Auditor General calls for stronger anti-corruption measures

The Office of the Auditor General released a report on public corruption Friday, calling for government to enact a long-dormant law designed to prevent conflicts of interests in government.

Among other items, the report also calls for government to fully implement its anti-fraud policy throughout all public entities, and expresses concerns that the Anti-Corruption Commission may be strained for resources.

The report’s primary recommendation is for government to enact the Standards in Public Life Law, which requires public disclosures by elected politicians, senior government workers and government-appointed board members.

The original Standards in Public Life Law was passed in early 2014, but the legislation was never put into effect, largely because of complaints from appointed members of boards and commissions serving at the request of politicians. The disclosures mandated by the initial law, board members argued, were far too broad – extending in some cases to distant relations and employees of the board members.

Under the 2016 amended legislation, board members do not have to declare memberships in any professional group, charity or special interest organization. Interest disclosure requirements for appointed board members extend only to their immediate family – spouses and dependents – and are to be declared only when the board member holds property or manages anything on behalf of that person or if that person manages something for the board member.

But those rules have not been enacted, either.

Last January, the Commission for Standards in Public Life met with Premier Alden McLaughlin “to express the commission’s eagerness in securing a commencement date for the law,” and to move forward with the drafting of legal regulations that will govern the operation of that legislation, according to a report released last year. At the time of the commission’s report, a Cabinet paper seeking approval for the drafting of regulations had not been issued.

Little movement has taken place since then, according to the Auditor General’s report released Friday.

“Until this law is in force, if conflicts of interest arise they might not be identified or dealt with appropriately, creating opportunities for corruption,” the report states, adding, “The fact that the law is not yet in force may also affect public trust and lead to lack of integrity, transparency, and accountability.”

The Auditor General’s report also called for government to fully implement its anti-fraud policy, which was issued in May 2017. The policy provides a framework for managing fraud risk, carrying out investigations, and maintaining internal controls to prevent, detect and treat fraud and abuse.

“However, it is not clear if the fraud risk-management framework has been embedded across the Cayman Islands Government,” the report states. “For example, the Ministry of Commerce Planning and Infrastructure and the Department of Planning did not have evidence that such a framework was in place.”

The report also found that the anti-fraud policy does not apply to statutory authorities and government companies. The Office of the Auditor General therefore recommended that those entities have fit-for-purpose fraud and corruption policies, or clearly state why one is not necessary.

Additionally, civil servants have not been trained to support government’s anti-fraud policy, according to the report. The training consists of four self-study modules covering an overview of the anti-fraud policy, anti-fraud code of business ethics, anti-fraud whistleblower policy, and the policy on offering or receiving hospitality, entertainment or gifts.

At the end of September 2018, only 19 percent of the 3,950 civil servants had participated in the training – and even fewer completed all four modules, the report states.

Along with spotting some of the lacunas in Cayman’s anti-corruption framework, the Auditor General’s report also details the caseload handled by the Anti-Corruption Commission over the years.

According to the report, the commission is currently investigating 14 cases, some of which have been ongoing for a number of years.

“Many of the corruption investigations are complex and some can take a long time to complete,” the report states. “It is not clear whether the [Anti-Corruption Commission] has the resources it needs to effectively investigate the volume of existing corruption cases.”

Public corruption cases that resulted in convictions include that of Canover Watson, who was sentenced to seven years imprisonment in February 2016 on charges of conspiracy to defraud the government in the CarePay scheme, as well as for three corruption-related charges in the fraud, which prosecutors said skimmed a total of nearly $6 million from public coffers over three years.

Cases that resulted in arrests and are still in court include one where 12 people were charged with bribery of a public office, fraud on government and breach of trust relating to immigration. That case involves six Department of Immigration officials and six members of the public who allegedly participated in a scheme to cheat the Immigration Department’s English language test for work permit holders.

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