nib report - former chairman gregory moss

7/23/2019 NIB Report - Former Chairman Gregory Moss

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1 PRIVATE & CONFIDENTIAL

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, todetermine 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.




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 includeda 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 NIB’s 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 NIB’s 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.




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 r esolut ions heretofor e passed by the Board of D ir ectors in respect of the

spending authori ty and spending mandate of any and all Dir ectors and Executives of the

Nati onal I nsurance Board (save and except in respect of the payment of employees, uti li ties and

other business expenses in the normal course of business of the National I nsurance Board) are

hereby revoked with immediate eff ect and that subject to any fur ther resolution of the Board,

the Chairman in hereby empowered to authorize and approve such spending as in his

discretion are requi red as a matter of urgency between sittings of the Board to the maximum

sum of F if ty Thousand Dollars ($50,000) and is required to repor t to the Board at the fi rst

sit ting thereafter any and all such expendi tur es so author ized and approved by him."

NIB 2012 5TH

(REGULAR) MEETING OF THE BOARD OF DIRECTORS OF THE

NATIONAL INSURANCE BOARD

4.0 SPENDING AUTHORITY AND SPENDING MANDATE OF NIB

EXECUTIVES

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, thefollowing resolution was adopted:

“Be it resolved that all resolutions heretofore passed by the Board of Directors in

respect of the spending authori ty and spending mandate of any and all Di rectors

and Executi ves of the National I nsurance Board (save and except in respect of the

payment of employees, util it ies and other business expenses in the normal course

of business of the Nati onal I nsurance Board) are hereby revoked with immediate

eff ect and that subject to any fur ther resoluti on of the Board, the Chairman is

hereby empowered to author ize and approve such spending as in his discretion are

requi red as a matter of urgency between sitti ngs of the Board to the maximum sum

of F if ty Thousand Dollars ($50,000) and is required to report to the Board at the

fir st sitting thereafter any and all such expenditures so author ized and approved by

him.”






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.

4.1.7 The Director stated that while there was clarity on payment of employees’ salaries andutilities he needed more clarification on what constitutes “other business expenses

in the normal course of business…”

4.1.8 The Chairman invited the Director to meet with his financial persons for the purposeof putting together a resolution as to what items would fall in the category of “normalcourse of business” and the same can be circulated to the Board for approval.

b)

We interviewed Mr. Gregory Moss at Grant Thornton’s office on February 7, 2013. He was asked to respond toeach 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 fi rst 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 havesuch author ity. GM said that AC replied that the power was given to him based on

the Statute. AC’s claim to a delegated author ity to spend up to $100,000 was deni ed

by GM and the other members of the Board. GM said that i n the meeting, the Board resolved to remove any such author ity. GM said that was the purpose of the

Resolution.

14. Grant Thornton asked GM i f he was aware of the letter f rom the NIB F inancial

Controller that sought to introduce the definition of what fell under “other business expenses.”

14.1. GM said that when the Board passed the resolu tion to remove that alleged

“delegated authority” from AG it also vest ed GM, as Chairman with the author ity

to bind NI B to any contract for up to $50,000 on condition that he must report any

such contr acts to the Board at its next sitting.

As a part of that r esolution 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 Dir ector, wi th an

author ity 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.”






“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 5

th(Regular) meeting held on 25

thJuly, 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 theFinancial Controller in which she suggested that a number of items be included in thedefinition “other business expenses, in the normal course of business of the NationalInsurance Board.”

2.3.3 Members agreed to the following, with changes made to the various pointshighlighted 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.






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 NIB’s

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.) shouldread: 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 beyondthe amended point.

9. Payments related to the implementation of the Insurance Administration System. (Thisitem 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 Director’s Spending Limit

Mrs. Ernestine Kelson, NIB’s 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 Board’s 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:

4.1 NIB (09) 065 – Approval for the Director to Execute Contracts and/orAgreements up to One Hundred Thousand Dollars ($100,000.00)

4.1.1 The Director explained that the Board of Directors’ approval was being sought toauthorize the Director of the National Insurance Board to execute any and allContracts and/or Agreements on behalf of The Board up to One Hundred ThousandDollars ($100,000.00).






NIB Director’s 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 Mr. Van Diah was of the opinion that $100,000.00 was too high.

4.1.4 Ms. Debbie Ferguson added that the request was too broad or too wide. She askedhow often contracts were approved.

4.1.5 Members discussed this item for some time, and concluded that certain procedureswill have to be followed before such a request is approved. The request wastherefore deferred.

4.1.6 The Chairman said that he and the Director would discuss how the request should berefined, and thereafter the same can be re-submitted for the next meeting.

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 - ChairmanMr. John Pinder - Member Dr. Robin Roberts - Member Mr. Algernon Cargill - ResourceMrs. Phaedra Mackey-Knowles - ResourceVP Finance - Resource

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 theapproved 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 investmentand overall policies.







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 Cargill’s spending limit to $100,000.

DISCUSSION ON INCREASING MR. CARGILL’S 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 Agreementsup to One Hundred Thousand Dollars.

NIB 2009 10TH

(REGULAR) MEETING




Insurance Board held on Tuesday, 8th

December, 2009 in the Boardroom of The National











NEVER GRANTED) (continued) _ _

NIB 2010 1ST

(REGULAR) MEETING


The Minutes of the 1st



January, 2010 in the Boardroom of The National




NIB 2010 2ND

(REGULAR) MEETING


The Minutes of the 2nd



February, 2010 in the Boardroom of The

National Insurance Headquarters Building situated on Baillou Hill Road, at 4:00 p.m.



NIB 2010 3RD

(REGULAR) MEETING


The Minutes of the 3rd


Insurance Board held on Monday, 29th

March, 2010 in the Boardroom of The National












NIB 2010 4TH

(REGULAR) MEETING





May, 2010 in the Boardroom of The National




NIB 2010 5TH

(REGULAR) MEETING





June, 2010 in the Boardroom of The National




NIB 2010 6TH

(REGULAR) MEETING





August, 2010 in the Boardroom of The National












NIB 2010 7TH

(REGULAR) MEETING




Insurance Board held on Thursday, 23rd

September, 2010 in the Boardroom of The



8.1 NIB (09) 065 – Approval for the Director to Execute Contracts and/or Agreementsup to One Hundred Thousand Dollars.

NIB 2010 8TH

(REGULAR) MEETING





October, 2010 in the Boardroom of The National


7.0 DEFERRED MATTERS CONT’D.


NIB 2010 9TH

(REGULAR) MEETING





December, 2010 in the Boardroom of The












NIB 2011 1ST

(REGULAR) MEETING


The Minutes of the 1st



January, 2011 in the Boardroom of The National




NIB 2011 2ND

(REGULAR) MEETING


The Minutes of the 2nd



February, 2011 in the Boardroom of The




NIB 2011 3RD

(REGULAR) MEETING


The Minutes of the 3rd


Insurance Board held on Thursday, 31st

March, 2011 in the Boardroom of The National












NIB 2011 4TH

(REGULAR) MEETING





May, 2011 in the Boardroom of The National




NIB 2011 5TH

(REGULAR) MEETING





June, 2011 in the Boardroom of The National


6.0 DEFERRED MATTER


NIB 2011 6TH

(REGULAR) MEETING




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.





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 Director’s 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 Thornton’s office on February 7, 2013. He was asked to respond toeach allegation in the Affidavit filed by Mr. Algernon Cargill, dated November 28, 2012.


19. Grant Thornton r ead section (k) (i i) and asked GM if he recommended the relocation

of the Director’s office in 2012. GM said yes, he recommended the relocation of the Director’s office.

20. Grant Thornton asked GM what was the purpose of the relocation of the Director’soff ice in 2012? GM said that the Dir ector occupied a larger off ice compared to the

Chairman’s office and that as Chairman he needed to have a larger space to allow himto do his work and hol d meetings with Dir ectors, staff and the Committees of the Board

when needed.





ALLEGATION 1.2 - (ii.) in Affidavit (continued)

21. Grant Thorn ton asked GM how long it took for the Dir ector to relocate from the time

of the communication. GM said that the Director did not relocate ri ght away because

he was going to Puerto Rico on a tr ip with M rs. Phaedra Mackey-Knowles and said

that he would have the relocation done dur ing his tr ip.

22. GM said that he could only r ecollect two things he did without pri or approval of the

Board and they are: (1) Switch Of fi ces of the Chairman and the Director and; (2)

Switch parking spots of the Minister and Chairman to put the Minister’s parking spot in a more prominent positi on than that of the Chairman.

23. Also, GM pointed out that the prime parking spot should be for the Minister and not

for the Chairman of NI B. GM said that the spots were laid out in the order Chairman-

M in ister-Di rector whereas it should be in the order of M in ister-Chairman-Di rector.

GM said that AC agreed with the changes. But the changes took effect weeks after i t had been raised.





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 non-

interest 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".





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.






We asked Mrs. Knowles if was there any loss suffered by NIB for not having transferred the more than $15million 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 Thornton’s 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.


25. GM further explained that the memorandum was in relation to one of the early Board

meetings where there were discussions on I nvestments of the NI B Fund ($240 mill ion

of assets).

26. GM said that management sets the draft agenda and one item was investments. GM

said that at a Board meeting, an i tem came up about investment and that AC said that

he wil l deal with i t as he had a delegated author ity to do so.

GM said that the Board went into an extensive discussion based on AC’s claim that hecould invest the NIB fund by “delegated authority” without any Board approval.

27. GM said that he asked AC where he got such delegated authori ty and AC stated that

the delegated author ity was thr ough the Statute. GM said that he refuted this by saying

he had read the Statute and no such authori ty was stated there. AC then said it was

under the Regulati ons. 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 Regulat ions. I nstead, befor e the next sitti ng of the Board he provided GM wi th two documents: (1) I nvestments Guideli nes approved by the

M in ister (2004) and (2) a 2010 Investments Guideli nes that was not approved by the

Minister.






28. GM said that thi s is the crucial poin t and said that when you see both I nvestment

Guideli nes they both expressly provided in red, bold print, capitali zed letters that they were not to be acted upon by NI B unti l such time as legislation had been enacted to

give effect to them. GM said that that was not surpr ising since the Third Schedule to

the National I nsurance Act expressly provided the law on how NIB F unds are to be

invested and any such Guideli ne would not be lawfu l unless and un til the National

I nsurance Act was amended.

29. Grant Thornton asked GM if he was saying that AC was utili zing a gui deline that had

no eff ect. GM said yes and said that upon review of the investment Gui deli nes provided

he pointed out to AC that it should not be foll owed and deemed in eff ect as it expressly

provided that it was not to be acted upon unti l l egislation had been passed to give effect

to it. GM said that discussions with the legal counsel of NI B, M rs. Heather Maynard

and the Board regarding the poli cy guideli nes on investment fol lowed thereafter. GM

said that M rs. Maynard fi rst gave a wri tten opin ion that the 2004 Guidelines could be acted upon but, later af ter he pointed out to her the words menti oned above in red, bold

pri nt, capitali zed letters to the effect that they were not to be acted upon by NIB un ti l

such time as legislation had been enacted to give effect to them she clearl y admitted

that she agreed that the poli cy is subject to the Statute befor e it can be implemented.

30. Grant Thornton continued reading section (k) (iii) of AC’s 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 Nati onal I nsurance and advised him on several occasions of the negative effect of M r.

Moss’ unilateral decision to revoke an Investment Policy Statement and previousBoard D elegations that were previously approved.”

31. 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 i ts behal f such functi on

as the Board may determine”. (2) Every delegation under this section shall berevocable by the Board and no delegation shall prevent the exercise by the Board of

any function.

GM continued by reading the Thi rd 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 theBoard in accordance with the provisions of the Thir d Schedule and, subject to those

provisions, of any regulations made pursuant to paragraph (b) of subsection (4) establishing cr iter ia for the investment of reserves. (6) Notwi thstanding 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 Mini ster acting after

consul tation with the M ini ster responsible for F inance may direct.






32. Af ter r eading, GM reiterated the Board author ity and said that AC wanted to act on

the 2004 investment poli cy Guideli nes although they expressly pr ovided that he was not

to act upon them unt il legislation was enacted to give eff ect to them and although they

were contrary to the provisions of the Third Schedule of the National I nsurance Act.

33. GM stated that the 2004 and 2010 Guideli nes were distri buted to all Di rectors of the

Board and the Board passed a resolution to vest that investment power in the Finance

and I nvestment Committee as a part of the Terms of Reference of that Commi ttee. GM

said that that r esolu tion was the one by which all committees were formed and vested

with their terms of reference.

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).






NIB 2012 6TH

(REGULAR) MEETING


The Minutes of the 6 th

(Regular) Meeting of the Board of Directors of The National Insurance Board held on Thursday, 30

thAugust, 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

Apologies: Dr. Josephine Bartlett, Member

Mrs. Phaedra Mackey-Knowles, Deputy Director/Vice President Investments Mrs. Sonia Gill, Financial Controller

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 Delegated I nvestment Author ity

2.8.1 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. Mackey- Knowles 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.

2.8.2 The Chairman was of the view that Management should not have been acting without authority.

2.8.3 The Director indicated that he responded in writing to the Chairman’s memorandum and it ishis 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.






2.8.4 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 30

thAugust, 2012.

2.8.5 He said that the Board is to advise the Minister on the Investment Policy, and we are acting on the Minister’s directives.

2.8.6 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 separateentity from their Social Security Scheme.

2.8.7 He pointed out that legislative changes would have to be made for NIB’s investments to be

separated from the Social Security aspect of the Scheme.

2.8.8 He went on to say that the Minister’s wish is to have investment s as a separate entity.

2.8.9 One member commented that because of the liquidity in the market, there is no place to invest funds locally.

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 beenapproved. 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 nointerest 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 discussionabout 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.






NIB 2012 5TH

(REGULAR) MEETING



(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 Management’s 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 Board’s approval and subsequently to the Minister for Ministerial approval.

5.5.2 He further pointed out that there were some investments which would be authorized by him as aresult of the delegated authority.

5.5.3 The Chairman then inquired as to the source of the delegated authority.

5.5.2 The Director and Mrs. Mackey-Knowles responded that this was covered in the regulations and

also the Investment Policy Statement.

5.5.3 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.

5.5.4 The Chairman commented that he found it surprising that the Board would have been bypassed oncertain investments.

Please see page 7 regarding the Director ’s spending authority, or lack thereof. Please note it is the

Finance/Investment Committee’s 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.





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

Mrs. Bethel directed Mr. Osbourne Moxey, Manager, Projects, to prepare the check and he refused, although sheadvised 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 "AMC-

16 ".



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.






b) We interviewed Mr. Gregory Moss at Grant Thornton’s office on February 7, 2013. He was asked to respond toeach allegation in the Affidavit filed by Mr. Algernon Cargill, dated November 28, 2012.


47. GM said that he is not connected in any way to the Company.

48. Grant Thornton asked GM of hi s association with Mr. Gregory Smith. GM said that he

has a business relationship with M r. 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 wi th AC. GM said that he did not recall ever discussing that matter with AC. He said that he was told by Theresa

Burr ows that NIB had received a proposal f rom Earth and Sun Energy Company

L imi ted to conduct an energy audit. He said that M rs. Bur rows 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 Mr s. Burrows to follow whatever

was the standard procedure in NIB and as far as he knew no contract was ever

concluded with Ear th and Sun Energy Company Limi ted and no cheque was ever

issued by NI B in respect of that matter.

49. Grant Thornton asked GM i f he issued a dir ective to pay $42,000. GM said that that

was an absolute li e and i t was never done. He said that he did not issue any dir ective.

50. Grant Thornton read AC Affidavit that read “ Mr. Moxey also advised that we had several of fers for free energy studies, and had also completed a simi lar study in 2011

f or approximately $3,000 and Mr. Gregory Moss’ directive was to now pay $42,000 for the same type of wor k. M s. Theresa Burrows advised M r. Moss of these comments

during a meeting in the Chairman’s office that Mr. Moxey and I also participated in,and advise d him of the Minister’s reluctance to approve this payment as he had directed Mrs. Cecile Bethel to execute.”

GM said that that is an absolute unmi tigated lie. He said that he never gave a dir ective

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.






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. Wewill 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.”






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 you r Chairman, Mr. Moss on July 27

th , 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 NibSub 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.






Excerpts:

“Thanks for your feedback. I do not have any of these answers but suggest that you ask thecompany for further clarity.

“let’s 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.






FINDINGS

a) We interviewed Mr. Gregory Moss at Grant Thornton’s office on February 7, 2013. He was asked to respond to



51. GM said that was true but that it was for the purpose of implementing the resoluti on of

the Board by which the Board had resolved that the cur rent i nsurance contract with

Bahamas First be terminated and a new insurance contract with Star General

I nsurance be implemented. He said that before that, the Board had passed a resolution to terminate the insurance contract with Bahamas Fi rst.

53. GM said that the communication was a part of the resolution whi ch had been passed

by the Board. He said that he just wants to reiterate that i t 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 simpl y untr ue as anyone who reads the National I nsurance Act and

the M inutes of the Board Meetings would see that they were decisions of the Board

which I was implementing as the Chairman.

54. GM said that the Board passed a resolution to terminate the contract with Bahamas

F ir st and out of cour tesy, they inf ormed the M ini ster Mr. Shane Gibson but the

M in ister said no, do not terminate.

55. GM said that the Minister, M r. Shane Gibson took the positi on not to termi nate.

56. 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 i ts

resoluti on to termi nate the Bahamas Fi rst 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

dir ective, the Min ister should foll ow those steps and issue his directive.

The Board disagreed with the M in ister over leaving the insurance policy in place.

57. GM said that the Minister met with the Board on a Sunday and, after a discussion wi th

the Board, menti oned that he would issue a wr itten directive to say that the termination

of the Bahamas Fir st insurance policy would not be put into effect. No wri tten dir ective

from the Mini ster was ever r eceived according to GM.





ALLEGATION 1.5 - (v.) in Affidavit (continued)

58. Grant Thornton asked GM if he knows why the Minister M r. Shane Gibson did not

cancel the Bahamas F ir st contract. GM replied that he cannot speculate why the

M in ister would not want to terminate the contract with Bahamas F ir st. GM added that

as per N IB Act Section 7, the Min ister has the power to give a directive after

consul tation with the Board.

60. GM referred to an earl ier Board Meeting and said that AC and M rs. Phaedra Mackey-

Knowles were present and the Board was discussing the terminati on of the Bahamas

F ir st insurance poli cy because of a clear confli ct of interest in the previous Board of

NI B having awarded that policy to Bahamas F ir st when the Chairman of the Board at

that time was an executive of Bahamas F ir st. Ei ther AC or M rs. Phaedra M ackey-

Knowles (he could not recall wh ich person i t was) stated that the policy could not be

terminated. When asked why it could not be terminated, that person responded to say

that N IB could not terminate the poli cy because it was a fixed thr ee year contract and,also, that because if NI B sought to cancel the insur ance policy, in the middle of the

hurr icane season, the shor t rate premium which would be imposed upon cancell ation

would be the same as the fu ll extent of the premium which NI B had paid.

61. GM said that in the middle of that earli er Board meeting the members had suggested

that the meeting be adjourned in order for h im to consul t with the Minister and to find

out why the Bahamas F ir st policy had been approved. He said that af ter consul tation

with the Minister he informed the Board that the Minister had indicated that Cabinet

had in iti ally disapproved Bahamas F ir st, notwithstanding that it had the lowest bid, on

the basis of the same confl ict of in terest which the Board had identi f ied and had

dir ected AC to send the matter back out to tender and to exclude Bahamas Fi rst f rom

the second tender exercise. He said that the M in ister explained that AC had sent the

matter back out to a second tender as instructed but had still included Bahamas Fi rst in the second tender exercise with the result that Cabinet felt compell ed to accept

Bahamas F ir st notwi thstanding the conf li ct of interest because it was the lowest bid

and because the hurr icane season was approaching and there was no time to conduct

another tender exercise. He also said that the Mini ster agreed that i f there was a basis

for cancell ing the Bahamas F ir st policy the Board shoul d cancel i t as there was an

obvious confli ct of interest. As a resul t, the Board deferred the matter and instructed

him to review the policy.

b) Mr. Moss indicated that he was acting on a resolution passed at the Board of Director’s 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).






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 Minutes of the 6 th

(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

Apologies: Dr. Josephine Bartlett, Member Mrs. Phaedra Mackey-Knowles, Deputy Director/Vice President Investments

Mrs. Sonia Gill, Financial Controller






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

NI B proper ties presently insured by Bahamas F ir st General I nsurance 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 I nsurance Agents & Brokers Ltd. and J.S. Johnson

Company Ltd.) to resubmi t tenders, and upon the identi f ication and placement of a sui table replacement poli cy of i nsurance coverage for the NI B properties, to

termi nate the contract with Bahamas F ir st General I nsurance 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 InsuranceCompany Limited

Contracts and Tenders Committee13

th , 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

Apologies: Mr. Algernon Cargill, Director

Mrs. Sonia Gill, Financial Controller

In Attendance: 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

2.2.10 On a motion duly made seconded and unanimously carried, the following

Resolution was adopted:






“Be it resolved that the Contracts and Tenders Committee authorizes and

directs the Di rector to:

1) Enter into a contract with Star General I nsurance Agents & Brokers Ltd.

Ef fective 24 th September, 2012 to 31

st May, 2013 at the prorated amount of

approximately $1,562,014.39 for replacement i nsurance coverage for the

NI B properti es presently insured by Bahamas F ir st General I nsurance

Company Ltd., and

2) Terminate the Policy with Bahamas Fi rst General I nsurance Company

Limi ted, as previously approved by the Board, effective 24 th 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 andRegulations. 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.





ALLEGATION 1.6 - (vi.) in Affidavit (continued)

Mr. Gregory Moss subsequently advised me, Mr. Osbourne Maxey, and Mrs. Theresa Burrows, and later the NIBBoard 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 theremaining 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.






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 can’t is sue 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 acouple 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.




76. Grant Thornton asked GM if he knows Ms. L inda Elizabeth Russell (i.e. the name on

the Guarantee issued on July 28, 2012).

77. GM said that he doesn’t know her.

78. Grant Thornton asked GM to descri be the situation around the Guarantee.

79. GM then related that to prove that he does not to th is day know that woman whom he

gave the guarantee for he can recall that one morn ing, sometime after the sur gery had

been performed, Min ister Ken Dorsette of the Ministry of Housing came to Freeport

and after hi s business was concluded GM was dropping him to the airport. As it was

still very early for his fli ght, they stopped at a business establi shment and whil e they

were walk ing in GM was approached by a woman who hugged him and said thank

you. When he did not r ecognize her she said that she is the woman whose li fe GM

saved by helping to pay for the surgery at the Doctor’s Hospital and she showed himher scar. GM said he remembers the woman’s 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 Settler’s Way in Freeport which shesaid was near her house so he assumes that she li ves near there.

He said that he would not recognize the woman who r eceived the surgery if he sees her

again because that was the fi rst and onl y time that he met her.






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 morni ng when he got a call

from a lady who identi f ied herself as the daughter of a woman who needed surgery.

She said that he knew her as she and her mother helped duri ng the campaign with Mr.

Darvill e and she said that her mother was having heart surgery the foll owing M onday

at 8am. She said that the sur gery would cost $35,000 and that their famil y 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 ur gency of

the matter, GM said that he called the mother’s 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 i f she had the surgery she would li kely stil l not li ve. GM said that

he then called Dr . Sands and told Dr . Sands that he would br ing a personal cheque to

Nassau the next week f or $15,000 but that Dr. Sands stil l refused to proceed un less he received the funds that day.

83. Grant Thornton asked GM if he at any point advised AC, Mr. Osbourne Moxey and

Mrs. Theresa Bur rows that his request was ult ra vi res the National Insurance Act and

Regulations.

84. GM said that he did not advise any of those persons or anyone else of any such thi ng

because that would not be true since that act was not ultra vir es because he was

authori zed by the Board to enter into any contr act of up to $50,000.

86. GM said that he phoned Mr s. Cecil e Bethel and directed her to issue a guarantee to

Doctor’s Hospital for $15,000. GM said that he gave the directive since the Board had

authori zed him to approve up to $50,000 for any contract subject to hi s obligation to report to the Board at the next sitti ng. He said that as a part of his dir ective to Mrs.

Bethel he told her that he would recommend to the Board to consider i t as a donation

in the next meeting and that i f i t was not approved, he would pay it personal ly.

87. GM said that he subsequently discussed the matter wi th the M in ister and advised the

M in ister 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 M in ister agreed that

a thi rd party would issue a $15,000 cheque to Doctors Hospital in order to preserve

GM’s anonymity and that he (GM) would then reimburse the cheque. He said that the

thi rd party then issued a cheque to Doctors Hospital and that he (GM ) then issued a

personal cheque for $15,000 to Mr. Joseph Cur ry to reimburse the thi rd par ty.

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.






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. Patient’s

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.






Chairman was advised by both Dr. Kevin Bowe (whom I contacted and asked to also speak with the Chairmanto 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 Doctor’s 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 attor ney’s 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 Doctor’s 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:

Chairman’s Report on Exercise of Spending Authority

4.4.1 The Chairman informed the Board that he was contacted by someone in Freeport whohad a health crisis, and needed to have an emergency heart surgery.

4.4.2 He explained that $35,000 was needed for the surgery to be done at Doctor’s Hospital in New Providence.

4.4.3 The Chairman said that he had spoken with Drs. Duane Sands, Winston Forbes and theindividual’s own physician, Dr. Wilfred Ferguson who all confirmed that if the lady did

not have the surgery she would not have survived.






4.4.4 He went on to say that the crisis occurred on a Saturday and the surgery was scheduled

for the Monday.

4.4.5 He continued that the Public Hospitals Authority gave $15,000, and an additional $15,000 was still needed.

4.4.6 The Chairman said that he instructed NIB to give $15,000 for this cause.

4.4.7 He later got advice from NIB which indicated that this type of donation does not fit into NIB’s benefit parameters.

4.4.8 He is now bringing the matter to the Board to review and suggest how situations like thisone can be funded by NIB.

4.4.9 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.

4.4.10 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 mayhave 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 operatewithin the parameters of the Board.

4.4.14 It was the member’s view that this particular incident was all the more reason for theGovernment 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 hewas 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.






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 therelevant 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. Osbourne’s contrac t 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

NIB’s 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".





ALLEGATION 1.7 - (vii.) in Affidavit (continued)



RESULTS OF PROCEDURES

a) Mrs. Cecile Bethel, Acting Director, indicated to Grant Thornton that she cannot speak on this matter.


each allegation in the Affidavit filed by Mr. Algernon Cargill, dated November 28, 2012. (Appendices 1.09

through 1.11)


88. Grant Thornton read Section (k), vii regarding GM’s instructions to AC to terminatethe contract of Mr. Derek Osbourne, NIB’s Actuary. Grant Thorn ton asked GM i f he

communi cated with AC on August 27, 2012 requesting the termi nation of M r. Derek

Osbourne.

89. GM said that he did.

90. GM said that the instructi on to termi nate the services of M r. Osbourne was based on

thr ee issues. F ir st, that as with audi tors, no company should have its books reviewed

by the same persons for such a protracted period of time as the fi f teen (15) years that

Mr. Osborne was acting as the actuary of NIB. As all of the projections of NI B, in

relati on to the level of contr ibutions and otherwi se, were based solely upon M r.

Osbourne’s actuarial conclusions and projections, there was a significant concern as

to the degree to which past actuar ial anal yses had not been reviewed by a subsequent

actuar ial analysis. Secondly, that section 48(1) of the Nati onal I nsurance Act speaks

to an actuar ial process that involves NI B, on the one hand, and an actuary, on the

other hand. In other words, it envisages an actuar ial report being prepared by an

independent actuary and not by an employee of NIB. In that regard, Mr. Osbourne’s

role in NI B is not that of an independent actuary. He is not only employed by NI B but also serves in var ious management and non-actuar ial advisory capacit ies within NIB.

As a resul t, any report produced by him (or any other employee of NI B) would not have

the independent input that is requi red under the National I nsurance 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 I nsurance Act. Thirdly, as an employee of N IB, NI B

would have no recourse against Mr. Osbourne shoul d it be determined that hi s advice

was negligent or deficient.





ALLEGATION 1.7 - (vii.) in Affidavit

Not only would there be no legal basis for NI B (as an employer) to sue its own

employee, but M r. Osbourne would not have the fi nancial 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 actuar ial services to what i s essenti all y the largest savings fund for

the Bahamian people.

91. GM said that he discussed these issues with the M in ister and that the Mini ster agreed

that Mr. Osbourne’s services should be terminated. However, after the instructions to

termi nate Mr . Osbourne were given, the M ini ster indicated that no termination should

be effected until after a replacement insti tuti onal actuary had been engaged.

92.

Email s and communications between the Minister and GM are available and wil l be provided as requested by PAG.

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.







ALLEGATION 1.8 - (viii.) in Affidavit (continued)

RESULTS OF PROCEDURES




93. Grant Thornton r ead Section (k), vii i, regarding the alleged undermining of AC,

inclusion of Mrs. Cecile Bethel on sensiti ve meetings and directing Mrs. Bethel to issue

a guarantee to Doctor’s Hospital.

94. Mr. Moss said that Mrs. Bethel i s a Deputy Dir ector and it is inconceivable that she be

kept in the dark. When the Director i s out, she has to sit on his behal f and, therefore,

must be aware of everything that is going on in NI B. He said that the matter was

discussed with the Min ister and the Board agreed to invi te her in to the meetings and

the reason that she is there is to step in on behal f of the Director.

95. GM said that under section 9 of the National I nsurance Act, the Board delegates

authori ty. Al l author iti es which were delegated to AC as Di rector were to be exercised

by the Deputy Di rector when he was not avail able. That is why she is called the Deputy

Di rector . AC had no r ight to attempt to sub-delegate any of his author ity to anyone else

of his choosing. That is the positi on under the Act and was also the dir ective of the

Minister to him. GM said that AC’s attempt to delegate HR matters to Richenda King was totall y ul tra vires his powers and that the HR matters, in the absence of AC as the

Di rector , should have been delegated to Mrs. Cecil e Bethel as Deputy Di rector and not

to Mrs. Richenda King. The incongruence of AC’s attempt to delegate HR matters toMrs. Richenda King dur ing his absence was that M rs. King (as the Vice President of

HR) would have been reporti ng to herself (as the delegate of the Di rector) in all H R

matters when the Dir ector was not present. That was simpl y wrong and unworkable in

every respect. The Director’s functions were clearly to be performed by the Deputy

Di rector in the absence of the Dir ector.





ALLEGATION 1.9 - (ix.) in Affidavit

Contrary to the sound and professional advice of Phaedra Mackey-Knowles, a Certified Public Accountant andChartered 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".







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.




96. Grant Thornton r ead Section (K), ix, r egarding the private placement of $10 M il lion

preferred shares offer. Grant Thornton asked GM if he and Mr. Patrick Davis

overturned Management’s recommendation and directed management to seek

Mini steri al approval for the full $10 M ill ion dollar offering pr ivate placement.

97. GM said that that never happened and is impossible under the stru cture of NI B. He

said that NI B received a proposal f rom BAB Holdings Limited to invest $10 mil lion in

preferred shares.






98. He said that he received a call fr om a Lawyer M r. John Wi lson asking NIB to place monies in BAB H oldings Limi ted through a private placement of $10 mill ion preferr ed

shares. He believes that thi s company is owned by Mr. Chester Cooper and Mr. John

Wil son. Whether there are other owners, he is not sure. GM said that he does not

know Mr. Chester Cooper personall y but he knows him by reputation as a former

President of the Chamber of Commerce. He also said that he and Mr. John Wi lson

were former Associates at McKinney Bancrof t & Hughes. He said that he does not

have any personal association with either of them.

99. Regarding that call , GM mentioned that M r. John Wi lson asked him whether he had

received the proposal f rom BAB. He (GM) said that he told Mr. Wi lson that the

proposal was with NIB management for their recommendation in order for the

F inance and I nvestment committee to review it. Once that was all done they would make whatever recommendation seemed appropri ate to the Board.

100. GM also mentioned a dinner at Luciano ’ s where he saw M in isters Ryan Pinder, and

Khaalis Rolle, who were there to celebrate Min ister Pinder’s birthday. During their brief talk, M r. Rol le mentioned that he understood that BAB has made an application

to NI B 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, i n f act, it would

not be possible to do so under NIB’s investment structure.

101. GM said that the investment structure at NIB involves five (5) dif ferent levels of review.

The fir st level was that management (M rs. Phaedra M ackey-Knowles) produced a

paper on the investment and said some posit ive things about the company and the

proposal but u lt imately did not r ecommend 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 Mackey-

Knowles) l ooked at the proposal. The proposal as made by BAB was disapproved by the

F inance and I nvestment Committee but was recommended for consideration of the

Board subject to various conditi ons that were approved by the Finance and I nvestment

Committee. The thi rd level was that the matter went befor e the Board (comprising 10

voting members and at least 4 resource members - includi ng AC and Phaedra Mackey-

Knowles ) and was again not disapproved by the Board as presented by BAB, but was

approved by the Board subject to the impositi on of various other conditions (including

a fi nal condit ion which was recommended by AC that the interest rate be increased by

1%) and subject to M ini ster ial approval by the Minister of National I nsurance and by

the Mini ster of F inance. I n that regard, the Board gave express instructions to AC to

wri te to the Minister to draw h is attention to the recommendation of management that

the proposal not be approved as presented by BAB and to the vari ous conditions which

had been imposed by the Board. A t the four th l evel, the matter was then approved by

the M ini ster of National I nsurance subject to the conditions imposed by the Board and

at the fi fth level the matter was disapproved by the Ministry of F inance.






102. GM said that there was nothing untoward about the process that was adopted by

NI B. I n fact the process worked. The reali ty is that the BAB proposal was never

accepted by the Board but a coun terproposal was fr amed, which counterproposal

was eventually disapproved by the Min istry of F inance 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".







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 NIB’s 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



(Special) Meeting of the Board of Directors of The National Insurance Board held on

Tuesday, 16 th

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

In Attendance: Mr. Algernon Cargill, Director

Mrs. Cecile Bethel, Senior Deputy Director, Operations Mrs. Ernestine Kelson, Manager/Secretary to the Board of Directors






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 & TendersCommittee 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 Well s, Vice President/I T Department for gross misconduct in relati on to

the rental of Apartment 124A, Sandyport, by NI B f rom Jes-El Car Company Ltd, a

company owned by Mr . Godwin Cargi ll , the brother of Dir ector Cargil l;

(b) To authori ze the Chairman to invite both Mr. Cargil l and Mr. Wells to resign from

their employment with immediate effect as an alternative to having their

employment summar il y terminated in which case the Chairman was authori zed to

pay them up to one year’s salary each;

(c) To appoint the cur rent Senior Deputy Dir ector/Operations, M rs. Cecile Bethel to

Act as Di rector of NIB pending the appointment of a Dir ector, and

(d) To authorize Mrs. Bethel to identify a suitable person (s) within the I.T.Department to carr y on that function.

The above is subject to Ministerial approval.”




106. Grant Thornton r ead 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 r elati on to AC or

personall y make any decision regarding AC other than his dir ective to AC to switch the

off ices which were occupied by the Chairman and Di rector for the reasons mentioned

above.






107. GM said that some time befor e a resolution had been passed by the Board to termi nate

the services of AC i n r espect of the Sandyport matter. H e said that the Board made that

resoluti on expressly subject to M ini steri al approval and that as no M ini steri al approval

was obtained, that resolution was not implemented. He said that on November, 14,

2012 he was instructed by M in ister 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 fir st draft of the letter was draf ted by Mr s.

Theresa Bur rows through the instruction of the Mini ster 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.



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.





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 andsimilar 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".


(No procedures performed)





ALLEGATION 1.13 - (xiii.) in Affidavit

I have queried directly with the VP of Business Support, Ms. Theresa Burrows, the business reasons why theChairman 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.





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





ALLEGATION 1.13 - (xiii.) in Affidavit (continued)

Excerpts:

“This is to advise that your contract of employment with The National Insurance Board will ceaseeffective Wednesday, September 5, 2012.”

“Management would like to express sincere gratitude to you for the contributions you have madeto 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 [email protected] (Gregory

Moss).

Excerpt:

“Good evening, I offer no objection.”



mailto:[email protected]









109. GM said he sat down wi th the Minister and informed him that as he was coming in

fr om another I sland 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. Fr anklyn L aing was hi red for that very important pur pose and that was for

him to quickly be apprised, by someone in whom he had confi dence, of the various

personali ties and issues at NI B through the eyes of the employees at NIB. H e said that

Mr. Laing’s role was to help him understand the personal it ies of the people inside NI B

and that he did that job. Once that job was fin ished he reported to me and I instructed

Mr. Cargill to terminate his employment. GM’s recollection was that the total effort was completed in the month of August.

110. GM said that AC was just degrading M r. L aing by saying that he was a chauffeur . GM

reiterated that the Minister was aware of all that happened in relation to Mr. Laing’s

employment to the point of termi nation.

112. GM said that they were talking about the $811.10 that he incur red for food and drinks

at NI B-r elated meetings which he held at the Br iti sh Colonial H il ton but which he

elected to pay to NI B out of hi s personal resources so as to avoid disclosing the names

of the part ies that he had met with as mentioned above.

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 Direct Bill - National Insurance BoardAugust 21, 2012 Valet Parking $ 10.00August 21, 2012 Bullion Liquor $ 28.00August 21, 2012 Bullion Gratuity $ 14.20August 21, 2012 Energy Surcharge $ 10.00August 21, 2012 Room Attendant $ 5.00

August 21, 2012 Guest Room $350.00August 21, 2012 Room Tax $ 35.00August 21, 2012 Resort $ 28.00Total charges: $480.20






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 $588.82Miscellaneous $ 20.00Food & Beverage $292.80Other $ 78.92Total $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.





ALLEGATION 1.14 - (xiv.) in Affidavit (continued)

I subsequently wrote Mr. Gregory Moss on October 3, 2012, expressing my concern about these unusual charges andMr. 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 Mackey-

Knowles, 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




114. GM stated the following:

Whenever he came to New Providence at NIB expense, he engaged in NI B r elated

business and usuall y physicall y attended at the NI B of fi ce to engage in meetings or

otherwise to do work.






To avoid any suggestion that he has ever sought a Par li amentar y reimbursement for travel that was paid for by NIB, from the date of his election to the date of the

termi nation of his appointment as Chairman of NIB, he has never made

application for, or received, any reimbursement f rom Parl iament f or any tr avel

expenses whatsoever even when such travel expenses were paid for by him out of

hi s personal funds. He only used the NI B credit card for hotel charges and travel

(air far e) expenses when he travell ed to Nassau on shor t noti ce when i t was too late

to book those travels through the NIB of f ice as, for example, when he had to meet

with someone on NI B business or when he was called by the Min ister to meet wi th

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 N IB business, as when

he, the M in ister and another Board member met with NIB staff i n F reeport.

116. GM repeated that the fir st meeting with AC was the breakfast meeting where they had

a fr ank discussion and he stated to AC that he did not personal ly know him and had no

bri ef to do anything other than to protect the NI B Fund. The second meeting was when

he, along with other Di rectors, met with the Mini ster, AC and var ious executives at the

M ini stry of L abour f or an intr oductory talk by the M inister during which the Mini ster

repeated hi s charge to the Board. Af ter that meeting all the part ies went to a Union

Hall for a meeting with the NIB staff.

117. GM said that he returned everything at NIB’s Freeport office on January 8, 2013,except the cell phone as he could not locate it. He said that he had communicated to

Ms. Bethel that if he cannot fi nd the cellphone, he will reimburse NI B the cost of it.

GM said that when the Audit Committee interviewed Mr. Whitney Patton, NIB Chi ef

I nternal Audi tor, they asked him about the credit card purchases of AC whi ch were in

excess of $240,000 in approximately 3 years. He said that M r. Whi tney Patton

in formed the Committee that he had no idea that AC or anyone else in N IB 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.

119. After that staff meeting, (whether it was the same day or another day, he couldn’t

recall) GM said that he went to N IB and met with AC. He said that he asked AC if

there was a car assigned for h im (GM ) as Chairman as he (GM) is from Freeport and

would need transportation whil e in Nassau. AC said no, there was no car for the Chairman. GM said that he told AC that he was told that Patri ck 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 identif y a car. GM said that he then went to

Fr iendly Ford and identi fi ed 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 confi rmed that the

car would be at the airport u pon GM’s return to Nassau. GM said that before he next retur ned to Nassau he telephoned AC who conf irmed that the car was ready and that






there would be someone waiting at the air port wi th the car. He said that when he

arr ived there were two NI B employees at the airport and that they deli vered the car to

him. He stated that the car has always been parked at the airport i n the Parl iamentary

park ing section when he has not been on the island.

Cardholder name: Gregory MossPrimary contact: Algernon CargillSigning officer: Sonia GillRBC officer: Brian KnowlesLimit: $25,000

August 1, 2012 $125.00 Customer annual fee

August 4, 2012 $400.44 British Colonial Hilton, NassauAugust 11, 2012 $163.50 Bahamasair August 11, 2012 $97.00 Regional Air August 11, 2012 $38.35 Curly Tails Restaurant & Bar, AbacoAugust 14, 2012 $78.50 Western Air #2, New ProvidenceAugust 16, 2012 $83.50 Western Air #6, New ProvidenceAugust 17, 2012 $690.46 British Colonial Hilton, NassauAugust 24, 2012 $138.22 British Colonial Hilton, NassauAugust 27, 2012 $162.00 Bahamasair, NassauAugust 28, 2012 ($125.00) Card paymentSeptember 3, 2012 $162.00 Bahamasair, NassauSeptember 7, 2012 $30.00 Bahamasair, NassauSeptember 18, 2012 $142.00 Western Air #2, New Providence

October 2, 2012 $25.00 Late payment fee November 2, 2012 $39.47 Monthly interest November 2, 2012 $162.00 Bahamasair, Nassau

Summary

Annual fee $125.00Branch payment ($125.00)Monthly interest $81.42Late payment fee $50.00Travel charges $2,489.97Total $2,621.39





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.







ALLEGATION 1.15 - xv. in Affidavit (continued)


124. GM said that the trip i s in fact related to NI B because his purpose of coming to

Mangrove was to inspect the NIB facili ty under construction. He also addressed a

gatheri ng that evening on NIB related matters and reported the tr ip to the Board at the

next sitti ng of the Board. Also, he said that the M in ister 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".







ALLEGATION 1.16 - xvi. in Affidavit (continued)

FINDINGS

a) Letter was reviewed and confirmed that Mr. Wells was placed on Administrative Leave.




126. GM said that he put M r. Raymond Wells on admini strative leave with the instruction of the M in ister also. He said that as with AC, the Board had passed a resolution to

terminate the services of M r. Wells over the Sandyport matter but that as that

resolution was subject to Mini sterial approval, and as no Min ister ial approval had been

obtained, the resolution was never implemented. However, he was instructed by the

M in ister to put M r. Well s on admin istrative 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 doubtwhatsoever 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.





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




128. GM said that that was a diff icul t question f rom Grant Thornton because he (GM) is

also a Member of Parl iament. He said that in his mind, he was certain ly there as an

MP and as Chairman of the Board of N IB.

129. Grant Thornton asked GM if he really said on the Jones & Co. show, that he has no

doubt whatsoever that the forensic review wil l come to the same determination as that

in the November 8 th letter f rom GM to Min ister M r. Shane Gibson, on that Sandyport

issue.

130. GM confirmed that he did say so because he was confident that the Forensic

examiners wil l come up with the same determination as the Board. He said that there

was no disrespect in tended towards the Forensic examiners in what he said but rather

that h is comment was an expression of his confi dence in the work of the Board.




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 hadapproved 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 Bahama’s 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.”





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 handwritten 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.



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.

nib report - former chairman gregory moss

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