Archive for September 6th, 2013

FATCA could affect 6,000 people living in Cayman

| 06/09/2013 | 0 Comments

(CNS Business): A seminar focusing on how the US Foreign Account Tax Compliance Act (FATCA) will impact individuals has been set for early next month, and everyone who was born in the US, holds a US passport or a green card, or who has a US address is encouraged to attend and find out more about what they need to do to prepare themselves for compliance. The event will be co-hosted by Cayman Finance and the Financial Services Ministry, which both stress the serious impact the new legislation is anticipated to have on individuals, as well as businesses, in the Cayman Islands. Financial Services Minister Wayne Panton said that while Cayman’s financial services industry has been working diligently to prepare for FATCA, local residents also need to take careful note. Read more on CNS Business

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White collar thief gets 7.5 yrs

| 06/09/2013 | 126 Comments

(CNS): A 57-year-old South African national who stole over US$846,000 from a local legal firm was handed a seven and a half year sentence on Friday by visiting judge, Justice Malcolm Swift. Michael Levitt, who was described as a "sophisticated and calculating criminal", admitted seven counts of theft and related crimes in connection with more than 80 fraudulent transactions from the accounts of Solomon Harris, where he was employed as the financial controller. Michael Snape, who prosecuted the case for the crown, said the crime was a serious "campaign of offending" by someone in a position of trust, aggravating thecircumstances.

The court heard that Levitt had two previous convictions in his native South Africa, where he was imprisoned on a seven year sentence for fraud, and in Canada, where he was also convicted of white collar theft. 
The serial offender concealed his background from the local authorities when he first came to work in Cayman on an emergency permit in the wake of Hurricane Ivan in October 2004. He worked for various companies before he joined Solomon Harris after meeting one of the partners via the local service club, Rotary, where he served as president for the Sunrise branch. Levitt continued to conceal his past and just a year or so after he started work he began systematically stealing small amounts. 
Levitt turned to crime in Cayman, according to his defense attorney, Ben Tonner, because he was disgruntled over what he felt was a lack of financial reward from his employers, despite his hard work, and to fund his lifestyle as he attempted "to live the Cayman dream". 
The court heard that he used the stolen funds to help with the purchase of his house, including paying various bills as well as the stamp duty and to furnish and decorate the home. He paid off his car loan and other bills, as he tried to live a life he could not afford.
The judge was told about a series of voluntary work and good deeds that Levitt had been involve with since coming to the islands, from mentoring young people on the BBBS programme to helping out at the elderly residents facility, The Pines. However, the judge remained unmoved by such alleged chartable work, as he said that Levitt's volunteering was "hypocrisy", as it was merely a tool to get a job where he was able to steal the money.
Justice Swift listed a number of aggravating factors in the case, in particular the motivation of greed, since the defendant was not in dire circumstances. He also emphasized the risk to the reputation of his employer and the risk to the very heart and "life blood of the Cayman Islands", as the offences impacted the local financial services sector, and the potential for an even wider impact on the economy in general.  
The judge said that Levitt's offending was "systematic and prolonged". Dismissing explanations regarding his previous convictions, the judge said he was a person who made excuses for his criminal conduct and that the case was a very serious breach of trust. 
Referring to legal authorities, comparative cases and the sentencing guidelines, Justice Swift started his sentence at eight years based on the amount stolen. However the judge pushed that to the maximum penalty for theft, which is ten years, before he gave Levitt a 25% discount for his guilty plea and arrived at seven and a half years for each of the counts to run concurrently.
The court adjourned the confiscation hearing for three months to allow the crown to attempt to investigate what assets, if any, Levitt still has, as so far only around $200,000 of the stolen cash has been returned.

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Young Sailors narrowly miss Olympic qualification

| 06/09/2013 | 8 Comments

(CISC): It was a steep learning curve for the Youth Sailing Team at the Byte C11 World Championship and 2014 Youth Olympic Qualifier held in Newport, Rhode Island, 24-28 August. The regatta attracted the very best sailors from around the world aged from 14 to 16, as a position in the top five qualified their country for the Youth Olympic Games in Nanjing China in August 2014. With 38 sailors representing 21 countries, our sailors knew it would be tough but would afford them invaluable experience in competing against top sailors in big fleets.

With over five days of competitive sailing it was also a test of their stamina and skill, and a chance to see how the many hours of training on North Sound waters would equip them against sailors such as Jonatan Vadnai of Hungary, the 2013 World and European Laser 4.7 Champion, and Optimist North American Champion Odile Van Aanholt of Curacao.

Pablo Bertran had some great results finishing in the top ten a number of times and at one point looked like he might be challenging in the top 6 but a couple of bad starts and rule 42 infringements in the light airs of the last two days cost him. He did storm back to take 5th place in the final race and finished a very respectable 9th boy and 11th overall.

Shane McDermot and Jesse Jackson represent themselves very well, considering it was only their second regatta overseas. In the medium to heavy winds (typical Cayman wind conditions) they excelled, racking up a number of top 10 finishes, which catapulted them into 11th & 15th respectively. However with just five races to go the wind dropped to around 4.5 – 5 knots and the boys struggled,  finishing up the regatta in 15th and 20th. Hungary, USA, Croatia, Singapore and Canada took the qualifying positions.

Florence Allan was within a whisker of qualifying, narrowly missing out on the final fifth spot in the girl’s division on the very last day to Celeste Lutmeijer, of the Dominica Republic. Hungary, Netherlands, Bermuda and Singapore were the other qualifiers.

Coach Raph Harvey was quick to put their achievement in perspective. “They all did a fantastic job. They might have suffered the agony of just missing out on qualifying for the biggest prize of all, but they still have that chance, and will benefit immensely from what they learned here. The variable winds (5 – 18 knots) on the world-renowned waters of Narragansett Bay combined with its daily five feet tidal range, and some of the world’s best youth sailors, pushed the Byte team to their utmost physical and mental limits. They represented themselves and the Cayman Islands very well. They now know what it takes to compete at such a high level and are very keen to get back to training".

Indeed, just two days after returning they were back out on home waters racing against the adults in the Sailing Club monthly dinghy racing. The team have now got their eyes firmly set on the North American and Caribbean qualifier, which will be held in Jenson Beach, Florida  at the end of February next year.  

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Almost 1,000 homes depend on welfare

| 06/09/2013 | 70 Comments

(CNS): The head of the Department of Child and Family Services (DCFS) has revealed that 971 households are receiving some kind of permanent financial support. Although there had been suggestions, because people misunderstood the department’s report, that over 8,000 people were receiving welfare, DCFS Director Jennifer Dixon told Finance Committee members Wednesday that this was incorrect and, going forward, annual reports would break down the assistance the department provides to show what it does more accurately. However, the agency helped another 1,795 households with some form of service, from help with elderly relatives to paying one-off bills for families.

Dixon explained to the Legislative Assembly's Finance Committee that the agency provides many services and the figure of 8,000-9,000 was a reflection of the number of people that could have benefited directly or indirectly from some kind of intervention from the department. By multiplying the average number of people in households (based on the census) by every home they help in some way, people arrived at the inflated figure.

Dixon said that the vast majority of those helped were not necessarily receiving financial assistance, since the figure includes intervention in family problems, adoption services and support for the elderly.

With this system of multiplication of what services are provided, the misleading figures were circulated in the community. Nevertheless, while there may not be 8,000 people on welfare, almost 1,000 homes are receiving direct financial help from government on a long term basis and almost 1,800 more households are receiving some other form of assistance, which may also include financial help with CUC bills, school lunches, medicines or providing food.

The department is propping up a significant number of local families in some way, with more than 1,300 assisted with food and 437 with rent on at least one occasion over this financial year.

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Causes of unemployment among Caymanians

| 06/09/2013 | 80 Comments

Being an unemployed Caymanian is what I have experienced most of my adult life in the Cayman Islands. However, because of the good people of George Town I had steady employment between November 1996 and May 2005. The reasons for my unemployment are many, some of which are certainly attributable to me. But the fact that so many Caymanians are now without employment might at least suggest that my chronic unemployment was not totally of my own doing.

I am now beyond the time when I should fight to be employed since I do and have always employed my intellect in the area of culture and the social sciences, which one day will be of use to my people if they choose to learn about themselves and their challenges; but what now of all the others unemployed?

I understand, and I pray there are others that do as well, that many times Caymanians wish for the worst for their brothers and sisters. We did not really need the expat to discriminate against us since we have always discriminated against each other, even when it is to our benefit to cooperate. This is a deeply rooted subconscious trait.

This lack of collective behavior and making rational decisions in relationship to the employment of people is rooted in the irrational nature of the economic activities we founded during early settlement. Employment was a way to reward or punish individual behavior rather than to create profits.

The expat owners of business have had a different approach to employment, always employing to increase profits rather to socially control. Therefore, many Caymanians over the last four decades sought refuge in the civil service where they were hired and promoted according to their adherence to the ruling political class.  The merchant class system of patronage and loyalty had moved from the private to the public sector by the politicians who sought to replace the declining merchant class as Cayman’s elite.

This system of political paternalism has now been uprooted by the global rescission and the UK’s control of our countries finances. Many Caymanians who would have in the past been hired by the public sector are being thrown to the capitalist owners of local businesses that are operating their business not to please Caymanians but to exploit employees for the sake of profits, not votes or a superior position in the social hierarchy of this country.  

Cayman may have a few thousand Caymanian unemployed because of their being rejected by the private sector but we need to count those in government hiding from the private sector to realize just how the capitalist institutions in his country are in conflict with our traditional values and culture. Too many of us have been made dysfunctional within rational profit oriented environments, not because of any fault of our own but because of the difference in our cultural conditioning.

The defensive myth of Caymanian thrift is known to employers who are interested not in who your mammy or daddy is, or whether you from West Bay or East End, but in profits. It is only an examination of the history and sociology of Caymanian entrepreneurial and labor exploitation from slavery to present that will reveals the truth. In the past Caymanians did work hard but they worked for themselves and their families, neither for local nor especially for foreign bosses.

This point is so significant and we should not feel ashamed that in the past we were self-sufficient family units and not instruments of capitalist exploitation. Today the price is unemployment when there are so many jobs in our country. However, had the politicians been allowed to recruit more and more Caymanian labor without concern to the financial consequences, we would be experiencing very little unemployment among qualified and willing to work Caymanians.  

Therefore, unemployment among Caymanians is mostly a consequence of the austerity measure of our government and our education system’s ability to produce many more qualified people than can be employed by government, rather than an increase in discrimination against Caymanians in the work place.

A solution to this problem must therefore be gradual and cannot be managed without the acceptance of certain sociological facts. Blame is, of course, never helpful because it will disrupt the possibility of any meaningful solution. Understanding the causes and meaning of Caymanian unemployment must begin with a truthful examination of Caymanian economic and social institutions pastto present.

My question is whether the present Minister of Labor is willing to make this necessary analysis or is she also going to deny the relevancy of our past economic and social experiences on our present condition.

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Issues women face in recovery

| 06/09/2013 | 2 Comments

Recovery Month is an international observance that highlights the fact that addiction treatment and mental health services can enable those with a mental and/or substance use disorder to live a healthy and rewarding life. Each September, thousands of prevention, treatment, recovery programs and services around the world celebrate their successes and share them with their neighbors, friends, and colleagues in an effort to educate the public about recovery, how it works, for whom, and why.  

Locally, we are highlighting the interaction between women and recovery with a specific focus on barriers to treatment.  Worldwide statistics suggest that women are underrepresented in Substance use treatment. The data suggest that anywhere between 25-40% of clients in treatment at any given time, are women.  On Island, these statistics are even lower.  Recent data from The Department of Counseling Services show that 20% of active clients that are in treatment for substance use, are women.  This article seeks to highlight the underrepresentation of women in recovery, and some of the many barriers women face in recovery.

Historically the underrepresentation of women in recovery was attributed to the fact that prior to the 1960’s; many people were not looking at the world through a "gender lens". Understanding women from a social science perspective began during the second wave of the women's movement (1960's through 1970's).  It wasn't until researchers began to question science’s conclusions that women’s issues in recovery began to surface.

Most users will not seek treatment on their own; contact with treatment largely depends on other persons or agencies (e.g. family members, health care providers, government agencies, the legal system etc).  The likelihood that a substance abuse problem will be identified appears to differ by gender. Forexample, compared with men, substance abuse problems among women, particularly older women are less likely to be identified in health care settings. 

Compared with male substance abusers, female substance abusers tend to have more physical problems, and are more vulnerable than males to the physiological effects of substance use.  Given this information, it is not entirely surprising that upon contact with health services, women are more likely to be referred for mental health or medical intervention, as opposed to substance abuse treatment.  More often than women, men will be mandated to treatment by the criminal justice system. The strong correlation between drugs and criminal behavior amongst men is a factor that contributes to higher rates of identification.
In addition to various medical problems, the substance abusing woman is at increased risk for psychological problems. Co morbid psychiatric disorders, such as depression, anxiety, bipolar affective disorder, phobias, psychosexual disorders, eating disorders, or posttraumatic stress disorder are found more in women than in men.  This can affect their interaction with treatment in many ways.  For example, the depressed woman might know that she needs treatment but due to her disorder, might lack the motivation necessary to do so; or the substance abusing woman with anxiety disorder might be paralyzed by the thought of attending treatment. 

One of the biggest issue women faces as it pertains to recovery, is stigmatization and the accompanying shame.  The size of our Island nation lends itself to more frequent occurrences of stigmatization, as even the slightest variation increases the possibility that it will be detected.   Drug use is one of those variations that carry a heavy stigma anywhere in the world.  Both men and women experience the stigma attached to drug use, they differ however in the degree to which it is experienced.  It has been found that the stigma is much greater for women because of gender-based stereotypes that hold women to different standards. 

Men’s drug and alcohol use is more socially tolerated and sometimes condoned as acceptable “machismo” behavior, whereas drinking and drugging on the part of women engender greater social disapproval and are considered adverse to traditional female roles of mother and wife.  Fueling the already high stigmatization that women user’s experience, is the assumption and belief that women who uses drugs and abuses alcohol also engages in prostitution to fuel their addiction.  These demoralizing assumptions also contribute to the women not attending treatment.  Women tend to feel exacerbated shame due to their roles as primary caretakers and nurturers. 

Women, especially The Caymanian woman, were historically considered the backbone of the family.  Traditionally the Caymanian woman had to maintain 2 roles; she looked after the affairs of the house while earning a living to support her family. She was asked to be strong, tough and rugged, but also nurturing, loving and protective.  Compounding the role of traditional Caymanian women is the high rate of absentee fathers. The fall from grace women users’ experience, when they perceive others as seeing them as “unfit” and “less than”; is much easier to disregard than to confront.  Attending treatment would most likely lead to addressing the issues that gave rise to the identification of a problem and the acceptance that the problem is real; a task that might be overwhelming to thefemale user. 

Added to the stigmatization and shame, the female user is highly fearful.  There are many reasons as to why fear affects women in recovery; but it specifically focuses on 2 areas. Generally speaking, women are usually the main care providers in the family. For some women drug users, parenthood can be a barrier to treatment, as theyfear the involvement of children's services could mean their children will be taken away. Some women look at attending treatment as admitting that they are unfit mothers. Most men users tend to be absentee fathers and thus this issue tends to be female dominated.  Even the female user who desires to attend treatment encounters concerns with parenting. Women in treatment are more likely to be responsible for the care of children, to have more children living in their homes, and to be more concerned about issues related to children than men. 

Without securing childcare issues, the female user who wants to attend treatment will encounter logistical issues that can interfere with treatment outcomes.  Another reason why the female experience is characterized by fear is that, in some situations attending treatment might be putting her at increased risk.  Research has shown that female users are more likely to have using partners than men users.  The female user that desires to attend treatment might not get the support and encouragement she needs to develop the motivation necessary to address her issues.  As a matter of fact, she is more likely to experience the opposite.  Seeking treatment may create a serious problem for the relationship; she is more likely to be discouraged, threatened or even abused than encouraged 

The issues women face in recovery could not be fully explained in such a relatively small article.  The article's main intent was to highlight some of the many gender specific issues experienced by female users.  The Department of Counseling Services is committed to Client directed therapy that is sensitive to the complex issues of those who we serve.  The 3 arms of the department work cohesively as a unit and in partnership with outside agencies to increase the possibility of sufficiently addressing all therapeutic needs. Join us as we celebrate Recovery Month.

Greg Miller is a Counsellor (Community Based) with the Cayman Islands Department of Counselling Services

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Surplus $18M short of goal

| 06/09/2013 | 56 Comments

(CNS): Although the UK appears to have fewer concerns about the current budget situation in the Cayman Islands than last year, the government has wound up around $18.7 million short of the predicted target. Finance Minister Marco Archer confirmed this week, as he went through the supplementary appropriations, that the unaudited results for the 2012/13 fiscal year saw government end the year with a surplus of $63.3 million. While this was the biggest surplus for many years, it was still short of the projected budget surplus of $82 million, which the former premier and minister of finance, McKeeva Bush, had presented last year after a protracted battle with the UK and a flurry of new fees and increases.

Although austerity measures across the civil service resulted in a fall in the operating budget of a welcome $10 million, government collected around $30 million less than anticipated.

The fall in predicted revenue was because the relevant legislation was passed too late to generate new fees or not passed at all and because predicted sources of revenue missing thier targets. For example, the special economic zone, Cayman Enterprise City, was expected to generate millions of dollars but the revenue collected was less than $200,000.

Although the new PPM government has not yet presented its full budget for the 2013/14 year, because of the need for an interim budget it has already cleared the broad outline with the UK after the FCO confirmed that it had accepted the government’s new four year fiscal plan and the route back to compliance with the Public Management and Finance Law.

Presenting a report on the first 99 days in office on Thursday, Premier Alden McLaughlin said that government had managed to tighten its belt recently and by not using its overdraft facility over the last quarter, it had saved government those fees as well.

“Government negotiated an increased overdraft of up to $46 million for more flexibility with cash flow, with the stipulation that government could not spend more than $30 million before 31 October. One of the positive effects of achieving expenditure restraint is the fact that government has not incurred an overdraft balance during the three-month period from 1 June to 31 August, 2013. Consequently, overdraft interest has been completely avoided,” McLaughlin told legislators.

Government is expected to deliver the full budget for 2013/14 during the week starting 23 September, more than a month ahead of the expiration of the emergency budget, which the finance minister and premier have said will give MLAs time to properly scrutinize the spending plans and question civil servants without sitting in the early hours of the morning in last minute marathon sessions, as has been common over the last four years.

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ERA explains premature news of cheaper bills

| 06/09/2013 | 4 Comments

(CNS): Expectations of cheaper power bills in September have been dashed after the Electricity Regulatory Authority announced that it jumped the gun when it supplied information to government which was used in a public report. Revelations in the PPM’s 99 day report, released Thursday, that said customers would get a small reduction in their CUC bills and a credit this month in connection with an insurance payment were later revealed to be premature. The new managing director of the regulatory authority confirmed Thursday evening that the talks regarding the adjustment are ongoing.

“The comments on both items – the base rate adjustment and the insurance proceeds – were premature and are subject to on-going discussions between the ERA and CUC,” Charlie Farrington, the MD, stated in relation to the details in the government’s report.  “The confusion arose at the ERA where there was a mix-up in communications resulting in the ERA providing the Ministry with premature and inaccurate information. The ERA regrets this error,” he added.

Despite the disappointment, the government is confident that the credit and base rate cut is coming soon. The misunderstanding relates to a section in the report that states the ERA had successfully won a dispute with CUC regarding the recent base rate increase.

The ERA expects there to be a credit applied to consumer bills in September and for the rate
to be adjusted slightly downward commencing in September billings. The regulator was said to have reached a settlement with CUC to claim around US$950,000 from insurers for additionalfuel consumed due to catastrophic failures of generators in 2011. The money will, once the deal is finalized, be credited back to consumers via the fuel charge, reducing the balance in the CUC fuel tracker account.

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Juvenile lock-up in the works

| 06/09/2013 | 17 Comments

(CNS): The chief officer in the new home affairs ministry, which has responsibility for the prison, has revealed that a temporary facility is being constructed at HMP Northward that will help the Cayman government meet what were described as “the minimum requirements” in the country’s Bill of Rights when it comes to separating young offenders from adults in the prison system. Government officials confirmed Wednesday that around $1.3 million had been spent on preparing the foundations at the more sophisticated planned youth facility in Fairbanks but that project had been stopped because of budget constraints.

As a result of the introduction of a bill of rights and the accepted position that children should not be held in custody in an adult jail, or even at the same facility as adults, the government had set about creating a modern facility that covered a range of needs for the growing number of young people who are vulnerable, at risk or who have already fallen into the criminal justice system before reaching adulthood.

The previous government had planned to adopt the much heralded and successful Missouri Model of juvenile incarceration, but plans for that facility now appear to have been abandoned because of costs. Expected to cost close to $10 million to build and then several million per year to run, the government has been forced to shelve the modern facility, even though the foundations have been prepared and around $1.3 million spent already on plans, designs and the early construction work.

It is now just two months away from the deadline for when the government must meet the requirement in the Bill of Rights, and with the full facility abandoned, Home Affairs CO Eric Bush explained to legislators during a special sitting of Finance Committee on Wednesday that the ministry is constructing a new stand-alone facility at HMP Northward to house young offenders. 

“We will be compliant by November 6 with the separation from adult prisoners,” Bush told lawmakers. “Government had allocated funds in the temporary budget to allow work at HMP Northward for the separation of juveniles,” he said but noted that there would be no separate facility at HMP Fairbanks, where female prisoners are held.

Bush explained that, at present, there is just one young offender being held in HMP Northward. His colleague, Dorine Whittaker, explained that other juveniles have been detained elsewhere, such as the Bonaventure boys home and other secure homes, as the courts are now well aware of the problem of sending young offenders to the main prison. There are estimated to be around 35 young people in need of secure accommodation.

Concerns were raised by the independent MLA for North Side, Ezzard Miller, over the latest developments.

“It appears this is an arbitrary situation and I encourage the government to address this appropriately,” he said, adding that it was disappointing, having been told that the young offenders specialist centre was needed, that government was now scrambling to house young people who were in trouble, after abandoning earlier plans and wasting $1.3 million of public funds.

His independent colleague for East End, Arden McLean, also queried whether the construction of another facility at the main prison would work as Eagle House, the existing young offenders section of HMP Northward, has already lost its designation. This section is now being used to house category C adult offenders because of the over-crowded conditions at the main prison. He said that young offenders should be housed as far away from Northward as possible but predicted that it would not be long before the new add-on building would also be housing adults.

Deputy Premier Moses Kirkconnell agreed that this was not ideal but pointed out that the new government had inherited the problem, and the plan to build a stand-alone facility at HMP Northward was thebest short term solution that government could come up with to meet the Bill of Rights requirement until it found a way to develop an more suitable centre on the Fairbanks site.

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Cayman signs up to exchange more tax information

| 06/09/2013 | 0 Comments

(CNS Business): The Cayman Islands Government has taken another step towards increased transparency regarding the country’s offshore financial services sector. Local officials have formally asked the United Kingdom to extend its membership in the OECD-Council of the Europe Convention on Mutual Administrative Assistance in Tax Matters to the Cayman Islands. The move comes with the backing of the industry as Cayman continues down the road towards more automatic change of information, in line with global trends. Read more and comment on CNS Business

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