Investigators get big bucks, first-class flights
A special report of the auditor general on the investigation into alleged misconduct and corruption in the Royal Cayman Islands Police Service has revealed significant deficiencies in the management of the probe.
The investigations, dubbed Operation Tempura and Operation Cealt, were headed by officers from the UK Metropolitan Police, started in September 2007 and has led to criminal trials which ended in the acquittal of a top police official and a former Cayman Islands lawmaker.
Government estimates put the entire cost of the investigation at CI$10 million or more, but specific breakdowns for those costs had not been revealed until Monday when Auditor General Dan Duguay released his office’s review of the investigation.
Mr. Duguay’s audit revealed that CI$5.7 million was spent on Operations Tempura and Cealt from September 2007 to January 2009. His office estimated a further $1.1 million was spent from February through June 2009, but did not specifically review costs for that period.
For the period of September 2007 through January 2009, the costs break down as follows:
*CI$1.3 million spent on contracted officers, UK Met police officers and other contract personnel;
*CI$541,619 spent on q consulting contract handled by a UK firm;
*CI$780,957 was spent on travel for police officers and their families, as well as others who assisted in the investigation;
*CI$443,235 was spent on housing for members of the police investigation team;
*CI$928,673 was paid out in legal expenses, including amounts needed to handle lawsuits filed over the police team’s actions;
*CI$197,320 was spend on office accommodation costs for the investigation team;
*CI$109,247 was spent on vehicle costs for officers;
*CI$1.275 million was paid to Grand Court Justice Alexander Henderson following his wrongful arrest in 2008 by representatives of the UK Met team;
Mr. Duguay did not opine in his audit whether any of that expenditure represented good value for money to the Cayman Islands government.
‘It’s almost impossible to say ‘here’s what…should have been paid.” Mr. Duguay said. ‘It’s a unique thing (referring to Operation Tempura.)’
However, the audit noted several areas of concern where government records and procedures related to the Tempura investigation were lacking.
For one, no bids were taken for the police investigating unit looking into Operation Tempura, and oversight management of the team seemed lacking or confused on certain occasions.
In addition, all payment approvals for the officers involved in the probe were made based on recommendations from Mr. Bridger, who was not a Cayman Islands government employee, but rather worked for the UK Met police force at first and then spent another year as a government consultant.
The auditor general’s report also pointed out that police officers were flown from the UK into Cayman in first-class or business-class airline seats to help maintain their cover as businessmen/investors. That cover was blown in late March 2008 when government officials made the police investigation public.
Nearly CI$600,000 has also been paid to a UK consulting company in separate instalments to provide law enforcement advice and expertise. That contract was never bid and did not come before government’s Central Tenders Committee for review.
Massive pay day
An audit has revealed that a former UK police investigator was paid more than CI$27,000 per month in salary and expenses on average over a 17-month period to lead the corruption probe.
‘That was the highest salary paid to any government employee at the time, including the governor,’ Mr. Duguay said
Mr. Duguay’s report revealed that former Senior Investigating Officer Martin Bridger was paid a total of CI $73,242 in salary between September 2007 and April 2008 as the lead detective in the probe known as Operation Tempura – about $9,155 per month.
However, Mr. Bridger’s remuneration tripled after he retired from the UK Metropolitan Police force and became a special constable with the RCIPS. The audit shows that Mr. Bridger then received a total salary of $247,000 between May 2008 and January 2009 – roughly $27,444 per month in salary alone.
Between June 2008 and January 2009, two other investigators with the UK Met team, Richard Coy and John Kemp, were paid respectively daily consultant salaries of CI$648 and CI$590 per day, plus expenses.
A third investigator, Steven Deberg, was paid a daily consultant salary of CI$648 plus expenses between June 2008 and September 2008.
According to Mr. Duguay, other officers on the investigating team remained in the employ of the UK Metropolitan Police force and secured their regular salary payments, which were then reimbursed through the Cayman Islands government.
‘While we have not evaluated whether or not value for money was obtained by paying the Senior Investigating Officer this amount of fees, we believe it is important information to be made public,’ Mr. Duguay wrote in his report.
The Cayman Islands government, via Portfolio of Internal and External Affairs senior manager Peter Gough, responded to Mr. Duguay’s statements by pointing out the audit only focuses on cost, not value.
‘No comparisons have been made with other police corruption investigations,’ Mr. Gough wrote in response to the audit. ‘If this had been done it would have shown that these types of police corruption investigations are expensive.’
Mr. Duguay pointed out in his report that responsibility for the oversight management of Operation Tempura was passed back and forth to several government entities within the civil service, starting with the RCIPS, then the governor’s office, then the Portfolio of the Civil Service, onto the Portfolio of Internal and External Affairs, and was finally returned to the RCIPS.
‘Assembling the costs associated with Operation Tempura was complicated by the fact that the project did not have a ‘home’ in government,’ Mr. Duguay wrote.
The services of the Met police officers were acquired without any competitive bidding process and auditors found that there was no formal agreement or contract regarding the deployment of Met resources to Cayman. Those services were obtained, the audit states, via an ‘e-mail arrangement with John Yates (the assistant commissioner of the UK Met police force).’
Some costs for the Met investigation were never obtained by the auditor’s office. Those included information technology resources provided by Cayman’s Computer Services department.
‘Their inability to provide me with this information concerns me,’ Mr. Duguay said. ‘I will be investigating this matter in future audits.’
Mr. Duguay also noted that the full costs of Operation Tempura and its off-shoot investigation, Operation Cealt, would likely not be known for at least another year.
The Operation Tempura audit identifies several instances where management of the investigation seemed uncertain. For example, Mr. Duguay said a one-page summary presented at a meeting of the Strategic Oversight Group overseeing the investigation in November 2007 served as the ‘terms of reference’ for the oversight group.
But two of the six attendees at that meeting disputed that the committee had adopted or even discussed those terms of reference. Mr. Duguay was unable to determine with certainty what responsibilities of the Strategic Oversight Group had.
‘As a result, we conclude that there was no clear oversight of financial management and ensuring value for money for the two investigations,’ Mr. Duguay wrote.
Further, payments requested for Operation Tempura were based on recommendations from Mr. Bridger, who was never an employee of the local government.
The audit also identified some instances where government might have opted to cut costs in certain areas.
‘For example, the need to fly police officers in more expensive airline seats and the frequency of their travel were not issues dealt with by any administrative officer in the government,’ Mr. Duguay’s report noted.
In fact, the auditor’s office indicated that police officers were, in the first months of the probe, taking first class or business class flights to ‘maintain their cover story.’ Met investigators operated in secret for their fist seven months in Cayman by posing as investors.
‘That was the story we were told,’ Mr. Duguay said during an interview Monday.
Mr. Gough noted that government was concerned about rising costs and did move to replace rental cars with unmarked RCIPS vehicles ‘when the operation became overt.’
Mr. Gough also stated that contracted officers began replacing UK Met officers at ‘much lower daily rates’ and that the travel allowance was eventually discontinued and other costs reduced.
‘The government does not accept the criticism that they were not concerned about the costs of this investigation or value for money,’ Mr. Gough wrote.
In September 2008, the Cayman Islands government agreed to contract a UK firm named BGP Training and Consultancy to help the Met team carry the investigation into its next stage, which eventually came to be called Operation Cealt.
The Met officers determined that BGP’s services were necessary because they needed certain expertise to conduct briefings with individuals coming forward to report alleged instances of police wrong-doing unrelated to the initial Tempura probe.
The contract, upon which CI$585,700 was spent through 31 January, was obtained without tender.
‘This is contrary to the financial regulations that require tenders for all contracted services greater than $50,000,’ Mr. Duguay wrote, adding that permission to use a sole-source bidder was granted in this case by the Central Tenders Committee chairman.
Mr. Duguay also noted that BGP and its principals were known to Mr. Bridger and Mr. Yates.
‘It was explained to us by several officials that this firm offers unique services that could not be obtained anywhere else,’ Mr. Duguay’s report states.
However, auditors did locate at least one other company that provides similar services as part of their review and were made aware that other companies do engage in this type of work.
Eventually, well more than CI$250,000 was spent on the BGP contract. That $250,000 is the limit government can spend on any contract without referring those agreements to the Central Tenders Committee to ensure a competitive bid process.
While certain projects don’t have to be bid publicly, Mr. Duguay said government is required to explain itself regarding why services aren’t available through another company and that value for money is being obtained.
That was not done in the case of the BGP contract, Mr. Duguay said.
‘The government says that because this is policing, this is different,’ Mr. Duguay said in an interview Monday.
Audit manager Martin Ruben, who was the main investigator for the audit office on this case, added: ‘It should have been documented as to how this was good value for money and they didn’t do that.’
Payments to BGP were initially authorised by Mr. Bridger and were approved for payment by Donovan Ebanks, who was then the Chief Officer for the Portfolio of Internal and External Affairs.
‘We understand from our discussions that both these individuals had knowledge that the expenditures were being made in excess of the contracted amount, and later, without a contract in place,’ Mr. Duguay wrote.
Mr. Gough’s response on the BGP project indicates the auditor’s office did not provide proper context regarding government’s decision to hire the firm.
‘To record (allegations made against police officers as part of Operation Cealt) in a secure and covert way, the government was advised by Metropolitan Police to engage BGP who had the necessary expertise and independence to carry out this sensitive work,’ Mr. Gough wrote.
‘If, as the report suggested that an open tendering process should have been undertaken, it could have undermined the whole operation.’
Mr. Gough pointed out the actual workload handled by the BGP firm was triple what had initially been envisioned, although the contract was not amended to reflect the extra work.
In general, Mr. Gough said it was important to take into account the unique nature of Operation Tempura and Operation Cealt.
‘This investigation was unique to the Cayman Islands and developed in such an unpredictable way that it was not possible to treat it like a normal project,’ he said.
A different opinion
Independent Cayman Islands MLA Ezzard Miller plans to bring a motion asking the government to consider filing a lawsuit against the UK and Governor Stuart Jack over Operation Tempura.
Mr. Miller attempted to make the motion at a Finance Committee meeting last week, asking members to consider bringing a lawsuit in London against the Governor, the UK Government, the Foreign and Commonwealth Office and the UK Metropolitan Police to recover costs and damages from the long-running investigations.
‘I believe the Finance Committee needs to consider some way of trying to recoup some of these expenses, and this is the only way I know,’ Mr. Miller said.
A detailed breakdown of the cost of the UK-led investigation was disclosed to Members of the Legislative Assembly on Thursday, prior to its public release on Monday.
Saying he expected the motion to generate much debate, Leader of Government Business McKeeva Bush convinced Mr. Miller that the motion would be better presented as a private member’s motion to the House.
Mr. Bush pointed out that any lawsuit would likely cost the Cayman Islands money.
‘It is a very serious matter that the member has raised, one that we all have to consider where this could go to. We can do it out of principle, or we can do it in the hope to win. If we lose, it is an extra burden of expense that we would have to worry about,’ Mr. Bush said.
Mr. Miller said he was bringing the motion as a matter of principle and would table it after the completion of LA’s Finance Committee.
At Friday’s meeting, legislators voted six votes to four to budget for $315,036 in expenses for special police investigations, including Operation Tempura. Last year’s budget allocated nearly $5 million to Operation Tempura and Operation Cealt.
Mr. Miller asked for a division, in which individual votes of members are counted, so that it could be recorded that he voted no. All members of the Opposition who were present at the meeting voted no, while UDP government members voted yes.
Prior to the vote, things got heated when Mr. Bush said the People’s Progressive Movement had supported Operation Tempura in its early days when the party headed the government and suggested it should have consulted with the people on the scope of the investigation.
This enraged Opposition member Arden McLean who said court documents on one of the court cases that resulted from the investigation indicated comments Mr. Bush made to former Police Commissioner Stuart Kernohan had led to the investigation in the first place, an assertion Mr. Bush denied.