Two players in the Matrix scrap metal deal had very different approaches when it came to testifying before the Public Accounts Committee this week – one questioned what he was doing there and the other desperately wanted to speak but couldn’t.
Arden McLean who was Minister for Works when the deal was signed in 2007 told the committee that he was at a loss to understand why he had been called to give evidence.
As Mr. McLean was giving evidence, the Canadian owner of the company, Bruce Young, was sitting by a telephone in New Brunswick waiting for a call from the committee that never came because members decided they had heard enough information.
The Public Accounts Committee is scrutinising an Auditor General’s report on the Matrix contract which was signed in March 2007 and declared in default six months later.
Mr. McLean distanced himself from the decision to engage Matrix International to remove scrap metal from the George Town dump, insisting that as minister, he was responsible for policy, and not for individual tenders.
‘It was agreed that the [Auditor General’s] review would be limited to the process leading up to the awarding of the contract to Matrix International Inc., the tender preparation process… Ministers don’t get involved in that,’ he said.
Mr. McLean said the People’s Progressive Movement government’s policy on the scrap metal was to remove it from the island and sell it for the highest price possible.
Pressed by committee members Ellio Solomon and Cline Glidden of the United Democratic Party on whether he had seen an email from the Acting Solicitor General in December 2006 that raised concerns about the financial viability of the company, Mr. McLean admitted he may have been made aware of it, but had not personally received it.
The former minister insisted that the decision on the tender fell to the Central Tendering Committee, and not the ministry, for ‘fundamental reasons… to avoid the influence of political involvement’.
The Matrix contract stipulated that the government would be paid $1.25 million for the scrap. In the end, the company removed about 6,500 tons from the dump and paid the government $310,000. The committee heard that local sub-contractors hired by the company are still owed between $300,000 and $400,000.
The Auditor General’s report stated that the company had been required to meet three criteria prior to the signing of the contract – to confirm a line of credit; demonstrate it could get insurance coverage; and supply recent audited company accounts. The Auditor General’s report stated that none of these criteria had been met when the contract was signed.
Mr. Glidden said that the questionable financial viability of the company, which he said the minister was aware of, had ultimately led to the failure of the deal and was detrimental to the Cayman Islands
The committee had scheduled a phone call with Mr. Young, but decided at the last minute not to put the call through, after members decided that they had gleaned enough evidence from Mr. McLean and earlier witnesses.
Committee chairman Ezzard Miller told members that taking evidence from Mr. Young would entail moving from the main legislative chamber to another room and setting up separate recording equipment. When Mr. McLean’s testimony, scheduled to last 30 minutes, continued for an hour, Mr. Miller asked if members still wanted to hear from Mr. Young and was told they did not.
Mr. Young, speaking on Tuesday afternoon to the Caymanian Compass, said he was disappointed and angry that he had not been given a chance to put his side of the story to the committee.
‘Afraid of the truth’
‘They contacted me a week and a half ago and asked me to testify, and then I got a call from the Serjeant-at-Arms this morning saying they don’t need to speak with me.
‘I think they’re afraid of the truth,’ Mr. Young said.
He said that a three-month delay in signing the contract – a draft contract was drawn up in December 2006 and the final contract was signed in March 2007 – meant that the market price for scrap metal had dropped by about 25 per cent in the intervening months.
‘We were handed the contract at the end of November, and invited to come to the island to sign the contract on 6 December ,’ he said. By the time the contract was signed, his Canadian partner had pulled out and he had to find a Caymanian partner, William Bodden.
During those three months, Mr. Young said he had regular meetings with Mr. McLean, and also the then Leader of Government Business Kurt Tibbetts and officials from the Department of Environmental Health.
Mr. Young clarified that his company BV Young was not owned jointly by him and his brother Vincent as has been reported, but by him and his wife, Vicki.
He said he was upset that he was being seen as the ‘bad guy’ in the deal, and insisted he had gone personally bankrupt because of it, and his investors in Canada were owed US$450,000.
Mr. Young said he had wanted the opportunity to explain to the committee, and the Caymanian public, all the obstacles that had been placed before him and his company throughout his time in Cayman.
These included, he said, docking delays at the port that cost the company up to $20,000 a day; the unexpected levying of export fees of up to $450 per ton; a faulty baler the government had purchased; the theft of equipment after the company was locked out of the dump; and the final nail in the coffin – the suing of Matrix by a US shipping company that seized two shipments of scrap as payment for an outstanding bill.
Mr. Young says he still wants to work with the government to remove the scrap and that this could make money for him, the local sub-contractors and the government if the island is willing to cooperate. ‘I know all the players, where to sell the stuff, who to sell it to and how to transport it. We just need to work together again,’ he said.
He added: ‘If I did so much wrong, why is it that the government is using the people I trained and the methods I showed them to still separate and bale the scrap materials?’, Mr. Young said.
The Public Accounts Committee will now write up and submit its report to the Legislative Assembly.