In the early hours of the morning on Wednesday, May 27, news began to break in the Western Hemisphere that more than a dozen world football leaders and businessmen had been formally accused by U.S. authorities of participating in a massive corruption, money laundering and racketeering scheme, some of which allegedly involved Cayman’s financial sector.
Just before FIFA’s annual meeting in Zurich, Switzerland, seven FIFA officials, including Caymanian Jeffrey Webb — then the head of football in Cayman and the region — were arrested by Swiss police.
It took CIMA a full five days to issue a public response on the situation. On Monday, June 1, here’s what the regulator had to say:
“The Cayman Islands Monetary Authority (the Authority) is aware of the allegations which have been made by Swiss and U.S. federal authorities regarding a number of officials of the Fédération Internationale de Football Association (FIFA) and a bank regulated by the Authority.
“The Authority takes these matters very seriously and in respect of the allegations relating to one of our licensees, we will act appropriately, dispassionately and in accordance with our obligations under the law.
“However, at this stage it would be inappropriate and legally impermissible for us to make any further comment or statement on these matters.”
Here’s what CIMA did not say:
That CIMA Managing Director Scotland is married to Mark Scotland, a former government sports minister who in 2014 began working for Mr. Webb as youth development director for the Cayman Islands Football Association.
That Mr. Scotland was, in fact, in Zurich with Mr. Webb — as part of the Cayman delegation that also included former tourism minister Cline Glidden, now working for CONCACAF to set up a regional football dispute resolution court, as well as local attorney Bruce Blake, who on Monday night was “promoted” from CIFA first vice president to president, to replace Mr. Webb “on a provisional basis.”
The conflict of interest is clear: As long as Mrs. Scotland does not formally step aside, her agency CIMA cannot be expected to investigate “dispassionately” allegations and issues that are entangled with the organization her husband Mr. Scotland works for, or his direct business associates.
At this point, let us emphasize that there has been no indication whatsoever that Mr. Scotland personally has done anything wrong, or has had knowledge of any wrongdoing by others. He has not been arrested, indicted, charged or even accused of anything. Mr. Scotland, a relative newcomer to CIFA, is as far as anyone knows, as spotless as a newborn lamb.
However, in Mrs. Scotland’s line of work, appearances really do matter. And, as the journalism aphorism goes, the appearance of a conflict of interest is a conflict of interest.
As the regulator of Cayman’s financial services industry — one of the largest in the world — CIMA is by far the most important statutory authority in Cayman. The people running Cayman’s regulatory regime, especially Mrs. Scotland, who has been at the top of CIMA’s organizational chart since 2002, must, therefore, be “as close to God” as possible.
The recusal of Mrs. Scotland from FIFA matters isn’t even a close call. She should have made that decision herself, as soon as she heard of the U.S. indictments and arrests in Switzerland.
She must make that decision immediately.
If she does not, CIMA’s board of directors — chaired by the Cayman government’s former Chief Secretary George McCarthy — should convene immediately and make that recommendation, accordingly, to Cabinet, which ultimately has the power to hire, and fire, the managing director of CIMA.