There's a bad moon rising over the Bahamia Casino in Freeport, Bahamas, 30 minutes by air from Miami. And the face on the moon is that of Randall D. Smith, a/k/a Randy, the secretive multimillionaire who owns a chunk of the 'New York Press'.
On paper, it looks like a routine dispute: Bahamia Casino Ltd. has been sued by five expats who say they were fired after being given inadequate notice and denied adequate compensation. Under Bahamian law, which favors the native-born, the expats feel they have no choice but to leave the country. One of them is an Italian croupier who worked at the casino for 20 years; another is a British-born casino supervisor who joined the company in 1987. In return for suddenly losing their jobs and home base, they are asking for reasonable damages.
But read between the lines and the case offers a rare glimpse into the business practices of Randy Smith. As this column reported in 1999, Randy bankrolls the New York Press, an alt-weekly run by his brother, Russ. If Randy is the avatar of naked capitalism, Russ is its ardent defender.
The man in charge of the business is David Buddemeyer, president of the West Palm Beach company Driftwood Ventures, which purchased the resort and casino last year. Buddemeyer has a reputation for "taking resort properties that were failing, revamping them, and then slapping on a franchise name and selling them for a profit," says plaintiffs' spokesperson Mark Woods.
Buddemeyer is the public face of Bahamia. But both Woods and an insider who requested anonymity insist that Smith is "financially involved" and that Smith, not Buddemeyer, is calling the shots. Smith and his wife, Barbara, visited the property both before and after Driftwood purchased it last year, says the source, and this summer, Barbara was spotted at the resort and casino, giving orders to management and reviewing the company's financial status.
In business circles, the practice of investing in troubled companies is known as vulture capitalism, and it is Randy Smith's lifelong m.o. But 10 years ago, after his brokerage house was investigated by the SEC, the vulture reincorporated, a move that camouflaged his beak and talons. (No SEC charges were filed.) Through the '90s, the New York-based Smith Management Company (SMC) maintained a low profile, purchasing a majority stake in Hawaiian Airlines in 1996.
Before landing in the Bahamas, Smith and Buddemeyer revamped the hotel chain formerly known as Servico. In 1995, SMC was the biggest shareholder in Servico, SMC's John Adams was chairman, and Buddemeyer was CEO, according to the Palm Beach Post. After selling Servico in 1998, Buddemeyer launched Driftwood with financing from Lehman Brothers and some "private investors."
In a December 1999 column, Russ Smith recounted a Smith brothers' reunion that began on a yacht moored in Nassau and ended at Richard Branson's private resort in Montego Bay. There, Russ wrote, Randy and the gang partied and sang the night away, raising toasts to "the family's fortune and how no one among us . . . has to eat canned fruit cocktail ever again."
Five months later, Driftwood purchased the property formerly known as Princess Resort and Casino, and announced plans for a $42 million renovation. Today, the casino is hopping, but instead of maintaining a stable of supervisors who are vested in the company and who can expect to retire gracefully, Smith's message to the expats seems to be: Let them eat canned fruit.
The company has said it is simply following government rules that favor the employment of Bahamians, according to Woods, but it doesn't seem to be doing them any favors, either. According to bjnottage.com, Bahamia is now turning away natives for construction jobs, preferring to employ Koreans at slave wages.
Obie Ferguson, the plaintiffs' lawyer and president of the country's Trade Union Congress, calls the lawsuit a test case for the rule of law. "We must send a message to foreign investors that we welcome their presence in the Bahamas," says Ferguson. "But they must follow our laws. They must not play games with workers' lives."
A hearing is scheduled for September 28 in the Bahamas Supreme Court. Plaintiffs say that after stonewalling, Buddemeyer initiated settlement negotiations last week.
Asked to comment on Bahamia, a Smith employee said, "We don't answer questions like that," and hung up. Buddemeyer did not respond to a detailed message left on his voice mail. Casino lawyer Valentine Grimes, of Nassau, had no comment, and casino spokesperson Donald Glass said the knowledgeable parties were in meetings all day and unavailable for comment.
At Witt's End
Washington City Paper editor Howard Witt is looking for someone to write "Loose Lips," a weekly column that covers local politics in D.C. The byline of Jonetta Rose Barras, the last person to write the column, has been missing for four weeks.
When Witt hired Barras last year, they seemed a good fit: He was a newcomer to a D.C. paper with a very white staff; she was an African American with great connections. In no time, she was voted one of The Washingtonian's 50 most influential local journalists and developed a following. So why did Barras resign abruptly on August 13?
Barras says she and Witt had a difference of opinion. Admitting that she's not an easy edit, she told me, "When a column runs under my name, it's going to reflect my opinions, not yours. I needed more freedom than he was willing to give." Barras is now working on a book, a radio show, and a column for commondenominator.com.
"Jonetta offered her resignation and I accepted it," Witt repeated ad nauseum. "Not to sound too much like Gary Condit, but Jonetta asked me herself not to speak about her departure, and I want to honor her request."
Insiders say both have shortcomings: Barras is combative and not a graceful writer, while Witt can be disrespectful and unsupportive. But the rift comes at a time of waning staff morale and has prompted a new round of internal complaints about his managing style. And not all of them are anonymous: Dorothy Brazill, a friend of Barras and head of the watchdog group DCWatch, says of Witt, "The one trait that seems to be lacking in addition to his maturity is the ability to manage and supervise people."
Witt says, "I'm putting out a darn good newspaper, which is the only thing that counts." He notes that in the past year, City Paper won an Association of Alternative Newsweeklies award and several first-place awards from the local chapter of the Society of Professional Journalists. So why didn't he attend the SPJ awards dinner? They were charging too much for a table, he says, so he threw a staff party at a local bar instead.
City Paper may have lost "Loose Lips," but the media column has just resumed after a 15-month hiatus as "Press Corpse." The writer is Associate Editor Richard Byrne. Wish him luck.
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