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PROGRESSIVES PROBED OVER CIG OVERSEAS OFFICES

Government 02 Feb, 2022 Follow News

Sir Alden McLaughlin

HE Governor Martyn Roper

A spat between the ruling PACT coalition administration and the opposition Progressives party over overseas diplomatic offices has taken a new twist.

Leaked government documents suggest that funding commitments for offices in Washington, Brussels, Hong Kong and Dubai by the previous administration are now under scrutiny by the Office of the Auditor-General and are also said to be the subject of an internal probe.

The issue revolves around the timing of the decision-making, funding and staffing of the offices, of which at least one was in the process of being established.

With the matter now in the public domain, the offices of the Governor and the Deputy Governor have issued joint statements addressing the disclosures in response to what they describe as “in response to the unauthorised leak of the Office of the Auditor General’s Report regarding work by the former Ministry of International Trade, Investment, Aviation and Maritime Affairs to set up overseas offices.”

In his statement from HE Governor Martyn Roper says, “I can assure the public that my office and the Cayman Islands Government remain committed to transparency. However, an unauthorised leak of an official document is a serious matter and will be investigated.”

He said that the Auditor General’s report, which he confirms that he requested, raises important matters that were already being addressed as part of the civil service’s response to the findings of the report.

“As this work is not yet complete, it would be inappropriate for me or any other Government representative to comment substantively on it at this stage. There are undoubtedly lessons to be learned from the OAG’s report. I will ensure that they are learned,” Mr Roper added.

Hon. Deputy Governor Franz Manderson, who heads the civil service, wrote: “The unauthorised leak of the report is most unfortunate and unhelpful to the review currently in progress.”

Stating that “the report has rightly generated public interest,” Mr Manderson added: “However, due to this matter currently being under review, it limits what can be shared at this time. As Head of the Civil Service, we remain committed to ensuring transparency while following the processes and policies in place to deal with such matters. As such I ask that the process is respected and allowed to be carried out without prejudice to preserve the integrity of the review.”

The Deputy Governor said it is important for the public to be aware that there is an established review process for matters of this nature.

“The report has already been helpful to the Civil Service and we are developing a policy to guide the conduct of Civil Servants before, during and after an Election. This will include advice to Government on the role of elected representatives during the election period.”

The opposition Progressives party which is at the centre of issue, also issued a statement saying it has noted the stories in the press regarding the leaked report.

“This leak was regrettable and was a deplorable attempt to pervert the course of justice,” said party leader Roy McTaggart.

“We are eager for the full facts to be known to the public but, in the interim, will respect the position taken by the Governor and Deputy Governor that in the interest of an ongoing inquiry, they will refrain from discussing the matter.”

He added: “We in the Opposition also respect the ongoing inquiry process and so will also refrain from discussing the report at present. We encourage the speedy conclusion of the inquiry and look forward to its work being published.”

 

CAMPAIGN ISSUE

During last year’s election campaign, overseas representation of Cayman in selected major international capitals was a key platform point for the then ruling Progressives-led Unity coalition.

The idea was also advocated by other candidates across the political spectrum.

Cayman has had a UK Government Office for many years which also covers Brussels, headquarters of the European Commission.

Now on the opposition benches, the Progressives recently criticised the current PACT government for failing to expedite the setting of the offices, especially in Brussels.

They see that office as critical to Cayman’s lobbying against moves to label the jurisdiction as non-compliant with international regulations to curb money laundering and tax evasion.

 

“DITHERING”

In a recent press release, the party recalled its plans to push ahead with the overseas representation and accused the PACT government of “dithering”.

The Progressives said that while in government they had started the process of establishing the Brussels office as a priority, and accused the current administration of dragging its feet despite committing to having a Cayman representative at the seat of EU decision-making.

This comes against reports that Cayman could be under further pressure from Brussels over compliance with international regulations for the financial services sector.

Cayman has consistently defended its record of compliance.

“It was on that basis that the last Government, after consulting with the Financial Services Sector, developed plans for an overseas office in Brussels as a priority, with another one in Washington DC to follow, and finally an Asian Office in Hong Kong, or failing that perhaps in Singapore. The main role of the Brussels and Washington Offices would be to defend our financial services businesses,” Progressives leader Roy McTaggart had said in the press release.

Progressives leader, Roy McTaggart said, “Despite our warning that dithering would likely be problematic, the PACT Government delayed the opening of Overseas Offices, including the important Brussels Office.”

And while he acknowledged that the current administration “did give some commitment to having an office in Brussels and Washington in place before the end of 2021,” he said to date that has not been done.

 

POLICY REVIEW

The decision of the then Progressives-led Unity government to set in motion its plans for at least one office in the run-up to the election is seen as “saddling” the current PACT government with a financial commitment is said to be excess of CI$6 million.

The government is said to be reviewing and prioritising how Cayman is represented overseas.

There is reference in the budget for “increased resources for the promotion and regulation of the financial services industry”, although it does not specifically mention overseas representation.

Last year, PACT Financial Services Minister Andre Ebanks, who headed the CIG UK Office prior to being elected, told the Parliament that the government was reviewing the original plans to expand Cayman’s overseas representation.

Caymanian Times had reported on the policy shift last July.

“In another significant policy shift, the PACT government scaled down funding earmarked by the previous administration for international representation of the Cayman Islands particularly aimed at lobbying and promoting the key financial services sector.

“After considerable probing by the Opposition defending the advantages they saw in having this policy in place and countered by arguments by the PACT government, especially via Hon. Minister for Investment and Social Development, Andre Ebanks, the government’s coalition carried the vote,” the Caymanian Times report said then.

Mr Ebanks had explained then that the initial $2 million allocated for that purpose was being redirected to fund local micro and small businesses and for social development support.

He had also said that staff recruited would have been reassigned elsewhere in the civil service.


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