AUTHORITIES responsible for stamping out white-collar crime are failing to do their job because they operate in a "culture of secrecy" in which they do not have to produce results, it is claimed.

And yesterday one business chief called on Government and fidiciary watchdogs to open up their regulatory procedures to the public and be held accountable for protecting the victims of corporate crime.

The call comes following claims in last week's Mid-Ocean News from two entrepreneurs involved in longstanding legal battles against the Bank of Bermuda. The two men argue that the authorities set up to investigate their complaints have instead attempted to sweep them under the carpet. In one case, businessman Harold Darrell filed a criminal complaint against the banks lawyers with Fraud Squad officers seven months ago. He has had no response from the police since.

And a second businessman, who did not wish to be named, filed a complaint with the Bermuda Monetary Authority against the bank, alleging it was in breach of its fidiciary duty.

According to the businessman, the BMA told him it had carried out an investigation into his complaint but was not obliged to tell him of its findings. He claims that he was subsequently told by the Ombudsman that the BMA never did investigate his complaint. The businessman also claims that a criminal complaint that he filed with the Fraud Squad was not investigated fully.

Last Thursday evening, in a response to questions from the Mid-Ocean News concerning those allegations, a BMA spokeswoman said: "The BMA role is to monitor the affairs of licensed institutions to ensure that they comply with, and do not breach, the legal requirements and regulations that apply to them.

"In doing this, the authority also monitors whether those institutions conduct their business prudently, to minimise the risk that clients, potential clients, counterparties or creditors may suffer losses as a result of an institution encountering major problems.

"Investigating or adjudicating complaints by individuals in relation to claims of unfair treatment by an institution or other disputes are non-regulatory matters, and are not the responsibility of the BMA. However, given its statutory responsibilities for supervising and regulating institutions, the authority is always interested to receive information that may be relevant in determining whether an institution is being operated prudently.

"Therefore, where an aggrieved customer of a bank or other licensed institution believes their complaint is relevant to the authority's supervisory responsibilities, they may wish to bring that matter to the BMA's attention.

"The Authority will review the matter and using its risk-based approach may or may not investigate it further. If the Authority decides to investigate a licensed institution based on such information, or requires an institution to take particular action, that process is conducted privately between the BMA and the entity concerned, as prescribed by the Bermuda Monetary Act 1969. Under current provisions of that Act, the Authority does not disclose the status of any investigation or action taken to a complainant or the general public."

The statement failed to address questions from this newspaper concerning the BMA's general policies and procedures, including how many complaints it had received in the past three years, how many of those had been investigated, whether or not it had uncovered any form of illegal activity in its investigations and forwarded on any complaints or findings to the police.

And the statement was also ridiculed by one senior executive who claims the BMA is a watchdog that is refusing to bite.

Yesterday, accountant Mike Hardy, who has 25 years of experience as a manager and auditor in the insurance ind reinsurance industries, said Bermuda's reputation as a 'gold standard' business jurisdiction was being tarnished by the BMA's apparent failure to tackle white-collar crime.

Mr. Hardy also questioned why so many Bermuda-based firms were being probed by overseas agencies while the BMA appeared to do nothing.

And he pointed out that the staement appeared to contradict a later public comment from the BMA concerning a seperate investigation.

In a story in Wednesday's Royal Gazette, a BMA source confirmed that it had been investigating the business activities of Premier Ewart Brown's constituency manager, Andre Curtis, and his company, Harvest Investment Holdings.

The source added that the investigation was only launched last month after the BMA became aware of a US investigation into Mr. Curtis, who is accused of posting false information on his company web site since at least 2007.

"The BMA statement is very cloudy in response to complaints that were highlighted in last week's Mid-Ocean News," Mr. Hardy said.

"It would seem that the BMA is only now investigating Mr. Curtis because it has to. It has become political and the US authorities raised the alarm about it publicly. It was only then that the BMA was forced to act and acknowledged that it is looking into the matter.

"As for the excuse for not investigating the matter earlier – that it was so blatant that they overlooked it – well, that doesn't exactly inspire confidence does it?

"How can they tell one complainant that they have carried out an investigation but cannot tell him its findings, then later tell the Ombudsman that it never carried out an investigation because it does not have the authority to do so? And then later still, confirm publicly that it is does have the authority and is in fact carrying out an investigation into a second, non-licensed company?

"According to the Act, the BMA is meant to unsure that crimes are not committed and yet, according to the BMA statement, there is no one to protect Bank of Bermuda customers.

"And what about all these other cases? This week heard that six people have been arrested in connection with a $600 million fraud involving a Bermuda-based company. But the investigation was carried out by police in the UK, not our own watchdogs. We have heard nothing from the BMA about this matter, even though it's going on in our own back yard. Why is there no disclosure? Why have they not reported on the Ipoc scandal? What about Mark Lay losing $70 million in Government pension funds? Why has this not been fully explained? There is a selective culture of secrecy that is still firmly in place."

Mr. Hardy added that he had asked Police Fraud Squad officers if they had ever received tip-offs from the BMA highlighting suspect practices by Bermuda companies. He was told that the BMA had never received any concerns from the watchdog.

Yesterday, the Mid-Ocean News e-mailed the BMA seeking further clarification about its general practics.

This newspaper asked:

Is the BMA obliged to divulge the results of any investigation to the complainant?

What happens once an investigation has been concluded? Is a file forwarded on to the Police/Prosecution Services?

How many complaints the BMA has received in the past three years?

How many of those have been investigated?

Has the BMA uncovered any form of illegal activity in its investigations?

Has it forwarded on any complaints or findings to either the Police or the Prosecution?

What does the BMA say to allegations that it is a paper tiger, set up to do nothing more than give a veneer of credibility to a corrupt system?

A BMA spokeswoman responded by saying that the organisation had nothing to add to its original statement.

The Mid-Ocean News also e-mailed questions to Finance Minister Paula Cox, Shadow Finance Minister Bob Richards, and Opposition Senate Leader Michael Dunkley, asking if they had any concerns about the effectiveness of authourities such as the BMA and Fraud Squad in investigating white-collar crime.

No responses were received by Press time last night.