New papers reveal AG’s Affordable Housing concerns

| 16/02/2009

(CNS): Despite the Royal Cayman Islands Police Service’s recent announcement that there was not enough evidence to bring any criminal charges regarding the mismanagement of funds on the Affordable Housing Initiative (AHI), documents released under the Freedom of Information Law reveal that Auditor General Dan Duguay had “uncovered substantial reasons to suspect bribery and corruption" between the minister involved and the contractor.

In an affidavit which Duguay gave to the RCIPS following his forensic audit of the National Housing and Community Development Trust, the organization which was managing the AHI on Grand Cayman, the auditor general set out his concerns over a number of issues and made it clear why he felt a police investigation was necessary.

Among them were the numerous personal interventions by the minister at the time with responsibility for housing, Dr Frank McField, to ensure that contractors Staunch Limited were awarded the contract to rebuild the homes destroyed by Hurricane Ivan, and various other irregularities that suggested kickbacks and misappropriation of public money had occurred.

The affidavit, obtained by CNS under the FOI Law, contains details of Duguay’s suspicions, based on his investigation, that Staunch Ltd was awarded the contracts without due process and that payments were made to personal bank accounts that were not properly accounted for, arousing suspicion of kickback payments.

Duguay said Staunch was awarded contracts in the absence of proper tendering, payments were authorized to Staunch by McField against the advice of senior trust officials, dates on letters were altered to give Staunch additional contracts after the election, large amounts of cash were withdrawn from bank accounts and other suspicious amounts were paid by Staunch to Capital Trucking, a firm owned by McField. Duguay also raised concerns about Immigration Law breaches by Staunch over a number of employees.

Duguay explained in his original reports that during the period of 1 September 2004 to 1 May 2005 the NHCDT entered into contracts with two construction companies — Staunch Limited and Vetromeccaniche Invest Ltd (Veto) — to repair and rebuild houses which were damaged or destroyed during the passing of Hurricane Ivan. A contract was also entered into with Staunch Limited to construct 20 temporary houses and a laundry and recreational facility.

“My office expressed concern during Phase 1 of the AHI that there was no competitive bidding on contracts. I must again express concern with the absence of competitive bidding processes and the overall manner in which contracts are awarded by the NHCDT,” Duguay wrote.

In his affidavit Duguay explains that, following a dispute between McField and Vetromeccaniche, the minister ordered officials at the NHCDT to give the contracts to Staunch, despite the fact the company had no construction history on the islands. Moreover, although officials at the NHCDT had raised concerns over Staunch’s ability to do the work, McField still directed the contract to be awarded to the firm. Duguay states that there were numerous occasions when the minister directly intervened to order officials at the trust to pay Staunch despite work not being completed.

The AG also cites a number of cash payments and transfers, as well as cheque payments made between various bank accounts and individuals that could not be explained. Although some of the details in the documents requested under the FOI law have been redacted, it appears that around $300,000 was paid into a personal bank account of an individual member of the Staunch management team from NHDCT without a legitimate explanation. Duguay also states in his affidavit that at least six Staunch employees who were working on the island were listed with immigration as visitors with no right to work.

In his affidavit Duguay states that the use of large sums of cash was something that commonly occurs in cases where bribes and kickbacks have been alleged or proven – in other words this was a red flag to the government auditors. “The large amounts of cash paid out in this case certainly provides in my opinion the opportunity to pay significant bribes or kickbacks to individuals,” Duguay said

Given the various payments that passed between the NDCHT, Staunch and Capital Trucking (McField’s own company), Duguay stated that he was concerned about the relationships and the links between the three parties, and it was because of these unaccounted for cash payments combined with the unorthodox way that McField ensured Staunch was awarded the contracts, that Duguay believed there was a need for the RCIPS Financial Crimes Unit to take up the investigation.

Three years after beginning their investigation, however, the police announced in January of this year that no charges would be brought in the case. Police stated that a legal ruling given by an independent UK Senior QC, following examination of the case file, exhibits, papers, statements and interviews, advised that there was insufficient evidence to lay any charges against those involved and the investigation should be closed.

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Comments (13)

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  1. Anonymous says:

    Thumbs Up CNS.. Bring it all out yes.

     A very interesting subject and a simple explanation of the Police in-ability to perform their work.

    I also thought that the Police, after all these years of investigation in this case, would had offered a no findings and closed up the case file and, not completed the investigation as usual only to finish another investigation with their Incompetence

    If the proof is in the pudding that these payments and cash give outs where made then, why and how were the Police not able to put their hands on this information? Or, did the Police know about this information and just thought that they would let Mr. McField off the hook, hide the information and close up the case file and then say "Insufficient evidence"

    There is alot of problems with the Police and it keeps getting worst and worst. An acting Commissioneer who seems to love being involved into Corruption and it’s investigations has formed Another  investigation  in the RCIPS and  showing  more of his love and affection for corruption, in the wake of making more millions of dollars to be drained from the Cayman Economy and driving the Poor populas to endure more long suffering.

     The Government is very laxed on all that has and will cost the Cayman Islands a detrament  and will always be very abiding in these aspects…. However I too should hope that when May 2009 comes around that the people of Cayman will make the "Right" decisions form a better Government than the present and past ones.

    Too Much Corruption in Cayman Islands

    • Anonymous says:

      It sounds very impressive to say that a Q.C. said that there was "insufficient evidence", bu this all depends upon the quality of the investigative work that was done and what evidence was laid before him. I find it very difficult to believe that the basic evidence referred to in the Auditor General’s report coupled with four years of investigation by presumably competent investigators could not have completed the circle. How difficult was it really to trace the funds?

      It is staggering when you recognize that the police proceeded on far less evidence to arrest Justice Henderson and search his premises for some relatively trivial matter of an alleged unauthorised entry into the office of the Editor of the Net News office by two of the Net News employees, one of whom initially had 14 charges laid against him!   No such frenzied efforts with the AHI investigation. 

      Isn’t it strange that in the campaign to root out corruption that Governor says he is conducting we have majored in the minor and have walked by major corruption staring us in the face?  Since SPIT will be staying on, perhaps it should investigate this investigation to give it something meaningful to do. Something is very fishy here.     

  2. Anonymous says:

    As long as WE THE PEOPLE, keep voting for and putting these persons in office, then WE THE PEOPLE are guilty of condoning the corruption that is "apparently" plaguing our homeland. No politician will ever be convicted of corruption because WE find it acceptable or are at least willing to look the other way (and they are very aware of this!). March 20, 2009……do we send the politicians current and future a message or do we just sit back and buckle up for the next ride? ITS OUR CHOICE  so lets choose well.

     

  3. Anonymous says:

    Thank you, CNS!

    It is clear therefore that the decision not to prosecute on the basis of "insufficient evidence" in no way exonerates Dr. McField although he is understandably breathing a sigh of relief. 

    Here is the ironic thing: 

    Minister Clifford was subjected to a Commission of Enquiry  over the issue of leaking Government documents, a comparatively trivial matter in the particular circumstances.  Although the Commission did not apply the strict rules of evidence or a criminal law standard of proof many have concluded that the Commission’s findings as to his motivation meant that Minister Clifford was "guilty".

    On the other hand former Minister McField was subjected to a criminal investigation over a very serious matter. However, as there was insufficient evidence (although there is clearly some evidence) to charge him with a crime some would have us believe that he is "innocent" since there is no official finding by a court or commission of enquiry.  Grand court judges have been arrested based on less evidence.

    What is wrong with that picture?!  

    We can all relax now since SPIT is so adept at rooting out corruption!    

  4. Twyla M Vargas says:

    WILL IT EVER END

    There has been so much suspicion on corruption, mis-management of funds and criminal activities suspected among government past and present that it is not funny any more.   What is wrong anyway with these people we crying GOD, GOD, and serving DEVIL, DEVIL.   Is it the big pile of money gone to their heads and the prestige of becomming an MLA.   We have become too selfish and un caring for or fellow men and that is the reason why this unhappness has befallen the land, precious Isle Cayman. 

      What I have observed is that we cannot trust half of these politicians.  When they want you to vote for them they are waving all too hands, turning up and crying at everybody funeral whether they know the dead or not,  passing out paint brush and cook top, every corner you turn you will see them, and still they dont learn a lesson.  They get fat off all the free food and hand outs and only care about close friends and family.  I say Enough is Enough, Not  only this Government, but some of the last Government too.   

    Too much accusation of corruption.  I  hope some of them read my comments, and if they dont I hope who ever reads it tell thm what i have to say.   Iam one Caymanian who do not care what anyone have to say about me, because like I have said before and I sayit again, I only fear GOD.

    The question is, when will this ever end, every day is discoverig more and more corruption.   Who can we trust.   And mind you there are some running for office for next election who is just as bad.  If they cant talk to you now, you would be double fool to vote for them.  When I read about these things happening about the discovery and misappropation of funds I feel down trodden by my people.  But you know what it is? "WEALTH" It has gone to our heads, we take the name of the Lord in vain and still we are being deceitful, craving, unfaihful, cant be trusted and the list goes on.   Then we have the nerve to say that foreigners come and envade our territories.  

    I have not heard of any foreigner waving a gun at anyone asking for employment or I have not heard of any foreigner bein seen at the Employmnet services or Immigration with a gun demanding a work permit.  You know what happens here, we want our cake and eat it too.   I do not have anything for anyone to take from me except love so I will continue trying to let my people know where they are going wrong.  Does it make sence for me to keep writing?  Maybe not, however if nothing else I will get an award for that.   Let us all try and work together for a better Cayman, remember itis only a matter of time when we become too old and miserable and would have realized that it is too late to do some good.  Be careful who you put to run this country, It is in a very bad condition now, but I assure you it can get a hell lot worse.

    stay blessed.

    • Anonymous says:

      That was your government, Tywla. Please don’t try to confuse the issue by rolling allegations of profligate borrowing and spending up with allegations of corruption and criminality.   

      • Twyla M Vargas says:

        YOU GOT THAT WRONG SIR

        Sir,  to me profligate borrowing and spending somebody else money is corruption in my books.   Dont you dare think that because I supported the then Leader of Governement Business,  meant I supported all of those undermining hipocrites who had a knife to his throat.  For your information I know that we have a few good men who are UDP and a few who are PPM.   So, If you feel offended by what I say in anyway please be at peace. 

        My statements are meant to be widespread  with openess and transparency, not directed at you in a personal way.  What I am really trying to say is that for the past 10 years I have had the opportunity to see wide spread corruption which seems to never end.  Further more I am also trying to make Caymanians see further than the end of their noses.  There is much work for us to do, and we need to begin by helping our people stay together.   Its a rought road to travel and a long way to go.  Can you safely say that  you are unboard with us?   

        Be  very blessed.

        • Anonymous says:

          Thank you Twyla, as always for your level headed comments…and I reiterate…Where are the  govt. financial statements for the last three years…the dump fiasco…the "settlements" paid off to everyone from a to z…..Fiscal responsibility? I think NOT!

        • Anonymous says:

          "Sir, to me profligate borrowing and spending somebody else money is corruption in my books". 

          Oh, you mean like the profligate debt financing of $44.6 million of Boatswain’s Beach? Cayman Net News Article published on July 18, 2007 read: "The recently published report by the Auditor General on the Turtle Farm/Boatswain’s Beach Financing Project has brought to light the wanton disregard for financial prudence in government debt arrangements". The Auditor General is quoted as satating: " in the course of almost 30 years of government auditing, I have difficulty thinking of any situation which showed such a cavalier attitude to the expenditure of such funds". Even the Commission of Enquiry Report stated "The material relating to the Boatswain’s Beach Project evidences a waste of Government money". And what about the case of the insurance settlement negotiated by Mr. Bush with Cayman General in the aftermath of hurricane Ivan? Mr. Bush compromised the Government claim of CI$108M for $70M and then agreed that the Government would accept $50M in cash and the remainder in a 24% shareholding in Cayman General.

          But didn’t you just declare your support of the very politician responsible for all that? Are you ready to take back your definition of "corruption" now? You really stepped in that one, didn’t you?

          • Twyla M Vargas says:

            WRONG AGAIN MY FRIEND

            If you think I am going to jump fence, think again.  So what ever million and bilions you try to cough up in your comments will not make me change what I had to say;  and further more I supported MacKeva Bush then and I will continue to support MacKeva Bush now.  I  will speak of a man how I find him in his operations, and I do not care what anyone have to say about me supporting MacKeva Bush, beccause majority of the persons who are against him it has nothing to do with running this coun try.  When you get to thebottom of it you find that it is all a personality clash.   "YOU JUST DONT LIKE THE MAN"   Why? I know and you know  too, it is all personal.

            The old status trick against MacKeva Bush cannot work this time, it has worn out, because every one of you held a piece of paper  waving in front of his face with names of your friends on it getting them status.   I am an open book thats why I can identify myself, and you do not want to start a war with me, because that is one battle you wont win, anynomous or not.  Ever read the book  titled "I know who you are, and I saw what you did."  Get a copy its interesting.

            As long as I have supported MacKeva Bush, no one can ever say I have ever been to his house or office to ask him for a dime.  In fact I dont know where his house is.  I read alot, and I do not take comments lightly and pick them apart.  I am only a college graduate, and at this age still have some brains left in my head, but I have more sence than some of you university Graduates with your big time office jobs and who want to put Cayman on the reef. 

            There is nothing personal against you,  I still hold the greatest of respect for my friend, and I wish you a very blessed day.

            • Anonymous says:

              Twyla,

              It is hypocritical to adopt a definition of  "corruption" for some people but not for others. I simply presented you with the facts (which you have ignored), not with my opinion. You on the other hand have allowed personal affection to colour your judgement. Please do not insult our intelligence with any pretence of objectivity. This is simply blind loyalty.  As for any battle, if you cannot reason your position you have already lost.

              Note that my comments had nothing to do with the status grants but clearly your conscience recognized the iniquity of that as well.

  5. A Concerned Caymanian says:

    Thank You , Thank You,

    Can we see some justice now!

    After all it is the people’s money.

    Why do they think the people did not see the abuse of funds!

    Let’s see some real facts!!!

    Don’t sweep this one under the rug.

  6. noname says:

    Horray to CNS for not allowing this outrageous situation to be swept under the rug as it has been for the past 3 years!  I remember when this case was first brought to light and I’ve been asking since then why has there not been an investigation yet? It is unbelievable to me how it could have been rendered with insufficient evidence when the Auditor general himself has stated on numerous occasions that there was suspicious activity since his initial report 3 years ago.  Doesn’t anybody care that this blatant corruption is going on?  Or are we still at the mercy of political smoke & mirrors? Thank you CNS for providing an excellent example of using the FOI act in full service of the people of the Cayman Islands!