ESTABLISHED 1965 www.caymancompass.com – 50 CENTS – Wednesday June 3, 2015 High of 83 Low of 75 Moderate with wave heights of 3 to 5 feet, becoming rough in and around heavy showers. J UN E 201 5 • W WW . C A YJOUR N AL.CO M 152 THIS ISSUE: SPECIAL REPORT CORPORATE DISASTER RECOVERY >>PAGE 17 PRECIOUS METALS Private vaults Byzantium offers golden opportunities >>PAGE 4INTERNATIONAL TRAVEL Bullish on Cuba Pent-up U.S. demand fuels airline options >>PAGE 6 CYBERSECURITY Who hacked Sony? Cybersecurity expert has his own theory >>PAGE 9 Health City targets self-insured companies CHARLES DUNCAN Two months ago, Health City Cayman Islands accepted its fi rst patients from a self-insurance pool in the United States, IndUShealth, an administrator for medical tourism.Rajesh Rao, CEO of IndUShealth, said that although he most often sends patients seeking lower-cost care in the Caribbean to Costa Rica, these two pa- tients wanted to come to Cayman for their surgery. Now that Health City has received accreditation from the Joint Commission International, among the leading accrediting bodies worldwide, Rao said, “We’re bullish on using it.”That will come as good news to Health City. At a press conference last month announcing the accreditation, hospital spokesman Shomari Scott said self-insured companies in the United States are the fi rst big target market for Health City. Big companies can opt to self-insure, which typically means setting up a trust for employees and paying di-rectly for medical care instead of buying insurance at a fi xed rate per employee.According to Rao’s estimates, the self-insured market is about 70 million people. The accreditation in May from JCI opens up the East End hospital to its tar- get markets in North America. The cer-tifi cation means that the hospital meets high standards of care for potential medi-cal tourists from the U.S. and elsewhere.The JCI team came to Cayman for a week in April to review all aspects of Health City’s operation, including op-erating room sanitization procedures, medical ethics policy, and the supply chain for medical supplies. At the press conference, the hospital said it had already seen more than 4,000 patients. A spokeswoman later said that about 10 percent of the hospital’s surgical procedures have been on patients from the U.S.Rao said, based on his experience, “Cayman is seen in a very favorable light.” He said Cayman’s reputation as a fi rst-class tourist destination is a major selling point. He came to the island in Now that Health City Cayman Islands has received accreditation, hospital officials say self-insured companies in the United States are its first big target market. – PHOTO: CAYMAN COMPASS Monetary awards aside, whistle-blowers face hard reality MICHAEL KLEIN Whistle-blowers are in a tough spot. They have to fear re- taliation from their employers and legal tangles when dealing with law enforcement and regulatory agencies. Their portrayal by the media will fl ip fl op between the depiction of data thieves who steal information for personal gain and concerned employees who want to expose an organization’s wrongdoing. And the information that whistle-blowers believe is important – and that they have taken great risks in obtaining – is not al- ways met with the anticipated enthusi-asm by the authorities. Signifi cant monetary awards for whistle-blowers who help the U.S. In- ternal Revenue Service recover large sums of unpaid taxes and fi nes for tax evasion have turned the process and the personal motivations of whistle-blowers into even more of a gray area. Hervé F alciani, a former systems engineer at the Geneva-based private banking unit of HSBC, who obtained the personal banking details of 24,000 customers and passed them on to French authorities, was charged in Switzerland with violating Swiss secrecy laws and in-dustrial espionage. HSBC says Falciani simply stole the data to sell it. He maintains that he act-ed because he wanted to improve over-sight of the bank’s activities and protect client data, and because of the illegal behavior of the bank he observed in his position as systems analyst. “What motivated me to blow the whistle was that no effective control was possible in the bank. No system was effi cient enough to ensure that terrorism fi nancing or money laundering was under scrutiny or under control,” he told the Offshore Alert confer-ence in May via video-link because he still faces an international arrest warrant. Asked what percentage of the bank’s activities was illegal in his estimation, he said it is diffi cult to express in percentages. “But I was 100 percent certain that it was a system out of control.” France charged HSBC with money laundering offenses, initiated tax investi- PLEASE TURN TO PAGE 8 » PLEASE TURN TO PAGE 8 » THE cAymAn ISLAnDS journAL Health City targets self-insured companies Editorial | pagE 4 Corruption: an insidious, Creeping Crime SWIM | DINE | DANCE | RELAX Webb out as local football president James Whittaker jwhittaker@pinnaclemedialtd.com Facing corruption allegations and sus- pended from “football-related activities” by world governing body FIFA, Jeffrey Webb has been replaced “on a provisional basis” as president of the Cayman Islands Football Association, a position he has held for 24 years. First Vice President Bruce Blake has taken over as acting president of the organization. The announcement, the first public com- ment from anyone involved with Cayman foot- ball since Webb was arrested in Switzerland a week ago, followed an emergency meeting of the association’s executive com- mittee on Monday night. “Our thoughts and prayers go out to Jeffrey and his family at this difficult time,” the asso- ciation said in a short statement. The decision coincided with the shock an- nouncement Tuesday from world football boss Sepp Blatter that he would resign as FIFA pres- ident, just days after he had been re-elected. CIFA said in a statement that it was “con- cerned and disappointed” to learn of Webb’s arrest but declined to comment on the alle- gations, saying the presumption of innocence until proven guilty “must prevail.” CIFA has also declined to comment on what, if anything, other Cayman officials knew about the deals detailed in the indictment. Webb is one of 14 current and former FIFA officials, businessmen and sports marketing executives accused of a bribery Webb-Watson connection in bribe allegation Brent Fuller and miChael klein bfuller@pinnaclemedialtd.com; mklein@pinnaclemedialtd.com Cayman Islands businessman Canover Watson sat on a three-person committee that evaluated bids for a US$15.5 million contract that now forms part of a U.S. criminal investi- gation into alleged bribery and racketeering in world football’s governing body, FIFA. The contract, according to U.S. federal court indictments, was for the commer- cialization rights to the 2013 version of the Gold Cup tournament and the 2013/14 and 2014/15 CONCACAF Champions League com- petitions. The indictment in the U.S. District Court, Eastern District of New York alleges that the rights to those football games were sold to Traffic USA after then-CONCACAF President Jeffrey Webb solicited US$1.1 mil- lion in bribe payments from the company, through an intermediary. A press release announcing the contract award for the tournaments was released on Nov. 27, 2012: “The multi-year agreement was Baines: Police have money – but problems hiring Brent Fuller bfuller@pinnaclemedialtd.com Cayman Islands government immigration and hiring freeze rules are combining to prevent additional police officers from being hired to patrol local com- munities, Royal Cayman Islands Police Commissioner David Baines said Monday. Mr. Baines, in testimony be- fore the Legislative Assembly’s Finance Committee, fielded ques- tions about police responses to certain incidents that some law- makers indicated were lacking, particularly in the less-popu- lated areas east and north of Bodden Town. “I have to manage demand with the resources I have,” Mr. Baines said. “I haven’t asked for more of the budget. I have asked for the budget that’s been allocated.” The commissioner said that RCIPS has struggled through “stop-starts” over the past sev- eral months where certain po- licing programs could not begin Police Commissioner David Baines PLEASE TURN TO PAGE 8 » Blatter to resign as FIFA president Under investigation in corruption probe The New York Times reported late Tuesday afternoon that U.S. law enforce- ment officials have confirmed that FIFA President Sepp Blatter is a focus of a fed- eral corruption investigation. This follows a stunning announcement made at a hastily called news conference Tuesday in Zurich, when Blatter said he will resign after FIFA elects a new leader at an “extraordinary congress” that will be called by the organization’s executive committee. A new election will be at least four months away, a FIFA official announced. FIFA’s next congress, at which such deci- sions usually are made, is not until next May in Mexico, but FIFA announced its de- sire to speed up the process in order to put the scandal in the past. “It is my deep care for FIFA and its in- terests, which I hold very dear, that has led FIFA President Sepp Blatter, during a press conference Tuesday in Zurich, Switzerland, announcing his resignation. - Photo: aP PLEASE TURN TO PAGE 6 » PLEASE TURN TO PAGE 8 » PLEASE TURN TO PAGE 7 »2 REGIONAL NEWS Wednesday June 3, 2015 • Cayman Compass If the speed of your internet does not allow you to enjoy a night of binge-viewing, then why not switch to a real quality connection? Contact us about our Fibre Internet and TV options today! www. REGmovies.com SATURDAY NIGHT: For your viewing pleasure, minors under the age of 18 will not be admitted to any lm starting after 6pm, unless accompanied by their parent. y x *Additional charges will apply per 3D ticket requested. - WEDNESDAY - $8.00 SAN ANDREAS 3D (PG13) 12:45 I 3:20 2D I 7:15 I 9:50 2D ENTOURAGE (R) 1:15 I 3:45 I 7:20 I 10:05 TOMORROWLAND (PG) 1:00 I 3:55 I 6:50 I 9:45 PITCH PERFECT 2 (PG13) 1:10 I 4:10 I 7:15 I 9:50 POLTERGEIST 3D (PG13) 12:30 I 2:50 2D I 5:10 I 7:30 2D I 10:00 AVENGERS: AGE OF ULTRON (PG13) 3:25 I 9:30 MAD MAX: FURY ROAD (R) 12:40 I 6:45 www.tonymosleylifeinsurance.com Some Jamaica police officers walk off job in wage dispute KINGSTON, Jamaica (AP) — A number of rank-and-file police officers in Jamaica walked off the job in a wage dispute with the government, prompting the increased use of military personnel in crime-fighting patrols on Tuesday. National Security Minister Peter Bunting blasted the police union protest, saying it “exposes the public to unneces- sary risk” and may damage the image of the roughly 11,000-member Jamaica Constabulary Force. “This behavior is not appropriate for an essen- tial service,” Bunting said Tuesday in the Caribbean country of 2.7 million people that has long had one of the world’s highest crime rates. An estimated 10 per- cent of the force took part in the sick-out, ac- cording to Assistant Police Commissioner Assan Thompson. Sgt. Raymond Wilson, chairman of the is- land’s police federation, did not return repeated calls. Bunting appealed to union leaders to return to the bargaining table. He said the finance ministry has pro- posed a 6.5 percent wage in- crease during the first year of a possible agreement and a 5.5 percent increase during the second year. The police union has been trying to win higher wages, but it was not immediately clear how their proposals differ from what the govern- ment is offering. Last year, the union said a constable at the lowest level makes less than $3 per hour, just over the minimum amount paid to security guards. The job action brought to the surface the hard feel- ings that have accumu- lated as unionized public sector workers have failed to reach new contracts. On Monday, some members of Jamaica’s teachers’ associ- ation dressed in black and picketed for better pay in downtown Kingston. Jamaica is in the third year of a four-year $930 million loan package with the International Monetary Fund and it has passed con- secutive tests without short- falls, drawing high praise from IMF managing director Christine Lagarde. But numerous Jamaicans have seen their wages frozen while the cost of food and other essentials has increased on the is- land with an economy that has sputtered for decades. The Jamaican dollar has also devalued significantly, deepening hardships for many families. Earlier this year, the Washington-based Center for Economic and Policy Research issued a report saying that Jamaica was running “the most austere budget in the world” amid the IMF program, high debt and low growth. Airbnb offers authenticity and a few challenges in Havana BETH J. HARPAZ HAVANA (AP) — In the two months since Airbnb started doing business in Cuba, list- ings have ballooned to about 2,000. The website makes it relatively easy to find lodging in a country that’s largely been cut off from the online booking systems most trav- elers take for granted. But while Airbnb offers au- thentic local experiences and cheap options in Cuba, just like it does elsewhere, several things make listings here a little different. For one thing, most Cubans don’t have easy email ac- cess. So it can take days to get booking confirmation. For another, while Airbnb accommodations vary every- where, it’s especially hard for Cuban hosts to get quality materials and skilled labor to spiff things up, and many neighborhoods suffer from decades of neglect. You might end up in a luxurious villa that looks like a magazine cover, or a rundown building reminis- cent of the Lower East Side of Manhattan circa 1980. On the plus side: Airbnb is a great way to connect with lo- cals and see daily life up close. I first tried to book my Airbnb on a Friday. Twenty- four hours later, an automated message apologized because the host hadn’t responded. On Saturday night, the host – Reyes – emailed that she had an inquiry from another guest and needed another day to confirm. On Sunday, I was told the apartment was unavailable. Monday, I tried another listing and got immediate con- firmation. I then heard back from Reyes, saying her apart- ment was available after all – the first guest fell through. Too late for me. Many property owners hire middlemen like Vienna Garcia to manage on- line inquiries. “I’m the bridge between the owners who don’t have Internet connections and the guests,” explained Garcia. But tracking reserva- tions is complicated. Many Airbnb properties are also rented out through other sources, but there’s no cen- tral database. These accom- modations, called “casas par- ticulares,” get guests through word of mouth, travel agents, street signs, TripAdvisor and even taxi drivers paid to steer visitors their way. Jonathan Ashton, who lists two Airbnb properties in Central Havana, checks “email every day so we can communicate effectively. But I have to go to an Internet center at a hotel and pay $4.50 an hour” to get online. National Security Minister Peter Bunting blasted the police union protest, saying it “exposes the public to unnecessary risk.” While Airbnb offers authentic local experiences and cheap options in Cuba, just like it does elsewhere, several things make listings here a little different.3 LOCAL NEWS Cayman Compass • Wednesday June 3, 2015 James Whittaker jwhittaker@pinnaclemedialtd.com A Cayman Islands bar manager is planning to paddle 400 miles across Canada – the third time he has done the trip to raise money for foster children. Jasmin “Yaz” Muratagic is planning a repeat of his epic journey across lakes and rivers in Alberta and Saskatchewan. Mr. Muratagic com- pleted similar trips in 2013 and 2014 along with his friend Chad Guenter, a Canadian firefighter. Paddling for up to nine hours a day through breath- taking scenery and camping by the water’s edge at night, the two men aim to complete the journey in nine days Last year Mr. Muratagic raised just over $5,000 for the Nadine Andreas Residential Foster Home, run by the National Council for Voluntary Organisations. He is organizing a paddle board day on July 11, as well as selling T-shirts and hosting trivia and bingo nights over the next two months to raise sponsorship funds for the upcoming trip. Mr. Muratagic, who works as a bar manager for JLC Restaurant Group, which includes Lone Star, Craft and Dukes, is currently training by paddling five times a week in Cayman. He says completing the 400-mile journey will be more about endurance than speed. He said, “I’m out as often as I can be, just ripping it up and down Seven Mile Beach. It is not a race, it is a mar- athon. You just have to put your head down and paddle. I’m usually out for a couple of hours at a time. He said his main aim is to raise awareness and money for the National Council of Voluntary Organisations. “They are doing an excel- lent job there looking after these kids, and I wanted to raise some money to help them. They do all the hard work, I just paddle around.” His main sponsors in- cluded Keith High, Marcus Cumber, Nik Tatarkin and Martin Laidlaw, with support from Epic Day Entertainment, Kiristen Cousins of Waterman and SUP Cayman and Martin Van Zyl D’Signs. Bar manager to repeat epic paddleboard trip Jasmin ‘Yaz’ Muratagic is planning a repeat of his epic journey across lakes and rivers in Alberta and Saskatchewan to raise money for the Nadine Andreas Residential Foster Home. Last year Mr. Muratagic raised just over $5,000 for the Nadine Andreas Residential Foster Home. Visitor sentenced for ATM attempted thefts More than 200 debit/ credit cards affected CarOL WiNker cwinker@pinnaclemedialtd.com Two charges of attempted theft from Automatic Teller Machines resulted in a sen- tence of 16 months’ impris- onment for Andon Krastev Smilyanov, a visitor from Bulgaria who pleaded guilty. Magistrate Valdis Foldats imposed the sentence on Monday. Defense attorney Dennis Brady had urged him to im- pose six months, the same as another defendant in an ear- lier case. Mr. Brady empha- sized that no money was ac- tually stolen by Smilyanov. The magistrate said the scale of the offending could be measured by the number of credit/debit cards that had been compromised. When Smilyanov, 32, was first brought to court in April, the estimate was that between 60 and 100 people had been seen on CCTV whose cards were poten- tially affected. This week, however, Crown counsel Candia James said a little over 200 personal identifi- cation numbers had been compromised. The magistrate pointed to the time, energy and expense the bank had to go through to “re-PIN” the cards, plus the inconvenience to the customers concerned. Ms. James explained that a senior officer of Cayman National Bank contacted police after someone ob- served what appeared to be a card-skimming device in an ATM. Officers and bank officials examined CCTV footage from March 26. As a result, officers checked with the Immigration Department and this led them to the West Bay Road resort where Smilyanov had been staying since his ar- rival on March 21. Items found in his room included tape, “super glue” and a plastic skimming de- vice. Smilyanov was inter- viewed with the assistance of an interpreter and he ini- tially denied any wrong- doing. He subsequently pleaded guilty to attempting to steal credit and debit card track data from Cayman National Bank on March 26 and March 27 with the use of a card-skimming device. Ms. James explained that the attempted theft was of personal information stored on a card’s magnetic strip. The skimming device scans and stores the information, but a PIN is still needed for the information to be used. This scheme required the installation of a camera to view the keypad when a cus- tomer uses the ATM. She noted that the skim- mers had been placed in ATMs. at “very heavy traffic areas” – The Strand shop- ping plaza and the airport Foster’s Food Fair. Had Smilyanov not been detected, potentially large sums of money could have been stolen, Ms. James pointed out. Further, his of- fending was a direct attack on the public’s confidence in the banking industry. In ad- dition, it had the potential of causing consumers to be anxious about using ATMs, Ms. James submitted. Mr. Brady told the court that Smilyanov had not em- barked on the scheme out of greed. A trained teacher of physical education and sport, he had also worked as a lifeguard and saved three lives. He left teaching and started his own business. Needing money in 2011, he took out a mortgage on the home he shared with his parents. After a downturn in the economy, the mortgage was being foreclosed. As a result, Smilyanov took this chance, Mr. Brady narrated. He accepted that his client had not cooperated with authorities in terms of where he had obtained the three skimming devices. “He is not the kind of guy who would stand up and rat out someone. Because of his ti- midity, self-preservation and concern for his family, he re- mains a frightened man,” the attorney suggested. The magistrate accepted that Smilyanov’s remorse was genuine and he was a man of previous good character. He said he had to con- sider not only the amount taken but also the amount Smilyanov intended to take – “as much as you could get away with to help with your financial pressure if you had not been stopped by the vigilance of the bank and the police.” The magistrate cited a 2006 judgment of Justice Alex Henderson. The judge had said that the most im- portant sentencing prin- ciple in such cases was de- terring others who might be tempted, because this type of offending strikes at the financial underpinnings of this country. The magistrate pointed out that this was a sophisticated, well-planned scheme in which Smilyanov had targeted the Cayman is- lands. “We still don’t know why, or where these devices came from.” He said lack of cooperation was not an ag- gravating factor – it was simply the absence of a mitigating factor. Imposing a short sen- tence simply as a practical way to save government the cost of imprisonment would undermine the principle of general deterrence, he said. In his view, a deter- rent sentence would be two years imprisonment. The aggravating and mitigating factors balanced each other out, but full credit was given for the guilty plea. Reducing the 24 months by one-third, the final sentence was 16 months for each of- fense, to be served concur- rently. The skimming de- vices and other items seized were ordered forfeited. Ms. James explained that a senior officer of Cayman National Bank contacted police after someone observed what appeared to be a card-skimming device in an ATM. Police host children’s fun day with seventh-day adventist church Youngsters who dream of becoming a police of- ficer had a chance to hop into a police car and police boat during a day of fun hosted by the Seventh-day Adventist Church. The Royal Cayman Islands Police Service joined with the church’s children’s ministry to allow children and parents to see that po- lice officers can be their friends too. Police Constable Cornelius Pompey of the Neighborhood Policing Department, whom the kids kept busy all day, expressed his satisfaction with the event. “We are very pleased with the large number of both children and par- ents who came out and the high level of participa- tion in the different activi- ties,” he said. “We believe that the more that we en- gage with the community, it will make our jobs easier in protecting and serving the public.” He also said the police were very happy to have been able to join with the church in hosting the event and look forward to doing it again next year. The police brought a boat from the Marine Unit and the kids were able to pre- tend they were on a high- speed chase on the ocean, while the teenage boys got a thrill just sitting behind the wheel of the police car. However, the highlight of the day for youngsters was get- ting to sit in the helicopter. Cereta McDonald, di- rector of the church’s chil- dren’s department thanked the police for their tremen- dous effort. “We have always had the police assisting us each year in entertaining and informing the kids, but we are even more delighted this year as they have taken on an even bigger role in the program,” she said. Parents and children got the chance to see that police officers can be their friends too.The islands’ most-trusted news source 4 – EDITORIAL – Opinion&Letters The Cayman Compass welcomes comments, opinions and viewpoints from readers. Letters to the editor can be emailed to editor@pinnaclemedialtd.com, submitted via www.caymancompass.com, sent by post or hand-delivered to the Compass office. Pankaj Mishra Bloomberg View Since the end of the Cold War, rising gross domestic product and regular elections have come to mark progress in large parts of the world. Such apparent resemblances to Western-style capitalism and democracy still enthuse many commentators. But do they actually conceal the deteriorating political and moral health of emerging economies until it’s too late? A case in point is Russia, the site of the first major ex- periment in westernization after 1989, which has wit- nessed high GDP growth and routine elections during most of the previous two decades. In his startling and illumi- nating book, “Nothing is True and Everything is Possible: Adventures in Modern Russia,” Peter Pomerantsev describes “the bankers, law- yers, international develop- ment consultants, accoun- tants, and architects” who hoped to remake Russia into their image of the West. For them the long evolu- tion of “Western civilization,” he writes, came to be “con- densed into bullet points: ‘Elections? Check.’ ‘Freedom of Expression? Check.’ ‘Private Property? Check.’” As an aggressively revan- chist and oligarchic Russia shows, such stocktaking was pitifully inadequate. It ig- nored the fact that a func- tional market needs a stable society – one in which prop- erty rights are protected from predators, the media is rea- sonably independent and the rulers, while strong enough to prevent fraud, are re- strained from abusing their immense power to garner the best cuts of the economy for themselves and their chums. Such basic prerequisites did not exist in Russia, or the countries which, once hailed for combining liberal capi- talism with democracy, now manifest political, economic and psycho-social patholo- gies that we have yet to prop- erly diagnose. In Russia, regular elec- tions, multiple parties, and a free media exist. But they have a nominal as opposed to sub- stantive existence. The experi- ence of India and Turkey, too, tells us that crony capitalists using easy loans from public banks, and acquiring cheap land with the help of politi- cians, are not entrepreneurs. A largely corporate-owned media that can be forced to bend be- fore the powerful is not free. It is also clear that GDP statistics do not capture the growth of extreme inequality. And the stock exchange index is hardly an accurate indi- cator of the overall state of the economy. Still, false labels multiply, obliterating nuances and dis- tinctions. One consequence of this weakened sense of reality, and corresponding growth of fantasy, is that rulers find it easier to persuade the ruled to inhabit a make-believe world, a “society of simula- tions,” as Pomerantsev calls it. “’Everything is PR,’” he writes, “has become the favou- rite phrase of the new Russia.” For the New Russians, as in- deed for many New Indians and New Turks, “life is just one glittering masquerade, where every role and any po- sition or belief is mutable.” Ideological promiscuity rather than consistency de- fines the new authoritarians. With its contradictory rhet- oric and actions, Putin’s re- gime “can feel like an oli- garchy in the morning and a democracy in the afternoon, a monarchy for dinner and a totalitarian state by bedtime.” Putinism itself is an ideo- logical collage, drawing upon economic liberalism and na- tionalism as well as conser- vatism, Orthodox Christianity and Eurasianism. You can also see the same evidently incompatible projects of ra- cial-religious chauvinism and economic modernization among populists and author- itarians from Turkey to India and Japan. Their rhetoric is ever- shifting. As Pomerantsev points out, the new authori- tarianism “instead of simply oppressing opposition, as had been the case with 20th- century strains … climbs in- side all ideologies and move- ments, exploiting them and rendering them absurd.” Thus, its exponents don’t have to be overly crude in their assertion of power. Indeed, such leaders as Recep Tayyip Erdogan, Narendra Modi, and Shinzo Abe slickly use egali- tarian social media to project themselves as unique, om- nipotent and indispensable. Against such masters of PR, who deploy the latest com- munications technology to re- package politics as continuous spectacle, traditional political formations of the left and the right can only look clueless. Putin’s remarkable pop- ularity, two decades after Russia embraced capitalism and democracy, is one sign among many that the conven- tional indices and tools used for assessing emerging econ- omies have told a very mis- leading story. Writing about the emerging U.S. economy in the 19th century, Tocqueville warned that “the old words despotism and tyranny are not suitable” to describe the subtle form of oppression in a formally democratic society. “I myself seek in vain,” he wrote, “an expression that exactly re- produces the idea that I form of it for myself.” Such a quest for fresh intel- lectual vocabulary may be be- yond the journalists and com- mentators who obsess over GDP, or who rehearse the fusty narratives of liberal democracy and capitalism. These laggards could learn a few things from a cutting-edge absolutism like Putin’s – what Pomerantsev terms “the twenty-first centu- ry’s geopolitical avant-garde.” Certainly, the PR-driven autocrats seem aware that the most persuasive narratives today are hybrid and open to continuous improvisation. In an ironic twist of history, it is the new authoritarians of the East who expound a suavely postmodern politics while their Western critics look un- imaginatively one-dimen- sional, if not clueless. Pankaj Mishra is a Bloomberg View columnist, author and commentator. © 2015, Bloomberg News Wednesday June 3, 2015 • Cayman COmpass Corruption in a country corrodes, erodes — and eventually destroys. It is too common in the Cayman Islands and can be seen in the reflections from ultra-dark window tint on passing cars, in ramshackle buildings wedged into undersized under-kempt lots, in the gleaming metal of brand-new appliances acquired just before election time, and now, in Page One headlines on the FIFA scandal in newspapers across the globe. Whether it’s securing a vehicular inspection sticker, an exemption to development regulations, approval for work permits, the support of a partic- ular bloc of voters, or, allegedly, millions of dollars in bribes in relation to sporting events — lurking behind the scenes are shadows of impropriety, influence and inscrutability. Because such behavior is so commonplace, we tend to “normalize it,” refusing even to recognize it, or neglecting to see how aberrant it really is. In the 1990s, U.S. Senator Daniel Patrick Moynihan called this “defining deviancy down.” In Cayman, we’re more likely to attribute such behavior to “cultural differences.” Perhaps that is one reason that our leaders have been so reticent to speak out on sensational allega- tions of corruption within world and regional football. To adapt the infamous observation of former U.S. Supreme Court Justice Potter Stewart (who was writing about a 1964 case involving the determination of what constitutes hardcore pornography), perhaps, when it comes to identifying corruption, people in Cayman truly “don’t know it when they see it” — because they have been culturally steeped in it. We often boast that Cayman is the world’s fifth- largest financial center, in the elite class of offshore jurisdictions alongside London, New York, Hong Kong and Tokyo, and with clients dispersed across the Earth. The industry is so global, and its lifeblood (capital) so fluid, that even a whiff of corruption should not be tolerated or condoned. An exodus of funds away from Cayman could happen in the blink of an elec- tronic eye, bringing about dire economic consequences that would reverberate through the generations. From George Town to ghost town. It could happen. Apart from reasons of common decency and basic morality, that is why we must not continue to wink at what seem like the most minor infractions of traffic laws, such as cars that are obviously not “roadworthy” nevertheless sporting brand-new inspection stickers. That is why our planning boards, along with our myriad of other administrative law bodies, including liquor licensing and immigration, must be held to the highest standards of accountability, rationality and transparency. That’s why, as MLA Winston Connolly has righteously and rightfully pointed out, it should be unacceptable for a politician to buy off constituents with “shut-up money.” That’s why Cayman’s officials should be calling vocif- erously for a complete investigation into the allegations, filed in U.S. district court, that Caymanian Jeffrey Webb (amongst others) used his leadership position within regional football as a platform for the perpetration of acts of corruption and money laundering. Further, our officials should be locally executing exhaustive inquiries with the goal of identifying any and all illicit activities that may have occurred in relation to the FIFA scandal, involving any Cayman res- idents or banking institutions — and then exonerating or prosecuting accordingly. When it comes to Cayman’s continuing status as a financial services center of the first class, not even the appearance of corruption can be tolerated. In this arena, on the world stage, there can be no room for “cultural differences.” Corruption: An insidious, creeping crime ‘New East’ authoritarians Printed and Published by: Caymanian Compass Limited (a subsidiary of Pinnacle Media Ltd) Compass Centre Shedden Road, George Town send us yOur VieWs Or neWs: P.O. Box 1365 Grand Cayman KY1-1108, Cayman Islands Telephone: (345) 815-0095 Email: newsdesk@pinnaclemedialtd.com adVertise With us: Telephone: (345) 949-5111 Email: sales@pinnaclemedialtd.com Website: www.caymancompass.com PUBLISHERS daVid r. legge and Vicki l. legge EdITOR-In-CHIEf daVid r. legge A MEMBER OF THE INTER-AMERICAN PRESS ASSOCIATION “Give light and the people will find their own way”5 LOCAL NEWS Cayman Compass • Wednesday June 3, 2015 DART DEVELOPMENT PLAN PRESENTATION You are invited to attend a public presentation on the Dart group of companies and its upcoming real estate development plans. Regal Cinemas, Camana Bay THURSDAY 4 JUNE 2015 5:30 pm – 6:30 pm Seating is limited; please arrive early to ensure availability. Sessions are open to the public; however, photography and videography will not be permitted. Drunken party-goer admits stabbing Judge imposes two- and-a-half years for wounding Carol Winker cwinker@pinnaclemedialtd.com David Mac Bodden was sentenced to two-and-a- half years’ imprisonment on Friday for wounding a fellow party-goer at the Jacques Scott compound in the early hours of Dec. 13, 2014. Crown counsel Candia James said the victim was stabbed while trying to calm Bodden down after he started arguing with a cook at a nearby jerk stand. Defense attorney John Furniss said Bodden had started drinking around 2 p.m. and did not remember much about the incident that occurred some 12 hours later. Ms. James said the victim/complainant ob- served Bodden arguing with the cook and demanding food while the cook refused him service because of his belligerent behavior. “The complainant de- cided to intervene to calm the situation. He pleaded with the defendant to calm down. The defendant con- tinued to argue, stating that he did not like Jamaicans. He then stabbed the com- plainant to his left side,” Ms. James summarized. Bodden likely would have stabbed him again, but the man was able to grab his hand and stop him. Officers on patrol nearby grabbed Bodden away from his victim, who by this time was bleeding profusely. The man was taken by ambulance to the Cayman Islands Hospital, where he underwent emergency sur- gery for a punctured lung and severe interior bleeding. The initial charge against Bodden was wounding with intent to cause grievous bodily harm. On Jan. 16 he pleaded guilty to the lesser charge of unlawful wounding. The maximum penalty for this offense is seven years. Hearing that Bodden had previous convictions, Justice Michael Mettyear observed that this would be an aggravating feature, as would the fact that the stab- bing appeared to have been racially motivated. “He said he didn’t like the cook be- cause he was Jamaican and then he says to this man [the victim] when he re- buffed his help that he was Jamaican. He didn’t like Jamaicans,” he summarized. Mr. Furniss urged the court not to place too much weight on the racial over- tones of the incident. “I don’t think that was the cause of the fight. I think the problem [Bodden] had was that someone intervened,” the at- torney said. He suggested that Bodden didn’t like what was happening and that was perhaps more of a factor than the nationality of the person who did intervene. Justice Mettyear pointed out that under U.K. law, ra- cial aggravation can be a factor, while a racially motivated assault is a specific offense. Mr. Furniss emphasized Bodden’s remorse and early guilty plea. He accepted that the knife was an ag- gravating feature. “He just gets into this argument and then, unfortunately, because he has the knife – which is so often the problem – he has the knife and then he uses the knife.” Since being in prison, Bodden has accepted that once he starts drinking he can’t stop; he has been attending Alcoholics Anonymous meetings in prison and has kept busy working different jobs, Mr. Furniss advised. In passing sentence, Justice Mettyear told Bodden that the victim had been trying to help him. “He was trying to seek to calm you down so that the police wouldn’t be called … but in your drunken condition you couldn’t see the sense of what he was saying.” The stabbing could had been more serious, he noted. “You could have killed him. Think of what you would have been facing then.” Justice Mettyear said Bodden was extremely lucky that Mr. Furniss had per- suaded the Crown to drop the more serious charge, which could have resulted in a longer sentence. Cayman’s maximum of seven years for this offense is more than the U.K. max- imum of five years, he said. “I believe it’s partly because of the recognition that there is a great deal of violent crime here, including the carrying of weapons.” With a starting point of three years, Justice Mettyear gave Bodden a full one-third discount for his guilty plea. He then adjusted the re- sulting two years to two- and-a-half because of the aggravating features. Ms. James said the vic- tim’s medical expenses to- taled $8,911.24. The judge said he would not make a compensation order because of the length of Bodden’s custodial sentence. Royal Navy team will train Cayman police An international maritime training team from the Royal Navy will be in Cayman next month to conduct a series of training courses to enhance navigation and small craft operating skills, according to a press release from the Royal Cayman Islands Police Service. For four weeks, 10 RCIPS officers and up to 40 offi- cers from other Overseas Territories will develop and improve their knowledge and application of navigation and advanced small craft han- dling, learning an array of tactics, techniques and pro- cedures that will enhance their operational effective- ness in maritime security pa- trols, the press release states. The project has been coordinated between the RCIPS and U.K.’s Defence Section in Kingston, Jamaica. It is jointly funded by the U.K.’s Conflict, Security & Stability Fund and the Foreign and Commonwealth Office’s Overseas Territory Policing Fund. The Royal Navy’s interna- tional maritime team provides security training and educa- tion to international maritime forces to contribute to the global maritime security. The team’s staff will also provide education and sup- port to improve engineering and maintenance proce- dures that will boost avail- ability of marine resources to conduct operational pa- trols of the islands. Governor Helen Kilpatrick said “I welcome this training program which, in addi- tion to the year-round pres- ence of a Royal Navy vessel in the Caribbean, is evi- dence of the U.K.’s commit- ment to the security of the Cayman Islands.”The islands’ most-trusted news source 6 Wednesday June 3, 2015 • Cayman Compass FUEL THE DIFFERENCE. GRAND PRIZE OF $5,000! $1000 FOR 9 FINALISTS! DEADLINE: JUNE 13TH WHO’S ELIGIBLE? - 8-12 year olds eligible to enter - All schools in the Cayman Islands VISIT WWW.RUBISCAYMANISLANDS.COM FOR MORE INFORMATION WHAT ACADEMIC SUBJECTS, EXTRACURRICULAR OR SPECIAL INTEREST ACTIVITIES ARE HIGHLIGHTED? eg. Music, Studies, Arts, Dance, Sports a). Go to WWW.RUBISCAYMANISLANDS.COM and click on the Rubis Top Student link to the contest. b). Scan and upload a copy of your application form with parent/guardian signature that agrees to the terms of the contest. c). Scan and upload the costs/estimates for what you want to use the grant funding on. Please attach for both KY$1000 and KY$5000 estimates. d). Upload your video presentation. Your video must not be longer than 4 minutes. ROUND ONE - APPLICATION SUBMISSION MAY 27TH - JUNE 13TH ROUND TWO - SEMI FINAL VOTING JUNE 13TH - JUNE 20TH ROUND THREE - FINAL TOP TEN BY ONLINE PUBLIC VOTING JUNE 20TH - JULY 17TH Hey kids do you do well in sports, music, art or academics? Is there a special activity that you are really great at doing? Introducing Rubis Top Student. An 8 week contest brought to you by Rubis Cayman Islands. All kids who live in Cayman ages 8-12, now have an incredible opportunity to further develop themselves in an area that they are passionate about. Rubis is here to help fuel the future of our kids in the Cayman Islands. HOW TO ENTER? me to take this decision,” Blatter said. Blatter was elected to a fifth term as FIFA president on Friday, two days after U.S. prosecutors indicted a number of FIFA officials on corruption charges and promised more indictments were likely, though Blatter’s name was not specifically mentioned. However, after Blatter’s announcement, news broke that he is being targeted by the FBI. “While I have a man- date from the membership of FIFA, I do not feel that I have a mandate from the en- tire world of football the fans, the players, the clubs, the people who live, breathe and love football as much as we all do at FIFA,” Blatter said. “Therefore, I have de- cided to lay down my man- date at an extraordinary elective Congress. I will con- tinue to exercise my func- tions as FIFA president until that election.” On Monday, reports linked FIFA Secretary General Jerome Valcke, Blatter’s right-hand man, to a $10 million payment sent to former FIFA vice pres- ident Jack Warner in ex- change for what prosecu- tors say was a positive vote on South Africa’s bid for the 2010 World Cup. The $10 million was taken out of the oper- ating budget for that year’s World Cup and transferred by FIFA in 2008 to an ac- count controlled by Warner, ostensibly to fund some- thing called the “Diaspora Legacy Programme.” All of this was detailed in a letter sent from the South African Football Association to Valcke in 2008. In a statement released Tuesday, FIFA claimed the program supported “the African diaspora in Caribbean countries as part of the World Cup legacy” and that neither Valcke “nor any other member of FIFA’s senior management were in- volved in the initiation, ap- proval and implementa- tion of the above project.” However, the program’s name did not appear in any official FIFA documents until the letter was uncov- ered Tuesday, and U.S. pros- ecutors allege that Warner transferred the $10 million to his personal accounts. Last week’s indictments and Valcke’s alleged corruption were only the latest scan- dals faced by FIFA under Blatter’s reign, which began in 1998. FIFA itself investigated the bidding processes in- volved in the votes to award the 2018 World Cup to Russia and the 2022 World Cup to Qatar, a nation with inhospitable summer weather and almost zero soccer tradition. Michael Garcia, a former U.S. pros- ecutor, spearheaded the in- vestigation, but the organi- zation has refused to release his full report, instead re- leasing only a summary that Garcia declared a white- wash before resigning. Human rights groups also have blasted FIFA for not doing more about harsh conditions faced by migrant workers building the World Cup stadiums in Qatar. According to some esti- mates, more than 1,000 for- eign workers have died in Qatar since 2010, when FIFA awarded the World Cup to the country. Blatter turned FIFA into a financial behemoth, with billions in the bank as advertisers and televi- sion networks across the globe lined up to link their names to the World Cup, the world’s most-watched sporting event. In turn, Blatter dispersed this lar- gesse to the confedera- tions of the world’s smaller soccer-playing nations, who then promised to support him during presidential elections. Under FIFA’s elec- toral process, each confeder- ation gets one vote, meaning the smallest nations have the same amount of power as titans such as Germany, Italy, Spain and Brazil. Thus, Blatter maintained his stranglehold on the pres- idency until the mounting corruption charges toppled his reign. Blatter to resign as FIFA president Brent Fuller bfuller@pinnaclemedialtd.com The seven FIFA offi- cials arrested in Zurich, Switzerland last week, in- cluding Cayman’s Jeffrey Webb, remain in deten- tion pending extradition to the United States, a spokesperson for the Swiss Federal Office of Justice confirmed Tuesday. “The persons are still being detained … at a number of different facil- ities in Canton [county] of Zurich,” Ingrid Ryser said via email. “The requests [for ex- tradition] haven’t yet been submitted.” The U.S. Attorney’s Office for the Eastern District of New York de- clined to comment on the status of the extradition request for the seven de- fendants, all of whom are all ccused in var- ious bribery and money laundering schemes in a 47-count U.S. federal indictment out of the eastern district. The seven suspects, in- cluding Webb, were ar- rested on May 27 in Zurich where they were attending FIFA’s annual meeting. According to a state- ment on the Swiss federal office of justice’s website: “For those individuals who are contesting extradition, the federal office of jus- tice will now ask the USA to submit formal extradi- tion requests within the 40-day period provided for in the bilateral extradition treaty. Extradition pro- ceedings will be resumed as soon as these requests have been received.” According to the extra- dition treaty, the defen- dants may be held in de- tention for the full 40-day period, but it is not re- quired, depending on what the Swiss courts decide. Until the federal office of justice rules on the case, the seven defendants can always change their minds and agree to simplified ex- tradition proceedings, at which point they would be turned over to U.S. au- thorities immediately, officials said. extradition orders from uS awaited CONTINUED FROM PAGE 1The islands’ most-trusted news source 7 Cayman Compass • Wednesday June 3, 2015 and corruption racket con- nected to television rights for international football tournaments. Webb, once tipped by Blatter himself as a potential successor, was “provisionally banned” from football-related activities by FIFA’s ethics committee. He was “provi- sionally dismissed” as presi- dent of CONCACAF, the gov- erning body for football in North and Central America and the Caribbean, losing his position as vice president of FIFA as a consequence. CIFA’s statement con- tinued, “As a result of the decision of the FIFA Ethics Committee on 27 May to pro- visionally ban Jeffrey Webb from carrying out any foot- ball-related activities on a national and international level, the CIFA Executive Committee took the deci- sion to appoint Bruce Blake as acting president on a pro- visional basis, pending the outcome of any on-going investigation by the FIFA Ethics Committee.” Webb was first elected as resident of CIFA in 1991 and has been consistently re- elected since then. He is next up for re-election in 2017. Whether he returns to the role will depend on the outcome of the FIFA Ethics Committee probe as well as the criminal prosecution. CIFA’s statement added that the events of the past week would not prevent it from proceeding with events planned for the coming months, including the CONCACAF Boys Under-15 championships – a 37-team event also featuring Brazil and England, that is expected to be the biggest sporting event Cayman has hosted. The statement said, “We are focused on hosting the CONCACAF Boys Under-15 Championship in August of this year, the Men’s Olympic qualifying in Haiti this month and our end of season awards ceremony on 26 June 2015, in addi- tion to the completion of the artificial turf field at the Centre of Excellence. “CIFA recognises the im- portance of football within our community and will con- tinue to support efforts to provide opportunities for local athletes.” Webb out as local football president Fidelity Bank to review transactions in FIFA probe JAmes WhIttAker jwhittaker@pinnaclemedialtd.com Cayman’s Fidelity Bank has announced plans to con- duct an internal review of transactions linked to the FIFA corruption probe. U.S. prosecutors allege bribery payments to Jeffrey Webb were routed through Fidelity Bank accounts in the Cayman Islands, controlled by Webb’s attaché Costas Takkas. The bank’s parent company, Fidelity Group, said in a state- ment Tuesday that it had drafted in external experts to assist with the review of the transac- tions referred to in the indict- ment. Fidelity Group CEO Anwer Sunderji added, “Licensed in- stitutions are required to re- port suspicious activity and we are satisfied that the bank dis- charged its duty with respect to the specific transactions. “We will be embarking on a comprehensive independent re- view of our procedures and pro- cesses to confirm that our bank is indeed in line with regula- tory requirements.” The Cayman Islands Monetary Authority said Monday it was aware of the con- tent of the indictment and was looking into the matter. “The authority takes these matters very seriously and in re- spect of the allegations relating to one of our licensees, we will act appropriately, dispassion- ately and in accordance with our obligations under the law,” the regulator said in a statement. The Fidelity statement said it took its role as a quality ser- vice provider within the finan- cial services sector seriously and was cooperating fully with au- thorities. “Fidelity Group takes seriously the allegations sur- rounding Mr. Webb and the other individuals connected with the FIFA investigation. “The Bank is not aware of any allegations against it, but has been cooperating in full accordance with its respon- sibilities with regulators and other government authorities, and will continue to do so,” the statement added. As a regulated financial ser- vices group, the statement said, Fidelity has procedures for re- porting suspicious activity, as per the Cayman Islands All Crimes Anti-Money Laundering Laws. Mr. Sunderji added, “The directors and executives con- sider the fight against money laundering to be a priority issue, and while we move through this process, we want to ensure that our valued customers and our staff understand that we will continue to operate as normal, providing our standard, high quality service”. He also expressed some sympathy for Mr. Webb, a former employee of the bank. “We share our deep disap- pointment at the indictment of Jeffrey Webb, a talented man who had the hopes of his country resting on his shoul- ders. We hope that he will be able to rebuild his life,” he said. CONTINUED FROM PAGE 1 The announcement, the first public comment from anyone involved with Cayman football since Webb was arrested in Switzerland a week ago. The islands’ most-trusted news source 8 Wednesday June 3, 2015 • Cayman Compass We Buy Gold!We Buy Gold! Cash For Gold Silver, Coins and Broken Jewelry Cash Paid on the Spot! Call 927-8565 Cash For Gold • Shedden Road because of uncertainty about staffing. He said he did not intend to criticize the current Progressives-led administra- tion in making his remarks, but was merely flagging up a structural problem that ex- isted in government finances. “It happens with the police, probably as one of the most affected departments, namely because we’ve got around 50 percent of expats, so when there’s a freeze needed to meet a budgetary need in the county, the gaps and vacancies are held in those departments which have [the] most expats,” Mr. Baines told the committee. He was referring to a “soft” hiring freeze that the civil ser- vice started around 2009 and has maintained to some level ever since. “At the minute, my budget suggests that I should have 487 officers,” Mr. Baines con- tinued. “I’ve got 450. We move constantly to fill those vacan- cies, and it makes sense that I don’t like to take staff from one area … into the other. I seek to use [officers] in the best areas to develop public confidence and reassurance, to meet local demands but also to have suf- ficient [officers] there to re- spond quickly to any incidents that are developing.” On Tuesday, Mr. Baines clarified that 487 is the total number of jobs in the RCIPS, both civilian and police. That figure is the total planned in the budget for the upcoming 2015/16 year. However, at var- ious times in a budget year, the government will give directives for the “freezing” of current va- cancies in order to save money. “I will be in the region of $1.9 million underspent on my budget this year [refer- ring to the 2014/15 budget year that ends in June], not be- cause I didn’t want to spend it, but due to various bureau- cratic procedures that prevent the quick advertisement and replacement of positions that become vacant by retiring or leaving staff,” he said. “The po- lice and other agencies that have a significant expat work- force get disproportionately hit by this moratorium on ap- pointments as it is the short- term contract[s] that are sub- jected to most churn and are most affected by freezes.” Police staffing during the government’s 2013/14 budget year, the latest re- cords available, showed 217 Caymanians and 232 non- Caymanians working in the RCIPS, about a 52 percent non-Caymanian workforce. Over each of the last two years, the RCIPS has hosted one cadet course to hire local officers. The classes typically add 12 to 15 cadets to the department. North Side MLA Ezzard Miller asked how many police officers should be added to ensure “increased police pres- ence” in North Side and East End districts. “I don’t need additional budget,” Mr. Baines said, adding that hiring nearly 40 more officers would prevent the police from having to “rob” from certain areas of the de- partment to staff others – for instance – taking neigh- borhood police officers off their assignments to boost local patrols. “If we’re fully [strength- ened], I don’t need to deviate people from shifts in the eastern districts,” he said. Warrants In addition to the hiring issues, Mr. Baines said, a great deal of police offi- cers’ time over the past 18 months has been spent on serving either arrest war- rants or summonses from the courts. Mr. Baines said it has been the intention to move more of the process serving duties to the court mar- shals service, but for a variety of reasons that hasn’t happened. “Sadly, it is left as a baby for the police to look after and deliver,” he said. There are already hun- dreds of outstanding war- rants dating back years that have not been served, and Mr. Baines said Monday that the situation isn’t getting any better. “The reality is that often we serve all of them, a war- rant is executed, the matter goes to court and then it’s put off for another date,” Mr. Baines said. “We then get further summonses or warrants issued when it’s delayed yet again. So it triples, quadruples the number of times we have to go through the same pro- cess to go before a court.” Traffic department To help alleviate officers’ workload, Mr. Baines said the RCIPS has begun traffic enforcement efforts with the special constabulary. Special constables are un- paid, volunteer officers who work in certain capacities with the police. During the 2010/11 budget year, the RCIPS effec- tively eliminated its traffic department, shunting traffic duties to rank-and-file pa- trol officers. Since that time, the overall number of traffic tickets issued by police has declined steadily, reaching an all-time low last year before trending up again this year. Mr. Baines said the spe- cial constabulary unit would focus on traffic issues such as covered license plates, tinted windows and speeding. Baines: Police have money – but problems hiring reached after due process from the CONCACAF evalu- ation committee assigned to this bid comprised of Mr. Pedro Chaluja, Panamanian Football Federation President, Mr. Dan Flynn, general secretary of the U.S. Soccer Federation and Mr. Canover Watson, treasurer of the Cayman Islands Football Association, who evaluated all bids submitted.” CONCACAF is FIFA’s re- gional governing body for North and Central America and the Caribbean. Webb was elected its president in May 2012 and served until his “provisional dismissal” last week, following revelations that he had been charged with 15 counts in U.S. fed- eral court over a racke- teering scheme that spanned 25 years, according to pros- ecutors. Webb has also been Cayman Islands Football Association President since 1991. Watson, who is not charged or even named in the U.S. federal court indict- ment released last week, served as a member of the CONCACAF region’s audit and compliance committee until he was relieved of his duties last year following charges filed against him in a separate Cayman Islands criminal investigation. The Cayman Compass contacted Watson’s attorney Ben Tonner on Tuesday af- ternoon for comments about Watson’s membership on the CONCACAF evaluation com- mittee that recommended Traffic USA for the US$15.5 million contract. Neither Mr. Tonner nor Mr. Watson had responded by press time Tuesday. Watson and Webb have a long association with one another in Cayman. The Compass revealed earlier in the week that the two pur- chased mansions on the same street in Loganville, Georgia in the U.S. within a year of one another. Bribe payments According to U.S. federal court records, Webb, in 2012, directed an individual identi- fied as “co-conspirator #4” to seek a bribe payment on his behalf during the negotia- tions for the Gold Cup 2013 and Champions League 2013- 2015 tournaments. It is alleged that the US$1.1 million bribe payment was agreed to by Traffic USA President Aaron Davidson, who is also charged in the indictment. “Co-conspirator #4” – who has been identified as CONCACAF general secretary Enrique Sanz – and Webb al- legedly discussed “the best way to effectuate the bribe payment,” according to the indictment. Sanz, who is not indicted, was “provisionally banned” from participation in any CONCACAF-related activ- ities on Monday pending the outcome of an investigation by FIFA’s Ethics Committee. Before joining CONCACAF Sanz worked for Traffic Sports USA. According to the indict- ment: “Ultimately, Webb de- cided to use an overseas company that manufac- tured soccer uniforms and soccer balls (Soccer Uniform Company A). Webb eventu- ally instructed co-conspirator #4 [Sanz] to submit a false invoice to Traffic USA for US$1.1 million to be paid to Soccer Uniform Company A, which co-conspirator #4 did.” It is alleged that Traffic USA made wire transfer pay- ments for both the com- mercialization rights con- tract and the US$1.1 million bribe payment. It is alleged that in December 2013, the bribe money was wired from Traffic International’s [Traffic USA parent company] ac- count at Delta National Bank & Trust in Miami to a Wells Fargo correspondent ac- count in New York, New York for credit to an account in the name of Soccer Uniform Company A at a Capital Bank in Panama City, Panama.” Another Webb connection The soccer uniform com- pany that allegedly received the bribe payment is tied to co-conspirator #23, “a close associate of Webb,” who is described by the indict- ment, “as a high-ranking official of one of FIFA’s na- tional member associations, an official of FIFA and CFU [Caribbean Football Union], and a businessman.” Pedro Chaluja, the pres- ident of Panama’s football association was another member of the committee that evaluated the bids and awarded the contract to Traffic Sports USA. In November 2012, two weeks before the contract to Traffic Sports USA was awarded, Jeffrey Webb vis- ited Panama and together with Mr. Chaluja met the country’s president Ricardo Martinelli Berrocal. Mr. Chaluja was elected to become a member of CONCACAF’s executive com- mittee in April this year. Webb-Watson connection in bribe allegation CONTINUED FROM PAGE 1 CONTINUED FROM PAGE 1 Canover WatsonJeffrey Webb CONCACAF exeCutive sAys OrgANizAtiON is wOrkiNg with DOJ MIAMI BEACH, Fla. (AP) – CONCACAF’s acting general secretary said the organi- zation is cooperating with the U.S. Justice Department while it investigates allega- tions of corruption in FIFA. U.S. authorities in- dicted nine soccer officials on corruption charges last week, including the cur- rent and past presidents of the regional governing body for North and Central America and the Caribbean. Seven men were arrested by Swiss authorities at a luxury hotel in Zurich. Ted Howard, who be- came the acting general secretary for CONCACAF on Thursday, said the orga- nization continues to work with the U.S. government. “[The Justice Department] told us in their press conference the other day that they haven’t finished their investigation yet,” Howard said Monday night at a drawing an- nouncing the teams par- ticipating in a club tourna- ment later this year. “Like everyone, all of us [are] dis- appointed and shocked that this could happen again after four years ago.” CONCACAF announced the appointments of Howard and acting pres- ident Alfredo Hawit of Honduras on Thursday, one day after CONCACAF President Jeffrey Webb was arrested and indicted on charges of racketeering, money laundering and wire fraud. Webb, who is from the Cayman Islands, was elected president in May 2012. CONCACAF said Webb and Eduardo Li, the president of Costa Rican soccer’s governing body, had been “provi- sionally dismissed.” Li, who had been elected to fill one of CONCACAF’s seats on FIFA’s executive committee, also was in- dicted and arrested. CONCACAF has had a string of leaders in re- cent years. Jack Warner of Trinidad and Tobago held the position from 1990 until May 29, 2011, when he was suspended by FIFA during a bribery investigation. Lisle Austin of Barbados became acting presi- dent but was suspended by CONCACAF’s execu- tive committee that June 2 after he tried to fire Chuck Blazer, the confederation’s American general secretary. Hawit served as acting president until Webb was elected the following May 23. Howard served as acting general secretary between Blazer’s resignation at the end of 2011 and the hiring of Colombian-born Enrique Sanz on July 25, 2012. CONCACAF said Sanz had been placed on a leave of absence. An unidentified co-conspirator listed in the indictment fits the descrip- tion of Sanz’ work history. A press release announcing the contract award for the tournaments was released on Nov. 27, 2012.The islands’ most-trusted news source 9 India central bank cuts key interest rate India’s central bank cut a key interest rate by a quarter percentage point Tuesday, the third such reduction this year in support of government efforts to boost growth. Business Cayman Compass • Wednesday June 3, 2015 Deflation fears ease as eurozone inflation returns LONDON (AP) — For the first time this year, consumer prices across the 19-country eurozone are rising, easing fears that the region is set for a prolonged Japan-style era of debilitating deflation. Official figures Tuesday from the European Union’s statistics agency, Eurostat, showed that consumer prices across the single currency bloc were up 0.3 percent in May from the year before. That’s up from the flat reading in April and rep- resents the first positive reading since November. It’s also above market expectations for a more modest 0.2 percent rise and suggests the eurozone is past its bout of falling prices, or deflation, which can become a long-term threat to growth. The euro rallied after the figures’ publication, trading 1.6 percent higher at $1.1110. Many traders think the uptick in inflation will ease the pressure on the European Central Bank to extend its current monetary stimulus beyond its planned end date of September 2016. Meanwhile, the yield on German 10-year bonds rose 0.11 percentage points to 0.65 percent, a further sign that traders think the era of cheap and easy money may not last as long as predicted. “The market response to the news is perhaps not sur- prising given that it would appear to further reduce the chances of a sustained pe- riod of deflation in the cur- rency bloc,” said Ben May, lead eurozone economist at Oxford Economics. Eurozone consumer prices started falling in December, partly because of a sharp drop in global oil prices. The anemic state of the eurozone economy as well as high unemployment also kept a lid on inflation by subduing wages. However, over the past couple of months, oil prices have started edging higher while underlying inflation pressures across the euro- zone appear to be intensi- fying as the economy im- proves. That’s evident in the fact the core inflation rate – which strips out volatile items such as food, energy, tobacco and alcohol — was up 0.9 percent in the year to May, above April’s 0.6 percent rate. Policymakers at the ECB will welcome Tuesday’s in- flation news as they gather in Frankfurt, Germany, for their latest policy meeting. However, they’re unlikely to get carried away as the headline inflation rate is still way short of the target of just below 2 per- cent and the prospect of a Greek exit from the euro continues to cloud the re- gion’s economic outlook. In March, the ECB launched a 1.1 trillion euro ($1.2 trillion) monetary stim- ulus program that aims to stoke inflation and growth by injecting newly created money in the economy. A by- product of the policy was to push the euro down, which raises the price of imports and helps shore up inflation. The ECB’s concerns cen- tered on the possibility that prices might fall con- sistently over time. Such a longer-term fall in prices, called deflation, encour- ages people to put off spending and can prove difficult to reverse because it requires altering peo- ple’s expectations. It can lead to years of economic stagnation, as in Japan over the past two decades, or even something more severe, such as the Great Depression of the 1930s. Though some of the con- cerns of the ECB’s policy- making governing council may have been eased by the return to inflation, the prevailing view in markets is that the bank will perse- vere with its stimulus until the planned end-date. Any suggestion it could halt it sooner could prompt the euro to appreciate and the cost of borrowing in mar- kets to rise. “While today’s out- turn may provide further breathing room for the gov- erning council – by reducing the risk of a more perni- cious deflationary environ- ment taking root – it is far from sufficient to precipi- tate a change of course,” said Timo del Carpio, European economist at RBC Capital Markets. Eurozone consumer prices started falling in December, partly because of a sharp drop in global oil prices. Italian Prime Minister Matteo Renzi, right, meets with French Prime Minister Manuel Valls on Saturday prior to the start of the the Festival of Economics in Trento, Italy. Deflation has been a topic of major concern among eurozone leaders. - Photo: AP The news of Bitcoin’s death is greatly exaggerated Bitcoin startup Xapo recently announced that three financial eminences had signed on as advisory board members: former U.S. Treasury Secretary Larry Summers, former Citibank Chief Executive Officer John Reed and Visa founder Dee Hock. The news signaled that Wall Street is taking bit- coin seriously, which may surprise those who have followed the electronic cur- rency’s decline. Starting late last year, bitcoin-related headlines were uniformly grim. My Bloomberg View colleague Mark Gilbert noted in December that the value of a bitcoin had fallen more than 56 percent since January, beating out the Russian ruble and the Ukrainian hryvnia for the title of worst performing currency of 2014. Quartz wrote that bit- coin’s fall was steeper than the collapses of crude oil and the ruble. By the be- ginning of this year, publi- cations had declared that people had lost faith in bit- coin. Columnists wrote that it was at death’s door. The news of bitcoin’s death, it seems, is greatly exaggerated, especially now that the banking world is taking the digital currency seriously. Last fall, two U.S. banks agreed to use soft- ware created by Ripple Labs, whose real-time, cross- border payments product is based on bitcoin tech- nology. In January, a startup called Coinbase, which es- sentially stores people’s bit- coins for them, said it had received $75 million from investors, including the New York Stock Exchange, the Spanish bank BBVA, former Citigroup CEO Vikram Pandit and former Thomson Reuters CEO Tom Glocer. In April, Goldman Sachs Group led a $50 mil- lion investment in bit- coin startup Circle Internet Financial. And in March, Blythe Masters, the former JPMorgan Chase executive who pioneered the use of de- rivatives, became the CEO of Digital Asset Holdings, a software company that is building a trade-settlement platform for digital curren- cies and digitized versions of more commonly used fi- nancial assets such as tradi- tional currencies. Then last week came the Xapo (pronounced zappo) news, with Hock, Reed and Summers lending their pedigrees to a bitcoin storage company about which few have heard. Wences Casares, Xapo’s co-founder and CEO, says there was no watershed event that convinced Wall Street executives to take bit- coin seriously. Rather, he says, the financial services world has been tracking bit- coin since it started to gain attention a few years ago. During this winter’s Davos conference, Casares spent his days in one-on- one meetings with policy makers and bankers who wanted to know more about bitcoin. “The first time they heard about it, they thought it was a joke,” says Casares. “Now they see it’s not going away and they want to learn about how the tech- nology works. It’s been a very gradual process.” Banks are also under tighter scrutiny and recog- nize they’re in no position to take on new risks. Investing in and working with tech startups gives them entree to products they may not be in a position to develop, says Casares, who divides Wall Street’s bitcoin in- terest into several buckets. Some institutions are inter- ested in the technology that allows two parties to ex- change something of value without third-party veri- fication. Others are inter- ested in how the technology could remove counter-party risk from transactions. And some asset managers have bought bitcoins as a spec- ulative investment for cus- tomers’ portfolios. Masters, the former JPMorgan banker, is inter- ested in bitcoin’s potential to fill the first two buckets – as a technology to make faster, safer transactions. She told the Wall Street Journal that her company doesn’t think of bitcoin as “being a store of value or an alterna- tive currency or an invest- ment.” Rather, it regards bitcoin as a technology ad- vance that could become an important “medium for ex- change and a mechanism for recording information.” Her company, Digital Asset, is building a tool that lets customers con- vert securities into digital form so they can trade and settle in real time and by- pass middlemen. As the price of bitcoin fell last year and skepticism about the currency’s demise rose, critics failed to see that some of the world’s most powerful institutions were intent on learning more about how bitcoin could work for them. And that in- terest might help bitcoin to survive – and thrive. © 2015, Bloomberg News The news of bitcoin’s death, it seems, is greatly exaggerated, especially now that the banking world is taking the digital currency seriously.Next >