“I had to decide whether to choose substance or to choose process,” Mr. Bush said in a statement to the country that was broadcast Wednesday evening, an advance copy of which was provided to the Caymanian Compass. “With the state of the economy as it is and the government still needing every dollar that it can save…I chose substance over process.”
According to both representatives of the Central Tenders Committee and opposition party lawmakers, the eventual bid winner for the government financing – Cohen and Company Securities LLC – was not the firm that was recommended by the committee.
Opposition lawmaker Alden McLaughlin went on record earlier in the week expressing his “gravest concern” that the legally established bidding process for the loan was not followed.
In his statement Wednesday night, Mr. Bush went into some detail as to why six initial bids for the borrowing were all rejected and why Cohen and Company was selected by Cabinet the second time around, over the recommendations of the tenders committee.
Premier Bush said the first round of bidders had not presented any proposals that would allow government to consolidate its existing debt, as has been required by the UK’s Foreign and Commonwealth Office. Second, Mr. Bush said bidders were also being asked to provide proposals for the continued financing of Cayman Airways and other statutory authorities.
“I wanted the government to use its collective bargaining power to obtain the best terms possible,” Mr. Bush said. “The concept of negotiating for a better deal does not exist within the traditional approach of the Central Tenders Committee.”
The second request for proposals on the financing was issued and Premier Bush stated that lower financing offers did indeed come in as a result of that. He did not discuss the interest rate on the US$185 million loan because terms had not been finalised at press time.
However, this second round was still considered “not as competitive” and no one included financing proposals for Cayman Airways, according to the premier.
“While in New York attending the United Nations, I asked Cohen and Company if they could consider funding for Cayman Airways and also provide a more competitive interest rate. I told them to contact the Treasury.”
Copies of Cohen and Company’s amended proposal were received by government in mid-October. According to Central Tenders Committee representatives, no other bidders for the financing were allowed this opportunity to change their proposals.
“Cohen’s proposal allows government to benefit from the current low interest rates while guaranteeing that the interest rate will never go above the agreed fixed rate,” the premier said. “This saves the Cayman Islands government tens of millions of dollars. It is not possible to give an exact figure until the long-term financing facility is finalised.”
Premier Bush said he did not take the overriding of the Central Tenders Committee selection lightly. However, he said he felt “duty bound” to get the best financing terms possible.
“I sincerely believe that the best interests of the Cayman Islands, in this instance, are served by overriding the selection of the Central Tenders Committee, which will save this country millions of dollars,” he said.
Mr. Bush indicated that he intended to embark upon a revamp of the current tendering process and that he had asked the auditor general’s assistance in making recommendations to improve that process.
Representatives of the auditor’s office said they were unaware as of Wednesday that any such request had been made. However, Audit Manager Martin Ruben confirmed that the auditor’s office was conducting a review of the recently ended bid process for the Cayman Islands closed-circuit television public surveillance system.
The award for the CCTV system was granted to The Security Centre, a local security firm, on Wednesday.
Mr. Bush also generally addressed, in the copy of his broadcast statement given to the Compass, certain allegations that had been reported in other news media outlets regarding the award of the US$185 million financing deal.
Those accusations generally concerned certain individuals that were allegedly benefiting from the loan transaction and who were close supporters of Mr. Bush’s United Democratic Party. The Caymanian Compass has received similar statements but decided against publishing them as they involved potentially criminal allegations against people who have not been charged with any crimes.
“I can assure you that this entire transaction has been above board,” Mr. Bush said in response to the other news reports. “No member of the United Democratic Party has any financial interest in Cohen and Company whatsoever.”