Clifford accounts for $3 million

I issue this statement to set the record straight following the recent statement by Financial Secretary Kenneth Jefferson regarding $3M being approved in the latter half of 2008 under the emergency funding provisions of the Public Management and Finance Law for in his words “a CAL route”.

He was either deliberately misrepresenting the facts or at best manipulating the facts to suit his failed attempt at explaining the significant variance in the government’s estimated deficit between May 2009 when he last updated the PPM Cabinet and June 2009 when he advised the new Leader of Government Business on the financial position following the general elections.

Let me say first of all that the Financial Secretary’s statement in relation to Cayman Airways was not placed in context and that the $3M was not for “a CAL route” but rather for a number of things for Cayman Airways, including but not limited to, the acquisition of the 4th Boeing 737-300 aircraft; the launch of the Washington DC route; the re-instatement of the Chicago route; and the launch of the La Ceiba, Honduras and Panama routes.

On hold

The launch of the La Ceiba route was deferred for four months due to unreasonable delays by the Honduran Civil Aviation Authority and was inaugurated in early June. At the time of the general elections on 20 May, 2009, plans were being finalised for the launch of service to Panama.

Now to put the approval of this $3M in context it should be acknowledged that when the PPM government took office in May 2005 we had to first of all manage the country’s recovery from Hurricane Ivan.

Soon after our tourism industry’s recovery from Hurricane Ivan in 2007 the world was faced with a global airline crisis as a result of unprecedented oil prices. Many airlines around the world went out of business and those that managed to survive were forced to reduce service, their fleets and staff.

This negatively impacted global tourism and the Cayman Islands, like the rest of the Caribbean, did not escape the impact of this crisis.

On the heels of the global airline crisis, we began to see some worrying signs in the US economy. In fact, as far back as September 2007 during the Annual Tourism Conference when I was the Minister of Tourism I mentioned during my keynote address at the conference that we were monitoring closely what we saw as an unusual amount of foreclosures in the United States and we were beginning to plan our tourism mitigation strategies to cope with this.

More storms

During this period and leading up to the end of 2008 we also had to contend with three other hurricanes (Dean, Gustav and Paloma) of various intensities and threat levels, which required the evacuation of tourists from the Islands on two occasions. The latter of these hurricanes, Paloma, shut down the tourism industry in Cayman Brac for over six months and closed the Marriott Courtyard hotel in Grand Cayman.

In the second half of 2008 the US economy was officially declared to be in recession and many other developed countries around the world followed the US – triggering a global economic crisis. It should be noted here that the 2008/2009 budget for the Cayman Islands Government would have been prepared from early 2008 and approved in April 2008.

Despite these global challenges, I took the position as Minister of Tourism at the time that we must remain optimistic and seek out and embrace the opportunities presented by the challenges. At that time American Airlines had suddenly reduced its service to the Caribbean via their Puerto Rican hub by 50 per cent. This presented new and unexpected opportunities for the Cayman Islands tourism industry during what was its most turbulent time since its birth over 40 years ago.

New gateways

The Department of Tourism, Cayman Airways and our private sector reached consensus that the two additional US Cayman Airways gateways should be Washington, DC, and Chicago. It was also agreed that we should open up opportunities in South America via Panama.

At the same time there was growing demand from many Caymanians with family connections in Honduras and from immigrant workers for Cayman Airways service between Grand Cayman and La Ceiba, Honduras.

The Cayman Airways Honduras route was approved by the PPM government and it was agreed to test that market to see if it was feasible.

It is important to note again that during the time that these decisions were taking place the world had just entered an economic crisis and governments around the world had to make decisions which required emergency funding to mitigate the impact of the crisis.

The Cayman Islands was no exception and it is against this background that the PPM government used section 11(5) of the PMFL to approve the $3M for Cayman Airways, which was subject to the subsequent approval of Finance Committee when the committee next met.

It is not surprising that the Financial Secretary would misrepresent the facts of this matter given his very obvious and overt political posturing in the Legislative Assembly recently, which is a clear breach of the Civil Service Code of Conduct, rules and regulations. The question is – what is the Governor proposing to do about the Financial Secretary’s conduct in this matter. The country needs to know.

The Financial Secretary is not entitled to practice politics from his desk. He is required by law to maintain neutrality and to present fair and accurate financials to the Cabinet, the Finance Committee, the Legislative Assembly and the country. Given his obvious propensity for politics and to go beyond his mandate as Financial Secretary, how are we to believe that his recent statements are anything other than political rhetoric from the UDP government designed to discredit the PPM Administration.

In order to effectively meet these challenges we need to know the actual financial position of the government as a matter of urgency. I submit, as I did a few weeks ago in an earlier statement that given the recent several inconsistent statements on this matter from the Financial Secretary’s office, the only way we will be able to determine the actual financial position is through an independent audit by one of the major accounting firms.

It is unacceptable to leave these uncertainties out there and for our Financial Secretary’s conduct to go unchecked. Our current Governor claims to be the caretaker of ‘good governance’ in this country. Let’s see how it responds.

Charles E. Clifford

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