This statement is being sent to you to confirm that as of the date of its preparation, Wednesday July 8, 2009, I have still had no discussion or communication with anyone in an official capacity about my ‘removal’ as chairman of CIMA.
I can only say that my disappointment with such blatant disrespect is appalling after the many years of service I have provided to my country. It should now be clear that the LOGB considers this position as a political appointment even though my fellow directors and I have been elected for 3 year terms, something that has been in place for several years now. As I was in only my first year of a three year term as a director and Chairman, (having previous completed one term as director prior to my appointment as Chairman), I consider that I had committed for a further 2 years of service. Indeed there are currently two overseas and one local director’s positions open, whose terms expired in late May 2009, which have not yet been re-appointed. Although the two overseas directors had initially indicated they were prepared to accept another term, we had found the local position more difficult to fill. It appears that the consideration that the local candidate should ideally have practical experience in the financial services industry or other relevant relationships with international bodies and most importantly no conflicts of interest with any of the 15,000 entities regulated by CIMA, has made it difficult to find persons prepared to accept such a nomination. Accordingly, there was already a place available on the board if the LOGB was inclined to nominate Mr. McCarthy to a director’s position. It could have been agreed that I step down when my term expired and Mr. McCarthy could have had time to ease into the knowledge of CIMA’s activities much as was done with me. In spite of the fact that Mr. McCarthy had been a previous Chairman, the circumstances and situation is much different some 10 – 15 years since he held the position. However, this fact does not appear to have been the intention of the LOGB and, no matter what anyone says, it can no longer be said that there is an expectation that CIMA should act as much as possible as an independent body from central Government and that its appointments should not be seen as political. Indeed it has been shown from the last time the Financial Secretary held the Chairmanship of CIMA or its predecessors (the basis under which Mr. McCarthy had been the Chairman), and especially after First Cayman Bank, that it was deemed more appropriate to avoid bringing into question the independence of CIMA by having a civil servant as Chairman. The last four or five Chairmen have therefore been private individuals for this reason i.e. to avoid controversy by ensuring that CIMA would appear to act in an objective manner without undue political influence when regulating any of its licensees.
In spite of what people said when I was appointed Chairman, it should be noted that Mr. Ridley had reached the end of his three year term and it was decided by the powers that be not to re-appoint him. At least he was informed prior to the announcement being made and did not have to suffer the embarrassment of first learning of the matter when a newspaper reporter called to get his reaction to the matter, as was my case. I was not even afforded that decency even after some 20+ years of service in a number of appointed offices with various Governments. It should also be noted that I had been away for a week representing CIMA at a conference relating to a large financial industries association the week before this announcement only returning to the island on the night of June 26. I took great personal satisfaction when a past president of this large association of some 10,000 members said to me privately after my panel presentation that quote ‘You sold me on Cayman.’ unquote. On Monday, June 29, the same day as the announcement, I attended, along with several of my fellow directors and the Managing Director, Mrs. Scotland, a committee meeting of CIMA. So I was faithfully fulfilling my duties while my ‘removal’ must have been deliberated.
It is ironic to me that I served over 20 years as a director of the Turtle Farm/Boatswain’s Beach and was the one director with the highest profile to provide support to the current LOGB, then Chairman of the Farm, through much of the difficult times when the financing of the project was being reviewed by various Government officials. Even though it became clear from the subsequent reviews and reports that although the LOGB/Chairman’s decision to expand the Farm and the procedures followed may have had issues, it should be noted that I was congratulated by various Government officials on achieving a very favourable rate of interest in spite of the fact that this was the first time such non-banking financing had been sought by the Government or one of its controlled entities. Indeed it was shown, when comparing what the Government itself had subsequently negotiated for a similar loan for central Government financing, the Farm had still done comparatively better in total costs of financing despite the fact its fees had been higher due to a change in structure for the loan in mid stream resulting in certain duplications of fees. I retired from that organisation in December 2008 to devote my time and efforts to my role as Chairman of CIMA. That’s just my way of doing things. Keep your head to the grindstone and be focused on the objectives ahead. Private praise for a job well done is much more satisfying than any public accolades.
Many times when my fellow Caymanians have asked and twice when politicians asked why I didn’t run for the LA, I indicated to them that I felt I could do more good for my country, operating privately, behind the scenes providing my expertise to any Government or private entities that may require it. I was keenly aware of the lack of native persons with my various skill sets being willing and available to assist. I tried to execute my appointments without bias or political favour. However, it appears that my lack of need for self-promotion is probably the reason behind many of my ‘failures’. I will accept that. Much as I indicated at several of the initial conferences and discussion meetings held with the local financial industry upon attaining the Chairmanship of CIMA, I do not believe it was appropriate that CIMA should be seen as pushing the issues but should instead follow its mandate under the Law to be a liaison between Government and the financial industry to encourage them to hold each other accountable and to get on with the job of promoting and improving our financial industry in the eyes of the world and our local population. This is the part the ‘Carlyle who?’ blogger and others could never understand why I did not make more public statements. I felt I couldn’t do that and still maintain the level of impartiality and objectivity which came with the Chairmanship of CIMA. Indeed Mr. Ridley and more recently Mr. Travers were doing all of that already – something my presentations encouraged from the beginning. I would say to you that if you look at other regulators around the world and they are making substantial noises, it is because their regulation is coming under heavy fire by the public or the Government. We do not have that situation here in the Cayman Islands. In the year under my Chairmanship, CIMA has 1) reviewed each of its regulated entities anew to re-establish the risk profile of each of them and to consider what areas may have to be explored for future regulation taking into consideration the financial crisis and our stated objective of keeping our regulatory touch appropriate and cost effective to our licensees, 2) completed our registration process with IOSCO resulting in full membership only a few weeks ago, 3) completed our second annual statistical digest on our mutual fund licensees, 4) completed an update of its pay for performance methodology for staff compensation and 5) streamlined the production of reports for the board and other organisations to reduce duplication of efforts i.e. getting more productivity out of the limited staff we had. If one includes my previous three years as a director during Mr. Ridley’s time as Chairman, he had included me in most administrative areas such as the accounting, information technology and human resources sub-committees/task forces since I was able to bring my 25 years of experience in private industry, having retired as a senior partner of Ernst Young in 2003, to each of these areas. It is clear to me that CIMA is a different organisation since my appointment as director some four years ago. But before anyone gets the wrong impression, I consider these accomplishments as belonging primarily to the staff of CIMA who continue to respond to leadership who support and encourage them to improve their productivity and job satisfaction.
I believe many in the financial industry were upset with Mr. Ridley’s non-renewal as Chairman and used the circumstances to make my appointment appear to be only politically motivated as they did not feel I had the same talents as he did. I will agree with that only to the extent that each of us had a different management style and were able to accomplish different things. For the record, I did not consider myself a political appointee because I felt I was nominated as Chairman because of the skill set I brought to the equation as evidenced by my previous three years on the Board as a director. It should be known that I have been distanced from my father and his side of the family which includes Mr. Alden McLaughlin for some 20+ years. Indeed, it was only during this last year that I was able to re-connect to a limited degree with Alden by attending committee meetings with him on which the CIMA Chairman had always had a seat. I would like it to be known that I do not have or have I ever had the cell phone numbers of the former LOGB Mr. Tibbetts or Mr. Alden McLaughlin, but I have had the cell phone number of Mr. Bush, and he has had mine, for several years. I called him on a personal matter in December 2008 and sent him a text message on June 9, 2009 to wish him the best on his travels in relation to signing the various TIEAs as I had not been able to see him before he left.
As a last word, it makes me sad as it is now evident to me that my service is no longer required by my country. The lack of any significant support for my position, even after the newspaper article last week, shows me that. Consequently, I am announcing my retirement from holding any further positions nominated by any Government. I find myself in this position because it is perceived that I have become a political follower of one party or the other and this is against the principles I have maintained of impartiality and fairness in my various appointments though the years. These include in no particular order or sequence 1) a member of various committees to address financial matters including the one which first considered the implementation of a Mutual Fund Law, another that wrote the initial National Pensions Law, and another which reviewed enhancements of the National Pensions Law lately which is still currently in progress, 2) Board member and subsequent Deputy Chairman of the Immigration Board, 3) Director of the National Drug Council for 2-3 years to implement its first accounting system, 4) Founding trustee of both the Chamber of Commerce and Silver Thatch Pension Plans becoming Chairman of the latter since its inception nearly 10 years ago until now, 5) Board member and subsequent Chairman of the National Pensions Board for approximately 5 -6 years 6) Adjunct professor at the International College of the Cayman Islands for some 12 years and Trustee thereof for a similar period, 7) Cayman Turtle Farm director for some 20+ years and 8) Cayman National Insurance Co. Ltd (CINICO) director for 3 years during its formative years.
I am grateful for the number of people who supported me or provided me with opportunities throughout my private and public careers (people like Hal Reynolds of Triple C School, the late Dr. Hugh Cummings of ICCI and Lothar Kallweit, Jim Cleaver, Naul Bodden, and Dan Scott of Ernst and Young and its predecessor firms) and most importantly to Jesus Christ, my Lord and Saviour, who provided me the talent and opportunity to make a difference in my life and others. The events and private trials of the past year have convinced me that God has established a plan for me. I have been able to reflect on my life path that what I had previously considered disappointments in my life were just Him steering me toward a slightly different direction. I see the most recent events as no different. Now I will spend more time with my church and my family, including my 76 year old mother and 90 year old step-father, my wife, my two grown daughters and other relatives. Hopefully I can recommence some of the other things I hoped to accomplish when I originally retired from the auditing profession some 6 years ago – to improve my health and physical well-being, to travel to foreign lands for culture and history, and to enjoy my dream home on the North Sound. Thanks again Cayman for the chance to make a difference.
Carlyle B McLaughlin, Jr.