and labelling the boss "racist'' circulated around Bermuda yesterday.

But Elbow Beach Hotel general manager Bill Shoaf last night unequivocally denied allegations in the memo that he made negative comments about black people during the controversial World Conference of Mayors at his hotel.

It was also alleged that during the conference which ended three weeks ago he derided an ethnic art and clothing exhibition that was being set up in the hotel foyer, then ordered it be taken down.

He was alleged to have said: `The next thing you know they'll be walking through the foyer in their gowns and frying chicken outside.'' But Mr. Shoaf said: "My reaction is simple. I am not a racist -- why would anyone make such obviously inflammatory comments?'' "My grandmother is a full blooded Mexican.

"Because I was born with no external sign of that, I have endured all my life derogatory comments made by both white and coloured people about people of Latin descent -- not only on the mainland but quite frankly on this Island.

"So I do understand that those things happen and I choose not to live in that world and I am extremely offended when people say I do.

Staff at Elbow Beach were "excellent and dedicated to providing a five-star service'' and he commended them as a whole.

He said he had "absolutely no idea'' who was behind the vicious memo and questioned why he would have gone to such trouble to host the World Conference of Mayors if he was racist.

"We stayed with it when everyone else walked away from it and we lost money because of our support of it.

"It was a very difficult and stressful time but despite that I still have not, nor will I, make any negative comment about its organisers or organisation.'' He said the memo writer had "wildly embellished'' the situation.

"It had to do with people setting up stalls to sell clothes and art in the foyer without my knowledge. When I first saw it I asked and found out the art had been approved by a colleague so I supported that. "But the clothing was without permission, so it was removed.

"The only problem with the art was that when I first saw it it was all over a public seating area and that was it.

"We have just invested $40-something million dollars to achieve a top five-star environment in the lobby so it cannot be an extension of the retail area -- and it's that simple.'' He said if the issue was "truly inflammatory to general staff'' it would not have taken two or three weeks to come out.

"We at Elbow Beach have never wavered in our commitment to maintaining a positive image for Bermuda internationally.

"In fact I led the group who were instrumental in changing the conference organisers' minds when they were concerned that they weren't welcome here in Bermuda.'' TOURISM TOU MAYORS CONFERENCE CON