The corruption tax

It’s not just the arrest of 28-year veteran politician William McKeeva Bush that got the Cayman Islands interested in the topic.  

A couple of weeks before the Royal Cayman Islands Police Service took the country’s first premier into custody and then released him on bail, hundreds of people gathered at the University College of the Cayman Islands in George Town to hear one of Jamaica’s most recognised anti-corruption advocates speak on the topic.  

“I can tell you all are interested in the subject because so many are here,” Professor Trevor Munroe said to a crowd estimated at around 500 people the evening of 29 November. 

Since Professor Munroe’s talk, Bush was arrested and removed by his own government from his position as premier. However, he had not been charged as of the Journal’s press time and has proclaimed his innocence publicly on all allegations. Bush was also arrested on suspicion of theft as well as allegations that he violated three sections of Cayman’s Anti-Corruption Law.  

Bush addressed the issue at a recent public meeting in George Town where he spoke briefly regarding the corruption-related accusations against him: “A further set of allegations in relation to a memorandum, which I sent to the collector of customs as premier and the minister of finance, along with a letter which was attached to the memorandum were made in respect of the importation of blasting materials by Midland Acres.  

“My attorneys have written to the police in relation to these allegations many months ago, providing them a full explanation of the same. Additional allegations were made in respect of the ownership of Midland Acres. I refute the allegations. I have said publicly, I have done nothing wrong [or] unlawful. When any charges are ever brought they will be rigorously defended and I am confident that these charges will be unsuccessful.  

“They might have been right if they said I helped people, but not that I stole anything.”  

Bush says he fully expected to be charged “any time before the election”, referring to Cayman’s regularly scheduled May general election. He has blamed his arrest on a coordinated effort to discredit him by the United Kingdom’s Foreign and Commonwealth Office, the UK-appointed local governor and the RCIPS commissioner.  

Cayman Islands Governor Duncan Taylor has denied all such accusations by ex-Premier Bush and has said the governor’s office had no input into the police investigation.  

 

20 per cent tax   

Professor Munroe, who teaches at the University of the West Indies in Jamaica, says resisting corruption is easier if you look at it as a tax – like the World Bank does.  

“One study of foreign direct investment estimates that corruption is equivalent to a 20 per cent tax on foreign investors,” Munroe says. “Corruption is a regressive tax, the World Bank study concludes. 

“Countries that improve or control corruption…can expect an average in the long run a four-fold increase in income per capita. Business grows; on average it can make a difference of about three per cent per year in growth for the enterprise.”  

Munroe says Caribbean countries tend to have a high perception of corruption within their borders, but a 2010 review by the Latin American Public Opinion Project noted that actual reported incidents of corruption didn’t tend to bear that out.  

“The good news is that only eight per cent of Jamaica’s population and nine per cent of Trinidad and Tobago’s reported direct involvement [victimisation] in petty bribery,” Munroe says. “This is among the lowest rate in the Latin American and Caribbean countries.”  

Mid-range countries, according to the survey, were Belize and Guyana – where some 17 per cent of the population reported having been victimised within the past year.  

In Haiti, 54 per cent of the population reported having been victimised by petty bribe-takers.  

In most cases, there is an inverse proportional relationship between the incidence of corruption and the general poverty of a country. Former United Nations Secretary-General Kofi Annan has commented on the topic.  

“It is in the developing world that its effects are most destructive,” Annan told the UN in a speech during 2011. “Corruption hurts the poor disproportionately by diverting funds intended for development, undermining a government’s ability to provide basic services, feeding inequality and injustice and discouraging foreign aid and investment. Corruption is a key element in economic under performance and a major obstacle to poverty alleviation and development.” 

“Caribbean people in survey after survey…confirm that they perceive corruption in general, and political corruption in particular, as one of the main things that is wrong with the Caribbean,” Professor Munroe says.  

 

Party politics 

Professor Munroe says there is no way he could be considered an insider on Mitt Romney’s failed United States presidential campaign, but he – and everyone else in the world – is free to know who gave money
to Romney.  

“Any citizen of the Caribbean can, with the click of the mouse, know who gave the most money to Romney’s campaign – a man by the name of Sheldon Adelson, the owner of the Las Vegas Sands Casino 
empire,” Professor Munroe says. “That you can access by simply going on the website of the Federal Elections Commission of the United States.  

“By the same exercise, I know that Jeffery Katzenberg, Hollywood film producer and chief executive of Dreamworks animation was the No. 1 contributor to [US President Barack] Obama’s campaign. Any of us can know that about the United States.”  

What the citizens and residents of most Caribbean countries cannot know, at least officially, is who gave how much money to their own local political parties and, in some cases, individual political candidates.  

“It cannot be right,” he says. “Any of us can know who were the biggest contributors in the third quarter of 2012 to the British Labour party … but none of us here in a parliamentary democratic system can know who is paying the piper and is thereby well positioned to call the tune,” Professor Munroe said. “Not in Jamaica, not in Trinidad, not in Barbados, not in Guyana, and, of course, not in the Cayman Islands.”  

At the moment, Cayman has no upper limit on political contributions made to either individual candidates or political parties.  

The Elections Law (2004 Revision) does provide an expenditure limit, which candidates must stay within.  

The limit applies to candidates from the time they receive official nomination to the day of the general election, usually about six weeks. Candidates belonging to political parties can legally spend only $30,000 within that time; independent candidates may spend up to $35,000 between their nomination and election day.  

All candidates are required to report the total amount of their expenditures within that time period to the elections supervisor’s office, where those records are kept on file for a year after the votes are counted.  

Any candidate accepting a donation greater than $5,000 must identify the source of that donation to the supervisor. The name and address of any person who contributes more than $10,000 to a candidate or party must also be given to the supervisor’s office.  

Candidates and parties are not required to document any donations or expenditures that occur outside of the nomination period. In other words, if someone receives or spends $200,000 on a campaign prior to their official nomination as a candidate, that would not violate spending limits.  

 

Vote buying   

Munroe points out that most Caribbean countries had laws against vote buying, although most citizens of those countries wouldn’t realise it.  

“This happens almost as if it’s a matter of course … and what [non-enforcement] does is bring the law into disrepute,” Munroe says.  

In Cayman, vote-buying allegations would likely be handled under the territory’s Anti-Corruption Law as a form of bribery.  

According to the law, anyone pretending to have influence and who accepts rewards in exchange for some kind of government cooperation or assistance could face 10 years in prison upon conviction.  

Public officials are also legally obligated to report bribes offered to them.  

The law replaces criminal offences that were under the Cayman Islands Penal Code for official corruption and false certificates by public officers. Mr. Munroe said tightening up campaign finance laws and making donors to political parties public would go a long way toward cleaning up some of the “dark corners” of Caribbean politics. 

“We should not have to speculate,” he says. “The point is that we should have campaign finance regulation in law that provides disclosure from big donors, who gives how much to which party and should ban – prohibit – unregulated financial organisations … from giving money to political parties to fund election campaigns.  

“The longer we take to plug this and similar loopholes, the more people will lose confidence in the rule of law, the justice system and ultimately the democratic system of governance.”  

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