Anti Corruption Commission gains momentum

The Anti Corruption Commission has gradually become more comfortable with Cayman’s anti corruption legislation and will make increasing use of its powers, says the commission’s Chairman David Baines.

The Anti Corruption Commission was created by the Anti Corruption Law in January 2010. Yet, when the police commissioner and chairman of the Anti Corruption Commission David Baines spoke at a Cayman Islands Compliance Association seminar in September about the work of the anti corruption body, it was the first time that a representative of the ACC held a public presentation on the commission’s purpose and work.

Resources

Since its formation the ACC had resourcing difficulties to overcome. “Initially it was intended that we would have our own independent secretariat and indeed an independent investigative arm to support the role and the work of the ACC,” the chair of the ACC explained.

But just at the time when this support infrastructure was supposed to be set up, Cayman faced significant financial constraints. “So those ideas and ambitions were reduced,” Baines said.

The Commission is now supported by the Constitutional Commission’s secretariat and investigations are carried out by officers of the RCIPS Anti-Corruption Unit, which typically focuses on anti-corruption within the police but now has taken on a dual role and wider remit.

This situation is far from ideal, said Baines, who noted that in a small jurisdiction members of the ACC and the Anti Corruption Unit have to wear two hats. However, he predicted that there is going to be increasing demand on the governor to put in additional resources.

Former senior partner at Maples and Calder and ex-chairman of the Monetary Authority Tim Ridley drove home the same point at the event. “I would like to think that what is going on at the moment might be an opportunity for members of the assembly and members of government, perhaps nudged by the governor and the police commissioner, to allocate more resources so that we can staff up the ACC directly or through secondments in a way that it can become more effective.”

He said he was not criticising the police commissioner and fully understands the difficulties of resourcing. But Ridley, who has been a long time critic of the dual roles that the members of the ACC and in particular the police commissioner have, also noted that as part of good governance moving forward the Anti Corruption Law may have to be revisited in order to make it fully independent, similar to the Independent Commission Against Corruption in Hong Kong.

“I don’t take issue with that comment,” Baines said, conceding that there is a question over whether the ACC is appropriately constituted and that the dual roles of the police commissioner, the auditor general and the complaints commissioner are indeed a challenge. The difficulty is often to define who should be taking the lead on a particular issue, Baines said.

But there are also positives as the Commission aligns the specific roles of police, financial investigation, complaints commissioner, auditor general and anti corruption. At least this “gives us the opportunity to determine who is best placed to exercise their primary roles and their support roles on the ACC to make sure that we seize the best opportunity,” Baines said.

Staffing limitations and resources were not the only reason that the Anti Corruption Commission, which meets on a quarterly basis, has come slowly out of the starting blocks. The Commissioner explained that the ACC has operated with “a degree of caution or conservativeness” to ensure that the law “is underwritten by the appropriate protocols and procedures to avoid the denigration of the ACC from birth”.

“In the past prosecutions have failed gloriously because legislation had been overlooked, legislation from alternative jurisdictions had been applied here that has then subsequently been found to be inappropriate,” he said.

Notwithstanding these issues the ACC has been equipped with far-reaching powers including, among others, placing control on bank accounts and the ability to instruct anyone to supply information.

“This is not would you, this is you will,” said Baines and added that sanctions are available. In fact any person that fails to provide requested information faces potential penalties of $50,000 or a prison term of up to two years.

“We have started to use this power because we have become more comfortable with the legislation,” noted Baines. “You will start to see increasingly requests under the banner of the commission to supply details and information.”

This accelerates investigations and focuses the line of inquiry of the Commission instead of having to search for information in lengthy, intrusive operations, he explained.

Investigations

So far the Commission has received 26 complaints alleging some form of corruption and 13 investigations are ongoing. Five cases have been investigated and concluded without any evidence of a breach or suggestion that corruption had been proven and six cases have been pended because there was insufficient evidence to prove or disprove an offence.

Two cases were referred to other agencies that, although investigations found there was no contravention of the Anti Corruption Law, will deal with the alleged conduct under disciplining standards or standards in public life.

In one case an investigation has led to the arrest of an RCIPS officer, who solicited the immigration department for information about an individual’s immigration status for his personal benefit.

The ACC chair said this and other cases brought to the attention of the Commission were indicative of “a widespread abuse of access to confidential information”.

The case investigated by the Commission has led to the arrest of the officer and according to Baines shaken up the law enforcement agencies that were riddled with an almost “endemic misuse of information”.

Baines stressed that while the case in question is not closed, it already has brought about a change in how data is handled and the understanding that misuse of data will lead to criminal prosecution and the loss of one’s job.

Compliance officers in the public and private sector may want to look at preventive measures, such as ensuring that data controls are in place, access to information is limited and the potential misuse of data is monitored, he suggested to the CICA seminar attendees.

Liability

Ridley emphasised that the Anti Corruption Law is something that compliance officers and directors of Cayman companies need to worry about.

He referred specifically to a section “that can impose liability on a director or officer not simply because you consented or connived in the payment of a bribe by the company of which you are a director, but if the bribery by the corporate entity was attributable to your neglect”.

Ridley argued the section will be the “gateway to imposing liability on senior officers and directors of Cayman companies”. And while it is not certain whether such a case will ever come before the Cayman courts, he said, “prudence would suggest that just as companies are wrestling with KYC and anti money laundering, that you also need to add to the list of things that your procedures should deal with would be adequate procedures to prevent bribery.”

Get out of jail card

Baines and Ridley agreed that the transitional provisions of the Anti Corruption Law were poorly drafted. As a result of the provisions several sections of the penal code dealing with corruption of public officials were repealed. At the same time the Anti Corruption Law came into effect in 2010, which means that it only covers actions or omissions that took place after this date.

The transitional provisions of the Law provided a “get out of jail card”, said Ridley, who insisted that he does “not think for one minute” this was done deliberately. But what happened before 2010 “does not fall under the penal code sections because they have gone and it does not fall under the Anti Corruption Law because it was not enforced then”, he explained.

Any alleged offences prior to 2010 will now have to be tried under common law legislation, “which obviously in a 21st Century society and financial world is not really ideal”, said Baines.

Corrosiveness of white

collar crime

Ridley urged Cayman politicians amid the importance of addressing street crime not to lose sight of white collar crime, anti bribery and corruption, which are equally as corrosive to the community.

“Bribery and corruption, we have seen what happened in the Turks and Caicos Islands, can be as devastating to the community as street crime,” Ridley said.

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