Is Baha Mar developer, Sarkis Izmirlian, “mad”?

An angry Bahamian government minister has suggested that foreign developers should undergo a "psychological evaluation" before being allowed to operate in the Bahamas.

His comments came as the war of words between the government and resort developer Sarkis Izmirlian reached an alarming pitch last week.

Labour minister Shane Gibson in effect questioned the mental soundness of Izmirlian, developer of the troubled $3.5bn Baha Mar resort, in a vivid address to the country’s House of Assembly on 4 August.

He was defending his cabinet colleague, foreign affairs and immigration minister Fred Mitchell, who said equally harsh things the day before.

On that occasion, Mitchell used an Emancipation Day speech to lambast Izmirlian and to suggest that the Swiss-born businessman should leave the country if he was not prepared to behave in a way befitting an "economic guest".

All of a sudden this one man, because he got couple dollars, believe that he could come to the Bahamas, and talk to us and the prime minister any way he feel like– Shane Gibson, Bahamas’ labour minister

Izmirlian, already at loggerheads with the government over how to finish the near-complete mega resort, provoked fury among the ministers by suggesting in a radio interview that Prime Minister Perry Christie was acting against the interests of the Bahamian people.

The developer may have miscalculated the effect his comments would have, but was Gibson justified? Is Izmirlian, as the minister implied, "mad"?

I don’t believe he is, but the exchange shows how fraught the situation has become.

Soured spectacularly

Major projects often go wrong, but rarely do they sour so spectacularly and publicly.

In the background, the Christie government wants to stop the developer Baha Mar Ltd., of which Izmirlian is chief executive and chairman, from seeking protection under Chapter 11 of the US bankruptcy code.

Instead the government wants the matter dealt with in the Bahamas’ courts, which would entail Baha Mar Ltd. going into liquidation. Under Chapter 11 in the US, the company could seek further financing to survive.

Both the government and Baha Mar Ltd. claim their preferred route would be the best way to get the resort – considered a project of national importance – finished and open for business as soon as possible.

Baha Mar Ltd. meanwhile is pursuing a claim in the English High Court in London against China State Construction Engineering Corporation Limited, the state-owned parent of China Construction America Inc. (CCA), whose Bahamian subsidiary is main contractor on the beleaguered project.

Izmirlian blames CCA for failing to meet project deadlines, while CCA blames Izmirlian’s company for changing construction orders and not paying for work done. Izmirlian further accuses the Bahamian government of siding with CCA and the project’s main financier, China’s Exim Bank.

Like the government, both Chinese parties want to prevent Baha Mar Ltd. getting Chapter 11 bankruptcy protection.

Pitted against Perry?

In the radio interview, aired on 29 July, Izmirlian angered ministers by making the issue overtly political.

He accused the government of attacking him personally, and raised the prospect of voters expressing their displeasure at Christie’s handling of the affair at the next election. (Baha Mar Ltd. provides a transcript of the interview here.)

He also twice referred to the 2,500 Baha Mar employees as "Baha Mar citizens", an unusual formulation that the company has used in recent weeks, one which, taken with everything else, could be interpreted as Izmirlian pitting himself against the elected prime minister of the Bahamas, who can also – and more accurately – claim to be acting on behalf of "citizens".

That is exactly how Fred Mitchell, minister in charge of foreign affairs and immigration, chose to interpret Izmirlian’s words. His speech, given on the day marking the emancipation of African slaves, was charged with indignation.

Quoting a famous Bahamian politician, Clarence A. Bain, he said: "We must not be weak-kneed apologetic Negroes."

He called Izmirlian’s comments "offensive", an "attack" against the prime minister, and "incompatible with the status of someone who is not a Bahamian citizen," according to newspaper The Tribune.

Mitchell said Bahamians are fed up with expatriates who abuse the hospitality of their host country.

"It is like people want to invite us out of our own country," he said, "that the privilege which has been extended to them to work and live here has been abused.

"It is therefore no surprise then that an investor, because he has the word billionaire behind his name, would have temerity to believe that he can challenge the leader of our country on political grounds."

Where loyalty should lie

Mitchell also took issue with Baha Mar Ltd.’s use of the word "citizens".

"Let me get this straight," he said, according to The Tribune. "There are only citizens of the Commonwealth of the Bahamas. That is the country to which we owe loyalty. Baha Mar is a commercial entity, designed purely for the profit of the developer."

"This cannot stand," he added. "It is at the very least important for an invitation to be extended to that individual to consider making the appropriate steps to live elsewhere if he does not wish to conform with the mores of conduct of those who are economic guests in our country."

Opposition politicians criticised Mitchell for his speech. His shadow counterpart Hubert Chipman called it a "rabid attack" that hurt the country’s reputation.

Preventing more trouble like this

But his cabinet colleague Shane Gibson jumped to his defence. Addressing the House of Assembly on 4 August, he said that perhaps in future developers will need a "psychological evaluation" to prevent the trouble Izmirlian seemed to be causing.

"I could go through the list of all our major developers throughout the Bahamas where we didn’t have any problems at all," he said, according to The Tribune. "All of a sudden this one man, because he got couple dollars, believe that he could come to the Bahamas, and talk to us and the prime minister any way he feel like.

"Maybe as a part of our overall assessment, when we are looking at allowing developers to come to the Bahamas, to look at having them do a psychological evaluation. All developers, we won’t discriminate. All developers will need to look at having a psychological evaluation."

Gibson was speaking heatedly and rhetorically, and Prime Minister Perry Christie has distanced himself from his two ministers’ outbursts, saying on 5 August that their comments were personal and did not reflect the position of the government.

For his part, Sarkis Izmirlian isn’t behaving as if he is mad, but rather as one backed into a corner with plenty to lose.

But if he wants support from the Bahamian political establishment, he will need to tread more carefully.

Main photograph: Happier days: Baha Mar Ltd. chairman and chief executive Sarkis Izmirlian (front, second from left) at the Baha Mar ground-breaking ceremony in February 2011. Behind him stands Perry Christie, who was leader of the opposition at the time (Source: China Construction America)