Tribune Four Page Wrap June 11th

PAGE 1 , THURSDAY, JUNE 11th, 2020

THE TRIBUNE

TOURISM PR MOTION BOARDS $219 MILLION “BLACK H LE” How Foreign Ex-Pat CEOs Control Our Nations’ Tourism Industry & Spend YOUR Taxes!!

EXCLUSIVE

The People’s Paper invites the public to meet the foreign ex-pat CEOs from most major hotels, all of which are foreign owned, who have gained control of our Bahamian Tourism Promotion Boards - placing themselves effectively beyond any form of legitmate Parliamentary Oversight as to how they’ve spent a staggering $219 Million YOUR taxes since 2010! $219 Million ofof Your Tax Reveneus since 2010!

If this is not enough to get one’s head around, the Minister of Tourism, Hotel Corporation Board andTourism Development Board have no seat, vote nor any say in the runnnig of said Boards. In point of fact, we cannot find any audited financial statements justifying in detail how Hundreds of Millions in stop-over visitor levys (taxes) have been used!

Our investigation has revealed that as opposed to both the PLP & FNM increasing taxes and having to institute VAT on the backs of the hard working Bahamian public to save our barren, debt-ridden Public Treasury, the NPIPB appears to have hired 60 Foreigners vs Zero a wopping 60-70 foreigners andBahamians given Mr. All is not lost however as the CEO of Nassau Paradise Island Promotion Board (NPIPB), got a hefty pay raise to $400,000 per annum

So if you want to learn from filings with the IRS / Justice Department how NPIPB has dolled out “Cash Rewards” Rewards” for said funds on “Cash travel agents not to meniton Room & Food Credits for bookings made at the very same hotels they manage; rent for its plush offices in Plantation, Fl; provided comprehensive healthcare, pensions, “private derivatives and other closely held securities” for its US staff; whilst, if you can believe, furloughing our brother and sisters working at their respective resorts in The Bahamas, then read on! #BahamianEmployees.

And, of course, let’s not forget conferences and familiarization trips, euphemistically called “education and training” exercises which is an excuse to trek around the world in luxury on your dimewith an expense acount in tow! We know you won’t want to miss seeing how your taxes have been used nor a reivew of such matters from the one and only $50M Hon. Alfred Sears, Q.C., former Attorney General of Commonwealth of The Bahamas.

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The Promotion Boards of these Bahamian companies are controlled by ex-pats from most major hotels, all of which are foreign owned. If this is not enough to get one’s head around, the Minister of Tourism, Hotel Corporation Board and Tourism Development Board have no seat,vote nor a say in the runnnig of said Boards, Yet, we cannot find audited financial statements justifying how Hundreds of Millions in stop-over visitor levys (taxes) have been used

SPOT THE BAHAMIAN- Minister of Tourism & Aviation, Hon. Dionisio D’Aguilar (centre) met with members of the Nassau Paradise Island Promotion

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over the last 10 years!

SPOT BAHAMIANMinister ofPictured Tourism & Aviation, Hon. Dionisio meets withClub}; executives the Nassau Paradise Island Promotion Board at the Ocean Club BoardTHE at the Ocean Club Boardroom. from left: John Conway, InterimD’Aguilar Chairman(centre) (Four Seasons Ocean GeorgeofMyers, Chairman Emeritus Boardroom.

Pictured from left: John Conway, Chairman (Four Seasons OceanParadise Club}; George Myers, D’Aguilar; ChairmanWilliam Emeritus (Bay View Suites, Paradise Island); Oswell, (Bay View Suites, Paradise Island); Audrey Oswell,Interim President & Managing Director, Atlantis Island; Minister Naughton, Vice-Chairman/Paradise IslandAudrey (Comfort Suites President & Managing Atlantis Paradise Island; Minister D’Aguilar; William Naughton, Vice-Chairman/Paradise Island (Comfort Suites Paradise Island); Graeme Davis, Paradise Island); Graeme Director, Davis, Vice-Chairman (Baha Mar Resort) and Fred Lounsberry, Chief Executive Officer.

(BIS Photo) Vice-Chairman (Baha Mar Resort) and Fred Lounsberry, Chief Executive Officer, Nassau/Paradise Island Promotion Board (BIS Photo)

PAGE 2 , THURSDAY, JUNE 11th, 2020

THE TRIBUNE

Paradise Lost for Bahamians Oh, Hell No! You just didn’t say Dat?

By Hon Alfred Sears, QC

Grand Bahama Island Tourism Board was incorIn a series of public lectures commencing on porated as a company limMarch 5th, 2019, I stated that the ring-fenced ited by guarantee to promote hotel development processes,comprising inbound tourism to Grand state subsidies, concessions, exemptions and Bahama Island, From March Crown land grants around direct foreign in- 8, 1970, these promotion vestment in tourism had reached a point of di- boards collected a resort levy minishing returns hampering the growth and from each guest at its memopportunites for Bahamians to such an extent ber hotels. Hotels in New that it posed constraint on the national devel- Providence collect 10 percent of room rate, eight peropment of our nation and its people. cent of room rate as a resort In the White Paper for Independence of levy which they retain, and a the Commonwealth of The Bahamas, pre- lesser amount is collected by sented by the prime minister to Parliament Family Island hotels which on October 18, 1972, it is affirmed that: is paid to their promotion “Incentives. 135. The Commonwealth of boards. The retained amount The Bahamas shall continue to provide taken by promotion boards is spent in the boards’ excluwhat is among the best range sive discretion for “promoof incentives for the develoption and training programs”. ment of a private enterprise These boards are controlled anywhere in the world, and primarily by the major hothe nationalization shall tels, all of which are foreign not be an instrument of owned and controlled; the government’s ecothe Ministry of Tournomic policy. Thereism has neither a seat fore, the assumpon the boards of ditions of the Stafford rectors nor a vote in the running of be extended with each major renovation or Sands model were the Bahamas promotion boards. refurbishment for said property. continued after inde- pendBahamian-owned hotels, with under 75 ence by both the Progressive PROMOTION SUBSIDIES BY rooms, find it difficult to qualify for conLiberal Party and the Free THE MINISTRY OF TOURISM cessions under this act due to the requireNational Movement government that they expend 25 percent of the ments.”

1. Promotions and special marketing market value of their properties in refurUnder this model, The Bahafunds from the budget of the (MOT); bishment over a period not exceeding two mas was presented as a success 2. (a) Atlantis receives an annual proyears. This requirement, while intended model which saw visitors’ armotional cash subsidy of $4 million from to apply to foreign investors, has had the rival grow from a mere 32,018 the Ministry of Tourism. On an estimated unintended consequence of penalizing visitors in 1949 to 6.6 milinvestment of $2.5 billion to $3 billion, it Bahamian-owned small hotels. lion in 2018. It has produced is conservatively estimated that Kerzner in 2018 a gross domestic receives concessions valued north of $500 CASINO CONCESSIONS product of US$12.9 billion, million, inclusive of exemptions from cuswith a per capita income tom duties, real property tax, stamp duty Foreign-owned casinos pay lower gamof $23,000.The financial and casino tax rebate under the Hotel Ening taxes and enjoy the benefit of concesservices sector in The Bacouragement Act, the Stamp Act and the sions, exemptions and subsidies. Bahamihamas, based on the asheads of agreement.

Kerzner, when refian-owned gaming house operators, who sumptions of the Stafford nanced in 2014, granted a combination of pay higher gaming taxes, do not enjoy the Sands model, also ringcasino tax rebate and marketing contribusame exemptions, concessions, state subsifenced foreign-owned tion of $8 million for years 2014 and 2015. dies and are restricted from doing business banks, trust companies In consideration, Kerzner provides employwith the 6 million tourists who visit The and insurance compament, purchases local goods and services.

Bahamas annually. nies from the obligation (b) Baha Mar receives an annual promoto pay local taxes. tional cash subsidy of $4 million from the • Pay lower casino taxes and licensing fees Ministry of Tourism. On an investment on a sliding scale that is lower than that of HOTEL OCCUPANCY/ HOTEL OCCUPANCY/ estimated at $3 billion, Baha Mar receives the gaming house operators.

RESORT/ROOM LEVY RESORT/ROOM LEVY concessions conservatively estimated at • Do not pay business license fees. $500 million; in addition, Baha Mar re- • Do not pay VAT on gaming revenues.

By letter dated March ceived a $20 million contribution from 3, 1970, the Minister of Govt on the relaunch of Baha Mar. 1. Casino taxes and fees are fixed for a peTourism, Sir Clement (c) Resorts World Bimini receives $3 riod of 20 years for Atlantis and Baha Mar. T. Maynard, granted million per year for several years.

2. Casinos at Atlantis and Baha Mar are the newly constituted (d) The Pointe receives an annual permitted to deduct taxes for 21 years: Nassau and Paradise cash $1 million promotion subsidy (a) $5 million from the amount of the anIsland Visitors and from the Ministry of Tourism.

On an nual license and monitoring fee; Group Promotion investment estimated at $300 mil(b) 50 percent of the annual gaming tax, Board, incorporated lion, The Pointe receives concesin respect of taxable revenue in excess of in March 23, 1970, the sions conservatively estimated at a $20 million. right to “start lobbyvalue of $75 million.

3. Resorts World Bimini enjoys similar ing a toll of four (4%) (e) Sandals – several million concessions & Freeport casino enjoys lowThere is no statutory on room prices (Euro(f) Club Med – several million er tax rates that others. pean Plan) as of Sunauthority for these Over a period of eight years, day, 8th March 1979”. promotion boards/ the cash subsidies from the govCRUISE SHIPS ACT OF 1995 On October 18, 1984, hot ernment to hotels, with HOA’s els to coll ect $50M the Paradise Island amount to $100 million+.

Cruise companies which deliver a miniin taxes or levies, apart Tourism Developmum of 500,000 passengers and stay overment Association from the 1970 letter from HOTEL ENCOURAGEMENT ACT, night in an approved or designated port was incorporated the Ministry of Tourism. in The Bahamas qualify for a concession as a company limThe Under the Hotels Encouragerefo re, it is, I beli of $5 per passenger from the Ministry of eve , ited by guarantee ment Act, 1954 and VAT, hoa live, legal question as to Tourism’s budget. to promote the tels and casinos are exempted tourism indushow the bulk of our nations’ from the payment of VAT, custry of Paratourism promotion budget, FAMILY ISLAND DEV ENCOURAGEMENT ACT toms duties, stamp tax on madise Island.

The concessions under this legislation, infrom taxes, is controlled by exterials, equipment, furnishings In 2003, tended to stimulate economic growth in the and vehicles used in construcpats outside of the lawful statutory the tion. They are also exempted Family Islands, have spurred the growth of the framework -- beyond the control from payment of real property second-home market that has morphed into a of the Ministry of Tourism and not tax for 10 years and pay only $20 vacation home industry marketed by Airbnb per hotel room for the next 10 years. and other online agencies. Vacation home accountable to Parliament!”

These concessions under the Hotels rentals or the rental of owner-occupied homes, especially in Abaco, Eleuthera and Freeport Encouragement Act may HON. ALFRED SEARS, Q.C.

PAGETRIBUNE 3, XXXDAY, XXXMONTH XX, 2015 THE

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Would it not be preferrential, bordering on nepotism, for the NPIPB to be doling out millions of taxpayer derived funds(levy)on “Cash Rewards” for travel agents, not to mention Room & Food Credits for guests bookings stays at the very same hotels that the Chairman & Board of Directors manage/operate?

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TRIBUNE THURSDAY, JUNE 11th,THE 2020, PAGE 3

Could NPIPB provide Audited Financial Statements with respect to its allocation of of $219 MILLION public funds since 2010 including, without limitation the processes by which said funds were allocated?

OURQUESTIONS #BahamasIsForBahamians

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As a Bahamian registered company requires 60% ownership/control Ownership/Control how could an ex-pat 60% have been appointed as Chairman; let alone, the other foreign Board members without Central Bank approval?

EIGHT THINGS WE’RE CURIOUS ABOUT

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Who authorizes the generous salary of NPIPB’s Chief Executive Officer to the tune of $400K+ $400K+ per annum. Or how about funds being dished out for rent of the luxurious offices in Plantation,FL at a rate of $23K+ $30K a month??

LETS PLAY SPOT THE BAHAMIAN EMPLOYEE@NPIPB What’s the Nassau/Paradise Island Promotion Board Doing with so many companies?

It’s bad enough the NPIPB doesn’t hire Bahamians nor allow companies based in The Bahamas to bid on any projects; has the Promotion Board decided to compete

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Is Nassau/ Paradise Island charging VAT on Bahamas Govt Promotion Board Tax (Levy)? If so, why?

Does NPIPB and/or any respective hotel resort claim a refund??

That’s Easy!

We can’t find Any Bahamian employees from IRS& FL.Dept of State Docs

8 As a “Contracting State” to the Chicago Convention

Has the NPIPB stopped paying millions to airlines /cruise ships to fly and/or stop in The Bahamas via some AirLift mechanisms?

on International Civil Aviation The Bahamas should avail itself of its sole sovereign right to charge airlines for the use of our strategic airspace - like 186 other nations- not be Paying Delta, United, American, Southwest, JetBlue, Carnival or Royal Caribbean to come to our islands. Thats not free trade its Colonialism 2.0!

Socially Distance Ya Self!!

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PAGE 4 , THURSDAY, JUNE 11th, 2020

THE TRIBUNE

THE STAFFORD SANDS MODEL IS IN CRISIS.

By Hon Alfred Sears, Q.C. Nobel Laureate Sir Arthur Lewis, the leader of the theory of economic growth by foreign direct investment, ar- gued that such efforts should be used by Caribbean countries to jump start their econ- omies through through, capital savings and invements by foreign nationals, to ensure more sustainable national development.

Foreign direct investment is by all accounts a welcome component of national development, but it must be complementary (i.e.obtain exemptions) it should be mandatory that investment in certain areas requires a Bahamian participation. The current investment ar- chitecture, based on outdated assumptions which are inconsistent with a sovereign country and its needs, increases the competitive advantages of foreign investors, who are the exclusive beneficiaries of incentives, concessions and state subsidies.

Most foreign investors will have the benefit of unfettered access to global venture capital and the support of their respective export-import banks. Bahamian investors, on the other hand, do not enjoy those advantages and are prohibited by law from accessing the cheapest venture capital from outside The Bahamas. There is no Import-Export bank of The Bahamas to incentivize citizens to become regional and international players.

“IT IS EASIER FOR FOREIGN INVESTORS TO DO BUSINESS IN THE BAHAMAS THAN BAHAMIAN INVESTORS”.

For 46 years since Independence, The Bahamas continues to operate according to the assumptions of the Stafford Sands model with a deepening systemic dis-functionality and diminishing competitive position in tourism and financial services. In 2018, a picture of the Bahamian economy reflects a broken model: 5. Projected growth rate 2018-2019 was 2% 1. Gross national product, $12.9 billion 6. Projected public revenue (16.1% of GDP), 2. National debt, $8.2 billion a. Debt servicing 3. Pension liability, $2.5 billion b. Public salaries, pension and gratuities, 4. Projected national deficit 2018-2019, $230 million c. Subventions to state-owned entities In spite of the opening of Baha Mar resort, unemployment currently stands at 10.7 percent, with youth unemployment at 25%. According to the IMF, The Bahamas will have to achieve a growth rate of 5.5 percent over the next five years to achieve a 50 percent reduction in unemployment

REPEAL HOTEL ENCOURAGEMENT ACT & DISBAND ALL PROMOTION BOARDS.....

Bipartisan consensus is needed around a coherent fiscal, monetary, investment, trade and industrial policy that rationalizes the use of incentives, concessions, crown land, natural resources and state subsidies to give primacy to Bahamian investors and Bahamian/foreign joint ventures in order to create sustainable development throughout the archipelago of the Commonwealth of The Bahamas, with preferences reserved for investment in the most underdeveloped Islands. Currently the Cabinet, through the National Economic Council operated from the Office of the Prime Minister, facilitates only investment proposals submitted by foreign in vestors, where incentives are granted way above statutory provisions.

Investment legislation, incorporating existing concession legislation, should be enacted to treat all investors, Bahamian and foreign, in an fair transparent and even manner. Further, the legislation should set a threshold amount to qualify for concessions, the amount of concessions to be granted by the authority, and above a threshold parliamentary approval; timeline for approval. There should also be a requirement for a public consultation with respect to any proposed development project that would have a significant impact on the environment and the way of life of a Bahamian community. Such legislation would bring certainty and increase public confidence in public administration.

..ENACT TOURISM ENHANCEMENT ACT, CREATE BAHAMAS TOURIST BOARD & TOURISM DEVELOPMENT CO. LTD FOLLOW JAMAICA’S LEAD