Election night jitters

Local politics and the upcoming Bermuda election (18 December) may at first glance seem to have little bearing on the booming re/insurance sector on the island.

With the top 16 companies worth an estimated $64bn in capital (Benfield Bermuda Quarterly) in 2006, and with a net income for the year at $11.6bn, the to-ing and fro-ing of local politics might seem below the big names.

But recent events have got this band of super-companies hot and bothered about the local political scene.

First and foremost is a law which restricts work permits for the majority of foreigners to six years, which is causing a headache for the whole island.

Secondly there are the allegations of corruption and cronyism inside the left-wing Progressive Labour Party (PLP).

The corruption allegations have been particularly unsettling. They came to the world’s attention after the premier, Ewart Brown, threatened to sever ties with the governor following leaks about a housing scandal and then tried to gag the local press on writing about the scandal.

The very conservative and cautious men at the top of international business in Bermuda are not happy with any negative publicity.

This is not helped by the anti-foreigner and anti-big business rhetoric used by many PLP supporters which, while a vote winner, is not making the big businesses feel welcome. This stance is a vote-winner because a third of the working population is imported, mainly white and affluent.

The PLP was voted in in 1998 on the back of disaffected black workers who do not enjoy the benefits of the economic miracle that is Bermuda. The PLP had a remit to redistribute the wealth and bring in black empowerment as well as make the mid-Atlantic island independent.

Dr Brown is seen as a controversial figure in a small country where rocking the boat is not the norm – and many who would have supported the PLP previously are not happy with his leadership.

“Each day you and I must awaken to the harsh reality that we are up against the most vicious and vile opponents in the history of our struggle

Bermuda premier Ewart Brown

“The current PLP leader, Dr Brown, appears to me to be stoking his reputation as one who is going to pay back all those whites and foreigners who in the past exploited blacks,” said Stuart Hayward, a columnist on the bi-weekly Bermuda Sun newspaper.

“I believe his decades in the racially poisonous climate of Los Angeles, California… has reinforced an aggressive edge to his style that resonates with local blacks who feel the island’s affluent surge has passed them by.”

Dr Brown believes the opposition party, the United Bermuda Party (UBP), are behind a smear campaign which is trying to stop them getting elected – and the local media is being used as their tool.

Speaking to members of the PLP, at a banquet the day after calling the general election, Dr Brown said: “Tonight, we begin the journey of 45 days — a journey we have never taken before under conditions we have never endured before. Each and every day will be critical. Each day you and I must awaken to the harsh reality that we are up against the most vicious and vile opponents in the history of our struggle. Remember that, and take note of the fact that vicious and vile is not all they are.

“They are scared. They are terrified. That is why they have authored and executed a smear campaign of gigantic proportions.”

Dr Brown has tried to blame the UBP and the media for allegations about him and other party members made in reports on a $8m scandal involving the Bermuda Housing Corporation, a government funded scheme for affordable housing.

At the centre of the storm is a leaked police dossier detailing allegations of corruption at the BHC. It names Dr Brown and other members of the cabinet, including the former premier Jennifer Smith.

Dr Brown, who denies the allegations, said: “Yes, a free press is vital to a democracy. But, the press, in cahoots with a morally bankrupt, desperate opposition, is an irresponsible press when it prints unsubstantiated tales supposedly contained in a stolen police file about my colleagues and me.”

In the long speech there was not a single mention of international business (ie reinsurance), which is the lifeblood of the economy.

Despite many requests to the PLP for a comment on how the party feels about international business, no one was made available for comment.

“A very strong win by the PLP might see a strong PLP move towards independence in the very near term

Larry Burchall

The premier’s press secretary did, however, send through a document from October published in the Bermuda Sun by Dr Brown.

The article said: “As I have said repeatedly, international businesses contribute a tremendous amount of goodwill and wealth to our community. The members of the international business community are our friends, and we want our friends to be successful.

“Any policy the government contemplates is a delicate balancing act – designed to look out for the best interest of Bermudians, while not interrupting successful commerce. This balancing act is never easy.”

The UBP has promised not to rise to the bait of the PLP rhetoric and run a clean campaign. Opposition leader Michael Dunkley has promised business that he will revoke the controversial term limits on work permits, and work with business for the good of Bermuda.

“I think the UBP clearly understands business,” he said. He added that he had spoken to many business leaders who had expressed concerns over the Brown leadership. “There is real concern there, so much so that people don’t trust him.”

He said the idea that the UBP were behind anti-government or anti-Dr Brown stories was “hogwash”. He promised to update Bermuda’s laws so that those involved in the BHC scandal could be prosecuted and bring in protection for whistle blowers.

One of the issues which was expected to make headlines in an election, but has not, is independence. The PLP has been pushing for independence, but there appears to be little overall support for severing ties with the UK in the general population. The UBP is not pro-independence.

Larry Burchall, a black political commentator, said: “Neither party currently advocates strongly for immediate independence from the UK. However, a very strong win by the PLP – 24 seats or more – might see a strong PLP move towards independence in the very near term. A win, even a very strong win, by the UBP should see no change in the current and historic UBP attitude towards independence.”

Despite the anti-foreigner rhetoric, many commentators say that the PLP will not actually do anything to hurt the booming re/insurance industry if it wins.

Tom Vesey, a political commentator, said: “If the PLP is returned to office, it will probably do so without the get-tough-on-foreigners rhetoric. I’m sure a lot of things like affirmative action plans, mentoring, stricter limits on work permits and mutterings about restricting car ownership for foreigners, will be watered down substantially or politely forgotten about altogether.

“A lot of that was pre-election rhetoric, and the party’s leaders know that much of it simply isn’t practical or realistic.”