Thirteen months before Communications and Works Minister Mark Vanterpool signed a no-bid service contract with an Ocean Conversion-BVI holding company to produce water for the territory, Mr. Vanterpool and Deputy Premier Dr. Kedrick Pickering had financial interests in OC-BVI, pre-election disclosure notices show.

The Cabinet-approved contract could be worth more than $700,000, depending on the amount of water the company produces.

But Mr. Vanterpool and government Communications Director Arliene Penn aren’t saying if he still has the OC-BVI interests, which were held through another holding company.

Dr. Pickering, who previously held OC-BVI interest through a third company, no longer owns shares, his private secretary wrote in a letter on Dec. 18. But the minister didn’t respond to the Beacon’s query about whether he had any interest in OC-BVI at the time of the contract signing.

 

Contract signing

During a Nov. 29 ceremony, Premier Dr. Orlando Smith and Mr. Vanterpool signed a contract with Sage Utilities Holdings Limited for the management of the Baughers Bay desalination plant. Meade Malone, an SUHL director, thanked officials “on behalf of the more than 1,000 local shareholders of” SUHL.

SUHL wholly owns a subsidiary, Sage Water Holdings BVI Limited, which in turn has a 56.47 percent stake in OC-BVI, according to an OC-BVI press release issued last year.

Mr. Vanterpool and Dr. Pickering declared their interest in other OC-BVI affiliates shortly before last year’s election, in notices published in the government’s Gazette on Oct. 10, 2011.

Mr. Vanterpool reported that he was connected with 11 companies, some of which did business with government. Along with the retailer K-Mark’s Foods Limited, shipper LTL Cargo, and several real estate holdings disclosed in the notice, Mr. Vanterpool also declared an interest in “Mount Sage Investment, which holds shares in Ocean Conversion.”

Dr. Pickering’s notice disclosed an interest in three companies: Mount Sage Holding [1996] Ltd., Omega Caribbean [2005] Ltd., and Picsmith Medical Services.

“I further declare that the above named company is associated with Ocean Conversion (BVI) Limited, which has a contract to supply portable [sic] water to the government of the Virgin Islands,” the notice adds, though it does not specify which company is associated with OC-BVI.

The disclosures did not detail the extent of the legislators’ interest in the water producer.

 

Requests for comment

In response to this reporter’s questions, Ms. Penn, government’s communications director, confirmed Dec. 5 that the SUHL contract had been awarded by Cabinet and that it was not tendered.

She added that Mr. Vanterpool did not have an interest in “Sage Holdings.” But when asked on Dec. 10 to clarify whether or not the minister and Dr. Pickering had any financial interest, directly or indirectly, in OC-BVI, the communications director responded in an e-mail Dec. 18, deferring comment to the ministers.

As of the Beacon’s print deadline Dec. 19, Mr. Vanterpool had not responded to multiple phone messages and two letters sent to him over the course of two weeks.

A Dec. 10 letter to Dr. Pickering asked him, “Did you have an interest in any company that held shares in Ocean Conversion-BVI when the contract [with SUHL] was awarded?”

Michelle Bhajan, Dr. Pickering’s private secretary, provided the Beacon a letter Dec. 18 with the minister’s response.

“I am directed to inform you that [Dr. Pickering] owns no shares in the company,” the letter stated.

It did not mention when Dr. Pickering disposed of his OC-BVI interest or if he held the shares at the time of the contract signing.

According to a press release distributed by OC-BVI in October 2011, members of the BVI Investment Club own a 73.1 percent share in SUHL, with “the BVI public” owning the rest of the holding company.

In a Dec. 4 interview, Mr. Malone, the SUHL director, declined to explain how the companies through which the ministers held OC-BVI interest were connected to SUHL and OC-BVI.

According to the pre-election disclosure notices, no other Cabinet ministers have OC-BVI interest.

Beacon reporters were not informed in advance of the Nov. 29 contract-signing ceremony and were thus unable to attend and ask Mr. Vanterpool about his pre-election disclosure.

Governor Boyd McCleary, who chairs Cabinet, declined to comment on the matter through a spokeswoman, citing the confidentiality of Cabinet proceedings.

The 2009 Cabinet Handbook requires Cabinet members to declare their interest and excuse themselves from discussion on matters in which they have an interest.

However, with the exception of the pre-election disclosures, which are mandated by the Constitution, legislators aren’t legally required to make more frequent public disclosures of their interests.

And under the current patchwork of laws that regulate public finances and legislators’ conduct, there appears to be no provision specifically barring House of Assembly members from entering in to contracts with companies in which they have an interest.

Still, the Constitution requires lawmakers who are partners, managers or directors of firms that enter into government contracts to vacate their seat in the HOA unless they get special approval from the legislature. To get this approval, they must disclose their interest and the nature of the contract “before or as soon as practicable after becoming otherwise interested in such contract.”

This provision does not appear to apply to legislators who don’t play a managerial role and are merely shareholders in such firms.

 

Exemption clause

Both Virgin Islands Party and National Democratic Party legislators have previously invoked the exemption clause to the benefit of their members. In May 2009, HOA members voted on motions that allowed Drs. Smith and Vincent Scatliffe, then the Fourth District representative, to continue being paid by the government to provide medical services.

A similar motion was approved to allow Vernon Malone, an attorney and former at-large representative, to receive public monies for representing clients through legal aid. And on Tuesday night, lawmakers approved a motion that would allow Marlon Penn (R-D8) to be paid for information technology services under a contract with the Financial Services Commission.

 

Registry of Interests

During past election campaigns, NDP lawmakers have advocated for the passage of ethics legislation for elected officials.

And in May 2006, under the former NDP administration, they took a step in that direction: Legislators passed the Register of Interests Act, which for the first time required HOA members to list details of their paid employment, company and land holdings, gifts, complimentary travel and other financial sponsorship they’ve received.

Lawmakers who fail to disclose or lie in their disclosure can face fines or suspension from HOA meetings.

However, the register has not yet been created because the Standing Select Committee needed to authorise its format hasn’t been appointed, according to Victoreen Romney-Varlack, the territory’s registrar of interests.

That committee can’t be appointed until the Legislative Council Standing Orders are updated to conform to the Constitution.

Health and Social Development Minister Ronnie Skelton said at the end of 2011 that the HOA should approve changes to the Standing Orders within a year, but this hasn’t happened to date.

 

Good governance

Additionally, under current law, the register is not public: It can only be viewed by HOA members, upon a court order or as part of a criminal investigation.

“I’m not allowed to divulge what’s in the register,” Ms. Romney-Varlack said on Dec. 4.

In his 2011 Speech from the Throne, the governor said the Register of Interests Act would be amended to “include senior public officers and make all declarations public.” This hasn’t occurred, and the promise was not repeated in this year’s Speech from the Throne.

Despite the dearth of laws requiring public disclosure of legislators’ economic interests, both the NDP and the VIP stressed the need for good governance during last year’s campaigns.

“We believe that good governance must exist at governmental, corporate and international levels,” the VIP stated in its 2011 election manifesto.

The NDP’s manifesto stated that the party believes government ministers “must be held to the highest standards of constitutional and personal conduct.”

“Ministers must ensure that no conflict arises, or appear [sic] to arise, between their public duties and their private interests,” the manifesto states.

 

Full disclosure: Beacon Publisher Russell Harrigan has an interest in OC-BVI

 

 

The following article was originally published in the Beacon’s Dec. 20, 2012 edition.