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Rejected Ginn buyer settles COVID fraud

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

THE GOVERNMENT has rejected a US hotel group, which last week agreed to pay $325,000 in sanctions to settle COVID fraud allegations, as a buyer of the 2,012 acre former Ginn development in Grand Bahama’s West End.

Kingwood International Resorts, which has been pursuing a multi-year effort to obtain Bahamian government approval to acquire the project, had been accused by the US Justice Department of “knowingly providing false information” to secure pandemic-related financial assistance via a scheme involving “ghost” employees that was designed to “personally benefit” its principals.

The disclosures, and related fines and penalties, provide further justification for the Davis administration’s repeated rejections of Kingwood as a suitable purchaser for such a large and potentially valuable tract of resort development

• To pay $325,000 over ‘ghost employees’ scheme

• But still in charge of key West End project entities

• Was planning to sell real estate at ‘inflated values’

real estate. Chester Cooper, deputy prime minister, and minister of tourism, investments and aviation, did not respond to Tribune Business messages seeking updates on the status of Kingwood’s bid for the necessary approvals.

However, one well-placed source, speaking on condition of anonymity, told this newspaper simply and emphatically: “The Government has refused the application of the Kingwood group.”

SEE PAGE B8

FNM chair: VAT health claims change ‘insane’

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

THE FNM’S chairman yesterday branded the proposal to change the VAT treatment of health insurance claims as “absurd, insane and inane”, warning that it will “destroy” the medical sector if implemented as originally planned.

Dr Duane Sands, himself a physician, told Tribune Business that the Government’s proposalwhich would halt insurance companies reclaiming VAT on health insurance claims payouts by treating it as an

‘input’ cost - “flies in the face of everything we have been trying to accomplish over the past ten years”.

The Davis administration has deferred the change, which many

Gov’t ‘not just dictating’ over work permit policy

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

THE Chamber of Commerce’s labour division chair has hailed that the Government is “not just dictating” over plans to develop a national policy to govern the issuance of work permits in The Bahamas.

Peter Goudie, also a member of the National Tripartite Council, the body former to tackle all labour-related issues in The Bahamas, told Tribune Business that the Government appears open to a genuine dialogue with the private sector, trade unions and other stakeholders on the issue instead of

Businessman loses $22m RBC lawsuit

• Over sand mining investment by Slovak he had never met

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

A BAHAMIAN businessman has lost his breach of contract claim against Royal Bank of Canada (RBC) after it refused to clear a $22.11m investment in his aragonite export venture by a Slovakian citizen he had never met. Justice Diane Stewart, in a March 24 verdict, ruled that the Canadian-owned bank was fully justified in refusing to process the transfers to Larry A. Ferguson’s merchant account because the Visa card company rejected the transactions on the basis they exceeded the cardholder’s agreed limit. She also found the account was “not being used for the purpose” for which it was established, given that it was supposed to facilitate a vacation rental home business, and the balance had never previously exceeded $16,000, while the investment by a

foreigner had not received Central Bank and other necessary government approvals.

The judgment reveals that Mr Ferguson initiated legal action in November 2016 after RBC refused to honour a series of payments made to his account by Boris Plavala, a Slovak citizens, and reversed the transactions after they were “flagged as suspicious and fraudulent”.

The payments were made by a series of 21 transactions, each worth $990,000, made to Mr Ferguson’s merchant account which was in the name of his vacation rental business, Coastal Winds. Another payment was also received for $168,000, and another $990,000 was transferred to a separate account in the name of Store Away Ltd, an entity in which Mr Ferguson was also a shareholder.

“The plaintiff claimed that the transfer was to have represented a

simply saying ‘this is what will happen’.

“I think it’s great we’re having this dialogue, and it’s not just the Government dictating,” he said. “That’s all we’ve ever had. Government says, and on the follow through do whatever. Now

THE LIGHTHOUSE concept - Reunion Cay

TOURISM MEETS GOV’T IN BID TO RAISE TRANSPORT STANDARD

THE Bahamas Hotel and Tourism Association (BHTA) and key industry stakeholders, including representatives from ports of entry, met with a Cabinet minister and officials in a bid to improve the transportation experience for visitors.

The BHTA, in a statement, said it had met with JoBeth Coleby-Davis, minister of transport and housing, and other public sector partners including senior executives from the Road Traffic Department to discuss how all parties can work together in enhancing the transportation industry.

The meeting sought to establish a foundation for talks with all industry parties, especially taxi drivers and other public transportation workers, plus government `agencies and other private sector stakeholders. The tourism industry body said the goal is to provide “top-of-class” service to visitors and locals who use taxi services.

“Taxi Drivers are tourism ambassadors; they are quite literally one of the first tourism professionals our guests meet when they

arrive in The Bahamas,” said Robert Sands, BHTA president. “As the saying goes, you get one chance to make a great first impression, and last impressions are lasting impressions. Our taxi drivers set the tone for our visitors’ experience.

“Tourism-relat business owners and operators, be it bellman, front desk clerks, waiters, chefs, tour guides, boat captains, mixologists, artists, musicians... they are all ensuing links in a lengthy chain of Bahamians our guests meet during their stay. It is this series of encounters that will forge indelible memories in the minds and hearts of our guests. Therefore it is integral we work together as interconnect links to make our beautiful ‘chain of gold’ as strong as possible.”

Among the issues discuss were the introduction of standards in an effort to upgrade providers’ appearance and conduct, and their compliamnce with systems and protocols at each tourism gateway and hotel property. Rate increases, industry compliance and enforcement; and the introduction of mandatory

ED FIELDS, Nassau Cruise Port’s director of business development; Sharon Farrington, executive administrator, BHTA; Jonathan Hanna, Nassau Airport Development Company’s (NAD) vice-president of operations; Amanda Freedman, Nassau Cruise Port communications manager; Vernice Walkine, vive-president of alli members, BHTA; Ross Smith, acting controller, Road Traffic Department (RTD); Suzanne Pattusch, executive vice-president, BHTA; Lanecia Darville, chairman, Road Traffic Authority; Gabrielle McKenzie, consultant, Road Traffic Department; Vaughn Newman, consultant, Road Traffic Department. Seat from L to R: Jackson Weech, senior vice-president, BHTA; Robert ‘Sandy’ Sands, president, BHTA; JoBeth Coleby-Davis, minister of transport and housing; Antoinette Thompson, permanent secretary, Ministry of Transport and Housing. Photo courtesy of Anthon Thompson.

minimum standards for vehicles, including their age and appearance, were among the issues discussed.

This first meeting with government officials gave the Bahamas Hotel and Tourism Association-l ‘Transportation experience

working committee’ the opportunity to express its enthusiasm and commitment to work alongside public and private sector

Ten firms recognised for energy efficiency

TEN Bahamian businesses select from out of 600 applicants have being recognis for adopting energy efficiency practices that save money and reduce their carbon footprint.

Senator Michael Halkitis, minister of economic affairs, speaking at a reception to honour the recipients, said: “This ceremony represents the result of weeks of hard work by the Access Accelerator (Small Business Development Centre) team, who have been working diligently to select the businesses that have had the highest impact in energy efficiency after heeding the call to have their businesses studied.”

He urg all start-ups and existing businesses to find ways to incorporate energy efficiency into their

businesses. Samantha Rolle, the Small Business Development Centre’s executive director, said the energy efficiency drive is part of 11 initiatives under the guarante loan programme support by the Inter-American Development Bank (IDB), which will be launch this year. The initiative will impact a cross-section of industries, including food service, export readiness, fitness and wellness, hospitality, women in business and other sectors. Ms Rolle said that, for this initiative, more than 600 applications were receiv and, after a strict process, ten companies were select with the top three receiving a cash injection into their businesses, a free audit and an energy plaque.

Many of the businesses select use L lighting, solargenerat devices, recycling processes and energy efficient appliances to decrease their energy costs. Some

have implement protocols such as using a timer to schedule the optimal timing for high use/low use needs, or shut down or reduc their energy output while not

in use, such as when the company is closed. They also employ ductless air conditioning units instead of central air conditioning systems.

A BAHAMIAN vendor says it had “an absolute blast” in promoting its products at the first-ever Nassau Paradise Island Wine & Food Festival, host and produc by Atlantis, last weekend.

The New Duff, head by chef/owner Kendrick Delaney, in a statement said it provid numerous food samples alongside renown international vendors such as Chef JJ Johnson, Alex Guarnaschelli, and the Food Network’s Duff Goldman, who visit their store on West Bay Street.

The Bahamian company participat in the Cake & Ice Cream Social, host by Goldman, as well as the Jerk Jam. Chef Delaney said: “Being able to showcase our guava duff and jerk chicken bao buns, pair with our Guavalava hot sauce, to local and international foodies was a delight and we were happy to engage

partners to develop strategies that achieve common aims for the betterment of all those that own, operate or are connect to the tourism industry in The Bahamas.

Mrs Coleby-Davis reaffirm her ministry’s commitment to strengthening the transportation sector. She said: “The transportation sector must evolve, and the role taxi drivers play in enhancing the visitor experience is very important.

“The Ministry of Transport and Housing is considering a number of policy proposals to share with stakeholders and, to be clear, we welcome respectful feedback and collaboration, but the transportation industry must be revitalis and enhanc for the benefit of all Bahamians.”

Mrs Coleby-Davis said the Government is committ to empowering Bahamians, and views the high tourist arrival numbers as an opportunity to deliver a top-class experience by all stakeholders.

These methods enable them to reduce costs and decrease their carbon footprint. The top ten businesses includ New Life, The New Duff, MGS Grocery Store (Long Island), PerfecTon, Best Energy Bahamas, A & M Electrical Supplies (Long Island), Sawyer’s Studio, H. Russell Convenience Store (Andros), The Promise Institute and J & M Island Shop Consultants (Eleuthera). The top three also receiv grants in the amounts of $5,000, $7,000 and $10,000.

with the star chefs, all who are business owners, and get feedback on their own trajectory in the culinary world.

“The bits of knowledge we’ve garner from our engagements at the festival will be invaluable to our company moving forward, and will push us to continue to be innovative.” Lazar Delorenzo Charlton, the New Duff’s co-owner with responsibility for business development, added: “Not only did we have an absolute blast at the festival, but we were so grateful to Atlantis for including our company and other hardworking Bahamian business owners in this inaugural event.

“The exposure to other players in the international culinary scene is just another step for us to take our company global, and continue to feature our country on the culinary world stage.”

The New Duff team, inclusive of co-owner for operations, Ryan Lightbourne, are seeking to take their guava duff product - and eventually their Guavalava and Pineapple Pow hot sauce line - to the US market. Their store on West Bay Street now boasts an outdoor patio.

THE PRINCIPALS from the company that received the highest recognition for energy efficiency, J & M Island Shop Consultants (Eleuthera), pose for a group shot with Michael Halkitis, minister of economic affairs. Photo:Mark Ford/BIS

SUPER VALUE SAVES $400K THROUGH WAREHOUSE SOLAR

SUPER Value’s president says it has slashed its annual energy bill by $400,000 through installing solar panels on its warehouse and is now seeking to roll-out renewable energy at all its 13 stores.

Debra Symonette told the Energy Expo 2023 conference that volatility and uncertainty around global oil prices, the main driver of electricity costs, made the choice to go solar an easy one for the supermarket chain. She said: “There are a number of steps, which are

recommended, that are currently being used by some of us in the industry to combat what we call the energy challenge. Just to start with, changing out old appliances. Old appliances use more energy than the newer, more energy efficient models.

“For example, we changed our open display cases to cases with clear sliding doors. The doors save energy by keeping the cool air in. We retrofitted some of the older cases with plastic doors so that we could close them at night. The fact is, if you leave your refrigerator open, the compressor will never cut off, resulting in much higher energy usage.

Ms Symonette continued: “Insulation of buildings. Not only can insulation help improve energy efficiency, but it can improve air

quality and prevent moisture and mould problems, which are both important for our customers and staff.

“Old lighting can be replaced with energy

efficient lighting. We are finding that our LED lights use 40 percent less energy than the old ones that we used. They also produce less heat, which helps the air conditioning system. Motion detectors can be installed to automatically switch off lights when they’re not in use.

“You can also make use of solar power. The installation of solar panels on the roof of our warehouse has saved us around $400,000 annually, and we have undertaken a project to install solar on all of our stores.” Energy costs

account for up to 7 percent of Super Value’s total expenses. “We’re anticipating a very significant increase in electricity rates in the near future; I think it’s going to be around 60 percent,” Ms Symonette said.

The retail grocery sector needs energy on a consistent 24-hour, seven days per week basis it needs to keep perishable items refrigerated. These make up 50 percent of the items sold at grocery stores, thus making the industry one of Bahamas Power & Light’s (BPL) most valuable customers.

Businesses seek $8.1m in renewables financing

By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net

BAHAMIAN businesses have requested a collective $8.1m in financial assistance to help them acquire renewable technologies and energy efficient equipment, it has been revealed.

Phyllice Bethel, the Small Business Development Centre’s (SBDC) interim deputy director, made the disclosure at the Energy Expo 2023 conference while confirming that 77 percent of business respondents to one of the agency’s recent surveys have pledged to alter their energy consumption habits.

To help them achieve this, they requested a collective $8.1m in financial assistance to help with the acquisition of solar panels, solar batteries, LED lighting and other energy efficient materials.

Ms Bethel said: “Now energy efficiency is not achieved by merely installing spray foam insulation or LED lighting. A business must also operate its energy consuming systems efficiently. For example, lighting should not should always be turned off when it’s not needed.

“Although a combination of energy efficiency and renewable energy can potentially result in significant energy cost savings, energy efficiency should be considered before renewable energy. A business that

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is energy efficient, may not require a large or costly renewable energy system to generate its desired amount of cost savings. [We have to] determine if survey participants truly need $8.1m for energy efficiency upgrades and renewable energy systems.”

Ms Bethel said the Small Business Development Centre has helped funding to entrepreneurs, start-ups and small

businesses increase by 5 percent since October 2022.

She said the agency has helped 1,977 such ventures accessing financing since it was established, with a collective $76.4m provided to-date through the SBDC’s financing partners.

“This funding is provided through multiple funding programmes and multiple funding partners,”

Ms Bethel confirmed.

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represent 47 percent of the funding recipients, and she added: “The SBDC currently has Family Island centres in Grand Bahama, Abaco, Eleuthera, Andros and Long Island. Exuma is next.”

Ms Bethel continued:

“Our flagship, or main, funding programme is called the Guaranteed Loan Programme, a programme that helps MSMEs (micro, small and medium-sized enterprises) access up to $500,000 in loan equity and grant funding and, in special cases, MSMEs can access up to $1m in funding.

“We have a list of specialty initiatives like the creative entrepreneurs initiative, the women entrepreneurs initiative, the young entrepreneurs initiative, the food security Initiative, the export readiness initiative, but today we’re talking about the renewable energy Initiative.

“On January 31, the SBDC launched the renewable energy Initiative in collaboration with Bahamas

Power & Light, Grand Bahama Power Company and the Bahamas Chamber of Commerce,” Ms Bethel continued.

“The first reason for launching the renewable energy initiative is to bring more attention to climate change and global warming. If most businesses rely on renewable energy, as you’ve heard earlier, they will produce less greenhouse gas emissions that contribute to climate change, global warming and catastrophic hurricanes like Hurricane Dorian.

“The second reason for launching the renewable energy Initiative is because energy costs rank in the top three operating expenses for MSMEs around the world.”

ATTENDEES at Friday’s Energy Expo 2023 conference, including Vaughn Miller, minister of the environment and natural resources.

PM addresses Bahamas First on 40th anniversary

BAHAMAS First has celebrated its 40th anniversary with a reception that attracted 250 guests and a keynote address from Prime Minister Philip Davis KC.

The event attracted representatives from the property and casualty insurer’s local and international business partners, shareholders, industry peers and employees. Bahamas First opened in January 1983 at a time when the prevailing business model for general insurance in The Bahamas was the century-old practice of local agencies tied to overseas insurance companies.

The view was that a general insurance company operating solely in The Bahamas could not succeed. But, as local insurance underwriters began to emerge in Caribbean neighbours such as Jamaica and Trinidad, a group of entrepreneurs led by Bahamas

First’s founding chairman, the late Robert ‘Bobby’ Symonette, were sufficiently emboldened to make the first locally-established general insurer in The Bahamas a reality.

“What makes this anniversary extra special is that our 40th birthday coincides with the Golden Jubilee of independence for the Commonwealth of The Bahamas,” said Bahamas First’s group president and chief executive,Patrick Ward. “I think the parallels of a nation moving from a Crown colony to an independent country, and a group of businessmen moving from an overseas headquarters to self-rule, are quite striking.

“Learning to govern, grow and evolve – that is something that the founders and original leaders of our company understood with quite a short learning curve.” At

the end of its first year in operation, Bahamas First had recorded $8.4m in gross written premiums. In 2007, the company became the first Bahamian general insurance company to exceed $100m in premium income.

For 2022, the group’s total gross written premiums were $191m.

“I think it is clear that our founders’ vision has been realised and even surpassed,” added Mr Ward. The carrier has developed First Online, the first fullservice online home and auto insurance portal in The Bahamas. “Staying current and relevant requires all business sectors to enhance the value of their services through innovation, and the insurance sector is no different,” said Bahamas First chair, Alison Treco.

“Any company wishing to remain in business into the future has to embrace change and, at Bahamas

First, we realise that it is imperative that we stand at the front line of innovation.” Bahamas First has also created First Response, an on-site accident assistance programme to provide help to insured clients from the moment of an accident through the claim and repair process.

Bahamas First said it has maintained its initial A- (Excellent) financial strength rating, showing its ability to pay claims, ever since obtaining the first rating in 1999.

Mrs Treco said: “One major development since 1983 is the increase in the severity and frequency of hurricanes. There is little doubt that this trend is not reversing and is directly linked to climate change. The need to reverse this trend is real and urgent, and

PRIME Minister Philip Davis congratulated Bahamas First on its contribution to the strength and resilience of the Bahamian economy over the past 40 years. Pictured L to R: Carmen Biek, client manager/regional lead for the Caribbean, Munich Re; Patrick Ward, group president and chief executive, Bahamas First Holdings; Prime Minister Philip Davis; Alison Treco, Board chair, Bahamas First Holdings; Warren Rolle, chief operations officer, Bahamas First Holdings.

AS a part of its 40th anniversary celebrations, Bahamas First renewed its partnership with the University of The Bahamas for the Bahamas First Emerging Leaders Scholarship Award. Pictured L to R: Patrick Ward, group president and chief executive, Bahamas First Holdings; Alison Treco, Board chair, Bahamas First Holdings; Inga Bostwick, assistant director, corporate and foundation relations, University of The Bahamas; Kandice Eldon, executive director of corporate and foundation relations, University of The Bahamas; Melanie Hutcheson, group manager of marketing and communications, Bahamas First Corporate Services; Richenda King, vice-president of human resources and training/CHRO, Bahamas First Corporate Services; Warren Rolle, chief operations officer, Bahamas First Holdings.

I welcome and applaud our government’s stance in this regard and the focus on the impact on smaller nations.

“Several years ago, Bahamas First formed a corporate social responsibility committee, which reports to the Board. Whilst it has a broad agenda, our current goals are to provide education to our staff on climate change, and ways we as individuals can make a difference.”

Mr Ward added: “The work that we do as insurance professionals plays a critical role in providing financial resilience against natural disasters, and gives our clients a sense of safety and security in the toughest times. Insurance plays a vital role in supporting the individuals and communities that are most vulnerable to the impacts of climate change.

“Looking specifically at catastrophe/hurricane events

over our company’s history, Bahamas First alone has settled more than half a billion dollars in claims to make our policyholders whole. In accord with our industry, we

are committed to building a stronger Bahamas through the provision of safeguards for families and local businesses.”

PATRICK G. WARD, group president and chief executive, Bahamas First Holdings (right), poses with Roger Balkissoon, managing director of affiliate company, Cayman First Insurance Company (left), and Abraham Thoppil, a member of the Cayman First Board of Directors.

Crypto revival

By CHRIS ILLING ActivTrades Corp

The current plight of the banks brings back memories of the 2008 financial crisis. Calls for alternatives are getting louder. Bitcoin supporters are feeling encouraged. There has been a clear pattern on the crypto markets in recent years, which is when stocks weaken, Bitcoin, Ether and company also lose value. When share prices fell, investors reduced their risks. Since crypto assets are classified as highly risky, especially by institutional investors, this asset class has regularly been trampled on when stocks rattled. But the recent stock market weakness, triggered by the collapse of Silicon Valley Bank in the US and exacerbated by the near-collapse of Credit Suisse, broke this pattern. While Germany’s Dax stock market index has fallen by almost 5 percent since March 8, the day before the US bank quake, the crypto currencies Bitcoin and Ether have gained 28 and 13 percent, respectively. Bitcoin is approaching the $30,000 mark again.

One might think that with the recent banking crisis, the typical narrative of crypto fans is alive and well in which the banking system - based on central bank money - is doomed to fail. Even if such statements usually lack substance, the loss of credibility for the banking sector that is manifested in them should be taken seriously.

In fact, it is difficult to convey that only 14 years after the financial crisis, banks are again collapsing and state aid is being mobilised to stabilize the system. Many people wonder what is so special about banks that the state always must bail them out with taxpayer monies.

Banks play a central role in our financial system as financiers, asset managers and operators of the payment system. As a rule, large banks are also considered to be of systemic importance, since in the event of insolvency all the bank’s debts would become due from one day to the next. This would lead to chain reactions due to the worldwide networking with almost all economic sectors. For example, companies that have deposited their money in a collapsing bank would no longer have access to their assets, and

would no longer be able to pay their employees. This is exactly what was feared with Silicon Valley Bank. Lending would also be restricted, resulting in a slump in investment spending. In addition, investors would consume less in the face of losing their savings, and there would be a downward spiral of falling demand and rising unemployment.

According to the prevailing view, there is therefore no alternative to rescuing systemically important banks. Crypto supporters, on the other hand, claim that blockchain-based concepts do offer an alternative while decentralised crypto currency could make the system more stable and make such bailouts obsolete.

The basic idea is to replace national currencies, which staunch crypto fans believe are the root of all evil, with Bitcoin and its fellow travellers. However, many crypto supporters have the idea that national money – and also an exchange guarantee – will disappear completely, and that cryptos will prevail as a unit of account with people carrying out transactions directly via the blockchain.

But, until we get to this point, blockchain

technology still must eliminate issues such as transaction volumes and reliability. But crypto fans are definitely experiencing a revival after the recent turmoil in DeFi (decentralised finance) land.

FNM chair: VAT health claims change ‘insane’

FROM PAGE B1

doctors and insurers fear will increase medical bills and treatment costs for thousands of Bahamians with private health insurance, and will not proceed prior to end-May’s Budget debate to allow time for further consultation after medical practitioners raised concerns about the impact it would have on patients, healthcare costs and their businesses.

Dr Sands yesterday argued that it would be “unconscionable” to further increase already-high healthcare costs, saying the proposed change would inevitably increase the $400m-$500m that Bahamians already spend annually in Florida and other US states, thereby undermining efforts to further develop a Bahamian healthcare industry. Foreign exchange reserves would also be impacted, he added, as patients sought to access cheaper, non-VAT care abroad.

The altered VAT treatment had been due to take effect on April 1, and would have left patients/consumers responsible for paying the full 10 percent levy on treatment, care and medicines. They are presently only covering the VAT due on the co-payment, which is typically 20 percent of the total costs, but the revision would have also left them carrying the tax burden on the remaining 80 percent of the bill that is paid by the insurers.

“It is absolutely something they have not thought our adequately,” Dr Sands blasted yesterday. “It is an absurd, insane and inane idea. What you are basically doing is adding a massive impediment to care. If we are talking about the level of illness, as reported in the 2019 STEPS survey, which was done when I was the minister of health, we know the massive level of non-communicable diseases presents a massive threat to not just the health of Bahamians but the economy of The Bahamas.

“If you now add a 10 percent front-loaded tariff, tax, excise barrier to care, you’ll make it very difficult for people to get care. If you had not gone and added multiple increases to other taxes, there might have been some other options, sin taxes and so forth, but you have made healthcare so ridiculously expensive that any further tax will be unconscionable.

“This is a situation where they are not thinking things through clearly, having tunnel vision and are desirous of getting more money without any regard to the impact on human lives and the health of human beings. What we see is a scatter gun approach to health. This is stuck on stupid for the Government to have considered that this was a reasonable idea.”

The Ministry of Finance’s position has been that it is “clearly against the VAT Act” for insurers to claim back the 10 percent levy on medical claims payouts by netting it off against the VAT paid on the premium - a practice allegedly costing the Public Treasury millions of dollars. Its position is that VAT is payable on medical insurance claims payouts because these are being made on behalf of the end-user - the consuming patient - and thus should attract the tax.

Dr Sands said the changed tax treatment would result in VAT being levied at the point of patients receiving health treatment, and thus act as “an impediment to care that will do irreparable damage to the health of Bahamians.... This 10 percent VAT imposition is an egregious example of user fees and flies in the face of everything we have been trying to accomplish in healthcare in the last ten years.

“I would do a number of things,” he added. “It would drive people with health insurance out of the jurisdiction to access care where they do not have to pay VAT, so many people will go to south Florida. It has a drain on the foreign reserves. It will clearly be detrimental to my practice, and especially to those people who have no choice and have to access emergency care in The Bahamas.

“If we are going to try and build a healthcare system, which is already faced with $400m-$500m being spent outside The Bahamas every year, why would you now have as a national government policy a programme that says for any given procedure it’s cheaper to have it in south Florida because they’re not going to charge you VAT. It’s just dumb, dumb, dumb. We should be trying to grow the healthcare sector, not destroy it.

“It might force people to go out-of-pocket to have care, and how many Bahamians have more than $1,000 in a bank account? Last time I heard it was less than 1 percent. If you have insurance, this is making it impossible for you to access high cost healthcare and you’re forcing people to use an over-burdened public healthcare system. This is just not thought out properly. It’s time for them to go back to the drawing board.”

Gov’t ‘not just dictating’ over work permit policy

we’ve got a conversation opened up, and I think it’s great, I really do, that we’re having a conversation as opposed to being told: ‘This is how it is’ whether we like it or not.”

Mr Goudie spoke after Keith Bell, minister of labour and Immigration, said at Friday’s annual general assembly meeting of the National Tripartite Council that the Government plans to host a roundtable discussion to formulate a national policy on the issuance of work permits win The Bahamas.

While no specific date was provided, Mr Bell said talks are expected to be held between the months of July and August 2023. The Government grants around 15,000 work permits annually, out of around 30,000 applications, of which the majority are usually for posts such as maids, gardeners, labourers and landscapers.

The minister also called for increased productivity

by the Bahamian workforce, suggesting that weaknesses in this area have contributed to the number of work permits approved by the Government every year. Mr Bell called for “specific and concrete recommendations” be given for increasing productivity within the Bahamian labour force.

“Although it is not on the agenda, I am seeking your specific and concrete recommendations on increasing productivity in the workplace,” said Mr Bell. “It is something that we cannot legislate but we have to ensure that the increase in minimum wage corresponds with an increase in productivity in the workplace, especially as we move towards a livable wage.

“This is a special concern to me as the minister of labour and Immigration, and part of the reason, in some respect, why we have to issue so much work permits in this country every year. This is a matter that

must be addressed sooner rather than later.”

The Bahamian private sector has long voiced concerns over what it sees as relatively low overall productivity by the workforce, and has been especially vexed at the quality - or lack thereof - of potential employees coming out of the public high school system.

Frequently voiced complaints are that many employee candidates lack basic literacy and numeracy skills, and even rudimentary socialisation that will enable them to get along with both colleagues and customers to deliver the required level of service.

Increased worker productivity, so the theory of “supply-side economics goes”, will increase output and help lower a firm’s unit costs of production, thereby

making Bahamian companies more price competitive on the goods and services they sell.

A previous National Tripartite Council “white paper” outlining the rationale for Bahamian productivity legislation argues that it will ultimately boost worker incomes and living standards, while generating private sector and economic growth that leads to a more sustainable economy.

“The implementation of a productivity legislation in The Bahamas is likely to lead to highly-skilled employees who are competitive both at the regional and the global level,” the “white paper” said. “Therefore, the employees will be able to ask for higher salaries given their experience and professional mastery.

“The higher salaries will increase the disposable income available to the employees, improving their access to better medical care and enabling them to contribute towards their retirement. Additionally, the employees can choose to invest their excess income in revenue-generating projects, hence further boosting their standards of living.

“The consumers’ standards of living are likely to improve due to better employee productivity, since companies will be able to operate more efficiently, passing the benefits of lower costs of production to the consumers.”

Acknowledging that low labour productivity was “one of the major concerns of businesses in The Bahamas”, the “white paper” added: “Implementing the

productivity legislation will lead to high levels of productivity in the country to the benefit of the private sector. Private companies will be able to produce more efficiently, hence lower the costs of production, and report higher profit margins.

“This is possible when you consider that a highlyskilled workforce is related to a low employee turnover in firms. The increased profit margins can be ploughed back into the business, thus contributing significantly to a thriving private sector......

“Furthermore, skilled employees are also likely to improve corporate governance, thereby leading to an accountable and transparent corporate leadership which instills trust in the private sector.”

NOTICE is hereby given that MAURICE EMMANUEL BRIAN DOLCE of Flamingo Gardens New Providence, The Bahamas is applying to the Minister responsible for Nationality and Citizenship, for registration/ naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/naturalization should not be granted, should send a written and signed statement of the facts within twentyeight days from the 20th day of March, 2023 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, Bahamas.

REJECTED GINN BUYER SETTLES COVID FRAUD

This newspaper revealed in July 2022 that Kingwood and its principals had been turned down by the Davis administration, yet subsequent information suggested the group was not dissuaded and made a second, fresh bid for the necessary permits and approvals. And last week’s confirmation of their rejection may still not be the end of the Kingwood saga. For Tribune Business has obtained documents revealing that, in August 2022, Ginn’s former financing partner attempted to conclude the project’s sale to Kingwood offshore and outside The Bahamas.

The papers reveal that executives from Lubert Adler, the Philadelphiabased investment bank that provided West End’s seed capital, and which took over the development after original developer, Bobby Ginn and his Ginn Clubs & Resorts, defaulted on their loan repayments in 2011, resigned en masse from their positions as officers and directors with a variety of project companies on August 3, 2022. Those departing included Ira Lubert and Dan Adler, Lubert Adler’s principals, plus Amanda ‘Amy’ Wilde, who for more than a decade had served as Lubert Adler’s ‘point person’ in trying to secure a new buyer/investor. They were replaced on three

separate corporate Boards by Richard Nasser and Anthony Carll, respectively Kingwood’s resort division president and general manager of its Reunion resort in Orlando, Florida.

Messrs Nasser and Carll, together with Kingwood’s ultimate chief and owner, Farbod ‘Fred’ Zohouri, are all named personally as defendants in the original US Department of Justice lawsuit that was finally unsealed last week to coincide with the settlement agreement.

However, the documents obtained by Tribune Business show that Messrs Nasser and Carll are now president and vice-president/secretary, respectively, of LRA-OBB Ltd, which

stands for (Lubert-AdlerOld Bahama Bay), the entity which owns the common areas around the Old Bahama Bay resort’s condominiums, pool, beach, marina, shops, restaurants, undeveloped golf course, and much of the land previously controlled by Ginn.

Mr Zohouri’s signature appears on the documents affirming the officers and directors change in his capacity as head of Reunion Cay Island Resort Ltd, a Delaware-based company said to be the manager of LRA-OBB LLC, a Georgia company that is described as the sole shareholder of its Bahamian equivalent.

And, by virtue of LRAOBB being the sole shareholder, the Kingwood group’s control of that company also enabled it to appoint Messrs Nasser and Carll as president and vicepresident/secretary of Grand Bahama Resort Utility Services and Sur Mer Club Ltd. The former provides all utility services to the ex-Ginn project, while the latter is a hospitality services vehicle that collects maintenance fees and holds the common area, beach club and services operations.

The appointments of the Kingwood executives took place on August 4, 2022, just one day after the resignations of the Lubert Adler executives who they replaced. Tribune Business sources have confirmed that Kingwood, and Messrs Nasser and Carll, remain in these posts today, and have voiced fears that the situation threatens to create an impasse, or quagmire, that will prevent any resolution at West End in the form of fresh investment and a new buyer.

For while Kingwood cannot move forward in the absence of government approvals, it is seemingly not going anywhere and remains in control of corporate entities critical to progress at the 2,012-acre site. As a result, the concern is that no other viable investor will dare look at acquiring the Ginn project - and seek to realise its initial vision - until Mr Zohouri and his colleagues have finally departed.

“Lubert Adler tried to do the deal offshore,” one source said. “The deal cannot be done that way because the switching of beneficial interests needs to be approved for the person they’re vesting in by the Government of The Bahamas. That didn’t happen here. They may have made an application after they obtained control. At the end of the day the Government’s not going to approve that.

“I don’t know how they [Kingwood] can operate if they have no permissions. How are you going to get any licences and permits out of the Government of The Bahamas? It leaves the whole project in limbo; it cannot move forward. But there are other international buyers. We need to get them out so that we can have a real buyer come in. The longer they stay there, the longer it will be stuck.”

Resolving West End’s fate has previously had the added complication of dealing with two vendors. What would have been the core project is owned by Lubert Adler, which holds 280 acres that were earmarked as the site for the hotels and casino as well as much of Old Bahama Bay. Its landholdings also include key amenities such as the airport, marina and utilities.

Meanwhile, a Credit Suisse-led lending syndicate took possession of the remaining 1,476 acres after Ginn Development Company defaulted on its $276m loan. It effectively inherited the real estate component of the Ginn sur mer project.

Lubert Adler and the syndicate, though, have worked together in the belief this is the best way to maximise their exit price - and potential recovery - by selling the former Ginn sur mer as one. “All of it is under a giant sales agreement,” the source said. “As long as they’re [Kingwood] there, nothing is going to happen. They have to move.”

Another West End contact, familiar with developments but also speaking on condition of anonymity, said of Kingwood: “From what I understand the Government has pretty much cut them off. It just sounds like the deal is dead in the water. When they couldn’t show proof of funding or a business plan, it seems like Chester Cooper shut them down.

“For the benefit of The Bahamas we need to make these guys go away so we can get some money in there. I have two investment groups ready to go in there now, but it seems like Kingwood or Lubert Adler are stonewalling the transaction.”

The potential consequences for The Bahamas are that more than 2,000 acres of prime resort development land, which have already been largely unused for more than a decade, could be tied up for many years to come.

Kingwood had planned to construct a 28-storey “iconic tower”, modelled on Alexandria’s ancient lighthouse, as its focal point if its project was approved. Its plans for the renamed Reunion Cay, which is still listed on its website, call for the construction of a “a new wonder-of-the-world” in Grand Bahama’s West End.

The tower, to be called The Lighthouse, would have stood almost 400 feet high and featured “a fivestar luxury hotel” with 102 rooms; 40 two-bedroom condominiums and penthouse suites on the top four floors.

Meanwhile, the US Department of Justice lawsuit, filed in June 2020 and based on ‘whistleblower’ evidence from the thendirector of human resources at Kingwood’s Reunion resort, alleges that Mr Zohouri and his senior executives planned to “inflate” the price of real estate lots sold to buyers if they were approved to acquire the former Ginn project.

The ‘whistleblower’, described as a “relator” in the lawsuit, was alleged to have been “told by Carll that a new project was being started, known as the Bahamas Grand Sur project, by defendant Kingwood. Under the new project, the company is starting to sell lots at $400,000 and that they planned to inflate the prices of the properties by half. Defendant Carll joked and told relator to ‘Google Fred and see what you find out about him inflating real estate’.”

The action related to

Kingwood’s efforts to access the US government’s Paycheck Protection Programme (PPP), which was designed to help businesses stay open and keep their staff employed using federal taxpayer monies at the height of COVID-19. Applicants had to testify to the truthfulness and accuracy of their submissions, but Kingwood’s scheme allegedly “violates nearly every single certification and aims to further deceive the government by attempting to obtain forgiveness of the ill-gotten PPP loans”.

Kingwood and Mr Zohouri allegedly wanted to add between 100-150 “employees” to their payroll for an eight-week period using persons working for APDC Cleaning Services, a contractor that provided cleaning, housekeeping and security services to the resort group, so it could qualify for the PPP loan forgiveness “with no intention of bringing back” staff who had already been furloughed due to the pandemic.

The lawsuit alleges numerous questionable business practices, including assertion that he was “planted” at the Reunion resort by Kingwood prior to the latter acquiring the property “so that they could obtain company information beyond the scope of what would ordinarily be known in a commercial real estate transaction”.

Carll also allegedly suggested that Kingwood was charging property buyers at its project’s artificially inflated bills. “APDC billed Kingwood $92,900 a month and then Kingwood turned around and billed the Homeowners Association $142,000 per month, which put $50,000 per month ‘in Fred’s pocket’,” the lawsuit alleged.

“In addition, Kingwood had made money off a roofing job at Heritage Crossings by finding a local contractor to do the job for $40,000 and marking it up to the Homeowners Association.”

As for the PPP fraud, the whistleblower alleged that Fred Zohouri himself was listed as a new hire, making $195,000 a year, at a Reunion property restaurant that was closed, along with his son, who was shown to be earning $91,000. Yet both lived in Georgia, not Florida.

“On May 21, 2020, relator learned that defendant Kingwood had added four new ‘hires’ to their payroll to inflate their PPP loan forgiveness numbers with no intention of actually paying these ghost employees,” the US Justice Department alleged. “As of this date, 31 ‘new hires’ have been added as managers for the closed Traditions Grille.

“On May 29, 2020, payroll cheques will be issued to ‘ghost employees’ masquerading as food and beverage managers for Traditions Restaurant as security employees and, possibly, other positions. Cheques issued on this day will be retained by defendants and deposited in accounts, yet unknown, for their benefit.” The whistleblower estimated that the US government and taxpayers would suffer a $2.6m rip-off as a result.

Tribune Business efforts to obtain comment from Kingwood proved fruitless. The phone number provided on the resort group’s website went to an answer phone during working hours on multiple days, and a detailed e-mail message was not responded to.

“PPP loans were intended to help small businesses retain employees and keep their doors open during the pandemic,” said principal deputy assistant attorney general Brian M. Boynton, head of the US Justice Department’s Civil Division, in relation to Kingwood. “The department is committed to holding accountable those who knowingly and improperly sought PPP loans or forgiveness of those loans.”

“This settlement demonstrates that attempts to wrongfully obtain loan forgiveness will not go unnoticed, and violators will be identified,” said special agent in charge, Amaleka McCall-Brathwaite, of the Small Business Administration Office of the Inspector General’s (SBA OIG) eastern region. “I want to thank the Department of Justice and our law enforcement partners for their support and dedication to pursuing justice in this case.”

BUSINESSMAN LOSES $22M RBC LAWSUIT

non-obligatory investment in the plaintiff’s aragonite business of sand harvesting and exporting,” Justice Stewart noted of Mr Ferguson’s position. “The sum was facilitated by 23 force posted transactions from the Visa card of Boris Plavala who had agreed to provide the plaintiff with the funds without him having to repay him.”

Some $20.958m was credited to the Coastal Winds account, and $990,000 to that of Store Away, before RBC deemed the transactions questionable, then reversed them and refused to honour them. Setting out Mr Ferguson’s case, Justice Stewart wrote: “The plaintiff submitted that he had always been a good customer of the defendant and that there was never any allegation of fraud against him.

“The stellar relationship was no doubt the reason he maintained a business relationship with the defendant for upwards of 30 years, and what led the defendant’s compliance department to quickly approve the change of his profile for him to receive the sum.” He also pointed to the fact that RBC had not reported the $22mplus sum as suspicious to the Financial Intelligence Unit (FIU) or Financial Crimes Investigation Branch of the Royal Bahamas Police Force.

Mr Ferguson and his attorneys also pointed to a March 4, 2021, letter from the latter’s head, Chief Superintendent Matthew Edgecombe, in which he wrote in relation to the Plavala transfers that “no criminality of any kind was found in this matter. We are of the opinion that this is a civil matter”.

RBC, though, in its defence, asserted: “The plaintiff had advanced a somewhat bizarre case that he elected to obtain an investment of over $20m by virtue of a credit card transaction using the credit card of a person whom he had never met before to be deposited to an account which was not designated for such a purpose.

“It was perplexing that such an investment would be accepted by credit card. Merchant transactions attract significant credit card

fees. In this case, the fees would have amounted to $838,320 if the transactions had cleared. A wire transfer would have cost a fraction of that sum. The plaintiff had been advised of a more efficient method of transferring the funds.

“The plaintiff was out of his depth and had little knowledge of the nature of the alleged investments or of the individual who was to provide the funding. He stated that he had never met Mr Plavala and relied almost exclusively on Mr [Derek] Smith to facilitate the transaction... His account under the name Coastal Winds was for a vacation rental business and there was no indication that he utliised the account for investment purposes.”

RBC said exchange control approval from the Central Bank was also required from such a major investment, while each $990,000 payment had exceeded the $250,000 limit on Mr Plavala’s card. This prevented the transactions from being processed, and Visa sent such a signal to RBC, which never received the funds.

The Canadian-owned bank said “another factor which made the transactions suspicious”, apart from the fact there were 22 payments of exactly the same sum value just below $1m, was the fact they were conducted when Mr Ferguson’s point of sale credit/debit card machine was offline via a technique called “force posting”.

This enables someone to manually enter a fictitious authorisation code, which bypasses the authorisation normally requested from the cardholder’s bank, but triggers the receiving bank into advancing monies to the recipient’s account pending settlement from Visa.

Mr Ferguson had also said he was a shareholder in an entity called Nassau Island Company, and his account was used for the benefit of this firm. Two other entities mentioned were Tarmax Investments and Sigma Management Ltd, but no evidence was provided relating to them and RBC argued that nothing was produced to support the businessman’s contention that the funds were to be used as an investment in his sand mining operation.

PUBLIC NOTICE

INTENT TO CHANGE NAME BY DEED POLL

The Public is hereby advised that I, GEORGETTE COLEBROOKE of Mastic Point, North Andros, The Bahamas, intend to change my name to GEORGETTE AALIYAH ROLLE If there are any objections to this change of name by Deed Poll, you may write such objections to the Chief Passport Officer, P.O.Box N-742, Nassau, Bahamas no later than thirty (30) days after the date of publication of this notice.

NOTICE

NOTICE is hereby given that ERIC OSAGIE OKHAROBO of #4 Mahogany Street, Pinewood Gardens, New Providence, The Bahamas is applying to the Minister responsible for Nationality and Citizenship, for registration/naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/ naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 20th day of March, 2023 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, Bahamas.

NOTICE

PURSUANT TO SECTION 222(2) OF THE COMPANIES ACT, 1992

Brickell Holdings Ltd. (the “Company”) (IN VOLUNTARY LIQUIDATION)

TO: All Shareholders and Contributories of the Company

NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting of the Company will take place on April 21, 2023 at Equity Trust House, Caves Village, West Bay Street, P.O. Box N-10697 at 9:30 am to review the report and account of the voluntary liquidator(s) of the Company respecting the voluntary liquidation of the Company.

Dated: March 23, 2023

Signed: Kim D. Thompson

Internet research by Tribune Business suggests that Nassau Island Company is really Nassau Island Development Company. Previous court rulings have identified its president and chief executive as a “Larry Ferguson”, and there is also a LinkedIn page naming a Larry Ferguson as vicepresident of Nassau Island Development.

And the EY accounting firm’s probe into the Water & Sewerage Corporation, carried out under the former Minnis administration, named Nassau Island Development Company as the contractor for the Gladstone Road Wastewater treatment plant project that had endured significant cost overruns. Some 4,999 shares in Nassau Island Development Company were said to be held by the company’s principal, Anthony ‘Larry’ Ferguson.

Meanwhile, Justice Stewart said the agreed facts showed Mr Ferguson had written to RBC two days before the monies were received, asserting that he would be receiving a 350m euro transfer to his account and that he needed access to those funds. However, RBC placed a hold on the account after a fraud alert was triggered, Visa declined to settle the transactions and Mr Plavala’s bank in Slovakia informed it they were fraudulent.

The judge, in her verdict, said: “The plaintiff claims that the sum was sent from Zuno Bank by Mr Plavala

as an investment for his sand mining business. He has provided corporate documents of an unrelated company in support of this of which he is an officer.”

However, Mr Plavala was never called as a witness, no Central Bank approval was obtained and “not much was explained about the sand mining business”. Given this, Justice Stewart found RBC was justified in determining that the transactions were suspicious. They were inconsistent with

previous account activity, and also also inconsistent with the merchant terms of service agreement between Mr Ferguson and the bank that allowed the former to accept credit and debit card payments for his business via a point-of-sale terminal. As a result, she dismissed the breach of contract claim.

SOLAR INSTALLER LEADS ON WOMEN’S EMPOWERMENT

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The Bahamian company playing a leading role in the installation of 9.5 Mega Watts (MW) of solar power on Grand Bahama says it is the first in this nation to sign on to the United Nations Women’s Empowerment Principles.

INTI Corp, which is responsible for the design, engineering, procurement and construction of the Lucayas Solar Power project, said adopting the gender equality initiative is one of its core corporate responsibility principles.

Owen Bethel, the company’s founder and president, said: “We at INTI are proud to become a signatory to the UN’s Women’s Empowerment Principles for multiple reasons. One of those reasons is because it is the right thing to do. It is hard to believe in this age of instant information and AI (artificial intelligence) all around us that we are still talking about a need for gender equality.

“We recognise that in terms of the success of any venture, you want to draw the best from the widest skilled labour pool. At INTI, we want to identify women engineers, designers, administrators and construction workers, and encourage more women

to enter the solar space as sustainability, especially in the face of climate change, becomes a greater priority for all.”

Mr Bethel said INTI’s commitment includes equal pay, benefits, opportunities and respect. “When you see the disparity in pay scales, even today, and how little that has changed in more than 20 years despite all the talk about equality, it is very troubling and we just want to do our part to do the right thing,” he said.

Statistics show women still earn about 84 percent of what men earn in similar positions, with the greatest gap in the legal profession. One study by the InterAmerican Development Bank (IDB) showed what the financial institution called the “feminisation of poverty”, with about one in four women over 50 showing no income and, although women tend to live longer, they also have a greater chance of being poor at an older age.

INTI Corp, a Bahamian company, will install two solar farms in Grand Bahama that will produce a collective 9.5 MW to be supplied to Grand Bahama Power Company (GBPC).

Ground was broken on the first site on March 17

in a ceremony hosted by the Grand Bahama Port Authority (GBPA), and attended by Cabinet ministers, business and civic

leaders, artists, educators, judges and clergy. Mr Bethel said the gender equality initiative was one of several targets

that also included building resilience for Grand Bahama’s power supply, reducing dependency on - and the expense associated with

importation of foreign oil, including foreign exchange, and reduction of the carbon footprint.

IDB Invest, the private sector arm of the InterAmerican Development Bank (IDB), has funded some 75 percent - or $11m of the $15m project’s capital needs. Sarah St. George, the GBPAs chair, praised INTI and Lucayas Solar Power, which will receive and sell the power to GB Power Company, for moving The Bahamas in the direction of sustainable, renewable energy.

“You are truly blazing a trail,” Ms St George said at the ground breaking. “Grand Bahama is the first in the entire Bahamas to take the bold green mandate to move to 30 percent renewables by 2030.

“No country can develop without electricity. We don’t have coal or natural gas. What we do have is vast sun photons. Solar also needs large spaces, which we do have. This project ticks all the boxes I applaud your gender equality initiative and this project, which is a new string in our bow.”

Shown is today’s weather. Temperatures are today’s highs and tonight’s lows.

OWEN BETHEL, founder and president, INTI Corporation.

Gap grows between TikTok users, lawmakers on potential ban

By HALELUYA HADERO Associated Press

On the one side are dozens of lawmakers on Capitol Hill issuing dire warnings about security breaches and possible Chinese surveillance.

On the other are some 150 million TikTok users in the U.S. who just want to be able to keep making and watching short, fun videos offering makeup tutorials and cooking lessons, among other things.

The disconnect illustrates the uphill battle that lawmakers from both sides of the aisle face in trying to convince the public that China could use TikTok as a weapon against the American people. But many users on the platform are more concerned about the possibility of the government taking away their favorite app.

TikTok CEO Shou Zi Chew said during a nearly six-hour congressional hearing Thursday that the platform has never turned over user data to the Chinese government, and wouldn't do so if asked.

Nevertheless, lawmakers, the FBI and officials at other agencies continue to raise alarms that Chinese law compels Chinese companies like TikTok's parent company ByteDance to fork over data to the government for whatever purposes it deems

to involve national security. There's also concern Beijing might try to push pro-China narratives or misinformation through the platform.

"I want to say this to all the teenagers out there, and TikTok influencers who think we're just old and out of touch and don't know what we're talking about, trying to take your favorite app," said Republican Rep. Dan Crenshaw during the hearing. "You may not care that your data is being accessed now, but you will be one day."

Many TikTok users reacted to the hearing by posting videos critical of lawmakers who grilled Chew and frequently cut him off from speaking. Some called a potential TikTok ban, as some lawmakers and the Biden administration has reportedly threatened, the "biggest scam" of the year. And others blamed the surge of scrutiny on the platform on another tech rival, Facebook founder Mark Zuckerberg.

But few expressed fear of possible Chinese surveillance or security breaches that lawmakers continue to amplify as they look to rein in TikTok.

Rep. Ro Khanna, D-Calif., whose district is in the heart of Silicon Valley, said he is mindful of the value that platforms like TikTok provide to young

people as an outlet for creative expression and building community. "But there's absolutely no reason that an American technology company can't do that," said Khanna, the top Democrat on the cyber subcommittee on House Armed Service. "America has the most innovative technology companies in the world."

He added that Congress should move forward with a proposal that would force platform's sale to an American company for continued access for its millions of users while "ensuring that the platform isn't subject to Chinese propaganda or compromises people's privacy."

According to a survey by the Pew Research Center, two-thirds of Americans aged 13 to 17 use TikTok, and 16% of all teens say they use it almost constantly. It's because of TikTok's large user base that Lindsay Gorman, a former tech adviser for the Biden administration who now works as a senior fellow for emerging technologies at the German Marshall Fund, says the Biden administration will likely pursue every option short of a ban first. That would include the option for the app's Chinese owners to divest, which the Biden administration is reportedly demanding from TikTok if it wants to avoid a nationwide ban.

Bank failures and rescue test

Yellen’s decades of experience

By FATIMA HUSSEIN Associated

Press

WORKING against the clock to stop a developing banking crisis, Treasury

Secretary Janet Yellen had until sunset on Sunday, March 12, to come up with a plan to calm the U.S. economy. She quickly turned to someone who had been through the fire before, and on a much larger scale: Hank Paulson.

Paulson, who ran the Treasury Department during the financial crisis in 2008, counseled immediate government action. "It's really hard to stop or even slow down a bank run. And to do that requires a powerful and quick government response," Paulson said, recounting what he told Yellen.

A bank run on Silicon Valley Bank had begun earlier in the week. Regulators took it over by that Friday afternoon. The move panicked shareholders and depositors, stirring stark reminders of earlier failures that triggered the Great Recession.

Perhaps no treasury secretary has come to the office with Yellen's ample resume, including service as the chair of the Federal Reserve and a lifetime of studying economics and finance. That experience was put to a severe test as she worked to assure multiple constituencies, including financial markets, balky Republicans in Congress and President Joe Biden's White House economic team.

Yellen spent that crucial period two weeks ago assembling Federal Reserve officials; regulators at the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency; lawmakers, including congressional leaders on banking — Sen. Sherrod Brown, D-Ohio, and Rep. Patrick McHenry, R-N.C.; and Wall Street

executives such as Jamie Dimon, the chief executive of J.P. Morgan & Chase.

But few could relate as well as Paulson, who had asked Congress for authority to buy up $700 billion in distressed mortgage-related assets from private firms to save the larger U.S. financial system. His words to Yellen as she navigated the bank collapses: "We are fighting for the survival of our regional banks."

The Fed defines regional banks as those with total assets between $10 billion to $100 billion, not as small as community banks and not as large as national ones. Regional and community banking organizations constitute the largest number of banking institutions supervised by the Federal Reserve.

The crisis became apparent on Wednesday, March 8. Silicon Valley Bank's chief executive officer, Greg Becker had sent a letter to shareholders stating that the bank would need to raise $2.25 billion to shore up its finances after suffering significant losses.

The bank held an unusually high level of uninsured deposits, and many investments in longterm government bonds and mortgage-backed securities had tumbled in value as interest rates rose. That caused depositors on Thursday, March 9, to rush to withdraw their funds en masse. It triggered a bank run.

On the next afternoon, Yellen spoke with Fed Chair Jerome Powell, FDIC head Martin Gruenberg, acting head of the OCC Michael Hsu and San Francisco Fed chair Mary Daly. Regulators rushed to place Silicon Valley Bank into FDIC receivership.

SUPPORTERS of TikTok hold signs during a rally to defend the app, Wednesday, March 22, 2023, at the Capitol in Washington. The House holds a hearing Thursday, with TikTok CEO Shou Zi Chew about the platform’s consumer privacy and data security practices and impact on kids.

Photo:Jose Luis Magana/AP