Operation Tempura

| 28/11/2008

In a recent letter to the media, I made it clear that I was not necessarily a proponent of conspiracy theories but I questioned the manner in which Commissioner Kernohan’s employment matters were dealt with.

The perception communicated to the public (and clearly not just the Caymanian public when one considers how Henderson’s arrest and related matters were published all over the Canadian press)  regarding a judiciary in disrepute, the basis on which the various investigations were conducted and the resultant costs to these islands.

Without some clear and unambiguous statement from Cabinet (ie one statement from Governor Jack, the elected members of Cabinet and our attorney general) to the contrary, it is difficult when critically scrutinized to not to consider that Cayman may be experiencing some form of systematic destabilization.     

In his pre-budget speech the UK Chancellor Alistair Darling said:

“The British taxpayer cannot be expected to be the guarantor of last resort. The Government will shortly commission am independent review of British offshore financial centres; their role in the global economy; and their long term business strategies in the pre-budget report”.

I found his comments unnerving and reason for pause. Our constitution provides:

Section 1(1). There shall be a Governor of the Cayman Islands who shall be appointed by Her Majesty by Commission…and shall hold office during Her Majesty’s pleasure.

Section 1(2). The Governor shall, for the purpose of administering the government of the Islands, have such powers and duties as are conferred or imposed on him by the Constitution or any other law and such other powers as Her Majesty may from time to time be pleased to assign him…and shall do and execute all things that belong to his office according to such Instructions…

Under Section 7(1) of the Constitution the Governor is required to consult with the Cabinet in the formulation of policy and in the exercise of all powers conferred upon the Governor by the Constitution and by any other law for the being in force in the Islands.

However under the same section the Governor is not required to consult with Cabinet where for example (1) when the Governor is carrying out instructions handed down by Her Majesty and (2) when the Governor carries out his special responsibilities.

The Governor’s special responsibilities include matters in his opinion relating to internal security, the police and the appointment, suspension of any person to any public office. Although the Governor is not required to consult with Cabinet in exercising these powers the Governor is required to keep the Cabinet informed of any matter that he believes may involve economic or financial interests of the Cayman Islands. Under section 8 of the constitution the Governor may act contrary to any advice that provided by Cabinet if he considers it to be conflicting with public order, public faith and good government.

Whilst I have no intention to bore anyone with the specifics of our constitution I thought that it was very important to spell out the precise nature of the Governor’s powers and that of Cabinet and bear to in mind when considering what follows.

We the members of the public have been led to believe that our elected members of Cabinet were unaware of/had no input into the recent heatedly debated and in some instances, contested investigations relating to Operation Tempura commenced by Governor Jack. To this day we have not been afforded the courtesy of knowing whether our attorney general, Mr. Sam Bulgin advised the Governor on the one hand and not  the elected members of Cabinet on the other or vice versa. And we should know to be in a position to evaluate his judgment. We may also end up having to foot the bill at a time when there is the perception that the country is simply broke; not aided by the unaudited accounts going as far back as 2003 which involve “every statutory authority, every government owned business and every Cabinet ministry and portfolio” totaling at least $1.5 billion and over in inadequately accounted for expenditures.

If it is true that the Governor exercised his reserve powers under section 7(1) of the constitution where he is not required to consult with Cabinet when carrying out instructions handed down by Her Majesty or carrying out Her special responsibilities, this presupposes that (a) Governor Jack had reason to believe that his decision to commence the investigation was in the interest of good governance (in spite of what we are now aware of courtesy of the decision of the Chief Justice regarding Operation Tempura) and (b) he explained his reasons to the government of the United Kingdom who agreed and therefore approved and authorized his decision to commence and continue the investigations. 

If this is accurate we the public must ask the question whether Governor Jack distrusted our elected members of Cabinet to consult with and or inform them or whether they too were/are under any investigation? Whatever the position, we should be told the truth. 

It is quite a grave and serious situation when (i) a country’s judiciary is shamed and ironically there is an almost immediate appointment of three new court of appeal judges and (ii) the police force is brought into question due to alleged corruption charges, especially having read Chief Justice Smellie’s recent ruling on Operation Tempura.  But when coincided by what may be construed as an assault on the economy this raises additional concerns.

The proposed commission of enquiry as expressed by Mr. Darling is to be commenced by the UK government prompted by the alleged growing international pressure to line up standards of financial regulations and meet the standards of international norms relating to taxation (aka: full exchange of information). This strongly suggests that our offshore industry is about to come under further attack.

Whilst we are undoubtedly one of the most regulated jurisdictions we  appear to have dropped the ball by failing to focus on maintaining tax treaty networks to continue the promotion of transparency and assistance with the exchange of information (as for example our competitor the BVI has done through double tax treaties with Japan, the UK, Australia and Switzerland). Note that Mr. Darling also made it clear that the UK taxpayer will not be ‘guarantor of last resort’. In other words, the UK government is not apt to be saddled with any debt or other contingent liability from its overseas territory and is clearly concerned about our fiscal performance at a time when there has been a collapse in the financial community worldwide.

 There will be no Bailouts in Cayman by the UK government with respect to the $1.5 billion.

Finally in the midst of this conundrum there is the ongoing constitutional modernization debates in the face of the devastation brought to bear by Paloma, citizens with no health insurance, no homes and or insurance on their homes, increasing local unemployment (whether the elderly, graduates and professionals) and the rise of violence and robberies.

This cocktail is the recipe for changing attitudes from sensible, passive and conservative to outright aggression and intolerance. It will be interesting to observe how any government now or in the future with limited funds at its disposal address these issues.


Governor Jack’s term in office has been extended until the constitutional modernization debates have concluded.   This may be unusual in the Cayman context as attempts were made by previous administration to extend the term for Governors Peter Smith and Michael Gore to no avail. But times are changing.

I have asked the question and will ask again, who has this community’s best interest at heart? Who will be responsible for the cost incurred due to any breach of good governance?  And this is no time for division in our islands; we are all in this together.

The increasing intensity and interest expressed by Caymanians (and non Caymanians alike) regarding the intent and content of what is occurring should be astutely observed by all leadership and not be confused with creative tension. I am reminded of the late Haig Bodden’s observation on the meaning of democracy: democracy is all about whether people are hungry or not.

Print Friendly, PDF & Email

Category: Viewpoint

About the Author ()

Comments (4)

Trackback URL | Comments RSS Feed

  1. Anonymous says:

    It is time for the Cayman Islands to realize that they are about to lose all that they hold dear. A very careful and orchestrated subterfuge has almost brought Cayman to its knees. The government is in so much debt that these islands are no longer owned by the Caymanian people. More decisions are made at Lodge meetings than the Legislative Assembly. Look at the moral decay of the UK and ask yourselves if that is what you want for yourselves. Send the governor back home and any so-called senior civil servants and be accountable for yourselves. What! are you children that need to be ruled? I think not.

    Yet even at this 11th hour, there is an answer. I hope and pray that honest, God-fearing politicians can rise up and lead the people into independence from the filth and corruption of the British Empire. Once they have done that, they will need to renegotiate the debt that is crippling them and then pay it off as fast as possible by taxing their oppressors.

    Get rid of all these parasitic industries that have prostituted us to the almighty dollar and turn to the Almighty. The insurance industry is nothing but a big scam that preys on the fear of people and weans their trust from God. The banking industry panders to the wealthy minority and squeezes the poor majority by sucking us all into debt. It then rakes in the profits as we pay vastly inflated prices for our own lands. The legal industry is nothing but a brood of conniving vipers seeking how to squeeze nickels and dimes out of people so they can pay for the next status symbol as they as aspire to a partnership. They then pimp the next crop of aspiring lawyers, many of whom burn out.

    Start to develop more programs that give our children real-life skills. We take our brightest and best students and push them into totally worthless careers and as we integrate them into our never-ending bureacracy of hell and give them titles and salaries that dull their quest for truth.

    Our children are experts at shuffling papers around, using the Internet, Facebook, Ipods and all other kinds of wortless vanities, but between them, they could not grow a tomato. Wake up!

    Cayman, I fear time is running out, but if indeed "He did found us upon the seas", then we have a chance. We should return to God in true repentance knowing that He is gracious and merciful.

    I have faith that when the Lord returns, He will find the people of the Cayman Islands patiently waiting for Him with thankful hearts. He is our Rock.

  2. Anonymous says:

    I agree with all that has been said by Theresa and Burns and it affirms my conclusion that this fiasco now comes about leading to the "New World Order", of which the UK is one of the nations seeking to establish such "Order" upon the rest of the world, including us.

    The Cayman Islands has for too long, according to them who seek to make us fall flat on our faces and bring us to our knees, too much of a success story and it’s now time to pull the "bridle and brakes" on them and let them pay dearly for their successes over the past 25-30 years.

    We are no longer the "Jewel of the Caribbean" but now viewed more like the exclusive "Banana Republic of the Caribbean". Previously, when I travelled overseas, I was proud to say that I’m a Caymanian born and bred but now I totally refrain from saying this unless it’s absolutely necesssary. I’m so disappointed that my country has now been portrayed to be this "lawless and corrupt" British Overseas Territory, which I know is not true. 

    I really disturbs/disappoints me to see our PPM government  and many other tertiary educated Caymanians both by birth and by law, to see how over the past couple of years, they were being spoon fed and swallowed line, sinker, hook and bait. While this was being done, they never seemed to have the slightest inclination through "Common Sense" that they were all being set up for this downward spiral that we are all now facing.

    Just before I resigned from my "Public Servant" position that I held for many years, I told many of colleagues who were in top positions along with me, what my views were. I specifically told them that I was not going to be part of the "Imported Cleek" whom arrived to our shores under the pretence of positive change, only now to see that their true intentions were to disrupt, divide, conquer and then untimately rule.

    Today these same ones who once embraced the "Imported Cleek" are now reaching out and literally pulling the hairs from their head in total shock and disbelief. Thank God I had the vision to see the "Escape Light and Hole" in the tunnel back then and climbed out to safety.

    If I should die today, tomorrow, next week or whenever, I will go to my grave knowing and believing that this was all a calculated conspiracy from the F.C.O. in the United Kingdom through the most highest office in this land. Their motives were to ultimately "Destabilize the Cayman Islands" for their own financial gain in the UK, and unfortunately, I believed for the most part they accomplished just that. 

    However, I do take great solace to know that you never made a foolish a** out of me and while you may take many things from me, you never came close and will never take my proven true beliefs from me !!!!!!!


  3. Anonymous says:

    The issue is not one of reserve powers but instead that the Police fall directly within the special responsibilities of the Governor who is therefore not required to consult with or inform Cabinet of any operational decisions with respect to them under our existing Constitution regardless of the fact such decisions inevitably have financial implications. Further, quite apart from the letter of the Constitution, there has been no convention of any such consultation with Cabinet. This is the reason a National Security Council is being proposed for our new Constitution. As Ms. Lewis-Pitcairn herself has drawn the parallel with the Eurobank spy scandal she is well aware this is not the first time that this has happened and the fact that Governor did not consult with or inform Cabinet therefore need not imply that the Governor found the individual Cabinet Ministers untrustworthy or that they were/are themselves being investigated, but is clearly is an expression of our outdated, paternalistic constitutional arrangements.

    However, I agree with the gist of the comments expressed by both Ms. Lewis-Pitcairn and Mr. Conolly. The UK Government has made no secret of the fact that it would prefer that Cayman not have a financial services industry. I believe that this played a role in the UK Government’s decision not to provide any real assistance to us in the aftermath of Hurricane Ivan possibly in the hope that we would not be able to recover and business would leave the jurisdiction. Cayman’s stability is key to our financial industry. Contrary to the assertion of H.E. the Governor, we cannot rule out the possibility of a systematic effort to destabilize Cayman as “preposterous”.

  4. Burns Conolly says:

    I would like to support the sentiments highlighted in this posting by Theresa Pitcairn.

    Theresa, in a careful and non-emotive manner, has opened the door to shed light on what may be the far greater issue occurring at this time in Cayman.  One only has to read " Empire : The Rise and Demise of the British World Order and the Lessons for Global Power by Niall Ferguson" to see that there may be other forces at work here, especially at a time of proposed constitutional change.

    It is clear from what has been published to date that this "operation", and the reckless manner in which it and other issues have been executed over the last year, has not taken into account the good of this country.  Clearly just the negative PR created would have impacted the Cayman Islands unfavourably in the International arena.   I am, and I am sure the last majority of Caymanians are, in full support of rooting out any corruption.  However, many an evil have been created in the name of "anti-corruption", “national security” or "confidentiality".

    Safety (policing), political stability, good governance by UK, Independent and fair Judiciary, lower taxation, qualified workforce and geographical location….We can see clearly that these six or seven so called reasons that The Cayman Islands are the place to carry out legitimate offshore business are almost all under attack simultaneously, and very likely on purpose.  It is fortuitous that we cannot be moved geographically.

    I echo Theresa’s call that all Caymanians recognize these facts and come together on these issues.  It is a time for a new set of local Leaders to emerge that have the fortitude, education and foresight to take the destiny of these islands forward, and post haste.