Press Statement

By

Bradley B Roberts

National Chairman

Progressive Liberal Party

March 7^th 2010

Nassau Bahamas

Kenyatta Gibson & Reece Chipman Scandals

Last Sunday, I exposed the abuse of the public purse by the awarding of a Government operational audit at The Bahamas Mortgage Corporation to a company headed by Reece Dean Chipman of Catsan & Chipman Limited.

Mr. Chipman was the unsuccessful FNM candidate for St. Thomas More in the last general election.   He is also the President of The Bahamas Institute of Chartered Accountants, the statutory body which regulates the accounting profession in The Bahamas.

 My statement disclosed that Mr. Chipman's firm was awarded a contract although that firm submitted the highest bid to perform an operational audit for The Bahamas Mortgage Corporation, of which Mr. Kenyatta Gibson currently serves as its Chairman.   More experienced, less costly accounting firms that have   international affiliations such as Ernst & Young, KPMG, Deloitte and Gomez Baker Tilly, to mention a few, were overlooked by the Corporation, although their bids were lower, and in some cases considerably lower than the bid that was submitted by Catsan & Chipman Limited.   Mr. Chipman's firm submitted a bid of $152,000 -- the highest of all bids and Baker Tilly Gomez submitted the lowest bid for slightly more than one-third that amount of $57,500.

Kenyatta Gibson's initial response was that this represents "the kind of low-minded politics that one comes to expect from Bradley Roberts.   He continuously contorts and twists the truth to suit his political ends." The Bahamas Mortgage Corporation sought to justify the award on the basis that Mr. Chipman’s Firm was going to do more extra work and had agreed to cap their fees.

Nine Firms were invited and from all of the responses only two did not give a specific amount. All except theses two firms responded with a fixed fee which itself was the cap. The other two had a range but in each instant the maximum of rage quoted was far less that the contract price awarded to Catsan. With respect to the suggestion that Mr. Chipman somehow was prepared to do more work could only be relevant if somehow Mr. Chipman was responding to a different RFP.

It is very interesting that Mr. Gibson did not address the issue at hand which was the award of a grossly inflated contract to an FNM crony, but rather Kenyatta Gibson preferred to attack the messenger.    He did not deny my claim that this travesty under his chairmanship equates to "a scandalous abuse of the public purse."   Never once did Mr. Gibson refute that point. Is it because he cannot?

Surely Mr. Gibson does not believe that it is "low-minded politics" to bring to the attention of the public the waste of public funds or the abuse of the public bidding process because I exposed Gibson and Chipman for what they truly are, namely persons who colluded to engage in "milking the taxpayer" while also engaging in a conflict of interest in order to personally benefit from public funds.   This is shameful and disgraceful.   

It might seem to be strange that Mr. Gibson would respond in such a bellicose manner but then when one considers that Kenyatta Gibson is also a business partner of Reece Chipman, then Kenyatta Gibson's vociferous responses become more understandable.   There can be no denying of the fact that to the extent that Reece Chipman and Kenyatta Gibson are in any sort of partnership raises a legitimate concern about an actual or perceived conflict of interest arising from their common business relationship.

I take no particular pleasure in bringing to Prime Minister’s attention and that of the Bahamian public that Kenyatta M Gibson and Reece Dean Chipman have been partners in Braxton Wheels Limited which was incorporated on June 17^th 2003. The Register Number of the Company is 50,759. The share capital was $5,000.00. The last returns showed that Kenyatta M Gibson holds 3,000 shares and is listed as President and Chairman of the Board of Directors and Reece Dean Chipman holds 2,000 shares and is listed as Managing Director and Vice-President. I am advised that Braxton Wheels Limited is in the business of wheel chair and baby stroller rentals at Paradise Island.

Reece Chipman trading under the name TABS has a contract with the DOEHS for Curb Side Cleaning on Kemp Road in the St. Thomas Moore Constituency at a monthly fee of $4,000.00. Reece Chipman also has a $4,000.00 per month cleaning contract for the St. George’s Park off Mackey Street in the vicinity of the headquarters of the FNM.

But then, we should not be surprised by Mr. Reece's penchant for conflicts of interest.   He recently negotiated the lease for shared premises and expenses for both his accounting firm and The Bahamas Institute of Chartered Accountants (BICA) at Maritime House on Frederick Street, effectively tying the future of the BICA to that of his firm.    And I am advised that he executed that lease before formally obtaining the approval of the BICA through the normally established protocols.   It is now clear that the voters of St. Thomas More saw through his veneer when he sought their support some three years ago.

In addition, the question that must be asked is why did the Mortgage Corporation select the accounting firm with the highest bid for work that could have been performed by other, more reputable and more experienced accounting firms?   It is fair to ask whether Mr. Chipman's firm has the professional expertise, capacity and the manpower to effectively conduct and complete this engagement as do the other firms that submitted bids for this engagement.

The nasty personal and untruthful attack on me in the House of Assembly on Thursday evening past by Kenyatta Gibson together with the ramblings of his Minister Kenneth Russell have sent a clear message that I have touched a raw nerve. I decided to dig further and hence my disclosure today.

Reece Chipman is a sole practitioner yet he practices in the name of Catsan Chipman Limited. There are several things wrong with this picture.  

(1)      The Bahamas Institute of Chartered Accountants (BICA's) Rules of Professional Conduct (RofPC) specifically states in Rule 19 under the heading Description of Public Practice, that "No person shall engage in public practice under a name or style which is misleading as to the nature of the practice.   The practice of public accounting should be carried on under the descriptive style of "Public Accountant(s) or "Chartered Accountants" in the case of those persons who are also members of the Institute". This means that only members of BICA can hold themselves out as "Public" or "Chartered Accountants."   

I have checked the membership list of the BICA and there is no such member by the name of Catsan. Neither Kenyatta Gibson nor Minister Russell has advised the pubic whether Mr. Chipman’s Firm is even designated under BICA Rules of professional conduct to be a Firm of Public Accountants or Chartered Accountants. It is worthy of note that Mr. Reece Chipman is reported in the media to be associated with a Company by the name of  NASTAC which teaches persons about the stock market and securities and that is the name CATSAN spelled backwards.

  The upshot of this is that The Bahamas Mortgage Corporation has NOT awarded the engagement to a firm of Chartered Accountants.

 (2)     I have visited the web-site of Catsan & Chipman and observed that besides Mr. Chipman there is only one CPA listed. It begs the question as to how many persons Catsan & Chipman Limited employs and whether or not this firm is able to competently conduct this engagement.   How many other engagements of this type and scope has Mr. Chipman’s firm completed?

(3)      Did Catsan & Chipman meet privately with the Chair of the audit committee chair before being awarded the engagement? If in the affirmative were the other firms who submitted bids given the same opportunity?

(4)      BICA's RofPC number 4 speaks to this under the heading of "Independence and Objectivity" and states that "Every accountant engaged in public practice must be free of any influence, interest, relationship which, in respect of an audit or review engagements, impairs or appears to impair the professional judgment or objectivity of the accountant."  

If this engagement constitutes a significant part of the Firm's income, there will be a question of that accountant's independence.

Kenneth Russell MP, the Minister of Housing with the responsibility for the Mortgage Corporation told the House of Assembly that he never met Reece Chipman.   How can that be? Mr. Chipman was a candidate for the FNM in the last general election. Is it logical or conceivable that candidates on the same party ticket never meet each other during the campaign?   Can Minister Kenneth Russell, Minister Earl Deveaux and Prime Minister Hubert Ingraham explain to the Bahamian people the logic and the justification in giving cleaning contracts to a former FNM candidate who is Certified Public Accountant and President of the Bahamas Institute Chartered Accountants?

These are pressing questions that we call on the Prime Minister to answer in the spirit of transparency and accountability which he often says is the hallmark of his administration.

The question must now be asked: just whose hand was caught in the cookie jar or should in say caught in the plunder of the Public Treasury this time?

I have noted with a great deal of interest that the Prime Minister has failed to respond to the very serious strong charges of wasteful expenditure, disgraceful abuses and blatant nepotism in award of contracts to the then cousin of the Minister of the National Insurance Board when Minister Kenneth Russell held portfolio responsibility. The Prime Minister must without further delay respond to these important pressing issues.

I now call on the Prime Minister to inform the Bahamian people what he will do about the contract that has been awarded to Catsan and Chipman in light of these revelations that Mr. Chipman and Mr. Gibson are business partners in another venture.   I also call on the Prime Minister to inform the Bahamian people what he will do about Mr. Kenyatta Gibson in his capacity as Chairman of The Bahamas Mortgage Corporation because of the conflict of interests that has resulted from his business relationship with Mr. Chipman, and further how his Government can justify awarding the Mortgage Corporation contract to Chipman's firm both in light of the aforesaid conflict of interest and because of the disparate costs that have been submitted by other more reputable, experienced and qualified accounting firms for such services.