Amid a number of comments by members of the public and a statement by Leader of the Opposition Kurt Tibbetts concerning the debris removal contract a warded to MC Restoration, Leader of Government Business McKeeva Bush made a presentation on the matter to the Legislative Assembly Monday.
Following is the full text of his statement.
‘Mr. Speaker, I am grateful for the opportunity to clarify for the Members of this Honourable House and for members of the public some of the rumours that have been circulating on the issue of MC Restoration.
Unfortunately, we have seen that, in times of crises, we are particularly vulnerable to rumour mongering. It is therefore important that the circumstances of this contract be made known.
I am also aware that Members have tabled questions; otherwise, I may have been content to leave it to the publication of the Auditor General’s findings. And I want to assure everyone as well, that the report will be published. I am looking forward to it. Unfortunately, however, it will, I understand, take some time to be completed. That timeframe and other reasons make it additionally important for Members and the public to understand the issues right now.
And I must say that I am looking forward to the Auditor General’s findings. The process by which this contract was granted was in complete compliance with the established procedures under the law and with the policies that Government has determined provides the appropriate due diligence.
In turn, the Central Tenders Committee, whose members are responsible for ensuring that we dot every ‘I’ and cross every ‘T’, provided its usual diligent oversight.
To assist Members and the public to understand the issues, I would like to first review the sequence of events that led to the selection of MC Restoration.
As you are all aware, during the first weeks after Ivan, the Governor formed a public/private committee, the National Recovery Committee. The NRC, which the Governor chaired, was with the NHC, running the show at that time.
At that time, there also existed a committee that had evolved from among a core group of civil servants, with some private sector individuals, who had described themselves as the ‘Clean-Up Committee.’ They had assumed the task of finding solutions to the urgent clean up of Grand Cayman.
That committee brought to the NRC, representatives of a company that had appeared here uninvited. In their presentation, that company, Custer Battles, proposed a clean up exercise, which they told us, would cost $40 million to $80 million, depending on whether or not we supplied some equipment, if I recall correctly.
I can tell you that most of us on that committee were very surprised. If we had that amount of money to give away, which we do not, we would certainly have wanted to put it in housing for our people and not to hand out to some sharks waiting for some feeding frenzy.
So we said no. But while some of us may be forgetting how Ivan had thrashed our environment, the NRC, as well as the Cabinet, which resumed control about two months ago, understood very well that the number one priority, after security, was the clean up of Cayman. This was what everyone had written to say was the priority, clean up Cayman.
As one of the first actions after the Emergency Powers was lifted, Cabinet signed on a company that had long-standing expertise in disaster recovery – James Lee Witt and Associates. The principal of that company, Mr. James Lee Witt, who visited us last week, had served for eight years as the head of the US Federal Emergency Management Agency, commonly referred to as FEMA.
We were confident that their track record would have provided us with the support we needed to get through this crisis, as well as help us prepare in such a way that we would not suffer as much if we faced another disaster. We want to ensure that we are not quite as overwhelmed as we were when Ivan struck, when disaster strikes again; and we can really know when something like this could happen again. As a small island, we do have certain vulnerabilities.
James Lee Witt recommended an organizational structure headed by the Cabinet and a Recovery Manager, who reported directly to Cabinet. The Cabinet asked the Cabinet Secretary to assume the role of the Recovery Manager. The Governor appointed me the responsibility for the overall recovery answerable to this Honourable House.
The structure we adopted provided for private sector involvement and for permanent secretaries to serve as a steering committee. Another tier down was a number of sub-sectors, chiefly operations and logistics.
The operational sub sector was further broken down into key target areas, and was made up mainly of civil servants who are normally involved in the work of those areas.
We wanted, however, to have a manager for those areas to assist in coordination and to ensure effective cross flow, up and down and across the organization. That individual would also be a part of the Witt team, which makes a lot of sense, as the consultant’s job is to influence the work of the organization in fulfilment of their contract.
So Witt caste around for someone, and Mr. Mark Scotland, with his expertise as a former PWD engineer was recommended to them. Mr. Scotland was then employed as an essentially employee of Witt, but was not a party to the contract, nor was he involved at the stage at which the contract was entered into, as the Cabinet dealt with the contract.
It makes absolute sense for local people to be employed by overseas companies working in sensitive areas, especially in such sensitive times as after a major disaster. So, Mr. Scotland is a very capable employee of Witt.
Now, following the appointment of Witt, a debris removal company by the name of DRC made an initial visit, and made a proposal to Cabinet. It was the only proposal at that time, so initially the Cabinet accepted the proposal. However, Cabinet later rejected it, because of concerns about some conflicts of interest. Cabinet was very concerned about those conflicts and responded very strongly in rejecting the proposal.
Subsequently, Cabinet was advised that several other companies were interested in bidding for the contract. Cabinet directed that all proposals should go to the Central Tenders Committee (CTC), and tendered in accordance with all policies and procedures, and with the full oversight of the CTC.
The companies that tendered their bid were as follows: Ash Britt, $19.04M; Crowder-Gulf, $18.99; HCI, $12.696M; MC Restoration, $10.71 million, and DRC $8.767M.
For reasons explained earlier, we again rejected DRC, because of the conflicts of interest. MC Restoration, being the lowest of the remaining bidders, were sent to the CTC.
And I must also add that all of the companies we have named were non-Caymanian, and we made no invitation to them to bid. We did not then and up to now, have not received any tangible expression of interest from any local company.
And I can understand why. At the best of times, we do not have the equipment on island for the intensive and specialized demands of the clean up effort, and our limited capacity was further greatly reduced after Ivan. But, regardless, no local company approached us with any proposal to undertake this work. However Mr. Speaker, due to my concerns that Caymanians get business where they can, I arranged a meeting with a group of local heavy equipment operators and Mr. Connor to assure them that local Caymanians and local equipment which was available at a reasonable rate would be used. At that meeting they even gave me HEAVO’s rates for heavy equipment, but no mention or indication at all that wanted to bid or intended to bid. Their concern was that Caymanians be employed and equipment be used where possible. This was what we agreed with them to ensure.
Getting back to the rigorous process through which the MC Restoration contract was put, the next step after the CTC awarded the contract was to negotiate the details of the contract, by means of a panel that comprised the Recovery Manager, Witt and the Solicitor General.
On completion, of the contract by the CTC and negotiations, the contract was signed on 19 November. Incidentally, I would like those persons who are running around with a supposed copy of the contract to be aware that the contract that they have is not the one that Government signed. The contract that was signed on the 19th followed tough negotiations by Government, and so has been considerably modified in the interest of efficiency and cost-effectiveness. For example, we negotiated away from the ‘per-hour’ debris removal costing methodology to the per-cubit-foot measure. That is already saving Government quite a bit of money.
I would also like to observe that there is no requirement for Government to publish the contract, no more so than for any commercial company. Not that there is anything thing to hide – this practice is purely from a business point of view. We have to respect that when we enter into contracts with private companies. And Government has never done so with any private company in the past.
And those individuals who have unlawfully obtained this dated copy (which is obviously not serving their political ends, since they are now demanding the final contract) should be aware that they might very well be in breach of Common Law as well as Civil Service Regulations.
Once the contract was signed on 19 November, MC Restoration then enlisted the help of a respected local law firm, very well experienced in immigration policies and requirements, to guide it through the process of fulfilling those legal requirements.
In so doing, MC Restoration applied to the relevant immigration board for a local companies licence. Those of you familiar with this particular licence will be aware that this is not required where there is a local 60/40 partner.
So obviously, had there been any local beneficial shareholders or partners, MC Restoration would not have needed to apply for a local companies licence to operate here.
The local law firm guiding MC Restoration were obligated under law, as well, to carry out the necessary due diligence, as is required of all businesses in the Cayman Islands, particularly when there is overseas involvement.
This due diligence, commonly referred to as ‘know your customer,’ and other legal and policy requirements, satisfied the immigration board, which then issued at the same sitting both required licences – the local companies and the Trade and Business licences.
So, Mr. Speaker, everything that was done has been undertaken diligently and stringently in compliance with every related policy, regulation and law, but not just to satisfy the law, but to save the Government money.
Mr. Speaker, given that the Auditor General’s report will not be ready for sometime, I hope that I have succeeded in allaying any fears that may have been so unfortunately stirred up by those with political agendas.
I appeal to everyone, as well, to exercise some due care when rumours come to your attention; dig a little to see if they are authentic.
I realize that at times when you hear parts, or distortions of the facts that things may seem entirely different from what it really is. So I hope that the information that I have shared with you today will help to fill in the gaps, and so make clear what others have tried to muddy.
Mr. Speaker, the Leader of the Opposition have gone to the papers and on the radio to ask questions which cast aspersions and of course his mouth champion, the second elected member from George Town was there doing what he only has done since being in this House. That is to make accusations without doing any work which could sort out the problems the Cayman Islands face.
Firstly, let me say to the Opposition, that since they are saying that we handled this matter in a ‘reprehensible manner’, when indeed we followed all the correct procedures through the CTC and Trade and Business Licensing Board, that should tell this country how much they regard proper procedures and the CTC.
No wrong doing
In their charge of ‘possible corruption’, they should bring the facts, but they can’t because there has been no wrong doing. I believe the scripture when it says that ‘as a man thinketh, so is he’.
What was reprehensible Mr. Speaker, was the manner in which so much Government Printing was done and so much Government funds were spent without CTC involvement. That is what has been wrong in this country for so long.
What was reprehensible was the way ‘Custer Battles’ was going to get that 80 million dollar contract signed, if the Chief Secretary had not walked in and stopped the contract being signed. And what the country really deserves to know is whether the Leader of the Opposition had anything to do with Custer Battles, or any PPM member were part of it or whether in fact any PPM member is in deep financial trouble and was or is dependent on such a contract or contracts for funds to get them out of their mess. As far as them wanting an inquiry, let them get one done.
Mr. Speaker, I believe in the Audit System. The PAC is well known, it comprises members of this Hon House in good standing. It has two well known members of this House who are Opposition members, and who are capable members and have my confidence and the country’s. The fact that the second member from George Town has no confidence in the PAC is his problem. However I will not allow him to go unchallenged while trying to defame, and blame, and accuse every institution in this country, because he can’t have his way.
Until, we can provide the public with a published accounting, I ask for patience and that an open mind is kept until all the facts are in.
The Biblical advice, ‘judge not that ye be not judged,’ has application here; that counsel was not given lightly – it is inherent in our humanity and it is the cause of a lot of ill in this world!
As a politician, I have long accepted that I will be the target of smear campaigns. My family has had to suffer much. But I chose this walk, at least for now, so I have had to learn to live with it, and have learned to minimize the impact on me personally.
But I pray that you consider the harm that rumour mongering can do to civil servants, who are dedicatedly serving this country, and private citizens who are striving to make a contribution. Especially during this stressful time of recovery.
I enjoin us to put all our energies into the rebuilding of this our island home that we all love so much.
You know, as the head of the recent UN ECLAC Mission to Cayman said, no country that has been hit the way we have, has remained the same – most have emerged better than before.
That’s where we need to focus our hearts and minds – and I pray that with God’s help we will press on, regardless of the hurdles and the obstacles and the discouragements, and that at the end of the road on which we are travelling, we will all claim the victory.’