No answers on Cohen deal

| 22/06/2011

(CNS): Following questions raised in the budget debate about the circumstances surrounding the loan deal with Cohen & Co, which was abandoned by government earlier this year, the premier accused the opposition leader of being “hell bent on trying to make me look bad” but didn’t reveal how much the failed deal had cost the country. McKeeva Bush told Alden McLaughlin to go ahead with his relentless pursuit of the issue as he had done nothing wrong. The premier said the deal with Cohen had been an attempt to save the public purse millions of dollars for government’s financing needs but when the firm could not come through government was encouraged to look elsewhere for the funds.

Government first announced that it had secured a deal with the New York based financial firmto provide government with the US$185m loan it needed to make up what was expected to be a deficit and to cover capital projects for this financial year. However, this was contrary to the decision of the Central Tenders Committee which, based on the recommendations of the ministry’s technical team, had awarded the contract to a bid made by a joint venture of two local banks.

During his debate on the premier’s budget presentation Alden McLaughlin had asked Bush to reveal the details surrounding the decision to deal with Cohen and Co outside of the CTC process, what had happened during that process, why government had then pulled out and how much had been spent on arrangement fees and the loan advance.

McLaughlin said the premier had admitted that he and the government had ignored the decision of the CTC and  his own ministerial team and had, himself, handpicked the New York firm by claiming that he had acted in the best interests of Cayman and would save millions, but the premier had never revealed what the interest rate would be, he noted.

The opposition leader accused the premier of acting unlawfully, which he said was a grave step for the elected leader of the country to take. “The first obvious question therefore is, why?” McLaughlin said on Wednesday. “The premier says it was to save the country money.  But he has never said how, nor has he explained why he invited Cohen and Company to make another proposal after the Central Tenders Committee had already decided to award the financing contract to Royal Bank and FirstCaribbean. 

“Neither has he explained why he did not invite all the other bidders to engage in negotiations or to present another proposal to government in the way that Cohen and Company was invited to do, nor has he told the country why Cohen and Company was singled out for special treatment in this way.”

Although the premier had said at the time that he chose substance over process, the opposition leader noted that the process was important and not just for reasons of compliance with the rule of law. 

“When due process is not followed it opens up the ominous prospect of corruption,” he added.  “The spectre ofcorruption has the capacity to undermine any government’s reputation, including ratings by Standard and Poors and Moodys.  If potential bidders come to believe that the process of awarding contracts is not fair, predictable and transparent, then the attractiveness of this jurisdiction as a place to invest is lost, with potentially dire consequences.”

McLaughlin also noted that at the time the UDP Treasurer, Peter Young, had called CrossTalk and in a discussion lasting the best part of an hour described in detail the process involved in arriving at the decision to choose Cohen.  “Despite what appeared to be intimate knowledge of the details and why it was such an attractive deal for the Cayman Islands government, (he) was unable or unwilling to disclose what the interest rate on the loan would be,” McLaughlin added.

The opposition leader reminded the premier that the opposition had already asked government for the details and circumstances, as well as an explanation of why Cohen and Co were singled out, plus disclosure by the CTC, the premier and government of all relevant documents, a report from the attorney general regarding the legality of the premier’s action and a special investigation by the auditor general.

“We have never received a response to these calls other than an indication from the governor that the auditor general was looking into the matter,” McLaughlin said, noting that no report had been released.

The opposition leader said that after government had received substantial advances from Cohen, the premier announced the agreement had been terminated because they couldn’t provide the previously agreed rate-cap on interest.  FirstCaribbean was then awarded the financing contract.

“The people of the country are owed a proper explanation and accounting by the premier and the government for the irregular and apparently unlawful course of action which it took in relation to this critically important matter of securing financing. In light of the termination of the agreement, the premier as minister of finance should also explain how much the Cohen arrangement has cost the government,” he said.

Hitting back on Monday afternoon as he wrapped up his budget debate, Bush did not answer the questions about how much the loan advances and arrangement fees had cost government, nor did he address the details of the process.

The premier denied wrongdoing, as he said it was all about trying to save government money, but when Cohen said they couldn’t make the promised deal, government walked away. He accused the opposition of saying there was something sinister or that he was trying to “get something for myself or my party,” the premier said, adding that now he had moved away from the deal they were chasing shadows and he hoped they tripped up.

Category: Politics

Comments (21)

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  1. Anonymous says:

    The Canary has lost his voice! how do you expect him to give you an answer?

  2. Lachlan MacTavish says:

    Cayman politricks 101. If the question was asked to Ms Annie, Mr. Craddock, Captain Benson or Charles or Mr. Norman there would be an immediate answer and total transparency. It is very obvious, as k the question, no answer, you figure it out.

  3. Anonymous says:

    let us go down the list again

    1st. Cayman Bank

    Ritz Carlton

    EE Mega Quarry

    Turtle Farm

    How many others have a Mac signature to them??


  4. Anonymous says:

    Some of the above observations ask questions of the Governor, some of Bush, yes thats pertinent, and the question asked is about right, was a commission paid (or any "arrangement fee") but, why is there no involvement by the audit commission? Why hasnt the Governor charged that office with asking the questions?

  5. Joe B says:

    Bush does not McLaughlin to make him look bad.  He is doing a great job of that all by himself but I understand his personal need to make sure he puts the blame on some one (anyone) else.  Just the fact that he will not answer the damn question paints him as some one not willing to follow even the most basic of rules of public service.  The fact that he will not give the facts over spending of the publics money would be cause for imprisonment in any but a third world country.

    • Anonymous says:

      Yes, Bush does not want McLaughlin to show the world how bad Bush makes himself look. Answer the questions, Bush and show the world just how innocent and upright you are.

  6. Anonymous says:

    me na do na deal wid dem, me just visit dem and wlk away

  7. Anonymous says:

    Score – Alden 1 McKeeva 0

    I'd say all the right questions are being asked and the answers (if we get any) are going to be embarrassing.

  8. Anonymous says:

    okay… you know won't get answers from a dictator like bush….next put the same questions to our mute governor…..if he doesn't respond then appeal to the uk to get bush and taylor removed!

  9. Anonymous says:

    anywhere else in the world this would be a resigning matter… it is just another day in wonderland (cayman)….lucky we have the mad hatter (governor) ensuring good governance….zzzzzzzzzzzzz

  10. CSI says:

    "…hell bent on trying to make me look bad."

    Doesn't really matter if Alden is "hell bent" as accused.  The Premier is doing a fine job of making himself look bad, without Alden's help.


  11. noname says:

    Alden, jump on the boat, and ask two questions: "Was there a commission paid" by anyone and "Who received the commission"?

  12. Anonymous says:

    Another refusal to respond.  Can't there be a way to get him out based on his refusal to public and opposition questions in an open forum?  Come on you experts please let us know what is available to us before there is nothing left.

    If we were allowed to wager my money is on that the cost of the Cohen deal will never be contested nor will the likely litigation that will result from the GLF debacle (unless of course the Chinese agreed to make them whole).  People will always settle out of court when they don't want the truth publicised. 

  13. Anonymous says:

    I absolutely love that man!

  14. Surprise! says:

    And we will never get an answer as he does not want the truth revealed.

  15. Trying? says:

    The Premier accused the opposition leader of being "hell bent on trying to make me look bad"

    Well I have news for the Premier, he himself is doing a great job in that and does not need the opposition leader tobe hell bent on trying to do so!

  16. nauticalone says:

    It is indeed interesting that neither the Attorney General nor the Governor have ensured that the Premier answer these questions (in the name of "Good Governance").

    And what in the world is "the Commission of Standards in Public Office" doing?

    • Joe B says:

      The same as most.   
      Gettting a pay check to NOT do his job.

    • Anonymous says:

      The Commission of Standards in Public Life is waiting for their law to be passed, but Mac and Ms. Mary are probably blocking it from ever coming on before the LA. Gov and Deputy Gov where are you in all of this?

    • Anonymous says:

      The Attorney General and the Governor, like everyone else in government, are obviously afraid of King Mac. What a mess.

      • Anonymous says:

        Govenor is not afraid…he is watching the demise of a financial industry competitor.