N.H. Calls for Lease Hearing

Concord Monitor
Saturday, June 10, 2017

After bribery schemes in Africa led the U.S. government to fine the new operator of Mount Sunapee Resort $412 million last year — one of the biggest penalties ever issued under the Foreign Corrupt Practices Act — the New Hampshire attorney general wants to hold a public information meeting about plans for the resort.

The resort is part of Mount Sunapee State Park, but ski operations are run by private companies under a lease. That lease was sold recently by its previous owner, Florida-based real estate investment trust CNL, to New York hedge fund Och-Ziff. The sale was part of a reported $830 million deal involving a number of other ski areas, including Okemo in Vermont and Sunday River and Sugarloaf in Maine.

News about the purchase circulated late last fall, but the sale didn’t trigger a notification clause in the lease and the state was not officially notified of it until March, Attorney General Gordon MacDonald said on Wednesday.

No plans have been announced to change the operations of the ski area, which has thrived in recent years, according to MacDonald and statements from the Department of Resources and Economic Development.

But Och-Ziff’s recent history has raised questions, leading to a push by the Attorney General’s Office and DRED to hold a public discussion.

“The company is under a compliance agreement with the federal government,” MacDonald said. “The suggestion is to get the compliance monitor up here and engage the company directly.”

New Hampshire has owned Mount Sunapee State Park for close to a century, and development on the ski area began in the 1950s when the sport was starting to bloom. In 1998, the state leased management and operations to the owner of the Okemo resort.

In 2008, the lease was sold to a subsidiary of the CNL trust, which hired the Okemo group, now called The Sunapee Difference, to operate it.

The state lease was updated in 2016 and runs at least through 2028.

Under the lease, the state must be notified and give its approval if a change is made in the management group — that is, if The Sunapee Difference no longer operated the ski area. But the lease does not give the state a say if ownership of the lease changes hands, as has happened.

According to a memo from MacDonald and Jeffrey Rose, commissioner of DRED, the state began to receive questions in March about Och-Ziff, the new owner of the lease.

Och-Ziff is a sizable hedge fund, with a reported $39 billion in assets under its management. It was founded in 1994.

According to news reports, the company became embroiled in a major bribery scandal in several African nations, including Chad, Niger, Guinea, the Democratic Republic of the Congo and Libya, to help win mining rights. Och-Ziff subsidiary OZ Africa Management GP LLC pleaded guilty in September to a criminal case in federal court in New York City.

News reports said Och-Ziff CEO Daniel Och agreed to pay nearly $2.2 million to settle Securities and Exchange Commission charges that he caused the violations, while the company will pay $199 million to the SEC to settle civil charges of violating the Foreign Corrupt Practices Act and pay a criminal penalty of $213 million.

Under the agreement with the U.S. Department of Justice, the company agreed to a federal “compliance monitor” to oversee its operations for three years.

No schedule has been set for any public meeting concerning Mount Sunapee Resort.