CarePay trial: 'No way' ministry could pay contract, says witness

Eventually, US$1.8M spent for CarePay “rollout” that didn’t happen

CarePay trial:

A government financial manager refused to authorize a US$1.2 million payment for the proposed expansion of the CarePay patient swipe-card contract, even though his superiors at the Ministry of Health had already approved the payment, jurors in the criminal trial of Canover Watson heard Tuesday. 

Carrol Cooper, the former chief financial officer of the health ministry, testified that he could find no evidence that a contract to support such a payment existed. Mr. Cooper further testified that Watson, then chairman of the Health Services Authority board of directors, contacted him personally a number of times in August 2011 asking about the status of the US$1.2 million payment. 

“What I remember from the telephone [calls], there was a persistent request to get the payment to AIS and I firmly declined,” Mr. Cooper said. “There was no way the ministry was in the position to make payment to AIS [Cayman Ltd.]. 

“It just wouldn’t be logical,” Mr. Cooper said. “All of the arrangements were done by the Health Services Authority. The whole project was done by the HSA. The ministry could not make those payments to AIS.” 

Testimony on Monday from health ministry Chief Officer Jennifer Ahearn indicated that the only contract for the CarePay project existed with the HSA, not the ministry itself, and that the government arranged to transmit those funds to the health authority during its 2011/12 budget year. However, both Ms. Ahearn and Mr. Cooper testified that once those funds had been “released” by the ministry, it was up to the HSA to perform its own due diligence on the expenditure. Yet as late as 2013, health authority managers testified, they were still trying to find the contract that authorized the US$2.4 million payment for the expansion of the CarePay system to private sector insurers and healthcare providers. The system did have a contract with the HSA that had been signed in December 2010, but whether anyone approved the expansion of the system to the private sector has been a major question in the trial. 

Prosecutors have alleged that Watson “doctored” copies of the initial contract signed in December 2010, fooling health ministry officials into believing there was some contractual relationship that required payments for the CarePay expansion. Mr. Cooper testified Tuesday that was indeed his initial belief when he viewed documentation for the project in 2011. 

Eventually, US$1.8 million for the CarePay system expansion was paid by government to a company named AIS Cayman Ltd. and its parent company, Health Adjudication Systems of St. Lucia. The Crown has alleged that Watson and his business partner Jeffrey Webb personally benefited from hundreds of thousands of dollars from the deal Watson directed from his position as HSA chairman. 

Watson’s attorney, Trevor Burke, QC, argued during testimony Monday and Tuesday that a simple misunderstanding led to Mr. Cooper’s refusal to approve payments for the CarePay expansion. Mr. Burke suggested that approval was initially sought from the Ministry of Health instead of the HSA, and that if those invoices had gone to the health authority initially, government financial managers would not have raised any issues about them. 

Mr. Burke also suggested that Watson, as HSA chairman, was keen to avoid perceived conflicts of interest in the CarePay expansion deal that might arise from HSA providing certain funds to private sector healthcare providers – essentially its competitors – as an incentive to use the CarePay card system. 

Mr. Cooper said he did not recall Watson mentioning any issues regarding conflicts of interest during phone calls in August 2011, when he was seeking to confirm payments of US$1.2 million. An additional US$600,000 was paid into the CarePay expansion effort before the project’s funding was pulled in 2012 due to government budget problems. 

The expansion of the CarePay system to Cayman Islands private sector providers never occurred. 

Mr. Burke also raised the issue, indirectly during the trial, as to where former Health Minister Mark Scotland fit into all the discussions that were occurring. 

Earlier on Tuesday, Ms. Ahearn was questioned by Deputy Director of Public Prosecutions Patrick Moran. Mr. Moran sought to determine whether the ministry chief officer would have agreed to authorize funding for the expanded CarePay project if she had known during 2011 that the ministry had no contract in place for it. 

Mr. Moran also alleged that communications from Watson to Minister Scotland and others indicated that the initial December 2010 contract for the CarePay system had included expansion to the private sector. 

Mr. Burke objected to the question, stating that Ms. Ahearn as chief officer of the ministry, could not answer on behalf of her boss, former Minister Scotland. 

“This woman can’t answer it; only the minister can answer it,” Mr. Burke said. 

“It’s the very question that’s in the indictment [against Watson],” Grand Court Justice Michael Mettyear interjected. 

Ms. Ahearn eventually was allowed to answer. She said the ministry would not have made the payment to AIS Cayman “on that basis.” 

“[CarePay] was a project that everybody supported … but not to the detriment of following due process,” she said. “[There was] a representation that these processes had been followed as part of the initial tendering.” 

Mr. Moran further questioned Ms. Ahearn regarding what she would have done “if she had known at the time the ministry had been provided with a false contract” for the CarePay project expansion. 

Mr. Burke again objected. “She’s never seen this document,” he said. “How can she comment on what the minister thought?” 

Ms. Ahearn was allowed to answer and said she would not have supported the request for payment to AIS for the CarePay contract if she knew the documents supporting it were “fraudulent or forged.” 

“I certainly never imagined that somebody who is the chair of the HSA and who is bound by that law … would be acting contrary to the provisions of the law governing the board of directors explicitly requiring them to disclose a conflict of interest,” Ms. Ahearn said. 

Mr. Burke has stated a number of times during the trial that the US$2.4 million provided for the proposed CarePay expansion had the full support of Minister Scotland and his former United Democratic Party government, was approved as part of government’s 2011/12 budget and had been signed off by top officials in the ministry and by the minister himself. 

Canover Watson

Canover Watson