Dear Sir,

I refer to your headline story on David Burt’s Butterfield Bank account no longer being active and also to my letter of February 21 of this year, when I was disturbed by Derrick Burgess’s rant against said bank for kicking out four of his colleagues — and summarised my letter as follows:

What this means is Butterfield has repeatedly requested information from four account holders that it is required to by law, and these four people have refused to provide sufficient, if any, responses to legitimate inquiries. The only question remaining is, “Why?”

Yes, in the often entertaining, outrageous, revealing and/or petty speeches during the House’s motion to adjourn, Mr Burgess informed the public that we have elected people who are breaking Bermuda’s laws.

These laws are punitive for both client and customer alike. Butterfield Bank must adhere to the strictest confidentiality when dealing with clients who fail to provide the required support for unexplained transactions in their accounts. Once making several unsuccessful attempts to get such legally required information, a bank must then take two steps under the legislation with respect to dropping the customer as a client and filing a suspicious activity report with the Financial Intelligence Agency.

For clarity, when/if the Bermuda Monetary Authority audits a bank and it finds that a bank has requested the legally required diligence, records, etc several times and not taken further action, the bank will be heavily penalised. So there is no choice here. It’s not personal; it’s the law. But it is indeed political to the extent that Mr Burgess stated these four individuals were “politically exposed persons” for whom there are additional levels of legally required scrutiny.

Mr Burgess went as far as to suggest in his well-publicised speech that, because the Bermuda Government — like Britain, the United States, etc — bailed out Butterfield from its subprime exposure in 2009, the bank “owes” these colleagues of his special favours or exemptions.

That is probably the most worrying statement of all: relaxing laws for politicians because they took a move to prop up a local bank — as did other governments in countries whose banks created the financial crisis of 2008 — is corruption in its purest form. The bank cannot legally ignore its regulations to “thank” certain Progressive Labour Party politicians or party colleagues for using Bermuda’s money to stabilise the economy.

Any politician expecting or demanding special favours/exemptions for doing their job is, at best, highly unethical and, depending on the law of the land, any such favour given would be seen as criminal — textbook example of corruption.

In my past lives, I have written up, signed and passed SARs directly to the money-laundering reporting officer of whichever company employed me. Had I mentioned this to my colleagues, I would have committed a criminal act and be subject to at least a fine and possibly loss of my licences if reported. I add this because I see statements or comments questioning the bank, and it cannot, by law, disclose anything further than it has.

By law and virtue of the above summary, a law-abiding bank that closed the accounts of four party colleagues of an MP — with at least two being PEPs — for not providing support for unusual transactions would then follow through to file SARs with our FIA. That’s the law and because our FIA is a competent agency and aligned with other jurisdictions’ equivalent bodies worldwide, Bermudians should take comfort that the FIA is doing its job — we cannot possibly have a regulator in a jurisdiction of our calibre that is politicised and ineffective. Certain bodies of government such as the Auditor-General and FIA, Ombudsman, Human Rights Commission, Information Commissioner’s Office must be independent in fact and appearance for us to have attracted and retained international business and dominance in the world reinsurance market.

However, like any criminal investigation conducted by the police, the work of the FIA vis-à-vis SAR investigations are wholly confidential. For us, the public, this is the end of the story unless/until charges are brought as a result of any investigation.

Consider the implications of this follow-up investigation by The Royal Gazette and then the implications to Bermuda’s financial reputation considering who now owns the Bermuda Commercial Bank.

NICOLETTE J. REISS CPA, CPCU

Smith’s