Statement
STATEMENT BY PREMIER AND MINISTER OF FINANCE HONOURABLE ANDREW A. FAHIE
DURING THE FIFTH SITTING OF THE SECOND SESSION OF THE FOURTH HOUSE OF ASSEMBLY
Tuesday, 25th February, 2020
10:00 a.m.
Update on the Investigation into the BVI Airways Project
Mister Speaker, I will now update this Honourable House on the investigation into BVI Airways Project.
Mister Speaker, in December 2015, the Government of the Virgin Islands entered into a Framework Agreement with BV Airways Inc (“BVA”) to provide direct air travel service between Miami International Airport and Terrance B. Lettsome International Airport.
The Agreement provided that in exchange for $7 million of Government funds, BVA would deliver its passenger jet travel service by no later than 31st December, 2016 (a date which was later extended by agreement to 31st August, 2017).
By June 2017 it was clear that the BVA project had failed. No non-stop commercial air service from the BVI to Miami was delivered as promised. In early 2017, BVA asked the BVI government to inject further capital into the project.
However, the Government was clear from the outset that the amount of its contribution would not exceed (what came to be) $7.2 million. Thus the request was declined.
By July 2017 BVA announced that it had run out of money and BVA announced it was laying off its staff. The project was a failure.
In October 2018, the previous Government engaged the fraud and asset recovery law firm of Martin Kenney & Co Solicitors (“MKS”) of the BVI to conduct an investigation to determine why the BVA project failed; what had happened to the $7.2 million of public funds; and to identify a viable way to recover these lost funds.
MKS was instructed to continue with the investigation when the current government was elected in February 2019.
In July 2019, MKS delivered a report setting out the firm’s interim findings and conclusions.
In the course of MKS’s investigation, the firm determined that the two BAe Avro airplanes acquired in 2016 by BVA for the project were sold to the original supplier of the planes, Tronosjet of Prince Edward Island, Canada.
These planes appear to have been resold in the market and are now being flown by operators based in Missoula, Montana and Australia.
In June 2019, in apparent response to this investigation, BVA launched a claim against the Government of the Virgin Islands before the American Arbitration Association in New York. This claim seeks an unidentified sum of damages. It is based on allegations which the government strongly refutes.
In response, the Government has instructed MKS to file a defence and a counter claim seeking an award of $7.2 million against BVA. However, the arbitration proceedings have been placed on hold while the parties comply with the relevant terms of the Framework Agreement to attempt to compromise the dispute by way of mediation. Due to the confidential nature of the mediation process, the BVI government is unable to comment further.
In September 2019, the Attorney General of the Virgin Islands, on the back of the findings of the interim report, filed an application for pre-action discovery against attorney Lester Hyman before the US District Court for the District of Colombia. Mr Hyman has opposed the application. The matter now lies before Senior District Court Judge Royce C. Lamberth for a decision.
Attorney Hyman had acted as US legal counsel to the Government of the Virgin Islands from 1987 to July 2017. It was Mr. Hyman who introduced BVA and its promoters to the Government in 2014.
Following the conclusion of the discovery proceedings in Washington DC, the Government intends to bring an action against Mr. Hyman before the BVI High Court for damages based on his conduct in representing the Government in connection with the events leading up to and following the signing of the Framework Agreement with BVA.
In January 2020, disciplinary complaints were filed against Mr Hyman by an MKS Attorney with the Bars of the District of Columbia and the Commonwealth of Massachusetts alleging a number of legal professional ethical violations on the part of Mr. Hyman in connection with his representation of Government in respect of the BVA matter.
Mister Speaker, I want to make it clear to the people of the Virgin Islands that this Government will leave no stone unturned in its investigation to uncover the truth behind the failed project.
We intend to pursue all rights available to the Government to determine who benefited from the use of public funds and to seek recovery of the $7.2 million lost in this project, which are now needed to assist the many concerns, especially those being named by the opposition who served under the previous administration when the money and planes went missing.
Mister Speaker, finally we have found planes, now is time for the missing $7.2M to be found. In addition, Mister Speaker, anyone legally responsible for the Government’s loss will be held to account to the extent that the law permits.
I thank you.
