Even as the Government is questioning the legality of the $143 million BOLT (Build-Own, Lease-Transfer) arrangement entered into by the Tobago House of Assembly (THA), support for its legitimacy has come from acting President of the country Timothy Hamel-Smith, who has given a legal opinion in his capacity as partner of the law firm Hamel-Smith and Company.
In a six-page legal opinion commissioned by AIC Capital Market Brokers Ltd, dated January 3, 2011, Senator Hamel-Smith confirmed the ability of the THA to enter into the arrangement, saying there was no law restraining the THA from entering into a lease/leaseback arrangement to develop the Milshirv Administrative Centre for Education, Sport and Youth purposes.
In arriving at the decision, the law firm consulted the THA Act Ch 25:03 extensively and investigated several pertinent international cases, which sought to determine whether entities such as the THA had the authority to enter into similar arrangements without breaching the law.
But the People's Partnership Government has taken issue with the THA action in spite of the legal advice it was given to move forward, saying the Assembly has acted illegally and should have consulted with Minister of Finance Larry Howai before entering into any loan arrangement for the centre which is being built in Shirvan in southeast Tobago.
Sport Minister Anil Roberts was the first to allege wrongdoing by Chief Secretary Orville London in the Parliament during the 2012-2013 budget debate two weeks ago.
The ball was then picked up by Prime Minister Kamla Persad-Bissessar, who pronounced on it last Wednesday in the House when she threatened to stop the project and advised that she had referred the matter to Attorney General Anand Ramlogan for his investigation.
For his part, Ramlogan wasted no time slamming the THA and London for what he said was a breach of Section 51 of the THA Act, which states that the finance minister, and not the Chief Secretary, must approve the borrowing of loans for capital development. He claimed to have referred the matter to the Commissioner of Police, the Integrity Commission and the Office of the Director of Public Prosecutions (DPP).
Hamel-Smith and Company was asked to review the approach suggested by the THA for the BOLT deal.
This involved: "(1) a long lease over land vested in the THA to be granted by the THA to a special purpose vehicle (SPV) with the intention that the SPV will construct the building to house the administration centre and THA will lease back the land and building.
(2) The AIC will form the SPV which would raise financing by way of a bond issue to construct the administrative centre.
(3) On completion of the administrative centre, the THA will lease back the land and the building for a period of time and at a rate that will cover the cost of financing the construction of the building."
The legal firm was also instructed to provide an opinion on whether the THA had the necessary power and authority to "grant a lease over land vested in the THA to a third party Special Purpose Vehicle (SPV)", and "lease back the property following the construction of an administrative building by the SPV".
In summarising its "advice", Hamel-Smith told the AIC that since the THA has responsibility for education, sports and State lands in Tobago and is required to formulate and implement policy in relation to such responsibilities, leasing the said land can be considered to be an extension of such powers, or alternatively, incidental to such power.
Further, Hamel-Smith added: "Indeed as there is no express prohibition disallowing the THA from dealing with the land vested in it, and the THA is permitted to enter into such contract as it deems fit for the discharge of its functions, leasing and leasing-back the property with the view of acquiring an administrative centre to be used for education, sport, and youth purposes may well be considered within the powers of the THA and, in any event, incidental to such powers."
Hamel-Smith took special note of the THA's responsibilities as enunciated in Section 25 of the Act, which stated among other thing that the THA may "enter into such contracts as it deems fit for the efficient discharge of its functions".
The lawyers pointed out as well that Section 54 states, inter alia that all lands and other property of every kind located in Tobago vested in the State except the residence of the President and Prime Minister, are to be vested in the Assembly in right of the Republic of Trinidad and Tobago.
The opinion signed by the acting President made it clear that "there is no express prohibition on the THA restricting its ability to deal with its land", and that the "THA is given wide powers to enter into such contracts as it sees fit for the discharge of its functions".
The accusations of corruption and wrongdoing against the THA come in the wake of heightened political campaigning for a new mandate for the THA when Tobagonians go to the polls early next year.
But Chief Secretary London is holding firm that the advice from attorneys Hamel-Smith and Company clears him of any wrongdoing.
Even though the matter is now being raised, it was more than a year ago that legal advice was sought by the AIC from Hamel-Smith on whether the THA had the power and authority to enter into this multi-million dollar BOLT transaction.
Meanwhile, London has made it clear that he is not daunted by threat of court action by the People's Partnership Government.
He said there was nothing new in the Assembly being taken to court in a dispute between the Central Government and itself.
In a statement last Friday, he said the THA had to appear in court actions on at least five occasions from 1980 to present. It started in 1982 under the 1980 THA Act when then THA chairman Arthur NR Robinson was taken to court by the central government administration of George Chambers.
London said a legal opinion obtained from Hamel-Smith, attorneys-at-law, indicated that the BOLT arrangement was not contrary to Section 51 of the THA Act since it did not involve borrowing.
"The decisions we make are in accordance with the laws of Trinidad and Tobago and according to the powers given to the THA under the House of Assembly Act," he said.