Opposition demands answers

| 27/06/2009

(CNS): As the Legislative Assembly met to debate the government’s interim budget appropriation on Friday, the opposition also demanded answers from Financial Secretary Ken Jefferson about why his advice to the previous Cabinet on the state of government finances had been so dramatically revised only a few weeks after the election. Pointing out the dependence of any government on the financial secretary’s information to plan their policies, Alden McLaughlin said if it could not rely on that no matter who was in office the country was going to “Hades in a hand basket.”.

The opposition raised a number of questions about the statement by Leader of Government Business McKeeva Bush on 12 June that the country was facing a record deficit and debt. Aside from the obvious question of how the financial secretary could be predicting such an entirely different financial scenario from 5 May to the beginning of June, Leader of the Opposition Kurt Tibbetts also described Bush’s statement as “craftily crafted” as he was not comparing like for like figures and had mislead the country about the state of the country’s reserves. He said the statement had suggested that cash balances were only $17 million when in fact the combined reserves when the PPM left office were $110 million.

He said he understood politics very well and how information is presented to the public but he said playing with the presentation of figures had wider ramifications and made it look as though the country was in dire straits when it was not. Tibbetts acknowledged that these were challenging times and as a result he had asked the financial secretary to keep tracking the finances to ensure government remained within the boundaries of the PMFL. He said that the sudden change of financial predictions had made the previous administration out to be liars, which was not the case.

“I do not practice deceit and I will not stand idly by when someone tries to say I do,” Tibbetts said. However, it was of the financial secretary that Tibbetts demanded clarifications and explanations of how he could have told the PPM government one thing on 5 May and such a wildly different thing a few weeks later to the UDP government.

Tibbetts asked how the financial secretary could suggestion that another $19 million was now needed for government expenditure, a further $9 million to cover loses by statutory authorities and that revenues were out by a further $17 million following the election when he had given the PPM true figures on 5 May.  “It is obvious to me that this $19 million does not reflect a simple and straight forward increase of needs……Where has this sudden increase in expenses come from?” he asked. “It has to reflect policy decisions by the new government, and that is their prerogative, but don’t craft a statement of this nature and say it is us,” Tibbetts told the government benches.

He demanded that Jefferson give a full explanation of the circumstances and what had happened before the new budget was voted as he suspected what was going on was that  the new government was bundling up more spending and dumping it on the opposition. “Someone will have to prove to me that was not the intention.” Tbbetts said he suspected that he would have to wait for the exact year-end figures to see what the $19 million is for but he hoped someone might say (before that).

While Tibbetts was reserved in his demands of the financial secretary, McLaughlin held no punches and said he could not believe the complete absence of context from the financial secretary when he move the motion for the temporary budget.  “I am astounded with all that has transpired in relation to this that at the very least this House and the country would have had the benefit of an explanation,” he said, accusing Jefferson of a dereliction of duty. “If I sound aggrieved it is because I am,” McLaughlin added.

He said he considered the third official member a friend but something was radically wrong if what he now says is the truth. He noted that all governments had to be able to rely on the predictions made by the FS. “I don’t care who sits in government , the country is going to Hades in a hand basket if it cannot depend on the financial information it is given,” said McLaughlin adding that now more than ever in tough economic times the information had to be dependable because government revenue was exceptionally vulnerable to the global crisis.

He said the difference between the information Jefferson had given on 5 May to what was stated in the LoGB’ statement was all the more shocking as the financial secretary had given no indication of anything going awry.

“I don’t have much but my integrity and honour,” said McLaughlin, adding that both had been challenged by this and that the financial secretary had made it appear that he and his colleagues from the previous government had been involved in a big conspiracy.  He said the 5 May note presented to the Cabinet had, according to the financial secretary, represented the actual situation in relation to the cash balances and the deficit and the next thing he knew the LoGB was making his 10 June statement saying the deficit had gone from $29million to $74million, which was endorsed by the financial secretary. McLaughlin said he was not prepared to sit idly by and have his integrity challenged. “I take real umbrage to this,” he said, adding that the truth had to be told and that he had kept detailed notes on exactly what the previous administration was told. 

He demanded further explanation forthe current finances and the newly proposed interim budget and said the whole thing required an examination by Finance Committee.

Responding to the opposition, Rolston Anglin said he did not know why the opposition was shocked by the state of government finances when they had live through a period of extravagance and rode on the back of the Ivan recovery. “They cannot run from their record,” he said before the House was adjourned until Monday morning, 29 June.

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  1. Wonder Woman says:

    The ‘Anonymous’ post of 6/27/2009 – 14:07 was so perfectly worded and to the point, I just want to say ‘ditto’.   However, I will add my bit:

    The Financial Secretary, the Attorney General and even the Governor all seem to be dancing to the same tune. I guess we know which band is playing. The tune doesn’t sound like Beloved Isle Cayman!

  2. Anon says:

    All I know is I was horrified when I saw the news on Friday night and saw the MLA speaking of securing loans to cover this interim budget for the next 4 months.  This is an awful lot of money, and an awful lot of (additional) debt for the Cayman Islands and its people.  Another disturbing issue for me was hearing the MLA speak of how he had carefully calculated this money was needed for various projects… but no mention of the country’s ability to repay the loans – I worry about the country’s repayments more than the projects themselves!

    Or perhaps I just got it wrong?

  3. Anonymous says:

    For goodness sake, will the government and/or the Financial Secretary PLEASE just publish the underlying information so we can see what the actual state of play is?  Every third person on this island is an accountant-type, and the person standing beside each of those is an attorney, so just release the actual data and we’ll have it sorted out in no time. 

  4. Anonymous says:

    So what are the real numbers re Cayman Airlines – I am assuming they are not good at all  

    • Anonymous says:

      I hope you remeber the debt that Mac left at Cayman Airways 2005. I’m sure that won’t be the case with Mr. Clifford.  And hopefully Mac won’t do the samething again during these 4 years, if he last that long.

  5. Anonymous says:

    How amusing that the Minister most responsible for the government’s financial problems is raising such a stink.  The Ministry of Education was a black hole for government money with unregulated hiring and spending.  Every government department was forced to cut back budgets and staff in a futile effort to make up for the budget overruns of that one Ministry.

    At least that’s one opinion.

  6. Afraid to Strap on a Pair Also says:

    I Confess!  The Other Guy Did It!

    Alden, it’s time to man up here. Stop with ‘the buck stops over there’ crap.

  7. Anonymous says:

    Demand answers? That bunch  couldn’t even figure out the right questions . If I were them I would keep quiet until the accountants have sorted out the mess they have made .The FS makes estimates .That is what a budget is. .A prudent  Govt makes spending decisions  with margins for error.What they did  was a fiasco. Wait till they get  real numbers on Cayman  Airways . 

    • Anonymous says:

      "A prudent  Govt makes spending decisions  with margins for error.What they did  was a fiasco".

      The difference between a $29m deficit and a $74m deficit, and cash reserves of $126m versus $17m are hardly margin of error issues. It only appears to be a fiasco because, thanks to the FS, no one knows the true state of the country’s finances but he has nonetheless presented a budget to be passed. 

      McKeeva is comparing apples with oranges with his figures. For example, he quotes the cash reserves that his previous govt. left the country with in 2005 as $106m and compares this with the $17 m cash reserves that the PPM is said to have left the country with but he does not dislcose that in the first case he has included restricted cash reserves and in the second case he has not (about $80m). He is not stupid so we know that his purpose is to mislead the public. We just don’t know to what extent we are being misled by him.  

      The FS has had ample opportunity to explain himself. The fact that he has failed to do so, speaks volumes. Pretending that this is just a PPM issue will not help the country if he continues as FS. The public should demand an independent audit so that public confidence can be restored. Clearly we cannot have any confidence in what is coming from the FS, and obviously McKeeva is playing politics with the issue.     

      • Anonymous says:

        PPM should have demanded answers when they were in Government.

        The PPM has a lot to be worried about because of their careless actions in Government.

        They know where all the money went, and need to come clean.

        • Anonymous says:

          "PPM should have demanded answers when they were in Government".

          The questions have only arisen because of the statement made on 12th June by the LOGB and apparently approved by the FS.

  8. Anonymous says:

    I agree with Rolston Anglin.  The PPM has left the country in shambles and now they claim they were misled AGAIN!  Mr. Jefferson needs to clarify this quickly before the PPM continues to try to make him the scapegoat.  The PPM has no shame whatsoever.  And they talk about McKeeva.  Jeez!

  9. Anonymous says:


    Why is it I do a post-a long one I may add-and then send it only to get a message saying something like "comment field required"? This has happened more than once. Extremely frustrating.

    CNS: Could you email me here please. I don’t know what the problem is but obviously we’d liketo sort it out.

  10. Anonymous says:

    The FS’s office is in no position to propose any type of budget, first he has to figure out exactly how much the Government has.  Until the time that the FS can produce reliable figures, the house would be irresponsible in approving anything put forward by him.  The most Government should get is a one month approved budget.  At the end of that month the house should meet again to discuss the state of affairs and discuss the next month’s budget and so on and so forth until the Government’s affairs are up to date.  If that means the FS and every single Government CFO has to work 24/7, then so be it!  And if that means the members of the LA have to work 24/7, then so be it! 

  11. Anonymous says:

    Rolston, as a professional accountant you should be ashamed of yourself.  Please tell me of one accountant in the private sector that could report to his/her Board of Directors a projected loss of $29 million one month and then the next month report a projected loss of $74 million and not have to explain very quickly what was causing that 155% difference. It could not happen!  The significant impact of the economic slowdown has been apparent for months so those losses should have been built into the original projections. 

    Rolston was the last remaining member of the UDP that I had any respect for but for him to make this a UDP/PPM issue rather than an accountability issue for one of the highest positions in this land does not speak well to his integrity.  It seems that while the UDP is prepared to hold certain civil servants to such high standards that they were removed/shifted within a week of the UDP taking office, they do not seem to hold the FS (the Country’s chief CFO) to the same standards.  What a real leader would be saying is "Mr. Jefferson we want some real answers to this $45 million difference by the end of the week, or don’t show up on Monday morning!" 

  12. Anonymous says:

    OK Mr. Financial Secretary let us see if you are like Mr. Attorney General who stays just about mum on important issues and shirks his responsibilities to uphold the Constitution and laws.   He presented the Law Reform Report (which we paid him to do) and when invited by Madam Speaker to comment thereon he had nothing to say, only that the report speaks for itself. Yea, yea how many of us can get a copy? 

    Not good enough Mr. Attorney General, we demand that youexplain how our money was spent / wasted in “reforming laws”.   We demand that you inform the people of your work, yes, you are accountable to us too, not just the UK.
    The days of almighty powerful government officers and political leaders are coming to an end – you have to inform the people what you are doing to earn the hundreds of thousands of dollars we are paying you.
    Now Mr. Financial Secretary you have previously explained various financial matters very well, we are waiting for the explanation of the recent drastic Cayman Islands Government financial differences. Without understandable explanations for the differences we will forever doubt all that you say in the future.
    Sorry, but that is just how life is Sir, please do not lose our trust now.
  13. Anonymous says:

    The PPM are right to be indignant. This requires an independent audit. The silence of the FS is deafening. The manipulation of the figures by Mr. Bush is evident. The response of Mr. Anglin is weak. This is an very dangerous game the UDP is playing that puts our rating by the international credit rating agencies at risk of downgrade.