PPM asks costs of Cohen deal

| 19/04/2011

(CNS): Now that government has finally sorted out the financing arrangements for this financial year with a regular commercial loan, the opposition says government needs to reveal the details of the temporary loans which were organised by the New York firm, Cohen & Company Capital Markets LLC, and the process regarding the latest award. Alden McLaughlin, the leader of the PPM, said that while he was delighted that a local bank was supplying a conventional loan, there were still a number of unanswered questions surrounding the entire process. He said the people needed to know how much the loans of some US$138 million that were arranged by Cohen had cost in fees and interest and what had actually happened during the tendering. (Photo Dennie Warren Jr)

“Given the concerns over what transpired when government circumvented the tendering process in the first instance, it is in the public interest for government to offer some explanation,” he said. “I am delighted that a local bank has got the financing and this appears to be a conventional loan agreement. I don’t recall there being a new tendering process since it was announced that the Cohen deal was not going ahead.”

McLaughlin said while the conventional commercial loan government had now settled on was certainly what the people wanted to see, he believed the situation necessitated more transparency as it was not clear how the selection had been made.

“There are real concerns about the legacy of the Cohen arrangement,” the opposition leader pointed out. “What has that cost government? We need to know what we will end up paying,” the opposition leader added.

Cohen and Co arranged two temporary short-term bridging loans for government of around $36 million and around $92 million to enable it to pay bills during this financial year while it made a decision on the long term loan of up to $185 million. It is understood that fees were paid to the New York firm for arranging those loans which have not been revealed, nor were the interest rates.

The cost were incurred because of government’s initial decision not to accept any of the original bids for government financing made at the beginning of this financial year, one of which is believed to be the bid from FirstCaribbean International Bank (Cayman) Ltd, which has now been accepted.

The opposition leader said there needed to be far more transparency about the loan arrangements so people can understand what happened and why and how much it has cost the public purse. McLaughlin revealed that the opposition had submitted a number of parliamentary questions some time ago that have still not been answered and he said he intended to submit them again in preparation for next month’s new session of the Legislative Assembly.

The need to maintain confidentiality as a result of commercial sensitivities arising during negations was no longer a necessity, McLaughlin said, maintaining that there was a need to reveal what had happened. He also said he wanted to see the auditor general’s report on this and was hoping that it was a specific forensic report on the Cohen arrangements and not just a review of the tendering process.

“The people need a full explanation about what happened and what part was played by a UDP party executive in the process,” he said as he stressed the need for transparency.

The government finances for the 2010/11 year attracted considerable controversy when the premier rejected the recommendations of his own ministerial technical team, which had been approved by the Central Tenders Committee, in favour of a separate deal with Cohen and Company, which had come into the second round of bids, even though the firm had not been recommended in the top three.

The premier said at the time he had made the decision because the financiers had said they were also able to get financing for Cayman Airways — which had not been part of the original bid — and that the rate the firm would be able to secure would save the country $24 million. However, in February of this year the premier announced that the deal was not going to produce the anticipated savings and government was reviewing its position.

The premier further stated that the administration might not need to borrow the full US$185 million which had been approved by the UK, which was based on the presumption that the public finances would still be in deficit this year. However, it has been said that the country’s finances are improving and the premier is expecting a double figure surplus by the financial year end.

Treasury officials have pointed out, though, that the loan amount of $185 million approved by the parliament and the Foreign and Commonwealth Office is the last loan that the UK government is prepared to sanction until the CIG comes back into line with the parameters of its own Public Management and Finance Law.

Therefore, while taking the full amount would increase the public debt, it would be available for contingency plans, but not taking it would mean losing access to it altogether.
 

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Comments (30)

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  1. Anonymous says:

    ALDEN, DO NOT BACK OFF

    keep the pressure on for full disclosure and uncover the deals, corruption and commissions ditributed amongst all the players in this secret deal that has absolutely NO transparency whatsoever.

    KEEP UP THE GOOD WORK

  2. IRON CLAD says:

    Dennie, I suppose we could do Alden some better justice in his photos.

  3. Anonymous says:

    This question should just be buried under the MAIN 
    QUESTION Where or who has all that money gone to for the last 6 years?

     And the second question should be If someone or a lot of someones is not and has not been doing the job they have been so generously paid for for so long why are they still doing it?

    And the answer is because this is Cayman and thats the way they do it here.

    Summary:  Any money collected by CIG is for them to use as they see fit and because it is their money now why the hell should they have to tell anyone what it is spent on or in who’s (special Cayman islands) bank account it is going into.  All CIG land is also for them to use as they see fit and for their own benefit and not anyone else’s.  If you don’t like it then you run for Premier.  If yourCaymanian then you have all the Qualifications you need to get the job.  Go ahead and tell me I am wrong (All facts and other related evidence not withstanding).

  4. anonymous says:

    Mr. Alden is just simply stating the facts and he is not slandering anybody name, so why do your UDP supporters tend to be slandering Alden’s name? He is the Government opposition and since Ms. Mary does not allow them to oppose anything in the house, where else can they oppose other than via the media or public forums? get REAL guys, give the man a break. Alden you please continue to do your duty as an opposition and be like a thorn in their sides. Let them be transparent.

  5. ALL SEEING says:

    Alden is on track and shining light on these loans. We must know what is happening with this money. Well done Alen. Your on the trail.

  6. caymanianfirst@hotmail.com says:

    Hmmmmm….when since Alden started to worry about cost???

    Being the Opposition really brings you back to reality doesnt it?

    Someday you may sit on the Government bench again. Please dont forget to ask the relevant questions about cost…

    • Anonymous says:

      Thank you Alden. Please do not allow people like this to sway you from insisting that the details of these kinds of ‘deals’ be brought fully to light and to the public’s knowledge. We deserve to know.

    • Anonymous says:

      You are trying McKeeva’s tactics of attempting to silence the Opposition by constantly harpig on about their spending. Your motive s transparent to everyone.

  7. Speaker Says Don't Speak says:

    If an MLA had a copy of the Cohen loan and wanted to ask a question about it in the LA, say if there was a question about finder’s fees, our wonderful speaker would stop them given her gag order of last week.

  8. Anonymous says:

    Alden, get the AG on this immediately!!!!!!

    I hear that Big Mac sent out an edict to department heads today; NO EXPENDITURE by Civil Servants on anything other than salaries between now and July.

    Obviously than does not apply to him or Lady JuJu Magdalene.

    Can any CS blogger confirm?

  9. NJ2Cay says:

    Don’t get me wrong people I support neither the UDP nor PPM I think all politicians are corrupt and out for their own agendas. I don’t trust anything any of them say. They all claim to be speaking for the people but I think its all fluff. I do agree that the people need to know these things you are asking for, but don’t believe for a minute that the truth will come out. There will be some great masterminded response that these guys will put together trying to tell folks what they think they want to here. And as far as the cost to Cohen,XXXX  borrowing nearly 100 Million dollars is not cheap I’m sure the cost was at least or nearly 7 figures. My comment on the money belonging to the government and not the people it because the people have no say in how it’s spent and that goes for any government in any country even the taxpaying ones.

  10. New secret admirer says:

    It needs to be told. TRANSPERENCY it used to be called. All the facts nothing but the facts.

  11. New secret admirer says:

    Re People for HQ fence repair update; the insurance adjuster was on site yesterday and talks between the Landlord and the insurance co. representing the driver understand the urgency of the situatiob; News Flash: De fence will be fixed at Normal Height. Keep your eyes on de fence.

    • Anonymous says:

      Yes keep your eyes on de fence, folks, and off McKeeva. We would’nt want to catch HIM doing anything wrong, now would we.

  12. NJ2Cay says:

    Me thinks You’re wrong,, Weather you like it or not it’s not the public’s money, it’s the Governments money. Cayman residents pay no Taxes so how is it the publics money, when it was all earned by Goverment Expenditures. Those Politicians telling you that it’s the publics Money are just humoring you to get your Vote.

    After all what will you do if you don’t like the way they spend it, stop giving them money.

    • Anonymous says:

      NJ2Cay was on his way out the door when he heard McKeeva might give out another round of status grants. lol. If spelling is anything indication, NJ2Cay probably had a couple less years than The Mac in school.

    • Anonymous says:

      It is the public’s money raised by taxes, just not direct taxes. It is raised by fees and duty’s etc. Types of indirect taxation.

      It is the Leaders that treat it like theirs and forget where it comes from and who puts them in office.

    • Just the facts says:

      It sure feels like my money when I pay import duties, buy gas and food loaded with duty, and pay my companies’ annual fees. But since I don’t like how they spend it, I’ll tell Customs  to take a hike next time I deal with them, and ask them to get in touch with NJ2Cay to sort things out for me. I’m sure they’ll be reasonable once they understand my position.

      What frightens me is the very slight possibility that you weren’t joking.

    • Anonymous says:

      Presumably, you are joking. It is inconceivable that anyone could be that stupid. Obviously Cayman residents do pay taxes. For starters, virtually every item that is imported into these Islands are subject to a tax called import duty.

      Govt. revenues are earned by “Government Expenditure”s? LOL.

    • A Guilty Pleasure says:

      We can ask all we want but you can be sure we will never know. The answers would be too embarrassing for the premier who took it upon himself to make this stupid deal, bypassing everyone, including the recommedations made by those who are charged with such responsibility! We will never know the truth.

    • Anonymous says:

      Me thinks, and me sincerely hopes, that maybe one day you will start thinking.

  13. anonymous says:

    Keep them honest Mr. Alden McLaughlin.  Regardless of what they may accuse you of, you are doing your job as an opposition.

  14. People for HQ Fence Repair says:

    I too have a question. Mine is for Alden himself.

    How much does a little self-pride cost?

    A couple of hundred bucks or a few guys on a weekend could fix the fence and make this all go away.

    Do the right thing.

    PFHQFR

    • Anonymous says:

      It does look like SOME folks have absolutely nothing to worry about or anything whatsoever constructive to do under the Mac regime. Congratulations folks. We would love to know just how you are able to achieve that miraculous feat and keep a brain in your headsat the same time. 

  15. NJ2Cay says:

    I’m sure has could care less what the people deserve to here. This is all just one politician fishing for dirt on another. Don’t get it twisted, this is all politically motivate to whatever it takes to bring the UDP down whom themselves would most like be doing the same thing if the shoe was on the other foot. Politicians are Politicians no matter what party they’re in. Mark my words that whatever info comes out he’ll say it was bad for the Cayman People and that he would have never done it that way even if it was free. He’s just trying to rally folks against the UDP…

    • Stiff-Necked Fool says:

      NJ2Cay, you have a realserious promblem!
      Are you trying to say that no investigation should take place to find out how much hundreds of thousands of dollars were GIVEN away in the deal with Cohen & Cohen, just because you feel it will help to bring down the UDP.
      I dont care who is the Government, all monies should be accounted for and we the people should be in the know as to if it was given away or wasted.
      Man I tell you, UDP got you blind as a bat but what is in the dark MUST come to light eventually, take my word with that and I hope you are man enough to stick with whoever falls!

    • Just the Facts says:

      NJ2cay, that said, it is a fair question, and if Mr Bush chooses not to give a  straightforward answer, we, the people, will continue to suspect that protocol was not followed in organizing the Cohen loan. In the absence of the true facts, everything one hears about the deal  suggests that private interests were being put before Cayman’s. As you seem to  believe everything was above-board, you should have no problem with Mr Bush being asked to be open with the true facts of the case. (And by the way, the expression is, ‘couldn’t care less.’ ‘Could care less’, means the opposite of what you are trying to say, I think.)

    • Lachlan MacTavish says:

      Respectfully disagree. This is not fishing for dirt. The people deserve to know how their money is frittered away. They deserve to know how much money was spent on this and who received it. If there is nothing to hide then why doesn’t Bush publish he facts. 

    • Anonymous says:

      Do not be swayed by this nonsense my Caymanian people. This was the UDP’s, or more specifically, McKeeva Bush’s doings. We, the Caymanian people deserve and MUST know the truth, the whole truth, and nothing but the truth. This is ALL Alden is doing in ALL our very best interests. Thank you and congratulations Alden. Stand up and be aman in spite of it all. 

  16. Anonymous says:

    Well said Mr. Alden, we do need some clear answers here. I call upon our Premier, the honourable, God fearing, christian man Mr. McKeeva Bush to come out and explain to the people of the Cayman Islands the truth about this situation with the Cohen Company. We the people have a right to know and wedemand to know what we had to pay them back and how much interest was accumelated, after all it was the publics monies Thank you Mr. Premier.