The arrest of Premier McKeeva Bush is once again creating a problem of negative international perception for the Cayman Islands and its financial services industry, regardless of whether Mr. Bush is found guilty of an offence, financial services representatives said.
Mr. Bush was arrested on Tuesday morning on suspicion of theft through the use of government credit cards, as well as breach of trust, abuse of office and conflict of interest under the Anti Corruption Law 2008.
“The arrest of any person is not determinative of guilt. There are proper processes of law to be followed before an outcome is reached,” said Timothy Ridley, former chairman of the Cayman Islands Monetary Authority. “However, where the person arrested is the elected leader of government and the basis for the arrest is corruption and theft, that raises very significant negative credibility issues for the Islands and our government, and dramatically and adversely impacts how we are perceived internationally,” Mr. Ridley said. “It is therefore incumbent on our government to move speedily to repair the fallout immediately.”
The arrest was widely reported within hours by the international media including the BBC, The Wall Street Journal, Washington Post, ABC News, USAToday, Reuters and The Associated Press.
However, David Marchant, the publisher of Offshore Alert, noted the arrest may ultimately have a positive effect for Cayman’s reputation. “Strange though this might seem, I believe it will have a positive effect on Cayman’s reputation internationally because it demonstrates the jurisdiction is prepared to take action against individuals regardless of status.”
Mr. Marchant said the measure of any country or jurisdiction is not that scandals occur but what it does about them when they surface. “The worst thing any jurisdiction can do is bury its head in the sand. This has been the traditional approach in Cayman and the jurisdiction’s reputation overseas has suffered because of it. With one action today, that has changed for the better,” Mr. Marchant said.
The Cayman Islands Chamber of Commerce concurred, stating the arrest “demonstrates Cayman’s robust law enforcement and anti-corruption systems and the Islands’ intolerance with any alleged unethical behaviour or corruption even at the highest level of political office”.
Anthony Travers, senior partner at Travers Thorp Alberga, said it is too early to comment on “the substance of these matters”. But he noted “the timing” of the arrest “does not appear coincidental”, following the arrest of Michael Misick, the former premier of the Turks and Caicos Islands, on 7 December. “If these charges [against Premier Bush] are found by the court to be ill-founded then that aspect will need to be considered,” Mr. Travers said.
Mr. Misick was arrested last Friday at Santos Dumont Airport in Rio de Janeiro by Brazilian Federal Police on an international arrest warrant issued by Interpol.
According to the Turks and Caicos Special Investigation and Prosecution Team, Mr. Misick faces several “serious charges” relating to corruption and maladministration in Turks and Caicos, which led to the suspension of the democratic government in Turks by the United Kingdom in 2009.
Mr. Travers was sanguine about the effect Mr. Bush’s arrest will have on the financial services industry, saying its operation is unrelated to government affairs. “Under the Constitution, the financial services industry operates quite independently of the political arm of the legislature under the regulatory regime of the Cayman Islands Monetary Authority and is unaffected by any change in government leadership,” Mr. Travers said.
The Chamber of Commerce said this is confirmed by the robust performance of the industry and the economy as a whole, which provided quality services and products to the world’s financial markets, international visitors and investors despite the months-long ongoing investigation leading up to the arrest.
“We are wholly confident that that same level of integrity and service will continue as the case works its way through the judicial system. The Chamber of Commerce unequivocally supports all actions by law enforcement officials to root out any unethical behaviour that may damage the reputation of the Cayman Islands as a leading international financial centre and as a quality jurisdiction to conduct business and invest.”
Richard Coles, the chairman of Cayman Finance released a statement, saying the organisation representing the financial services industry in Cayman “is concerned at hearing of the arrest of the country’s premier”.
“As a jurisdiction that upholds good governance and transparency, we fully expect that due process will be followed,” Mr. Coles said, adding that as the investigation is ongoing, it would be inappropriate to comment further.