CIMA chief Scotland must recuse herself from FIFA matters

 Cindy Scotland, the managing director of the Cayman Islands Monetary Authority, must recuse herself from all matters that come before our country’s financial regulator involving the unfolding FIFA scandal.

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.

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NO COMMENTS

  1. Does this new editorial policy mean that from now on the Compass will recuse itself from coverage of stories that involve friends and business partners? Will the publication at least inform the public when those relationships apply to stories and editorials?

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  2. Mrs Cindy Scotland has done nothing wrong. So why should she resign, or why should anyone have to make recommendations that she resigns?
    Her husband Mr Mark Scotland has done nothing wrong, clearly stated so why even call his name.
    Now please do not build a political mountain here out of a mole hill.

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  3. Since Mark is going to be investigated this is only an obvious course of action. It shouldn’t take the Compass to point this out. If it does, then we really need to question if CIMA has the capacity to regulate the industry.

    This situation is only going to get worse and Cayman needs to lead the way. The banks of the USA, UK, Switzerland, HK and others were all involved. So a lot of people were fooled. This is nothing to be ashamed of, but we need to act swiftly.

    The Prime Minister of the UK and the White House were able to comment on this scandal in 48 hours. It took Cayman 1 week….we need to stop looking guilty.

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  4. in the interest of fairness and 100% accuracy, the comment from the White House came from Press Secretary Josh Earnest in response to questions from reporters and was made yesterday, Wednesday, the same day as the Premier’s was published.

    I tried to get the link inserted here, but you can look it up. The story, which was also actually carried in some international news briefs in yesterday’s Compass, if I recall correctly, made it clear that that was the first comment from the White House and none so far by the President himself.

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  5. To 9:05:13, I would suggest that we take another look at paragraph 10. which begins "At this point" Maybe some bright shining light can explain what does that paragraph mean.

    10:13:44 Arthur Rank… Yes I will argue; and unless I am reading the proof where that Mr Mark Scotland is being investigated, then yes there is room for argument.
    And yes if I read that, then of course I would expect Cindy to step aside. I believe it may be called conflict of interest.

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  6. I have heard no suggestion that Mark is being investigated. In any event, I don’t think that particular investigation would rest with CIMA which is really responsible for banking impropriety. If there is some suggestion that the head of CIMA might intervene in the banking probes being conducted by CIMA, I could be wrong, but I hardly think that workplace policies would allow improper interventions by her. I am willing to bet that workplace policies already require CIMA analysts and lawyers to work independently and in accordance with law. For CIMA to conduct itself otherwise would be a serious departure from the professional standards they have striven to establish and there have been no suggestions ever to the contrary. So I am sure the policies are already in place that would already remove her from any potential conflict of interests.
    By the way, I endorse the comment below by Hastings — I think that a good step towards Compass transparency might be to disclose who owns the company.

    ***Editor’s Note: http://compasscayman.com/caycompass/2013/06/14/Pinnacle-Media-acquires-Cayman-Free-Press/***

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  7. Twyla,
    I do not understand your 6:01:42 comment.

    Recuse means to excuse oneself from something because of a potential conflict of interest.

    Resign means to voluntarily leave a job or office.

    The word resign does not appear in this editorial. All that is being suggested is that she temporarily steps back (recuses herself) from something that involves or might involve her husband. There is no suggestion here that she quits CIMA altogether, which is what you are implying.

    I would say that the only person on this page making a mountain out of a mole hill is you.

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  8. Well Twyla, I think we might agree for once, if, thats if Mark is being investigated she must take no part and make no official comment. Glad we could agree on something.

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  9. Let’s cut to the chase. Cayman has to deal with two separate issues. First, the FIFA/CONCAF corruption scandal allegedly involving Mr Webb. Cayman, as a country, can hardly be held responsible for the acts of an individual who may have used his position in FIFA for the purpose of personal financial gain – even if funds received were perhaps Proceeds of Criminal Conduct. Cayman had no oversight of what he did on a day to day basis. If anyone in Cayman was aware of possibly corrupt practices, then by law they were bound to report them to the appropriate Cayman authority – failure to do so would of itself constitute a criminal offence. But we are still talking about individuals over whom the Government had no control. It would seem that Government is answerable to nobody on the underlying issue of corruption.
    The second issue is far more important. The extent to which licensed and regulated entities in Cayman, together with individuals, facilitated the transmission and/or laundering of funds representing Proceeds of Criminal Conduct. Only CIMA can determine if the entities involved had inadequate policies and procedures relating to KYC, Due Diligence, and satisfying itself as the origin of funds passing through customer accounts. That determination should be made as soon as possible, as the global perception that our regulatory and compliance culture is still flawed will result in continued reputational damage.

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  10. RE: comments

    Communication is really about taking someone else’s perspective, understanding it, and responding.

    Comments from those with an attitude of superiority, disdain and hateful remarks for those who may lack knowledge or don’t have the bigger picture view are actually damaging.

    Developing a healthy respect for people whose opinions differ from our own is more productive.

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  11. The FBI seem to have an awful lot of information on the funds deposited into the Fidelity account

    Mr. Cowans…the link to the headline to which your comment is made is disabled but this headline will do as well.

    You are mistaken in your assumption that any information used by the FBI to conduct this investigation comes from sources in Cayman.

    The majority of this information is garnered from Chuck Blazer, the American citizen who was the general secretary of CONCACAF for many years.

    Blazer was arrested and indicted in 2013 and has pled guilty to a number of corruption and bribery charges and agreed to turn informant for the FBI at that time.

    The Warner brothers found themselves in a similar situation, with identical results.

    Their father, Austin ”Jack” Warner, the man whose job Jeffrey Webb took as president of CONCACAF has recently agreed to co-operate fully with the FBI and has already turned over an ”avalanche” of documents relating to FIFA and CONCACAF financial transactions and other business details.

    If these allegations are proven to be true, you can look for a request from the FBI for a local investigation to conducted by the Anti-Corruption of the RCIPS.

    A request to which the CI Govt. will be forced to respond.

    Any investigation from within the Cayman Islands has yet to begin.

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  12. This is not even a question. Jeff Webb has been charged with serious financial criminal offenses by the US Dept. of Justice. He was the President of CIFA at the time of his arrest. Mark Scotland was in CIFA’s employ and in Mr. Webb’s company at the time of Webb’s arrest. Cindy Scotland, Mark Scotland’s wife, is the Managing Director of the regulatory body of Cayman’s financial industry. While it is not alleged that either Mr. or Mrs. Scotland is involved with US DOJs investigation, their association with Mr. Webb raises questions and eyebrows. We are talking about the MD of a nation’s financial regulator here. There cannot be any questions regarding her involvement in any scandal. Period. The mere mention causes serious tremors in the industry and shakes investor confidence. At the very least, Mrs. Scotland should step aside until US DOJ finishes its prosecution of Mr. Webb.

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