Cayman Islands Premier
McKeeva Bush said in a statement released to the Caymanian Compass Tuesday that
he had not acted illegally in securing loan financing for the government.
“In response to Mr.
Tibbetts’ allegation I would refer him to Section 34 of the Public Management
and Finance Law which states:
(1)
Subject to subsection
(3) the Minister of Finance may, on behalf of the Governor in
Cabinet-
(a)
borrow
money;
(b)
make a
loan;
(c)
give a guarantee;
and
(d)
enter into any
financial transaction or financial obligation for the purpose of avoiding
liabilities, executive revenue or executive expenses, that may be caused by
currency or interest rate fluctuations, or by credit, liquidity or funding
risks, on
such terms and conditions as the Governor in Cabinet may
determine.
“This
is exactly what I have done in Cabinet with a Cabinet Paper. There is precedent
for this.
“Mr.
Tibbetts in his wild statements shows that they do not know what they are
talking about.
“I’ve
asked everyone, because of the nature of financing in bonds to wait until such
time as the financing has been completed. What Mr. Tibbetts, the PPM and the
Rooster FM talk show are doing is putting the chance of a better interest rate
in jeopardy.
“It is
this fundamental lack of understanding of basic finance that got these
Islands into a financial mess under Mr.
Tibbetts and his PPM administration.”
Please see more on this
story in upcoming editions of the Caymanian Compass….
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Regrettably, the Premier fails to explain "subject of subsection 3" which, I believe states:
(3) The Minister of Finance shall not:
a) Borrow any money on behalf of the Governor in Cabinet unless the borrowing –
i) Has been authorised by an appropriation,
ii) Is consistent with the statement of borrowings included in the annual plan and estimates or supplementary annual plan and estimates for that finncial year, AND (My emphasis)
iii) Has been approved by the Foreign and Commonwealth Office of the United Kingdom where any of the principles of responsible financial management specified in S14(3)(c), (d) or (e) are in breach.
Perhaps, as we believe, that the rate of interest is still to be decided, S14(3)(c) is in breach.
Therefore, perhaps the Minister of Finance will confirm that the amount borrowed is consistent with the statement of borrowings for the current financial year AND he has the permission of the FCO to borrow this money.
Curiouser and curioser…………
Where is McKeeva living? Does he really think people are that ignorant?
From what I read, and yes I just read the PMFL, I read.
(2) Subject to section 33, no person other than the Financial Secretary may enter into any transaction of a kind referred to in subsection (1).
Subsection 33:
33. (1) Where a power or duty is expressed or imposed on the Financial Secretary under this Law, the Financial Secretary may authorise a member of the Governor in Cabinet or a public officer, by signed instrument in writing, to
exercise or perform on his behalf all or part of that power or duty.
So this begs the question did the Finance Secretary enter into this agreement?
In addition;
(3) The Financial Secretary shall not –
(a) borrow money on behalf of the Governor in Cabinet, unless the borrowing –
(i) has been authorised by an appropriation;
(ii) is consistent with the statement of borrowings included in the annual plan and estimates or supplementary annual plan and estimates for that financial year; and
(iii) has been approved by the Foreign and Commonwealth Office of the United Kingdom, where any of the principles of responsible financial management specified in section 14(3)(c), (d) or (e) are in breach;
The Auditor General better take a role in investigating this as well.
(e) if he is authorised in writing to do so by the Governor in the PUBLIC INTEREST (my emphasis), conduct investigations into the financial management or affairs of persons, companies and bodies other than those referred to in paragraphs (a) to (d).
Gio, please be very careful that you get your facts right …..
The Financial Secretary is now called the Minister of Finance (revision of the 2005 PMFL in 2009 is in the Gazette early 2010) and I think you will find that the current Minister of Finance is none other than ….
Hon McKeeva Bush OBE, JP!
BTW: The section 14(3)(c) I referred to earlier, states:
"Borrowing should not exceed and amount for which the sum of interest, other debt servicing expenses and principle repayments for a financial year are more than ten per cent of core Government revenue (calculated using generally accepted accounting practice) for the financial year, where, for the purposes of this principle, borrowing is defined as all borrowing that is in the name of the Government regardless of whether it is serviced directly by the core Government, a statutory authority of Government company."
I would suggest that where no interest rate has been set for the loan, it is impossible to claim that this section is not breached and I woluld further suggest that the actions of th Premier run contrary to the principles of responsible financial management.
Perhaps the Compass would like to take out a FOI (knowing how fond they are of them) to find out what hospitality any member of the Government and/or their staff/agents have received from all the parties involved in the bidding process including Cohen and Company.