Housing Minister David Burch said yesterday his Cabinet colleague Dr. Ewart Brown should have declared that he sold property to Bermuda Housing Corporation.

The Royal Gazette yesterday revealed the Transport Minister's sale of apartments in Flatts to BHC was criticised by Auditor General Larry Dennis in his report for flouting Government's Code of Conduct on conflicts of interest.

After spending $152,000 of tax-payers' money upgrading Dr. Brown's apartments apparently so they could be rented, BHC bought the properties from him without getting them independently appraised and without the MP declaring his interest.

Lt. Col. Burch said at a press conference yesterday: "I would expect (Dr. Brown) not just to declare an interest but that it would have a higher level of scrutiny than given to the average person.

"I am aware of the facts surrounding the Dr. Brown case but I have not read the three or four page spread (in The Royal Gazette) that tells how it is characterised, but you can't expect that if Ministers of a government want to sell to the Housing Corporation that they would be prevented from doing so purely because they serve in the government."

Dr. Brown insisted yesterday that he had done nothing wrong and all his dealings with BHC "were above board".

In his report, Mr Dennis found the BHC apparently planned - although no written agreement could be found - to manage and renovate two apartments in Flatts belonging to Dr. Brown and use the excess rental income to pay for the renovations.

This was a normal arrangement. But the apartments were found to be unsuitable to rent so BHC hired a construction firm to substantially refit them on the understanding the Corporation would be compensated for the financial outlay.

"Then, in early 2001, after $152,000 had been spent on renovations, the general manager (Raymonde Dill) agreed with the Minister to purchase the property for the Corporation," Mr. Dennis wrote in his report.

"The total cost to the Corporation, including the renovations and other incidental costs, was $610,000.

"Despite this purchase being a transaction between two Government-related parties, no independent appraisal or similar evidence was obtained to demonstrate that the acquisition cost was reasonable.

"Furthermore, although a director signed the purchase documents, there are no minutes or other evidence that the Board of Directors approved this purchase, as required by corporation policy.

"The Government's Code of Conduct calls for disclosure of actual or apparent conflicts of interest.

"While the Code does not define all potential conflicts of interest, it would seem to encompass situations where Members of the House or senior Government officials have significant business transactions with Government organisations."

Mr. Dennis wrote that at a bare minimum, documentation should have been produced to show that non-arm's length business was transacted at reasonable commercial prices.

The Code of Conduct directed that these situations "be resolved in favour of the public interest rather than your own".

It was not inappropriate for MPs to conduct business with Government organisations but "when property sales like these are conducted, as the Code of Conduct infers, the documentary evidence retained should demonstrate that the prices and arrangements arrived at are beyond reproach".

Dr. Brown said yesterday: "I understand from today's Royal Gazette that Auditor General Larry Dennis raised concerns about a number of occasions when the Bermuda Housing Corporation purchased homes without first obtaining an outside appraisal on the value, and that a home previously owned by my family was one of them. "The article goes on to quote the Auditor General as stating: 'It is not inappropriate for members of the House and Government officials to transact business with Government.'

"It appears the Auditor General's concern was that documentary evidence be retained demonstrating that the prices and arrangements are beyond question and reproach.

"I believe that the prices and arrangements with regard to this family property are beyond question and reproach.

"All my dealings with Bermuda Housing Corporation were above board. If the Bermuda Housing Corporation did not follow procedures, that was and is beyond my control."

When asked to respond yesterday to Lt. Col. Burch's statement that he should have declared his interest, Dr. Brown said: "I have no more comment."