Zane DeSilva calls for boycott of Butterfield Bank
Former Cabinet minister Zane DeSilva is calling for a boycott of Butterfield Bank, alleging it has mistreated him and “many citizens” by freezing and closing accounts “without notice and for no good reason”.
The government MP issued a scathing press release on Monday, which described his own recent banking problems and framed them as part of a wider issue that he claimed had affected others and needed tackling with legislative changes.
Mr DeSilva insisted in an interview with The Royal Gazette that Butterfield had given no warning or explanation to him in June before stopping funds being transferred out of the accounts for two of his companies — Island Construction Services and Island Quarry — and accounts held by his immediate family.
He said more than 20 people had contacted him in the past six months to informally share similar experiences.
The bank said in a statement: “We never comment on specific client relationships.
“Butterfield conducts ongoing reviews to ensure client compliance with Bermuda laws and international regulatory standards, and to prevent money laundering.
“Any decision to permanently terminate an account is within the bank’s contractual rights and exercised only as a last resort.”
Asked if the bank could be acting on instructions from law enforcement, Mr DeSilva told the Gazette: “I have done zero in terms of doing anything illegal.”
He said his accounts with Clarien and Bermuda Commercial Bank were unaffected.
Mr DeSilva, who has held various Cabinet roles and now sits as a backbencher, first publicly criticised the bank in November 2022 when it withdrew complimentary golf tournament tickets soon after he was charged with a money-laundering offence in relation to an $800,000 government loan to an American music promoter.
He had told Parliament four months before that the time was right for “comprehensive banking reform”, claiming the island’s banks "put the squeeze“ on those who were arrested.
"That in itself has to stop because it has crippled some people in this country,“ he said. ”That in itself is rotten to the core.“
He added: “That is a biggie, because as we know, some people are arrested in this country for political affiliation or other reasons. I believe that everyone is innocent until proven guilty.”
The criminal case against Mr DeSilva was dropped in August 2023, after which Mr DeSilva, who always maintained his “complete innocence”, revealed that Butterfield had closed an account of his and shut down his credit card.
In June this year, he and fellow Progressive Labour Party politician Derrick Burgess called in Parliament for a Commission of Inquiry into the island’s banks, alleging unfair treatment of citizens.
Mr Burgess had previously alleged in the House of Assembly that Butterfield “kicked out” four people, including two PLP premiers, without giving them a reason.
In Monday’s press release, Mr DeSilva wrote: “What my experience has done is to educate me about how Butterfield behaves towards many citizens in this country.”
He did not provide specific information about anyone else allegedly affected.
In his own case, he complained to the Bermuda Monetary Authority, but the regulator replied it was “not within the BMA’s legislated mandate to settle” customer grievances.
He shared the detailed complaint sent on July 5 by his lawyer, Jerome Lynch, KC, and the BMA’s response with the Gazette.
A formal complaint to the Bermuda Monetary Authority, sent by Zane DeSilva’s lawyer on July 5, details the problems the MP claims to have encountered with Butterfield Bank.
Jerome Lynch, KC, wrote that it became apparent on June 24 that “ordinary payables” out of the accounts for Island Construction Services and Island Quarry, two of Mr DeSilva’s companies, were "being returned unpaid, notwithstanding more than sufficient funds being in the accounts to meet those drawings“.
Mr Lynch said there was no warning about the stoppages and the company directors could not find out from the bank why it happened.
A complaint was sent to bank managing director Jody Feldman on June 26 and, the next day, Mr DeSilva received a letter asking for certain documents and information to comply with “know your customer” requirements.
Mr Lynch wrote: “What the bank have asked for, to be provided by July 18, 2024, is frankly ludicrous. Buried in among perfectly reasonable requests lurks the unachievable.
“It is not a real inquiry at all; it is designed to guarantee failure so as to justify the continuing freezing of accounts that have been open and operating without issue for in excess of 30 years, with millions of dollars passing through them.”
Mr Feldman replied to Mr Lynch on June 28, explaining that a review was under way of both accounts, as part of the bank’s KYC obligations, and they would remain blocked until that was complete.
Mr Lynch alleged to the BMA that the matter was really to do with “an ongoing personal and professional dispute between certain individuals at the bank” and the politician.
He wrote that it appeared to be “ … intended to ‘raise the stakes’ over [Mr DeSilva’s] determination to dispute the subsistence of a multimillion-dollar facility provided by the bank in relation to another company, of which he is a director, F&E Holdings Ltd.”
Mr Lynch’s letter reveals that Butterfield asked for confirmation of the relationship between ICS and Bluemantle, a small trust company, and 13 named entities, as well as the purpose of transactions involving them, with contracts, agreements and invoices required.
It also requested “confirmation on purpose of credits received from the Bermuda Government”.
Mr Lynch wrote it was “not a genuine KYC inquiry but a barrage of requests specifically and deliberately designed to ensure failure”.
He asked the BMA to investigate alleged breaches of the authority’s banking code of conduct by Butterfield.
The authority replied to say it was “not within the BMA’s legislated mandate to settle any complaint you have made with a licensed business”.
Stricter anti-money-laundering controls for banks came into force in Bermuda in 2009 and the BMA has powers to issue fines for non-compliance.
The authority’s mandate was expanded to promote the protection of bank customers, with the passing of the Bank and Deposit Companies Amendment Act 2022. Under the legislation, there is a code of conduct, which banks must follow.
The BMA said in a statement: “The BMA’s role is not to settle individual complaints but to ensure that financial institutions have fair and effective systems in place to handle customer complaints and that they are adhering to all applicable requirements...”
Mr DeSilva said a lack of robust regulation of the sector meant fast measures should be introduced to “contain the banks’ actions”, including the introduction of a financial ombudsman and legislation to prevent unfair contract terms for consumers.
In a direct message to consumers, he urged them to specifically boycott Butterfield in case their accounts were targeted because of “unidentified” criteria.
Mr DeSilva wrote: “It has become clear to me that not every bank is the same and I urge all Bermudians and anyone who cares about fairness to leave Butterfield now before they close your accounts without notice, disrupt your business by freezing your account or just stop you getting your money …
“What they seem to forget is this is not their money … They have no right to just treat it as if it is.”
He told the Gazette that Butterfield allowed money to be deposited in his two affected business accounts but not transferred out.
He showed the newspaper correspondence with the Office of the Tax Commissioner detailing how a payroll tax payment on July 11 from ICS was stopped, leading to a late-payment fine of almost $9,000 for the company, which he said was waived when payment was made from another account.
“How embarrassing,” the politician said. “This tax example is only one of many that we have had to go through with our vendors.”
He said Butterfield, where he has banked for 34 years, was sitting on nearly a million dollars of his, but refused to say when he could withdraw the funds and close the accounts.
Mr DeSilva shared a letter he sent on July 31, to David Burt, the Premier and Minister of Finance, calling for the legislative changes and alleging “maladministration, arbitrary actions and a wholly dismissive attitude to the people of this country” by Butterfield. He has not yet had a response.
Mr DeSilva, who is pursuing a civil lawsuit against the bank, said: “I’m a big boy; I can take care of myself. But this is so utterly wrong. I am doing this because how many other people are they doing this to that don’t have the money to fight them?
“What does poor little Johnny or Mrs Smith do?”
He also shared that it was “no secret” he was willing to stand for the leadership of the PLP, when Mr Burt steps down, if there was no other candidate he supported.
Former Cabinet minister Zane DeSilva is willing to run for the leadership of the Progressive Labour Party when David Burt steps down, he has revealed.
The backbench MP, in an interview with The Royal Gazette about his banking problems, said: “The other thing that is hanging out there is that our premier is not going to be there much longer.
“He has said in 2026, he’s not running. A lot of people have asked if I’m going to run for the premiership.
“I have said, if this was October 2026 [when the party leader position is open for election], I’m going to look at who is running. If I feel it is not the best fit, I’m throwing my hat in the ring to be premier of the country.”
He said he had already spoken to Mr Burt about his intentions, telling him: “If you were to get hit by a bus, or if tomorrow was October 2026, if I didn’t like who was looking to take over the leadership of the Progressive Labour Party, I would run.”
The BMA said in a statement that its website had detailed information on how customers could file complaints with their bank or file a notice with the authority if they believed the bank was not fulfilling its obligations under the banking code of conduct.
It added: “If the BMA has concerns that a bank is not adhering to the code of conduct in a continuing, systematic way, the authority does have powers at that time to bring it to the attention of the bank and/or take enforcement action.
“However, it is important to note that by law the BMA cannot intervene or mediate a customer’s dispute with a bank.”
The Bermuda Bankers Association declined to comment. The Gazette also approached the Bermuda Police Service and Mr Burt.
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