Some issues are "too important" to play politics with, Finance Minister Paula Cox stated yesterday.

Accusing Opposition Leader Grant Gibbons of politicising the issue of the illegal loan made by the Bermuda Industrial Union (BIU)'s Credit Union to Union Assets Holding (UAH), Ms Cox called his words "disingenuous" and "highly irresponsible".

Financial statements from the Credit Union in 2003 showed a loan of nearly $3 million made to UAH, the BIU-owned subsidiary which provided the completion bond for the new secondary senior school.

The unauthorised loan, however, contravened more than one section of the Credit Union Act - yet, auditors noted, no disciplinary action was taken against the Credit Union other than ensuring UAH repaid the money.

It has been alleged that a "senior member of the BIU" ordered Credit Union loan officers to go ahead with the loan, Dr. Gibbons said on Sunday.

Regarding the lack of disciplinary action, he also questioned whether or not members of the Bermuda Monetary Authority (BMA), the regulatory body which discovered the loan, were forced to bow to political pressure and sweep the matter under the carpet.

Yesterday, Ms Cox denied the allegations.

"Accordingly notwithstanding the accurate and correct statement that was properly made last week by the superintendent of Banking, Trust and Investment of the Bermuda Monetary Authority, given recent inaccurate and misleading utterances from the Opposition spokesman for Finance Dr. Grant Gibbons, it is absolutely essential for a further comment to be made given the innuendo and misrepresentations that are being made presumably for political ends," she stated.

"This is most regrettable."

Ms Cox commented again on the appropriate action taken by the BMA, praising the regulator for acting with "integrity and professionalism".

"It would be ill-conceived for regulators as a matter of course to publicise matters relating to institutions and companies that they regulate," she said.

"This is not the norm, and it could be very destabilising and detrimental to shareholder/member value to regulate or supervise the financial sector by way of media publicity.

She accused Dr. Gibbons of seeking to "impugn the integrity of the BMA and the Ministry of Finance" by "recklessly suggesting that political pressure was used to sweep matters under the table".

"With respect to the BMA's annual report," she stated, "it would have been highly irregular for the BMA to report on the affairs of any licensed institution in its annual report.

"This holds true also with respect to disclosure of the affairs of an organisation for which it performs an agency function on behalf of the Minister of Finance."

The BMA did mention the Credit Union in its 2003 annual report, stating that an on-site review of the Credit Union was conducted, but mentioning nothing about an illegal loan. Ms Cox earlier stated that former Finance Minister Eugene Cox ordered the BMA to conduct an on-site review of the Credit Union after the loan was discovered in 2003.

The Minister oversees the BIU Credit Union according to the Credit Union Act of 1982, she said. That Act provides for disciplinary action to be taken if the Credit Union steps out of line; namely the cancellation or suspension of the Credit Union's registration, and even the summary convictions of those involved.

"The matter was reported to the then-Minister of Finance (Eugene Cox), and he took timely and appropriate action to cause the Credit Union to come back into compliance," Ms Cox said.

Credit Union auditors noted the loan had been repaid. They also noted what disciplinary action the Minister could have taken under the Act. However: "No action has been taken to date," auditors stated in their notes to financial statements of the Credit Union.

"The Opposition Leader knows the process and how it works," Ms Cox said. "Therefore it is both disingenuous and highly irresponsible ... to suggest that there was any impropriety in the management of the remedial steps taken by the Minister ... and the BMA in this matter."