AG says end secret clauses

(CNS): When government enters into any kind of contract or deal with the private sector it should seek to avoid any kind of confidentiality agreement and maintain as much openness and transparency as possible to allow public scrutiny of public spending, says Auditor General Dan Duguay. One of the many recommendations he made regarding the government’s post Hurricane Ivan settlement with Cayman General was that government should not have agreed to a confidentiality clause with this deal.

Speaking at the Public Accounts Committee meeting, convened to begin calling witnesses regarding a number of Duguay’s reports for the Legislative Assembly, he noted that the public was not well served on this occasion over the secrecy surrounding this settlement. Duguay had explained in the report that in order to conduct his audit he had obviously breeched the conditions and he indicated that the Public Management and Finance Law (PMFL) entitled him to do so as a function of his office.

However, Duguay raised the concern that, as one of government’s strategic aims is to be more open and transparent, the inclusion of confidentiality clauses is inconsistent with those aims and the principles of the PMFL. Duguay explained that the government made this particular agreement because they believed taking the loss was in the best interests of the country as a whole, and he said the government had an obligation to be accountable for that decision.

As a result of this recommendation, Attorney General Samuel Bulgin was called as a witness in his debut appearance before PAC. Bulgin explained that the confidentiality clause was requested by Cayman General, who had suggested that public exposure of the agreement could undermine any other settlements on claims the firm would make going forward after the deal.

Speaking generally, Bulgin said it was perfectly normal to have confidential agreements. “Any agreement is between two parties and if it is the wish of one party for some sort of confidentiality it is in order for government to agree,” he said. “The presence of the confidentiality clause doesn’t fetter the auditor general, the complaints commissioner or the courts. While the observation is noted, it is not one that should cause the auditor general any anxiety; from time to time we will have them,” Bulgin added.

Duguay noted, however, that while he was aware that the clause did not apply to his office it was the wider principle that caused him concern. “Government should not enter into such clauses as a general rule,” he said, explaining that while confidentiality is the norm in business, for government it should be the exception and only in cases of national security. He said the question that needed to be asked here was if the public was better served by the original secrecy of the deal signed in April 2005 or when his report was made public in 2007, and he suggested it was the latter.

Speaking after the PAC meeting, Duguay noted that the public and public finance is always better served when those involved know that the details will be in the public domain and that secrecy surrounding government finances not only leads to unhelpful speculation but usually results in poorer financial management. He said in every case he has ever seen where governments move towards detailed public scrutiny of spending, expenditure and waste is significantly reduced.

It was not clear if the PAC was persuaded to make a general recommendation in their report that government avoid confidentiality clauses in any future deals or agreements it makes with the private sector.