval. 4 PRIVATE & CONFIDENTIAL 5/6/2013 3:57 PM
14.
14.1.
ALLEGATION 1.1 - (i.) in Affidavit (continued) I have sought clarity on the inclusion of other business expenses in the normal course of business and ask for your input/feedback so that we can ensure compliance going forward.
Please delegate as appropriate and ensure your management team particularly Family Islands, is fully familiar and compliant going forward.
2. On August 7, 2012, a letter is written by Financial Controller Mrs. Sonia Gill addressed to Mr. Algernon Cargill with subject line RE: SPENDING AUTHORITY. It outlines 11 items to be included in the definition other business expenses. 3. At the Board meeting on August, 30th, 2012, a resolution was passed by the Board with certain exceptions to the original resolution passed on July 25, 2012, the resolution and approval essentially accepts the 11 items proposed by Mrs. Sonia Gill with certain amendments in bold (See below): NIB 2012 6TH (REGULAR) MEETING OF THE BOARD OF DIRECTORS OF THE NATIONAL INSURANCE BOARD 1.3 SPENDING AUTHORITY The Chairman invited the Director to speak to item 4.1.8 relative to a resolution passed by the Board of Directors at its 5th (Regular) meeting held on 25th July, 2012 as it relates to the revocation of spending authority which reads as follows: The Chairman invited the Director to meet with his financial persons for the purpose of putting together a resolution as to what items would fall in the category of normal course of business and the same can be circulated to the Board for approval. 2.3.2 The Director proceeded to refer to a memorandum dated 7th August, 2012 from the Financial Controller in which she suggested that a number of items be included in the definition other business expenses, in the normal course of business of the National Insurance Board. Members agreed to the following, with changes made to the various points highlighted in bold: 1. Stage payments under already approved contracts/agreements. 2. Payments being made against Purchase Orders already issued to vendors. 3. Payments for standard office supplies, forms and tools. 5 PRIVATE & CONFIDENTIAL 5/6/2013 3:57 PM
2.3.3
ALLEGATION 1.1 - (i.) in Affidavit (continued) 4. Payments for rent, maintenance, security and cleaning of office accommodations and equipment (includes government occupied NIB buildings). (Management can expend up to $50,000 in the case of emergency maintenance that may be required to NIBs buildings, subject to providing the Board with a report at the next Board meeting.) 5. Payments for usual and customary staff training and business travel. (Management to approve training and business travel taking place internationally and in the Bahamas inclusive of staff required to travel to the Family Islands for an amount up to $2,000. The matter will be further reviewed by the Human Resources Committee.) 6. Payments for usual and customary public relations initiatives. 7. Payments for insurance and statutory assessments. 8. Payments for staff related benefits as per policy and practice (e.g. car loan etc.) should read: Payments for staff employment related benefits as per policy and practice (e.g. car loan etc.). This item is to be referred to the Human Resources Committee if it goes beyond the amended point. 9. Payments related to the implementation of the Insurance Administration System. (This item is to be deleted, as it is covered under Point 1). 10. Expenses related to Board of Directors and other meetings. 11. Legal fees for litigation in progress. NIB Directors Spending Limit Mrs. Ernestine Kelson, NIBs Secretary to the Board of Directors has confirmed (by email on January 28, 2013) that at the October 29, 2009 Board of Directors Meeting, Mr. Algernon Cargill requested the Boards approval to execute any and all contracts and/or agreements on behalf of the Board up to $100,000. The request was not granted at that meeting, and was deferred for several meetings following until the matter eventually fell away. Please note an excerpt from the October 29, 2009 Board of Directors meeting below: NIB (09) 065 Approval for the Director to Execute Contracts and/or Agreements up to One Hundred Thousand Dollars ($100,000.00) The Director explained that the Board of Directors approval was being sought to authorize the Director of the National Insurance Board to execute any and all Contracts and/or Agreements on behalf of The Board up to One Hundred Thousand Dollars ($100,000.00).
4.1
4.1.1
ALLEGATION 1.1 - (i.) in Affidavit (continued) NIB Directors Spending Limit (continued) 4.1.2 He said that he realized that there was no formal authorization in place, and the former Director had such authority to approve contracts etc. up to the requested amount. 4.1.3 4.1.4 Mr. Van Diah was of the opinion that $100,000.00 was too high. Ms. Debbie Ferguson added that the request was too broad or too wide. She asked how often contracts were approved. Members discussed this item for some time, and concluded that certain procedures will have to be followed before such a request is approved. The request was therefore deferred. The Chairman said that he and the Director would discuss how the request should be refined, and thereafter the same can be re-submitted for the next meeting.
4.1.5
4.1.6
Mrs. Kelson also forwarded to Grant Thornton the FINANCE/INVESTMENT COMMITTEE TERMS OF REFERENCE that empowers the Committee and not Mr. Cargill acting on his own. Specifics of the Terms of Reference are as follows: FINANCE/INVESTMENT COMMITTEE Mr. Peter Carey Mr. John Pinder Dr. Robin Roberts Mr. Algernon Cargill Mrs. Phaedra Mackey-Knowles VP Finance Terms of Reference (a) To review the annual budgets and make recommendations to the Board. (b) To review and approve the actuarial review of the Board. (c) To approve all purchases within the approved budget between $100,000 and $200,000. (d) To review and recommend approval of all purchases greater than $200,000 within the approved budget to the Board. (e) To advise the Board on investment matters. (f) To review the investments of the Board and recommend action on specific investment and overall policies. PRIVATE & CONFIDENTIAL 5/6/2013 3:57 PM Chairman Member Member Resource Resource Resource
ALLEGATION 1.1 - (i.) in Affidavit (continued) NIB Directors Spending Limit (continued)
Furthermore, Grant Thornton has stated that the following Board of Directors Minutes excerpts, from October 29, 2009 to June 16, 2011 (that is, for 21 months over a 36 month period), indicate that the Board of Directors DEFERRED any discussion on increasing Mr. Algernon Cargills spending limit to $100,000.
DISCUSSION ON INCREASING MR. CARGILLS SPENDING LIMIT DEFERRED FOR 3 YEARS (AND NEVER GRANTED) _ NIB 2009 9TH (REGULAR) MEETING THE NATIONAL INSURANCE BOARD The Minutes of the 9th (Regular) Meeting of the Board of Directors of The National Insurance Board held on Thursday, 29th October, 2009 in the Boardroom of The National Insurance Headquarters Building situated on Baillou Hill Road, at 4:00 p.m. 6.0 DEFERRED MATTERS 1. NIB (09) 065 Approval for the Director to Execute Contracts and/or Agreements up to One Hundred Thousand Dollars. NIB 2009 10TH (REGULAR) MEETING THE NATIONAL INSURANCE BOARD The Minutes of the 10th (Regular) Meeting of the Board of Directors of The National Insurance Board held on Tuesday, 8th December, 2009 in the Boardroom of The National Insurance Headquarters Building situated on Baillou Hill Road, at 4:00 p.m. 8.0 DEFERRED MATTERS 1. NIB (09) 065 Approval for the Director to Execute Contracts and/or Agreements up to One Hundred Thousand Dollars.
ALLEGATION 1.1 - (i.) in Affidavit (continued) NIB Directors Spending Limit (continued) DISCUSSION ON INCREASING MR. CARGILLS SPENDING LIMIT DEFERRED FOR 3 YEARS (AND NEVER GRANTED) (continued) _ _ NIB 2010 1ST (REGULAR) MEETING THE NATIONAL INSURANCE BOARD The Minutes of the 1st (Regular) Meeting of the Board of Directors of The National Insurance Board held on Thursday, 28th January, 2010 in the Boardroom of The National Insurance Headquarters Building situated on Baillou Hill Road, at 4:00 p.m. 7.0 DEFERRED MATTERS 1. NIB (09) 065 Approval for the Director to Execute Contracts and/or Agreements up to One Hundred Thousand Dollars. NIB 2010 2ND (REGULAR) MEETING THE NATIONAL INSURANCE BOARD The Minutes of the 2nd (Regular) Meeting of the Board of Directors of The National Insurance Board held on Thursday, 25th February, 2010 in the Boardroom of The National Insurance Headquarters Building situated on Baillou Hill Road, at 4:00 p.m. 5.0 DEFERRED MATTERS 1. NIB (09) 065 Approval for the Director to Execute Contracts and/or Agreements up to One Hundred Thousand Dollars. NIB 2010 3RD (REGULAR) MEETING THE NATIONAL INSURANCE BOARD The Minutes of the 3rd (Regular) Meeting of the Board of Directors of The National Insurance Board held on Monday, 29th March, 2010 in the Boardroom of The National Insurance Headquarters Building situated on Baillou Hill Road, at 4:00 p.m. 7.0 DEFERRED MATTERS 2. NIB (09) 065 Approval for the Director to Execute Contracts and/or Agreements up to One Hundred Thousand Dollars.
ALLEGATION 1.1 - (i.) in Affidavit (continued) NIB Directors Spending Limit (continued) DISCUSSION ON INCREASING MR. CARGILLS SPENDING LIMIT DEFERRED FOR 3 YEARS (AND NEVER GRANTED) (continued) _ _ NIB 2010 4TH (REGULAR) MEETING THE NATIONAL INSURANCE BOARD The Minutes of the 4th (Regular) Meeting of the Board of Directors of The National Insurance Board held on Thursday, 6th May, 2010 in the Boardroom of The National Insurance Headquarters Building situated on Baillou Hill Road, at 4:00 p.m. 7.0 DEFERRED MATTERS 1. NIB (09) 065 Approval for the Director to Execute Contracts and/or Agreements up to One Hundred Thousand Dollars. NIB 2010 5TH (REGULAR) MEETING THE NATIONAL INSURANCE BOARD The Minutes of the 5th (Regular) Meeting of the Board of Directors of The National Insurance Board held on Tuesday, 8th June, 2010 in the Boardroom of The National Insurance Headquarters Building situated on Baillou Hill Road, at 4:00 p.m. 6.0 DEFERRED MATTERS 1. NIB (09) 065 Approval for the Director to Execute Contracts and/or Agreements up to One Hundred Thousand Dollars. NIB 2010 6TH (REGULAR) MEETING THE NATIONAL INSURANCE BOARD The Minutes of the 6th (Regular) Meeting of the Board of Directors of The National Insurance Board held on Tuesday, 24th August, 2010 in the Boardroom of The National Insurance Headquarters Building situated on Baillou Hill Road, at 4:00 p.m. 7.0 DEFERRED MATTERS 1. NIB (09) 065 Approval for the Director to Execute Contracts and/or Agreements up to One Hundred Thousand Dollars.
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ALLEGATION 1.1 - (i.) in Affidavit (continued) NIB Directors Spending Limit (continued) DISCUSSION ON INCREASING MR. CARGILLS SPENDING LIMIT DEFERRED FOR 3 YEARS (AND NEVER GRANTED) (continued) NIB 2010 7TH (REGULAR) MEETING THE NATIONAL INSURANCE BOARD The Minutes of the 7th (Regular) Meeting of the Board of Directors of The National Insurance Board held on Thursday, 23rd September, 2010 in the Boardroom of The National Insurance Headquarters Building situated on Baillou Hill Road, at 4:00 p.m. 8.0 DEFERRED MATTERS 8.1 NIB (09) 065 Approval for the Director to Execute Contracts and/or Agreements up to One Hundred Thousand Dollars. NIB 2010 8TH (REGULAR) MEETING THE NATIONAL INSURANCE BOARD The Minutes of the 8th (Regular) Meeting of the Board of Directors of The National Insurance Board held on Thursday, 28th October, 2010 in the Boardroom of The National Insurance Headquarters Building situated on Baillou Hill Road, at 4:00 p.m. 7.0 DEFERRED MATTERS CONTD. 7.1 NIB (09) 065 Approval for the Director to Execute Contracts and/or Agreements up to One Hundred Thousand Dollars. NIB 2010 9TH (REGULAR) MEETING THE NATIONAL INSURANCE BOARD The Minutes of the 9th (Regular) Meeting of the Board of Directors of The National Insurance Board held on Thursday, 9th December, 2010 in the Boardroom of The National Insurance Headquarters Building situated on Baillou Hill Road, at 4:00 p.m. 5.0 DEFERRED MATTERS 5.1 NIB (09) 065 Approval for the Director to Execute Contracts and/or Agreements up to One Hundred Thousand Dollars. _ _
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ALLEGATION 1.1 - (i.) in Affidavit (continued) NIB Directors Spending Limit (continued) DISCUSSION ON INCREASING MR. CARGILLS SPENDING LIMIT DEFERRED FOR 3 YEARS (AND NEVER GRANTED) (continued) NIB 2011 1ST (REGULAR) MEETING THE NATIONAL INSURANCE BOARD The Minutes of the 1st (Regular) Meeting of the Board of Directors of The National Insurance Board held on Thursday, 27th January, 2011 in the Boardroom of The National Insurance Headquarters Building situated on Baillou Hill Road, at 4:00 p.m. 5.0 DEFERRED MATTERS 5.1 NIB (09) 065 Approval for the Director to Execute Contracts and/or Agreements up to One Hundred Thousand Dollars. NIB 2011 2ND (REGULAR) MEETING THE NATIONAL INSURANCE BOARD The Minutes of the 2nd (Regular) Meeting of the Board of Directors of The National Insurance Board held on Thursday, 24th February, 2011 in the Boardroom of The National Insurance Headquarters Building situated on Baillou Hill Road, at 4:00 p.m. 6.0 DEFERRED MATTERS 6.1 NIB (09) 065 Approval for the Director to Execute Contracts and/or Agreements up to One Hundred Thousand Dollars. NIB 2011 3RD (REGULAR) MEETING THE NATIONAL INSURANCE BOARD The Minutes of the 3rd (Regular) Meeting of the Board of Directors of The National Insurance Board held on Thursday, 31st March, 2011 in the Boardroom of The National Insurance Headquarters Building situated on Baillou Hill Road, at 4:00 p.m. 6.0 DEFERRED MATTERS 6.1 NIB (09) 065 Approval for the Director to Execute Contracts and/or Agreements up to One Hundred Thousand Dollars. _ _
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ALLEGATION 1.1 - (i.) in Affidavit (continued) NIB Directors Spending Limit (continued) DISCUSSION ON INCREASING MR. CARGILLS SPENDING LIMIT DEFERRED FOR 3 YEARS (AND NEVER GRANTED) (continued) NIB 2011 4TH (REGULAR) MEETING THE NATIONAL INSURANCE BOARD The Minutes of the 4th (Regular) Meeting of the Board of Directors of The National Insurance Board held on Thursday, 5th May, 2011 in the Boardroom of The National Insurance Headquarters Building situated on Baillou Hill Road, at 4:00 p.m. 6.0 DEFERRED MATTERS 6.1 NIB (09) 065 Approval for the Director to Execute Contracts and/or Agreements up to One Hundred Thousand Dollars. NIB 2011 5TH (REGULAR) MEETING THE NATIONAL INSURANCE BOARD The Minutes of the 5th (Regular) Meeting of the Board of Directors of The National Insurance Board held on Thursday, 16th June, 2011 in the Boardroom of The National Insurance Headquarters Building situated on Baillou Hill Road, at 4:00 p.m. 6.0 DEFERRED MATTER 6.1 NIB (09) 065 Approval for the Director to Execute Contracts and/or Agreements up to One Hundred Thousand Dollars. NIB 2011 6TH (REGULAR) MEETING THE NATIONAL INSURANCE BOARD The Minutes of the 6th (Regular) Meeting of the Board of Directors of The National Insurance Board held on Thursday, September 1, 2011 in the Boardroom of The National Insurance Board Headquarters Building situated on Baillou Hill Road, at 4:00 p.m. 6.0 DEFERRED MATTER 6.1 No matters were deferred. _ _
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ALLEGATION 1.2 - (ii.) in Affidavit
The second communication I received from Gregory Moss after his appointment as Chairman of the Board of Directors was on July 20, 2012. This communication requested that the Directors office be relocated to the present Chairman's Office and vice versa. Mr. Moss also advised me that I should relocate any furniture as I consider appropriate and he will speak with me regarding any new furnishing that is needed for the new Chairman's office. Although we did not have a discussion on this matter, Ms. Theresa Burrows, VP of Business Support, advised me on my return from vacation in early August 2012 that Mr. Gregory Moss advised her that she should contract an interior decorator to ensure that the former Director's office, now occupied by the Chairman, is decorated at a standard befitting of a Minister. The Director of the NIB has occupied the former Director's Office since the building was constructed in 1991, as the full-time statutory operational head of NIB. The building does include a full time office for the Chairman and all previous Chairmen, occupied this office whenever they visited NIB for Board, committee and other meetings. A copy of the memorandum of the 20th July, 2012 is now produced and shown to me to be exhibited hereto marked "AMC-14".
FINDINGS a) No Findings to report on this relocation. b) We interviewed Mr. Gregory Moss at Grant Thorntons office on February 7, 2013. He was asked to respond to each allegation in the Affidavit filed by Mr. Algernon Cargill, dated November 28, 2012. Here are the relevant excerpts from that interview: 19. Grant Thornton read section (k) (ii) and asked GM if he recommended the relocation of the Directors office in 2012. GM said yes, he recommended the relocation of the Directors office. Grant Thornton asked GM what was the purpose of the relocation of the Directors office in 2012? GM said that the Director occupied a larger office compared to the Chairmans office and that as Chairman he needed to have a larger space to allow him to do his work and hold meetings with Directors, staff and the Committees of the Board when needed.
20.
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ALLEGATION 1.2 - (ii.) in Affidavit (continued) 21. Grant Thornton asked GM how long it took for the Director to relocate from the time of the communication. GM said that the Director did not relocate right away because he was going to Puerto Rico on a trip with Mrs. Phaedra Mackey-Knowles and said that he would have the relocation done during his trip. GM said that he could only recollect two things he did without prior approval of the Board and they are: (1) Switch Offices of the Chairman and the Director and; (2) Switch parking spots of the Minister and Chairman to put the Ministers parking spot in a more prominent position than that of the Chairman. Also, GM pointed out that the prime parking spot should be for the Minister and not for the Chairman of NIB. GM said that the spots were laid out in the order ChairmanMinister-Director whereas it should be in the order of Minister-Chairman-Director. GM said that AC agreed with the changes. But the changes took effect weeks after it had been raised.
22.
23.
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ALLEGATION 1.3 - (iii.) in Affidavit Mr. Gregory Moss subsequently wrote to me a Memorandum on August 2, 2012, and copied the Board of Directors wherein he advised the following. "Accordingly, with immediate effect, I would request and require that no Executive or Officer of the National Insurance Board engage in placing or renewing the placement of any of the funds of the Board by way of any purported delegated authority without the express approval of the Board as expressed directly by the Board or the relevant Committee of the Board." This unilateral decision effectively resulted in the revocation of a standard and basic management function (cash flow management) that was originally delegated to management in 1987 and I replied to Mr. Gregory Moss on August 17, 2012, expressing my concern that his decision was not consistent with the views of NIB's Legal Advisor, Mrs. Heather Maynard, NIB's VP of Investment, Phaedra Mackey-Knowles, NIB's Financial Controller, Mrs. Sonia Gill, and NIB's Actuary, Mr. Derek Osbourne. Each of these Executives advised in writing that NIB had an approved Investment Policy in place that delegated this basic function, and the investment in Government guaranteed or issued securities to the Director of NIB, and that his directives were not consistent with this policy. I further explained in my August 17, 2012 communication, to which I have not received a response, that we should have a thorough discussion of this matter at a meeting of the executive committee, and if there was any further clarity needed, that the matter be referred to the Office of the Attorney General. I also copied this communication to the Minister of Labour and National Insurance and advised him on several occasions of the negative effect of Mr. Moss unilateral decision to revoke an Investment Policy Statement and previous Board Delegations that were previously approved. I subsequently wrote to the Minister of Labour and National Insurance on the 25 September, 2012 and outlined my concerns relating to this matter, the effect of this unresolved matter on NIB's operations and suggested to him that we either resolve or refer the matter to the Attorney General's Office for interpretation. On two occasions, had it not been for my intervention, pensioners would not have been paid their monthly pensions as Mr. Moss never responded to the Investment Recommendations of the Investments Department and I had to consult directly with Minister Shane Gibson for Ministerial Approval to ensure that pensioners were paid on time. I also advised the Minister that on one occasion, due to Mr. Moss' non-response to a further request from the Investments Department to transfer funds from the noninterest bearing Central Bank Account to Fixed Deposits at commercial banks, NIB had in excess of $15 million sitting in the Central Bank Account earning 0% interest for several days. A copy of Mr. Moss' August 2, 2012, my September 25th to Minister Gibson and my response of 17, 2012 are now produced and shown to me to be exhibited hereto marked "AMC-15".
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ALLEGATION 1.3 - (iii.) in Affidavit (continued)
KEY FINDINGS
We viewed discussion of the Delegated Investment Authority in the Board of Directors Minutes dated July 25, 2012. No resolution was passed at that meeting. (Appendix 1.07 & 1.08)
We have not found any confirmation of the passing of a resolution by the Board of Directors to revoke delegated authority in the Board of Director minutes that we were provided.
FINDINGS
a) We interviewed Mrs. Phaedra Mackey-Knowles, VP Investments, NIB, at Grant Thornton offices on February 8, 2013.
Here are her responses:
We asked Mrs. Knowles if she was aware of the Memorandum of Mr. Gregory Moss on August 2, 2012 with regards to Delegated Authority. Mrs. Knowles said that she is aware and had provided what was requested in the memorandum (the Board Resolutions and Certificate of Deposits maturing in the next 90 days) in her memorandum dated August 2, 2012 to Mr. Gregory Moss.
We asked Mrs. Knowles if she was aware of the reply of Mr. Cargill to Mr. Moss and if she agrees with the comments of some executives? Mrs. Knowles said that she is aware of what they wrote and she said that she concurred with what was written by the Financial Controller, the Deputy Director-Legal Affairs and the Actuary.
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We asked Mrs. Knowles if was there any loss suffered by NIB for not having transferred the more than $15 million sitting in the Central Bank account without earning interest for several days. Mrs. Knowles clarified with Mr. Christie if he meant about the time value of money or funds sitting in an account earning a zero rate of interest for several days. She said that it was the opportunity cost of having funds sitting in an account earning a zero rate of interest for several days.
We asked Mrs. Knowles if she was aware that the recommendation on Delegated Authority was from the Board and not Mr. Moss. Mrs. Knowles said that the policy was approved by the Board subsequently and at that point in time, it was the directive of the Chairman in his memorandum of August 2, 2012. b) We interviewed Mr. Gregory Moss at Grant Thorntons office on February 7, 2013. He was asked to respond to each allegation in the Affidavit filed by Mr. Algernon Cargill, dated November 28, 2012.
Here are the relevant excerpts from that interview: 25. GM further explained that the memorandum was in relation to one of the early Board meetings where there were discussions on Investments of the NIB Fund ($240 million of assets). GM said that management sets the draft agenda and one item was investments. GM said that at a Board meeting, an item came up about investment and that AC said that he will deal with it as he had a delegated authority to do so. GM said that the Board went into an extensive discussion based on ACs claim that he could invest the NIB fund by delegated authority without any Board approval. 27. GM said that he asked AC where he got such delegated authority and AC stated that the delegated authority was through the Statute. GM said that he refuted this by saying he had read the Statute and no such authority was stated there. AC then said it was under the Regulations. According to GM, he requested AC to provide the Regulations and AC said he will get back to the Board with the Regulations. But GM said that AC was not able to produce the Regulations. Instead, before the next sitting of the Board he provided GM with two documents: (1) Investments Guidelines approved by the Minister (2004) and (2) a 2010 Investments Guidelines that was not approved by the Minister.
26.
18
1. AFFIDAVIT OF ALGERNON MARSHIEL CARGILL (continued) ALLEGATION 1.3 - (iii.) in Affidavit (continued) 28. GM said that this is the crucial point and said that when you see both Investment Guidelines they both expressly provided in red, bold print, capitalized letters that they were not to be acted upon by NIB until such time as legislation had been enacted to give effect to them. GM said that that was not surprising since the Third Schedule to the National Insurance Act expressly provided the law on how NIB Funds are to be invested and any such Guideline would not be lawful unless and until the National Insurance Act was amended. Grant Thornton asked GM if he was saying that AC was utilizing a guideline that had no effect. GM said yes and said that upon review of the investment Guidelines provided he pointed out to AC that it should not be followed and deemed in effect as it expressly provided that it was not to be acted upon until legislation had been passed to give effect to it. GM said that discussions with the legal counsel of NIB, Mrs. Heather Maynard and the Board regarding the policy guidelines on investment followed thereafter. GM said that Mrs. Maynard first gave a written opinion that the 2004 Guidelines could be acted upon but, later after he pointed out to her the words mentioned above in red, bold print, capitalized letters to the effect that they were not to be acted upon by NIB until such time as legislation had been enacted to give effect to them she clearly admitted that she agreed that the policy is subject to the Statute before it can be implemented. Grant Thornton continued reading section (k) (iii) of ACs Affidavit that read This unilateral decision effectively resulted in the revocation of a standard and basic management function (cash flow management) that was originally delegated to management in 1987. And on another part of this subsection, Grant Thornton continued reading I also copied this communication to the Minister of Labour and National Insurance and advised him on several occasions of the negative effect of Mr. Moss unilateral decision to revoke an Investment Policy Statement and previous Board Delegations that were previously approved. GM read the Power of the Board to Delegate per Section 9. (1) and (2) of the Statute which states that (1) the Board may in writing delegate to any member or officer or committee or employee of the Board the power to carry out on its behalf such function as the Board may determine. (2) Every delegation under this section shall be revocable by the Board and no delegation shall prevent the exercise by the Board of any function. GM continued by reading the Third Schedule Section 44(5) of the Statute which states that Any moneys forming part of the Fund may from time to time be invested by the Board in accordance with the provisions of the Third Schedule and, subject to those provisions, of any regulations made pursuant to paragraph (b) of subsection (4) establishing criteria for the investment of reserves. (6) Notwithstanding the provisions of subsection (5) the Board may from time to time invest any moneys forming part of the Fund in such manner and in such investments as the Minister acting after consultation with the Minister responsible for Finance may direct.
29.
30.
31.
19
ALLEGATION 1.3 - (iii.) in Affidavit (continued) 32. After reading, GM reiterated the Board authority and said that AC wanted to act on the 2004 investment policy Guidelines although they expressly provided that he was not to act upon them until legislation was enacted to give effect to them and although they were contrary to the provisions of the Third Schedule of the National Insurance Act. GM stated that the 2004 and 2010 Guidelines were distributed to all Directors of the Board and the Board passed a resolution to vest that investment power in the Finance and Investment Committee as a part of the Terms of Reference of that Committee. GM said that that resolution was the one by which all committees were formed and vested with their terms of reference.
33.
c) Mr. Gregory Moss indicated in an email to Grant Thornton dated February 14, 2013 stated that this Memo from him was a directive to maintain the status quo between sittings of the Board. (Appendix 1.08)
Excerpt: As I mentioned during our recent meeting, Under Section 44 (5) of the National Insurance Act, the right to invest NIB funds is vested in the Board, not in any executive or employee of the Board. The rules governing such investments are found in the Third schedule to that Act.
Section 44 (5) of the National Insurance Act states: Any moneys forming part of the Fund may from time to time be invested by the Board in accordance with the provisions of the Third Schedule and, subject to these provisions, of any regulations made pursuant to paragraph (B) of sub section 4 establishing criteria for the investment of reserves.
d) In a subsequent meeting on August 30, 2012, regarding Delegated Authority, Mrs. Phaedra Mackey-Knowles commented that the 2010 Investment Guidelines had not been approved and that the 2004 Investment Guidelines were approved but, with a caveat which is subject to the necessary regulatory and legislative changes being made to implement it (see 2.8.1, pg. 12).
20
ALLEGATION 1.3 - (iii.) in Affidavit (continued) NIB 2012 6TH (REGULAR) MEETING THE NATIONAL INSURANCE BOARD The Minutes of the 6th (Regular) Meeting of the Board of Directors of The National Insurance Board held on Thursday, 30th August, 2012 in the Boardroom of The National Insurance Headquarters Building situated on Baillou Hill Road, at 4:00 p.m. Present: Mr. Gregory K. Moss, Chairman Mr. Bernard Evans, Deputy Chairman Mr. Jayson Moxey, Member Ms. Linda Denise Evans, Member Mr. Freddie Munnings Jr., Member Mr. Philip Beneby, Member Mr. Patrick Davis, Member Mr. Merrit Storr, Member Mr. Marquista Thompson, Member Bishop Harry Collie, Member Dr. Josephine Bartlett, Member Mrs. Phaedra Mackey-Knowles, Deputy Director/Vice President Investments Mrs. Sonia Gill, Financial Controller
Apologies:
In Attendance: Mr. Algernon Cargill, Director Mrs. Cecile Bethel, Senior Deputy Director, Operations Mrs. Ernestine Kelson, Manager/Secretary to the Board of Directors 2.8 2.8.1 Delegated Investment Authority In response to a question raised by one member in relation to delegated investment authority, the Chairman explained that he met with Mrs. Phaedra Mackey-Knowles, Vice President/Investments, and Mr. Derek Osborne, Actuary on the matter. Mrs. MackeyKnowles advised that subject to regulations, the 2010 guidelines had not been approved; however, the 2004 guidelines were approved but with a caveat which is subject to the necessary regulatory and legislative changes being made to implement it. The Chairman was of the view that Management should not have been acting without authority. The Director indicated that he responded in writing to the Chairmans memorandum and it is his view that the Delegated Authority that exists provides management with the Authority to place deposits, and invest in Government Securities and Government guaranteed securities. His communication was provided to the Chairman and not to the entire Board at this time.
2.8.2
2.8.3
21
ALLEGATION 1.3 - (iii.) in Affidavit (continued) 2.8.4 In relation to deposits that were due, the Chairman said that Management agreed to roll over the deposits. There was a set of deposits that were due on the 15th August, 2012 and another set on the 30th August, 2012. He said that the Board is to advise the Minister on the Investment Policy, and we are acting on the Ministers directives. As regards segregation of investments, the Chairman indicated that some members of the Board along with the Director will make a trip to Trinidad to look at the model used by National Insurance Board Property Development Company (NIPDEC) which is a separate entity from their Social Security Scheme. He pointed out that legislative changes would have to be made for NIBs investments to be separated from the Social Security aspect of the Scheme. He went on to say that the Ministers wish is to have investments as a separate entity. One member commented that because of the liquidity in the market, there is no place to invest funds locally.
2.8.5
2.8.6
2.8.7
2.8.8 2.8.9
2.8.10 The Chairman requested that this point be referred to the Investments Committee for discussion. 2.8.11 The Chairman also pointed out that nothing has changed in the way investments have been approved. He said that approval is by the Minister, and not through Delegated Authority. 2.8.12 The Director responded that maturing deposits, Government Registered Stock, and Treasury Bills are the only investments handled by Management. 2.8.13 The Deputy Chairman spoke of his experience on the BTC Pension Plan. He said that the Board is called upon to approve matters such as stocks, bonds etc. 2.8.14 The Chairman informed the Board that inquiries were made by CFAL and Providence Advisors to invest NIB funds. He said that no decision has been made, and the requests will be passed on to the Investments Committee. 2.8.15 The Director informed the Board that B$17 million is sitting in the Central Bank earning no interest due to delays in receipt of approvals for placement of new and maturing deposits. Grant Thornton reviewed the Board of Director Minutes. In the July 25, 2012 Minutes, we noted discussion about the investment placement authority of Management and delegated authority. No resolution was passed at that meeting. Grant Thornton has not found any confirmation of the passing of a resolution by the Board to revoke delegated authority in the Board of Directors minutes that we have reviewed.
22

NIB 2012 5TH (REGULAR) MEETING THE NATIONAL INSURANCE BOARD The Minutes of the 5th (Regular) Meeting of the Board of Directors of The National Insurance Board held on Thursday, 25th July, 2012 in the Boardroom of The National Insurance Headquarters Building situated on Baillou Hill Road, at 4:00 p.m. 5.5.2 The Chairman questioned Managements authority to invest NIB Funds, to which the Director responded that the National Insurance Board Statement of Investment Policy and Guidelines provided him with the delegated authority to invest certain NIB Funds and it was the general practice that all investments other than normal placement of deposits or purchase of government debt would be advanced to the Board of Directors for Boards approval and subsequently to the Minister for Ministerial approval. He further pointed out that there were some investments which would be authorized by him as a result of the delegated authority. The Chairman then inquired as to the source of the delegated authority. The Director and Mrs. Mackey-Knowles responded that this was covered in the regulations and also the Investment Policy Statement. The Chairman requested that a copy of the Investment Policy Statement/Guidelines be provided along with information on empowerment by Statute or Regulations for his review. The Chairman commented that he found it surprising that the Board would have been bypassed on certain investments.
5.5.2
5.5.3 5.5.2
5.5.3
5.5.4
Please see page 7 regarding the Directors spending authority, or lack thereof. Please note it is the Finance/Investment Committees authority and not his authority. Also, Mr. Cargill never had a $100,000 spending limit. ALLEGATION 1.4 - (iv.) in Affidavit Mr. Gregory Moss advised me at our first social meeting at the Hilton Hotel on July 19th, 2012, that he wanted my assistance with the approval of an Energy Study of NIB's properties, to be conducted by Earth and Sun Energy Company Ltd., a company beneficially owned by Mr. Gregory Smith, a former Insurance Executive with Star General Insurance Company in Grand Bahama, and that Mr. Smith was a business partner in his office complex in Grand Bahama. The due diligence on this company indicated that it was newly incorporated and there was no evidence provided that the company had successfully completed any Energy Studies that were, beneficial to its clients. Mr. Moss subsequently consulted with Ms. Theresa Burrows, VP of Business Support and requested that she prepare a check for $42,000, being the payment in full for the Energy Study to be completed by Mr. Smith's company. Ms. Burrows did not act immediately and Mr. Moss subsequently directed Mrs. Cecile Bethel, Sr. Deputy Director, Operations, to prepare the same check for $42,000. 23 PRIVATE & CONFIDENTIAL 5/6/2013 3:57 PM
ALLEGATION 1.4 - (iv.) in Affidavit (continued)
Mrs. Bethel directed Mr. Osbourne Moxey, Manager, Projects, to prepare the check and he refused, although she advised him that he should comply with a request from the Chairman. Mr. Moxey liaised with Ms. Burrows and me and was advised independently by both of us to not proceed with the issuance of the check as it was not NIB's policy to pay fully in advance for any work to be completed, and secondly, we were not satisfied that any benefit could be derived to NIB from the study to be completed by Gregory Smith's newly incorporated company. Mr. Moxey also advised that we had several offers for free energy studies, and had also completed a similar study in 2011 for approximately $3,000, and Mr. Gregory Moss' directive was to now pay $42,000 for the same type of work. Ms. Theresa Burrows advised Mr. Moss of these comments during a meeting in the Chairman's office that Mr. Maxey and I also participated in, and advised him of the Minister's reluctance to approve this payment as he had directed Mrs. Cecile Bethel to execute.
Ms. Theresa Burrows was subsequently advised by Minister Shane Gibson to not proceed with the Energy Study payment and the efforts to obtain the $42,000 payment from NIB were abandoned by Mr. Gregory Moss. Copies of the communication relative to this matter are now produced and shown to me to be exhibited hereto marked "AMC16 ".
PROCEDURES PERFORMED (See APPENDIX A - Specific Procedures)
KEY FINDINGS
It was confirmed through interviews and reviewing of correspondence that the Earth and Sun Energy Company Ltd. was never contracted to do any work at NIB.
FINDINGS
a) We obtained the Annual Return of Earth and Sun Energy Company Ltd. The latest Annual Return on file is dated June 7th, 2011 (Appendix 1.01). This shows Mr. Gregory K. Smith of Freeport, Bahamas as holding all of the 2,500 shares issued by the company. Mr. Gregory K. Smith is also listed as President and Director.
24
ALLEGATION 1.4 - (iv.) in Affidavit (continued) b) We interviewed Mr. Gregory Moss at Grant Thorntons office on February 7, 2013. He was asked to respond to each allegation in the Affidavit filed by Mr. Algernon Cargill, dated November 28, 2012. Here are the relevant excerpts from that interview: 47. 48. GM said that he is not connected in any way to the Company. Grant Thornton asked GM of his association with Mr. Gregory Smith. GM said that he has a business relationship with Mr. Gregory Smith wherein he (GM) has ownership of 49.5% and of a company Mr. Smith owns 1% in that company. That company is a company other than Earth and Sun Energy Company Limited. Grant Thornton asked GM if he discussed the Energy Audit with AC. GM said that he did not recall ever discussing that matter with AC. He said that he was told by Theresa Burrows that NIB had received a proposal from Earth and Sun Energy Company Limited to conduct an energy audit. He said that Mrs. Burrows told him that there had been other proposals in the past to conduct energy audits and that those proposals did not call for any upfront payments. He said he told Mrs. Burrows to follow whatever was the standard procedure in NIB and as far as he knew no contract was ever concluded with Earth and Sun Energy Company Limited and no cheque was ever issued by NIB in respect of that matter. 49. Grant Thornton asked GM if he issued a directive to pay $42,000. GM said that that was an absolute lie and it was never done. He said that he did not issue any directive. Grant Thornton read AC Affidavit that read Mr. Moxey also advised that we had several offers for free energy studies, and had also completed a similar study in 2011 for approximately $3,000 and Mr. Gregory Moss directive was to now pay $42,000 for the same type of work. Ms. Theresa Burrows advised Mr. Moss of these comments during a meeting in the Chairmans office that Mr. Moxey and I also participated in, and advised him of the Ministers reluctance to approve this payment as he had directed Mrs. Cecile Bethel to execute. GM said that that is an absolute unmitigated lie. He said that he never gave a directive to pay the $42,000. c) Mrs. Theresa Burrows confirmed that several proposals were received previously ranging in price from free to $2,500. Mrs. Theresa Burrows confirmed that eventually the energy proposal for $42,000 was not approved. This was corroborated by Mrs. Cecile Bethel, Acting Director and Mrs. Theresa Burrows, V.P of Business Support.
50.
25
d) Response in writing from Mrs. Cecile Bethel, Acting Director:
Chairman Moss requested that the proposal from Earth and Sun Energy Ltd. be reviewed and NIB should seek to engage their services. The proposal requested up-front payment in full of $42,000 which was the initial impediment to NIB doing business with the company as it was explained that this type of arrangement is not the norm. In this regard, it was suggested that Earth and Sun be so advised. It was later indicated that similar studies were known to cost less and, in some cases, to be offered free of charge.
e) We received an email dated February 11, 2013 from Mr. Don Hinst, General Manager, Illumination Logistic Services (ILS). He confirmed that Mr. Greg Smith, President, Earth and Sun Energy Company Ltd. began representing ILS on June 27, 2011 (Appendix 1.02).
f)
EMAIL CORRESPONDENCE FROM AFFIDAVIT OF MR. ALGERNON CARGILL FILED NOVEMBER 28, 2012 IN SUPREME COURT
July 21, 2012
Excerpts: Letter from The Earth & Sun Energy Co. Ltd addressed to Mr. Algernon Cargill, Director, The National Insurance Board from Greg Smith, President, cc. Mr. Gregory K. Moss, Chairman: A major emphasis of our audit will be placed on the lighting at the various buildings. We will be submitting a proposal that will reduce your energy consumption cost for lighting by some 40% to 50%. We are pleased to commence with this audit within one week of receiving an engagement fee of forty two thousand dollars ($42,000). We are proposing to carry out the audit on the Sir Clifford Darling Complex in Nassau and the NIB Complex in Freeport, Grand Bahama.
26
ALLEGATION 1.4 - (iv.) in Affidavit (continued) July 30, 2012 Excerpts: Letter from The Earth & Sun Energy Co. Ltd addressed to Mr. Algernon Cargill, Director, The National Insurance Board, from Greg Smith, President, cc. Mr. Gregory Moss, Chairman Further to my letter of July 21, 2012 and my subsequent discussions with your Chairman, Mr. Moss on July 27th, 2012, Please note that we agree with your requirement to expand the energy audit to include the Parliamentary Registration Department building on Farrington Road, Nassau; Alexander House on Robinson Road, Nassau; The Fox Hill Nib Sub Office, Nassau: Poinciana Hill Government Office Complex, Nassau; Poinciana Hill Government Office Complex, Nassau; The Thompson Boulevard Office Complex, Nassau; and the J.L. Centre Building on Blake Road, Nassau. We await your timely response and advise that we are available to commence the audit within days of us receiving the audit fee. August 13, 2012
Email from Algernon Cargill, 9:17am to Theresa Burrows and Osbourne Moxey.
Excerpt: FYI and action August 13, 2012
Email from Theresa Burrows, 9:48am to Algernon Cargill.
Excerpt: Director, I do not support the concept of full payment up front, Perhaps we can go with half down and the balance on completion of the assessment. August 13, 2012
Email from Algernon Cargill 9.51am to Theresa Burrows.
27
ALLEGATION 1.4 - (iv.) in Affidavit (continued) Excerpts: Thanks for your feedback. I do not have any of these answers but suggest that you ask the company for further clarity. lets make a formal recommendation after you have all of the answers to the questions raised. g) We requested the proposals that came in to management but never received.
ALLEGATION 1.5 (v. Affidavit)
During a business trip to San Juan Puerto Rico with Mrs. Phaedra Mackey-Knowles, Mr. Moss directed Mrs. Cecile Bethel, Sr. Deputy Director, Operations, on September 14, 2012, to issue a check to Star General Insurance Company to pay for the NIB General Insurance coverage, although at the time, coverage with NUA was still in effect. This payment of several million dollars would have resulted in duplicate coverage in place, and a contravention of the directive Ms. Mackey-Knowles and I had received from the Minister of Labour and National Insurance. Mrs. Bethel referred the request to Ms. Phaedra Mackey-Knowles for execution on her return from Puerto Rico and Ms. Mackey-Knowles refused to execute these instructions as she was also previously advised by the Minister of Labour and National Insurance "to not terminate the NUA contract if it is going to cost NIB more than we've expended already." A copy of Mr. Moss' directive is now produced and shown to me to be exhibited hereto marked "AMC-17".
KEY FINDING A resolution was passed at the Board of Directors meeting on August 30th, 2012 to authorize the Contracts and Tenders Committee to have the other two companies in the tender process resubmit so as to have one of them replace Bahamas First General Insurance Company Limited who was to be terminated.
28
FINDINGS a) We interviewed Mr. Gregory Moss at Grant Thorntons office on February 7, 2013. He was asked to respond to each allegation in the Affidavit filed by Mr. Algernon Cargill, dated November 28, 2012.
Here are the relevant excerpts from that interview: 51. GM said that was true but that it was for the purpose of implementing the resolution of the Board by which the Board had resolved that the current insurance contract with Bahamas First be terminated and a new insurance contract with Star General Insurance be implemented. He said that before that, the Board had passed a resolution to terminate the insurance contract with Bahamas First. GM said that the communication was a part of the resolution which had been passed by the Board. He said that he just wants to reiterate that it was the Board who made the resolution not him. He said that AC repeatedly has attempted to suggest that resolutions which had been passed by the Board were personal decisions by him (GM). He said that that is simply untrue as anyone who reads the National Insurance Act and the Minutes of the Board Meetings would see that they were decisions of the Board which I was implementing as the Chairman. GM said that the Board passed a resolution to terminate the contract with Bahamas First and out of courtesy, they informed the Minister Mr. Shane Gibson but the Minister said no, do not terminate. GM said that the Minister, Mr. Shane Gibson took the position not to terminate. Grant Thornton asked GM if they discussed the matter with the Board. GM said that he informed the Board that the Minister did not want the Board to implement its resolution to terminate the Bahamas First insurance contract and the Board said that it would follow the directive of the Minister because the Minister can issue a directive to the Board under Section 7 of the Statute but that as there are steps before giving a directive, the Minister should follow those steps and issue his directive. The Board disagreed with the Minister over leaving the insurance policy in place. 57. GM said that the Minister met with the Board on a Sunday and, after a discussion with the Board, mentioned that he would issue a written directive to say that the termination of the Bahamas First insurance policy would not be put into effect. No written directive from the Minister was ever received according to GM.
53.
54.
55. 56.
29
ALLEGATION 1.5 - (v.) in Affidavit (continued) 58. Grant Thornton asked GM if he knows why the Minister Mr. Shane Gibson did not cancel the Bahamas First contract. GM replied that he cannot speculate why the Minister would not want to terminate the contract with Bahamas First. GM added that as per NIB Act Section 7, the Minister has the power to give a directive after consultation with the Board. GM referred to an earlier Board Meeting and said that AC and Mrs. Phaedra MackeyKnowles were present and the Board was discussing the termination of the Bahamas First insurance policy because of a clear conflict of interest in the previous Board of NIB having awarded that policy to Bahamas First when the Chairman of the Board at that time was an executive of Bahamas First. Either AC or Mrs. Phaedra MackeyKnowles (he could not recall which person it was) stated that the policy could not be terminated. When asked why it could not be terminated, that person responded to say that NIB could not terminate the policy because it was a fixed three year contract and, also, that because if NIB sought to cancel the insurance policy, in the middle of the hurricane season, the short rate premium which would be imposed upon cancellation would be the same as the full extent of the premium which NIB had paid. GM said that in the middle of that earlier Board meeting the members had suggested that the meeting be adjourned in order for him to consult with the Minister and to find out why the Bahamas First policy had been approved. He said that after consultation with the Minister he informed the Board that the Minister had indicated that Cabinet had initially disapproved Bahamas First, notwithstanding that it had the lowest bid, on the basis of the same conflict of interest which the Board had identified and had directed AC to send the matter back out to tender and to exclude Bahamas First from the second tender exercise. He said that the Minister explained that AC had sent the matter back out to a second tender as instructed but had still included Bahamas First in the second tender exercise with the result that Cabinet felt compelled to accept Bahamas First notwithstanding the conflict of interest because it was the lowest bid and because the hurricane season was approaching and there was no time to conduct another tender exercise. He also said that the Minister agreed that if there was a basis for cancelling the Bahamas First policy the Board should cancel it as there was an obvious conflict of interest. As a result, the Board deferred the matter and instructed him to review the policy.
60.
61.
b) Mr. Moss indicated that he was acting on a resolution passed at the Board of Directors meeting on August 30th, 2012 to authorize the Contracts and Tenders Committee to find a replacement insurance company and subsequently terminate the insurance contract of Bahamas First General Insurance Limited (See below).
30
ALLEGATION 1.5 - (v.) in Affidavit (continued)
c) Timeline- Review of Contracts and Tenders Committee Minutes and Board of Directors Minutes for the period: i.) August 30th, 2012 - Resolution passed by Board of Directors to authorize the Contracts and Tenders Committee to have the other two companies in the tender process resubmit and have one of them replace Bahamas First General Insurance Company Limited who was to be terminated (See Below). ii.) September 13th, 2012 - Resolution passed by Contracts and Tenders Committee to enter NIB into contract with Star General Insurance and Terminate Bahamas First General Insurance Company Limited (See Below). iii.) September 14th, 2012 - Chairman Mr. Gregory Moss contacts NIB Management to terminate services of Bahamas First General Insurance Company Limited. Resolution was passed at the Board of Directors Meeting on August 30th, 2012 to authorize the Contracts and Tenders Committee to have the other two companies in the tender process resubmit So as to have one of them replace Bahamas First Insurance Company Limited who was to be terminated. NIB 2012 6TH (REGULAR) MEETING THE NATIONAL INSURANCE BOARD The Minutes of the 6th (Regular) Meeting of the Board of Directors of The National Insurance Board held on Thursday, 30th August, 2012 in the Boardroom of The National Insurance Headquarters Building situated on Baillou Hill Road, at 4:00 p.m. Present: Mr. Gregory K. Moss, Chairman Mr. Bernard Evans, Deputy Chairman Mr. Jayson Moxey, Member Ms. Linda Denise Evans, Member Mr. Freddie Munnings Jr., Member Mr. Philip Beneby, Member Mr. Patrick Davis, Member Mr. Merrit Storr, Member Mr. Marquista Thompson, Member Bishop Harry Collie, Member Dr. Josephine Bartlett, Member Mrs. Phaedra Mackey-Knowles, Deputy Director/Vice President Investments Mrs. Sonia Gill, Financial Controller
Apologies:
31
ALLEGATION 1.5 - (v.) in Affidavit (continued) In Attendance: Mr. Algernon Cargill, Director Mrs. Cecile Bethel, Senior Deputy Director, Operations Mrs. Ernestine Kelson, Manager/Secretary to the Board of Directors
2.9.11 Following some further discussion on this matter, on a motion duly made, seconded and unanimously carried, the following resolution was adopted: Be it resolved that the Board of Directors authorizes the Contracts and Tenders Committee to attend to source replacement insurance coverage for the NIB properties presently insured by Bahamas First General Insurance Company Ltd., through its agent N.U.A. Insurance Agents & Brokers Limited (NUA) and to invite the two other companies which were previously involved in the bidding process (Star General Insurance Agents & Brokers Ltd. and J.S. Johnson Company Ltd.) to resubmit tenders, and upon the identification and placement of a suitable replacement policy of insurance coverage for the NIB properties, to terminate the contract with Bahamas First General Insurance Company Ltd. and recoup the balance of the premium previously paid. September 13th, 2012 Resolution passed by Contracts and Tenders Committee to enter NIB into contract with Star General Insurance and Terminate Bahamas First General Insurance Company Limited Contracts and Tenders Committee 13th, September, 2012 at 5pm Present: Mr. Patrick Davis, Chairman Mr. Gregory Moss, Ex-Officio Member Mr. Bernard Evans, Ex-Officio Member Mr. Jayson Moxey, Member Bishop Harry Collie, Member Mr. Johnnie Taylor, Member Mr. Algernon Cargill, Director Mrs. Sonia Gill, Financial Controller Mrs. Cecile Bethel, Senior Deputy Director Mrs. Theresa Burrows, Deputy Director/Vice President Business Support Services Mrs. Heather Maynard, Legal Officer Mr. Whitney Patton, Chief Internal Auditor Mrs. Ernestine Kelson, manager/Secretary to the Board of Directors
Apologies:
In Attendance:
2.2.10 On a motion duly made seconded and unanimously carried, the following Resolution was adopted:
32
ALLEGATION 1.5 - (v.) in Affidavit (continued) Be it resolved that the Contracts and Tenders Committee authorizes and directs the Director to: 1) Enter into a contract with Star General Insurance Agents & Brokers Ltd. Effective 24th September, 2012 to 31st May, 2013 at the prorated amount of approximately $1,562,014.39 for replacement insurance coverage for the NIB properties presently insured by Bahamas First General Insurance Company Ltd., and 2) Terminate the Policy with Bahamas First General Insurance Company Limited, as previously approved by the Board, effective 24th September, 2012 and recoup the balance of the premium in the approximate sum of 60% of the paid premium. ALLEGATION 1.6 - (vi.) in Affidavit
During my vacation in July 2012, Mr. Gregory Moss contacted Mrs. Cecile Bethel, Sr. Deputy Director, Operations, to issue a Guarantee for $15,000, to Doctors Hospital, to pay for a heart valve surgery to be performed by Dr. Duane Sands on Linda Elizabeth Russell, a resident of Grand Bahama. Mrs. Bethel referred this request to Dr. Kevin Bowe, who was on vacation at the time, and requested that he prepare the Guarantee although it was outside of NIB's policy and the National Insurance Act and Regulations. Doctor Kevin Bowe advised Mrs. Bethel that he could not prepare the Guarantee and to do so would be a direct violation of the National Insurance Act and Regulations. At Mrs. Bethel's request, he subsequently telephoned Mr. Gregory Moss and advised him of the same and refused to participate in this illegal action. Notwithstanding this sound advice, and also notwithstanding her own awareness that to issue the Guarantee in payment of surgery that was not the result of an Industrial Action, and also notwithstanding Dr. Kevin Bowe's comments to Mr. Gregory Moss, and Mrs. Bethel's reported comments to Mr. Gregory Moss that the Guarantee should not be issued, Mrs. Bethel prepared and faxed the Guarantee to Doctor's Hospital on July 28, 2012, thereby binding NIB to pay for surgery that is not covered in any part of the National Insurance Act and supporting regulations. NIB's Actuary subsequently deemed this Act to be illegal and the Minister of Labour and National Insurance subsequently contacted me to determine the basis for NIB participating in this illegal act of issuing a Guarantee in payment of surgery, when there is no provision in the National Insurance Act and
Regulations. I was instructed the Minister to advise Mr. Moss that the Minister was now aware of this matter and had raised certain questions as to why he had directed that the guarantee that fell outside of the National Insurance Act and regulations was improperly issued.
33
ALLEGATION 1.6 - (vi.) in Affidavit (continued)
Mr. Gregory Moss subsequently advised me, Mr. Osbourne Maxey, and Mrs. Theresa Burrows, and later the NIB Board of Directors, that he was aware that the Guarantee issued by Mrs. Cecile Bethel, at his request, was ultra vires the National Insurance Act and Regulations, and should he be placed in same position, that he would do the same thing again. The repayment of this guarantee was subsequently completed via a direct payment received by me from an attorney to Doctor's Hospital on the understanding that NIB not be billed for the illegal guarantee provided by Mrs. Cecile Bethel. A copy of the Guarantee, cheque and receipt from Doctor's Hospital are now produced and shown to me to be exhibited hereto marked as "AMC-18".
KEY FINDINGS
a) The Chairman gave a report on the Guarantee in the section "Chairman's Report on Exercise of Spending Authority" at the Board of Directors meeting on August 30, 2012. See Excerpt.
b) The Guarantee was issued to Doctor's Hospital on July 28, 2012 but was never paid by NIB, as the hospital amounts due were paid by other entities.
FINDINGS
a) Dr. Kevin Bowe V.P, Medical Department at NIB, was interviewed and he indicates that Chairman Moss said there was a provision in the Act giving him the authority to approve the guarantee and that he would go back to the Board Members afterwards (See below). Excerpts from Interview on February 5th, 2012 with Dr. Kevin Bowe, V.P Medical Department: The exact flow of my account with regards to the matter was that I was on my first day of vacation, it was a Saturday. I got a morning call from Mrs. Bethel and she told me that she was advised by the Chairman that a person is requiring a surgery (heart-related medical procedure) and that the surgeon will not go ahead with the procedure until there was a guarantee of the remaining balance. Mrs. Bethel continued that Mr. Moss had indicated that there was a source who had provided for part of the payment, he was not sure but thought it may have been the PHA.
34
ALLEGATION 1.6 - (vi.) in Affidavit (continued) There was still a remaining balance which Mr. Moss requested that NIB cover in a guarantee amounting to $15,000. It was also indicated that the surgeon is not touching the patient without getting paid. Mr. Moss thought that NIB should be able to assist as this was a medical emergency. During the call with Chairman Moss, (a short call), I called Mr. Moss cell phone, I identified myself. I was calling at the request of Mrs. Bethel. Mr. Moss explained that the doctor was not touching the patient unless the amount was paid. He intended to apprise the Board Members. I conveyed to him that we cant issue a guarantee as it was not an industrial injury and I was not aware of any provision in the Act to say otherwise. I said to the Chairman that there were only a couple of incidents wherein NIB issued a guarantee on non-work related in jury. Grant Thornton: Was it unusual that Mrs. Bethel or Mr. Cargill prepares a guarantee? KB: I was never aware of any incident before. But I understand that Mrs. Bethel prepared the guarantee under the instructions of the Chairman. b) We interviewed Mr. Gregory Moss at Grant Thorntons office on February 7, 2013. He was asked to respond to each allegation in the Affidavit filed by Mr. Algernon Cargill, dated November 28, 2012.
Here are the relevant excerpts from that interview: 76. Grant Thornton asked GM if he knows Ms. Linda Elizabeth Russell (i.e. the name on the Guarantee issued on July 28, 2012). GM said that he doesnt know her. Grant Thornton asked GM to describe the situation around the Guarantee. GM then related that to prove that he does not to this day know that woman whom he gave the guarantee for he can recall that one morning, sometime after the surgery had been performed, Minister Ken Dorsette of the Ministry of Housing came to Freeport and after his business was concluded GM was dropping him to the airport. As it was still very early for his flight, they stopped at a business establishment and while they were walking in GM was approached by a woman who hugged him and said thank you. When he did not recognize her she said that she is the woman whose life GM saved by helping to pay for the surgery at the Doctors Hospital and she showed him her scar. GM said he remembers the womans daughter from having seen her at rallys in Freeport and having collected a thank you card from her on behalf of her mother. He said that he does not know where they live but that when she called him to collect the thank you card they met in front of a store on Settlers Way in Freeport which she said was near her house so he assumes that she lives near there. He said that he would not recognize the woman who received the surgery if he sees her again because that was the first and only time that he met her.
77. 78. 79.
35
ALLEGATION 1.6 - (vi.) in Affidavit (continued) GM continued to relate his recollection. He said that the issuance of the Guarantee happened on a Saturday. He said that it was late in the morning when he got a call from a lady who identified herself as the daughter of a woman who needed surgery. She said that he knew her as she and her mother helped during the campaign with Mr. Darville and she said that her mother was having heart surgery the following Monday at 8am. She said that the surgery would cost $35,000 and that their family had only $15,000. She said that Dr. Sands told her that if he (Dr. Sands) does not get at least another $15,000 that Saturday, he would not prepare for the surgery and would not perform the surgery and this meant that her mother would die. Given the urgency of the matter, GM said that he called the mothers local doctor, Dr. Forbes, to verify that what the daughter was saying was true and to discuss the condition of the mother. Dr. Forbes said that even if she had the surgery she would likely still not live. GM said that he then called Dr. Sands and told Dr. Sands that he would bring a personal cheque to Nassau the next week for $15,000 but that Dr. Sands still refused to proceed unless he received the funds that day. 83. Grant Thornton asked GM if he at any point advised AC, Mr. Osbourne Moxey and Mrs. Theresa Burrows that his request was ultra vires the National Insurance Act and Regulations. GM said that he did not advise any of those persons or anyone else of any such thing because that would not be true since that act was not ultra vires because he was authorized by the Board to enter into any contract of up to $50,000. GM said that he phoned Mrs. Cecile Bethel and directed her to issue a guarantee to Doctors Hospital for $15,000. GM said that he gave the directive since the Board had authorized him to approve up to $50,000 for any contract subject to his obligation to report to the Board at the next sitting. He said that as a part of his directive to Mrs. Bethel he told her that he would recommend to the Board to consider it as a donation in the next meeting and that if it was not approved, he would pay it personally. GM said that he subsequently discussed the matter with the Minister and advised the Minister that he would not bother with asking the Board to approve the sum as a donation but would simply pay in himself. He said that he and the Minister agreed that a third party would issue a $15,000 cheque to Doctors Hospital in order to preserve GMs anonymity and that he (GM) would then reimburse the cheque. He said that the third party then issued a cheque to Doctors Hospital and that he (GM) then issued a personal cheque for $15,000 to Mr. Joseph Curry to reimburse the third party.
84.
86.
87.
c) Mrs. Theresa Burrows, V.P. Business Support
Mrs. Burrows was not aware of any instance where Mr. Gregory Moss indicated that the guarantee was ultra vires the National Insurance Act.
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d) We requested policies and procedures around the issuance of guarantees from Dr. Kevin Bowe, Medical Officer at NIB and he told us that there are no policies and procedures in writing.
We reviewed the Board Minutes dated July 25, 2012 and do not see any instance where Mr. Gregory Moss indicated that the guarantee was ultra vires the National Insurance Act. e) The letter of Guarantee is dated July 28, 2012, a Saturday. The Surgeon is listed as Dr. Duane Sands. Patients name: Linda Elizabeth Russell. Amount of Guarantee: $15,000. Signed by Mrs. Cecile S. Williams-Bethel, Sr. Deputy Director (Appendix 1.05).
Kevin Bowe in his interview with Grant Thornton stated that it is not the practice of NIB to place amounts on Guarantees. We viewed five sample guarantees from the Medical Department and noted no amounts on them.
f)
LEGAL OPINION (Appendix 1.03)
Letter received from Mrs. Heather Maynard gave her opinion that the Guarantee was not issued in accordance with the National Insurance Act and aforementioned Regulations. (Appendix 1.03)
g) Response from Mrs. Cecile Bethel, Acting Director
I received a call on Saturday July 28, 2012 from Chairman Moss. He advised of a situation where a lady required a heart-related medical procedure without which she would likely die.
37
Chairman was advised by both Dr. Kevin Bowe (whom I contacted and asked to also speak with the Chairman to also provide clarity) and myself that the case did not fall within the ambit of benefits covered as this was not an illness arising from her employment. The Chairman instructed that the letter be prepared and that he would report to the Board at its next sitting to determine whether it would be a donation from the Board or whether he would pay for it himself. I prepared the letter and faxed it to Doctors Hospital, copying in the Chairman, Director Cargill and Dr. Bowe. Be advised that at the meeting of the Board of Directors (BOD) on July 25, 2012, a resolution was passed giving the Chairman spending authority up to $50,000 for urgent situations and requiring him to report back to BOD at its next sitting. The next sitting was August 30, 2012 at which time the Chairman fully disclosed the incident. I am aware that the letter of guarantee was withdrawn, the amount was paid off by a cheque through an attorneys office and NIB incurred no cost related to the guarantee.
We viewed a receipt from Doctors Hospital Health System dated August 24, 2012 in the amount of $15,000, receipt no. 27747. (Taken from Affidavit of Mr. Algernon Cargill) We viewed a Cheque copy dated August 24, 2012 paid to Doctors Hospital by order of Melissa Hall & Co., drawn on FINCO bank. (Taken from Affidavit of Mr. Algeron Cargill)
h) Excerpt from The Board of Director Minutes NIB 2012 6TH (REGULAR) MEETING THE NATIONAL INSURANCE BOARD August 30, 2012 Excerpt: Chairmans Report on Exercise of Spending Authority 4.4.1 The Chairman informed the Board that he was contacted by someone in Freeport who had a health crisis, and needed to have an emergency heart surgery. He explained that $35,000 was needed for the surgery to be done at Doctors Hospital in New Providence. The Chairman said that he had spoken with Drs. Duane Sands, Winston Forbes and the individuals own physician, Dr. Wilfred Ferguson who all confirmed that if the lady did not have the surgery she would not have survived.
4.4.2
4.4.3
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ALLEGATION 1.6 - (vi.) in Affidavit (continued) 4.4.4 He went on to say that the crisis occurred on a Saturday and the surgery was scheduled for the Monday. He continued that the Public Hospitals Authority gave $15,000, and an additional $15,000 was still needed. The Chairman said that he instructed NIB to give $15,000 for this cause. He later got advice from NIB which indicated that this type of donation does not fit into NIBs benefit parameters. He is now bringing the matter to the Board to review and suggest how situations like this one can be funded by NIB. The Chairman went on to say that a benefactor had volunteered to pay the $15,000 paid by NIB, and he requested the Director to confirm whether this had happened, and if it had not he would pay the monies back.
4.4.5
4.4.6 4.4.7
4.4.8
4.4.9
4.4.10 The Director confirmed that the benefactor did in fact come forth and make payment. 4.4.11 The Chairman concluded that he did not know what the donation policy of NIB was, but his duty is to make full disclosure. 4.4.12 One member commended the Chairman for the stand he took, but commented that he may have compromised his position as Chairman. It was said that thankfully the benefactor did come through. 4.4.13 For precedent setting, it was suggested that it was important to look at how we operate within the parameters of the Board. 4.4.14 It was the members view that this particular incident was all the more reason for the Government to look at implementing a National Catastrophic Insurance. 4.4.15 The Chairman did not feel that he had compromised his position as Chairman, but he was simply having NIB make a donation on behalf of someone that was in a life or death situation. 4.4.16 The Director suggested that there may be a need to expand the National Prescription Drug Plan, to have some assistance in place to accommodate these type of situations. 4.4.17 One member suggested further that it may be a good idea to look at an emergency fund. 4.4.18 Members concluded the discussion by stating that because we all contribute to the National Insurance Scheme, we cannot be selective in our decision making.
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ALLEGATION 1.6 - (vi.) in Affidavit (continued) 4.4.19 The Chairman requested that this matter be referred to the Finance/Investments Committee for review. 1.4.20 He said that all other deferred items appearing on the agenda should be referred to the relevant sub-committee. ALLEGATION 1.7 - (vii.) in Affidavit
Mr. Gregory Moss, without consultation or any prior discussion, with me or the Board of Directors, wrote to me on August 27, 2012, and requested that I provide Mr. Derek Osbourne, NIB's Actuary, with ninety (90) days notice and terminate his contract with NIB. This communication was copied to the Hon. Shane Gibson, the Board of Directors, Cecile Bethel, and Heather Thompson-Maynard. I replied to Mr. Gregory Moss on August 30, 2012, and cited several business and practical reasons why Mr. Osbournes contract should not be terminated. However, I advised Mr. Moss that I had no difficulty in carrying out the instructions of the Board of Directors, and in this instance, there was a directive from the Chairman, not previously discussed at the Board of Directors or approved by the Board of Directors. As Director of the National Insurance Board, I felt that I should have had an opportunity to outline to the Board why the directive from the Chairman, which was neither discussed at the Board of Directors' level, nor approved by the Board and/or the Minister, was not the most practical course to take at that time. I concluded by stating that confidential and sensitive matters like the termination of Derek Osbourne, an NIB Executive, should be discussed prior to committing to writing, and that I was available at Mr. Moss' convenience to discuss his August 27, 2012 communication prior to any action being taken to terminate Mr. Osbourne's contract. I subsequently spoke with the Minister of Labour and National Insurance who advised that Mr. Moss' instructions to terminate Mr. Osbourne's contract should not be carried out and, further, should not even be considered unless NIB had a replacement Actuary in place. I subsequently contacted the International Labour Organization, and the governing body for Global Social Security, the International Social Security Association, (ISSA) headquartered at the ILO's office in Geneva, Switzerland. These Agencies provided NIB with a detailed consolidated communication outlining that it was in NIBs best interest, and that of Social Security Organizations in general, to have a full time Actuary employed in the organization. They wrote in their October 22, 2012 communication that, "With this in mind, the ILO and the ISSA understand your concern to maintain the independence of the actuary, but also note that independence does not only depend on whether the actuary is an internal or external actuary. In addition, whatever the decision taken for the regular actuarial valuation, we believe that it is important for the reasons exposed above that the NIB maintains and even improves its internal actuarial capacities." Copies of the said communication of Mr. Gregory Moss and the ILO are now produced and shown to me to be exhibited hereto marked "AMC-19".
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ALLEGATION 1.7 - (vii.) in Affidavit (continued) PROCEDURES PERFORMED
RESULTS OF PROCEDURES
a) Mrs. Cecile Bethel, Acting Director, indicated to Grant Thornton that she cannot speak on this matter. b) We interviewed Mr. Gregory Moss at Grant Thorntons office on February 7, 2013. He was asked to respond to each allegation in the Affidavit filed by Mr. Algernon Cargill, dated November 28, 2012. (Appendices 1.09 through 1.11)
Here are the relevant excerpts from that interview: 88. Grant Thornton read Section (k), vii regarding GMs instructions to AC to terminate the contract of Mr. Derek Osbourne, NIBs Actuary. Grant Thornton asked GM if he communicated with AC on August 27, 2012 requesting the termination of Mr. Derek Osbourne. GM said that he did. GM said that the instruction to terminate the services of Mr. Osbourne was based on three issues. First, that as with auditors, no company should have its books reviewed by the same persons for such a protracted period of time as the fifteen (15) years that Mr. Osborne was acting as the actuary of NIB. As all of the projections of NIB, in relation to the level of contributions and otherwise, were based solely upon Mr. Osbournes actuarial conclusions and projections, there was a significant concern as to the degree to which past actuarial analyses had not been reviewed by a subsequent actuarial analysis. Secondly, that section 48(1) of the National Insurance Act speaks to an actuarial process that involves NIB, on the one hand, and an actuary, on the other hand. In other words, it envisages an actuarial report being prepared by an independent actuary and not by an employee of NIB. In that regard, Mr. Osbournes role in NIB is not that of an independent actuary. He is not only employed by NIB but also serves in various management and non-actuarial advisory capacities within NIB. As a result, any report produced by him (or any other employee of NIB) would not have the independent input that is required under the National Insurance Act in order to produce an independent report on the financial condition of the Fund and the adequacy of the contributions to lay before both Houses of Parliament pursuant to section 48(2) of the National Insurance Act. Thirdly, as an employee of NIB, NIB would have no recourse against Mr. Osbourne should it be determined that his advice was negligent or deficient. PRIVATE & CONFIDENTIAL 5/6/2013 3:57 PM
89. 90.
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ALLEGATION 1.7 - (vii.) in Affidavit Not only would there be no legal basis for NIB (as an employer) to sue its own employee, but Mr. Osbourne would not have the financial backing to pay any damages that might be awarded to NIB in such a case. That is why it was decided that an independent, institutional actuary, with substantial insurance coverage, should be found to provide actuarial services to what is essentially the largest savings fund for the Bahamian people. 91. GM said that he discussed these issues with the Minister and that the Minister agreed that Mr. Osbournes services should be terminated. However, after the instructions to terminate Mr. Osbourne were given, the Minister indicated that no termination should be effected until after a replacement institutional actuary had been engaged. Emails and communications between the Minister and GM are available and will be provided as requested by PAG.
92.
ALLEGATION 1.8 - (viii.) in Affidavit Since Mrs. Cecile Bethel's appointment to NIB as the Sr. Deputy Director, Operations in June 2012, Mr. Gregory Moss has taken several calculated and frustrating steps to undermine the office of the Director of NIB by inviting Mrs. Bethel to every Board of Directors meeting although the National Insurance Act makes no provision for her attendance at these meetings; by writing directly to her and excluding me, as the Director, on matters relative to NIB's business, to including her in sensitive meetings wherein he discussed with me the Sandyport contract and the Sean Moss claims of victimization against Executives of NIB; by including her in communications to terminate Mr. Derek Osbourne, when Mr. Osbourne does not report to her; by insisting that I delegate my full authority, including Human Resources matters, to her whenever I am out of the office; by requesting Mrs. Bethel and/or her secretary to prepare documentation for sensitive meeting involving me and to safeguard these documentations in her office and not discuss same with me prior to the meeting; by directing Mrs. Bethel to issue an illegal guarantee to Doctors Hospital; by directing Mrs. Bethel to pay Earth and Sun Energy Ltd in full for an Energy Study, and by directing Ms. Bethel to issue a payment for duplicate insurance coverage to Star General Insurance company.
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ALLEGATION 1.8 - (viii.) in Affidavit (continued)
RESULTS OF PROCEDURES a) We interviewed Mr. Gregory Moss at Grant Thorntons office on February 7, 2013. He was asked to respond to each allegation in the Affidavit filed by Mr. Algernon Cargill, dated November 28, 2012.
Here are the relevant excerpts from that interview: 93. Grant Thornton read Section (k), viii, regarding the alleged undermining of AC, inclusion of Mrs. Cecile Bethel on sensitive meetings and directing Mrs. Bethel to issue a guarantee to Doctors Hospital. Mr. Moss said that Mrs. Bethel is a Deputy Director and it is inconceivable that she be kept in the dark. When the Director is out, she has to sit on his behalf and, therefore, must be aware of everything that is going on in NIB. He said that the matter was discussed with the Minister and the Board agreed to invite her into the meetings and the reason that she is there is to step in on behalf of the Director. GM said that under section 9 of the National Insurance Act, the Board delegates authority. All authorities which were delegated to AC as Director were to be exercised by the Deputy Director when he was not available. That is why she is called the Deputy Director. AC had no right to attempt to sub-delegate any of his authority to anyone else of his choosing. That is the position under the Act and was also the directive of the Minister to him. GM said that ACs attempt to delegate HR matters to Richenda King was totally ultra vires his powers and that the HR matters, in the absence of AC as the Director, should have been delegated to Mrs. Cecile Bethel as Deputy Director and not to Mrs. Richenda King. The incongruence of ACs attempt to delegate HR matters to Mrs. Richenda King during his absence was that Mrs. King (as the Vice President of HR) would have been reporting to herself (as the delegate of the Director) in all HR matters when the Director was not present. That was simply wrong and unworkable in every respect. The Directors functions were clearly to be performed by the Deputy Director in the absence of the Director.
94.
95.
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ALLEGATION 1.9 - (ix.) in Affidavit
Contrary to the sound and professional advice of Phaedra Mackey-Knowles, a Certified Public Accountant and Chartered Financial Analyst, that NIB should not participate in a Private Placement of $10 million preferred shares offer, as the investment fell outside of NIB's Investment Policy Statement, the investment was high risk, the investment's size exceeded the company's net worth and the perpetual nature of the offering, Mr. Gregory Moss and Mr. Patrick Davis at the Investment Committee meeting overturned Management's recommendation and directed management to seek Ministerial approval for the full $10 million offering. Mr. Moss subsequently advised the Investment Committee, me, and Lolitta Rolle who deputized for Phaedra Mackey-Knowles at the September 28, 2012, Investment Committee meeting, and insisted that his comments be minuted, that he had spoken with Ministers Khaalis Rolle and Ryan Pinder, and that they wanted this investment to be approved by NIB, and he understands that Minister Ryan Pinder also spoke with Minister Halkitis who also wanted this investment to be approved by NIB, and further, that he understand that Minister Halkitis spoke to the Hon. Prime Minister, Perry G. Christie, who also wanted this investment to be approved by NIB. Mr. Moss insisted that these comments be minuted in the Investment Committee and the Board of Directors minutes. I considered that this practice was outside of the conventional behavior, and there, was no direct evidence that these conversations with the aforesaid Ministers did in fact happen, I contacted the Minister of Labour and National Insurance in the presence of Ms. Theresa Burrows, VP of Business Support, and advised him of my uneasiness with Mr. Gregory Moss' insistence that the Ministers' and the Hon. Prime Minister's purported comments be documented in the NIB minutes as supporting an investment that management did not support, and further, that the Investment Committee and Board of Directors overturned Management's recommendation on these bases. I documented Management's concerns in my September 28, 2012, communication to the Permanent Secretary, Ministry of Labour and National Insurance and the mitigating recommendations imposed by the Investments Committee and the Board of Directors, and outlined that notwithstanding these inclusions, that the investment still fell outside of NIB's Investment Policy Guidelines as the company is not publicly traded on BISX. The Ministry of Finance declined the Investment by way of its October 1, 2012, Memorandum.
Copies of the correspondence relating to this proposed investment are now produced and shown to me to be exhibited hereto marked "AMC-20".
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ALLEGATION 1.9 - (ix.) in Affidavit (continued)
KEY FINDINGS
The Board of Directors at its meeting on September 27, 2012 approved the investment in BAB financial private placements subject to certain conditions which were detailed in the resolution.
The Ministry of Finance declined to approve the investment on October 1, 2012.
FINDINGS
a) Response from Mrs. Cecile Bethel, Acting Director:
There was much discussion regarding this placement at both the Finance/Investment Committee meeting and the BOD meeting. The final determination was that while the proposal was not recommended by Management in its preliminary form, with the specified additional conditions, as recommended by Members and added to mitigate the risks, the Finance/Investment Committee at its meeting on September 27, 2012 adopted, and the BOD at its meeting on the same day unanimously passed a resolution for the approval of the investment. b) We interviewed Mr. Gregory Moss at Grant Thorntons office on February 7, 2013. He was asked to respond to each allegation in the Affidavit filed by Mr. Algernon Cargill, dated November 28, 2012.
Here are the relevant excerpts from that interview: 96. Grant Thornton read Section (K), ix, regarding the private placement of $10 Million preferred shares offer. Grant Thornton asked GM if he and Mr. Patrick Davis overturned Managements recommendation and directed management to seek Ministerial approval for the full $10 Million dollar offering private placement. GM said that that never happened and is impossible under the structure of NIB. He said that NIB received a proposal from BAB Holdings Limited to invest $10 million in preferred shares.
97.
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ALLEGATION 1.9 - (ix.) in Affidavit (continued)
98.
He said that he received a call from a Lawyer Mr. John Wilson asking NIB to place monies in BAB Holdings Limited through a private placement of $10 million preferred shares. He believes that this company is owned by Mr. Chester Cooper and Mr. John Wilson. Whether there are other owners, he is not sure. GM said that he does not know Mr. Chester Cooper personally but he knows him by reputation as a former President of the Chamber of Commerce. He also said that he and Mr. John Wilson were former Associates at McKinney Bancroft & Hughes. He said that he does not have any personal association with either of them. Regarding that call, GM mentioned that Mr. John Wilson asked him whether he had received the proposal from BAB. He (GM) said that he told Mr. Wilson that the proposal was with NIB management for their recommendation in order for the Finance and Investment committee to review it. Once that was all done they would make whatever recommendation seemed appropriate to the Board. GM also mentioned a dinner at Lucianos where he saw Ministers Ryan Pinder, and Khaalis Rolle, who were there to celebrate Minister Pinders birthday. During their brief talk, Mr. Rolle mentioned that he understood that BAB has made an application to NIB for funding and BAB seemed to be a good company. GM was emphatic that no one asked him to have BAB treated in any preferential way and that, in fact, it would not be possible to do so under NIBs investment structure. GM said that the investment structure at NIB involves five (5) different levels of review. The first level was that management (Mrs. Phaedra Mackey-Knowles) produced a paper on the investment and said some positive things about the company and the proposal but ultimately did not recommend the investment. The second level was that the Finance and Investment committee, of which he chaired (and which comprised some 4 voting member and 4 resource members - including AC and Phaedra MackeyKnowles) looked at the proposal. The proposal as made by BAB was disapproved by the Finance and Investment Committee but was recommended for consideration of the Board subject to various conditions that were approved by the Finance and Investment Committee. The third level was that the matter went before the Board (comprising 10 voting members and at least 4 resource members - including AC and Phaedra MackeyKnowles ) and was again not disapproved by the Board as presented by BAB, but was approved by the Board subject to the imposition of various other conditions (including a final condition which was recommended by AC that the interest rate be increased by 1%) and subject to Ministerial approval by the Minister of National Insurance and by the Minister of Finance. In that regard, the Board gave express instructions to AC to write to the Minister to draw his attention to the recommendation of management that the proposal not be approved as presented by BAB and to the various conditions which had been imposed by the Board. At the fourth level, the matter was then approved by the Minister of National Insurance subject to the conditions imposed by the Board and at the fifth level the matter was disapproved by the Ministry of Finance.
99.
100.
101.
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ALLEGATION 1.9 - (ix.) in Affidavit (continued) 102. GM said that there was nothing untoward about the process that was adopted by NIB. In fact the process worked. The reality is that the BAB proposal was never accepted by the Board but a counterproposal was framed, which counterproposal was eventually disapproved by the Ministry of Finance and the matter ended there. He said that is how the system is supposed to work.
c) Response from Mrs. Phaedra Mackey Knowles V.P Investments:
Grant Thornton interviewed Mrs. Phaedra Mackey Knowles on February 8, 2013: We read section v of Mr. Cargill's affidavit regarding the instruction of Mr. Moss to issue a check to Star General Insurance Company and Mrs. Knowles refusal to execute Mr. Moss' instructions. After reading it, he asked Mrs. Knowles if she agrees with the statement. Mrs, Knowles said that she did not refuse but she followed the directive of the Minister of Labour and National Insurance. She said that while she and Mr. Cargill were in Puerto Rico, Mr. Moss instructed Mrs. Cecile S. Williams-Bethel to terminate the insurance with NUA in their absence. On her return to Nassau, she was asked by Mrs. Williams Bethel to do the same but did not as the Minister advised not to terminate the contract with NUA if it would cost NIB to spend more than the NUA's premium. We asked Mrs. Knowles if she was aware at that time that there was a board resolution. Mrs. Knowles said she was not aware. We asked Mrs. Knowles if she was aware of the rationale why the board terminated the insurance with NUA. Mrs. Knowles said that the initial concern was a conflict of interest with the former Chairman. ALLEGATION 1.10 - (x.) in Affidavit Mr. Gregory Moss breached my Contract of Employment when he placed me on Administrative Leave on November 14, 2012, and further embarrassed me by copying this sensitive and confidential communication to the entire Board of Directors, all members of NIB's Executive Management Team, and Presidents of the Union of Public Officers and the Public Managers Union. A copy of this letter is now produced and shown to me to be exhibited hereto marked "AMC-21".
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ALLEGATION 1.10 - (x.) in Affidavit (continued)
KEY FINDINGS
Mr. Moss did not appear to do anything unusual in copying the letter dated November 14, 2012 to the Board of Directors, all members of NIBs Executive Management Team, and Presidents of Union of Public Officers and the Public Managers Union.
FINDINGS a) Board of Directors of The National Insurance Board held on Tuesday, 16th October, 2012, it was agreed to terminate the services of Mr. Algernon Cargill and alternatively ask him to resign. These matters subject to Ministerial approval (See Resolution Below). NIB 2012 9TH (SPECIAL) MEETING THE NATIONAL INSURANCE BOARD The Minutes of the 9th (Special) Meeting of the Board of Directors of The National Insurance Board held on Tuesday, 16th October, 2012 in the Boardroom of The National Insurance Headquarters Building situated on Baillou Hill Road, at 4:00 p.m. Present: Mr. Gregory K. Moss, Chairman Mr. Bernard Evans, Deputy Chairman Mr. Jayson Moxey, Member Ms. Linda Denise Evans, Member Mr. Freddie Munnings Jr., Member Dr. Josephine Bartlett, Member Mr. Philip Beneby, Member Mr. Patrick Davis, Member Mr. Marquista Thompson, Member Mr. Merrit Storr, Member Bishop Harry Collie, Member Mr. Algernon Cargill, Director Mrs. Cecile Bethel, Senior Deputy Director, Operations Mrs. Ernestine Kelson, Manager/Secretary to the Board of Directors
In Attendance:
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ALLEGATION 1.10 - (x.) in Affidavit (continued) By Invitation: Ms. Gail Carey, Sr. Assistant Manager, I.T. Department Mr. Winston Moss, President, Public Managers Union Mrs. Heather Maynard, Vice President/Legal Officer Mrs. Sonia Gill, Vice President/Financial Controller Mrs. Richenda King, Vice President/Human Resources Mr. Raymond Wells, Vice President/I.T. Department
2.1.164 In view of the foregoing and the recommendation put forth by the Contracts & Tenders Committee and following some further discussion, on a motion duly made seconded and carried with one opposing vote, the following resolution was adopted: Be it resolved that the Board of Directors approves: (a) To summarily terminate the services of Director Algernon Cargill and Mr. Raymond Wells, Vice President/IT Department for gross misconduct in relation to the rental of Apartment 124A, Sandyport, by NIB from Jes-El Car Company Ltd, a company owned by Mr. Godwin Cargill, the brother of Director Cargill; (b) To authorize the Chairman to invite both Mr. Cargill and Mr. Wells to resign from their employment with immediate effect as an alternative to having their employment summarily terminated in which case the Chairman was authorized to pay them up to one years salary each; (c) To appoint the current Senior Deputy Director/Operations, Mrs. Cecile Bethel to Act as Director of NIB pending the appointment of a Director, and (d) To authorize Mrs. Bethel to identify a suitable person (s) within the I.T. Department to carry on that function. The above is subject to Ministerial approval. b) We interviewed Mr. Gregory Moss at Grant Thorntons office on February 7, 2013. He was asked to respond to each allegation in the Affidavit filed by Mr. Algernon Cargill, dated November 28, 2012.
Here are the relevant excerpts from that interview: 106. Grant Thornton read Section (K), x, regarding GM allegedly Breaching the Contract of AC. Grant Thornton asked GM if he placed AC on administrative leave on November 14, 2012. GM said that he did not breach any contract in relation to AC or personally make any decision regarding AC other than his directive to AC to switch the offices which were occupied by the Chairman and Director for the reasons mentioned above.
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ALLEGATION 1.10 - (x.) in Affidavit (continued) 107. GM said that some time before a resolution had been passed by the Board to terminate the services of AC in respect of the Sandyport matter. He said that the Board made that resolution expressly subject to Ministerial approval and that as no Ministerial approval was obtained, that resolution was not implemented. He said that on November, 14, 2012 he was instructed by Minister Gibson to prepare a letter to AC placing him on administrative leave with immediate effect and that he then went to the NIB Headquarters to do so. He stated that the first draft of the letter was drafted by Mrs. Theresa Burrows through the instruction of the Minister and that he amended the same, signed it and sent the same to AC.
ALLEGATION 1.11 - (xi.) in Affidavit
These and other matters instigated by Mr. Gregory Moss and Mr. Patrick Davis, from the first communication of Mr. Gregory Moss on July 19, 2012, were designed to frustrate me in the execution of my duties as the Director and CEO of NIB, contrary to the terms of my contract of employment with NIB amounting to my constructive dismissal from the post as Director and CEO of the National Insurance Board. Further, the slanderous and reckless non-factual defamatory statements issued by Mr. Gregory Moss in his November 8, 2012 communication have placed me in great distress, embarrassment, with virtually no prospect to secure equal or comparable employment due to the permanent damage to my professional reputation.
PROCEDURES PERFORMED (See APPENDIX A - Specific Procedures) FINDINGS a) Mr. Gregory Moss in his interview dated February 7th, 2012, denies that any of his actions were of malicious intent. He stated that many of his directives were in line with decisions made at the Board of Directors level.
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1. AFFIDAVIT OF ALGERNON MARSHIEL CARGILL (continued) ALLEGATION 1.12 - (xii.) in Affidavit The National Insurance Board has made significant majority holding investments in The Bank of The Bahamas, Cable Bahamas and Commonwealth Brewery Ltd. With the approval/endorsement of the Ministry of Finance, the Director of the National Insurance Board has been approved to represent NIB and by extension, the Government's interest in these privately held companies. It was also previously approved that the Vice President of Investments would represent NIB's interest in the Educational Loan Authority, an entity in which NIB has also made significant investments. Notwithstanding several written requests to the Minister of Labour and National Insurance, the Director was not re-appointed to The Bank of The Bahamas Board, although the current director and previous Directors represented NIB's interest at the Board of Directors level at this financial institution. Additionally, the Minister informed me that it was the intention of the Government that either Gregory Moss or Patrick Davis would represent NIB on the various Bahamas Boards where NIB held directorship positions, even though the Director's appointment was previously approved by way of formal agreement and/or endorsed by the Ministry of Finance. The removal of the Director from the Bank of The Bahamas Board compromises NIB's management's ability to properly monitor its majority holding investment, as operational matters, and likewise, the appointment of any Board Member or Employee other than the Director to the Cable Bahamas and Commonwealth Brewery Board places the Director in a position of responsibility for investments of which he has no direct oversight at the Board of Directors' level. The Bahamas Investment Authority, in its letter dated the 6th June, 2011 stated that "The Director of the National Insurance Board is the Government's nominee in perpetuity" and that "only the Government is to be able to remove, its nominee". Similarly, the VP of Investments was not reappointed to the Educational Loan Authority Board and similar investments risks exist in this regard. Copies of my letter of the 7th August, 2009 to the Education Loan Authority, the letter from Mrs. Heather Maynard dated 2nd June, 2011 to Bahamas Investment Authority and letter dated the 6th June, 2011 from Investment Authority are now produced and shown to me to be exhibited hereto marked "AMC-22". PROCEDURES PERFORMED (No procedures performed)
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ALLEGATION 1.13 - (xiii.) in Affidavit I have queried directly with the VP of Business Support, Ms. Theresa Burrows, the business reasons why the Chairman of the Board required a driver, Mr. Franklyn Laing, who was contracted by NIB and compensation recommended by Chairman Moss to be outside of the scale for the work he was performing. His job title indicated he was a personal assistant to the Chairman, the first time this position has ever been created, and it was on this basis that the one year contract of employment was advanced to the Minister of Labour and National Insurance for approval. However, the functions Mr. Laing performed appeared to be that of a chauffeur and traveling companion for Gregory Moss and after this matter was elevated to the Minister by the VP of Business Support, and an editorial on Gregory Moss' spending habits appeared in the Tribune Newspaper, I subsequently received a text message on August 22, 2012 from Gregory Moss that read, "Director Cargill, the Personal Assistant position with Mr. Frank Laing is not working out. Please terminate that position effective the end of this month." Ms. Theresa Burrows also brought to my attention when I returned from vacation in early August 2012 that she was requested to approve various hotel charges by Gregory Moss at the Hilton Hotel, for unusual consumption of large amounts of alcohol and food.
She was concerned that these expenses should not be approved as he was consistently provided with a per-diem allowance of $125 per day for every day he advised he was in New Providence, even though on most days he was not at the NIB building. She also advised me that she would seek Ministerial guidance on whether these expenses, which were in addition to the $600 plus nightly cost of a suite at the Hilton Hotel. Ms. Burrows later advised me that the expenses should not be approved and she would speak directly with Mr. Moss on these unusual matters. Copies of the Hilton Hotel charges are now produced and shown to me to be exhibited hereto marked "AMC -23".
KEY FINDINGS a) Mr. Frank Laing's hiring on July 30, 2012 was approved by the Chairman of NIB, Mr. Gregory Moss and the Minister of Labour and National Insurance Hon. Mr. Shane Gibson. Mr. Frank Laing's employment was ceased/terminated on September, 5, 2012.
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ALLEGATION 1.13 - (xii.) in Affidavit (continued) b) Hon Mr. Shane Gibson by email dated July 25, 2012. The invoice in the Affidavit filed by Mr. Algernon Cargill in the amount of $980.54 from the British Colonial Hilton showing check-in date for Mr. Gregory Moss as July 25, 2012 and check-out date as July 26, 2012. i.) A Board Meeting of NIB was held on July 25, 2012 and review of Board of Director Minutes indicates that the meeting was conducted at NIB, Bailou Hill Road beginning at 4pm. Chairman Mr. Gregory Moss was in attendance for the entire meeting which adjourned at 9pm.
ii.) The approval for the stay at the British Colonial Hilton was by way of a letter from NIB dated July 25, 2012 to the British Colonial Hilton authorizing the stay of Mr. Gregory Moss for one night in a Suite Room, the letter is signed by C. Williams on behalf of Mr. Algernon Cargill Director/C.E.O. (Appendix 1.06) FINDINGS a) Frank Laing filled out an Application for Employment at NIB dated July 25, 2012. The position desired indicated Personal Assistant to Chairman. Contract of Mr. Frank Laing dated July 25, 2012. Duration of contract effective Monday July 30, 2012 to Monday July 29, 2013. Compensation of $40,000 per annum. Duties: You will report to the office of the Chairman of the Board of Directors who will provide you with your job description and other particulars of your posting.
August 22, 2012
Letter from Ms. Richenda King, Vice President/Deputy Director Human Resources and Training to Mr. Franklyn A. Laing, signed by S. Saunders. NIB/PF/1124
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ALLEGATION 1.13 - (xiii.) in Affidavit (continued)
Excerpts: This is to advise that your contract of employment with The National Insurance Board will cease effective Wednesday, September 5, 2012. Management would like to express sincere gratitude to you for the contributions you have made to the Organization. Email: July 25, 2012, 10:56pm, from Algernon Cargill to Shane Gibson.
Excerpt: Attached is a contract offer for Mr. Frank Laing to be hired as an Assistant to Chairman Moss. Can you review and provide your approval to proceed to offer this contract to Mr. Laing. Email: July 25, 2012, 10:59pm, from Shane Gibson to Algernon Cargill, cc gkmbarra@yahoo.com (Gregory Moss).
Excerpt: Good evening, I offer no objection. b) We interviewed Mr. Gregory Moss at Grant Thorntons office on February 7, 2013. He was asked to respond to each allegation in the Affidavit filed by Mr. Algernon Cargill, dated November 28, 2012.
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ALLEGATION 1.13 - (xii.) in Affidavit (continued)
Here are the relevant excerpts from that interview:
109.
GM said he sat down with the Minister and informed him that as he was coming in from another Island to sit as Chairman of NIB he thought it prudent to bring with him someone who could assist him in understanding the lay of the land at NIB. He said that Mr. Franklyn Laing was hired for that very important purpose and that was for him to quickly be apprised, by someone in whom he had confidence, of the various personalities and issues at NIB through the eyes of the employees at NIB. He said that Mr. Laings role was to help him understand the personalities of the people inside NIB and that he did that job. Once that job was finished he reported to me and I instructed Mr. Cargill to terminate his employment. GMs recollection was that the total effort was completed in the month of August. GM said that AC was just degrading Mr. Laing by saying that he was a chauffeur. GM reiterated that the Minister was aware of all that happened in relation to Mr. Laings employment to the point of termination. GM said that they were talking about the $811.10 that he incurred for food and drinks at NIB-related meetings which he held at the British Colonial Hilton but which he elected to pay to NIB out of his personal resources so as to avoid disclosing the names of the parties that he had met with as mentioned above.
110.
112.
c) I have no details about the circumstances surrounding the hiring of Mr. Frank Laing or his role as a driver. I am aware that Mrs. Richenda King would have prepared an employment contract for Mr. Laing, after having received instructions from Director Cargill. I cannot speak to the purchase of the Explorer.
d) Grant Thornton examined an invoice from The British Colonial Hilton for Gregory Moss, P.O. Box 42533. August 22, 2012 August 21, 2012 August 21, 2012 August 21, 2012 August 21, 2012 August 21, 2012 August 21, 2012 August 21, 2012 August 21, 2012 Total charges: Direct Bill - National Insurance Board Valet Parking Bullion Liquor Bullion Gratuity Energy Surcharge Room Attendant Guest Room Room Tax Resort
$ 10.00 $ 28.00 $ 14.20 $ 10.00 $ 5.00 $350.00 $ 35.00 $ 28.00 $480.20
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ALLEGATION 1.13 - (xii.) in Affidavit (continued) e) Grant Thornton reviewed receipt (No. 16525) from NIB dated August 24, 2012. Payment of $500 for Reimbursement of miscellaneous total charges, signed by P. Oliver.
Grant Thornton reviewed receipt (No.016557) from NIB dated September 11, 2012, received from Gregory Moss, NIB, of $311.10. Reimbursement of miscellaneous hotel charges, signed by A. Armstrong.
Grant Thornton examined from the Affidavit of Mr. Algernon Cargill an invoice from British Colonial for Gregory Moss F42533: Room & Tax Miscellaneous Food & Beverage Other Total $588.82 $ 20.00 $292.80 $ 78.92 $980.54
Check in - July 25, 2012, Check out - July 26, 2012. ALLEGATION 1.14 - (xiv.) in Affidavit
I subsequently raised a concern to Ms. Burrows for further discussion with Minister Gibson that it could appear to key stakeholders that inasmuch as NIB was paying Mr. Gregory Moss $125 per day, on days when he did not come to NIB but was at the House of Assembly, and also paying his travel and hotel costs for these days, and it appeared to me and several employees of NIB that we were paying Mr. Gregory Moss $125 per day on many days when he reported that he travelled to New Providence on NIB's business and was not at NIB nor available for any consultation by the Executive Management team, that this matter should further be discussed with the Minister as there was a general concern among several members of NIB's Executive Management team. I advised that the House of Assembly/Government could have been paying Mr. Moss for his associated travel expenses to New Providence, including airfare, and NIB was also paying for the same expenses and actually purchasing Mr. Moss' airline tickets. I also found it necessary to query a directive I received from Gregory Moss via Mrs. Ernestine Kelson, Secretary to the Board of Directors, that NIB should pay hotel costs for Mr. Franklyn Laing, charged to Mr. Moss' Corporate Platinum Visa Credit Card, whom she described in writing to me as the Chairman's Chauffeur, and not his personal Assistant.
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ALLEGATION 1.14 - (xiv.) in Affidavit (continued)
I subsequently wrote Mr. Gregory Moss on October 3, 2012, expressing my concern about these unusual charges and Mr. Moss responded on October 7, 2012, and advised that As per my handwritten note yesterday, I fully agree with the comments by Mrs. Kelson as they are consistent with my instructions to her." The Credit Card Statement also included several unusual Hilton Hotel charges ($388.78, $670.34, and $134.20) that have not been reconciled or explained, Regional Air travel ($97.00), Bahamasair travel ($163.50 &162.00), and a charge at Curly Tale
Restaurant and Bar, for $38.35 that Mr. Moss subsequently repaid to NIB. The airline travel charges are unusual as it is my understanding that NIB paid for Mr. Moss' travel to New Providence for this period. I discussed this concern with Ms. Theresa Burrows and she advised me that the Minister was not aware that Mr. Moss was even provided with an NIB Corporate Credit Card and that these expenses should not be paid. I advised Ms. Phaedra MackeyKnowles, who was deputizing for Mrs. Sonia Gill, that my previous approval on September 28, 2012, was rescinded and the Credit Card expenses should not be paid as these were not approved.
FINDINGS b) We interviewed Mr. Gregory Moss at Grant Thorntons office on February 7, 2013. He was asked to respond to each allegation in the Affidavit filed by Mr. Algernon Cargill, dated November 28, 2012.
Here are the relevant excerpts from that interview: 114. GM stated the following:
Whenever he came to New Providence at NIB expense, he engaged in NIB related business and usually physically attended at the NIB office to engage in meetings or otherwise to do work.
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ALLEGATION 1.14 - (xiv.) in Affidavit (continued)
To avoid any suggestion that he has ever sought a Parliamentary reimbursement for travel that was paid for by NIB, from the date of his election to the date of the termination of his appointment as Chairman of NIB, he has never made application for, or received, any reimbursement from Parliament for any travel expenses whatsoever even when such travel expenses were paid for by him out of his personal funds. He only used the NIB credit card for hotel charges and travel (airfare) expenses when he travelled to Nassau on short notice when it was too late to book those travels through the NIB office as, for example, when he had to meet with someone on NIB business or when he was called by the Minister to meet with him on a NIB matter. The only time, as far as he is aware, when NIB paid his per-diem allowance was when he was physically present in Nassau or otherwise on NIB business, as when he, the Minister and another Board member met with NIB staff in Freeport.
116.
GM repeated that the first meeting with AC was the breakfast meeting where they had a frank discussion and he stated to AC that he did not personally know him and had no brief to do anything other than to protect the NIB Fund. The second meeting was when he, along with other Directors, met with the Minister, AC and various executives at the Ministry of Labour for an introductory talk by the Minister during which the Minister repeated his charge to the Board. After that meeting all the parties went to a Union Hall for a meeting with the NIB staff. GM said that he returned everything at NIBs Freeport office on January 8, 2013, except the cellphone as he could not locate it. He said that he had communicated to Ms. Bethel that if he cannot find the cellphone, he will reimburse NIB the cost of it. GM said that when the Audit Committee interviewed Mr. Whitney Patton, NIB Chief Internal Auditor, they asked him about the credit card purchases of AC which were in excess of $240,000 in approximately 3 years. He said that Mr. Whitney Patton informed the Committee that he had no idea that AC or anyone else in NIB had a corporate credit card. GM said that he asked Mr. Patton how that was possible, whether he (Patton) was aware that he (GM) also had a credit card and why there was no internal tracking of AC credit card.
117.
119.
After that staff meeting, (whether it was the same day or another day, he couldnt recall) GM said that he went to NIB and met with AC. He said that he asked AC if there was a car assigned for him (GM) as Chairman as he (GM) is from Freeport and would need transportation while in Nassau. AC said no, there was no car for the Chairman. GM said that he told AC that he was told that Patrick Ward had a Honda with leather seats and that. AC repeated that no, NIB does not have a car for the Chairman but that he would have to identify a car. GM said that he then went to Friendly Ford and identified a car and had the lady email the invoice to AC. He said that he then telephoned AC who confirmed receipt of the email and confirmed that the car would be at the airport upon GMs return to Nassau. GM said that before he next returned to Nassau he telephoned AC who confirmed that the car was ready and that
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ALLEGATION 1.14 - (xiv.) in Affidavit (continued) there would be someone waiting at the airport with the car. He said that when he arrived there were two NIB employees at the airport and that they delivered the car to him. He stated that the car has always been parked at the airport in the Parliamentary parking section when he has not been on the island. Cardholder name: Primary contact: Signing officer: RBC officer: Limit: August 1, 2012 August 4, 2012 August 11, 2012 August 11, 2012 August 11, 2012 August 14, 2012 August 16, 2012 August 17, 2012 August 24, 2012 August 27, 2012 August 28, 2012 September 3, 2012 September 7, 2012 September 18, 2012 October 2, 2012 November 2, 2012 November 2, 2012 Summary Annual fee Branch payment Monthly interest Late payment fee Travel charges Total $125.00 ($125.00) $81.42 $50.00 $2,489.97 $2,621.39 Gregory Moss Algernon Cargill Sonia Gill Brian Knowles $25,000 $125.00 $400.44 $163.50 $97.00 $38.35 $78.50 $83.50 $690.46 $138.22 $162.00 ($125.00) $162.00 $30.00 $142.00 $25.00 $39.47 $162.00 Customer annual fee British Colonial Hilton, Nassau Bahamasair Regional Air Curly Tails Restaurant & Bar, Abaco Western Air #2, New Providence Western Air #6, New Providence British Colonial Hilton, Nassau British Colonial Hilton, Nassau Bahamasair, Nassau Card payment Bahamasair, Nassau Bahamasair, Nassau Western Air #2, New Providence Late payment fee Monthly interest Bahamasair, Nassau
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ALLEGATION 1.15 - xv. in Affidavit I was also advised by Ms. Theresa Burrows that she had been advised that Mr. Moss travelled to Mangrove Cay, Andros, with a Member of Parliament on Saturday August 18, 2012, for a political meeting, and her sources from Mangrove Cay advised her that he did participate in a political meeting on August 18, 2012, a day when the NIB satellite office was not open, NIB's single employee in Mangrove Cay or NIB's Andros Manager, did not meet with Mr. Moss on any of the days he claimed and was paid a travel subsistence of $250, and Ms. Burrows later advised me to be aware of any request for subsistence payments by Mr. Moss for this non-NIB related travel. To my knowledge as the Director and CEO of the National Insurance Board, there was no NIB business reason for the Chairman of the Board to visit Mangrove Cay or any part of Andros on a Saturday and Sunday, or any day for that matter. The request for subsistence ($250) was not provided to me for approval, but was referred to Mrs. Cecile Bethel, the Senior VP of Operations, although I was in office for approval, and subsequently approved by her on August 16, 2012. Mrs. Burrows advised me that she would update the Minister of this irregularity. Copies of the Hilton Hotel charges by Mr. Moss, the directive received to pay hotel charges for his chauffeur, and the $250 per diem authorized for non-NIB business travel to Mangrove Cay are now produced and shown to me to be exhibited hereto marked "AMC-24".
FINDINGS
a) Response from Cecile Bethel:
I am not aware that the Mangrove Cay trip was a non-business related. My information was that a meeting was being held and that Chairman Moss would address NIB related matters. I am not aware that the Chairman misused his corporate credit card. I am not aware that the Chairman made false per diem claims. b) We interviewed Mr. Gregory Moss at Grant Thorntons office on February 7, 2013. He was asked to respond to each allegation in the Affidavit filed by Mr. Algernon Cargill, dated November 28, 2012.
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ALLEGATION 1.15 - xv. in Affidavit (continued)
Here are the relevant excerpts from that interview:
124.
GM said that the trip is in fact related to NIB because his purpose of coming to Mangrove was to inspect the NIB facility under construction. He also addressed a gathering that evening on NIB related matters and reported the trip to the Board at the next sitting of the Board. Also, he said that the Minister told him that NIB should have a presence in all of the islands.
c) Mr. Moss indicated that he did visit the NIB office while on the trip to Mangrove Cay.
d) The British Colonial Hilton bill was reviewed and $250 per diem confirmed. e) Grant Thornton believes that it is important to remember that the Chairman of NIB is the Chairman of NIB - Bahamas and not of NIB - Nassau, and that Mr. Gregory Moss had a Board of Directors approved spending limit of $50,000 and the thought that he would need authorization from an employee at NIB to travel within The Bahamas, request per diem for that travel and obtain prior permission from NIB staff when hosting fellow Board of Directors at a hotel is not practical. ALLEGATION 1.16 - xvi. in Affidavit
Mr. Moss has further defamed my name by including in a letter dated November 22, 2012, wherein he placed Mr. Wells on Administrative leave that he "attempted to cover up the conflict of interest of Director Cargill in connection with the rental of Apartment 124A, Sandyport, by NIB from Jes-El Car Company Limited." At the time of Mr. Moss' November 22 communication to Mr. Wells, he was aware that the Minister had already appointed an Independent Audit Firm to review the allegations raised in his November 8, 2012, letter, and these allegations, including the Sandyport matter, should not be described as a conflict of interest as this has not been determined by the Independent Auditors or any independent legal expert. This letter is now produced and shown to me to be exhibited hereto marked "AMC 25".
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ALLEGATION 1.16 - xvi. in Affidavit (continued)
FINDINGS
a) Letter was reviewed and confirmed that Mr. Wells was placed on Administrative Leave. b) We interviewed Mr. Gregory Moss at Grant Thorntons office on February 7, 2013. He was asked to respond to each allegation in the Affidavit filed by Mr. Algernon Cargill, dated November 28, 2012.
Here are the relevant excerpts from that interview: 126. GM said that he put Mr. Raymond Wells on administrative leave with the instruction of the Minister also. He said that as with AC, the Board had passed a resolution to terminate the services of Mr. Wells over the Sandyport matter but that as that resolution was subject to Ministerial approval, and as no Ministerial approval had been obtained, the resolution was never implemented. However, he was instructed by the Minister to put Mr. Wells on administrative leave and did so.
ALLEGATION 1.17 - xvii. in Affidavit
Gregory Moss was a guest on the Jones Communication show, "Jones & Co.", on Sunday, November 25, 2012, which show was broadcast on Love 97 Radio Station and again on JCN TV on Sunday, November 25, 2012. I heard Mr. Moss specifically discuss and republish the defamatory allegations contained in his November 8, 2012 letter to the Board of Directors, in which he stated that a resolution was made to terminate my employment contract with NIB. His comments were specific with regards the Sandyport rental agreement, ratified by then Chairman Patrick Ward, prior to my approval of the payment request provided to me by Raymond Wells. Further, in a prejudgment of the independent audit report, Mr. Moss specifically stated that "Based on the information gathered, I do not think that the information gathered will be in Mr. Cargill's favour. I do not see that as being possible because we have done our due diligence on this. If this does happen, we will study that document and respond appropriately to that document. But I have no doubt whatsoever that the forensic review will come to the same determination on that Sandyport issue." According to the Bahama Journal of the 26th November, 2012 it is reported that "the only issue being investigated is the issue involving allegations that Mr. Cargill rented an apartment from his brother, Godwin Cargill." As noted earlier in this Affidavit, I did not rent the apartment and I was not involved in the process before the signing of the agreement.
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ALLEGATION 1.17 - xvii. in Affidavit (continued)
The agreement to rent the apartment was executed by Mr. Raymond Wells and payment approved by me only after Mr. Wells and I referred the matter jointly to the Chairman, Mr. Patrick Ward who ratified the agreement after which I authorized payment. A cop of the article in the Bahama Journal of the 26 November, 2012 is now produced and shown to me to be exhibited hereto marked "AMC-26".
FINDINGS a) We interviewed Mr. Gregory Moss at Grant Thorntons office on February 7, 2013. He was asked to respond to each allegation in the Affidavit filed by Mr. Algernon Cargill, dated November 28, 2012.
Here are the relevant excerpts from that interview: 128. GM said that that was a difficult question from Grant Thornton because he (GM) is also a Member of Parliament. He said that in his mind, he was certainly there as an MP and as Chairman of the Board of NIB. Grant Thornton asked GM if he really said on the Jones & Co. show, that he has no doubt whatsoever that the forensic review will come to the same determination as that in the November 8th letter from GM to Minister Mr. Shane Gibson, on that Sandyport issue. GM confirmed that he did say so because he was confident that the Forensic examiners will come up with the same determination as the Board. He said that there was no disrespect intended towards the Forensic examiners in what he said but rather that his comment was an expression of his confidence in the work of the Board.
129.
130.
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1. 0AFFIDAVIT OF ALGERNON MARSHIEL CARGILL (continued)
ALLEGATION 1.18 - xviii. in Affidavit
Mr. Moss also informed the hosts, Messrs. Wendell Jones and Godfrey Eneas that the Board of Directors had approved his directive to NIB to issue an ultra vires guarantee on July 28, 2012, to Doctors Hospital for $15,000 for surgery on a resident from Grand Bahama. This representation is false, as the Minutes of the Board of Directors of August 30, 2012, approximately one month later, confirm that this was not the case. At the August 30, 2012 meeting, the minutes (page 17, point 4.4.6) confirmed that at this meeting, the Board was advised that Mr. Moss had instructed NIB to give $15,000 for the person from Grand Bahamas surgery. Mr. Moss subsequently advised the Board that prior to his instruction to Mrs. Cecile Bethel; he had been advised that this type of advance did not fit into NIB's statutory benefit parameters.
Mr. Moss had explained, at this August 30, 2012 meeting, that he was bringing the matter to the Board's attention (for the first time). A member of the Board reprimanded the Chairman, as recorded in point 4.4.12, stating that the Chairman had compromised his position as Chairman.
The matter was subsequently deferred, at point 4.4.19, to the Finance and Investments Committee for review. In summary, the Board of Directors could not have approved this benefit to this person from Grand Bahama in July 2012, as suggested by Gregory Moss on the JCN Radio and Television station on November 25, 2012, as the Board of Directors was not informed of this illegal guarantee until the August 30, 2012 meeting of the Board of Directors. Mr. Moss also informed Messrs. Jones and Eneas that he had reimbursed the Board for the illegal guarantee that he had caused NIB to issue. This assertion is also false, as is evidenced in Exhibit 18, the payment for this guarantee was provided to me by attorney, Ms. Melissa Hall, and not Mr. Gregory Moss, on the direction of the Minister Shane Gibson, with further instructions to meet with Doctors Hospital and request that the hospital not bill NIB for the illegal guarantee issued by Cecile Bethel on the direction of Gregory Moss. A copy of the excerpt from Minutes of the Board Meeting of NIB of the 30th August, 2012 is now produced and shown to me to be exhibited hereto marked "AMC-27".
FINDINGS
a) We sent a letter to Mr. Wendel Jones of Jones Communications on February 25, 2013. (Appendix 1.12)
b) We received a package from Jones Communications consisting of the following: i. The Bahama Journal dated November 26, 2012 - Headline Moss: NIB Board has no vendetta. PRIVATE & CONFIDENTIAL 5/6/2013 3:57 PM
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ALLEGATION 1.18 - xviii. in Affidavit (continued)
ii.
CD Marked Jones & Co. dated November 25, 2012.
ALLEGATION 1.19 - xix. in Affidavit Further Mr. Moss informed Messrs. Jones and Eneas on Jones & Co.", that Mr. Frank Laing was an employee of NIB and was not his chauffeur. It is correct that Mr. Laing was contracted by NIB, at Mr. Moss' request, as a personal assistant to Mr. Moss, the first time in the history of NIB that a Chairman, including a Chairman from Grand Bahama, has had a personal assistant in addition to the Secretary of the Board of Directors assigned to the Board of Directors, and by extension the Chairman. However, Mr. Moss did not disclose that Mr. Laing was contracted only on July 25, 2012, and not terminated until August 22, 2012 when the Editor of The Tribune reported that Mr. Moss had contracted a chauffeur. Further, Mr. Laing did not report to any NIB office for duty during the course of his employment, as all full time employees are required to do, and when he did travel to New Providence with Mr. Gregory Moss, his core responsibilities, as it appeared to the Executive Management and the employees of NIB, were only to drive the Chairman wherever he required. There is no job description on file, although the contract of employment required Mr. Moss to provide one to Mr. Laing, and it should be noted that even the Secretary to the Board of Directors, Mr. Moss' closest employee in NIB, referred to Mr. Laing in a hand-written note to me, wherein she advised that I approve hotel expenses for Mr. Moss, as the Chairman's Chauffeur.
This note was provided to Mr. Moss via email, and Mr. Moss only reaffirmed the instructions of Mrs. Ernestine Kelson and did not correct the fact that the reference to Mr. Laing was the Chairman's Chauffeur. A copy of the said handwritten memo is now produced and shown to me to be exhibited hereto marked "AMC 28."
FINDINGS
c) We sent a letter to Mr. Wendel Jones of Jones Communications on February 25, 2013. (Appendix 1.12)
d) We received a package from Jones Communications consisting of the following: i. The Bahama Journal dated November 26, 2012 - Headline Moss: NIB Board has no vendetta.
ii. CD Marked Jones & Co. dated November 25, 2012.
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RESTRICTION ON CIRCULATION
In accordance with our engagement letter dated November 30, 2012, this report is prepared solely for the internal use of the Ministry of Labour and National Insurance. Our Services were provided in accordance with the International Standard on Related Services applicable to agreed-upon procedures engagements and the terms of this engagement, accordingly, do not constitute a rendering by Grant Thornton or its partners or staff of any legal advice, nor do they include the compilation, review or audit of financial statements. Grant Thornton makes no representations regarding questions of legal sufficiency. Had we performed other procedures we may have identified other information that would have been included in this report. If additional information that may change our findings is found, we reserve the right to supplement this report accordingly.
We appreciate the opportunity to serve you in this matter. If we can assist you by explaining our work in more detail, please do not hesitate to contact us.
Yours very truly,
GRANT THORNTON
GT/Admin.
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NIB Report - Former Chairman Gregory Moss

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NIB Report - Former Chairman Gregory Moss

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March 22, 2013 Mr.

PRIVATE & CONFIDENTIAL 5/6/2013 3:57 PM

1. AFFIDAVIT OF ALGERNON MARSHIEL CARGILL

ALLEGATION 1.1 - (i.) in Affidavit

(See APPENDIX A - Specific Procedures)

1. AFFIDAVIT OF ALGERNON MARSHIEL CARGILL (continued)

ALLEGATION 1.1 - (i.) in Affidavit (continued)

PRIVATE & CONFIDENTIAL 5/6/2013 3:57 PM

1. AFFIDAVIT OF ALGERNON MARSHIEL CARGILL (continued)

1. AFFIDAVIT OF ALGERNON MARSHIEL CARGILL (continued)

1. AFFIDAVIT OF ALGERNON MARSHIEL CARGILL (continued)

PRIVATE & CONFIDENTIAL 5/6/2013 3:57 PM

1. AFFIDAVIT OF ALGERNON MARSHIEL CARGILL (continued)

1. AFFIDAVIT OF ALGERNON MARSHIEL CARGILL (continued)

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1. AFFIDAVIT OF ALGERNON MARSHIEL CARGILL (continued)

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1. AFFIDAVIT OF ALGERNON MARSHIEL CARGILL (continued)

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1. AFFIDAVIT OF ALGERNON MARSHIEL CARGILL (continued)

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1. AFFIDAVIT OF ALGERNON MARSHIEL CARGILL (continued)

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1. AFFIDAVIT OF ALGERNON MARSHIEL CARGILL (continued)

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1. AFFIDAVIT OF ALGERNON MARSHIEL CARGILL (continued)

ALLEGATION 1.2 - (ii.) in Affidavit

(See APPENDIX A - Specific Procedures)

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1. AFFIDAVIT OF ALGERNON MARSHIEL CARGILL (continued)

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1. AFFIDAVIT OF ALGERNON MARSHIEL CARGILL (continued)

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1. AFFIDAVIT OF ALGERNON MARSHIEL CARGILL (continued)

ALLEGATION 1.3 - (iii.) in Affidavit (continued)

(See APPENDIX A - Specific Procedures)

Here are her responses:

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1. AFFIDAVIT OF ALGERNON MARSHIEL CARGILL (continued)

ALLEGATION 1.3 - (iii.) in Affidavit (continued)

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1. AFFIDAVIT OF ALGERNON MARSHIEL CARGILL (continued)

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1. AFFIDAVIT OF ALGERNON MARSHIEL CARGILL (continued)

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1. AFFIDAVIT OF ALGERNON MARSHIEL CARGILL (continued)

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1. AFFIDAVIT OF ALGERNON MARSHIEL CARGILL (continued)

ALLEGATION 1.3 - (iii.) in Affidavit (continued)

1. AFFIDAVIT OF ALGERNON MARSHIEL CARGILL (continued)

ALLEGATION 1.4 - (iv.) in Affidavit (continued)

PROCEDURES PERFORMED (See APPENDIX A - Specific Procedures)

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1. AFFIDAVIT OF ALGERNON MARSHIEL CARGILL (continued)

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1. AFFIDAVIT OF ALGERNON MARSHIEL CARGILL (continued)

ALLEGATION 1.4 - (iv.) in Affidavit (continued)

d) Response in writing from Mrs. Cecile Bethel, Acting Director:

July 21, 2012

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1. AFFIDAVIT OF ALGERNON MARSHIEL CARGILL (continued)

Excerpt: FYI and action August 13, 2012

Email from Theresa Burrows, 9:48am to Algernon Cargill.

Email from Algernon Cargill 9.51am to Theresa Burrows.

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1. AFFIDAVIT OF ALGERNON MARSHIEL CARGILL (continued)