As late as September 2013 – two years after it had already spent the majority of the funds – the Cayman Islands Health Services Authority was still trying to find a copy of the business contract that purported to authorize government to spend up to US$2.4 million on the proposed expansion of the CarePay patient swipe-card system, a Cayman Islands jury heard Monday.
A senior Ministry of Health official testified Monday that the ministry itself had “no contractual relationship” that would have allowed it to spend such sums to effect the “rollout” of the CarePay system to private sector healthcare providers in the Cayman Islands, even though an initial contract had been agreed with the government hospital to use the system.
Despite those statements, jurors in the trial of former Health Services Authority Board Chairman Canover Watson heard that installments of US$1.2 million and US$600,000 were paid to AIS Cayman Ltd. and its partner company, Health Adjudication Systems of St. Lucia, in the latter half of 2011. Those sums ostensibly went for the “rollout” of the system to private sector insurers. The third and final payment of US$600,000 was never made due to government financial difficulties at the time.
That proposed “rollout” or expansion never happened.
Prosecutors have alleged that AIS Cayman Ltd. was controlled by Watson and his business partner Jeffrey Webb through the use of “sham” directors.
Prosecutors have further alleged that some of the US$1.2 million from the initial payment for the CarePay “expansion” helped Webb pay off a US$240,000 loan on an Atlanta, Georgia-area home and also paid for Watson’s US$80,000 home entertainment system at another suburban Atlanta home he owned, down the street from Webb.
“I’m finding it very difficult to understand how this amount of money could be paid while there’s an outstanding issue of a contract and who has it,” Grand Court Justice Michael Mettyear interjected during testimony Monday.
Health Ministry Chief Officer Jennifer Ahearn testified that the ministry would have relied on the Health Services Authority to make sure those payments were required since the HSA held the contract with AIS and the St. Lucian company.
Justice Mettyear pointed out that HSA officials had earlier testified that they never had such a contract for the CarePay system expansion and had testified that ministry officials were in possession of it.
“Surely you must have known they said ‘we don’t have a contract, you have it?’” the judge asked Ms. Ahearn.
“With the benefit of hindsight, we probably should have confirmed [the contract] prior to releasing the funds to the HSA,” Ms. Ahearn said, adding that she believed at the time the ministry’s chief financial officer had reviewed a contract for the CarePay system’s expansion.
“Does it strike you as remarkable that without that [contract] issue being resolved, that sort of money is paid out?” the judge asked.
“I’m confident that the chief financial officer felt the issue had been resolved,” Ms. Ahearn said.
The issue regarding who authorized the additional US$2.4 million payment toward the expansion of the CarePay swipe-card system has become key in the trial of Watson and his former personal assistant Miriam Rodriguez. Watson is accused of using his position as chairman of the HSA board of directors between 2010 and 2013 to secure financial benefit for himself and Webb by directing the CarePay card contract to AIS Cayman Ltd. and its Jamaican partners.
Rodriguez and Watson are also accused of transferring various criminal proceeds from that ill-gotten contract to Webb and others.
The court heard Friday from former health ministry Deputy Chief Officer Stran Bodden that both Mr. Bodden and former Minister Mark Scotland approved the amount of CI$2 million [US$2.4 million] for the CarePay project expansion in the ministry’s budget for the government’s 2011/12 financial year. Watson’s attorney, Trevor Burke, QC, elicited that this was part of government’s normal annual budgeting process and did not necessarily require a new contract, as one had already been approved for the CarePay system in December 2010.
Justice Mettyear questioned Ms. Ahearn again after statements by Mr. Burke that the US$2.4 million payment had been approved in the budget.
“Does that mean [the money] can just be paid out without any tender, without any contract, without anybody scrutinizing the amount that’s been agreed?” the judge asked.
Ms. Ahearn responded that the government was bound by its procurement processes.
“Is the minister bound by that?” the judge asked.
“Yes, and by the Central Tender Committee procurement requirements, we have to go through a tender process,” she said.
Ms. Ahearn testified that had the Ministry of Health known at the time that the HSA had no specific contract for the CarePay expansion, it would not have authorized the release of funds for that purpose to the HSA.
Deputy Director of Public Prosecutions Patrick Moran said during the trial’s opening that ministry officials were fooled by Watson into believing the CarePay system expansion had been a part of the initial contract for the system that was signed by government in December 2010. He alleged that Watson did this by sending “doctored” copies of the original contract to the Ministry of Health in August 2011.
One of the alleged “doctored” versions of the contract was shown to Ms. Ahearn on Monday. She indicated she had seen it only a week ago when Crown prosecutors showed it to her prior to her testimony.
Mr. Burke has argued that claims Watson altered any contract involving the US$2.4 million CarePay system expansion were false, and has stated that “everyone,” including former Minister Scotland and Ms. Ahearn, fully supported the CarePay system.