Reputation

Has the Council decided to protect their reputation instead of getting it right 1st time?

Currently they are awaiting sight of Legal advice on 2 separate but distinct issues.

Firstly what will happen in the aftermath of the 2006 & 2009 development agreements running out on the 28th February 2014.

This issue is clouded by the 3 X 199 year leases sold to SFP Ventures (UK) Ltd in 2009 (The same development Keegan says they have spent £5M on)

Secondly the developer has requested a change to the agreement removing a legal protection from the said agreement because they (Keegan) say it will help them get a finance package.

So is this developer the "only game in town" or should TDC tell them to get lost?

Party Politics Thanet style

Whilst not strictly Pleasurama it is clear that dealing with the history of TDC's dealings with SFP and the public have an explanation in the lack of an open dialogue that is clear and transparent. This is apparent in this report which I reproduce in full and which will be debated on Thursday 21st 2013 in the Standards Committee.

1.  Introduction and Background
1.1.  The Localism Act 2011 changed the way in which complaints regarding the
behaviour and activities of elected Councillors were handled. In particular,
chapter  7  of  the  legislation  sets  out  the  responsibilities  of  Councils  to
“…promote  and  maintain  high  standards  of  conduct  by  members…”.   The
legislation  disbanded  the  national  Standards  Board,  and  removed  from
Councils  formal  sanctions  that  were  available  for  breach of  the  Council’s
Code of Conduct.
1.2.  Thanet District Council opted to retain a Standards Committee. Its remit is
reproduced  on  the  Council’s  website,  and  includes  the  following:
“To  promote  and maintain  high standards  of conduct  by  Members  and coopted  Members  of  the  District  Council  and  to  make  recommendations  to
Council on improving standards”
This  report  is  presented  by  the  independent  members  of the  Standards
Committee with this remit in mind.
1.3.  There are four independent members of the Standards Committee of Thanet
District  Council.   Independent  members  of  the  Standards  Committee  are
drawn from the general public, and were appointed bythe Council following
recruitment campaigns. The current independent members of the Standards
Committee  bring  with  them  a  wealth  of  experience,  gained  in  professional
service and other arenas. This experience includes extensive management
and leadership gained both in the public and private sector, including District
Councils, membership of the local bench, and other voluntary organisations.
Independent  members  have  also  severally  been  trained  in  mediation  and
have  extensive  experience  of  delivering  training  in  a number  of  different
sectors. All the independent members of the Standards Committee aim to
utilise their experience in the service of the Council.
1.4.  At a recent meeting of the independent members of the Standards Committee,
concern was raised regarding the conduct of councillors andthe perceptions
of that conduct by members of the public.
2.  The Current Situation
2.1.  Thanet District Council is a ‘hung’ council with a fine balance of power. This
political situation brings with it a number of practical challenges.
2.2.  As a political organisation, it is not surprising  that party politics are obvious,
not just in the debating chamber at Full Council, butalso in communications
between elected members and the local press, and in other fora including,
but not limited to, the use of social media (blogs, twitter, facebook and videoblogs (vlogs)).
2.3.  The  conviction  of  a  former  Councillor  has  had  an  adverse  effect  on  the
perception  of  the  Council  in  the  mind  of  the  public,  and  this  presents
challenges for all members of the Council.
2.4.  Recent  decisions  made  by  full  Council  have  sought  to  control  the  ways  in
which  moving  images  of  the  Council’s  meetings  are  produced  and
disseminated. This has led to the ejection of a memberof the public from a
meeting of full Council.
2.5.  Recent comments made by some  Councillors towards members of the public
in public meetings have been less than respectful, and have led on occasion,
to the making of personal threats.
2.6.  There have been suggestions that some Councillors have stated in public that
they  intend  not  to  comply  with  the  democratically  agreed  decisions  of  the
Council,  presumably  in  the  full  knowledge  that  there  are  no  meaningful
sanctions that can be taken against them. While the independent members
of the Standards Committee have no doubt that these actions are taken with
the noblest of intentions, it does make a mockery of the rules of the Council
by  which  all  Councillors  are  held  to  account  and  suggests  that  some
Councillors, at least, are not prepared to comply with the Code of Conduct.
2.7.  There have been occasions on which Councillors have stated that they do not
intend  to  comply  with  the  outcome  of  Standards  hearings,  again  because
there are no meaningful sanctions that can apply.
2.8.  It is suggested by the independent members of theStandards Committee that
the Council is held in low regard by the public. An,admittedly unscientific,
assessment  of  comments  made  (in  the  press,  local  bloggers,  twitter,
personal conversations, by local interest groups etc) suggest that there is a
local suspicion of secrecy, corruption and distance between the Council as it
is perceived in the offices in Cecil Square, the reality of people’s lives and
the needs of the district.
2.9.  Independent  members  of  the  Standards  Committees  have  observed  the
demeanour  of  Councillors  within  the  Council  chamber  towards  each  other,
and  towards  members  of  the  public.   The  perception  of the  independent
members  of  the  Standards  Committee  is  that  of  demonstrable  distrust
between members, and between the councillors and the  general public. On
some occasions this distrust has taken the form of outright hostility.
2.10.  Independent  members  of  the  Standards  Committee have  witnessed  many
personal  attacks  taking  place  between  members  during  debates,  and  from
their  position  in  the  public  gallery  have  heard  the  overwhelming  view  from
members  of  the  public  that  the  councillors  are  not  serving  the  public  by
whom they were elected. Indeed, attendance at Councilmeetings is seen by
some to be a form of entertainment.
2.11.  Correspondence published in the local press, including official press releases
and the columns written by the leaders of the main political parties, include
personal  attacks,  between  members,  and  on  some  occasions  towards
individual members of the public.
2.12.  The  overall  impression  of  the  independent  members  of  the  Standards
Committee is of a Council whose members are distrustfulof each other, and
of the public. There appears to be a ‘siege mentality’, which in the view of
the  independent  members  of  the  Standards  Committee  contributes  to
behaviour which falls short of the Council’s stated aim of “high standards of
conduct”.
3.  Standards Committee Input
3.1.  Standards  of  behaviour  are,  and  have  been,  subjects  for  discussion  at  the
Council’s  Standards  Committee  at  which  there  has  been  a general
consensus that some kind of action is necessary. However, the independent
members of the Standards Committee have seen little, if any, evidence that
this  consensus  is  repeated  outside  the  committee  meeting.   Certainly,  no
changes in behaviour have been observed by the independent members of
the Standards Committee.
3.2.  Independent members of the Standards Committee  are of the strong opinion
that  the  low  public  perception  of  the  Council  is  the  responsibility  of  all  the
members  of  the  Council,  and  is  not  limited  to  those  whose  names  and
profiles  appear  in  the  local  media  or  those  against  whom  complaints  are
recorded. The Council has the appearance of a dysfunctional organisation
whose  behaviour  and  internal  squabbles  adversely  affect  the  delivery  of
services, capital projects etc to the residents of the local district.
4.  Respect
4.1.  The independent members of the Standards Committee are of the mind that
this situation cannot be allowed to continue if Thanet  District Council and its
Councillors  are  to  be  viewed  as  true  leaders  within  the  District.   The
dominant view of the Council and its elected members  must be rehabilitated
as a matter of urgency.
4.2.  In particular, while the Council is a political organisation, by the very dint of
local politics and it being a creature of statute, its  primary objective must be
the delivery of services to the district. Elected officials are accountable to the
public that they serve.
4.3.  In order to be able to do this, it is the view of the independent members of the
Standards Committee that all Councillors should demonstrate respect in all
aspects of their work, including (but not limited to) their dealings with each
other,  with  Officers  of  the  Council,  and  crucially  with  the  public.
Demonstration of respect is, currently, lacking.
5.  Options
5.1.  The  Standards  Committee  is  invited  to  consider  the situation  as  above.
There  are  many  options  open  to  the  Council  to  address such  a  situation,
including  the  use  of  external  resources  to  review  the  efficiency  and
effectiveness of the ways in which elected members conducttheir business.
However, such an option would entail financial considerations, which are not
realistic in the current financial climate.
5.2.  The Committee may like to consider options as follows:
5.2.1.  No action– that the current situation be allowed to continue. In the opinion
of the independent members of the Standards Committee, this option carries
considerable  risk,  both  in  the  public  perception  of  the  Council,  and  in  the
ability of the Council to deliver effectively its obligations to the public. This
option is not recommended by the independent members  of the Standards
Committee.
5.2.2.  Action taken within political groups– that the leaders of political groups
take action to address the behaviour of their members. This option carries a
risk of a lack of consistency across the Council.
5.2.3.  Training– that the Standards Committee consider the desirability of training
for all elected members of the Council. However, for  training to be effective,
it  is  suggested  by  the  independent  members  of  the  Standards  Committee
that it should be compulsory. There are also financial implications associated
with  this  option,  although  some  training  can  be  delivered  by  resources
already within the Council.

I hope and pray that members of the Council take note of this report and don't assume it is all about Cllr Worrow and Cllr Driver. I have been at many meetings and listened to the points scoring, the reliance on old history and the fear that permeates the Chamber when past corruption is mentioned.

Thanet Council should be statesmen like and work TOGETHER for the people of Thanet not their own petty power plays

Who watches the watchers

As yet my email remains unanswered however tonight, 31/10/2013, spookily the Chief Executive, Dr Sue, (she was finance officer in 2009 and in charge of "due diligence" partially answered some of the points.

It seems that for those of us who follow the finer points of this saga they will know that part of the evidence said to prove the finances were in place to build (?) the flats and hotel was a letter from SFP Services ltd stating Wetmore were prepared to fund the hotel build to the tune of £5M.

Now questions being asked today wonder whether TDC ever checked the veracity of this letter and when asked by the T&F the same question Dr. Sue said yes but this was done by "External Solicitors"

Wow where is this report and why wasn't it part of the appendixes attached to the 2009 agreement?

Tonight we found out, it seems TDC's solicitor Eversheds were asked to write to SFP's solicitor (Prettys of Ipswich) to ask them to confirm the offer from Wetmore was genuine, that there was a valid agreement and that the finances were available.

No I don't know whether I'm cynical or not but considering Wetmore Foundation is 100% owned by Colin Hill, Shaun Keegan's son in Law I bet you can guess Wetmore were given a clean bill of health

Smoke & mirrors

New information has been given by the TDC Chief Executive concerning the 2009 agreement which has opened a can of worms over the openness or otherwise of information given to the Task & Finish Panel.

my new email to Harvey Patterson (under a freedom of Information request) follows:

The Task & Finish Panel have recently asked a series of questions to Dr. Sue McGonical which have now been published on the TDC website as an appendix to the upcoming meeting on the 31^st October 2013. As the answers are in the public domain I would like to raise some questions under an FOIA.

Also, I believe, you stated at a previous meeting of the T&F you said that a full disclosure of all papers was not an issue as only current negotiations would remain confidential. Is that still the case?

Both Ian Driver and Richard Nicholson asked broadly the same question as follows:-

Letter from SFP Ventures UK Ltd dated 2 June 2009 page 27: This letter states that Wetmore Investments will be funding the construction of the hotel through a £5million  investment.  What  checks  did  the  Council make  into  the  validity  of  this  claim  e.g.  obtaining copies  of  development  agreements  with  SFP,  and what  steps  did  the  council  take  to  check  the  bonafides  of  Wetmore  Investments  e.g.  securing information  about  company  registration  and ownership of Wetmore Investments and copies of its accounts.  Was  Wetmore  Investment  ever  contacted by the council?

Dr. Sue’s answer

External solicitors were used to validate the ability of Wetmore to provide the agreed level of finance, and that a binding legal agreement was in existence.

Having investigated both SFP and TDC over this affair for many months and accumulated much written evidence Dr. Sue’s answer comes like a bolt out of the blue and raises more questions than answers.

In the interest of openness please would you answer the following:-

1.       Who were the External Solicitors?

2.       Who instructed them and the date they were formally engaged?

3.       What was their brief?

4.       Was their final report to Council Verbal or written?

5.       Where is this report?

6.       Why wasn’t it included in the Pleasurama file given to the members of the T&F panel?

7.       Who are Wetmore?

8.       Where are they based?

9.       What was their financial standing?

10.   How long was the offer of £5M available for?

11.   Who owns Wetmore?

12.   How much was the Solicitor Invoice for?

13.   When was it paid?

14.   Who authorised payment?

15.   Why weren’t the findings part of the appendixes to the 2009 agreement?

   Harvey did state all relevant evidence would be given to the panel members so it does seem likely he is unaware of this External Solicitor report else he would have furnished to all members but then it is also likely smoke & mirrors are being deployed.

Task & Finish Committee & Rumours

At the recent committee meeting various decisions were made summarised here.

Summary follows:-

Minutes:

It was AGREED:

1.  THAT the S. 151 Officer be invited to attend the next meeting of the Group in order to answer questions; (be interesting having Sue answering questions)

2.  THAT that meeting takes place in 4 to 5 weeks’ time;

3.  THAT the Chairman emails Group Members as soon as possible, requesting that questions to be put to the S.151 Officer be submitted to him within 2 weeks of the date of his email;

4.  THAT, when responding to the Chairman’s email, Group Members select,“Reply All”;

5.  THAT the Chairman collates all Members’ questions and forwards them to the S.151 Officer as soon as possible after the 2-week period has expired.

6.  THAT assurance be given at the next meeting of the Group that legal advice is under way. (what questions will the lawyers be asked)

7.  THAT the Group considers inviting evidence in private session from a representative of the Friends of Ramsgate Seafront; (Is this just a pipe dream)

8.  THAT the Group considers seeking evidence from Members of Cabinet at the time the Development Agreement and Deed of Variation were entered into and also the former Director of Regeneration Services; (does anyone think the likes of Ezekiel and Latchford will be forthcoming?)

9.  THAT the Group consults with residents on any future options for the Pleasurama site. (got to get SFP removed first)

And so to rumours that building work will restart sometime soon being touted by various councillors. Interesting time of year to restart owing to the inclement winter weather but then it would make a built in excuse to ask for the extension until 2017

Vindication

After last night’s “Task & Finish” Sub-committee meeting  (29/8/2013) all the time and effort put in by myself and other researchers bore fruit and legal advice is being sought urgently to decide if there is a case for Shaun Keegan, aka the developer, having the development contract terminated.

For those that have not been following this saga the T & F committee, at their meeting on the 18^th July 2013, asked the Council Legal adviser, Harvey Patterson, to produce all documents pertaining to Pleasurama dating back to 2002 focusing on the Council’s “Due Diligence” procedures.

For those that have been regular readers of this blog will know this exercise was very poorly done!!

At last night’s meeting Harvey produced a document and presented it to the members and eventually to the public, outlining 2 main aims:

       A definition of due diligence (and why it is needed)

          Information about the “due diligence actually carried out.

Taking point 2 first he stated “SFP Ventures (UK) Ltd is a “shell” (my word he uses single/special purpose venture) company .... it had little or NO CASH or ASSETS .... nor a track record of development”

He goes on to state “there is no evidence of ANY financial “due diligence” being undertaken prior to the development agreement being entered into in 2006”.

So to clarify a shell company with no track record or financial assets is allowed to enter into an agreement with TDC for a development that would be costing over £20M. No wonder the opinion of the committee was overwhelmingly incredulous when they heard this.

Both officers and Councillors have a lot to answer for in allowing TDC to get duped.

Now going back to point one Harvey states “due diligence is a voluntary act where the amount of diligent enquiry contemplated or undertaken will depend on what is at stake to the enquirer. In other words the higher the risk to the inquirer, the more intrusive and thorough the “due diligence” can be expected to be”

In other words because NO “due diligence” was carried out, nor was it even attempted, then the conclusion  has to be there was NO risk to TDC. Well TDC the lost opportunities of a derelict site cannot have escaped your notice over the last 11 years.

Now I will turn my attention to the “alleged due diligence” carried out by officers prior to the Development Agreement being varied in 2009.

This very limited exercise was carried out during 2009 and only looked at the funding arrangements for the build. It comprises the following documents (the originals are now available from the TDC website)

1.       A business reference (undated) for Cardy Construction ltd (hardly proof of funding).

2.       Letter from Cardy to Shaun Keegan (dated2/6/2009) confirming they are willing to invest £1.5M in the project.

3.       Letter from Keegan (also dated 2/6/2009) stating they have spent £2M to date. (not sure how he arrives at this figure (their accounts show spend of only £1.6M) and not sure how he knew of Cardy’s letter as it would have been in the postal system at the time).

4.       Letter from SBP Banque to Brian White (dated 16/9/2008) stating the funding for the £1M deposit was in Geneva and was funded by SFP Services. (not relevant to the development funding issue but enlightening as to who is funding the project).

5.       This last is so laughable as to be untrue. A letter purporting to be from SBP Banque to Brian White that states “DRAFT LETTER FROM SBP BANQUE TO TDC” “Dear Sirs, This letter is to confirm that our client WETMORE INVESTMENTS has funds deposited with the bank to facilitate immediate funding of £5M for the hotel and commercial elements of the Royal Sands Development at Ramsgate, Kent.”

So to clarify, and despite the picture painted by Brian White and Harvey Patterson (the authors of Annex 4), SFP can only point to £1.6M invested to date and a promise from Cardy that they will contribute £1.5M to the project. The rest was just empty promises so it was hardly surprising the conclusion reached by the officers in Annex 4 was there was insufficient proof of funding and the development should be TERMINATED immediately (2009).

2 questions immediately spring to mind

1.       Why didn’t “shagpile” take notice of his officers and terminate?

2.       How much money has been lost because the agreement wasn’t terminated?

So the lack of due diligence is going to lead (probably) to a high cost Court Battle to retrieve the site leases granted to SFP Ventures (UK) Ltd or a deal will be struck with Keegan and his cronies reimbursing them for out of pocket expenses and compensation for the loss of the leases. This is likely to exceed £8M a figure that Peterborough Council coughed up when they took on Keegan between 2003 and 2010.

So TDC your words come back to haunt you-

“due diligence is a voluntary act where the amount of diligent enquiry contemplated or undertaken will depend on what is at stake to the enquirer. In other words the higher the risk to the inquirer, the more intrusive and thorough the “due diligence” can be expected to be”

Who does SFP Ventures (UK) Ltd protect

“The aim of the Money Laundering Regulations 2007 (the Regulations) is to detect, deter and disrupt financial crime and terrorist financing by reducing the possibility of legitimate businesses being used for money laundering or terrorist financing.”  From The Office of Fair Trading website. 

The whole point of adhering to this and the Proceeds of Crime Act is not to say that criminal activity IS taking place it is to DETER it, however if information comes forward at a later stage, then identifying what has transpired becomes easier for the Authorities.

What transpired within the Pleasurama debacle between Thanet Council and Shaun Keegan is a case in point and best explained using the “Horse and Cart” analogy. I have correspondence from TDC that indicates that they are dealing only with a UK based and registered Ltd Company, that much is true, however that is not the entire truth and the order of events and why they occurred is important in understanding what transpired.

 December 2002 Terry Painter stated “Shaun Keegan is the Project Manager of SFP Venture Partners (an overseas company)”, the beneficial ownership of this company wasn’t known at the time and only came to light in September 2008.

2008 “SFP Venture Partners is owned 100% by SFP Services”. This company is registered in Geneva and the general manager is Colin Hill. Who the ultimate beneficial owner is remains unclear. This company had the £1M that was paid through SFP Ventures (UK) Ltd so has to be connected.

In 2006, prior to the 1^st agreement being signed, Shaun Keegan incorporated SFP Ventures (UK) Ltd. The effect of this greatly helped TDC in their dealings with Shaun Keegan as it does several things. 

Firstly it allowed TDC to say they were dealing with a properly constituted legal entity registered in the United Kingdom, something that up to then garnered a great deal of criticism from the public. 

Secondly it enabled them to do some “due diligence” which was extremely difficult with a company registered overseas. 

Thirdly Shaun Keegan would normally have had to identify himself especially as he is the figurehead for the developers; the incorporation of a UK company has allowed the focus to be placed on the UK Company alone. A search of the Electoral Records for the UK has him on the voters list in Essex up to 2002 then he disappears.

In view of the monies being channeled through the UK registered Company in 2009 from SFP Services in Geneva one wonders just why it mattered to either Shaun Keegan or the Council to have a UK registered company as Keegan could just as easily have set up another Geneva based company to develop Pleasurama and it makes you wonder on whose behalf the UK based company was set up. 

Why identify the party you are dealing with:

The Home Office estimates that serious organised crime in the UK generates approximately £20 billion a year. Purchasing property in the UK and overseas continues to be a common method used by serious organised criminals to launder the proceeds of criminal activity. The advantage of doing so is that large amounts of criminal funds can be ‘cleaned’ in a single transaction.

 This equally applies to Estate agents and Councils selling Freehold/Leasehold Property or Freehold/Leasehold Land. 

What to look for (or what not to do)

Knowing your customer 

By exercising due diligence in taking steps to inspect and verify client identity documents, you may
identify anomalies.
Examples include:
•  Use of false documentation
•  Reluctance to provide personal details
•  Doubts about the source of client funds
•  Refusal to provide the requisite proof of identification or residence
•  Inconsistencies in documentation such as anomalies in dates photographs or signatures