TransEuropa Debt Unrecoverable - Call for Public Enquiry

Green Party Councillor, Ian Driver, is calling for an independent public enquiry into an “unrecoverable” debt of £3.4 million owed to Thanet Council by TransEuropa Ferries.

The debt, which is almost 20% of Thanet Council’s annual budget, results from a secret fees and charges  deferral arrangement between the Council and TransEuropa Ferries, which came to light in April of this year when the ferry company went bust owing more than £20 million to Ostend and Ramsgate ports, fuel supplier Oil Chart International, and several other creditors.

Earlier this week it was revealed in letter from the Information Commissioner, who is adjudicating on Driver’s request to see all of the secret documents relating to TransEuropa  deal, that Thanet Council  “will not be pursuing legal action to recover the outstanding debt”.

Said Driver “this astronomic loss of public money will ultimately have to be paid for by the people of Thanet through cuts in services and perhaps even Council Tax increases”.

Driver places the blame for the £3.4 loss on the shoulders of senior officers and the Council’s political leadership. He said “From what I have found out  the arrangements with TransEuropa appear to have been appallingly mismanaged by senior officers.  There was no formal legal agreement with TransEuropa covering the payment deferral; there were no regular reviews or risk assessments of the arrangement; TransEuropa’s claims about new investors were not properly investigated and the Council failed to seek security on the growing debt mountain which meant that it has been unable to share in the proceeds of the creditor-forced-sale of the Gardenia and Larkspur ferries which is estimated to raise euros £1.5 million”.

“Worse still, the deal  with TransEuropa was a closely guarded secret restricted to a small group of  senior council officers and political bosses including ex-Tory Leader of the Council  Bob Bayford, the current Labour Leader Clive Hart and Cabinet finance chief Councillor Rick Everitt.  This secrecy meant that other elected councillors were prevented from scrutinizing and asking questions about the deal. This was an extremely serious subversion of democratic accountability.”

“This appalling mismanagement and secrecy goes right to the top of Thanet Council. No amount of internal reviews or working groups will get to the bottom of what went wrong, because powerful people will be desperately trying to cover their backsides. What we need is an independent   public enquiry into how the Council lost £3.4 million of taxpayer’s money. This enquiry should name and shame those responsible and hopefully they will do they honourable thing and resign”

Driver, who has been fighting for the release of secret documents about the TransEuropa deal, for 6 months has been advised by the Information Commissioner that they will be made available to him in December. The Council’s Auditor, who is investigating complaints submitted by Driver about the TransEuropa fee deferral agreement, has also said that he will be reporting back his findings in December. Two days ago Driver was prevented from filming and broadcasting  a meeting of a Thanet Council internal review group looking into the TransEuropa debt because of what he claims is a “growing paranoia about public exposure of the secrecy and mismanagement surrounding this sordid affair”.

One of the senior council officers involved in the TransEuropa affair, Head of Regulatory Services Harvey Patterson, is widely rumoured to be leaving Thanet Council in the New Year with what several commentators have said might be  a so-called gagging deal  which , if true, would prevent  him from speaking about his role in setting up and supervising the  TransEuropa arrangements. Said Driver, “I sincerely hope this rumour is untrue. It would be highly inappropriate for the Council’s Chief Executive to allow public money to be used to silence a key player in the TransEuropa scandal, especially if there were to be a independent enquiry”. 

Councillor Ian Driver – Statement Regarding Thanet Council Scrutiny Meeting on 19 November

On 19^th November I approached the Chair of the TransEuropa Task and Finish Group, Conservative Councillor Jo Gideon before the meeting had started to request that I be allowed to film the meeting.

I presented her with my credentials – a copy of a current UK Press Card issued by the National Union of Journalist. These credentials meet the requirements of Thanet Council’s new policy covering the filming of meetings which was agreed by the Council on 3 October (1)

Despite having the proper credentials Councillor Gideon ruled that I could not film the meeting. She also ruled that I be not allowed to speak at the meeting.

I was extremely surprised by Councillor Gideon’s response. Within the last week Thanet Conservative MP Laura Sandys had urged the Council to permit filming of meetings by the public. Just one day before the meeting of the Scrutiny TransEuropa Task and Finish Group, the Thanet Council Conservative Group issued a press release which stated that they “agree to the live streaming and public filming of council meetings”.

In the 24 hours which had elapsed since this statement was issued the Conservative Group had either changed its mind about filming of Council meetings, or Councillor Gideon had forgotten what her Party policy was on this matter.

Having been refused permission to film even though I met the Council’s filming criteria I decided to film the meeting secretly. Unfortunately I was discovered and was asked to leave the meeting. I politely refused to do so as my rights as a properly accredited person under the terms of Thanet Council’s Constitution had been abused by Councillor Gideon.

By refusing to leave the meeting I was following the advice I had been given by Brandon Lewis MP, Parliamentary Under Secretary for Communities and Local Government who in a letter to me said that “you should openly challenge your council to welcome those who want to bring local news stories to a wider audience through, for example, filming and taking photographs”.

I am at a loss to understand why, whilst hundreds of Councils across the country are endorsing “digital democracy and welcoming the public filming their meetings, Thanet Council continues to adopt an old-fashioned, medieval approach.

Dartford District Council recently told me that it “welcomes the filming and relay of proceedings” which provides “huge benefits in better, and deeper, engagement between this local authority and the community it serves”.

Why can’t Thanet Council adopt such a positive and welcoming approach? Why do they have to insist on secrecy? What do they have to hide?

Notes

1.   Part 5 of Thanet Council’s Constitution, Filming of Council Meetings  sates that  

Requests to film Council Committee meetings will only be granted to accredited

media representatives. The definition of an accredited media organisation is as follows:

“a media organisation or individual that holds a National Press Card and is registered

with the Press Complaints Commission (or its successor) or a similar regulated body

with a code of conduct and associated complaints process through which the Council

could take recourse”.

2.   Filming at Council meeting the facts.

·        The Government has issued advice to all Councils advising them to allow the public to film meetings

·        The law will be changed in 2015 to force those Council’s not already doing so, to allow the public to film Council meetings.

·        Thanet and Swale Councils are the only 2 Councils (out of 13) in Kent not to allow the public to film meetings

·        The national leadership of the Conservative, Lib-Dem and Labour all support the filming of Council meetings but the leadership of the Thanet Conservative and Labour Parties

·        Anti-government corruption watchdog Transparency International endorsed the filming of Council meetings in its latest report on corruption in UK local government.

·        The Tax Payers Alliance supports the filming of Council meetings

·        2 members of the public have been thrown out of Thanet Council meetings in the past year and I have also be thrown out on one occasion

·        I am facing a costly investigation (estimated £6,000) for taking photographs of 2 councillors who were about to have a fight in contravention of old fashioned anti-filming rules

Letter from Brandon Lewis MP 

THANET DISTRICT COUNCIL - FILMING AT MEETING

Thank you for your email of 4 October to the Rt Hon Eric Pickles MP about filming the meetings of your Council. Your letter has been forwarded to me and I am replying as it falls within my ministerial responsibilities .

I note your concerns about your Council's decision not to allow local people to film and photograph its meetings, but as I explained in my letter to you in April this year , I cannot comment on this matter as the Government cannot intervene in the decisions councils take because councils are directly accountable to their local people.

 Nonetheless, I would like to remark that our message is transparency and openness should be the underlying principle behind everything councils do, and members should not shy away from letting their local people see how they are arriving at their decisions. Therefore preventing local people, particularly citizen journalists,  from filming or taking photographs at council public meetings can only weaken local people's confidence in local democracy and their elected representatives .

The guidance, recently issued, highlights that councils are required by law to provide reasonable facilities for any member of the public to report on meetings. It also recommends that those wishing to film or take photographs should inform their councils before the start of the council meeting.

Councils should be at the forefront of promoting transparency and openness and this means that you should openly challenge your council to welcome those who want to bring local news stories to a wider audience through, for example, filming and taking photographs. Councils who resist this transparency and openness should expect open criticism from us and the public.

TransEuropa Ferries Thanet Council Taken for Suckers

Tonight I attended a meeting of the TransEuropa Ferries Scrutiny Working Group. The meeting did not last long. I presented my credentials which, under the new Council rules, allow me to film but was refused permission by the Chair, Tory  Councillor Jo Gideon. She also refused my request to ask questions.

So much for the  Thanet Council Tory Group's one-day-old promise to promote open and transparent government and  allow filming at Council meetings. The word hypocrites comes to mind.  I therefore decided  to film the meeting secretly, but was discovered. I was asked to leave the meeting but  refused. The Chairman closed the meeting and postponed it to another time. 

During the short time the meeting was in session a Council officer distributed a letter which we were told was written by the Ostend Port Harbour Master. The letter is not dated or signed but reference to the forced sale of the TransEuropa ferry Gardenia would put it about late September/ early October.

The letter says that Ostend Port has lost 3.5 million euros (£2,938,953) by deferring Transeuropa's fees and charges in the same way that Thanet did. The letter also sates that Ostend will be trying to sell the remaining Transeuropa Ferry,  the Larkspur,  to offset some of its losses.  But  just like the case of the of Gardenia which was sold for 750,000 euros in September,  Thanet Council will not share in the proceeds of this   sale  because senior Council  officers  and Labour Cabinet members chose not secure Transeuropa's  mounting debts against its assets.

This astoundingly foolish and incompetent decision has cost the taxpayers of Thanet a share of  about  1.5  million euros which will have been realised by the sale of TransEuropa's assets. This money would have gone a long way to cushion the  blow of a secret gamble with your money which went badly wrong!

But most surprising of  all the letter from Ostend makes some  extremely serious allegations about the owners of TransEuropa Ferries. These allegations are so serious that I have edited them from the letter so that I will not be sued. If these allegations are true then why on earth did the Council agree to defer debts which rose to an astronomic £3.5million in 3 years when there appears to have been  some serious worries on the integrity front

One of the excuses given by the Council Chief Executive is that TransEuropa were in discussions with investors who promised to pay back all the company debts to the Council. However, the Chief Executive is on record as saying that the Council did not perform financial due-diligence on these investors. This is incomprehensible. Surely if someone who owes you several £million tells you they have an investor who will pay off the debt  the first thing you would do is to check if the investor is good to cover the debt. But not Thanet council. Not  good old incompetent,  maladministered Thanet Council. They simply took  the word of  a company which Ostend is now describing  in incredibly strong libellous terms. Sounds a bit  like Pleasurama if you ask me

Some  final comments on this appalling scandal of mismanagement and incompetence is that the Council has allegedly received independent legal advice which says that it has 2 hopes of recovering the £3.5 million debt - Bob Hope and No Hope. Word on the street is that this sad news will be announced before Xmas. Surely this should mean the political leaders (Clive Hart, Rick Everitt, Bob Bayford and Martin Wise) and the senior council offices who managed this scandal should do the honourable thing and resign. But not in Thanet. Things don't work that way here. 

Instead my Council insiders tell me that a fall guy has been set up to save some top honcho arses. The fall guy is now busily clearing his desk for a New Year departure with a large cash settlement and gagging clause perhaps?  But mine and Richard Eastcliff's  imaginary rabbit friend called Harvey  is telling me to be careful what I say.

One thing is for sure Thanet Council's augean stables stink and need a Herculean cleaning out. In 20015 you help to do this.

Here is the edited letter enjoy


To Mr. Mark Seed

  

Before taking on the issue of Transeuropa, I think I will have to explain the (legal) structure of the Port of Oostende.

 

There are 4 seaports in Belgium (Antwerp, Gent, Zeebrugge, Oostende) governed by a regional decree (Flanders) setting out in great detail structures, authorities, etc., including the possibilities for some government interventions of which the most important ones are the provision of base infrastructure (e.g. approach channels) and the maintenance thereof (dredging). The region of Flanders owns all land and water but gives that in a 99 year lease to the Port Enterprise (see further). From there on the Region is not involved at all in any matters concerning the Port, save for controlling if everything is done legally, on the basis of the Port Decree mentioned earlier.

 

The legal structure imposed by the Port Decree is that of an "Autonomous Municipal Harbour Enterprise". In essence it means that the port is an enterprise, a company governed by the laws on private enterprises, not under administrative law as for government or municipal agencies. This harbour enterprise is fully owned by the city in which it is located. (You could say the City owns 100% of the shares although there is in this case no issued shares as they are in any case never transferable).

 

As a result, the port decree states that the harbour enterprise is to be governed by a board of directors, 18 in total. Of these  18, 11 are city councilors from all parties represented in the city council. There is 6 parties in all, a coalition of 3 form the majority.

 

The board of directors of the Port is in a way a reflection of the city council with an additional 7 independent members (from industry, academy, education, and myself). The chairman is the  mayor of the  city (the mayor in our system is elected and combines your functions of leader of the council and mayor).

 

The board meets in principal four times a year and is given all relevant information, including financial. The fact that Transeuropa didn't pay its bills was mentioned with each financial report. Given the information available the board decided each time to give it a further chance. If we would pull the plug so to say, it would have meant the immediate end of the line with no - or very little - chance of ever starting again. It was considered that the continuation of the line was to be given every chance, knowing the risk of failure but at the time not jeopardizing its chances of survival.

 

At the board meeting of March 2013, for the approval of the accounts for 2012 (Balance sheet, p/I, etc.) the board agreed to my suggestion to write off all outstanding debts of TEF up to 31/12/2010 as a precautionary measure. This resulted in a extraordinary cost of 655 000 euro for 2012.

The accounts, as in any company, have to be approved at the AGM of shareholders. In our case, that is the city represented by the City Council. The City Council approved the accounts, unanimously (including opposition!) knowingly writing off old debts of TEF and was informed about the debts for 2011 an 2012, still in the accounts as receivable.

When TEF finally failed, the board was informed (again) of an outstanding debt of about 2,5 million euro for 2011 and 2012. We had sent, but not booked, invoices for 2013. These are therefore obviously a loss of income but not to be written off as a bad debt. Through a question officially filed on the meeting of the City Council in June by an opposition member, the Mayor confirmed to the City Council the debt of 2,5 million to be written off (which the councilors - board members already knew). Obviously it was then picked up by the press but caused not further commotion other than the community expecting the council and the port to try its best to attract another ferry line. After all, this was a break in a tradition that had started in 1846 and is understandably an emotional event.

 Our accounts at the end of 2013 will cumulate the loss of income in 2013 and the write off of 2,5 million euro for 2011 and 2012, resulting in a net loss of some 3,5 million euro. Since its creation in 1996, the Port never lost money, quite the contrary, but we will have to seriously consider on how to finance the future running and development of the port.

I hope the above sheds some light on how the Port of Oostende dealt with the failure by TEF. An additional problem now is that the ships are abandoned in our port and there is no provision under Belgian law about who should take care of an abandoned ship. As they are in our port, and a threat to safety in our port, we had to take charge. They cost us about 25 000 euro per month with no guarantee we will be able to recuperate that money.

The Gardenia has now been sold (two weeks ago), the Larkspur will hopefully be sold towards the end of the year.

All in all  very unsavory story with the Dias family appearing --------------  rather than the image of distinguished gentlemen they succeeded in making us believe.