Cohen link in GAB sale plan
(CNS): During efforts to sell the Government Office Accommodation Building in 2010, the Central Tenders Committee refused to act outside of the law following a request by the premier to enter into a deal with a Texas based firm. According to leaked letters between the premier and the committee as well as the release of minutes from a CTC meeting, at least three firms were in the running to buy government’s new office block. Expressions of interest, which were opened on 26 February 2010, revealed that McAlpine and local property brokers IRG in conjunction with Banque Havilland had responded to government’s offer to sell. But a week before the deadline the premier had asked the CTC to dispose of the process and agree to selling the building to an affiliate of Cohen and Co.
Strategos Realty Capital LLC, a real estate investment firm, is, according to its main website, an affiliate of Cohen and Co, the New York financing company that the premier selected later that year to provide government with a loan for the 2010/11 financial year.
The controversial deal eventually fell through, however, as the firm was not able to supply the rates as originally stated, but not before it had arranged two short term loans, one of which came through Banque Havilland, which, according to minutes from the CTC, had also made a bid on the Government Office Accommodation Project (GOAP) in partnership with IRG.
Strategos appears to have made an offer directly to Premier McKeeva Bush, who wrote in a letter to the CTC that they provided the best possibility for completing the sale in the timeframe needed by government.
At the time government was facing a major cash flow problem and was anticipating a deficit of some $25 million. Bush told the CTC that he had to act quickly and going with Strategos would present not only the best value for money but that they would be able to execute what he describes as a complex transaction within the timeframe. “We are very much pressed for time and we have grave concerns that if we do not act immediately to secure a purchaser for the GOAP we will not meet our budget deadlines,” the premier wrote to the CTC as he asked them to recommend the company.
The letter was sent to CTC on 18 February 2010, just one week before the CTC met to open the expressions of interest (EOI) that had been received in response to a request for proposals, which had been advertised in the local press a few weeks before.
Asking for the CTC’s blessing to circumvent the process, Bush said there was a genuine risk that if the GOAP sale did not occur by 30 April 2010, there would not be enough money in government to pay its bills, “… a consequence of which could be massive ‘lay-offs’ of Civil Servants. I also need to make it abundantly clear that the solution to this situation does not involve introducing income tax and property tax in the Cayman Islands,” the premier wrote.
Emphasising his point in bold capital letters, he added, “The Government that I led (sic) WILL NOT INTRODUCE PROPERTY TAX NOR WILL IT INTRODUCE INCOME TAX, in the Cayman Islands.”
He admitted that the disadvantages of the CTC recommending government appoint Strategos to sell the GOAP was that the transaction would not follow the normal protocol and would require special approval by Cabinet as well as an upfront cost to government of 3% on the sale price.
“However we feel this is justifiable because at this late stage CIG need to hire the best that will bring the quality and depth of expertise needed to complete the project in the timeline required and the Strategos’ structure will more than pay for itself given the significant savings it would yield over the lease term,” Bush wrote, as he implored the CTC to make the recommendation.
However, in a short response to the premier the CTC chair informed Bush that the committee had no legal authority to do what he asked. He said the committee had met and discussed the premier’s letter and while they understood the importance and potential ramifications, it could not find any legal authority on which the CTC could approve the Bush’s proposal.
“The CTC stands ready to assist the government in anyway it can. However, in doing so the committee cannot exercise powers not conferred to it by law and must preserve the integrity and spirit of the process for which it is charged,” Chairman Ronnie Dunn wrote.
The CTC went on to hold a meeting at which it opened the expressions of interest that had been received through the proper channels after government had announced its intention to sell and lease back its new building.
According to the minutes released by the Ministry of Finance in response to a freedom of information request submitted by CNS, at 1pm on 26 February McAlpine, the contractor on the building, expressed an interest in buying the building, as did IRG in partnership with the bank which the firm said it owns and operates. Although the minutes reveal this to be “Bank Aviland”, CNS understands that this is a spelling error and it should have read “Banque Havilland”, the same bank that had supplied one of the short term loans via the Cohen deal.
The owners of the bank are also the owners of a jet on which the premier returned to the Cayman Islands on New Year’s Eve 2010 aftera trip to the Bahamas. Bush revealed during a Public Accounts Committee hearing last year that the trip had not cost the public purse anything, but more than one year after the flight the premier has not recorded it in the Register of Interests.
CNS has made a full freedom of information request regarding correspondence and documents surrounding the proposed sale of the GOAB, which was originally made in October but has encountered some difficulties in getting a response from the office. So far, the only documents that have been released are the redacted minutes as posted below.
However, CNS is continuing to pursue the FOI request.
Category: FOI
Well done Ronnie for standing firm and refusing the sanction the bypass of proper due diligence. The logic behind the Premier's reasoning (a properly executed, international investment sale) probably would have yielded the best result in a sale, but anyone with real estate experience know that a fixed deadline on which to complete the transaction will result in a discount from what otherwise could have been gotten. Presumably the cashflow problems were known about way in advance of this, but yet no one (politician or civil servant) seemed to have acted.
Cayman has not heard anything as yet…Just wait until the information about the meetings held about the airport are published!!! Big discussions took place in November 2011.
Ezzard, are you listening?
U mean how they changed their minds from extending out to the sea and are now planning to close Crew Road by the airport and extend inland instead?
http://www.compasscayman.com/story.aspx?id=92582
How does all this differ from what is/was going on in the Turks and Caicos??????????
As as for that jet ride, it may not have cost the people anything, but the operating cost of a private corporate jet had to come out of someone's pocket and that "generousity" to the Premier and his family could certainly be construed as more than just "Hey, I'm heading in that direction. Hop aboard!" As a matter of fact, who picked up the "tab" for that Bahamas junket? That, too, might be worth investigating.
It's the same, only slightly less endemic. The real difference is that no one is paying attention to us.
The MAN trances the suited monkey into selling him his banana tree in return for a few bananas.
What is your Governor on? There is so much happening that leads a reasonable person to presume corruption that he has to act. Remember, the reason no charges were brought after the First Cayman collapse was that it would be bad for Caymans image to lay charges at a Government ministers door. There is now so much dirt circulating that not to do something about it brings Cayman into disrepute. The matters that require investigation are all mentioned in earlier posts, they are known all over the world, as a jurisdiction you will gain respect from dealing with them, not to do so will bring even more people to assume that the bad image Cayman has is justified.
If the dirt is not justified, your highly respected Court system will judge it so and all of us doubters will offer humble apologies.
Mr Governor, you need to remember what your job is!
Wow!!!! Nick Freeland, I hope you see what you signed up for, be ready when he comes, because he will come and I can only pray that he will run into another brick wall at the CTC.
Nick Freeland, from all appearances, is a man of integrity and honour. Nobody would ever question the decisions of the CTC with him as the Chairman. Unfortunately, with the stroke of a pen, the Premier could replace him with someone who would do as he says without question. The ex-Chairman of the Housing Authority is probably available to serve his country in a new position any day now.
Of course Banque Havilland own the Gulfstream jet that came and picked up Mc and CG (fresh out of law school) and brought them back too! "Wha you see wrong wid dat?"
"Strategos would present not only the best value for money"
Says who?
Ok, so the CTC had the guts up to stand up against him and say no – well done!
But I wanna know is did the sale of the GOAP occur before 30 April or not? If not, how come despite this and the Miller Shaw report, still no much needed lay-offs?
The Premier retains the legal services of Steve McField to make sure his actions stay within the law. Where was Steve on this one?. Are we tax payers paying for bad or absent legal advice as well?
Why not, that's what they do in Bermuda.
http://www.royalgazette.com/article/20120127/NEWS01/701269920/-1
Cayman, it is really unfortunate that no matter what level of corruption or illiegal activity that may come to light before the 2013 elections, they are so many people that will jump on the hype bandwagon and vote the idiot back into power.
This does not say much for the intelligence of the voters in a country that is supposed to be a world-class financial center. It is no wonder there are so many people that are willing to dump on Caymanians. I guess they say that if the people are stupid enough to vote UDP, then they deserve and will accept any kind of crap.
How can this continue? I say we all march to the govenors house waiving our white flags.
seems to me it's macs house you want to march to… just sayin….
I think we should use transparent flags… there's a message in there somewhere! 🙂
good idea…but what will our mute governor do??????
Interesting to find out who the 3% was going to be paid to……..Cohen……….Windsor Properties?????????????
Follow the money!
Auditor General, Follow the money!
Governor, Follow the money!
Foreign & Commonweatlth Office, Follow the money!
All paths lead to where the money has gone!
Didn't Banque Havilland own the Gulfstream jet Mac and his family used?
CNS Note: See penultimate paragraph in story above.
yes! yes! yes!
Cohen. Again. Do yourselves a favor if you haven't already, and google the company and discover all the lawsuits and XXXX deals they are involved in.
Hell, under this administration, we oughta give them status, they're practially family.
they probably gots the status bobo
mac should re-name his real estate company to 'caymankind realty'
A good government would not have a 'major cash flow problem' that would necessitate circumventing due process. What I don't understand is how this single act did not see him removed from government. Why do we even have a governor?
He was merely trying to plug the hole in cash left by Alden, Arden and the PPM. We remember….
That's right. The way to plug holes is to create $3m liabilities for no reason.
Maybe if you offer a big enough commission he'll also try to plug that hole in your head.
Mac is the highest person in authority on this island. When he barks the governor wags his tail.
So you guys finally read Alden's Constitution that less than 50% of of Cayman's voters voted for??!!!! A bit late dont you think….?? The Premier IS the highest authority. full stop.
The Governor cannot even vote in Cabinet anymore. He just sits there to look out for Britian's Interest. Thats it. If you dont like it speak to PPM they did it as they boosted in the last campaign.
That's rubbish. The Governor is the highest authority but he is failing to exercise his authority but could do so on a number of grounds including good governance. The Governor never could vote in Cabinet.
BTW it is norm the world over for referendums to be passed by a majority those voting.
I agree – enough is enough. Well done CTC for not bowing to this pressure but McKeeva needs tobe borught to account for requesting them to do this. not going to happen of course but……
Oh what a complex web we weave…
what do you mean we, kimosabi??
"a week before the deadline the premier had asked the CTC to dispose of the process and agree to selling the building to an affiliate of Cohen and Co."
"Central Tenders Committee refused to act outside of the law following a request by the premier to enter into a deal with a Texas based firm"
this man has NO respect for due process or accountability.
I am struggling to think of ONE decision he has made in office that does not have some corruption scandal stink all around it……anyone?…..anyone?
Dart deal, dump, shetty, CEC, cohen, Stan thomas XXX, nation building slush fund, setting up failed UDP candidates and cronies, port deals, CEC, GLF payment, exorbitant travel for himself and entourage, using government funds to paveprivate driveways in the Brac, interference with the tender process, having the Speaker prohibit opposition debate just to name a few from recent memory– FULLY FUQING RIDICULOUS!
This man has NO respect for anyone or anything!
Get RID of McKeeva and UDP – you CANNOT vote for UDP again
But what are the alternatives for the Cayman people besides UDP ? I have been here for a little over a year and am yet to hear a peep out of PPM. I don't know if there are worthy independends in each electorate ….
My dear, if you have been here for a little over a year you got nothing to worry bout coz you don't got a vote anyways. Take it from someone who lives here – a box of frozen squid would be waaaaaay better than what we got now.
There have been a few "peeps" out of PPM but they really need to step it up.
Just about anyone would be a better alternative than the UDP so the bar is really low.
Mac, the more information that comes out about your dealings convince more and more people that a large number of your dealings are far form being "good governance". It is my opinion that they are leaning toward corruption they all should be investigated fully and you should step down until you are proven either guilty or innocent.
Just another day another scam in Cayman What if our leaders had a little integrity?