Mac claims actions legitimate
(CNS): The premier has denied acting unlawfully in his decision to override the central tendering process over the financing of the CI$155 million loan. Speaking in the Legislative Assembly on Wednesday morning, McKeeva Bush said that Public Management & Finance Law gave him the power to legitimately abandon the tendering process and then act in the financial interest of the country. As controversy over the way the financing has been procured for the government loan mounted this week, the premier lashed out at the opposition and the local media saying their allegations could undermine the rate that the government will eventually get when the full deal is done.
As the Legislative Assembly opened for the third meeting of 2010/11 session, the premier dominated the morning’s business with two long statements. In his first he hit back at the opposition leader, Kurt Tibbetts, over a speech delivered while Bush was overseas that criticised government, and in the second he revealed a chronology of events, which he said led up to the selection of New York based Cohen and Company to be the entity that would supply the government loan.
Bush said that he did not see thetender documents before they were advertised on 1 July because of the way the system works. He said seven bids were received and these were opened on 28 July but the lowest bid of 3.5% was not recommended by the technical committee, which he said consisted of Financial Secretary Ken Jefferson, GloriaMyles and Debra Welcome. Following the opening of these bids four more financial institutions expressed interest in providing financing. As a result, the Treasury sought the CTC’s approval for an extension to allow these four institutions to submit their bids.
Bush did not say who the four extra bidders were but CNS understands that Cohen and Company was one of them as the firm had not been one of the first seven.
Bush said it was at that point that he discovered the original request for proposals didn’t include provision for the refinancing of all government’s debt, including Cayman Airways. As government is currently paying over $30 million in interest payments on existing public debt and other financing costs, the premier said he was right to concentrate on minimising the cost. Bush went on to say that the only way the new bids could legitimately be considered was to terminate the original tender and start over. On 24 August the Department of Treasury presented a report to the CTC that recommended the termination of the July tender for a new process to occur, which the CTC accepted.
The new request sought bids for the CI$155 million and liability management solutions for details of how government’s existing debt of half a billion dollars could be lessened and how bidders could assist statutory authorities and government-owned companies with their financing needs.
Bids came from seven institutions by the 9 September deadline, which were opened at a meeting of the CTC and handed to the technical committee for evaluation. Bush said on 22 September the technical committee presented a report to the CTC recommending a joint bid by two local banks. This was the second lowest bid as there were doubts, according to the technical committee, about whether the lowest 3.5% could deliver the money in the timeframe that government needed. Eventually, after ensuring this was the case the CTC accepted the second lowest cost bid from the two local banks.
Bush says it was at this point that he indicated to the financial secretary that the bid did not represent good value for money, nor was it offering the refinancing for CAL as mentioned in the second request.
“At that point I … informed the FS that because we were not accepting that recommendation, as it was not providing the financing to CAL and others, the bid process had failed and I considered it abandoned,” Bush told his legislative colleagues. “As the minister of finance it is my ministry that asked the CTC … to undertake the process, so I considered that I had that authority. In other words, if I had the authority to start the process, I had the authority to stop it.”
Bush then revealed that he contacted Cohen and Company while he was in New York to ask if they could provide the funding to CAL and if they could to contact the Treasury. Bush denied going to the offices of Cohen and Co as he said he did not know where they were. Meanwhile, despite having abandoned the bidding process, Bush said the CTC went ahead and awarded the loan to the two local banks.
Bush said that one of the reasons that Cohen & Company was chosen was because the firm was willing to provide financing for Cayman Airways. None of the other bidders made such a commitment so Bush questioned if any of the bids were in compliance with second the RFP. He also noted that the two local banks accepted by the CTC had been asked and they were not willing to provide financing of CI$19 million to Cayman Airways.
Bush also told the House he had a legal opinion from constitutional lawyer Professor Jeffrey Jowell that as finance minister he did not have to accept the CTC’s recommendation, but when asked to read it by the opposition he said he did not have it with him.
He said under section 34 of the PMFL the minister of finance may borrow money, make a loan, give a guarantee, and enter into any financial transaction for the purpose of avoiding liabilitiesor expenses caused by interest rate fluctuations, or by credit, liquidity or funding risks.
The premier claimed the offer from Cohen & Company was accepted because it would enable government to benefit from the current very low interest rate environment but still did not reveal what that rate would be. “I have stated time and time again that when the process is completed the full rates and conditions will be made public. But let me repeat again for the benefit of the leader of the opposition: this information had been given to the public … and why is it that the leader of the opposition can’t understand? Why is it that he would want to mention the word corruption?” Bush asked of his opposite number rhetorically.
He said that Tibbetts and the rest of the opposition did not know what they were talking about and the fundamental lack of understanding of basic finance was what had got the islands into the financial mess it did under the PPM administration.
“I asked them all to wait until the process was complete, as we now go to a bond issue and I would inform the country at that time. If we lose out on rates now because of the kind of airing the wild and unfounded allegations this matter has got from the opposition on TV, on CNS and on Rooster, the loss of the savings in millions of dollars in interest for the country, can only be blamed on their reckless and damming behaviour,” Bush stated.
Bush said he had saved millions of dollars for these Islands with the deal already signed and sealed but now could not give any guarantee that even with the falling interest rates in the USA that rates would be improved because of the “stupidity – the viciousness – the recklessness of the leader of the opposition,” Bush said.
The premier insisted there was precedent for his actions, and while it might not be set down in law, the practice has always been, over the years, that if Cabinet, was not satisfied with CTC, they carried out the process themselves.
“I am not naive to the realities of politics nor am I insensitive to the concerns of our people. I understand why people in the community have concerns,” the premier added. “My government took a very grave but legal decision to disagree with a process which gives many a sense of safety. This matter has revealed to me that the central tenders process cannot be a one size fits all methodology for capital works, service contracts and financing.”
Bush revealed that he had expected debate about his decision but he said it was coloured by partisan politics, innuendos, rumours and misrepresentations of the facts. He said he welcomed the review by the auditor general and said his government had nothing to hide.
Category: Headline News
MORE DOUBLE TALK, MORE DECEPTION
It is sad when the country has a leader who cannot differentiate between BS, lies and the truth. The country is run like a dictatorship and not by the consensus of the elected board of MLAs chosen by the people.
Not one of them has the principles and ethics to stand up for what is right and lawful so all of them are guilty and must share the responsibility with their leader.
How can an unlawful deal brokered solely by the leader by passing the CTC
be in the best interests of the country when it is signed with no interest rate agreed and absolutely no transparency whatsoever. the CTC is all about transparency. The leader bypasses CTC and the whole tendering process because there is something to hide. I wonder what that may be ?
Not all Caymanians are fools and not all Caymanians were stupid enough to vote this Govt into power. I say stupid, because they all new what he was like from the last time he was in office and they voted him in for more of the same, NOW THAT’S REALLY STUPID.
Someone I know should take heed in the below statement from the Premier of British Columbia.
"But Campbell said he concluded his political struggles had become too big a distraction after seeing the muted public and media reaction to his announcement last week of the second largest income-tax cut in the province’s history.
"I think it is in the best interest of British Columbia to refocus people’s attention," he told reporters. "When people are focused on one person … it’s better to step aside."
Remember Arnie the terminator "I’ll be back". Next election when the people of west bay votehim back in. Some people never learn.There he can fool most of the people all of the time.
Poster 17:26
i am thinking the same thing. 2 great minds working together!
Who or what establishment is Mr. Bush slave to ? There is no way he can possibly be conjuring up all that he does and says by himself with the intelligence expressed, – I am however impressed by the artful navigation
I think it is very progressive for Mac to seek out debt underwriters beyond our borders to secure best terms. However, there are legions of competitors to Cohen, why are they not invited to the party? How can he unilaterally select one banker? What deal have they cut? There is no preliminary prospectus that I can see, if there is, please post a link. There are at least 5000 sophisticated financial pros on the island that would like to take a look!
Folks of course you can trust him, remember, he used to run a bank and you trusted him with your savings!
The thumbs up are for sarcasm, right?
More like irony wouldnt you say?
You see, it is a fact that he was a director of a bank, and it did go down with a lot of peoples money, and he was kicked out of the same assembly where he is now able to make these sorts of financial arrangements! The checks and balances are there to control this sort of behaviour.
Ironic because his fellow countrymen and women ignore what he did and elect him anyway!
Go figure!
As a political leader, McKeeva Bush is polarising the country and he is never far from controvesy. Still some of the voters of this country keep electing him and his cohorts. And some of his cohorts are not much better. It would appear that a good portion of those voters are like a woman who marries a womaizing man naively expect him to change and settle down. It ain’t gonna happen baby, or bobo.
To those who voted for a UDP candidate, talk to your people and like a previous poster wrote, ask them to publicly agree or speak out their disagreement and resign if necessary.
To those who voted for independents or didn’t vote at all, "get off the pot or s*t". When you are not happy with the way things are going, just standing (or sitting) on the sidelines and complaining and criticising is not helping anyyone, not even yourself.
To those who voted for a PPM candidate, get back in there and help your movement get back on track. Make them listen to you and they will, if they know you are serious.
To wveryone, get involved in a constructive manner and make a positive difference!
One Cayman!
I applaud you poster, very constructive post…much more needed!
I have often been chided for finding levity in serious situations, but for the life of me I can find no humour in the Premier’s recent antics.
Appealing to the Premier is like talking to a stone wall, so I will make my appeal to the Deputy Premier who went to law school, to Rolston Anglin who is a CPA, and to the other two Ministers, Mike Adam and Mark Scotland:
Come out and tell the people that you agree the Premier is doing what is best for the country or RESIGN!
I do not want to hear a single member of the UDP say "I did not agree with it, but I was not able to speak out" after the proverbial $hit hit the fan.
I’m so confused ,I don’t know what to think any more. Let’s see…… if he’s wrong we kick him out even if he did help the country financially . Then we replace him right? But the CTC then have a meeting and they concur he did the right thing. Then the new premier ok’s the agreement with Cohen etc. right? Then the new premier will get the dock built ? Or should we build the schools and forget about the docks? Wait we need money for the poor also what about young people who can’t find jobs? The new premier will have to get money to pay for the new loan. Will we get taxes? Wait the hotels have lost so much money because of the depression. Not so many tourists. But people have said there are too many cruise ship tourists here. So then more tourists will come because there is no docks? But what about all the businesses that were making money from cruisers? Will they all go and work for the hotels and still be able to pay there mortgages and carloans? Wait what about the civil servants who lost 3.2% of there salary? Will they still have a job? I am asking these questions because I know its not election time but I/we need to hear what are the plans to pay the loans and bills of our gov’t. from the new person who would take his place. We have seen on CNS that we want less development and we don’t want to destroy the environment . But that group doesn’t want to pay taxes especially property taxes. So if tourism is going to take another downturn and i say this because we had 2500 beds in the hotel and condo units. I just don’t understand if hyatt is no longer with us and westin is taking a nose dive where is the tourist dollar coming from? Gambling i believe would have helped. But the island needs to make some new ideas or that bad word INVESTMENTS. But what would we offer the investment ? cayman status? work permits? permanent residency? We need to hear what are the new solutions or are they the same. It can not be that we go from the frying pan into the fire. Because what happens if the UK thinks that we are a bunch of fools and decides that they should take over? Will we still be able to tell anybody from that day forward I’m here to stay and you’re to go. The UK will come in and do a quick sweep and all the sweet deals will be over. Salaries will drop, taxes will come ,no more free ride, welfare will be the rule of the day. No more jobs for people who are not qualified etc.etc. So I’m confused what really is it that we want ? There is a price to pay. Can we afford it?
Dear Dave,
Let me rest your worried mind. When the UK comes in to take over which will be sooner than we all think, they won’t be able to tax us since we will have no income for them to tax. Likewise there will be no sales taxes since no one has any income to buy anything. So don’t worry about the taxes. That would truly be like trying to get blood from a stone. As long as Government continues to be the largest employer in the country, taxing income would be a waste of money since they could simply pay people less in the first place. This is how socialism works and it is what we are approaching ( with a dictator as well). In a true free market capitalist economy, jobs are not created by government, jobs come from the demand for goods and services in the private sector because the government has implemented good sound poilicies that favor economic growth and expansion. McKeeva keeps saying that he was forced to raise fees and duties in order to keep the economy from disaster. In reality, such increases cause the economy to collapse as we are now seeing. When hotel and condo rental units sit empty, it makes sense to give free airfaire on Cayman Airways just to get people down here to spend money. Unfortunately the premier’s attitude is to raise fees to try to make up for the shortfall in revenue which was caused by high prices and fees in the first place. I don’t know who is advising McKeeva on the economy or what his true motivation is but you can be sure it will become clear eventually. What he is doing and what he is failing to do is contrary to common sense and we as a country are going to suffer terribly for his lack of good policy and common sense. Remember, governments are not for creating jobs. Governments are for creating good sound economic policy which allows demand for goods and services to grow which results in jobs.
Bean
If the Premier knew so much about high financing and the rate sensitivity in respect to a Bond offer, I just can’t understand why he would have announced the deal before this had been agreed upon and the deal completed.
Please enlighten me…….
This should not have been announced at this point!!!
Doesn’t Chavez believe that everything he does is legitimate?
Yes, legitimate in his own eyes but not with the law!
I think the same thing is happening right here in our beautiful little Island!
Thank you thank you oh grand leader Kurt d tibbetts & gang for handing our budget and financial per strings to the F C O You have confirmed what we always believe that to be bestowed title in this island you have to sacrifice your own people for your own self gratification. all hail Kut & Aldon
This is now a worn out UDP song. People are fed up with it. It is not excuse for the UDP not to produce results and it does not give them carte blanche. We are not falling for it, and it will not help you in May 2013.
I guess we really haven’t stopped to think that maybe he may be right and this deal maybe good…just saying, the proof will be in the pudding..I am not jumping on his or anybody’s bandwagon, UDP, PPM or the newly formed RRT, (Rooster Radio Team) until I see what we actually get…
Let’s see what happens…enough of the fighting and name calling. it gets us nowhere!!
Why not disclose the terms of the various financing offers?.
Why are we reqiested to take the word of this or that spokesman?
It is easy to compare loans, only requiring some basic arithmetic. So let us see the loan terms that have been offered?
Erm "he contact Cohen and Company while he was in New York" because…
a) They were the first ones in the phone book?
b) They were a highly regarded bank expert in this type of finance?
c) Something he would rather not say?
d) They are from New York and they bid on the contract.
So did 6 others. That doesn’t really answer the question whygrant Cohen a special favour that he granted no other bidders. Are you beginning to understand the problem?
You are are absolutely right, I was thinking the same thing. Isn’t it just a little fishy that he had their phone number/email/ that he could just contact them out of the clear blue sky but then also made sure to tell us that he DID NOT go to their offices because he didn’t know where they were!
So for all he knew they could have been in the middle of the ocean. Obviously he knows a lot more about Cohen and Co than he is willing to admit to us.
Also we are tired of hearing him go on and on about how "reckless the previous Administration was." It is obvious that he wants to convince the "stupid" people that the PPM almost "destroyed" Cayman and here comes Mac, the "saviour" who saved Cayman and completely turned around the islands financial position…..miracle. Pity he didn’t have this kind of knowledge and insight with FCB, he was a director after all. I would have been able to live off my life savings now. Complete hogwash if you ask me.
Also I am not sure what kind of financial "whiz" he has employed but something is very wrong. A prediction of a deficit of 81 million and Mac has miraculously reduced it to 15 million?!!! Hmm. "Sum ting wong" Either the initial predictions were way off or Mac is smelling something strong.
Mr Premier, how can you sleep at night knowing that you are living high on the hog, while the poor people are getting poorer each day. I bet you dont give us poor caymanians a second thought when you are living it up eating steaks and loster while us poor folks is drinking chicken feet soup. Did someone say you are a born again christian ? You suppose to have compassion for your fellow man. Tell me ,do you thing that the man upstairs is please with what you are doing to our people ? I dnot think so.
This individual is absolutely and utterly out of control. He is like a maniacal banshee driving a train at breakneck speed off a cliff.
Hitler never broke any laws either…its true! Look it up.
Neither did Stalin…
Sounds kosher to me.
“…the premier lashed out at the opposition and the local media saying their allegations could undermine the rate that the government will eventually get when the full deal is done.”
hahaha this is so funny although at the same time it makes me want to cry! Obviously the Premier is trying to find a scapegoat to blame the rate on when he finally does reveal it to the publicand it’s not all that he made it out to be!
You are correct. You are SO correct. I hope you are Caymanian because THAT would mean that one more Caymanian is waking up to the little big Mac. I suppose it is asking too much to hope that you’re a Caymanian from West Bay…