Tax consultant landed overpaid contract in 2010: Ministry circumvented public tender rules

POSTED: 05/3/12 5:21 PM

St. Maarten / By Hilbert Haar – The Finance Ministry circumvented the rules for public tenders by granting consultancy contract worth 210,000 guilders in 2010 to B&B consultancy for assistance with a tax and investment plan. Later, a company the same consultant represented landed a contract worth approximately 14 million guilders (almost $7.8 million) for the restructuring of the Tax system. The company in question is Taxand, a global tax consultancy with offices in Curacao and St. Maarten.

Bas Roorda, the former head of the finance department, wrote in an email to this newspaper that the deal with Taxand was prepared by tax attorney Judith Brewster, who also secured a consultancy job for herself worth 17,500 guilders (a bit over $9,700) per month back in 2010.

Brewster appears in two capacities: as the managing partner of B&B consultancy, and as the managing partner of Taxand.

On October 4, 2010, six days before St. Maarten obtained country status, and therefore also six days before Hiro Shigemoto took office as Finance Minister, Brewster submitted a quotation for “a tax and investment plan” in her capacity as managing partner of B&B Consultancy.

The quotation suggested a 1-year contract based on 50 to 80 “professional hours” per month at a rate of 300 guilders per hour. The value of the quotation was therefore between 180,000 and 288,000 guilders ($100,000 – $160,000).

Article 47 of the national audit ordinance stipulates that buying goods or services worth more than 50,000 guilders ($27,778) require a public tender, unless the national interest does not allow for any delays.

Roorda sent this newspaper a copy of an advice for the services Brewster offered to render. “It is very unusual that this advice was written by Sherry Hazel,” Roorda wrote. “I refused to sign it, because it required a public tender. On top the fee is prohibitive: 1,400 guilders for half a day, while the standard is 1,300 for a whole day.”

The advice went through the system all the same, and resulted in a national decree signed by Governor Holiday. For 50 hours work per month, B&B consultancy received 17,500 guilders.

Based on the standard Roorda indicated in his email, the maximum compensation for 50 hours (12.5 days) should have been 16,250 guilders. At 210,000 guilders, the year-contract was therefore overpaid by 15,000 guilders. The fee did not include travel and hotel expenses.

Roorda describes Brewster in his email rather unceremoniously as “a sister of Ruth Brewster who works at the staff bureau of the finance department. Together with Sherry Hazel she forms the hamster sisters who attempt to conduct a reign of terror in the civil service at the finance department.”

Roorda wrote that Judith Brewster initially presented herself at the finance department as a managing partner of Taxand. He sent a copy of her business card along to substantiate the claim. “Now everything has changed and she is suddenly independent. Weird. I think that a managing partner at Taxand will receive a nice provision for landing an assignment of this magnitude.”

Roorda stressed that circumventing the rules for public tenders is prohibited. “There is no national interest at stake to choose for Ms. Brewster’s club. There are others capable of doing the same job. I wonder up to what point a former minister can be held personally responsible for malversation of this magnitude.”

Webster’s consultancy job is about providing a tax and investment plan for St. Maarten. In her quotation she wrote among other things, “We believe that country St. Maarten needs to modernize its financial infrastructure, rules and regulations, its legislation in order to support and further attract new tax treaties with other countries in the region.”

Furthermore, Webster wrote that the country needs an open economy and that it will need “to abolish or simplify all unnecessary or conflicting license requirements and legislations for business and or qualified persons to establish themselves on the island, whereby the main goal should be to increase employment and attract more foreign investors to the island.”

Country St. Maarten “should reposition itself as a fiscal and financial hub of choice for high-value financial services,” is another line from the quotation.

The services included assistance with the restructuring of the fiscal system and “preparation and execution of diversification of the economy to include e-business and other related businesses.”

 

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