Human Rights Commission chairman the Rev. Goodwin Smith could be prosecuted for allegedly breaching the organisation's laws.

And with representatives of the resort due to arrive in Bermuda today the future of the resort is once again in jeopardy.

Last night the lawyer representing Elbow Beach Hotel General Manager Bill Shoaf, who was heavily criticised in a report by the Commission last week, said that legal action will probably be taken shortly.

Last night Mr. Shoaf's lawyer Mark Pettingill said that, because the findings were leaked to The Royal Gazette last Friday, an offence against the Human Rights Act was committed.

"There may well be a complaint made to the Police about the Human Rights Commission or the chairman under Section 30 of the Human Rights Act which states that officers have a duty to preserve secrecy on their findings,'' Mr.

Pettingill said.

"You have to bear in context that, first off they told us that there were no complainants and then they invited these three complainants to the decision and then handed these three complainants a copy of the decision.

"The Commission is caught in a legal net. If there are no complainants then they have allowed these three people to have information. If there are three complainants then they should have told us so in the beginning.'' Mr. Pettingill also pointed out that the cover of the decision report states that the complaint was made against `The Elbow Beach Hotel' rather than his client.

He also questioned why the decision was not signed by anyone.

"This is just so amateurish -- they can't even get the cover right,'' he said.

"You have to know who your accusers are but you also have to know who your judges are. Mr. Shoaf's rights were totally ignored.'' Last night Rev. Smith admitted that there had been a violation of the Human Rights Act -- but added that the Commission had not been responsible for the breach.

"We had a reading on Friday where I presented both parties with the result. I then asked both parties if they understood or disagreed with anything. Both parties said they would go away and look at it and the next thing I know it's all over the newspapers.

"There has been a violation of the bill but I don't want to make too many statements at this stage. I am new to the job and I want to do what's right.

But there has been a lot of erroneous evidence and it needs to be put right.'' "But if there's a statement to be made it will be made by the Minister.

"Although the Minister, Terry Lister, is not part of the Commission, the Commission is responsible to him and he's off the Island at the moment.

"But, having heard the various statements it is clear to me that the Commission needs to move quickly to educate the community as to the function of the Commission.

"There's a lot that's been said that leaves a bad taste on the Commission.

Some things have been violated by what has appeared in the paper. A lot of the people who are accusing the Commission are only hearing one side.'' Representatives of the resort's Arab owner are due to arrive on the Island today for top level talks with Mr. Shoaf.

And one source claimed that, if they feel their man has been the victim of a personal hate campaign -- as Mr. Shoaf alleged in a television interview last night -- they could decide to pull the plug on the resort.

Just last month owners threatened to close down the hotel unless Mr. Shoaf's work permit, which had expired at the end of last year, was renewed.

But another hotel insider, who did not wish to be named, said that, Mr. Shoaf could be forced to quit if hotel bosses accept the Commission's conclusion that there was "overwhelming and credible evidence'' that the US manager made the racist remarks at a management meeting last November.