Money-laundering charges against former Cabinet minister Zane DeSilva were dropped after he agreed to discontinue a lawsuit against the Bermuda Police Service, according to his lawyer.

Jerome Lynch KC was asked by The Royal Gazette if a behind-the-scenes deal was struck with the Department of Public Prosecutions, which brought the criminal prosecution to a close.

Mr Lynch replied: “The quid pro quo, if there is one, is that we have dropped significant JR [judicial review] proceedings against the BPS.”

Cindy Clarke, the Director of Public Prosecutions, denied that yesterday.

She told the Gazette: “The Department of Public Prosecutions plays no role in the judicial review proceedings against the BPS and I am not familiar at all with the details of that proceeding.

“There was no consideration of that proceeding in my decision to discontinue the public prosecution of Mr DeSilva.”

She added: “I am surprised to hear that Mr Lynch takes a different position. He knows that the judicial review proceedings are a matter for the Attorney-General’s Chambers and nothing at all to do with the Department of Public Prosecutions.”

The criminal prosecution of Mr DeSilva, 63, was connected to a taxpayer-funded loan of $800,000 that was given by the Government to American music promoter Anthony Blakey in April 2018 and has not been paid back.

Mr DeSilva denied entering or becoming concerned in an arrangement that he “knew or suspected facilitated the use or control of criminal property by or on behalf of” Mr Blakey when he appeared in Magistrates’ Court in October.

The prosecution against Mr DeSilva was dropped on August 21 and he has paid back $100,000 to the public purse.

Mr Blakey, whose Savvy Entertainment company borrowed the $800,000 to open a recording studio in Dockyard, was charged in absentia with obtaining a money transfer by deception. He has yet to return to Bermuda from the States to face trial.

Ms Clarke said: “The extradition process has begun and is ongoing.”

Mr Lynch said his client agreed to pay $100,000 — which he claimed represented money received from Mr Blakey as partial repayment for a loan Mr DeSilva gave to a third party — to the Accountant-General by way of a consent order.

The lawyer said there was “no other mechanism for handing over” the cash.

The Gazette asked Mr Lynch if Mr DeSilva, the Progressive Labour Party MP for Southampton East, cut a deal with the DPP to pay back the money if the charges were dropped and whether the deal involved any other concessions on his part.

Mr Lynch replied: “DeSilva always insisted he was innocent of these charges. He has been vindicated.”

He added that the consent order was made under the Proceeds of Crime Act, which allows the civil recovery of anything of value which is traceable to property, including money, initially obtained by criminal conduct.

“The order made under POCA specifically envisages that [Mr DeSilva] received the money innocently,” said Mr Lynch. “That it is handed over to the state is the right and proper thing to do.

“He will pursue the recovery of these sums through [the third party] and, ultimately, Blakey/Savvy.”

Mr Lynch stated: “The quid pro quo, if there is one, is that we have dropped significant JR [judicial review] proceedings against the BPS.”

Mr DeSilva added: “The JR proceedings arose from the precipitous and unnecessary search of my home and office for material to support the police enquiry.

“Leave for JR was sought and obtained and the Attorney-General’s department abandoned any application to have the matter struck out.

“Frankly, as I claimed, all they had to do was ask me for whatever they wanted and it would have been provided.”

Mr DeSilva said he told police about the loan he made to the third party when he was first interviewed by detectives in October 2020.

He noted he was not in Cabinet when the $800,000 was lent to Savvy, adding that when he became Minister of Tourism and Transport in November 2018 it fell to him to “seek to recover” the funds on behalf of taxpayers.

“I did all I could to achieve that. It was on my watch that Cabinet decided to institute legal proceedings against Blakey/Savvy in July 2019,” he said.

“Contrary to some suggestions made that Cabinet were unaware of my dealings with Blakey, I told the Premier and other Cabinet colleagues of my own personal dealings with Blakey whilst in Cabinet.”

At a hearing on August 21, Magistrates’ Court heard that Ms Clarke had opted not to proceed with the case against Mr DeSilva.

The MP and construction company owner, who has been an MP since 2007 and has served in various ministerial posts, issued a statement after the hearing. He said his involvement in the matter was because of him loaning money to a third party, a lifelong friend, who invested some of the funds in a Savvy Entertainment project.

Ms Clarke told the Gazette: “There is a civil recovery order filed in the Supreme Court; DeSilva signed a consent order admitting that $100,000 he received from Blakey is recoverable property, which is an admission that the money was obtained by unlawful conduct.

“He has now repaid that money to the Government.”

She said she could not comment further, as the case against Mr Blakey was ongoing.

Darrin Simons, the Commissioner of Police, said the Department of Public Prosecutions “alone determines who will be prosecuted and for what offence” after police pass a case file to prosecutors.

He said: “The police do not get involved in ’striking deals’, as you put it, with persons accused of crimes; the rare exception being when dealing with persons who wish to assist police with investigations.

“The police did not participate in discussions relative to the disposition of this matter. The decision to prosecute, or not, is entirely a matter for the DPP. It is not for the police to express any view on such decisions.”

David Burt apologised in September 2020 for overseeing the Savvy loan, stating: “I was the Premier and Minister of Finance when the loan was made and I supported this project. No part of me feels good about the fact that this did not work.”

The Premier did not respond to a request for comment for this article.

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