Slight with wave heights of 1 to 3 feet. Editorial | pagE 4 Work permits and pr: Unshackling cayman’s economic progress High of 91 Low of 79 Friday July 24, 2015 • Cayman Compass Revisit Ms. Pac-Man Get your retro fix with this app B6 Cayman at sunset Readers’ images capture what we love about the island B10 ■ Travel Photography Technology Jolly Jolie This gentle and loving dog would love to be your forever friend. Can you open your heart and home to her? B4 Art & Culture Little A relaxing island hop B8 Horacio Esteban Artist nurtures his talent during Jersey residency B7 Cayman Get a quote today. +1 (345) 949 9744 Home • Contents • Motor • Liability • Business • Marin e #203 Alissta Towers, 85 North Sound Road, Grand Cayman KY1-1109. E: Aleisha.Lalor@caribbeanalliance .com www.caribbeanalliance .com Rated A (Excellent) at A.M. Best Company ...IN THE CARIBBEAN Our customers enjoy extensive coverage and competitive premiums on every personal and commercial insurance product. Stu The Bus Coming Soon..... Stu The Bus Coming Soon..... +1 (345) 949 9744 Little Cayman cayman weekender eSTaBLISHed 1965 www.caymancompass.com – 75 CENTS – Friday JUly 24, 2015 Auditor GenerAl report Gov’t acted unlawfully on two major deals Brent FUller bfuller@pinnaclemedialtd.com The Cayman Islands government acted unlawfully and “without proper authority” in signing two of the territory’s largest-ever private sector development agreements, the auditor general’s office concluded in a report released Thursday. The original National Roads Authority agreement, which paved the way for con- struction of a Kimpton hotel and permanent closure of a section of West Bay Road along Seven Mile Beach, was negotiated by elected ministers “without the knowledge or assis- tance of civil servants.” In the case of the agreement on Health City Cayman Islands, often referred to locally as the “Shetty hospital” after its founder Dr. Devi Shetty, auditors stated: “No approval from the Legislative Assembly was sought, even though the agreement committed government to hun- dreds of millions of dollars in tax, duty and fee concessions and contained obligations for infrastructure upgrading and expenditure.” Auditor General Alastair Swarbrick said the NRA agreement and the Health City hospital were used in his report merely as examples of how the Cayman Islands government failed to properly manage, or in some cases properly participate at all, in the development process. “The governance framework for government expenditure requires that ministers set objec- tives and policy, but do not become involved in selection of means or in operation imple- mentation,” the report, titled “National Land Development and Government Retail Property,” states. “Moreover, all activity and expenditure must be approved by the Legislative Assembly.” According to the report, Cayman Islands government officials admitted that elected ministers had played a greater role rela- tive to these two projects than is prescribed. Stray dogS targeted after attack on governor kilpatrick Governor bitten in attack on the beach James Whittaker jwhittaker@pinnaclemedialtd.com Out-of-control dogs are being targeted following an attack on Cayman Islands Governor Helen Kilpatrick and continued attacks on endangered blue iguanas at the Queen Elizabeth II Botanic Park. Baited traps have been laid in the area close to where the governor was attacked, near her home on Seven Mile Beach, as she tried to save her cat from being mauled. The governor was treated for minor injuries at the scene last week. Meanwhile, a gun club sniper has been called in at the botanic park to target stray dogs, which have killed at least five blue iguanas there in the past month. The National Trust plans to build a fence around the park at a cost of more than $100,000 to keep dogs out. Animal welfare advocates say the attack on the governor and the incidents at the park are just the latest high-profile examples of a significant ongoing problem with abandoned dogs, and they have called for more resources for animal control and public education. The governor’s office confirmed Wednesday that she had received “minor in- juries” in the dog attack. “It is believed that this is one of several recent incidents involving the same dogs,” a spokeswoman at her office said. Adrian Estwick, director of agriculture, said baited traps have been placed in the area in an effort to capture the stray dogs. House Speaker in ‘possible breach of trust’ Brent FUller bfuller@pinnaclemedialtd.com Former Cayman Islands Minister of District Administration, Works, Lands and Agriculture Juliana O’Connor-Connolly “directed” in 2012 that government funds should be used to buy a $125,000 property on Cayman Brac, the auditor general’s office reported Thursday. The purchase was made with “unspent funds” at the end of the government’s budget year, Auditor General Alastair Swarbrick’s report on govern- ment land management re- vealed. The property was in an undeveloped subdivision on Cayman Brac. “Although a Cabinet paper states the rationale for the purchase as development of affordable housing, the property has never been vested with Sister Islands Affordable Housing nor is there any evidence that the agency was consulted prior to the acquisition,” the audit report states. “[In the referenced case] there is a possible breach of trust as there was no evident government requirement [to purchase the land] whatsoever.” Ms. O’Connor-Connolly, who is now the Speaker of the House, was contacted for comment about the auditor general’s allegations on Thursday, as was Premier Alden McLaughlin’s office. The Cayman Compass had received no comment from either by press time Thursday. Mr. Swarbrick said Thursday that he would present the de- tails of his full report on govern- ment land management to the Cayman Islands Anti-Corruption Commission at its next meeting, which had not been sched- uled as of press time. He also noted that all members of the Legislative Assembly were given copies of his report three or four weeks ago. “We’ve had no reaction to the report at this time,” he said. David Baines, the commis- sioner of police, chairs the Anti- Corruption Commission and would have the final say on whether any criminal investi- gation is brought in connection with the findings of the report, PLEASE TURN TO PAGE 10 » PLEASE TURN TO PAGE 8 » Auditor GenerAl report ‘political direction’ used in land purchases PLEASE TURN TO PAGE 8 » ms. O’connor-connolly2 LOCAL NEWS FRIDAY JULY 24, 2015 • CAYMAN COMPASS Mobile: 345-323-8573 Office: 345-943-8573 / Fax: 345-949-9753 heather.richards@remax.ky / www.remax.ky Heather Richards DREAM WITH YOUR EYES OPEN! 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By integrating Safety, Aesthetics, E ciency & Ergonomics into your designs we ensure lower long and short-term costs. • CONSULTING • MEP DESIGN • ELECTRICAL CONSTRUCTION • EMERGENCY AND BACK/UP POWER • QUALITY ASSURANCE & CONTROL • SERVICE CONTRACTS Electrical Services “Right from the start” Unit B11, Kingbird Warehouses Kingbird Dr, Industrial Park Tel: 345-945-1108 Cell: 345-926-1108 darsco@candw.ky www.darsco.com Darsco Cayman 20% O select products for the month of July Like us on Facebook select products for the Ten-year sentence for workplace rape Defendant and victim knew each other CAROL WINKER cwinker@pinnaclemedialtd.com Saying that rape by an acquaintance could be just as traumatic as rape by a stranger, Justice Malcolm Swift imposed a sentence of 10 years for a man found guilty at a jury trial earlier this month. Manolo Vallo and the victim worked at the same business. The evidence was that he attacked her when they were alone on the prem- ises after business hours. In passing sentence on Wednesday, Justice Swift set out the background to the of- fense, noting that the victim was 16 years younger than Vallo; they had come from the same country and their families knew each other. Vallo took on the role of mentor, purporting to guide her as she obtained work and gained experience on the job. The judge said it was clear to him that Vallo had another ob- jective in mind as he began to display affection toward her and sought out her company socially. He persisted in trying to ingratiate himself with her. She gave him no encourage- ment and began to feel un- comfortable around him. The rape occurred at the end of a workday when they were alone together. “Using your superior strength you pinned her down on the floor and forced her into sexual in- tercourse despite her valiant attempts to stop you,” the judge said. Afterward, Vallo stopped her from reporting the matter by insisting on taking her home. Vallo then began a campaign of texting and phoning to prevent her from making any report by trying to embarrass her and pres- sure her, instilling feelings of shame and distress. The effect of the attack on her was clear from her first text back to him: “You just destroyed my life. It’s better you kill me than if you treated me like this.” Justice Swift said the young woman believed that Vallo had deflowered her and ruined her chances to lead a normal life with normal relationships. Vallo’s defense at trial in- volved the allegation that the young woman was his girlfriend and they had had sex before, but she had fab- ricated the attack because she was jealous of another girlfriend of his. That defense added to the abuse she suffered at his hands, the judge pointed out. Because of his not guilty plea, the young woman had to give evidence and relive the ordeal, the humiliation of being cross-examined and being accused of being a liar who had made up the whole allegation out of spite. Justice Swift read from a U.K. report titled “Protecting the Public” as it dealt with so- called date-rape or acquain- tance rape. “Our view is that rape is rape and cannot be di- vided into more or less serious offenses. It can be just as trau- matic to be raped by someone you know and trust who has chosen you as his victim, as by a stranger who sexually as- saults the first man or woman who passes by. “It is up to the courts to take all the particular circum- stances of a case into account before determining the ap- propriate penalty,” the judge quoted. He then commented, “That statement represents with accuracy and poignancy the grave effect of this rape on this victim in this case.” Defense attorney Fiona Robertson asked for leni- ency. She said people in the community who knew Vallo were struggling to recon- cile this conviction with the hard-working, reputable man they knew. She pointed out that Vallo would never be able to re- turn to Cayman after he serves his sentence, so there would be considerable fi- nancial impact on him. The work he did here for $1,000 per month would earn him $250 per month in his home country, she told the court. As the youngest child of his widowed mother, and the only one not married, Vallo was responsible for providing for her. She was now in her 70s and in poor health. Vallo was concerned about who would care for her while he was in prison and whether she would live long enough to ever see him again. Justice Swift agreed with the attorney that there were no aggravating factors to the offending, “other than those inherent in the rape it- self, which invariably causes trauma to the victim and in- stills feelings of worthless- ness, self-blame, despair and any prospects of happiness in the future.” Crown counsel Candia James had brought to his at- tention Cayman’s 2002 sen- tencing guidelines and a Court of Appeal judgment that set out aggravating and mitigating factors. Justice Swift referred to both as he imposed the 10-year term. Manolo Vallo and the victim worked at the same business. The evidence was that he attacked her when they were alone on the premises after business hours.The islands’ most-trusted news source 3 Cayman Compass • Friday July 24, 2015 4978 LIME - DOUBLE Data - Weekend - Full Page Ad - CMYK - 10.33 x 15.97 - 15 July 2015 DATA All weekend, add a prepaid data plan and get double the mobile data. Visit us online to find the mobile data plan that’s right for you. BIGDOUBLE DATA WEEKENDThe 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. Friday JuLy 24, 2015 • Cayman COmpass Work permits and PR: Unshackling Cayman’s economic progress Over the past year, the number of work permit holders in the Cayman Islands rose 9 percent — from 20,360 to 22,232 people. This includes a 12 percent increase in workers from Jamaica, who now number about 9,100. Make no mistake — that is very good news for Cayman’s economy. Last Friday, the Compass ran a front-page story on the government’s annual economic report from the Economics and Statistics Office, which contained a dizzying array of figures for the year 2014, including on Cayman’s gross domestic product (up 2.1 percent), overall unemployment (at 4.7 percent), Caymanian unemployment (at 7.9 percent), total visitors (up 16 percent), air arrivals (up 11 percent) and cruise arrivals (up 17 percent). At the same time, the government released another report showing that Cayman’s consumer price index, which is used to measure inflation, declined by 0.4 percent in the first quarter of 2015. Finance Minister Marco Archer attributed this deflation to falling oil prices, which are far beyond Cayman’s control. Trotted out all at once, those assorted facts and fluctuations are enough to combust calculators and crumble crania. Broadly speaking, in order to assess accurately the state of Cayman’s economy, we need not trouble our- selves with more than a handful of key statistics: • The number of work permits • The total population • The amount of imports (except for oil and gasoline) If those indicators are trending upward, which indeed they all were during 2014, then Cayman’s economy can be said to be growing. Of the three bullet points we list above, the one likely to attract the most disagreement is the first. We can hear the indignant rejoinder now, “Immigrants steal jobs from locals.” That, of course, is a myth. We maintain, and evidence-based analysis supports, the argument that the more people working in Cayman, regardless of immigration status, the better for the overall economy — and the better the overall economy is, the more job opportunities there are for everyone, including Caymanians and non-Caymanians. When functioning properly, it’s a cycle of positive feedback. Drawing on other recent headline news, our hypo- thetical opponents might point to the nearly US$180 million in remittances sent last year from Cayman to other countries (much of that, presumably, from foreign workers in Cayman to their dependents overseas). Isn’t that a clear indication of work permit holders shrinking, rather than expanding, the local economy? In Thursday’s editorial, we said it is readily apparent that, considering their contributions in terms of gov- ernment fees and local expenses, expatriate workers have a net positive effect on Cayman’s economy. We shall set aside that truth for now — and accept the narrower observation that outbound remittances, taken by themselves, do constitute a negative line- item on the economy’s balance sheet. There is a way to stem this capital flight from Cayman, and to un-tether the status of Cayman’s economy from the quantity of work permits: Rather than continuing to treat expatriates as “rented” labor for a specified rollover period, we should transform our immigration regime so that work permit holders are regarded fundamentally as candidates for permanent residence, and potentially full-blown Caymanian status. In other words, provide expatriates with a clear and level pathway to citizenship, so to speak. (Notice that we do not use terms such as “loose,” “easy,” or “non- selective.” Like academic testing, our immigration criteria should be rigorous and standards-based, but fair and transparent.) This evolution in immigration ethos would encourage expatriates to keep and invest their money in Cayman. And, as foreign workers — after proving themselves as fit additions to our society — transition to PR status, it would reduce our country’s reliance on work permits and make that particular number increasingly irrelevant to the condition of Cayman’s economy. Estonia’s simple and fair business taxation I’m very fond of Estonia, and not just because of the scenery. Back in the early 1990s, it was the first post- communist nation to adopt a flat tax. More recently, it showed that genuine spending cuts were the right way to re- spond to the 2008 crisis (not- withstanding Paul Krugman’s bizarre attempt to imply that the 2008 recession was somehow caused by 2009 spending cuts). This doesn’t mean Estonia is perfect. It is ranked No. 22 by Economic Freedom of the World, which is a respectable score, but that puts them not only behind the United States (No. 12), but also behind Switzerland (No. 4), Finland (No. 10), the United Kingdom (No. 12), Ireland (No. 14), and Denmark (No. 19). But I don’t believe in making the perfect the enemy of the good. Estonia is still a reasonably good role model for reform, par- ticularly for nations that emerged from decades of communist enslavement. You can see how good policy makes a difference, for instance, by comparing Estonia with Croatia (No. 70). At the time of the breakup of the Soviet Empire, living standards in Croatia were low, but they were about twice as high as they were in Estonia. Today, though, per-capita economic output in Estonia is about US$4,000 higher than in Croatia. That’s a dramatic turn- around and it shows that markets are much better for people than statism. Sort of like the lesson we learn by comparing Poland (No. 48) and Ukraine (No. 122). Let’s now take a closer look at one of the policies that has helped Estonia prosper. The flat tax was first adopted in 1994 and the rate was 26 percent. Since then, the rate has been gradually reduced and is now 20 percent. For some people, the most amazing aspect of the Estonian flat tax is its simplicity, as noted by Kyle Pomerleau of the Tax Foundation: “Republican Presidential hopeful Jeb Bush claimed that it only takes five minutes to file taxes in Estonia. This claim was confirmed by a number of reporters and tax author- ities in Estonia. For those of us that do our taxes by hand, this sounds like a dream. Depending on your situation, filing your taxes can tax a significant amount of time and due to the nu- merous steps involved (es- pecially if you are claiming credits) may lead some to make errors. According to the IRS, it takes an average taxpayer with no business income 8 hours to fill out their 1040 and otherwise comply with the individual income tax. Triple that for those with business income.” For those keeping score, this means Estonia is kicking America’s derriere. But Kyle is even more im- pressed by other features of the Estonian system. “… that is not the best part of the Estonian tax code. The best part of the Estonian tax code has more to do with its tax base (what it taxes) rather than how fast people can pay their taxes. Specifically, the Estonian tax code has a fully-integrated individual and corporate income tax. This means that corporate income is taxed only once either at the entity level or at the individual level.” And this means Estonia’s flat tax is far better for growth than America’s system, which suffers from pervasive and destructive double taxation. “In total, the tax rate on corporate income is 20 per- cent in Estonia. Compare this to the integrated tax rate on corporate profits of 56 per- cent in the United States. Even more, this tax system provides de facto full ex- pensing for capital invest- ments because the corporate tax is only levied on the cash distributed to shareholders, which is also a significant boon to investment and eco- nomic growth.” Wow. No double taxa- tion and expensing of busi- ness investment. There is a lot to admire about Estonia’s sensible ap- proach to business taxation. Particularly when com- pared to America’s masochistic corporate income tax, which ranks below even the Greek, Italian, and Mexican systems. Having the world’s highest statutory corporate tax rate is part of the problem. But as Kyle pointed out, the problem is actually far worse when you calculate how the in- ternal revenue code imposes extra layers of tax on busi- ness income. That’s why, at a recent tax reform event at the Heritage Foundation, I tried to emphasize why it’s eco- nomically misguided to have a tax bias against saving and investment. The bottom line is that high taxes on capital ulti- mately lead to lower wages for workers. Daniel J. Mitchell, a senior fellow at the Cato Institute and chairman of the Center for Freedom and Prosperity, is on the Editorial Board of the Cayman Financial Review. This column appeared on International Liberty, http://danieljmitchell.wordpress.com. Daniel J. Mitchell 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”The islands’ most-trusted news source 5 Cayman Compass • Friday July 24, 2015 4978 LIME - PICK-A-SEAT Promo - Full Page Ad - CMYK - 10.33 x 15.97 - 21 July 2015 LUCKYSEAT Pick your lucky seat and you could win a pair of cinema tickets each day through to the end of summer. And everyone who plays is entered to win the grand prize of a weekend at the Ritz Carlton, Grand Cayman. So go on, get picking at lime.com/luckyseat LIME Terms & Conditions Apply WIN BIG PICK YOUR LUCKY SEAT6 LOCAL NEWS Friday July 24, 2015 • Cayman Compass 179226_PRINT2-IH-Secure-Sonny.pdPage 1 6/11/15 1:18:05 PM AlAn MArkoff amarkoff@pinnaclemedialtd.com More than 62 percent of the respondents of a cayman- compass.com online poll said commercial-scale solar en- ergy is the direction Cayman should go in the future. Of the 377 total respon- dents, 236, or 62.6 per- cent, said commercial- scale solar energy was long overdue and any delay was counterproductive. “Thanks to CUC’s inter- ference, we are already at least 20 years behind the rest of the world with this,” said one person. “It’s not only overdue, it’s not enough,” said another person. “We need to allow people to utilize as much solar as they can and still be connected to the grid.” “Solar should be decen- tralized,” said someone else. “Just manage the grid.” “As was proven this week with an 8+ hour power failure to which CUC gave every single resident on this island insulting lip service excuses, CUC is a organization which is apparently beyond control of anyone in Cayman,” com- mented one respondent. “We need better options, and solar is a good place to start.” “Wind power needs to be added to the mix,” said someone else. Fifty-one people – 13.5 percent – said they were in favor of commercial-scale solar energy, but it would re- quire long-term changes for CUC and its customers, while another 58 people – 15.4 per- cent – responded “maybe” to the question, depending on the price for the consumer. “I am all for going green as long as it doesn’t cost me too much,” said one person. “Grand Cayman seems to be an optimal place for solar,” said someone else. Four people – 1.1 percent – responded “Not yet, but we are getting there,” and three people – 0.8 percent – said they were opposed because it requires long-term changes for CUC and its customers. “The idea is great, but it’s hard to believe the Cayman government will be able to make it work,” said one person. Twenty-five people – 6.6 percent – did not feel com- mercial-scale solar energy was the way to go because it was commercially unproven and too risky. “This is not their deci- sion,” one person said of the Electricity Regulatory Authority. “They are a reg- ulator, not an energy pro- viding company. Tell them to do their job of regulating and stay out of the business of power generation.” “Solar energy wouldn’t survive a hurricane whereas the old [generators] would restart fairly easily,” said someone else. “Solar power is a scam,” commented another person. Next week’s poll question Which aspect of Cayman’s cruise-berthing proposal is most significant to you? ■■ The potential eco- nomic benefits ■■ The potential envi- ronmental impacts ■■ The potential effect on stay-over tourism and residents’ quality of life ■■ The lack of suffi- cient infrastructure ■■ None of it is sig- nificant to me. To participate in this poll, visit www. caymancompass.com starting July 27. Online pOll Majority want solar energy Total respondents: 377 I'm in favor, but it requires long-term changes for CUC and its customers. 51 Votes 13.5% Maybe. It depends on prices for the consumer. 58 Votes 15.4% Not yet, but we are getting there. 4 Votes 1.1% I'm opposed because it requires long-term changes for CUC and its customers. 3 Votes 0.8% No, it's commercially unproven and too risky. 25 Votes 6.6% Yes, it's overdue and delay is counter-productive. 236 Votes 62.6% COMPASS ONLINE POLL Source: CaymanCompass.com Online Poll Question: Our electricity regulators say they are about to decide on commercial scale solar energy. Is this the right way to go? New seNior deputy clerk joiNs court Shiona Allenger has joined the judicial administration, taking up her post as se- nior deputy clerk of court and registrar of the Financial Services Division. She suc- ceeds Tomica Daley. Court administrator Kevin McCormac welcomed Ms. Allenger, saying, “She brings a wealth of experience, en- ergy and vision that will be a great asset to us as we con- tinue to develop the proce- dures and processes of the civil courts.” Ms. Allenger earned her law degree at the Cayman Islands Law School in 2001, followed by the professional practice course through Belfast University in 2002. She has also completed an MBA through the University of Phoenix, Arizona. After four years as an attorney in Cayman, Ms. Allenger moved to Florida, where she was administrative director to a regional counsel and gained considerable ex- perience in developing new administrative structures, in- cluding extensive involvement in family proceedings. Returning to Cayman in 2013, Ms. Allenger served as assistant clerk in the Legislative Assembly. Ms. Allenger7 LOCAL NEWS Cayman Compass • Friday July 24, 2015 Treasure Island deal in doubt Hotel back on the market James Whittaker jwhittaker@pinnaclemedialtd.com A multimillion-dollar agreement to revive the be- leaguered Treasure Island resort is in jeopardy after the property was put back on the market. The Canada-based Howard Hospitality Group says it is still in negoti- ations to finalize a deal, agreed in principle in May, to buy a controlling stake in the property. The group previously announced plans to in- vest $70 million in reno- vating the venue on West Bay Road. Michael Wilkings, chief operating officer of Howard Hospitality, said Thursday that those plans had not changed and nego- tiations were continuing. He said he was unable to comment further. The 280-room hotel was put on the market by realtor RE/MAX this week with a list price of $15.475 million. Receivership Current owner Restoration Cayman was put under receivership in November last year at the request of secured lender Scotiabank. The hotel was listed for sale in February but was taken off the market when the company announced it had agreed to the deal with the Howard Hospitality Group. Kim Lund of RE/MAX said the property is now back up for sale and open to anyone to buy. He said there were no restrictions or priorities on the sale, despite the previously an- nounced agreement. “It was taken off the market because it appeared there was going to be a so- lution, but we have had in- structions to put it back on the market and it is actively for sale,” he said. In May, the Howard Hospitality Group an- nounced it had agreed to buy a controlling stake in the hotel, with Restoration Cayman maintaining a mi- nority stake. Opportunity touted “It is a fantastic asset in a great location that requires a lot of vision and imagi- nation to figure out what to do with it,” Mr. Wilkings said at the time. “If you can see past what is here today and imagine what it could be with good design, good branding and significant investment, the potential is fantastic.” The RE/MAX listing ad- vertises Treasure Island as an “undervalued opportunity in a prime location for an as- tute investor to change the business model,” citing an opportunity to develop the current hotel to “gross ap- proximately $60 million.” It also highlights an- other potential opportunity to demolish the property and develop two 10-story towers for a new resort. Treasure Island is up for sale again. - PHOTO: CHRIS COURT The 280-room hotel was put on the market by realtor RE/MAX this week with a list price of $15.475 million. The islands’ most-trusted news source 8 Friday July 24, 2015 • Cayman Compass On June 19th, 2015, in Venice, Florida, Sallie K. Johnson passed away peacefully after a long illness. A memorial was held in Mobile, Alabama, her home town. She was interred off the west coast of Grand Cayman on July 1st, 2015. She loved friends, family, artistry, the Cayman Islands and the Sea. Sallie K. Johnson We have been asked to announce the passing of Mr. Mark Anthony Vernon who passed away on Tuesday, July 7, 2015. A Service of Thanksgiving will be held on Saturday, July 25, 2015 at Church Of God Prophecy, Victory Tabernacle, # 325 Eastern Ave, George Town at 12:00 p.m. Interment to follow at Prospect Cemetery. Condolences can be registered at: www.churchillsfuneralhome.com We have been asked to announce the passing of Mr. Mark Anthony Vernon who passed away on Tuesday, July 7, 2015. A Service of Thanksgiving will be held on Saturday, July 25, 2015 at Church Of God Prophecy, Victory Tabernacle, # 325 Eastern Ave, George Town at 12:00 p.m. Interment to follow at Prospect Cemetery. Condolences can be registered at: Condolences can be registered at: Cwww.churchillsfuneralhome.com Interment to follow at Prospect Cemetery. We have been asked to announce the passing of We have been asked to announce the passing of Ms. Tonia Annette Rankine aka Tone-Tone who passed away on July 20th 2015. A Service of Thanksgiving will be held on Saturday, July 25, 2015 at East End United Church at 3:00 p.m. Viewing will be from 2:00-2:45 p.m. Interment to follow at East End Cemetery Condolences can be registered at: www.churchillsfuneralhome.com We have been asked to announce the passing of Ms. Tonia Annette Rankine aka Tone-Tone who passed away on July 20th 2015. A Service of Thanksgiving will be held on Saturday, July 25, 2015 at East End United Church at 3:00 p.m. Viewing will be from 2:00-2:45 p.m. Interment to follow at East End Cemetery Condolences can be registered at: www.churchillsfuneralhome.comCondolences can be registered at: www.churchillsfuneralhome.comCondolences can be registered at The Family of the late ERNA AUDREY RYAN announces her home coming to be with the Lord on Saturday July 18, 2015 at 6:50am at the Faith Hospital on Cayman Brac. A Service of Thanksgiving for her life will be held on Sunday August 2, 2015 at 3:00pm, at the Aston Rutty Centre Cayman Brac. Interment will follow at the Stake Bay Cemetery, Cayman Brac. Condolences can be registered at boddenfuneralservices.com & Bodden Funeral Service Facebook page However, the unnamed offi- cials noted that, in their view, “It is not practical to exclude ministers from them, regard- less of the governance frame- work of the Cayman Islands government” due to the “na- tional importance” attached to such projects. Mr. Swarbrick said Thursday that he “had some sympathy” for the position expressed in that state- ment. However, he said ministers and the govern- ment in general had not followed the government’s own laws and regulations with regard to the approval of these two projects. “This is a challenging issue and it’s something we con- tinue to see across most of our audits,” he said. “Where does the political responsi- bility start and stop? There needs to be an open and frank discussion around that.” NRA deal The agreement concluded during the former United Democratic Party adminis- tration between government and Dart Realty Cayman Ltd. underwent some re- view prior to being signed, but auditors said a Cabinet paper presented by the former Ministry of District Administration was based entirely on reports from the private sector developer. After signing the initial deal, government did con- duct an “independent re- view” to determine whether it was receiving value for money, auditors said. However, that review raised questions about concessions made for stamp duty related to the project, as well as im- port duty abatements and a proposed hotel tax rebate. “The agreement was too vague to determine what the government would eventu- ally have to give [Dart Realty] in exchange, including the forgoing of future revenue,” the audit report noted. “The government had inadequate understanding of the costs in terms of duty and tax concessions to which it had committed itself for up to 40 years.” Although the current gov- ernment has since rene- gotiated the terms of the pending the advice of other commission members, Mr. Swarbrick said. Government land The revelation about the Brac land purchases is con- tained in a section of the au- ditor general’s report that found government owns 279 parcels of land – worth about $60 million – that are not re- quired for its operations. The unused Crown land was identified during the government’s Project Future review, and some proposals for sale of excess land are already being considered. Government officials have indicated that some of these “non-operational” properties are a liability to the public sector be- cause they are used for such things as illegal dumping. As part of the auditor gen- eral’s review, the office looked at a sample of 13 “non-opera- tional” properties and found that at least six had “no link to the strategic objectives of the Cayman Islands.” In three of the cases, “polit- ical direction” was used to pay the owners of the property more than the assessed value. One of those instances documented by auditors showed that about $3 mil- lion was paid for land to create Barkers National Park. The land had an as- sessed value at the time of $2.2 million. In another case, the gov- ernment paid $171,000 for a house next to the Cayman Brac fire station against the assessed value of $142,000. “The fire station plans to use the house for storage, al- though it had no pre-existing requirement for additional space,” Mr. Swarbrick’s re- port read. “Although the property was purchased in 2012, the property transfer is still incomplete and the building is unused.” CONTINUED FROM PAGE 1 CONTINUED FROM PAGE 1 hotel tax rebate agreement with Dart, auditors noted that for a period of time the Progressives-led administra- tion refused to honor that portion of the deal. If the renegotiation had not been successful, there would have been a risk of expensive litigation and that could have left the gov- ernment liable for dam- ages to Dart Realty, auditors concluded. Health City Two studies were under- taken relative to the Health City Cayman Islands project before the hospital opened in East End in February 2014. One was completed by the private sector company pro- posing the development, the other was done for the gov- ernment’s Ministry of Health. Neither study resulted in a complete, fully documented report, auditors noted. The private sector review focused mainly on potential revenue streams and the company’s own financial forecasts, while the ministry study questioned the competitiveness and prof- itability of health tourism in the Cayman Islands. Auditors revealed that when the hospital agreement was discussed in Cabinet, questions were raised about signing such a deal without “a full study.” “Assurance was pro- vided that the proposal had been researched by the former minister and that a full study was in prog- ress,” Mr. Swarbrick’s re- port found. “No such study was ever completed.” The conclusion from au- ditors was that the govern- ment committed to tens of millions of dollars in ex- penditure for the Health City Cayman Islands project without adequately re- searching the costs involved. “There is a risk that, should Health City expand to its full size, the Cayman Islands government could come under pressure to pro- vide infrastructure which it cannot afford,” auditors found. “While employment of Caymanians would increase and there would be private benefits, there would not be a proportionate growth in tax revenues due to the conces- sions given the company.” According to auditors, concessions for the hospital project included US$800 mil- lion in customs duty con- cessions on medical equip- ment and supplies, an unknown amount in reduced work permit fees, provision of water at a preferential rate by the Water Authority, Cayman for “an unspecified period of time” and a com- mitment to upgrade airport facilities to accommodate an expected increase in traffic due to medical tourism. “Again, no informa- tion was provided to the Legislative Assembly, even though the agreement com- mitted government to hun- dreds of millions of dollars in tax, duty and fee conces- sions and contained obliga- tions for infrastructure up- grading and expenditure,” auditors found. US Senate panel votes to lift Cuba travel ban WASHINGTON (AP) – A Republican-controlled Senate panel has voted to lift a de- cades-long ban on travel to Cuba, giving a boost to President Barack Obama’s moves to ease travel re- strictions and open up re- lations with the Castro- governed nation. The Senate Appropriations Committee also voted to re- peal a law prohibiting banks and other U.S. businesses from financing sales of U.S. agricultural exports to Cuba. The Obama administra- tion issued rules in January to significantly ease travel re- strictions to Cuba and allow regularly scheduled flights for the first time. The Senate Appropriations Committee 18-12 vote comes just days after the U.S. and Cuba formally ended more than a half-century of estrangement by re-estab- lishing diplomatic relations cut off during the Cold War. “We have the opportu- nity to increase the likeli- hood that Cuban people have greater liberties and freedom with the ability to connect with them,” said sponsor Jerry Moran, R-Kansas. “I also would say that as Americans we have certain freedoms that we cherish, and Americans can travel around the globe today without exception – no country is totally prohibited with the exception of Cuba.” The House Appropriations Committee has moved in the opposite direction, but the intra-party disagreement among Republicans makes it far less likely that the GOP- controlled Congress will try to use spending bills to chal- lenge Obama’s rapproche- ment with Cuba. The House provision would block new rules issued in January that would sig- nificantly ease travel restric- tions to Cuba and allow regu- larly scheduled flights for the first time. The Senate language goes beyond the administration rules, which lifted a require- ment that U.S. travelers obtain a license from the Treasury Department before travel- ling to Cuba. Instead, all that is required is for travelers to assert that their trip would serve educational, religious or other permitted purposes. “Positive change in Cuba will take time,” said Sen. Patrick Leahy, D-Vermont. “But it will come not as a result of stubborn nostalgia by a vo- ciferous few for the Batista years, but by visiting Cuba, listening to the Cuban people, and engaging with them.” The hospitality industry and other business sectors are still blocked from doing business in Cuba. Marriot International President Arne Sorenson just re- turned from Cuba and is repre- sentative of many companies eager to do business there, es- pecially as more Americans travel to the island. “With travel to Cuba now surging, existing Cuban ho- tels are full and hotel compa- nies from other countries are racing to tie up as many of the new hotels as they can be- fore the likes of Marriott and our U.S. competitors show up,” Sorenson said. The panel’s votes re- flect growing sentiment, even among some GOP conserva- tives, to ease the five-decade- plus Cuba trade embargo and travel restrictions to the is- land, which have failed to move the Castro regime to- ward democracy. “After nearly 60 years, we might try something dif- ferent,” Moran said. The panel also voted to lift restrictions on vessels that have shipped goods to Cuba from returning to the U.S. until six months have passed. The Cuba legislation was added to a $21 billion mea- sure funding the Treasury Department, which enforces the long-standing trade embargo. Separately, the panel voted narrowly to make it easier for legal vendors of medicinal and recreational marijuana to do business with banks instead of relying on cash to conduct their business. Marriot International President Arne Sorenson just returned from Cuba and is representative of many companies eager to do business there, especially as more Americans travel to the island. Auditor General report: Gov’t acted unlawfully on two major deals Auditor General report: ‘Political direction’ used in land purchases9 LOCAL&REGIONAL Cayman Compass • Friday July 24, 2015 CAMANA BAY / ROYAL PLAZA / COUNTRYSIDE UNLIMITED TEXTS UNLIMITED DIGI TO DIGI CALLS UNLIMITED FOR 3 MONTHS DATA BREAK FREE GO UNLIMITED TALK AND TEXT ALL YOU WANT WITH DIGICEL’S NEW PREPAID AND POSTPAID PLANS British OT minister replaced Kelsey JuKam kjukam@pinnaclemedialtd.com The British minister re- sponsible for overseas terri- tories including the Cayman Islands, has been tempo- rarily replaced while he is in hospital. James Duddridge, who was admitted to hospital last week, is being replaced by Grant Shapps. Mr. Duddridge, a member of Parliament for Rochford and Southend East, was ap- pointed to the office last August. He has suffered a series of complications since having gall bladder surgery in October, and re- cently fell ill again. Mr. Shapps, a member of Parliament for Welwyn Hatfield and the minister of state at the Department of International Development, was appointed to take over the office of the U.K.’s under secretary of state for foreign and commonwealth affairs. Responsibilities of the office include the Caribbean, Africa, polar regions and il- legal wildlife trade. Mr. Shapps has previ- ously been the subject of some controversy in the U.K. In March, The Guardian newspaper reported that Mr. Shapps had denied holding a second job as a “multi- million-dollar Web mar- keter” for at least a year after he was first elected to Parliament. He held the job, which included selling a self-help guide to get- ting rich called “Stinking Rich,” under the pseudonym Michael Green. In 2012, a picture of Mr. Shapps wearing a name tag that said “Michael Green” was discovered, but Mr. Shapps repeatedly told media that he had stopped using the pseudonym after he became a member of Parliament. In May, Prime Minister David Cameron fired Mr. Shapps from his role as Conservative Party co- chairman following a series of revelations pertaining to Mr. Shapps’s alleged at- tempts to edit his Wikipedia page, as well as the pages of his political opponents. Wikipedia blocked the account of Mr. Shapps (or someone acting on his be- half), after the user removed references on Mr. Shapps’s page to his online busi- nesses and the “Michael Green” pseudonym. James Duddridge, who was admitted to hospital last week, is being temporarily replaced by Grant Shapps. Mr. Shapps Liquor licensing holders, including those holding music and dancing licenses, have until Aug. 14 to renew the licenses. According to a reminder notice issued by government on Wednesday, “Licensees are reminded that their premises should be in- spected by the relevant gov- ernment agencies – the Fire Service, Environmental Health and Port Authority – before the 14 August dead- line. To avoid processing de- lays, these reports should be submitted along with the renewal applications.” The statement points out that even if these agencies’ inspection reports are un- available by the deadline, li- quor licensing renewal ap- plications still must be submitted to the Liquor Licensing Board by Aug. 14. It also notes that all in- spections by the Planning Department have been sus- pended until further no- tice. Liquor Licensing Board Secretary Marva Scott said the Planning Department sus- pended inspections on June 30 and is currently reviewing its inspection process. Ms. Scott said the re- view process was sup- posed to have been com- pleted by July 7, and in the event that the process has not been completed by the time the board meets in September, the board will then make a decision as to how to proceed. Renewal applications have been mailed to each li- cense holder and copies are also available from the Liquor Licensing Board counter at the Government Administration Building. Renewal applicants may contact Liquor Licensing Board Secretary Marva Scott on 244-3168 for more information. Liquor licensing renewal deadline nears hedge fund firm to buy puerto rico hotel SAN JUAN, Puerto Rico (AP) – A company of New York hedge fund billionaire John Paulson reached a $20 million deal to buy and renovate a recently closed hotel in Puerto Rico’s tourist district, officials said Thursday. Paulson & Co. will develop the seaside San Juan Beach Hotel into an ultra-luxury boutique hotel in the pop- ular Condado neighborhood, according to Puerto Rico’s Department of Commerce and Economic Development. The hotel previously filed for Chapter 11 bankruptcy amid the U.S. territory’s worsening economic crisis. Government officials said Paulson & Co.’s invest- ments on the island could reach $2 billion by year’s end. The company already owns the Vanderbilt Hotel and La Concha Resort in Condado, as well as the St. Regis Bahia Beach Resort in the northeast municipality of Rio Grande. “Paulson’s continued in- vestment in Puerto Rico is a testament to my adminis- tration’s efforts to generate economic growth,” Gov. Alejandro Garcia Padilla said in a statement. “Our economic development plan is working.”Next >