Everyone from appointed board members to directors of government departments will be required to register their income and financial interests in a public document once a law passed Friday by the Cayman Islands Legislative Assembly takes effect.
The Standards in Public Life Law, 2013, requires “a person in public life,” within 90 days of assuming the functions of office, to make a declaration to the Commission for Standards in Public Life of income, assets and liabilities acquired during the previous year.
For a candidate seeking election to the Legislative Assembly, that declaration should be made before the person files nomination papers. Thereafter, no later than June 30 of each year, the declaration must be updated.
Those required to register include all Legislative Assembly members (including the deputy governor and attorney general), the Speaker of the House, civil service chief officers and deputy chief officers, chief financial officers and their deputies, heads of departments, section or unit chiefs and their deputies, as well as top officials within statutory authorities or government-owned companies and appointed board members who oversee those authorities. Certain reporting requirements are different and less stringent for appointed board members.
The law does not apply to members of the judiciary.
Declarations should include: shareholdings and directorships in any company or corporate body; any contract made with a public entity; any company, partnership or association in which money is invested; any trust; any beneficial interest held in land; any investment fund in which an interest is held, any political, trade, professional, fraternal or charitable association or organization to which there is a connection; and sources of income other than salary or other emoluments of office.
The income, assets and liabilities of a person in public life include the income, assets and liabilities acquired, held or incurred by any other person as his agent or on his behalf. The bill would require the Commission for Standards in Public Life to keep the public declarations for at least five years.
It was clarified during proceedings in Legislative Assembly that certain loans held with private institutions must be reported as well, excluding any loan held by financial institutions regulated by the Cayman Islands Monetary Authority.
The law will require mandatory disclosure of a conflict of interest with respect to “any matter that comes up for discussion” as soon as the matter appears on an agenda for any public meeting. The bill requires the individual with the conflict to “leave the place in which deliberations are taking place” and orders them not to participate directly or indirectly in any deliberations touching on the matter.
The enforcement body for all these reporting requirements will be the constitutionally created Commission for Standards in Public Life. The commission has powers of investigation, including the ability to summon witnesses and to require the production of information from individuals. Any criminal violations of the public standards bill would have to be passed on to the Royal Cayman Islands Police Service.
The legislation makes it a criminal offense, punishable by two years imprisonment and a $10,000 fine, if any public official fails to furnish the commission with a declaration of interests, knowingly makes a false declaration relative to those interests, or who fails to attend an enquiry conducted about those interests. There are additional fines of up to $100 per day for anyone who fails to submit declarations by the annual deadline.
Although pleased to see a law giving “teeth” to public standards requirements pass the assembly – about four years after the commission was created – outgoing public standards commission chair Karin Thompson said in January that the chances of the independent body having significant investigative resources in the current financial climate were “bleak.”
Premier Alden McLaughlin said that all “persons in public life” would have to file relevant declarations to the commission within 30 days of June 30, 2014.
“This is a serious piece of legislation,” Mr. McLaughlin said. “We must ensure that everyone … is satisfied that all the matters that are dealt with, all the decisions that are taken … that conflicts of interest do not influence or color the decisions that are taken.
“[The law] will have far-reaching consequences, but consequences that will be nothing but positive for the reputation of these islands.”
Reporting requirements for appointed board members are different and “less onerous,” according to the premier, than those for civil servants and elected politicians. Board members are only required to disclose interests where there could be a conflict or a perceived conflict.
“For instance, if you are a member of the Central Planning Authority that is considering for approval plans with respect to a particular development, and you are in some way involved in that development because you were the architect … or they you are bidding on the job, you need to make that disclosure,” Mr. McLaughlin said, adding that the person would then have to remove himself from deliberations on any such matters.
East End MLA Arden McLean voiced concerns that these required disclosures on such a body as the planning board could lead to delays in project approvals if several of board members had to recuse themselves from certain decisions and, therefore, a quorum could not be maintained for a vote. Mr. McLaughlin replied that if that were the case, the authority probably needed some new board members.
Mr. McLean also said he did not want the legislation to lead to a situation where certain necessary expertise on various boards was lost because of perceived conflicts. “There is a balance we have to maintain,” he said.
Attorney General Sam Bulgin said, in almost every case, a board member should know if there is a conflict of interest with a company he or she owns and a bid on a particular government job. He said it has previously been a matter of properly educating board members on their responsibilities.
“We’ve seen a number of cases … where people think they make a declaration [and] can then stay for the meeting,” Mr. Bulgin said. “It is impossible to legislate integrity. It takes a culture. It’s going to be a challenge to find the right people to put on boards.”
North Side MLA Ezzard Miller raised questions about some of the declaration requirements for those considered to be in public life and whether they might allow certain individuals to “fall through the cracks.”
For instance, the law makes reference to disclosures required for any political, trade, professional, fraternal or charitable organization, leaving the terms “fraternal or charitable” undefined.
“That is extremely wide,” Mr. Miller said, asking whether specific organizations must be registered with the Friendly Societies Law to be considered under the Standards in Public Life Law.
“It is intended to be wide,” Mr. McLaughlin said.
The government later agreed to change the wording of the section to include organizations, whether registered or unregistered, in the disclosure requirements.
Anyone can allege that a person in public life is in breach of requirements of the public standards legislation by reporting the violation to the Commission for Standards in Public Life in writing.
Opposition Leader McKeeva Bush questioned what would occur if a person made malicious accusations against someone in public life.
Mr. McLaughlin said the law is worded so as to protect anyone making an allegation “in good faith,” even if their claim ends up being mistaken.
Mr. Bulgin said unfounded or bad faith allegations would be punished under the same law.