Monday, June 20, 2005


Even Bermudans didn't like MDL

One of the controversies around the MDL caper is that state officials (at least BWC representatives) signed an agreement with Mark Lay and his MDL enterprise to the effect that MDL would be incorporated in Bermuda and subject only to their judicial system.

There is no reason why any state official or representative should sign an agreement with any firm that is incorporated offshore. When it comes to potential state vendors, it's a buyers market and it confounds us as to why state rules allow contracting with scoundrels who are either too crooked or too unpatriotic to pay their fair share of taxes, or both.

Nevertheless, with so many businesses eager to operate in a beautiful offshore haven, we are sure that Bermuda business people, reporters and politicians are pretty jaded when it comes to suggestions that some of these companies are, uh, ethically-challenged.

So, it was that a story in the daily Royal Gazette (Hamilton, Bermuda) caught our eye:
MDL was one of a number of new fund managers recommended by Bermuda's pension fund consultant Tina Poitevien in 2001. Ms Poitevien, who has described Cabinet Minister Dr. Ewart Brown's wife Wanda Henton Brown as a close friend and mentor, was appointed as consultant to the Public Funds Investment Committee (PFIC) in 2000.

MDL invested some $70 million in US fixed income funds for the PFIC between 2001 and 2004, but was replaced around year-end 2004 for poor performance.
Okay, so Bermudans figured out before Ohioans that their pension money wasn't safe in MDL.

But even as MDL's performance for the PFIC started to slide, Mark Lay continued to scratch Dr. Brown's back while he scratched Lay's. Brown by the way, is Bermuda's Deputy Premier:
Dr. Brown, reported last week by the Pittsburgh Post-Gazette to have attended the opening of Mr. Lay's new offices in that city in 2003, declined to answer questions asking if he attended the event, if Mr. Lay was a friend, and whether Mr. Lay was invited to attend the Washington fund-raising lunch in honour of Dr. Brown, held in Washington in March 2002, when invitees were asked to contribute $2,500 to Dr. Brown. He also refused to answer a series of questions about his political fund-raising.

Dr. Brown wrote: "My lawyers have advised me to make no comment to the media regarding this matter."

. . . [Lay] cut the ribbon in an unveiling attended by Pennsylvania Governor Ed Rendell, Dr. Ewart Brown, the Deputy Premier of Bermuda, and an MDL client, and other dignitaries and special guests."


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