turks and caicos islands commission of inquiry 2008‐2009 · 2013-12-19 · turks and caicos...
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TurksandCaicosIslandsCommissionofInquiry2008‐2009
intopossiblecorruptionorotherseriousdishonestyinrelationtopastandpresentelectedmembersoftheLegislatureinrecentyears
ReportoftheCommissionerTheRightHonourableSirRobinAuld
PresentedtoHisExcellency,GordonWetherell,GovernoroftheTurksandCaicosIslands
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TURKSandCAICOSISLANDS
COMMISSIONOFINQUIRYINTOGOVERNMENTALCORRUPTION
REPORT
CONTENTS
PageNo
AppointmentofCommission 5
SubmissionofReporttotheGovernor 7
Acknowledgements 9
SummaryoftheReport 11
1‐INTRODUCTION
TheNatureoftheInquiry 14
BriefDescriptionoftheTurksandCaicosIslands 17
ShortHistoryoftheIslands 19
MattersgivingrisetotheCommission’sappointment 27
ScopeandconductoftheCommission’sInquiry 31
2‐CORRUPTION
Introduction 48
Conflictsofinterest 52
Disclosureofinterests 55
Politicsandpoliticaldonations 62
Belongership 67
2
ConstitutionalWatchDogs 69
3‐CONTEXTOFCORRUPTION
Abuseofofficeandofthepoliticalandelectoralprocess 77
CrownLand 81
Publiccontracts 100
Immigrationandpermissiontowork 104
RevenuesandExemptions 108
4‐INFORMATIONOFPOSSIBLECORRUPTIONAND/OROTHERSERIOUSDISHONESTYAND
RECOMMENDATIONS
Introduction 113
TheHonMichaelMisick
Background 114DeclarationsofInterests 119DisclosureofIntereststotheCommission 119PoliticalDonationsor‘Loans’ 120OtherPayments 125Tourism 132UseofGovernmentandleasedaircraft 138CasablancaCasinoandtheWindsorInvestmentGroupLtd 141JoeGrantCay 146SaltCay 151
TheHonFloydHall
Background 158DeclarationsofInterests 158DisclosuretotheCommission 160PoliticalPartyFinances 161LinkswithRichardPadgett 164‘Flipping’ofCrownLand 168MinisterialinterventionintheallocationofCrownLand 171Scholarships 172HealthCare 173CabinetResponsibility 178
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TheHonMcAllisterHanchell
Background 178DeclarationsandDisclosureofInterests 179Loans 182Caicos OilLtd 183MinisterialAllocationofCrownLand 184JoeGrantCay 188SaltCayDock 193
TheHonJeffreyHall
Background 195
DeclarationandDisclosureofinterests 195
MelbourneWilsonandthefirstNorthWestPointtransaction 197
MelbourneWilsonandthesecondNorthWestPointtransaction 203
TheHonLillianBoyce
Background 204DeclarationstotheRegistrarofInterests 204DisclosuretotheCommission 205AllocationandFlippingofCrownLand 205Awardofscholarships 207Profitmakingfromgovernmentcontracts 208SouthernHealthNetwork 208
TheHonGalmoWilliams
Background 209DeclarationstotheRegistrarofInterests 209DisclosuretotheCommission 211ConflictsofInterest 211FirstCaribbeanTrustCompany 212Immigration 212
5‐SYSTEMICLEGISLATIVEANDGOVERNMENTALWEAKENSSES
GeneralFaultLines 214
PartialSuspensionoftheConstitutionandInterimDirectRulefromWestminsterthroughtheGovernor
218
CriminalSanctionsandCivilRecovery 224
IntegrityinPublicLife 230
4
CrownLandAllocation,SaleandManagement 238
ANewConstitution 240
6‐SUMMARYOFFINDINGSANDRECOMMENDATIONS
FromChapter4–InformationofPossibleCorruptionAnd/OrOtherSeriousDishonesty
TheHonMichaelMisick 244
TheHonFloydHall 249
TheHonMcAllisterHanchell 253
TheHonJeffreyHall 255
TheHonLillianBoyce 256
FromChapter5‐SystemicWeaknesses
PartialSuspensionoftheConstitutionandDirectRule 257
CriminalSanctionsandCivilRecovery 259
IntegrityinPublicLife 260
CrownLand 262
ANewConstitution
264
APPENDICES
1. Maps:i) Caribbeanii) TurksandCaicosIslandsiii) Providencialesiv) SaltCay
2. Commissioner’s Opening Statement, Providenciales Proceedings 13th January2009
3. CommissionInterimReportof28thFebruary2009
4.
Significantlegislativeandotherinstruments:i) ConstitutionOrder2006ii) Constitution(InterimAmendmentOrder)2009iii) CommissionsofInquiryOrdinanceiv) RegistrationofInterestsOrdinancev) MinisterialCodeofConductvi) PublicServiceCodeofEthicsandConduct
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SUBMISSIONOFREPORTTOTHEGOVERNOR
YourExcellency,
Your predecessor in the office of Governor of the Turks & Caicos Islands, His
ExcellencyRichardTauwhareMVO,appointedmeassoleCommissionerunderawarrant
signed and issued by him on 10th July 2008, pursuant to the Commissions of Inquiry
Ordinance.Thewarrant,whichisreproducedattheheadofthisReport,requiredmeto
conduct an inquiry into thepossibility of corruption and/orother seriousdishonesty in
relationtopastandpresentMembersoftheLegislatureoftheTurks&CaicosIslandsand
to reportmy findingsand recommendationsby theendofOctober2008. On14th July
2008IattendedbeforeHisExcellencyinGrandTurkandtooktheoath.Onthefollowing
day he and I attended and spoke at a press conference in Providenciales, at which I
openedtheInquiry.
For reasons with which you became familiar following your succession to His
ExcellencyasGovernoron5thAugust2008,andwhichhavebeenwellpublicisedinPress
ReportsissuedbyYourExcellencyandbytheCommission,itbecamenecessaryforyouto
enlargethetimefortheconductoftheInquiryandsubmissionoftheReport.TheReport
isnowtobesubmittedby31stMay2009.
Followingmy appointment in July 2008, I spent the best part of sixmonths until
early January 2009, making written enquiries, mainly from the Commission’s Office in
London.Indoingso,IhadtheableanddedicatedassistanceofMrAlexMilneandMiss
SarahClark,CounseltotheCommission,MrsJacquelineDuff,SolicitortotheCommission,
andMrLauranceO’DeaandMissBaharehAla‐eddini,respectivelySecretaryandAssistant
SecretarytotheCommission.
Asyouknow,inearlyJanuary2009theCommissionmovedtoProvidencialesinthe
Turks & Caicos Islands to conduct oral proceedings, in the main for the purpose of
examiningMinistersandotherMembersof theHouseofAssemblyas to their interests
declarable under the Registration of Interests Ordinance 1993 and/or sought by the
Commission under the Commissions of Inquiry Ordinance. Despite requests from the
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Commission,manyofthoseinterestshadstillnotbeendisclosed.Theoralproceedings,
which included, towards theend,evidence fromanumberofotherwitnessescalledby
theCommission, took justover fourweeks,endingon11thFebruary2009. For reasons
that I gave on that day when closing the proceedings, I considered that there was a
nationalemergencyintheTerritorynecessitatinganInterimReportby28thFebruary2009
at the latest. TheCommissionTeamreturnedquickly to theUnitedKingdomtoenable
me,withtheirhelp, toprepareandsubmit it toYourExcellencyon28thFebruary2009.
With the continued and dedicated help of the Commission Team, involving also the
conductofanextendedSalmonexercise,1 IhavecompletedtheFinalReporttoday,31st
May2009,andpresentitherewithforYourExcellency’sconsideration.
TheRightHonSirRobinAuld
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1LettersofthiskindwererecommendedintheReportoftheRoyalCommissiononTribunalsofInquiry,whichwaschairedbyLordJusticeSalmonin1966.TheReportlaiddownasetofgeneralprinciples,designedtosafeguardtheinterestsofwitnessesandpartiestoatribunalofinquiry–RoyalCommissiononTribunalsofInquiry(1966)Cmnd3121,London,HMSO
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ACKNOWLEDGMENTS
IcannotsubmitthisFinalReportwithoutrecordingmanyandwarmacknowledgements
due to somany for their help in the Commission’s inquiry in and from the Turks and
Caicos Islands, the United Kingdom and elsewhere. Throughout, I have been greatly
aidedandreassuredbythewelcomeaccordedtotheCommissionbythepeopleof the
TurksandCaicos Islandsandvaluableassistance that thevastmajorityhavevoluntarily
givenbywayof contributions inwritingand/or inoralevidence,andby someof those
whogaveoralevidenceonsummons.
I include inmy thanks theGovernor,HisExcellencyGordonWetherell,hispredecessor,
His Excellency, Richard Tauwhare MVO, and their hard‐pressed staff, the Attorney
General and the many senior Departmental Officials and their staffs who responded
promptlyandhelpfullytoourmanyrequestsforinformationandassistance.
The Commission was also extremely fortunate in the arrangements made for its
accommodation and oral proceedings in January and February of this year in
Providenciales. The Regent Palms Hotel, under the well‐judged and hospitable
arrangements made by Monica Neumann and her proficient and welcoming staff,
provideduswithcomfortablelivingandalocationfortheoralproceedingsthatwasjust
right.
In such a setting, and despite all the customary travails of any such exercise, the
CommissionTeam,MrAlexMilneandMissSarahClark,ofCounsel,MrsJacquelineDuff,
Solicitor,andMrLauranceO’DeaandMissBaharehAla‐eddini,respectivelySecretaryand
AssistantSecretary,allgavemorethantheirbest,notjusttotheCommission,butalso,I
believe,toallwhoattendedthehearingsorhadoccasiontocontactit.Iincludeinthat
tribute the vastmajority of the parties’ attorneyswho, consistently with their duty to
their clients, showed high professionalism, good nature and a prompt and helpful
responsetothemanydemandsthattheCommissionmadeonthem.
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Inaddition, IshouldrecordmygratitudetotheCommission’sReal‐TimeStenographers,
Christina Yianni and Catherine Eden, without whose dogged and talented work in
producingdailytranscriptsofthehearings,muchofinterestandimportanceformanyat
thetimeandforthefuture,wouldhavebeenlost.Asimilarandequallyfulsometributeis
due toDavidWoods, theCommission’sweb‐siteConsultant, for his regular postingsof
thetranscriptandotherinformationabouttheInquiry’swork.
Finally, a thank you to the Royal Turks and Caicos Police, who, under the direction of
Superintendent David Ryder, ensured – with great efficiency and unobtrusively – the
orderlyandsecuremannerinwhichtheCommissionwasabletogoaboutitstask.
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SUMMARY
1. There is ahighprobabilityof systemic corruption ingovernmentand the legislature
andamongpublicofficersintheTurks&CaicosIslandsinrecentyears.Itappears,inthe
main, to have consisted of bribery by overseas developers and other investors of
Ministersand/orpublicofficers,soastosecureCrownLandonfavourableterms,coupled
withgovernmentapproval for itscommercialdevelopment. Breachand/orbyabuseof
the Government’s Belongers’ Empowerment and Crown Land Policies appear to be
frequentmechanismsof,andaidsto,suchtransactions.2
2.Overthesameperiodtherehasbeenseriousdeterioration‐fromanalreadylowlevel‐
intheTerritory’ssystemsofgovernanceandpublicfinancialmanagementandcontrol.3
3.Thisdeteriorationhasbeenaccompaniedbyextravagantandill‐judgedcommitments
by those in public office, primarilyMinisters, in public expenditure and in their private
expenditure at public expense. There has also been deterioration in the Territory’s
financialconditionand,morerecently,accumulatingbudgetdeficitsandanearcollapse
ofitsfinancialreserves,givingitdifficultyonoccasioninpayingitsbillsastheyhavefallen
due.4
4.Amongthecontributorstothismoral,governmentalandfinancialdeclinehavebeen:
1) the potential and encouragement in the system of governance for abuse of public
office, concealment of conflicts of interest at all levels of public life, and consequent
venality; 2) the power of politics in themix of public decision‐making and commercial
activity,andwillingnessofoverseasdevelopersandotherinvestorstoexploitthatpower
for their own purposes; 3) vulnerability of the majority of the Territory’s long‐term
residents,owingtotheprecariousnessoftheirpermissiontoliveandworkhere,andto
whom Belongership and, with it, the right to vote are denied; and 4) lack of effective
constitutional checks and balances in the system of governance to protect the public
2SeeChapter1,paras1.41–1.44,Chapter2,paras2.44–2.49,Chapter3,paras3.9–3.52,andChapter4generally,andtheCommissionInterimReportof28thFebruary2009atAppendix3tothisReport3SeeChapter1,paras1.38–1.43–1.49,Chapter2,paras2.50–2.644SeeChapter4generallyandtheCommissionInterimReportof28thFebruary2009atAppendix3tothisReport
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purse,theinefficientfromscrutiny,thedishonestfromdiscoveryandthevulnerablefrom
abuse.5
5. There isalsomuchscope in thewidediscretionarypowersaccordedtoMinistersby
the2006Constitution,and/orarrogatedbythem,forabusebythemoftheirpublicoffice,
inefficientgovernanceandpoorpublicfinancialmanagementandcontrol,particularlyin
the grant or withholding of Crown Land and permission to develop it and other
investmentopportunities,and intheexactionorwaiverofgovernmenttaxesandother
dues.6
6.PursuanttotheCommission’sfirstTermofReference,Ifindthatthereisinformation
of possible corruption and/or other serious dishonesty, includingmisfeasance in public
office,inrelationtofivepresentelectedMembersoftheHouseofAssembly,allofwhom
until recently wereMembers of the Cabinet, namely, the HonsMichaelMisick,7 Floyd
Hall,8 McAllister Hanchell,9 Jeffrey Hall10 and Lillian Boyce.11 I have recommended
criminalinvestigationbythepoliceorotherswithaviewtoprosecutions,ifsoadvised,in
relation to such possible offences in respect of matters identified and described in
Chapter4,andsummarisedinChapter6,ofthisReport.12
7.PursuanttotheCommission’ssecondTermofReference,Ifindthattherearesystemic
weaknessesInlegislation,regulationandpublicadministrationintheTerritory,inrespect
ofwhich Ihavemaderecommendations,13 largelyconfirmingthosemade inmy Interim
Reportof28thFebruary2009.14
8. Those recommendations include:1)partial suspensionof the2006Constitutionand
Interim Direct Rule fromWestminster acting through the Governor;15 2) provision for
special criminalprocessandcivil recoveryof assetsarisingoutof any criminalorother
investigationspromptedbythisReport,includingtrialbyjudgealoneandpartialreversal
5SeeChapter2generally6SeeChapter3,paras3.9–3.867Seeparas4.6–4.109andRecommendations1to138Seeparas4.110–4.151andRecommendations14to269Seeparas4.152–4.189andRecommendations27to3310Seeparas4.190–4.211andRecommendations34to3611Seeparas4.212–4.22andRecommendations37to3912SeeChapter4generallyandChapter6,Recommendations1‐3913SeeChapter5andalsoChapter6,Recommendations40‐6514SeeAppendix3tothisReport15Chapter5,paras5.11–5.22andRecommendations40to47
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of the burden of proof;16 3) improvement of standards of integrity in public life;17 4)
statutoryreformofthesystemforadministrationanddisposalofCrownLandintheform
ofaCrownLandOrdinance(alreadypartly indraft),soastoremoveorseverelyreduce
the scope for corruption and loss without appropriate return of the Territory’s most
valuableasset;185)onreturnoftheTerritorytoministerialgovernment,amendmentof
the2006Constitutionor,withaviewtoanewConstitution,reformoftheFranchiseand
removalor reductionof constitutional imbalancesandweaknesses;19and6) review, in
consultationwiththeTCIBarAssociation,ofTheLegalProfessionOrdinance.20
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16Chapter5,paras5.23–5.32andRecommendations48to5317Chapter5,paras5.33–5.43andRecommendations54to5918Chapter5.44andRecommendation6119Chapter5,paras5.45–5.48andRecommendations62to6420Chapter5,para5.49andRecommendation65
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1‐INTRODUCTION
TheNatureoftheInquiry
1.1On10thJuly2008IwasappointedsoleCommissionerofInquiryunderthetermsofthe
Turks and Caicos Islands Commissions of Inquiry Ordinance21 by His Excellency Richard
Tauwhare MVO, the then Governor of the Islands. The Terms of Reference of the
Commission(takingintoaccountsubsequentamendment)wereasfollows:
To inquire into ...[w]hetherthere is informationthatcorruptionorotherseriousdishonesty in relation to past and present elected members of the House ofAssembly(previouslyknownastheLegislativeCouncil)mayhavetakenplace inrecentyears...[and]tosubmit... itspreliminaryfindingsandrecommendations...concerning:
(a)instigatingcriminalinvestigationsbythepoliceorotherwise,[and]...torefersuchinformationitmayobtaintotheTCIprosecutingauthorities];
(b) any indications of systemic weaknesses in legislation, regulation andadministration;and
(c)anyothermattersrelatingthereto.
1.2AsIobservedinmyInterimReportsubmittedtotheGovernoron28thFebruary2009,
thetaskssetformebytheTermsofReferencecouldnotsensiblyhavebeenexpressedwith
lowerthresholds.
1.3 Under the firstTermofReference, Iamtoconsiderwhether there is information ‐ in
whatever form and giving it the weight I consider it deserves – of possible corruption in
relationto,thatis,involving,electedMembers,pastandpresentoftheLegislature.Ifso,I
amtoconsiderwhethertorecommendcriminalinvestigationbythepoliceorotherbodies.
The potential targets of the Commission’s Inquiry and any such criminal investigation are
thosewhomayhavebeenbribed,thosewhomayhavebribedthemand/orthosewhomay
havebeenpartiestoanysuchcorruptand/orotherwiseseriouslydishonestbehaviour.
1.4 Under thesecondTermofReference Iamtoconsider, in the lightof the information
before me, making findings as to any systemic weaknesses in legislation, regulation or
21Ch21;SeeAppendix4(iii)tothisReport
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administrationrelevant topossiblecorruptionand/orotherseriousdishonesty,and, if I so
find,tomakerecommendationsforchangeinordertopreventandtodetersuchconduct.
1.5 Under the third Term of Reference, I am to consider, in the light of the information
before me, whether to make findings and/or report on any other related matters, for
example, those thatbearon,ormaybeaffected in a fundamentalwayby, any statutory,
regulatory and/or administrative changes that I recommend. These I have interpreted as
including the Constitution, the extent andmanner of grant of the Franchise, the over‐all
structure of the Territory’s system of governance and financial and other control, the
fundingofpoliticalpartiesandanyrelevantcodesofpublicorprofessionalconduct.
1.6OversixmonthsofextensivewritteninvestigationsbytheCommissionbeforeitbegan
oralproceedingsinProvidencialesinJanuary2009,Ireceivedmuchinformationpointingto
possiblesystemiccorruptionand/orofotherseriousdishonesty involvingpastandpresent
electedMembers of the Legislature in recent years. I also found indications of systemic
weaknesses in legislation, regulationandadministrationand relatedmatterscalling, inmy
view, for attention. As will appear in the ensuing chapters of this Report, the oral
proceedings, were necessitated in the main to secure full disclosure of interests from
MinistersandotherMemberof theHouseofAssembly. Thoseproceedingsproducedan
abundanceoffurtherinformation–informationthatpointed,notjusttoapossibility,butto
a high probability of such systemic venality. Coupled also with clear signs of political
amoralityand immaturityandofgeneraladministrative incompetence, theydemonstrated
an urgent need for suspension, in whole or in part, of the Constitution and for other
legislative and administrative reforms. There were also strong indications, from the
informationbeforeme,oftheneedforchangesinotherrelatedmatters.
1.7 Iaccordinglydetermined,bythecloseoftheoralproceedingson11thFebruary2009,
that I should submit an Interim Report to the new Governor, His Excellency Gordon
Wetherell(whohadsucceededGovernorTauwhareasGovernoron5thAugust2008),thatis,
wellbeforetheexpiryoftheCommission’speriodforcompletingtheInquiryandreporting
to theGovernor (by then extended to 30th April 2009). In closing the oral proceedings, I
explainedwhyIconsidereditnecessarytotakethatcourse:
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...thegovernmentofthiscountryisatanearstandstill,theCabinetisdividedorunstable, theHouseofAssemblyhasbeenprorogued, its financesare inabadwayandpoorly controlled, governmental andother audit recommendations lieunattended, and disposals of Crown Land to fund recurrent public expendituredeficits continue for want of governmental revenue from other more fiscallyconventionalsources.Itisevidentthattherearewide‐spreadfearsonthepartofthepeopleoftheTerritorythattheyareleaderlessandtheirheritageisatriskofcontinuingfasttodrainaway.
... thetrainofevents leadingtothesehearingsandtheTerritory’sparlousandvolatilestatehasnecessitatedafurtherextensionoftheCommission’speriodofInquiryto30thApril.Butthatdoesnot–orshouldnot–allowtheCommissiontoassumetheluxuryofreturninghomeforsomemonthstopolishitsparsesbeforereporting.IntheTerritory’spresentstate,goodnessknowswhatmayhappeninthemeantime....
1.8IdulypresentedtheGovernorwithanInterimReporton28thFebruary2009,conveying
myfindingsthattheInquiryhadproducedinformation,attheveryleast,ofpossiblesystemic
corruptionand/orofotherseriousdishonestyinvolvingpastandpresentelectedMembers
of the Legislature, coupled with indications of systemic weaknesses in the Territory’s
legislation, regulationandadministrationand in relatedmatters. I included in theReport
some24interimrecommendations,someofwhichIregardedandexpressedtobeofgreat
urgency tomeetwhat I considered to be chronic ills collectively amounting to a national
emergency,othersforthemiddleandlonger‐term.
1.9InthisReport,IsetoutwhatwasabsentfromtheInterimReport,thefactualbasesfor
the findings of systemic governmental weaknesses and more fully developed
recommendations flowing from those findings. I also setout for the first time findingsof
information of possible corruption and/or other serious dishonesty involving individual
Members of the House of Assembly ‐ all Ministers at the material time and some third
parties,withrecommendationsforcriminal investigations. Inaddition,Irefertoanumber
ofother transactionsand relationships,which, forwantof resourcesand time, I havenot
beenabletoinvestigateasfullyasIwouldliketohavedone,butwhichmaybeofinterestto
any criminal investigators whomay be appointed as a result of this Report. Absence of
specific mention or criticism of transactions or relationships should not be taken by
individualsconcernedinthemasnecessarilyexculpatory.
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BriefDescriptionoftheTurksandCaicosIslands
1.10 The Territory of the Turks and Caicos Islands (“TCI”) is one of 14 United Kingdom
OverseasTerritories.Itconsistsofanarchipelagoofislands‐someverysmallandknownas
cays–at theeasternedgeof theCaribbean. They lie tothesouthof theBahamasChain,
some600milessouth‐eastofMiamiand90milesnorthofHaitiandtheDominicanRepublic
–seeMapatAppendix1(i).
1.11 TheTerritoryconsistsofsome40 islandsandcaysdividedbyadeep‐waterchannel
into two groups – see Map at Appendix 1(ii). To the north‐west of the channel and
extending in an arc to the south‐east are the Caicos chain of islands, starting withWest
CaicosandProvidenciales, the latterbeing themain tourismandcommercial centre– see
MapatAppendix1(iii),andcontinuingsouth‐eastwardswithNorth,MiddleandSouthCaicos
To theeast and south, andon theother sideof thedeep‐water channel, areGrandTurk,
where the Territory’s capital, Cockburn Town, and the seat of Government are situated.
Extending in a south‐westerly direction from Grand Turk is a chain of mainly small cays,
whichmakeuptherestoftheTurksIslands.Theyinclude,attheirsouthernextremity,Salt
Cay,which,asitsnamesuggests,hashadalongconnectionwiththeproductionofsalt–see
MapatAppendix1(iv).Thewholelandareaisabout190squaremiles.Ithasapermanent
orlong‐termpopulationestimatedin2008tobeabout36,000,22plusatransientandvarying
numberofoverseasworkersand illegal immigrants, the lattermostly fromHaitiandother
partsoftheCaribbean.AbouttwothirdsofthepopulationliveandworkinProvidenciales.
1.12OnmanyoftheIslandsandsmallcaystherearehighqualitytouristdevelopmentsand
expensive private homes. The main attractions to residents and visitors alike are the
dazzling white beaches, fringed with spectacular reefs, internationally renowned diving
areas, and, of course, good fishing. In recent years these attractions have become an
increasinglypopularlurefortourists,andforoverseasdevelopersseekingtoaccommodate
and profit from them. This has led to a boom in development on many of the Islands,
particularly in Providenciales, which the TCI Government has encouraged and enabled by
releasingandsellinglargeareasofCrownLandfortouristresortsandassociatedprojects.
22TCIGDepartmentofEconomicPlanningandStatistics,2008Estimate.
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1.13 There are also environmentally protected land areas, but the poor soil – mostly
limestone–anddryclimatedonotencourageagriculture.TheTerritoryhastoimportmost
of its food,save for fish. TheTerritory is subject toperiodic– that is, in theSummerand
Autumn – tropical storms and hurricanes. Most recently, in early September 2008 and
duringthecurrencyofthisInquiry,thereweretwoinshortsuccession,TropicalStormHanna
and Hurricane Ike. They causedmuch damage, including very serious devastation in the
south‐eastofthearchipelago,onGrandTurk,SouthCaicosandSaltCay.
1.14 Of the total permanent or long‐term population there are an estimated 11,750
Belongers–mainlylocallybornordescended,butincludingotherstowhom,exceptionally,
thestatushasbeengranted.OnlyadultBelongershavetherighttovote,andtheyenjoya
number of other benefits, including the opportunity to acquire Crown Land at a very
substantialdiscountforprivatehousingandcommercialdevelopment.
1.15TheIslands,asaBritishOverseasTerritory,arenotconstitutionallypartoftheUnited
Kingdom (UK). They have enjoyed varying degrees of self‐government over the years,
subject to oversight from the UK exercised through an Administrator or Governor. The
fundamental relationship between the UK and the TCI, as with all other of its Overseas
Territories,istoassistandguidethemtofullindependencewhentheyarereadyforit.That
aim isat theheartof theUK’sobligationsunder theUnitedNationsCharter,Article73of
which imposes on it, as the administering power, a solemn and heavy responsibility to
recognisethattheinterestsoftheTerritory’speopleareparamount.Thatincludesadutyto
promote their well‐being, including their political, economic, social and educational
advancement,justtreatment,protectionfromabuseandamovetoself‐government.
1.16 In 1999 theUnitedKingdomGovernmentunderlined its commitment to the goal of
eventualgrantoffullindependencetoallitsOverseasTerritoriesinaWhitePaper,23setting
out a new partnership with them based on four principles: 1) eventual grant of
independencewherethedevelopmentofaterritoryissuchthatitisconsideredanoption;
2) in the meantime, the grant of the greatest possible autonomy; 3) defence,
encouragement of sustainable development and care for their interests internationally, in
returnfortheirexerciseofhighstandardsofprobity, lawandorder,goodgovernanceand
23FCO(1999)PartnershipforProgressandProsperity;BritainandtheOverseasTerritories,Cm4264,p4
19
observanceoftheUK’s internationalcommitments;and4)continuingfinancialhelpwhere
needed.
1.17Astothelastofthoseprinciples,theTCI,incommonwithmostotherBritishOverseas
Territories,alsohasanindirectrelationship,throughtheUK,withtheEuropeanUnion(the
EU), pursuant to an EU Council Decision, known as the Overseas Association Decision,
renderingtheTerritoryeligibleforconsiderationforEuropeanDevelopmentfunding,24and
alsoaccesstootherregionalfundingschemes.
1.18TheTCIhasitsownConstitutionbyvirtueofanOrdermadebytheQueeninCouncilin
2006,25underwhichitisgovernedbytheQueenactingthroughaGovernor.TheGovernor
actsinconsultationwithaCabinetappointedbyhim,exceptsometimesinrelationtocertain
matters for which he has special responsibility, or when so instructed by Her Majesty
through a Secretary of State, or when acting in his discretion or judgement on the
recommendationofapersonorauthorityotherthantheCabinet.Mattersreservedtothe
Governor include responsibility for defence, external affairs, regulation of international
financial services and internal security, including the police, the public service and
administrationofthecourts.TheConstitutionalsoreservestotheUKanumberofpowers.
TheyincludethepoweroftheQueentolegislatefortheTCIbyOrderinCouncil,toinstruct
theGovernorintheexerciseofhisfunctionstoactwithoutconsultationwith,orcontraryto,
theadviceof theCabinet,and,acting throughaSecretaryofState, todisallowany lawto
whichtheGovernorhasassented.
ShortHistoryoftheIslands
1.19 I should say something about the history of the TCI before moving to the
circumstances giving rise to the appointment of this Commission. In doing so, I have
borrowedfromothermuchfulleraccountsthanarenecessaryhere.Oneaccount,towhichI
amparticularly indebted is thatof Sir (ashenow is) LouisBlom‐CooperQC in1986of an
24 FCA (2008), Overseas Territories: Seventh Report of Session 2007‐2008,Volume 1 (Report, togetherwith formalminutes), HC147‐1,LondonTSO,p47,para11225TheTurksandCaicosIslandsConstitutionOrder2006,SI2006/1913
20
Inquiry he conducted into allegations of arson, corruption and related matters in the
Territory(theBlom‐CooperInquiry).26
1.20 The first permanent settlement in the Islands was in the late 17th century when
Bermudansalt rakersestablishedsalt‐pans inGrandTurkand later innearbySaltCayand
SouthCaicos,establishingwhatwastobecomeoneoftheprincipalworld‐sourcesofsaltfor
useasapreservative.AftertheFrenchdrovetheBermudansoutinthe1760stherewasa
periodofthirtyyearsduringwhichtheBritish,actingthroughtheGovernoroftheBahamas
Islands, claimed territorial jurisdiction. Notwithstanding their claim, theBritishwerehard
puttokeepatbay,first,theFrenchand,bythen,thewell‐establishedsaltworkers.Toadd
to the mix, in the late 1780s American loyalists arrived in the Bahamas and began to
establishcottonplantationsintheCaicosIslands.
1.21 At the turn of the 18th and 19th centuries the TCI became a restless part of the
Bahamas–restlessinlargepartbecauseoftheIslands’saltproprietors’deepresentmentof
thesaltdutiesimposedonthembytheBahamians.Theoutcomewasseparationfromthe
Bahamas in the mid 19th century and the introduction of a form of self‐rule called a
Presidency,underthesuperintendenceoftheBritishGovernorofJamaica–some400miles
tothewest.Overthesucceedingyearsthedeclineofthesaltindustryandoftheeconomy‐
andadevastatinghurricane,bythesoundofitworsethanHurricaneIke–ledin1874tothe
Islandsbecoming,attheirinhabitants’request,adependencyofJamaica.Theysoremained
forthebestpartofacenturyuntil1962whenJamaicaitselfgainedindependence.
1.22 By this time refrigeration had largely replaced salt as a preservative, and the salt
industry in the Islands had all but come to an end. By this time too, the Territory had,
acquired a constitution,27 but now with the Governor of Jamaica as its Governor (acting
through an Administrator appointed by him) and an Executive Council and a Legislative
Assembly.Thiswasashort‐livedarrangement,comingtoanendin1965withtheTerritory’s
second Constitution and a period of rule by the Governor of the Bahamas (also acting
throughanAdministrator), anda further (slightly) amendedConstitution in 1969. Finally,
followingthegrantofindependencetotheBahamasin1973,theTerritoryacquiredin1976
26ReportoftheCommissionerMrLouisBlom‐CooperQC, intoAllegationsofArsonofaPublicBuilding,CorruptionandRelatedMatters,December1986,London:HMSO,SeeinparticularPartsA,E,FandG,General,Related,andUnrelated,Matters,andPoliticalPatronage27TheTurksandCaicosIslands(Constitution)OrderinCouncil1959
21
its first very own fully‐detached Constitution28 (the 1976 Constitution) and resident
Governor.
1.23 Turningback foramoment fromtheconstitutionalstatusof the Islandsachievedby
1976, itmaybehelpful to lookbackbrieflyat theirphysical, cultural, socialandeconomic
developmentsincethebeginningofthe20thcentury.Forthispurpose,Icannotdobetterby
wayof scene‐setting for today thandrawon the followingpassages from the1986Blom‐
CooperReport:29
... At the beginning of this century Grand Turk, Salt Cay, South Caicos, EastCaicos,MiddleCaicos,NorthCaicosandWestCaicoswereallpopulated.TodayEast and West Caicos are uninhabited. This small group of islands, sparselypopulated,havelimitednaturalresources.Therearevastdiseconomiesofscales,bothinpublicandprivatesectors,resultinginthehighcostofgoodsandserviceswhichmustbeduplicatedoneachisland.ThisisexacerbatedbythegeographicalspreadoftheIslandsrangingover166squaremilesandsurroundedbyreefandshallow waters. Communication between the Islands has been a perennialproblem. On the Caicos Islands there were no proper roads and the journeybetween the non‐coastal settlements was often made on foot or by donkey.GrandTurkwasacablestationandhadcontactwiththeoutsideworld,buttheCaicosIslandswerenotsofortunate.
TherehasbeenhistoricallyamarkeddividebetweenpeoplefromtheSaltIslands(Grand Turk, Salt Cay and South Caicos) and those fromMiddle Caicos, NorthCaicosandProvidenciales...IntheSaltIslands,saltwasacashcropandcreatedawageeconomy,whereas in theother islands subsistence farmingand fishingprovidedthesolemeansoflivelihood.DuringtheSecondWorldWaranairstripwasbuiltbytheUSforcesonSouthCaicosandanotherwasestablishedonGrandTurk.TheUSestablishedaCoastGuardbaseatthenorthernendofSouthCaicos.OnGrand Turk, at the polarities of the sixmile‐long andmile and a halfwideisland,theUSmaintainedaNavalBaseandanAirForceBase.Theconstructionand operation of these two bases brought a significant addition to the wageeconomy. While they provided much‐needed employment, they masked theunderlying weakness of a ‘one‐crop’ economy. The weakness was unmaskedwhen the bases were discontinued in the early 1980s, leaving unoccupiedbuildings,areminderofindirectaidfromtheUS,notsincereplaced.
1.24Aid,notsincereplaced,thatis,untilthestartintheearly1970sofUStourismtothe
Islands,developingeventuallyintoanotherone‐cropeconomy,30withitsmainfocusonone
of the most attractive, though hitherto least economically favoured Caicos Islands,
28TheTurksandCaicosIslands(Constitution)Order1976,1976/115629Report,pp5‐630It istruethatsincethe late1970stheTerritoryhasalsosoughttoestablish itselfasoffshorefinancialcentre,butwithonlymoderatesuccess.
22
Providenciales.Thenext30yearssawagatheringmomentum,indeedanexplosion,onthat
Islandoflarge‐scaletouristdevelopments,radiatingouttosomeoftheotherCaicosIslands
and associated cays, but not to any great extent in Grand Turk or the other former Salt
Islands. Despite,orbecauseof, thisdramaticeconomicturnabout, thecultural,socialand
economicdividebetweenthetwosetsof Islandshaspersistedin largeparttothisday,Sir
LouisBlom‐Cooper,commentingin1987,againaptlysetthescene:31
... Between thepopulationofGrandTurkand thatof theCaicos Islands, therewasaninitialdifference.TheformerconsistedofBermudansandtheirslavesinsearch of salt. The latterwere Loyalists from theUSwho emigrated after theWarofIndependence.WhilethesaltindustrybroughtameasureofprosperitytoGrand Turk, agriculture was always a struggle: Grand Turk, the seat ofgovernmenthasbeenconcentratedinasingletownandhasbeenpoliticallymoreadvanced. Inthe largerCaicos Islandssettlementhasbeenmorescatteredandless cohesivebutwitha sturdyparochialismencouragedby sectarianvariety inreligiousmatters.Fortheseandotherreasonstherehasbeenadivisionoflongstandingbetweenthetwogroups,dividedbya22miledeep‐waterchannel,anddifficultcommunications....
But a new dimension to the traditional rivalry and parochialism was alreadydevelopingbytheearly1970s.Tourismwasmushroomingonthemostattractiveof the Caicos Islands, Providenciales. Today there is a reversal of the unequalfortunesofthetwogroups,withthoseanxiousfordevelopmentonProvidencialesbelievingittobethwartedbythepoliticaldominanceofGrandTurk.Itisanewingredientintherivalry...32
1.25 All of this, as I have indicated, formed the back‐drop to the 1976 Constitution, a
change toaWestminster styleadministration. Thishad the familiar trappingsof aBritish
dependentterritoryoftheday,aGovernor,actinginthemaininconsultationwithandon
the advice of an Executive Council, save in certain matters reserved to him or when
instructed from London.33 It had a Legislative Council composed partly of members
appointed by the Governor and partly ex officio, all subject ultimately to the control of
Londoninmattersofpolicyandadministration.34
1.26The1976Constitutiongaverisetotwomainpoliticalparties,theProgressiveNational
Organisation, the forerunner of the Progressive National Party (PNP) and the People’s
DemocraticMovement(PDM).Withthesupportofindependentmembers,thePDM,ledby
31opcit26,p832ibid,p833s734ibid,s23
23
James(Jags)McCartneyasChiefMinister,wasabletocommandamajorityintheLegislative
Council for four years until the 1980 General Election. Thereafter the PNP secured a
substantialmajorityintwofurtherelectionsunderthesuccessiveleadershipofMrNorman
SaundersSnrandMrNathanielFrancisasChiefMinister,andwasthepartyinpoweratthe
timeoftheBlom‐CooperInquiryinApril1986.35
1.27 The main subject matters of the Blom‐Cooper Inquiry were, on the face of it,
comparativelynarrow,namelyallegedarsonofabuildingonGrandTurkonNewYear’sDay
1986andallegedcorruption inthePublicWorksDepartment in1985/1986. However, the
termsofSirLouis’appointmentalsoauthorisedhimtoinquireinto,andreporton,Related
Matters, which he did. His general conclusions on thosematters, suggest that little has
changedoverthelast20orsoyearsleadingtothisInquiry,exceptastothepossiblerange
and scale of venality in public life. The following passages from his Report, under the
headingofConclusions,givea flavourofwhathe foundorbelievedhewouldhave found
haditallbeenwithinhistermsofreference:36
Nineteen eighty six ought to witness a point of departure in the political andgovernmental life of the Turks and Caicos Islands. ... I am driven to theconclusion that the time has come to disperse the cloud that hangs like abrooding omnipresence in a Grand Turkan sky. Persistent unconstitutionalbehaviour(throughtheapplicationofpoliticalpatronage)andcontraventionsofthefundamentalfreedomoftheindividualfromdiscriminationonthegroundsofpoliticalopinions,maladministrationbybothMinistersandcivilservantsateverylevelofgovernment(mostlyatmiddlemanagementlevel),andintolerable(nottosayseditious)conductby leadingoppositionmembersof theLegislativeCouncilare constant blights upon a constitutionally ordered society which is alreadydisplayingsignsofpoliticalinstability.
...
... Ihavenot foundcorruption. But I cannotsimulatedeafness to thevoicesofresponsiblepeopleintheIslandswhocomplainthatthereispervasivecorruptioningovernment,ifonlyitcouldbeuncoveredbydiligentandsustainedinquiryoveranumberofareasofgovernmentaladministration,allofthemoutwithmytermsofreference....
35AppointedundertheCommissionsofInquiryOrdinance1986(ofwhichthecurrentCommissionsofInquiryOrdinanceisarevision);thefirstoftwoInquiriesconductedbySirLouisin1986,thesecondintoanarrowerissue,SeeReportofCommissionofInquiryintotheNorthCreekDevelopmentProject1986‐1987(1987),Cm195,London:HMSO36ibid,PartH:ConclusionsandRecommendations,ChapterXIX,pp98‐99
24
Ifnothingisdoneaboutthisdepressingstateofpublicaffairs,thediseaseinthebodypoliticthatIhaveidentifiedmayalltooreadilybecome–ifitisnotalready–endemicandineradicableforthepresentgenerationofIslanders....
....Thetwindevelopmentoftourismand,since1979,theoffshorefinancialcentrehasoffered...theseIslandstheirfirstmodernopportunityofeconomicprosperity.Butbothelements in theeconomyareatpresentprecariouslypoised. It is theresponsibility of the people not to forego this opportunity through inertia andunwillingness to adapt. It is the duty of the politicians,with the assistance ofadministrators,topromoteandstimulatethatprosperity,notjustforthemselvesortheirsupporter{s]butforthebenefitofallthepeoplesoftheseIslands.
1.28 In the result, Sir Louis found that threeMinisters, including the ChiefMinister,Mr
Nathaniel Francis, had been guilty of unconstitutional behaviour and of ministerial
malpractices rendering themunfit to exerciseministerial responsibilities.37 He alsomade
findingsagainsttwoleadingMembersofthe(PDM)OppositionintheLegislativeCounciland
a Public Works Department employee, expressing the view that they were unfit to hold
publicoffice.However,herecommendedthattheyshouldnotbeprosecutedfortwomain
reasons. First, theadversepublicitygiventothembeforeand inthecourseofthe Inquiry
woulddeprivethemofa“fairhearing”towhichtheywereentitledundertheConstitution.
Secondly,itwouldbeimpossibletoempanelanimpartialjury:38
... Almost everyone in the Islands identifies himself with one or other of thepoliticalparties.Withsuchamanifestcommitmenttopartypolitics,itwouldbeimpossibletoachieveimpartialityinajuryempanelledfromamongthequalifiedjurorsintheTurksandCaicosIslands.
1.29Onawiderplane,andfollowinginlargepartfromthosefindings–andalso,nodoubt
becauseofhisviewastothegeneralconstitutional,administrativeandpoliticalmalaise in
the Islands, he recommended three further options for consideration.39 They were: 1)
suspension of the 1976 Constitution and introduction of an interim system of direct rule
through the Governor; 2) not to amend the Constitution, but to operate the Executive
Council throughMinisterswithoutportfolios;or3)–hisdiffidentlyexpressedpreference–
partial suspension of the Constitution to retain administration of the Territory by the
Governor actingon, but notboundby, the adviceof anAdvisory ExecutiveCouncil,while
retainingtheLegislativeCouncil.
37Report,p9738ibid,pp58and9739ibid,pp99‐101
25
1.30 In July 1986, shortly after the submission by Sir Louis of his Report, the 1976
Constitutionwas amended by anOrder in Council, temporarily suspending theministerial
system of government, his preferred option. A Constitutional Commission under the
Chairmanship of Sir Roy Marshall (the Marshall Commission)was appointed to consider
possible future constitutional arrangements.40 The Marshall Commission’s Report,
submitted inDecember 1986, gave rise to anOrder in Council in 1988 introducing a new
constitution (the1988Constitution),41 restoringministerial government in the formof the
GovernorandExecutiveCouncil, includingaChiefMinisterandfourotherMinisters,anda
LegislativeCouncil, consistingof12electedmembersand threeappointedmembers. The
1988Constitutionlastedfor18yearsuntilitsreplacementbyanOrderinCouncilin2006.
1.31Thatperiod,inpoliticalterms,continuedtobedominatedbyrivalrybetweenthePNP
and PDM, and ‐ particularly since the turn of the century ‐ accelerating economic
developmentandgrowthinpublicwealthandprivateprosperityengenderedinlargepartby
tourismandoverseasdevelopers catering for it. In theyears from2000up to the recent
world‐wide economic crisis, the Territory had, according to the UK National Audit Office,
experienced economic growth among the highest in the world.42 This influx of overseas
investment,muchof ithungry forCrownLandat thedisposalof theGovernor inCabinet,
alsobroughtwithitcontinuedgovernmentalmaladministrationandamixofincompetence
andperceivedcorruptioninpublicaffairs‐whicheverofthetwopartieswasinpower.
1.32So,thereisnothingnewaboutallegationsofgovernmentalincompetenceandabuse
of power in the TCI. As indicated in the next Chapter of this Report, many who gave
evidence to the UK Foreign Affairs Committee in 2007‐200843 and to this Inquiry have
stigmatised the conductofbothpolitical parties and theirmemberswhen in government,
accusing them of abuse of office or political power for personal or political advantage.
However,ofthetwo,thePNPhaveinrecentyearsattractedthemainandmostvociferous
criticism.
40TCIConstitutionalCommission(1986),ReportoftheConstitutionalCommission,Cm111,London:HMSO41TheTurksandCaicosIslandsConstitutionOrder1988,SI1988/24742UKNationalAuditOffice(2007),ReportbytheComptrollerandAuditorGeneral,ForeignandCommonwealthOffice:ManagingriskintheOverseasTerritories,HC42007‐08,p5843ibidp56,para149
26
1.33Whatisnewaboutthesecriticisms,oftenclearlytheproductofstronglyfeltgrievance,
istheincreaseintheirprevalenceandseriousness.Thatisparticularlysoinrespectofthose
voicedagainsttheHonMichaelMisick,hispoliticalcolleaguesandsupportersandfamilies,
since the PNP gained control and he became Chief Minister in the 2003 elections. The
dramatic surge inpowerandwealth thatheand theyenjoyedover the succeeding years,
which they openly displayed, appeared tomany to be egregious and tell‐tale signs of, at
best,abuseofpowerandfavouritism,atworst,corruptionorotherseriousdishonesty.
1.34 It was in such a political and economic climate that, at the suit of a now highly
confidentPNPadministration,seekingmoredevolutionofpowersfromWestminsteranda
furthermovetowardstotalindependence,thatthe2006Constitutioncameintobeing.44The
principal changes wrought by it were the introduction of a modernised chapter on
fundamental rights and freedomsof the individual and the replacementof the Legislative
Council with a House of Assembly composed of a Speaker, 15 electedMembers (one for
each of 15 electoral districts), four appointed Members and the Attorney General. The
former Executive Council was replaced with a Cabinet consisting of the Governor, a
Premier45andsixotherMinistersappointedbytheGovernorontheadviceof thePremier
fromtheelectedorappointedMembersoftheHouse,andtheAttorneyGeneral.
1.35TheConstitutionrequirestheGovernortoconsulttheCabinetonmattersofpolicyand
in the exercise of all functions conferred on him, savewhen otherwise instructed by the
Secretary of State or in functions expressly exercisable by him in his discretion. It also
reserves to theGovernor certain special responsibilities,namely:defence,external affairs,
internal security, including the police force and appointment to any public office; and it
providesforthejudiciaryandthepublicservice.
1.36TheCabinetanditsMembersindividuallyweregranted,orwereenabledtoexercise,
significantly more discretionary power than they or their predecessors had enjoyed as
MembersoftheExecutiveCouncilunderthepreviousConstitution.
1.37Whenthe2006Constitutioncameintoforceon9thAugust2006,theGovernorinpost
wasHisExcellency,RichardTauwhare,MVO.ThePNP,withtheHonMichaelMisick,asChief
44Schedule1totheCaribbeanandNorthAtlanticTerritories–TheTurksandCaicosIslandsConstitutionOrder2006,2006/191345sostyledbysection27(1)(b)
27
Minister,hadbeeninofficeforthreeyears,havinginAugust2003,followinganelectionand
twoby‐elections,defeatedwithamodestmajority46thepreviousPDMAdministrationunder
theHonDerek Taylor as ChiefMinister. The2006 Constitution called for fresh elections,
whichwerescheduledforFebruary2007.ThePremier,astheHonMichaelMisickhadthen
become, and his fellow PNP colleagues and supporters resolved to secure amuch larger
majoritythanthemajorityithadbeenabletosecurein2003.Ishallhavemoretosayabout
theFebruary2007electioncampaign later inthisReport. Forthemoment it isenoughto
record that this time they secured a resoundingmajority in the new House of Assembly
composed, inadditiontotheappointedmembersandtheAttorneyGeneral,of15elected
members, with 12 seats to the two of the PDM. This result, no doubt coupledwith the
continuingrisingwaveoftourismandassociatedprosperitytotheIslands,gavetotheHon
MichaelMisick and his political colleagues and friends optimism and zest for evenmore
ambitiousprojects.
MattersgivingrisetotheCommission’sAppointment
1.38DespitetheseeminglyboomingeconomyatthetimeofthePNP’ssweepingelection
victory in February 2007, all was far from well with its public finances and their
management,astheReportsofTCIChiefAuditor,CynthiaTravis,for2005and2006show.47
Despite unprecedented growth in governmental revenue and expenditure in those years,
there were growing budget deficits for want of proper control and monitoring of
expenditure. InherReports,48 theChiefAuditor identifiedmanyserious issues,andmade
manyrecommendationsrequiringurgentattention.Mostofthemwerelargelydismissedor
ignored by the Misick Administration, the Hon Michael Misick and the Hon Floyd Hall
treatingherwithhostility.AuditReportsofindividualgovernmentboards,forexample,the
Tourist Board and the National Insurance Board49 revealed similar serious deficiencies in
their financialmanagementand control,mostly routinely ignoredby those in government
responsibleforthem.Untilabout2007,incomefromstampdutyonlandsalesandimport
dutieshadbeenthelargestcontributorstomeetingcurrentexpenditure,some50%ofwhich
went to meet the costs of government and public healthcare. But with the weakening
46Byamajorityof8to5seatsintheLegislativeCouncil.47Themostrecentauditedaccounts.48AnnualReportstotheHouseofAssembly,GrandTurkAuditOffice49AuditReportsoftheTouristandNationalInsuranceBoardfortheyearended31stMarch2005.
28
economy,as2007gavewayto2008,thosesourcesofrevenuediminished,adiminutionnot
matched by reduction in extravagant spending by Ministers on various projects and
themselves. The result was that the Government had to borrow heavily to meet its
recurrent revenue expenditure as well as significant capital expenditure obligations. The
accumulatedpublicdeficitwastorisebytheendofthefinancialyearinMarch2008tosome
$38million,with an overdraft on its bank accounts of over $6million, shortly before the
Commissionstartedwork.
1.39 That worrying trend was confirmed in a Report by the UK National Audit Office in
November2007onManagingRisk in theOverseasTerritories (theUK2007NationalAudit
Report).50 The UK National Audit Office considered proper management of TCI public
finances to be a key risk, noting: 1) expenditure consistently over budget, without prior
statutory authorisation and with financial controls routinely overridden and projects
informallyadded;2) relianceonunplannedsurplusesoverbudgetedrevenue, inparticular
theproceedsof salesofCrown land tomeet current sales receipts; 3) risingpublic sector
debt;4)widespreaddeparturesfromcompetitivetendering;5)publicfundingofMinisters’
extravagantlife‐style;and6)electoralabuse,particularlyintheformofbribes.51
1.40InJuly2007theUKForeignAffairsCommitteeopenedaninquiryintothesecurityand
goodgovernanceofthe14UnitedKingdomOverseasTerritories.Itsoonhadreasontopay
particularattentiontotheTCI.AstheCommitteehasrecordedinitsReport,52thenumber
andweightofsubmissionsthatitreceivedfromtheTCIledittosingleouttheTerritoryasa
particularcauseforconcern.Byfarthemostevidencereceivedfromanyofthe14Overseas
Territories was from the TCI, as also were the majority of all witnesses requesting
confidentialitybecauseoffearofintimidationorreprisalsiftheirevidencebecameknown.53
1.41Theevidence,insummary,consistedofallegations,muchofithearsay,ofwidespread
governmental corruption, in particular in relation to sales of Crown Land, allocation of
contractsanddevelopmentagreements,grantsofBelongershipunder statutorypower for
discretionarygrant inexceptional cases,misuseofpublic funds,mismanagementofpublic
50opcit42p5851ibid,pp60‐61,paras166‐16952ibid,p51,para127,andp55,para14753ibid,p 51, paras 127 – 131, leading it to recommend, in para 131, extension to evidence given to the FAC of the protection of theWitnesses(PublicInquiries)ProtectionAct1982.
29
finances,lackoffreedomofspeechandaclimateoffear.ThePDMsubmittedanextensive
memorandum detailing the same and other serious concerns, which concluded with a
request, echoing that of individual witnesses, for the appointment of a Commission of
Inquiry.54 Many of these concerns were, as the UK Foreign Affairs Committee put it,
highlighted in private meetings that a delegation of some of its members had with
individualsduringavisittotheTCI.
1.42 TheUK Foreign Affairs Committee also received, byway of response from the TCI
Government,55oralevidencefromtheHonMichaelMisick56andawrittensubmissionfrom
theHonFloydHall,thenMinisterofFinanceandDeputyPremier,withparticularreference
tocriticismsoftheTerritory’sgovernanceandpublicfinancialmanagementinthe2005and
2006 TCINationalAudit Reports and the2007UKNationalAudit Report.57 In the visit of
someoftheCommitteememberstotheTerritorytheyalsospokewithGovernorTauwhare,
thePremierandfellowMinisters.
1.43 The HonMichaelMisick, in his oral evidence to the Committee, hotly denied the
allegations ofwidespread corruption and abuseof public office, publicmaladministration,
mismanagementofpublic finances,andof intimidation.TheHonFloydHall, inhiswritten
evidence to the Committee, sought to discredit the TCI Chief Auditor and to dismiss the
concerns inthe2007UKNationalAuditReportasaresultofbias inherAuditReportsand
hercontributiontotheUKReport.58Hisevidencemakesinterestingreading.Itistoolong
forinclusionhere,butIshallreturntoitindifferentcontextsinlaterpartsoftheReport.
1.44TheCommitteeexploredwiththeGovernorTauwharesuggestionsbysomethathe,in
his role asGovernor and as President of the Cabinet, had not been sufficiently vigilant in
puttingastoptopossiblycorrupttransactionsorproposalsapprovedinCabinet,particularly
in relation to grants of Crown land. His response to the Committee was that it was
constitutionally very difficult to intervene when all legal requirements appeared to have
beenmet.59FrommyexaminationoftheCabinetpapersandtheGovernor’sownfiles,his
54FAC(2008),OverseasTerritories:SeventhReportofSession2007‐2008,VolII(OralandWrittenEvidence),HC147‐II,London:TSO,Ev339,MemorandumsubmittedbyHMLoyalOpposition,TurksandCaicosIslands55opcit24,pp63–65,Ev35156ibid,p63,para176,Ev1157opcit42,p4358opcit24,p63,para17759ibid,pp65‐66,paras183‐187
30
response as recorded by the Committee does not do him justice. He clearly scrutinised
matters closely, took issue in Cabinet, and, in reporting to the Foreign& Commonwealth
Office,expressedconcernonsomeworryingproposals,notablyforthedevelopmentofSalt
Cay.
1.45 The UK Foreign Affairs Committee also examined the role of the UK Government,
characterisedbymany themaseffete in the faceofobvious corruption. The responseof
Meg Munn, the then Parliamentary Under Secretary of State at the Foreign &
CommonwealthOfficeresponsibleforOverseasTerritories,wasthat,despitetheallegations,
therewasnosubstantiveorcompellingevidenceofcorruptiontojustifyeitherprosecution
or intervention, saybyaCommissionof Inquiry.60 Sheadded that theConstitutionof the
Territoryempowered theSecretaryof State to interveneandoverrule theCabinetonany
matter should it prove necessary, and that she was reassured by new TCI provisions
designedtopromoteintegrityandopennessinpubliclife,includinganIntegrityBill,aCrown
LandBillandaMinisterialCodeofConductbasedontheUKCodeabouttobeintroduced.
1.46TheCommittee’sconclusionandrecommendationonallthisevidencewasclearlyand
trenchantlyexpressedinfavouroftheappointmentofaCommissionofInquiry:61
... We are very concerned by the serious allegations of corruption we havereceivedfromthe....TCI.TheyarealreadydamagingTCI’sreputation,andtherearesignsthattheymaysoonbegintoaffecttheIslands’tourismindustry.ThereisalsoagreatriskthattheywilldamagetheUK’sownreputationforpromotinggoodgovernance. .... theonushasbeenplacedon localpeopletosubstantiateallegations in TCI. This approach is entirely inappropriate given the palpableclimateoffearonTCI. Insuchanenvironment,peoplewillbeafraidtopubliclycomeforwardwithevidence.WeconcludethattheUKGovernmentmustfindaway to assure people that a formal process with safeguards is underway andtherefore recommend that it announces a Commission of Inquiry, with fullprotectionforwitnesses....
As to the stance of the Foreign& CommonwealthOfficewith regard to intervention, the
Committeecommented:62
437....in...caseswhichshould...causegraveconcern,inparticular,allegationsofcorruptionon theTurksandCaicos Islands, itsapproachhasbeen toohandsoff. The Government must take its oversight responsibility for the Overseas
60ibid,pp67‐69,paras188‐197;andopcit24,Ev5661ibid,para19662ibid,para437
31
Territorymoreseriously‐ ... demonstratingagreaterwillingnesstostepinandusereservepowerswhennecessaryontheother.
1.47ThepublicationoftheUKForeignAffairsCommitteeReportinmidJune2008wasthus
ofapiece,initsexpressionsofseriousconcernaboutgovernanceoftheTCI,withthe2007
UKNationalAuditReport.
1.48 TheUKForeignAffairsCommittee’s concernalso reflectedagrowingoutcryamong
the people of the TCI against perceived governmental corruption,misuse of public funds,
seriousmismanagementofpublic financeandtheescalatingpublicdeficit.Theseconcerns
wereaccompaniedbyaperceptionofincreasingcontrolbytheHonMichaelMisickandhis
PNPAdministrationofpeople’slivesandlivelihoods,inhibitionoffreedomofspeechandof
non‐Belongers’righttoremain,extensiveexerciseofpowertograntorwithholdpatronage,
increasingcontrolofthepublicmediaand,over‐all,ageneralatmosphereofintimidation,as
reportedbytheUKForeignAffairsCommittee.63Toallofthiswasnowaddedsomecriticism
ofGovernorTauwhareforseeminglynotstandinguptothePremierandhisfellowMinisters
andtheUKForeignAffairsCommittee’sapparentendorsementofthegrowingperceptionof
neglectbytheForeign&CommonwealthOffice.
1.49 Itwas in such circumstances that theGovernor, nowwith the encouragement and
support of the Foreign & Commonwealth Office, took urgent steps to establish this
Commission,pursuant to theCommissionsof InquiryOrdinance,whichhedidon10th July
2008–withinamonthafterthepublicationoftheUKForeignAffairsCommitteeReport.
ScopeandConductoftheCommission’sInquiry
1.50AsIhavesaid,thetaskssetbytheTermsofReferencecouldnotsensiblyhavebeen
expressed with lower thresholds. As I have interpreted them, they required me to
investigateandreportwithinfourmonths:
1)whether there is information ‐ inwhatever form and giving it theweight it
deserves ‐ofpossible corruptionand/orother seriouslydishonestbehaviour in
recentyearsinrelationto,thatis,involving,electedMembers,pastandpresent,
63ibid,para173
32
of the Legislature and/or those who may have been parties to any such
behaviour,and,ifthereis,whethertorecommendcriminalinvestigation;
2)whetherthereareindicationsofsystemicweaknessesinlegislation,regulation
or administration, and, if there are, to make recommendations for change in
ordertopreventandtodetercorruptionand/orotherseriousdishonesty;and
3) whether they give rise to findings and/or recommendations on any other
relatedmatters, for example,matters relevantor complementary to the cause
and/orremedyoffindingsand/orefficacyofrecommendationsunder1)and/or
2),includingtheextentandmannerofimmigrationcontrolthroughthegrantof
Belongership and permission to work, any relevant codes of public and/or
professionalconduct,governanceofandbypoliticalparties,electoralreformand
theoverallstructureoftheTerritory’ssystemofgovernanceandpublicfinancial
control.
1.51On15thJuly2008GovernorTauwhareandIpubliclyopenedtheInquirywithapress
conference inProvidenciales. TheGovernor, inhis introductoryobservations indicated,as
he had in announcing the Inquiry, that he had appointed the Commission only after the
Foreign&CommonwealthOfficehadinstructedhimtoconsiderdoingso.Heindicatedthat
anumberofpersonshadwrittentohiminconfidencepromptinghimtorefertheirconcerns
to the relevant TCI authorities for inquiry and that he had directed the Commission to
respect confidentiality by conductingparts of it in cameraas considered appropriate. He
alsoreferredtoanumberofrecentlegislativeandotherinitiativesintheTerritorytoreduce
thescopeforcorruptionandtopromoteintegrity,openness,fairnessandaccountabilityin
theconductofgovernmentbusiness.64
1.52 Inmy opening statement,65 I stressed, as I have donemany times since, that this
Inquiryisintopossiblecorruptionorotherseriousdishonestymeritingcriminalinvestigation
andintoindicationsofneedforsystemicgovernmentalandadministrativereform.Itisnot
64includingtheestablishmentofanIntegrityCommission,aHumanRightsCommission,aMinisterialCode,aPublicServiceCodeofEthicsandIntegrity,appointmentofaChiefAuditor(thepostthenbeingvacant),adoptionofaProceedsofCrimeOrdinance,advancedworkonaCrownLandBillandarevisedImmigrationBill.65SeetheCommissionweb‐siteforthepressstatementcontainingthisopeningstatementinProvidencialesof15thJuly2008.
33
formetomakefindingsofcorruptionorothercriminality,simplytorecommendareasand
people or bodies for further investigation, while at the same time indicating areas of
systemicweaknesssuggestinganeedforconsiderationbyothersofreform.Ialsosaidthat,
with liberal use of a Commissionweb‐site and press statements, Iwouldmake a start by
seekinginformationinwriting‐undertermsofconfidentialityifrequested‐andwhenready,
wouldfollowitwithoralhearingsintheTCI.TowardstheendofmystatementImadethe
following appeal for cooperation from Ministers and other Members of the House of
Assembly:
In all of this, I hope to have the full cooperation of those asked to assist theInquiry.ThoseMinistersandMembersoftheHouseofAssembly,orMembersoftheformerLegislativeCouncilwhohavenothingtofearfromthetruthshouldhavenoneed towithhold the true source of their capital and incomeonanyissue relevant to the Inquiry. As I am concerned withMinisters and electedMembers of the Legislature, whose remit is the honest stewardship of theirpublicresponsibilitiestothepeopleoftheseislands,thereshouldbenoneedforme tohave recourse to thewidepowersgiven tomeby the [CommissionsofInquiry]Ordinancetocompeldisclosure.
1.53 Howwrongthehopeprovedtobe. Onthepreviousday,14th July, twoback‐bench
PNPmembersoftheHouseofAssembly,theHonRoyalRobinsonandtheHonSamuelBeen,
had already taken steps to apply to the Supreme Court of the TCI seeking, among other
things,adeclarationtorestrainmefromproceedingwiththeInquiry.Theyclaimedthatmy
Terms of Referencewere invalid andmy appointment, therefore, was of no effect. This
application,which induecoursewas rejectedby theChief Justice, theHonGordonWard,
andtheCourtofAppealof theTCI,66wasaccompanied in theearlydaysof the Inquiryby
regularly repeated television broadcasts of the Premier urging opposition to it. He
stigmatised itasnothingmorethanafishingexpedition, todisguisethetrueplot, tomake
criminals out of our politicians, on both sides of the political divide, and destabilise our
country, and suggested an early move by way of elections or a referendum towards
independence.
1.54 Notwithstanding that inauspicious start, I returned immediately to the UK and
establishedaSecretariatinLondonandbegantoconsidertheinformationalreadyavailable.
Mystartingpointwasapreliminarydiscussion Ihadhadwith,andbriefingnote from,the
66On1stOctober2008thetwoapplicantswithdrewaproposedapplicationtotheCourtofAppealforleavetoappealtothePrivyCouncil.
34
out‐going Governor Tauwhare on my short visit to the TCI, supplemented by further
informationprovidedshortlyafterwardsbyhissuccessorasGovernor,HisExcellencyGordon
Wetherell,followinghisappointmenton5thAugust2008.
1.55Shortlyafterwards,theUKForeignAffairsCommittee–forwhosereadyandhelpful
assistance throughout I am grateful ‐ made available to the Commission the recently
publishedtwovolumesofitsReport,thefirstcontainingtheReportitselfandtheseconda
record of the oral and written evidence given to it by those who had not requested
confidentiality. As Ihaveindicated,manyofthosefromtheTCIwhogaveevidencetothe
Committeedidsoonlyonthebasisthatitwouldbetreatedasconfidential.TheCommittee
hadsoughtandobtainedtheirconsentandthatofallotherpersonswhohadgivenevidence
to it, for itsprovision to theCommissionon the same terms. Ihave treated thatbodyof
materialasinformationandevidenceintheInquiry.Over‐all,itisconsistentwiththevast
bodyofwrittenandoral informationsinceprovidedtotheCommission,otherthanthatof
theHonMichaelMisickandhisministerialcolleaguesandotherpoliticalsupporters.
1.56ThetimeallowedtotheCommissionwasshort,anditsTermsofReferencewerewide.
Abroadlybased,butalso selective inquirywasclearlynecessary.Theaimwas todiscover
whethertherewerecertainmajorcategoriesand/orseriousinstancesofpossiblecorruption
involving electedmembers of the TCI Legislature and/or others thatmightmerit criminal
investigationand/oras leads for such investigation. I couldnothope to investigateevery
allegedlycorruptordishonestrelationshiportransaction,howeverbigorsmall.Itdoesnot
follow that, because I have notmentioned as possibly corrupt a particular relationship or
transaction,itshouldbeexcludedfromanyensuingcriminalinvestigations.
1.57IalsodecidedthatIshouldhavetoconcentrateonrelativelyrecentmatters,sincethe
priorityistoidentifythepresentmalaise,saidtobeoneofendemiccorruptioninpubliclife
in the Territory. Therewas also the important practical consideration that the older the
alleged crime, the colder the trail for the purpose of investigation and prosecution.
Accordingly,Itookaperiodofuptotenyears,thuscovering,notonlythePNP’sfiveyearsof
office frommid 2003 tomid 2008, but also the previous three to four years of the PDM
administration under the leadership of the Hon Derek Taylor from 1999 to 2003. If my
widely directed requests for assistance were to be heeded, there would be every
35
opportunityforevidenceofanysignificantvenalityintheHonDerekTaylor’stimetobeput
beforeme. AsIhavealreadyobserved, likeSirLouisBlom‐Cooper, Iwasawarethatthere
hadlongbeenapublicperceptionofcorruptioninthisTerritorybymorethanonepolitical
partywheninpower.
1.58Idecidedtodevotethefirstpartofthefourmonthsthenavailabletogivingthewidest
possible publicity to the Inquiry. I did so through the Commission’s web‐site and in
correspondence,seekingassistancefromTCIpublicingeneralandfrommanyindividualsin
theprivateandpublicsectorsoftheTerritory,includingallpresentandpastmembersover
thelasttenyearsoftheLegislature.
1.59 InearlyAugustandearly September2008, through theCommission’sweb‐site, the
Commission made general requests to the public for information that might assist the
Inquiry, indicating as it did throughout that such information could be provided
confidentially.Asaresult,theCommissionhasreceived,bywayofwrittensubmissionsand
oral approaches, much assistance from persons within and outside the Territory. These
includealmost500submissions,26underpseudonyms,81confidential,299frommembers
ofthepublic,39fromTCIGovernmentofficialsand27fromformerMinistersandMembers
of the House of Assembly. There were almost none from current Ministers or other
Members of the House of Assembly or others in positions of responsibility or from
developerswhomighthavebeenexpectedtocomeforward.Muchoftheinformationwas
ofadirectnature;manysubmissions,whetherofageneraloranecdotalnature,wereinthe
formofhearsay.Overwhelmingly,theinformationpresentedapictureconsistentwiththat
given to the UK Foreign Affairs Committee. It was of widespread abuse of public office,
corruption and other forms of dishonest or unethical behaviour by Ministers and other
Membersof theLegislature,presentandpast,andsomepublicofficials. TheCommission
also sought and obtained copies of a wide range of the Territory’s CabinetMinutes and
Papers,publicrecordsandreports,includingauditreports.Responsesfrommembersofthe
publicincludedmuchinformationallegingorsuggestingcorruptioninrecentyearsbythose
inthePNPAdministrationor their familyandfriends. Buttherewasrelatively littleabout
earlierdayswhenthePDMheldgovernmentalsway.
36
1.60Inaddition,inearlySeptember2008IwrotepersonallytothemajorityofMembersof
theLegislatureoverthepreviousdecade,invitingtheirassistancewithwhateverinformation
orsubmissiontheyconsideredmightbearonmyTermsofReference.I laterextendedthat
invitationtotheCabinetSecretaryandmostGovernmentPermanentSecretariesandUnder
Secretaries. Even allowing for the disruption and devastation to the Islands caused by
TropicalStormHannaandHurricaneIkeinlateAugustandearlySeptember,theresultwas
deeplydisappointing. Therewasno response from the HonMichaelMisickorhis fellow
PNPMinisters, and little from otherMembers of the Legislature, present or past, or the
seniorpublicservantstowhomtheCommissionhadwritten.
1.61So,despitetheCommission’sattempttobepoliticallyandhistoricallyeven‐handedin
itssearchforinformationofpossiblecorruptionorotherseriousdishonesty,theresponses
toitsrequestspointedmostlyoneway.Theypointedtoarapidriseintherangeandscale
of corruption, abuse of political office, personal aggrandizement and extravagance by the
PremierandhisfellowPNPMinistersandintimates.Theypaintedapicturewhich,inmore
guardedtermsistobeseenintwomissives,separatedbyaboutayear,fromwithinthePNP
anddirectedtothePremier.
1.62 Thefirstwasa letterof18thOctober2007,purportedly fromExecutiveMembersof
thePNP, including itsChairman,LloydStubbs, itsDeputyChairmanandSecretaryGeneral,
theHonDon‐HueGardiner,67headedLeadershipConcerns. The letter listed11complaints
about the Hon Michael Misick’s and his fellow Ministers’ conduct, including his
absenteeism, failure to attend to governmentorparliamentarybusiness, failure to inform
the public of governmentalmatters andministerial private extravagance accompanied by
failureofpublicfinancialmanagement.Itconcludedwiththefollowingexhortationtodeal
withcorruption:68
11.HouseofAssembly–ThereneedstobemorefrequentmeetingoftheHouseofAssembly to dealwith the several bills that are outstanding andneed to beaddressed as amatter of urgency. Wemake reference to the Anti‐CorruptionLegislation in particular, which the PNP promised to deal with since the 2003generalelections. ThisbillshouldbepresentedinParliament ifonlytogivetheperceptionthattheGovernmentisseriousaboutit.
67TheHonDonHueGardinertoldtheCommissionthathedidnotsignandwasnotpartytothedraftingorsendingof this letter;Transcript,4February200968PNPParty(2007)LeadershipConcerns,availablefromTCINetNews,publishedon16thAugust2007
37
... We expect that you will immediately address these issues and change themannerinwhichyouandyourCabinetaregoverningtheCountry.
1.63ThesecondmissivewasalettertotheGovernoron15thDecember2008,passedtothe
press,revealingseriousdissentamongPNPMembersoftheHouseofAssemblypurportedly
from several PNP elected Members, including the Hon Floyd Hall69 and the Hon Lillian
Boyce,70 inprotestatabroadcastaddress to thenationby thePremier. Itwasofapiece
withmuchoftheevidencegiventotheUKForeignAffairsCommitteeandwiththatprovided
totheCommissionbeforeitbeganitsoralhearingsinProvidenciales:
...ManyofuswithintheGovernment,withintheProgressiveNationalPartyandindeedwithinthecountryat largehave longbeenfrustratedwiththePremier’stabloid,DListHollywoodstyleofleadership.Wehavewatchedindisbeliefastheresources of our country have been squandered on an unsustainablematerialisticallyorientedlifestyle.Wehavesatinstunnedsilenceasourcautiousand[sic]warningshavebeenrudelyrebuffed.AndwehavelivedeachdayinfearofbeingthenextvictimofthePremier’smuchtoutedappetiteforvengeancehadwebeenmoreoutspoken.
ThenetresultofourfailuretobringthePremiertoheel,andforwhichweoweour countryanapology,hasbeen thatGovernment’s financesare in such totaldisarray that we have been unable to assist the victims of last September’sstormsfromourownresourcesandhavehadtorelyinsteadoninternationalandcharitableaid.Thatnotwithstanding,thePremiersawfitrecentlytocharterajettoParis forashoppingspree forhimselfandhismistressat theexpenseof theGovernmentandthepeopleofTurksandCaicosIslands.
ThePremierhasalsobroughtusanotorietyabroadthat isusuallyassociatedwiththemostdespoticandparasiticofregimesworldwide....
1.64 Given the many allegations to the UK Foreign Affairs Committee and to the
CommissionofthestrikingincreaseinaffluenceandextravaganceoftheHonMichaelMisick
and of his ministerial colleagues and other Members of the House of Assembly in the
relativelyshorttimesinceachievingpublicoffice,Idecidedtogiveprioritytotheirfinancial
affairs. IdidsobyrecoursetotheirdutyundertheTCIRegistrationofInterestsOrdinance
199371 to make annual declarations of them. The Ordinance provided for a Registrar of
Interests, whose duty it was to ensure the fullness and accuracy of each declaration by
examination and, if necessary, by questioning the declarant about it, and to compile an
70TheothersweretheHonsKarenDelancy,AmandaMissick,WayneGarland,GregoryLightbourne,NormanSaunders,RoyalRobinsonandSamuelBeen.
71TheHonFloydHalldeniedbeforetheCommissionhavingbeenapartytotherelease.71enactedpursuanttos87ofthe1988Constitution;nows98ofthe2006Constitution.
38
Annual Register of interests declared byMembers. Hewas also required to produce his
Register to the Legislature for inspection bymembers of the public at any of its sittings.
Failurebyanymembertomakeatimely,fullandaccuratedeclarationalsorequiredhimto
reportthefailuretotheLegislature,aSelectCommitteeofwhichcouldimposeasanctionof
afineofupto$5,000orsuspendthedefaulterfromsittingorvoting.
1.65 Frommid‐August2008 theCommissionwrote toeachMemberof theGovernment
andotherpresentandpastelectedMembersoftheLegislatureinvitingthemvoluntarilyto
providebytheendofthefirstweekinSeptember:1)copiesoftheirannualdeclarationsof
their financial interests, benefits and obligations for each of year of office; and 2)
information they would give if making such a declaration at the time of receipt of the
request. The response over the following three weeks was scant, evasive and in some
respects clearly obstructive. So also was the response of certain public officials on the
IslandstotheCommission’sattempttoidentifyandlocatesomeoftheirnumberandcertain
public records, including the Register of Interests itself. Those delays, to which Tropical
StormHanna andHurricane Ike contributed, led the Commission to extend the period of
timeforreplytoitsrequesttothethirdweekinSeptember.
1.66ForthoseandotherreasonstheCommissionwascompelledtodelaytheplannedvisit
of twomembersof itsTeamto the Islands to contactofficialsandothersand toexamine
public records. I also sought from the Governor an enlargement of the four months
originally allowed for completion of the Inquiry, contemplating by then: 1) a visit by
membersoftheCommissionTeamtotheIslandsinOctobertointerviewpotentialwitnesses
andexaminepublic records;2)oralexamination intheTerritory inNovemberofMinisters
and other Members of the House of Assembly on their declarations of interest; and 3)
furtheroralhearingsthereinDecembertoexaminespecificallegationsofcorruptionand/or
other dishonesty. The Governor granted an enlargement of the Commission’s time for
submissionofitsReportuntil16thFebruary2009.
1.67Meanwhile,asSeptembergavewaytoOctober,responsesfromMinistersandothers
to the Commission’s invitations voluntarily to provide details of their financial interests
continued,inthemain,tobeslowandinadequate,andinsomeinstanceswerenotprovided
at all. As a result, the Commission by letters and in its press statements of 3rd and 10th
39
October,indicatedthat,failingfullandaccurateresponses,itwouldissuesummonsesunder
the Commissions of Inquiry Ordinance requiring attendance of those concerned to give
evidence and/or to produce the relevant documentary information in public oral
proceedingsintheTerritory.
1.68 Throughout October and into November the Commission continued, in a series of
exchangesofcorrespondence,topressforfullandadequatedisclosurefromMinistersand
otherMembersoftheHouseofAssembly,butlargelywithoutsuccess.Accordingly,inearly
November theCommissionTeambeganpreparing listsof informationanddocumentation
outstanding from Ministers and Members for inclusion in summonses requiring them to
attendforexaminationintheTerritory.DuringthatperiodtwomembersoftheCommission
TeamspentsometimeintheTerritoryinterviewingpotentialwitnessesandtryingtolocate
andexaminevariouspublicrecords.However,theydidnotalwayssucceedingainingaccess
to what they needed to see. As a result of those two set‐backs, Senior Counsel to the
CommissionandIhadtomakeashortimpromptuvisittotheTerritoryinearlyNovemberto
take up the search for outstanding public files which, with the helpful assistance of the
CabinetSecretaryandDepartmentalPermanentSecretaries,wasmorefruitful.
1.69TheCommission’sindicationsthatitwould,ifnecessary,resorttoitspowersunderthe
CommissionsofInquiryOrdinancetoexamineMinistersandotherMembersoftheHouseof
Assemblypromptedmostof them inNovember toprovideagooddealmore information.
However, the information was still, in the main, inadequate and in some respects
questionable. It was also submitted in a piecemeal fashion, without regard to the time‐
tables andwell‐publicised programme set by the Commission for two sets of hearings in
earlyDecember.Thosedelayswereaccompaniedbyasurgeinsubmissionsfromthepublic,
someofferingtogiveoralevidence.
1.70BecauseoftheshortnessoftimeleftfortheCommissiontoanalyseanddocumentthe
newlyarrivedandstillincompleteinformationastointerests,andalsothevolumeofrecent
submissions,theCommissionhadagaintopostponethetwosetsofhearingsithadplanned.
Initspressstatementof25thNovember2008,itstated:
The Commission, in its Press Statement of 17th November 2008, indicated itsintention to hold hearings in Providenciales in December, depending on the
40
information providedand yet to be providedbyMinisters andMembers of theHouse of Assembly as to their interests. Only recently ...some Ministers andMembershavebegun toprovide theCommissionwithvoluminousquantitiesofdocuments purportedly in full and accurate disclosure of their interests.However, in themain, suchdocumentation– in the short time theCommissionhashadtoexamineit–stillappearstobeinadequateandinsignificantrespectsotherwisequestionable.Theprocessofpiecemealdisclosurecontinues–mostlywithout regard to time‐tables set by theCommission. Someof the promiseddocumentation has beenmade available only in hard copy in Providenciales or has still to arrive at theCommissionSecretariatinLondon.MuchthathasbeensenttoLondon,eitherinhardcopyorelectronicform,hasarrivedonlyinthelastfewdays.AllofthisnewmaterialhasnowtobeanalysedandconsideredalongsidepreviousreturnsanddisclosurestotheCommissiontoenableittodeterminetheneedforandformofanyoralexamination.This late provision, principally by Ministers, of documentation has beenaccompaniedbya recent surgeofapproaches fromothers seeking,notonly toprovideinformation,butalsotogiveevidence.Thistoohasledtotheproductionof much fresh documentation for analysis and comparison with ministerialdisclosuresofinterest.Fairness requires that all this new material, whatever its source and whererelevant, should be considered for inclusion in reconstituted or new bundles ofCommission copy documents for service onMinisters and others in advance ofanyhearings.Inthecircumstances,theCommissionhasbeendriventoabandonitsintentiontoholdhearingsinDecember...
1.71 In the event, the Commission, having reviewed the state of disclosure throughout
December, still found it seriously wanting, and re‐cast and served its summonses on
Ministersandotherstoattendforexamination.TheCommissionTeamleftfortheIslands
in early January ‐ still not having had an opportunity to examine all the last‐minute
disclosure, andwithno time to complete its taskbefore the start of thehearings on13th
January2009.
1.72 BythetimetheCommissionfinallyopenedtheproceedings inProvidenciales, ithad
beendriven to try tocombine inonesetofhearingsoralexaminationas todisclosedand
undisclosed interestsandalso furtherevidence that theCommissionwished to call. Here
again,theprogrammewastoslip–andforthesamereason–continuingfailure,inthemain
41
byMinisters, but also others – in some instances by conduct in and out of the hearings
bordering on obstruction – to make complete disclosure and/or to produce necessary
supportingdocuments.
1.73 It was now obvious that the Commission would not be able to complete its work
within the enlarged period allowed by the Governor, namely by 16th February 2009, and
wouldrequirestillmoretime. TheGovernorwasshortly tograntanenlargementof time
until30thApril2009.
1.74BeforeIcontinue,Ishouldpausetosayafewwordsaboutthepoliticalandeconomic
sceneintheTerritorybythistime.Itsgovernmentwasatanearstand‐still.Notwithstanding
aheavylegislativeprogramme,proceedingsintheHouseofAssemblyhadbeensuspended
and had stood prorogued since 15th December 2008 at the instance of the HonMichael
Misick.Hehadtakenthatcoursetoavoidadebateonapotentiallysuccessfulmotionofno
confidenceinhisAdministrationbythePDMminority,whichadiscontentedmajorityofPNP
Members,includingatleasttwoCabinetMembers,showedsignsofsupporting.TheCabinet
wasthus,atbest,highlyunstable,atworst,bitterlydivided, thePremierdevotingagreat
deal of his timebefore andduring theCommission’s hearings to abortive attempts to re‐
constructanewCabinetandasupportivemajorityintheHouseofAssembly.
1.75 TheTerritory’s financeswere, as theyhadbeen for some time, in a verydangerous
state,withadeficit,saidtobeofabout$6millionandrising,outstandingdebtsthatitcould
notpayandcurrentobligations,suchasthegovernmentmonthlypay‐roll,thatitcouldnot
meetastheyfelldue.Itsmanagementofpublicfinancescontinuedtobeofgreatconcern,
forwantoflong‐termdisregardofnationalandotherauditrecommendationsandno,orno
effective, scrutiny by the House of Assembly’s Public Accounts, Expenditure and
Administration Committees. Meanwhile it was still attempting to fund recurrent public
expenditurepartlyoutof theproceedsofdisposalofCrownLand, forwantofothermore
fiscallyconventionalsources.
1.76 Such was the scene when the Commission opened its oral proceedings in
Providencialeson13thJanuary2009.MyopeningstatementisAppendix2tothisReport.In
it I stressed that Iwas concernedwith the possibility, not proof, of corruption. I had no
powertodetermineissuesoffactortodirectanyparticularoutcome.Itwasnotmyjobto
42
makefindingsofguiltortoexoneratethoseagainstwhomallegationshadbeenmade.The
most Icoulddo– if Ihad informationofpossiblecorruptionorotherseriousdishonesty–
was to recommend further andmore searching investigationby thepolice or someother
body, with a view to criminal prosecution, recovery of the proceeds of crime and
considerationofothersanctions.
1.77Ialsoreferredinmyopeningstatementtothestateoftheinformationandmaterialby
thenaccumulatedbytheCommission:72
Anyone with any familiarity of the public affairs and commercial life of theTerritory knows that the escalating volume of allegations – true or false – hasreachedacrescendo.ThepressingconcernisforthehealthoftheTerritoryanditspeopletodayandfor the future–notwhatmayhavehappenedsomeyearsago. Thevastbulkof the informationputbefore theFACand this Inquiry isofallegedcorruptionunderthisAdministration,relativelylittleabouttheirpoliticalpredecessors. That may be in large part a symptom of the passing of time,dimming as it does keenly felt grievances and memories and leading todisappearance of evidence. I should also mention that a likely source forcanvassing such earlier transgression, namely present Ministers and otherMembersoftheHouseofAssembly,producedvery little. Personal lettersthat Iwrotetoallofthemandothersinvitingwhateverassistancetheycouldgivemeinmytask,wereinthemaingreetedwithsilence.Inshort–incontrasttothemanycomplaintsabout them– therewas very little from themorothersabout theirpredecessors....SohereIam,withmuchoftheCommission’senquiriesmadeandtheinformationin,butstillshortoffullandaccuratedisclosurefromanumberofpersons,inthemain Ministers in the present Administration alleged to have profited frombribery. Ihavemaderepeatedcomplaint intheCommission’spressstatementsabout theabsenceof hardand statutorily disclosable information from them–not so much about how they spent their money, but where they got it from.Hence the summonses that I have been obliged to serve on them to producedocumentsandgiveevidenceoftheirinterestsandhowtheyacquiredthem....
1.78IntheoralexaminationsoftheMinistersandMembers,startingwiththeHonMichael
Misick,astotheirinterests,itsoonbecameobviousthat,despitethepreviousbesteffortsof
mostoftheirlegalrepresentatives,therewerestilllargeandsignificantgaps.Moreover,the
piecemealand incompleteprocessofdisclosure, coupledwith continuingattemptson the
partofsomenottogiveit,continuedthroughoutthehearings. Aswillappearlaterinthis
72SeeAppendix2tothisReport.
43
Report,thehighlyunsatisfactorywayinwhichmostoftheMinistersrespondedtoquestions
abouttheirinterestssodominatedthefourweekssetasideforthehearings,thatverylittle
timewaslefttotheCommissiontocallotherwitnessesforexamination.
1.79 The oral proceedings came to an end onWednesday, 11th February 2009. It was
urgent in the interests of the Territory and its people that the Commission should, if
possible,completeitsworkbytheendofApril. SuchwastheurgencythatIconsideredit
necessarytoattempttoprovideanInterimReportby28thFebruary.Igavemyreasonsfor
thatinastatementclosingtheproceedings:73
...insteadofspendingtwoweeks,ashoped,tofinishthejobastodisclosureandmove to other evidence, the Commission has spent the best part of the fouravailableweeksstillseekingdisclosureand/orexplanationofdisclosuremadeonthespot–disclosureas thosegiving itmusthaveknowntheCommissioncouldnotpossiblymasteronthespot.
While all this has been going on, the government of this country is at a nearstand‐still, the Cabinet is divided or unstable, theHouse of Assembly has beenprorogued,itsfinancesareinabadwayandpoorlycontrolled,governmentalandotherauditrecommendationslieunattendedanddisposalsofCrownlandtofundrecurrent expendituredeficits continue forwantof governmental revenue fromothermorefiscallyconventionalsources.Itisevidentthattherearewide‐spreadfearsonthepartofpeopleintheTerritorythattheyareleaderlessandthattheirheritageisatriskofcontinuingtodrainaway.
... the trainof events leading to thesehearingsand theTerritory’sparlousandvolatile state ...[have] necessitated a further extension of the Commission’speriod of Inquiry to 30th April. But that does not – or should not – allow theCommissiontoassumetheluxuryorreturninghomeforsomemonthstopolishitsparsesbefore reporting. In theTerritory’spresent state,goodnessknowswhatmayhappeninthemeantime.
Inthecircumstances,speedcoupledwithfairnesstoallthosethesubjectoftheInquiryisvital. TheCommissionhastobalancethestrongpublicinterestofthepeople of the Turks and Caicos Islands for early resolution of their problemsagainsttheprivateinterestsofthosethesubjectofbeingtreatedfairly.FairnesstothemhereincludesareasonableopportunitytorespondtocriticismsthattheCommissionmaybemindedtomakeofthembeforefinallyreporting....
73SeeTranscript,Day22,pp171–177.
44
1.80 On its return to London, the Commission allowed legal representatives of those
examined as to their interests ten days, i.e. until 21st February to make further written
submissionsinrespectofmattersconcerningthemthathadarisenduringtheproceedings.
Italsoallowedanyotherstomakesubmissionsortoprovidefurtherinformationinwriting
over thesameperiod. Within sevendays thereafter,on28thFebruary, I submitted to the
GovernoranInterimReport,towhichalltheCommissionTeamcontributed,summarisingin
thebarestoutlineandingeneraltermssomeofmyprovisionalconclusionsandmaking24
Interim Recommendations, in the main in relation to my second Term of Reference
concerning indications of systemic weaknesses in legislation, regulation and
administration.74
1.81 Myprovisional conclusions in summarywere that,onall thematerial andevidence
beforeme, therewas information inabundancepointing toahighprobabilityof systemic
corruption and/or other serious dishonesty. This, coupled with clear signs of political
amoralityandimmaturityandofgeneraladministrativeincompetence,demonstratedtome
an urgent need for suspension, inwhole or in part, of the TCI Constitution and for other
legislativeandotherreformsandchange,allsetoutinmyInterimRecommendations.
1.82On16thMarch2009,GillianMerron,whohadsucceededMegMunnasParliamentary
UnderSecretaryofStateattheForeign&CommonwealthOffice,madepublicadraftOrder,
tobemadebytheQueeninCouncil,pursuanttoherpowersundertheWestIndiesAct1962
andherotherpowers,suspending,initiallyfortwoyears,partsoftheConstitution,including
those relating to Ministerial Government and the House of Assembly. As the Under
SecretaryofStateandtheGovernorexplained incorrespondingpublicannouncementson
thesameday,shetookthatcourse:
...InthelightoftheaccumulationofevidenceinrelationtoTCIinthelastyearorso, and fortifiedby theCommissioner’s interim report, theUKGovernmenthasformedtheviewthatpartsoftheConstitutionwillneedtobesuspendedandhasdecidedtotakestepstoenableittodoso.
1.83TheUnderSecretaryofStateaddedthat,unlessthefinalReportsignificantlychanged
theForeign&CommonwealthOffice’scurrentassessmentofthesituation,theOrderwould
bebrought intoforceafterreceiptofthatReport,orsoonerifcircumstancesarisinginthe
74SeeAppendix3tothisReport.
45
Territory prior to that date justified suspending relevant parts of the Constitution. She
explained:
Asdrafted,theOrderwouldleaveinplaceimportantelementsoftheConstitutionsuchasthefundamentalrightschapterandprovisionsrelatingtotheGovernor,thecourtsandthepublicservice,whileremovingtheCabinet,HouseofAssemblyandreferencestoministerialandrelatedpowers.Powersandfunctionscurrentlyexercised by Ministers would be exercised by the Governor acting in hisdiscretion, including in relation to public finances, legislation necessary andregulatoryreform.
This would be an act of constitutional significance in order to restore theprinciplesofgoodgovernance.
1.84 On 18th March 2009 HerMajesty in Council made the Order, the Turks & Caicos
IslandsConstitution(InterimAmendment)Order2009(the2009ConstitutionOrder),75laying
itbeforeParliamenton25thMarch,withaviewtoimplementationfollowingreceiptofthe
Commission’s final Report. In addition to the partial suspension of the2006 Constitution
provisions for the Cabinet, House of Assembly and references to ministerial and related
powers, theOrder inCouncilprovides for theGovernor toexercise,athisowndiscretion,
powers currently exercised by Ministers, including those relating to public finances,
legislationandnecessaryregulatoryreforms. TheOrderalsoprovidesfortheGovernorto
be assisted in the exercise of those powers by an Advisory Council composed of persons
nominatedbyhim,themajorityofwhomaretobeBelongers,andalsoaConsultativeForum
drawn from persons representative of the TCI community to make recommendations in
relationtolegislationandpolicyissues.
1.85WithinamonthafterthemakingofthatOrder,theHouseofAssemblywasrecalled,in
midApril2009withtheHonGalmoWilliamsasPremierandaCabinet,apartfromhimself,of
new Ministers. The House initially sat for two days, but with little productivity, early
adjournmentsandleavingthebusinessofeachdayunfinished.Followingnearlyamonth’s
adjournment, it sat for a third time on 15thMay 2009 for half a day, again leavingmore
businessunfinished,beforeadjourninguntil29thMay2009.
1.86 In themeantime and sincemid February 2009, I have, with the assistance of the
CommissionTeam,preparedthis,myReportandRecommendations,confirmingand,where
75SeeAppendix4(ii)tothisReport.
46
Iconsider ithelpful,elaboratingonoraddingtomyInterimReport. IneverycasewhereI
was minded to make an adverse finding leading to a recommendation of criminal
investigationinrespectofanypersonwhoseconductisthesubject,orwhoisimplicatedor
concernedinthesubjectmatter,oftheInquiry,theCommissionAssistantSecretarywrotea
Salmon letter76 inviting any representationswithin aweek to ten days. Thiswas shorter
than I wished, and most of those who made representations in response are to be
commended for doing so in the time. Others took longer, seeking to challenge the
Commissioninconsiderabledetailonitsprovisionaladversefindings,and/orseekparticulars
asiftheywerecountsinanindictment.SomeeventhreatenedtheCommissionand/orthe
Foreign&CommonwealthOfficewithlegalproceedingswithaviewtopreventingmefrom
submittingmyReporttotheGovernor,orsoughtaccesstoitscontentbeforeIdidso.Inall,
19 persons made written representations in response to Salmon letters, many of them
repeatingorsupplementingwrittenandoralsubmissionsontheirbehalfintheproceedings
inProvidencialesandinfurtherwrittensubmissionsinFebruary2009.Inmakingmyfindings
and recommendations set out in this Report, I have taken all those representations into
account.
1.87TheInquiryendedasitbegan,withlegalchallengesintendedtothwartitswork.This
time the challenges were made by the HonMichael Misick personally and two overseas
developers in the TCI, Mr Mario Hoffmann and Dr Cem Kinay. The former Premier’s
challengewasmadeintheAdministrativeCourtinLondon,bywayofapplicationforleaveto
claim against the Secretary of State at the Foreign & Commonwealth Office for judicial
reviewof the2009Order.Hesought tohave itquashedasultravires theWest IndiesAct
1962, in removing him and other electedMembers of the House of Assembly from their
postswithoutcompellinggrounds. On1stMay2009, theAdministrativeCourt refusedhis
applicationonthegroundthatithadnorealisticprospectofsuccess,andon20thMay2009,
theCourtofAppealdismissedhisapplicationforpermissiontoappealagainstthatrefusal.
Mr Hoffmann’s claim is for judicial review in the TCI Supreme Court against me and the
Governortorestrainmefrom,amongstotheractions,submittingaReporttotheGovernor
unlessIcomplywithMrHoffmann’sdemandstoexcludeanyreferencesinittohim,andto
theGovernortorestrainhimfrompublishingtheReportwithoutadvancereferencetohim.
76opcit1
47
DrKinay’s challenge is in similar form,namely to requireme to removeany references to
him from the Report, to requireme to recommend the Governor not to publish it, or to
require him not to publish it or any press release accompanying it referring to Dr Kinay.
HearingdatesforbothmattershavebeensetforearlyJune.
___________
48
2‐CORRUPTION
...theverynatureofcorruptiondefiesprecisedefinition.Likearotwhichcan,unseen,destroythefabricofahousebeforecomingtothe surface, corruption grows and spreads out of sight, onlyoccasionally revealing itself. When it does, it reveals only itspresence, not its extent or when it started. Treatment of thevisiblepartalone isnotsufficient. The trueextentof the troublewillonlyberevealedbyfurtherexamination....77
Introduction
2.1 Corruptionisasimpleenoughnotion;thereisnothingtechnicalabout it. At itsmost
basic,itistorotwhatwaspure.Inthecontextofhumanrelationshipsitistorendermorally
unsoundwhatwas – or should have been ‐morally sound. At its heart is the notion of
dishonesty,whichisorshouldbecleartoall intheseIslands,especiallythoseholdinghigh
publicoffice,andwhatevertheCaribbeanculturetowhichsomeoftheMinistershadresort
fromtimetotimeintheirevidence.
2.2Inlawyers’language,itisanofferand/orthepaymentofabribeorgrantofafavourto
anotherasaninducementorrewardforimpropermisuseofposition,ortherequestand/or
acceptanceof abribeorother favour fromanotheras an inducementor reward for such
behaviour.Improprietyinacaseofallegedbriberyoforbyapublicservantisaquestionof
fact fordetermination in the circumstancesofeach case,but ismost readily identifiedby
asking the question whether there was a sought or actual misuse of position. The Law
CommissionofEngland&Wales,initsrecentreport,ReformingBribery,78tookasitsstarting
pointforbriberyatcommonlaw,thefollowingvenerablepropositionfromthe12thedition
ofRussellonCrime:79
Bribery is the receiving or offering [of] any undue reward by or to any personwhatsoever, inapublicoffice, inorder to influencehisbehaviour inoffice, andinclinehimtoactcontrarytotheknownrulesofhonestyandintegrity.
77perGordonWardCJ inRoyalRobinsonandSamuelBeenvTheRtHonSirRobinAuldandTheHonAttorneyGeneraloftheTurksandCaicosIslands26thSeptember2008,CA17/2008,para25.78LawCommission(2008),ReformingBribery,LawComNo313,HC928,London:TSO79(1964)p381
49
I am not surewhat thewordundue adds to the test, other than to indicate that it is an
evidential feature of a transaction from which a corrupt intent on the part of the giver
and/or the recipientmaybe inferred. As theLawCommission’sdiscussion inPart3of its
Reportmakeplain,improprietyisthetestandthat,inmostcircumstances,meansmisuseof
position.
2.3Whenappliedtoapublicofficer,MrArielMisickQC,inhissubmissionsonbehalfofthe
HonMcAllisterHanchell,helpfullytookthecommonlawashisstartingpointinthefollowing
proposition,derivedfromthewordsofLawrenceJ,givingthejudgmentoftheCourtinRv
Whittaker:80
Itisacommonlawoffenceforapublicofficerwhohasadutytodosomethinginwhichthepublicare interestedtoreceiveabribeeither toactcontrarytohisdutyortoshowfavourinthedischargeofhisfunctions.
2.4 The criminal law of bribery in the TCI ismuch the same as in England&Wales, its
relative simplicity ineachcasemaskedbyanunsatisfactorymixof commonandstatutory
law. MrMisick and other counsel helpfully directedme to section 18 of the Legislative
Council (Powers and Privileges) Ordinance 1998, which makes it an offence to bribe
Members of the House of Assembly in relation to proceedings before the House, and to
sections 68 and 69 of the Elections Ordinance 1998,81whichmake it an offence to bribe
voters, both sets of provisions overlapping with or replacing the general common law
offenceofbriberyintheirrespectivecontexts.
2.5 However, while corruption, in particular, of those in public office,may be a simple
enoughnotion,itisbyitsverynatureoftenhardtoprove.Therearetworeasonsforthis.
First,asChiefJusticeWardobservedinthepassagefromhisjudgmentsetoutattheheadof
this Chapter, its invisibility or secrecy, usually between two consenting persons, readily
defies discovery or proof. Secondly, even when the material relationships and facts are
established, it can still be adifficult value judgmentwhether, in the circumstancesof any
particularcase,atransactioniscorruptoraccordswithwidelyacceptedsocialandbusiness
normsof itscontext. It isaninternationallyacknowledgedphenomenonthatthedifficulty
80[1914]3KB1283,at1296;Seealso10CrAppR,245CCA81Cap5,Revised15thMay1998
50
ofprovingcorruption inanysociety isalmostalways in inverseproportion toweaknessof
thatsociety’sdemocraticcontrols.82
2.6Variouslegalsystemshaveemployeddifferentformulaefordealingwiththeproblem,
mostly through thenotionof illicit enrichment coupledwith some formof reversalof the
burdenofproof,suchas inexplicablewealth calling forsatisfactoryexplanationas inHong
KongandArgentina. Therearesimilar legaldevices inthefieldofcontrolofdrugs,where
the knowledge as to possession of drugs or of their proceeds is peculiarly within the
knowledgeof thesuspect. Perhaps thebestknownandwell‐triedprovisionof this sort is
section 10 of theHong Kong Prevention of BriberyOrdinance (Cap 201),which enables a
courttoconvictanofficialwherethereisevidencethatheislivingabovehispresentorpast
officialmeansandforwhichhehasnotgivenasatisfactoryexplanation.Convictionsunder
section 10 carry a heavy financial penalty and imprisonment for up to 10 years. The
provisionhas survived the scrutinyof thePrivyCouncil andmore recently theHongKong
CourtofAppeal,83evenafterpayingdueregardtothepresumptionofinnocenceenshrined
intheInternationalCovenantonCivilandPoliticalRights.84Itisforadefendanttoestablish,
on a balance of probabilities, a satisfactory explanation for disproportionate wealth; the
smallerthedisproportion,theeasieritwouldbetogiveanexplanation.85Theintroduction
ofsomesuchprovisionasaruleofevidenceincorruptioncasesandthelike,ratherthanthe
creationofanewsubstantiveoffence,maybeworthconsideringfortheTCI.Thiscouldbe
an interim measure to meet the present insufficiency or rustiness of the Territory’s
democratic controls. Or it could be a longer term and common‐place international
protection against insidious corrupt practices whatever other constitutional, investigative
andforensictoolsaredeployedagainstthem.
2.7TherehavebeenanumberofconditionsintheTCIoverrecentyearswhich,together,
havemadeitaveryfertilegroundforcorruption,namely:
1) a Constitution and other statutory provisions and policies that allowed
individual Ministers, acting individually and in Cabinet, considerable
82SeeUnitedNationsConventionAgainstCorruption(UNCAC)DocA/58/422,NewYork,31October2003;andLegislativeGuideof theUnitedNationsConventionagainstCorruption,Vienna2006
83AttorneyGeneralvHuiKin‐hong[1995]1HKCLR22784UnitedNationsGeneralAssemblyResolution2200A(XXI)of16thDecember1966(inforce23rdMarch1976)85 Fung, Daniel R, Anti‐Corruption and Human Rights Protection: Hong Kong’s Jurisprudential Experience, paper presented at the 8thInternationalAnti‐CorruptionConference
51
discretionarypowerinvariousrespects,notablyin:(a)allocationofCrownLand
and as to price, development and terms of development, planning permission
and conditionsand concessionsas toBelongers’discountand stampduty; (b)
theawardofpublicworksandothergovernmentalcontracts;and(c)inrelation
toimmigrationmatters,inparticularinthegrantofBelongershiponexceptional
grounds,therighttoremainandthegrantorwithdrawalofpermissiontowork;
2) a booming tourist economy, attracting a surfeit of overseas interest and
investmentintouristdevelopments;
3)limitedsupplyoflandfordevelopmentunlessbyreleaseofCrownLandunder
thepolicyoftheday,86andatasubstantialdiscounttoBelongersorcompanies
inwhichtheyheldatleasta50%equity;
4)becauseofthesmallTCIcommunity,considerableexposureofMinistersand
other Members of the Legislature to conflicts between their public duty and
privateinterests;
5) lack of basic and available mechanisms of governance to deter or combat
possiblecorruptionbyMinistersandotherMembersoftheLegislature,and/orof
guidance in the form of a promulgated and enforced Ministerial Code of
Conduct;
6)widespreaddisregardbyMinistersandotherMembersoftheLegislatureof
their constitutional obligation regularly and publicly to declare their financial
interests;
7)thepowerofpoliticsormoreparticularlyinrecentyearsthepowerofthePNP
to dominate the TCI Legislature and Executive, and to channel unaccountably
largesumsofmoneytoandfromMinistersandtheirassociates;
8)empowermentofBelongers;and
86i.e.theCrownLandPolicy;Seeparas3.9–3.52below
52
9)lackof,oroftheconstitutionalmachineryfor,effectivepublicwatchdogsover
the TCI Government’s governance and financial management and control, in
particularthroughitsparliamentarycommittees.
IdiscussallthosemattersinsomedetaillaterintheReport,butitmaybehelpfultosetthe
scenebysayingalittlemorehereaboutthelastsix.
ConflictsofInterest
2.8Iflocalsignpostswereneededtopointtopossiblecorruptioninpublicofficetheywere
andaretobe found inplenty. Asastartingpoint, therehasbeenaseeminglyembedded
disregardbyMinistersandotherMembersoftheLegislatureofthe imperativetoavoid, if
possible,anyconflictofinterestorperceivedconflictthatmayimpairtheirdutyandability
toact in the interestof thepublic. It isan imperativeenshrinedsince1995 in theUnited
KingdomintheNolanPrinciples87–TheSevenPrinciplesofPublicLife,AnnexAtotheBritish
Code of Ministerial Conduct. The Hon Michael Misick introduced an almost identical
documenttotheCabinetaslongagoas7thMarch2007,withaviewtosuchadaptationfor
useintheTCIasmightbenecessary.88IttooknearlyafurtheryearbeforetheCabinet,on
6th February 2008, accepted it in principle, subject only to a few small amendments
substitutingreferencestotheTCIforreferencestotheUK.89
2.9 TheCode,90 including theNolanPrinciples,makesdetailedprovision foravoidanceof
conflicts of interest and for declaration of potentially conflicting private interests,
acceptanceofgiftsandhospitalityandinconnectionwithoverseastravel.Itsetsoutbasic
aspectsofhonestythatareorshouldbefamiliarenoughtoallcivilisedpeopleengaged in
public life, whatever their local culture. Such norms are as ‐ or more ‐ critical in small
countries like the TCI with closely‐knit relationships and associations, than in larger and
possiblymorepoliticallyandeconomicallysophisticatednations.Thetwomostrelevantand
obviousaspectsofhonesty in this contextare summarised in thesixthandseventhNolan
Principles:
87socalledbecausetheyweredrawnupundertheChairmanshipofLordNolan.88Minute07/141/2007ofCabinetMeeting7thMarch200789Minute08/107ofCabinetMeeting6thFebruary200890Seeinparticularsections7and9.
53
Honesty
Holders of public office haveaduty to declareanyprivate interests relating totheirpublicdutiesandtotakestepstoresolveanyconflictsarisinginawaythatprotectsthepublicinterest.
Leadership
Holders of public office should promote and support these principles byleadershipandexample.
2.10 On 10th July 2008, Governor Tauwhare, in his press statement announcing the
appointmentoftheCommission,includedtheMinisterialCodeinalistofimportantsteps...
recentlytakenorunderwaytoreducethescopeforcorruption. A fewdays later,on14th
July, the Hon Michael Misick, in a widely reported speech challenging the need for the
Commission,spokeofhavingintroducedandpassedsuchaCode.
2.11 AsCounseltotheCommissionobservedinhisclosingsubmission,despitethosetwo
publicreferencestotheCode,anditsacceptanceinprinciplebytheCabinetinearly2007,it
does not appear to have been formally adopted, published or promoted. When the
Commissionfinallyobtainedacopy,itwasintheformofareproductionoftheBritishCode,
saveforthetitleandcrestoftheTCIandwithsmall,butincomplete,adaptationsforusein
theTerritory.
2.12TheattitudeoftheHonMichaelMisickandsomeotherMinisterstotheprinciplesset
out in that Code is well illustrated by his denial in evidence in the Commission’s oral
proceedings that the Code existed.91 When pressed by Counsel to the Commission, he
stated:
...IhadaskedtheclerktotheHouseofAssemblytogetacopyofthecodefromtheUK.Thecabinethad–theplenarywentthroughit....itwasneveradopted.Shewassupposedtohavetidieditup–makeitrelevanttooursituationhereintheTurks&Caicosforfurtherconsideration. Thatneverhappened. AndsothefactisthatthereisnoministerialcodeofconductthatpresentlyexistshereintheTurks&Caicos....
When asked whether he had regarded it as a good starting point for seeking to enforce
standardsofprobitywithintheCabinet,hecontinuedinthesamevein:
91Transcript,Day2,pp6‐15
54
Thisdraft codeof conductwasneveradoptedand thereforeneverenforced ....Therefore,thereisnoministerialcodeofconduct. ...That’smyanswer.... Iamsayingthatthisministerialcodeisnotenforced.....thisisaworkinprogress.
Later,whentheCabinetMinuteof6thFebruary2008wasput tohim,92heabandonedthe
stancethatithadneverbeenadopted,andsoughtthistimetoblametheCabinetSecretary
fornothavingtidiedupthedocumentandpresentedittohimforsignatureanddistribution.
The Minister for Natural Resources, the Hon McAllister Hanchell, like the Hon Michael
Misick,repeatedlystressedthattheCodehadnotbeenintroduced.
2.13 TheHonFloydHallhadadifferentapproach.Whenquestioned,hesaidthathehad
known that the Cabinet had approved the Code and that, although it had not come into
force, he had regarded it as a guide to proper behaviour and its principles as binding on
him.93However,hedoesnotappeartohaveappliedthoseprinciplestohisownconductso
astoavoidconflictinginterests.
2.14 Thelethargyandlackof interestwithwhichtheCabinetasawholeapproachedthe
simple but important task of incorporating the essentials of theUKCode into its law and
practiceareunfortunate.Theirdisregardofitinpromotingtheirprivateinterestsandthose
oftheirintimatesdeservesmoreseriouscensure,asdoesthehypocrisyoftheHonMichael
Misickon14thJuly2008inhispublicrelianceonhisclaimedintroductionofittotheTCIasan
argumentagainsttheneedfortheCommission.
2.15TheattitudeoftheHonMichaelMisickandhisfellowMinistersinthisrespecthasnot,
asIhavesaid,beenpeculiartothePNPAdministrationforwhichtheywereresponsible.It
has been a constant theme of many complaints made against them and their PDM
predecessorsovertheyears. WiththesweepingelectoralmajorityofthePNPinFebruary
2007,givingitseeminglyimpregnablecontrolofthecountry,theneedforclearrecognition
andobservanceofsuchaCodebecameevenmorenecessary.
2.16 As Cabinet papers, Minutes and other public and private documents in evidence
before the Commission show, there have been frequent actual or potential conflicts of
interestinthepubliclifeoftheTerritoryinvariouscontexts.Manyindividualandcollective
examples are discussed in Chapter 4 of this Report. They include failures by Cabinet
92Transcript,Day3,pp5‐1493Transcript,Day5,p7
55
MinisterstodeclareinterestsonparticularmatterscomingbeforeCabinetfordecision,for
example as to grant or development of Crown Land, making of commercial concessions,
grantoffranchisesofwhatinpracticeamounttopubliclyprotectedmonopolies,theaward
of public contracts, or with regard to parties who in other ways would benefit from
governmentspendingunderconsideration.TherearealsoanumberofexamplesofCabinet
Ministers, purportedly exercising their own discretionary powers in favour of themselves,
membersoftheirfamilies,closefriends,thePNP,politicalsupportersorbusinesscolleagues.
2.17Inallofthoserespects,thepoliticaldominationbytheHonMichaelMisickofthePNP,
andthroughitanditsfinancialdealings,overtheengineofStateanditspeoples,hasgiven
specialpotencytotheevilofabuseofconflictofinterestinpubliclife.Thatdominationwas
and is aidedby the small size of the electorate, confined as it is to Belongers – less than
7,000ofthembeingregisteredtovotein2007–outofatotalofsome36,000permanent
residents of the Islands. This political dimension is not limited to cash payments and
improperfavourstopotentialelectorsatelectiontime–mostegregiouslyinthelastelection
inFebruary2007. It includeslongertermlurestoBelongersthatwerelikelytopredispose
themtothePNP.TheseBelongerswereencouragedandsometimesprompted,purportedly
aspartoftheirempowerment,toprofitfromthatstatus,notjusttoacquireasmallareaof
Crown Land at substantial discounts for themselves, but also to acquire it, sometimes in
largetracts,foronwardsaletooverseasdevelopers(flipping),ortofront,inwholeorinpart
andsometimes just temporarily, forsuchdevelopers. Theywerealsoprovidedwithnon‐
existentgovernmentjobs‐popularlyknownasgovernmentghostworkers‐forwhichthey
receivedregularwages.
DisclosureofInterests
2.18ThepotentialforexploitationbyMinistersandtheirfellowMembersoftheLegislature
of conflicts of interest in their public lives was complemented and encouraged by their
indifference to their constitutional duty to make full and accurate disclosure of their
financialaffairs.Suchindifferencehasbeenevidencedinabundanceby:1)theirfailure,year
on year, to make full and accurate returns to the Registrar of Interests, pursuant to the
Registrationof InterestsOrdinance1993;2) theTerritory’sChiefAuditor’s identificationof
56
such failure in her TCI Audit Reports for 2005 and 2006,94 in each of which she called
attentiontothefactthatthemajorityoftheLegislativeCouncilhadfailedadequatelyorat
alltodisclosetheir intereststotheRegistrar;3)theirdelays,disregardand,inmanycases,
obstruction of the Commission in the opportunity it gave them to make good those
deficiencies, even when, late in the day, it brought into play its powers under the
Commissions of Inquiry Ordinance; and 4) such openly expressed disregard, bordering on
disdain, in their evidence to the Commission as to their constitutional obligations of
disclosuretowhichtheRegistrationofInterestsOrdinancegaveeffect.
2.19 The result is that the Commission has had to extract – albeit with difficulty and
incompletely ‐ information of hitherto hidden interests and involvement in suspect
transactionsandrelationships.Therevelationofmanyoftheseinterestswastheproductin
largepartoftheCommission’swritteninvestigationsoverthefirstfivemonthsofitsworkin
andfromLondon.Manymoreweretoemergeintheglareofpublicityinitsexaminationof
MinistersandothersintheoralproceedingsinProvidenciales.
2.20 In all of this, the Hon Michael Misick set the tone in his late, inadequate and
misleadingwrittenresponsestotheCommission’srequestsfordetailsofhisinterests,andin
hisevasiveandsometimestruculentandobstructiveoralevidenceonthepoint.Effectively,
hisstancewastodismissthosestatutoryobligationsasofnopracticalapplicationtoelected
MembersoftheHouseofAssemblybecause,asheputit,ofacross‐partyculturetoignore
them.Theremaybesometruthinthesuggestionthattherewasacross‐partyattitudeto
thateffect.Buttocallitacultureand‐givenhisposition‐todonothingaboutitamidstthe
increasingdinofpublicconcernoverperceivedexcessesofhisAdministration,wouldhave
causedraisedeyebrowsinthefoc’sleofapiratesloop,asPGWodehousemighthavesaid.95
Thedisclosureobligationshave longbeenafeatureofTCI law,startingat leastasearlyas
the 1988 Constitution,96 and re‐enacted in the 2006 Constitution.97 They are necessary,
familiarandobviousaidstoencourageandenforcehonestyandopennessbythoseinpublic
office, at which ordinary canons of public behaviour and the shelvedMinisterial Code of
Conductweredirected.
94Seepara1.38above95Wodehouse,PG(1926),KeepingInWithVosper,London,p9996s87(1);Seealsoss25(1)(f)and26(3)(d)97s98;Seealsoss47(1)(f)and(g)and48(2)(d)
57
2.21 The2006Constitution,98 like its1988predecessor,requiresprovisiontobemadefor
the appointment of a Registrar of Interests, and imposes a duty on all Members of the
Legislature,includingMinisters,todeclareannuallytotheRegistrartheirfinancialinterests,
includingassets, incomeand liabilitiesand thoseof suchpersons connectedwith themas
mightbeprescribed.TheRegistrationofInterestsOrdinance1993spansbothConstitutions
inprescribingbywayofaScheduletheformoftheannualdeclarationandtheintereststo
be declared to the Registrar. The form of the annual declaration could not have been
plainer.Itrequiresthedeclaranttodiscloseinrespectofhimself,hisspouseoranychild:
1) Directorships ‐ the names of companies in which any of them held a
remunerateddirectorship;
2)Employmentoroffice–thedetailsofanyremuneratedemploymentoroffice;
3) Trades or professions etc. ‐details of any remunerated trade, profession or
vocationpractised;
4)Financialsponsorships,giftsetc‐includinganymaterial[i.e.$10,000ormore]
benefitsreceivedasacandidateormemberoftheLegislature;
5)Overseasvisits‐includingdetailsofeveryvisitrelatingto...membershipofthe
LegislativeCouncil[/Cabinet]undertaken...thecostofwhichhasnotbeenwholly
bornebythedeclarant,hisspouseorchildorbypublicfunds;
6) Land and Property ‐ including the location or description of any land or
propertyfromwhichthedeclarantorhisspouseoranychildderiveanincomein
excessof$10,000,orwhichconstitutesanassetworth$10,000ormorewhether
bywayofrentalorotherwise;
7) Declarable shareholdings ... in companies or bodies – of the declarant, his
spouseoranychild(i.e.abeneficialinterestinshareholdingofavalueexceeding
$10,000);
8) Liabilities – including the names of any creditor towhom the declarant, his
spouseoranychildisindebtedtoanamountexceeding$10,000.
98s98
58
2.22ItwasandistheRegistrar’sdutytoensurecompletenessandaccuracyoftheRegister
byexaminationofeachdeclaration,andifnecessarybyquestioningthedeclarant.Heisalso
boundtomaketheRegisteravailableforinspectionbymembersofthepublicatanysitting
oftheLegislature.FailurebyaMemberoftheLegislaturetomakeatimely,fullandaccurate
declarationrequirestheRegistrartoreportthefailuretotheLegislature,aSelectCommittee
ofwhichmayfinetheMemberupto$5,000orsuspendhimorherfromsittingorvoting.
2.23IdecidedtorequestallMembersoftheLegislatureoverthelasttenyears,whowere
still alive and could be traced, voluntarily to providemewith copies of their declarations
overtheperiod,andfromthosestill intheLegislature,a freshdeclarationuponreceiptof
the request. In making those requests, I had in mind the power of the Commission to
require such information, pursuant to the provisions of the Commissions of Inquiry
Ordinance.99 However, it proved extremely difficult to obtain from any public source the
identity or address of the Registrar and the addresses or telephone numbers ofmany of
those to whom the Commission wished to write, especially previous Members of the
Legislaturewhohadheldofficebefore2003.
2.24 From about mid‐August 2008 the Commission Secretary sent to present and past
MembersoftheLegislativeCounciland/ortheHouseofAssemblya letter inthefollowing
terms:
... [the Commissioner] has instructedme towrite requesting you voluntarily toinformandprovidehimwithcopiesofthefollowinginformation:
1)thedateandcontentofeachDeclarationofInterestsmadebyyouatanytimeduringyourtenureasaMemberoftheLegislatureoftheTurksandCaicosIslandsto the Registrar of Interests, pursuant to your obligation to make suchDeclarationsundersection98oftheConstitutionOrder2006and/oritsstatutorypredecessorand/oranylawmadeundereitherinstrument;
2) whether or not you havemade any such Declarations, the information anddocumentsthatyouwouldnowprovideinsuchaDeclarationofInterestsifmadepursuanttosection98(3)and/orofanylawmadeunderit;
3) if, in any 12month period during your period of appointment as an electedMemberoftheLegislature,youhavenotcompliedwithyourobligationtomakesuchDeclarationpursuanttothatprovision,or itsstatutorypredecessorand/orofanylawmadeundereitherinstrument:
99ss4(1)(d),(f),(k)and(2);SeeAppendix4(iii)tothisReport.
59
a)whyyoudidnotdoso;andb)what,ifany,sanction,admonitionordirectionresulted....
2.25 At the same time theCommissionattempted to findand seek theassistanceof the
Registrar,with a view to examining the declarationsmade to himover the years and the
Registerinwhichhehadrecordedtheirdetails.Itprovedverydifficulttoidentifyhim,never
mind locate him. Nobody in the TCI seemed to knowwho hewas or where he lived or
worked,orotherwisehowhecouldbecontacted.RuthBlackman,theClerktotheHouseof
Assembly and other public officialswere seemingly unable to help – even theGovernor’s
Office could not immediately assist. Eventually, the Commission learned that theDeputy
Governor, theHonMahalaWynns, knewhisname ‐AlfredBeen,a retired schoolmaster ‐
and his telephone number, but not his address. Following a telephone call, contact was
establishedandarrangementsmade for amemberof theGovernor’s staff to collect from
thelivingroominhishomeaheap,asheputit,ofdeclarationsandtheRegisterinvarious
forms.
2.26ThesedocumentscouldnotbeexaminedbytheCommissionuntillateOctober,when
itsSolicitor,accompaniedbytheCommissionSecretarymadeavisittotheTerritoryforthe
purpose. Someof thedeclarationsof interest, including thoseof theHonMichaelMisick,
wentbacktotheearlyandmid1990s.Thereturnsfrom2000to2007,whichwerenotall
complete,werefiledyearbyyearinseparateenvelopes.Foreachoftheyears2004to2006
there was a bound Register containing typed entries taken from the declarations. The
entriesfor2007wererecordedinmanuscriptinanexercisebook.
2.27 I have referred to delays, evasion and obstruction byMinisters and others in their
responses or lack of response to the Commission’s requests and then to summonses for
informationastotheirfinancialinterests.Ishallrefertothatconductagaininmoredetail
when dealing with individualMinisters and otherMembers of the House of Assembly.100
Counsel to the Commission – echoing the Territory’s Chief Auditor in her 2005 and 2006
Reports,rightlysummariseditallasapictureofwholesaleandwidespreaddisregardforthe
requirements of the law. He referred, in particular, to the requirement of disclosure of
FinancialSponsorships,Giftsetc. Noneof theMinistersorotherelectedMembersof the
HouseofAssembly everproperly completed that sectionof thedeclaration form. Eachof 100Ch4
60
themwho gave oral evidence to the Commission admitted that and other deficiencies in
their returns. Some, in particular theHonMichaelMisick and theHon FloydHall, did so
becausetheyregardedtheirstatutoryobligationsundertheOrdinanceasofnoimportance
atall. Others,suchastheHonMcAllisterHanchellandtheHonJeffreyHall,attributedthe
omissionstosimpleerror.
2.28 The Hon Michael Misick, in answer to a general question from Counsel to the
Commissionabouttheinadequacyofhisreturns,explained:
... this has to be put in its right perspective. ... in relation to the Register ofInterests,andthere isnoexcusefor it, thereweremembersasamatterof factthatneverevendeclaredaninterestatall.....ithasbeenacross‐partyculturetoreport in themanner inwhich I did. Particularly in relation to gifts and partypoliticaldonations,therehasbeennoonewhohaseverdeclared,probablywiththe exceptionof onenewmemberwhoprobablydeclareda small amountandthis is primarily because, particularly the small nature of our Territory, personsgivingpoliticalcontributionwouldhavepreferredtobenotnamed.101
... there has been a cross‐party culture not to – to enter these as correct aspossiblebasedonyourrecollectionandinmanycasesthereweremembersandmembers of the oppositionwhowere then in government from 1995 to 2003,whoneverdeclaredtheirinterestsatall....Sonotwithstandingthefactthatitisa legal obligation, ministers as a whole were quite prepared to adopt a laxapproach to it. ... I have always declared interest based onmy knowledge intermsofthecross‐partyculture.Itiswhatitis.102
2.29 TheHonFloydHall,whohadmadefuller,butstill farfromcomplete,declarationsof
interest,saidthathetoohadnotdeclaredfinancialsponsorshipsorgifts,adding:103
...Noonefilledoutthatsection.Iguessitwasacaseofgroupthinking,inmyrespect and that section was not filled out. ... it was not filled out becausenobodyelse seemed tohavebeendoing itand therewerenopenaltiesbeingenforcedasaresultofit.SoitwasagroupthinksituationIthinkamongstallofusandresultedinmynotfillingoutthatsection.InhindsightIdobelievethatitwasinappropriatetodothat.
That evidence of the Hon Floyd Hall, when confronted with the inadequacy of his
declarations, is to be compared with his written evidence to the UK Foreign Affairs
Committeeayearorsobefore,inwhichhehadasserted,withoutqualification,Ministersdo
regularlyandroutinelydeclaretheir interests. Inafurtherpassage inthatevidencetothe
101Transcript,Day1,pp47‐48102ibid,pp51‐52103Transcript,Day5,p7
61
Committee,hehadshownthathewaswellawareofwhathadbeenrequiredofhimandof
hisministerialcolleagues:104
Thegovernmentfullysubscribedtogoodgovernmentprinciples. .... Weare...committed to proper functioning of committees of theHouse of Assembly. Aspartofour legitimateagendasince the [2007UKNationalAuditOffice]Reportwas published, we have taken steps to ensure disclosure of interest by publicofficials,includingmembersoftheHouseofAssembly.Inthisregardyouwouldbe pleased to note thatwe are in the process of piloting an Integrity in PublicOfficeOrdinancethroughtheHouseofAssembly....
2.30TheHonMcAllisterHanchell,whosedisclosurewas,andremainsdeficient,maintained
inhisoralevidencethathehadcompletedhisdeclarationsovertheyearstothebestofhis
abilitybasedonhisinterpretationatthetimeofwhatwasrequired.Heacknowledgedthat,
intheglareofthespotlightthrownonthematterbytheCommission’sInquiry,hehaderred,
inparticularinhisroutinefailuretoaccountforanyfinancialgiftsorsponsorship.105
2.31 TheHon JeffreyHall,Minister of Communications andWorks,whose returnswere
amongtheworstexaminedbytheCommission,adoptedasimilarstance.Hedidnotprayin
aid any cross‐party culture or group thinking excuses; he simply said in relation to each
deficiencyputtohimthatitwasanerrororcarelessnessonhispart.
2.32 It may assist, before I leave the generality of this topic, to set out what the
CommissionwasaskingforbywayofdisclosurefromtheMinisters.Following,andinreply
to,thedisappointingresponsesfromMinisterstotheCommission’sinitialletter,towhichI
have referred,106 sent to all Members of the House of Assembly in mid August, the
Commissionwrotesecondletters,explainingwhatitsoughtbywayofdisclosure.Hereisa
specimenof the information sought in those letters,provisionofwhich shouldhavebeen
withintheunderstandingandcapacityofanyreasonablydiligentpublicservant:
Anyandallpayments,emoluments,salaries,wages,commissions,honorariaandbenefits inmoneyor inkind,orentitlements tosuch, fromall sources, receivedsincecomingtoofficeasaMember,whetherornotassociatedwithyourroleasaMemberorMinister,andthosereceivedbyyourspouseandanychild.
Any sponsorship, presents, gifts, services, commissions or payments, includingtravel, accommodation, food, drink, clothing, holidays, entertainment and
104opcit54,Ev351105Transcript,Day7,p79andpp86‐94106Seeparas1.53–1.71above
62
hospitalityprovidedtoyou,yourspouse,familyorfriendsduringyourofficeasaMember ofmore than nominal value (i.e. over $100)whether or not explicitlyrelatedtoyourpositionasaMemberorMinister.
Alllandandpropertyownedbyorheldonyourbehalf,yourspouseoranychild,whetherfreehold,orleasehold,oranyentitlementtothesame,anywhereintheworld.Thistoincludedetailsofthelocation,valuationonpurchaseandnow,itsstate of development, stamp duty paid, any planning permission sought orgrantedandtheidentityofanyagentactingonyourbehalfinrelationtoit.
AllbankaccountsheldintheTCIorelsewhere,byyou,yourspouseandanychild,orheldonyourortheirbehalfintrust.
All personal and corporate credit cards held by you, whether in sole or jointnames.
All shareholdings, debentures or commercial interests in any company,partnershiporfirm,andanycontractsenteredintowhetherinyourownnameorthat of an intermediary, including options to purchase, franchises, licences, orcontractswithanybodiescorporate.
Any directorships or positions of authority, whether remunerated or not, inrelationtoanycommercialenterprise.
All liabilities in excess of $10,000 in money or money’s worth includingmortgages,loans,debts,guarantees,indemnitiesorwarrantiesgiven.
2.33 Theclearandundisputedpicture isthusofacknowledgedwidespreadfailureonthe
part ofMinisters and otherMembers of the Legislature overmany years to complywith
their constitutional obligation to provide full and accurate declarations of their financial
interests. Whatevertheir individualreasonsorsubsequentrationalisationfortheirfailure,
there isnodoubtthatthey ignored‐certainlysince2005‐thestricturesoftheTerritory’s
ChiefAuditorinherAuditReportsaboutit.
PoliticsandPoliticalDonations
2.34Theallpervadingimpactofpoliticsonpeople’slivesandlivelihoodsintheTCIandthe
seeminglyimperceptiblelinebetweenpoliticalpaymentsordonationsontheonehandand
bribesontheotherhasbecomeacankerintheeconomicandsociallifeoftheTCI.Ittakesa
number of forms. First there are payments made by potential or well‐established
developers and other businessmen to PNP funds or to PNP Ministers individually,
purportedly as political donations. These are sometimesmade direct, but are also often
63
made through and held by a third party, such as an attorney or close business or family
associate. Wealthy developers and other businessmen usually made their donations on
termsofstrictanonymityandwithnorestrictionsastouse,politicalorotherwise.Whythe
secrecy?Whynostringsattachedtoitsuse?
2.35 Mr Norman Saunders Jr, when seeking on the PNP’s behalf to persuade the
Commissionnottohearevidenceaboutsuchdonors‐ornottodosoinpublic‐couldnot
have answered the first of those questions more plainly. They were afraid that it would
become common knowledge that they had been donating large sums to one party or to
individual members of that party while in power, lest it damage their access to and
possibilityofinfluencingtheirpoliticalopponentsifandwhentheycametooffice:107
....donorstoapartyare...highlysensitiveaboutthedisclosureofinformation.ThefactthatthedetailsofdonationsaregoingtobemadepublictothisInquiryisgoingtosendashiveringeffectdownthespinesof thedonors ...There isanenvironment that – there is a feeling that if you donate and you are a strongsupporterofaparticularparty,whetherornotthatisactuallyrealorimaginary,if you are a strong supporter of a particular party and you are engaged inbusiness thatwith the flows and ebbs of political fortune,when the party youstrongly support is in opposition, that very few of your callswill be answered,veryfewofyourapplicationswillbeconsidered.....thereisthatperceptionanddonorsdonotliketheirinformationtobemadepublic....
and108
... Theproblemandconcern is thatpublicdiscussionaboutthe identityof thedonorsorevenoneortwodonorsandevenifthosedonorsaresomehowinvolvedwith criminality or conduct that is inappropriate, that even in those instancespublic discussion about those donorswill irreparably damage the ability of thepartyinthefuture–theabilityforpartyinthefuturetoraisemoney,tocollectmoney,which isabsolutelyessential for its function. That is themajorconcernthatthepartyhas:thatfuturedonorstobepetrifiedaboutdonatingtotheparty.
Q Why should they be petrified if their intentions are good and in the publicinterest?Whathavetheygottobefrightenedof?
ATheyareafraidoftheirdetailsbeingmadepublic...whenthereisachangeinpolitical parties, they fear that their applications, their telephone calls, theirproposalsmaygounheard....
107Transcript,Day5,pp116‐117108Transcript,Day7,pp3‐4
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2.36 As to my second question ‐ Why no strings attached? – it applied, not only to
paymentsmadebydevelopersandthelike,butalsotopaymentsmadebythePNPtoeach
ofitscandidates,knownas“Candidate’sStipend”.Suchpaymentswereforthemtospend
as theywishedandwithout any requirement to account for its use forpolitical purposes.
Theanswersarefound,first,byexamining,astheCommissionhasdone,alargenumberof
relationshipsbetween,on theonehand,PNPMinistersand,on theother,developersand
others,andtransactions‐in‐the‐makingaboutthetimethedonationsweremade.Chapter4
of this Report contains a number of clearly evidenced instances of very large payments,
direct or indirect, to, in particular, the HonMichael Misick, the Hon Floyd Hall, the Hon
McAllister Hanchell and the Hon Jeffrey Hall, whose Ministerial portfolio included
responsibilityfortheawardofpublicworksandothergovernmentcontracts.
2.37ItlooksfromtheevidencebeforetheCommissionthatdonorsdidnotcarehowtheir
politicalrecipientsspentthemoney,aslongastheystayedinpowerorhadtheprospectof
it and remainedamenable to their commercialproposals. ThePartyhadno system– the
HonFloydHall,itsTreasurerandacertifiedpublicaccountant,seemedoblivioustotheneed
for‐requiringindividualrecipients,whetherofsumsdirectfromdonorsorfromthePartyto
account for theiruseofsuchmonies. Mostof thedonationsorpaymentsappear tohave
been at the disposal of individual Ministers to spend on what they liked, free from any
requirementtoaccountfortheirexpenditure.Thefollowingextractsfromoralevidenceof
theHonMichaelMisick,theHonFloydHallandtheHonMcAllisterHanchell,inexamination
bySeniorCounsel to theCommissiongivea flavourofwhatwasgoingon. First, theHon
MichaelMisick:109
Q...On3rdNovember2006...[y]ougotadonation,soyoutellus,of$100,000from Caicos Construction Management and Development Limited. What wasthatfor?
AItwasapoliticaldonationforme....
Q...whatisthepurposeofapoliticaldonation?
A Thepurposeofapoliticaldonation in theTurks&Caicosmightbedifferentfromthepurposeofapoliticaldonation in theUK, soyouhave toput in thosetwo different perspectives. The purpose of a political donation in the Turks&Caicos is toassist theperson receiving itwithhisorherpoliticalambitionsbut
109Transcript,Day1,pp158‐161
65
also in most cases when donations are given to individuals, it is to use yourdiscretion, because you use your personal money to advance your politicalambition,andsodonationsissortofhelptosupplementthat.
QWhatispoliticalaboutthat,MrMisick?Whatisintheleastbitpoliticalaboutthat?Hereissomemoneytouseforyourself.Thatisnotapoliticaldonation.Itisagiftpossibly.
AYouareobviouslynotaCaribbeanpolitician.
Q...IamstillwaitingtohearfromaCaribbeanpolitician,withrespectsir,whatitis about $100,000 froma construction company that hasapolitical angle to itwhenitisputintohiswife’scompanysoshecangoandspenditintheUSA.....Explainittomeagainplease.
A Ihaveexplained it toyou, tothebestofmyknowledge. And Istandbymyexplanation.....
Q[Commissioner]...Whydidthiscompanypaythismoneytoyou?Why?
AThecompany,asIexplained,paidthismoneytomeasapoliticalcontributiontomeforthepoliticaldonation/gift.
Q[Commissioner]Butwhyshouldtheydothat?
AThiswasmonthsbefore theFebruary2007election. Certainly in theTurks&Caicos a number of political contributions are given sometimes to a party,political contributions/gifts topartiesand to individuals. There isno campaignfinance laws that regulate strictly how that is spent. So when you get acampaigncontribution,justlikehowyouspendthecontributionthatyougetonyourself.Itisallintertwined....
2.38TheHonFloydHall,whenasked,byreferencetohiscreditcardexpenditure,whether
hecouldaccountforhisuseofpoliticalpaymentsmadetohimpersonally,said:110
To some degree but not any degree of specificity ... this is the areawhere itcouldgetabitmuddyinthesensethat...inmycase,Ihavebeenusingpersonalfunds for political endeavours as well, including loan proceeds to enforce mypolitical endeavours throughout the Turks & Caicos Islands. So it is quiteconceivablethatsomeofthosepolitical[sic]wouldendupbeingcon‐mingledattheendofthedaywhenitreachedmybankaccountormycreditcard....
Q ... Did you not regard it as being slightly messy that there would be con‐mingling of personal funds and political funds when it would be a relativelysimple exercise to separate and account for those to avoid the possibility ofinterpretationlateron?
110Transcript,Day5,pp22‐24
66
A...youhavetoappreciate...thathereintheTurks&CaicosIslands,wedon’thave any campaign finance laws. So I didn’t feel it an obligation to treat theprocedureorthedisbursementsandtheincomeofthosefundsinthefashion...youhavejustdescribed....
2.39 TheHonMcAllisterHanchell had the samedifficultywhenaskedbyCounsel to the
Commissiontoaccountforhisexpenditureofalargesumofmoneygiventohim,whichhe
claimedtohavespentonaseriesofelectionpartiesataboutthetimeoftheFebruary2007
election.
2.40Therewasalsomovementofpoliticaldonationstheotherway,fromPNPpoliticiansat
oraboutelectiontimetotheirvoters,insomecases,giventhesmallconstituenciesandthe
limitation of the franchise to Belongers, to relatively few of them. As Counsel to the
Commission observed in his closing submission,111 the remarkable aspect of such funding
was the sheer volume of money washing through the system, with an electorate of just
under7,000spreadacross15constituencies.FromthePNPpapersbeforetheCommission
alone, it canbe seen that in the sixmonths spanning the February2007electiona figure
approaching$4millionwentinandoutofthePNPParty’smainbankaccount.
2.41 Therewasmuchotherevidencebefore theCommissionofwide‐spread largesseby
MinistersandthePNPpartymachineamongsttheirconstituentsbeforetheFebruary2007
elections.MsMcCoy‐Misickgaveafirst‐handaccount112ofhisapparentpersonalgenerosity
intheformofsubstantialcashhandoutstothosewhomhesawaspotentialsupporterson
hiselectionvisits.TheHonFloydHallspokeofalargenumberofround‐sumpaymentsspent
byhim,including$5,000atRoyalJewelsinAugust2007,whichhesaidhehadusedforthe
purchaseofpresentsformothersinhisconstituencyincelebrationofMothers’Day.113He
addedthathehadspentabout$15,000eachyearonMothers’Daypresentsforabout200
mothersinhisconstituency.
2.42 It istrue,astheHonMichaelMisickandotherMinistersremindedtheCommission,
thattheTCIhasnostatutoryprovisionsspecificallyrestrictingtheamountoruseofelection
campaign finance expenditure. However, sections 68 and 69 of the Elections Ordinance,
reproducingorreplacingthecommonlaw,makeitanoffencetoengageincorruptelection
111Transcript,Day22,p44112Transcript,Day14,p106113Transcript,Day15,p194
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practicesofbriberyandtreating,whetherbefore,duringorafteranelection,byseekingto
influenceorpersuadeapersontovoteortorefrainfromvotingbytheofferorgivingofa
rewardofanysort.
2.43 Insummary, thePNPpoliticalpresenceandmachineryappear tohavebeenawell‐
usedchannelforthepassingofconsiderablesumsofmoneyonewayortheother,andwith
noaccountabilityatallonthepartofthePartyoritsMinisterialMembersandothersasto
whattheydidwith it–anall tooeasymechanismforcorruptionbythosemindedtotake
advantageofit.
Belongership
2.44Putatitsbroadest,BelongershipintheTCIstemsfrombirththereand/orbydescent
fromaBelongeroraspouseofaBelongeroffiveyearsstanding,orexceptionallywherethe
Governor, acting on the advice of the Cabinet, considers that a person has made an
outstanding contribution to the economic and social development of the Islands.114
Belongers,byrightofthatstatus,havetwomainprivilegesintheTCIthatarenotenjoyedby
thosewitharightofpermanentresidenceorother lesspermanententitlementtoremain.
Theyaretheonlyoneswitharighttovote,andtheyareonlyonestowhom,asamatterof
policy,CrownLandmaybedisposed,eitherintheirownrightorasthemajorityshareholder
inacorporatepurchaser,andatasubstantialdiscount. Theyalsobenefit fromapolicyof
empowermentespousedbybothmainpoliticalparties.Oneofitsavowedaimsistoenable
everyTCIBelongertobuyasmallplotoflandforhimselfandhisfamily.
2.45 There is no legal restriction, however, on the number of plots each Belongermay
acquire,andthesameprivilegesareaccordedtoprominentandwealthypersons,including
developersandotherswhohavebeenaccordedBelongershiponexceptionalgrounds.Nor
isthereanyrestrictioninpracticeonaBelongerimmediatelyflipping,thatis,quicklyselling
ontoadeveloperaparcelofCrownLandgrantedtohim,orfromfrontingforadeveloperin
thetransaction,soas,ineithertransaction,toenablethedevelopertoacquirethelandata
substantiallydiscountedprice.Sometimes,BelongersflipinunisonwithotherBelongersto
114ImmigrationOrdinance,s3
68
the same developer, thereby enabling him to acquire a large acreage of land on
advantageous terms. Sometimes, it appears, the flipping Belongers are only informed by
governmentauthoritiesshortlybeforeorafterwards. Inthateventtheyaretobeorhave
beenusedas intermediaries in thisway ‐possiblyorpossiblynot ‐witha smallprofit for
themselves.
2.46 Suchtransactionscanbe initiatedatMinisterial levelandtheirproductapproved in
Cabinetintheformofgrantsof largeareasof landtodeveloperscoupledwithconditional
development approval. The Commission’s examination of Executive Council and Cabinet
minutesoverthelastdecaderevealedanincreasingpatternofsuchproposalsputbyoneor
otherMinisterbeforetheGovernorinCouncilorCabinetforurgentdecision,oftenwithno
Cabinetpaperandwithminimalinformation.IftheCouncilorCabinet,withtheagreement
of theGovernor,approvedsuchaproposal, itwasoften,as theMinutes record, for rapid
communicationtothedeveloperconcerned.
2.47Inmanysuchcases,theclaimedjustificationforsuchurgencywastheneed,inahighly
competitive international market for tourists and tourist development, to secure the
investment in the interest of the people of the Islands. That was certainly how such
proposals were often put to the Governor in Cabinet – speedwas of the essence or the
developerwouldgoelsewhere.ThatwasalsothejustificationgiventotheCommissionbya
numberofPNPMinistersandothersforsuchhighlevelproposalsandthedevelopmentsto
whichtheyled.
2.48Ontheotherhand,thereareindications,increasinginfrequencyandscaleduringthe
PNP Administration, of other possible motives as well. There is information before the
Commissionof transactions inwhichtheMinisterconcernedhas,withtheapprovalof the
Cabinet,securedforadevelopera lowerpricethanthatadvisedbytheGovernmentChief
Valuation Officer or other exceptionally favourable terms, including relaxation of
developmentconditionsand/orinterventioninhisfavourintheplanningpermissionprocess
and/or a substantial reduction in duties to be paid. As Chapter 4 of this Report
demonstrates, such favourable treatment might have been part of an agreement or
understandingfortheMinisterand/orothersclosetohim‐perhapsarelativeoracomplicit
Belonger‐intermediary, perhaps a lawyer acting for both sides ‐ to be rewarded with a
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substantialcashpaymentorotherfavour.Ifapayment,itmighthavebeenrepresentedasa
loanwithnoformalagreementorprovisionforrepaymentorforpaymentofinterest.Orit
mighthave taken the formofa finder facilitation fee,or realtor’scommission,or shareof
the equity in the development when built, or a condominium. Or it could have been a
favour,saybywayofarrangementofawell‐paidemploymentorallotmentofashareina
corporateinterestorotherbenefittoamemberoftheMinister’sfamily.
2.49Thus,thelaudableandmuchvauntedPolicyofEmpowermentofBelongersmayhave
had uglier manifestations in its application. It may, in some instances, represent an un‐
earnedbenefitorprivilege–evenaninformalprospectiveinterestinCrownLand,byvirtue
only of that status and regardless of any personal need for land. Itmay include already
affluent newly minted developer/Belongers as one media commentator has recently put
it.115AnysuchmisuseofthePolicysuggeststhepossibilityofabusebyMinistersandothers
oftheirpublicofficeforthepurposeofcorruptreward.
ConstitutionalWatchDogs
ChiefAuditors’Reports
2.50Ofthetwospeciesofconstitutionalwatchdogs,theGovernmentChiefAuditorsand
ParliamentaryOversightCommittees, the formerbarked, loudly and repeatedly, the latter
barelyshowedanysignsoflife.IhavereferredbrieflyinChapter1ofthisReport116tothe
comprehensiveandpenetratingreportsofCynthiaTravis,theChiefAuditorfrom2005and
2006, inwhich she identifiedmany recurring issues of serious concern, including growing
budgetdeficits forwantofpropercontrolofexpenditure. Thedifferencebetweenactual
andbudgeted figures for receipts fromCrown Land saleswas amajormismatchbetween
estimatedandactualfiguresinthe2005‐06Budget,butitwasnottheonlyone.Themany
othersnodoubtcontributedtotheChiefAuditor’sconclusionthatthebudgetprocesswas
ineffectiveandthattherewasalackoffiscalopenness.117Asshereportedelsewhere,there
has been throughout successive governments an excess of expenditure over that
115EquitableEmpowerment,TCIJournal26thFebruary2009;UnearnedPrivilege6March2009TCIJournal116Seepara1.40.117AuditReportontheFinancialStatementsoftheGovernmentoftheTurksandCaicosIslandsfortheyearended31March2006,p22
70
appropriated.InthefinancialyearendinginMarch2006,theactualexpenditureexceeded
thebudgeted,orapproved,expenditureby15.9%.118
2.51 This isnotanewproblem inTCI. Nor is itunimportant. As theUKNationalAudit
Officerecognised,intheir1995Report,ContingentLiabilitiesintheDependentTerritories,119
realistic estimates of revenue, expenditure and borrowing requirements or increases in
reservesareakeyelementofanygovernment’sfinancialplanning. TheUKNationalAudit
Office found that lack of commitment from the TCI Government to firm budgetary
managementandpublic sector reformhad resulted in continuingbudgetarydifficulties.120
More recently, in their 2007Report, they recorded that expenditurewas consistently and
repeatedly being incurred in excess of annual budgets, across most government
departmentsandwithoutpriorstatutoryauthorisation,andthatfinancialcontrolsdesigned
to prevent this were routinely overridden.121 Astonishingly, as one Acting Permanent
SecretarytoldtheTCIPublicExpenditureCommittee:122
YoumustrealisethattheMinistrycanbudgetbutitisstilllefttotheMinistryofFinancetogiveuswhatwebudgetedfor.InmanycasesourbudgetsareslashedandweoperateknowingthatwearegoingtogooverbudgetandtheMinistryofFinanceknowsthisalso.That’sthepositionweareputinaswehavenocontroloverthefinalfigures.
ParliamentaryOversightCommittees
2.52 The2006 Constitution provides in a largely permissiveway for the appointment of
StandingCommitteesof theHouseofAssembly tomonitor theway inwhich government
conducts its business. For some years there have been three such bodies, the Public
Accounts,ExpenditureandAdministrationCommittees. However, theConstitution leaves
muchtotheinitiativeoftheHouseitselftodeterminebyStandingOrdershowtheyshould
be composed, andhow they should conduct their business. A political partywith a clear
majorityintheHouseisthusable,throughthemediumofStandingOrders,toneutralisethe
workofsuchCommitteesinmonitoringtheconductoftheGovernment.Thishascertainly
been the case since at least 2003, while the PNP has been in control. There is thus no
118ibidpage38119UKNationalAuditOffice(1997),ContingentLiabilitiestheDependantTerritories,HC131997‐1998,page29120ibid,page47121opcit42122PublicExpenditureCommitteeMinutes,10February2004
71
effectiveconstitutionalunderpinningofthepublicsafeguardsthatsuchCommitteesshould
provide – a serious weakness given the chaotic state of the Government’s long‐standing
financialmanagement and control of public finances repeatedly identified in national and
otheraudit accounts towhich Ihave referred. In short, therehasbeennoparliamentary
oversightofanysignificance;andthepowerofthePNPhasbeenlargelyunchecked,givenits
overwhelmingand,untilrecentlyloyal,parliamentarymajority.
2.53 Such machinery as the 2006 Constitution123 requires is the establishment by the
Legislatureofat least twoStandingCommitteesof theHouse,eachwith responsibility for
monitoring the conduct of the business or a ministerial department or departments. In
addition, it empowers the House, with the approval of the Governor, to make Standing
Orders,whichmayprovidefortheestablishmentofadditionalStandingCommitteesofthe
House.124EachStandingCommitteeistoconsistofMemberswhoarenotMinistersandto
correspond proportionately, so far as possible, to numerical strengths of political
representationintheHouse.AtleastoneoftheCommitteesmustbepresidedoverbyan
oppositionMember.UndertheConstitution,theCommitteesmay,butarenotrequired,to
summonMinistersoranypublicofficerforexaminationandprovideinformationabouttheir
departmentalresponsibilities.Theymay,butagainarenotrequiredto,reportontheirwork
totheHouseofAssembly.IfaCommitteedoesreport,theHouseisrequiredtopublishtheir
reports,butnotwithinanyspecifiedtime‐scale.
2.54AsinthecaseofotherinstitutionsofpublicgovernanceandadministrationintheTCI,
the Commission has had great difficulty in extracting from those who should be most
familiarwith the system,what, if any, effectivemachinery these constitutional provisions
haveprovidedforpublicoversightofgovernmentconduct.StandingOrdersoftheHouse,125
whichhavebeenamended from time to time,provide for StandingCommittees tobe re‐
appointed at the commencement of each Parliamentary Session. Under the Orders, the
ExpenditureandAdministrationCommitteesarerequiredtomeetatleastoncepermonthin
123asinthe1998Constitution124ss60and61125SeeLegislativeCouncil(PowersandPrivileges)Ordinance,RevEd1998,consolidatingStandingOrdersoftheLegislativeCouncil1990asamendedbylegalnoticesSeptember2003andDecember2004.
72
every Session, and all threeCommittees are required to report to the Legislature at least
onceineverysession.126
2.55 From informationobtainedbytheCommission,albeitwithconsiderabledifficulty, it
looksasifallthreeStandingCommitteesmetinfrequently.Sometimestheycouldnotmeet
becausetheywereinquorateduetonon‐attendanceofPNPMembers.Forexample,four–
possiblyfive‐meetingsofthePublicAccountsCommitteescheduledinthefirstquarterof
2008werecancelledforwantofaquorum;Ibelievethatitonlymettwiceinthewholeof
2008.AlthoughallthreeCommitteesarerequiredbyStandingOrderstoreportupontheir
activitiestotheHouseofAssembly,andtheHousewasrequiredtopublishtheirReports,127
compliance with both requirements has been distinctly patchy. Unless reports are
presented to the Legislature and tabled, the exercise is pointless. EvenwhenCommittee
ReportsweretabledbeforetheHouse,Ministersoftendidnotmakethemselvesavailableto
answerquestionsarisingfromthem,and,onoccasion,haverefusedtoanswerquestions.128
2.56 Even in lesstroubledtimesforthegovernanceoftheTCI, theseCommitteesdonot
appeartohavemetregularlyorreportedtotheHousepromptly,oratall. Sincetheearly
nineties, and throughout, there has been concern about their ineffectiveness. In 1993 a
consultantengagedbytheForeign&CommonwealthOfficeidentifiedanumberofareasof
concern, such as widespread laxity in adopting financial procedures and a failure to
administergovernmentfinanceswithduerespectforthelawandlegislature.129Thereafter
eight technical officers were appointed to senior financial posts in the TCI to encourage
improvementsinfinancialcontrolandreporting,andseparatearrangementsweremadefor
trainingfinanceandauditstaff.
2.57 But therewas little change for the better. TheUKNational AuditOffice expressed
concern in 2005.130 These concerns include Committee hearings being held in private,
failuretoachievequora,especiallyinsensitiveareaswhereback‐bencherswishedtoavoid
anappearanceofdisloyalty,perceivedpoliticisationbecausetheChairmaninthecaseoftwo
oftheCommitteesistheleaderoramemberoftheOpposition,andalackofexperienceand
1262006Constitution,s37andStandingOrders57.3.1and57.3.2127s61(5)(c)and(6)128opcit54Ev336,para5.4129TCINationalAuditOffice(1997),TCINationalAuditReport,p30130ibid,p32
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expertise in scrutinisingaccounts. Allof thosedeficiencies,as Ihavesaid, continueduntil
anypossibilityofStandingCommitteescrutinyoftheGovernmentwascompletelydeniedto
thepeopleoftheTCIwhen,attheendof2008,attheHonMichaelMisick’sinstigation,the
HouseofAssemblywasproroguedforoverthreemonths.NoneoftheCommitteeshadin
factsatorreportedsincetheHouseofAssemblyhadbeenpreviouslyproroguedattheend
of July 2008. They had been briefly re‐established in mid December 2008 in the dying
momentsoftheMisickAdministration, justbeforetheHousewasagainprorogued. When
Parliamentre‐openedon14April2009underthestewardshipoftheHonGalmoWilliamsas
thePremier,heexpressedhimselfunreadytoconsidertheestablishmentandcomposition
fortheSessionofanyoftheStandingCommittees.Afurthermonthpassedbefore,on15th
May2009,heannouncedintheHouseofAssemblythattheyhadthenbeenestablished.
2.58 The Public Accounts Committee ‐ This Committee’s statutory role is to examine
accountsshowingtheappropriationofthesumsgrantedbytheLegislaturetomeetpublic
expenditureandsuchotheraccountslaidbeforetheLegislatureastheCommitteemaythink
fit.131ItmustconsistoftheLeaderoftheOppositionasChairmanandfiveothermembersof
theLegislatureandbeestablishedatthecommencementofeachparliamentarysession.For
anumberofyearstheHonFloydSeymour,asleaderofthePDM,hasbeentheChairman.Its
rolewastwo‐fold.First,itwastoexaminethefinancialperformanceoftheGovernment,in
themainbyexaminationofitsannualfinancialstatementslaidbeforetheLegislatureandby
questioning those responsible for them. Secondly, it was to report on its work to the
Legislature,makingrecommendationswherenecessaryforimprovement. Itthusformeda
vital part of the financial accountabilitymechanismof theGovernment, as Cynthia Travis,
whenChiefAuditor,observedinherannualAuditReportstotheLegislaturefor2004‐2006.
Yet, as she reported in the second of those Reports, submitted to the Legislature in
November 2007, therewas a huge back‐log, going back to 2003‐2004, of annual financial
statements and audit reports that the Committee had not examined, and it had not
submittedanyreportstothelegislatureforanumberofyears.
2.59TheCommitteeappearstohavemettwiceinDecember2007.Perhapsstungbythe
ChiefAuditor’scriticisms,oneofthemeetingswastoconsidertheGovernment’sFinancial
131StandingOrder4
74
Statementsfor2005‐2006.132 However, itdidnotproduceareporttotheHouseonthose
accounts‐thistimeseeminglyforwantofaChiefAuditorinpostwithwhomitcouldconfer,
and ithasnotdoneso since. Secondly, itmet todiscuss theTouristBoard’saccounts for
2005‐2006, amatter that Imentiononlybywayof examplebecause theCommissionhas
seen a transcript of the proceedings, chaired by the Hon Floyd Seymour. The transcript
indicatesanappropriatelyvigorousandthoroughexaminationoftheDirectoroftheTourist
Board, Mr Lindsey Musgrove and its accountant, Mrs Pauline Saunders, revealing a very
unsatisfactory picture of the Board’s system, or lack of it, of financial management and
control.YettheCommitteedoesnotappeartohavereportedtotheHouseonthematter;
nor, from theCommission’s examinationof theHonWayneGarland, theChairmanof the
Board,MrMusgroveandMrRalphHiggs,DirectorofTourism(Marketing),133doestheBoard
appeartohavetakenanyconcertedstepstoputmattersright.AswillappearinChapter4
inrelationtotheHonMichaelMisick’sdealingswiththeTouristBoard,whichwaswithinhis
portfolioofministerial responsibilities,whathadpassed for theBoard’smanagement and
controlofitsfinancialaffairshasdeterioratedfrombadtochaotic.
2.60In2008thePublicAccountsCommitteeappearstohavemetonlytwice,onceinlate
June and once in mid July 2008, but at neither did they consider the Government’s
Accounts,134whetherthosefortheyears2004–2006,orfor2007(which,seemingly,have
yet to be completed and presented to the House). The last scheduled meeting of the
Committee,whichwasfortheendofJuly2008,likeothersearlierintheyear,wascancelled.
2.61 The Expenditure Committee ‐ This Committee’s statutory function is to examine
expenditureofsumsgrantedbytheLegislatureorotherwiseallocatedtoMinistriestomeet
public expenditure. It consists of six Members of the Legislature, all appointed at the
commencement of each Parliamentary Session, and its Chairman is elected by the
Committee.135 It is requiredbyStandingOrders tomeetat leastoncepermonth inevery
Session.TheroleoftheCommitteewasdescribedbyitsChairman,theHonWendalSwann,
in the course of a meeting on 13th November 2007, as being to review the accounts of
Ministries,includingtheMinistryofFinance.Headdedthatitsmandatewastoinvestigate
132Seepara1.38above133Transcripts,Day1913426thJune2008:CARIFTAGamesandFire&RescueServices;17thJuly2008:DisasterManagement135StandingOrder57.1
75
and report to the House of Assembly areas for improvement of the management of
governmentexpenditurewithaviewtosecuringvalueformoney.136Itdoesnotappearto
havemetveryoftenoverthelastfiveyears.NotwithstandingrequestsbytheCommission
toMrsRuthBlackman,theClerktotheHouseofAssemblyandtoMrDudleyBeen,nowthe
ActingClerk,forinformationontheroleandactivitiesoftheCommittee,andforsightofany
ofitsreportstotheHouseofAssembly,verylittlehasbeenproduced‐onlytheminutesof
sixmeetingsoverathreeyearperiod,threein2004,twoin2006andonein2007.137There
is, therefore, no information before the Commission that the Committee has turned its
attention,forexample,totheescalatingcostofthetwonewhospitalsunderconstructionby
JohnstonInternational,ortothedisastrouslyexpensivecontractenteredintowithSouthern
HealthNetwork(SHN)forreferralofTCIslanderstooverseashealthcareatfavourablerates.
2.62TheAdministrationCommittee‐ThisCommittee’sstatutoryfunctionistomonitorthe
conduct of the business of the Government and to report on the implementation,
administrationanddevelopmentofpoliciesoftheGovernmentineveryMinistry,exceptfor
mattersreferredtotheExpenditureCommittee.138 It isappointed inthesamewayasthe
otherCommitteesatthestartofeachparliamentarysession,andconsistsofeightMembers
of the Legislature, with a Chairman who must be the Leader of the Opposition or his
nominee.TheHonFloydSeymourwasalsotheChairmanofthisCommittee.Inthecourseof
ameetingoftheCommitteeon27thMarch2008,hedescribedtheCommittee’smandateas
to investigate andmonitor the conduct of theGovernment’s business, to review areas of
concernandtoreportonbothtotheHouseofAssembly.TheresponseofMrDudleyBeen,
torequestsfromtheCommissionabouttheroleandworkofthisCommitteewassimplyto
producefourmeetingagendasandonesetofminutes.Threeoftheagendaswerefor2005,
andonewasfor2006;thesinglesetofminuteswasforameetinginMarch2008.Nothing
wasproducedtotheCommissiontoshowanyothermeetingoractivityofthisCommittee,in
particularpresentationofreportstotheHouseofAssembly.
2.63Thus,suchprotectionastheStandingCommitteesweredesignedbytheConstitution
togivetheTCIslandershasnotbeenprovidedformanyyears.Itisanadditionalaffrontthat
136Minutesofmeetingon13thNovember2007137MrBeenisnewtohispostandisnottobeblamedforwhathasgonebefore,138StandingOrder57.2
76
such records as there are, are unavailablewhen a public body appointed in their interest
comesknockingonthedooraskingtoseethem.
2.64InconclusiononthisandtheotherissuesconsideredinthisChapter,theinformation
beforemeindicatesthatthosewhohadresponsibilityandwerebestplacedtoestablishand
maintainsystemstosecuregoodandhonestgovernancefortheTCIIslanders,theleadersof
theGovernmentandtheirfellowMembersoftheLegislature,havefallenfarshortoftheir
responsibility. Theywerealsobestplacedtosetanexampleandtopreventorreducethe
scopeforcorruptioninpubliclife,simplyby:1)followingbasictenetsofhonesty;2)avoiding
conflicts of interest; 3) observing the law as to declarations of financial interests, and 4)
effectively using the constitutional tools provided to secure good governance. The clear
signsarethattheychosenottodoso.
__________________
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3‐CONTEXTFORPOSSIBLECORRUPTION
Abuseofofficeandpoliticalandelectoralprocess
3.1 Elections in theTCI are governedby theElectionsOrdinance1998, a revision largely
reproducing earlier legislation. As emphasised by a number of legal representatives for
Ministers at the Commission’s oral proceedings, it does not deal with election campaign
financing.Thatistosay,itdoesnotlimitorcontrolthesourcesoffundingfororamountof
lawful expenseson elections,which it defines in predictable forms,139 as long as they are
incurredingoodfaithatorconcerninganelection.140Itdoes,however,insections68and69
oftheOrdinance,makeitanoffencetobribeortreatvoters.Section68(1),initsdefinitions
ofvariousformsofelectionbribery,couldnotbeinbroaderterms.Bywayofexample,Iset
outthefirstandmostgeneralofthesevenformsspecified:
(a)everypersonwho,directlyorindirectlybyhimselforbyanyotherpersononhis behalf, gives, lends, or agrees to give or lend, or offers, promises, orpromises to procure, or to endeavour to procure any money or valuableconsiderationtoorforanyvoter,ortoorforanypersononbehalfofanyvoter,ortoorforanyotherpersoninordertoinduceanyvotertovoteorrefrainfromvoting,orcorruptlydoesanysuchact...onaccountofanyvoterhavingvotedorrefrainedfromvotingatanyelection;
Treatingisequallybroadlydefinedinsection69:
Thefollowingpersonsshallbedeemedguiltyoftreating...–
(a) every personwho corruptly, by himself or by any other person, either before,duringorafteranelection,directlyorindirectly,givesorprovidesorpays,whollyorin part, the expenses of giving or providing any food, drink, entertainment, orprovisiontoorforanypersonforthepurposeofcorruptlyinfluencingthatpersonoranyotherperson,tovoteortorefrainfromvotingatsuchelection,oronaccountofsuch person or any other person having voted or refrained from voting at suchelection;
(b)everyvoterwhocorruptlyacceptsortakesanysuchfood,drink,entertainmentorprovision.
3.2 Thetrouble is that thereappears tohavebeena long‐standingtraditionofwideand
opendisregardofthoseprovisions,mostblatantlyintheFebruary2007electionwhenvast
139s68(1)140s68(2)
78
amountsofmoneywerespentbyoronbehalfofPNPcandidates, incash,procurementof
ghostjobsontheGovernmentpayrollandentertainment.Thereappeartohavebeenlittle
or no official system or resources to monitor or police corrupt conduct on such a scale.
Even if there had been, and it had led to prosecution, themaximumpenaltywould have
beenmodestinfinancialorcustodialterms,$5,000oroneyear’simprisonmentorboth.
3.3 IhavealreadyreferredtoevidencebeforetheCommission, includingthatoftheHon
MichaelMisick,theHonFloydHallandtheHonMcAllisterHanchell141–alsotothefirst‐hand
evidenceoftheHonMichaelMisick’swife,MsMcCoy‐Misick.142Shesaidthatshehadbeen
onthecampaigntrailwithhimjustbeforetheelectionandthathehadbeenverygenerous
onthecampaign. Shespokeofhimgivingahundreddollarbillhereandtherewhenthey
werecampaigninginhishomeisland,NorthCaicos.Shealsospokeoforganisingacarnival
for children over Christmas just before the announcement of the election, for which the
Government paid, but thatwhen she sought to repeat it the followingChristmas, he said
thathehadonlydoneitbeforebecauseoftheelection,andwouldnotdoitagain.143
3.4EarlierinthisReport,IhavealsotouchedontherelativesmallnessoftheTCIelectorate
and of individual electoral constituencies, ranging from 190 to 882.144 There is a single
nationalelectoralregisterdividedinto15partscorrespondingwiththe15electoraldistricts.
Aperson is entitled tobe registeredand to voteonly in thedistrict inwhichhenormally
resides,145 a test frequently the subject of uncertainty and dispute in the TCI with many
instancesofpeoplelivingonmorethanoneisland,andconstantmovementbetweenislands
for temporary employment purposes or otherwise. In addition to the widespread
allegations of election abuse in the form of largesse to electors, there are also strong
indications of rigging of individual electoral district rolls, not just in the February 2007
elections,butalsomoregenerally.
3.5AllofthesemattershavebeenrecentlyauthoritativelyandcarefullyconsideredbyaUK
organisation, Electoral Reform International Service (ERIS) in a Report commissioned by
Governor Tauwhare, entitled Turks & Caicos General Elections 9 February 2007 Election
141Seepara2.40above142Seepara2.41above143Transcript,Day14,pp106‐110144GeneralElectionReturns,February2007–190MiddleCaicos,882BlueHills145ElectionsOrdinance,s11.2
79
ObservationReport(theERISReport).TheauthorsoftheReport,were,asitstitleindicatesa
team of persons who observed the election. Their assessment and recommendations,
including early review of the Elections Ordinance, are of a piece with many submissions
madetotheCommission.AnExecutiveSummaryoftheReportbeginsasfollows:
... the elections were technically sound, and run in accordance with theapplicable lawofthe islands. However,anumberofsignificantshortcomingwerefoundintheelectoralprocessandinitslegalframework,whereitdidnotmeetinternationalstandards,someofwhichwereexacerbatedbytheactualElectionLawandthenewconstitution.
3.6AmongtheshortcomingsidentifiedbyERISwere:
1)suffragelimitedtolessthanhalfoftheadultpopulationoftheTCIandthe
needtoconsideranenlargementorpossiblereplacementofBelongershipwith
a more inclusive form of citizenship as the basis for entitlement to vote, a
suggestionalreadymadebyanotherreviewbodyin2004.146
2)animbalanceinthenumberofregisteredvotersbetweendifferentelectoral
districtsthatmayaffectthequalityofthevotescast;147
3)potentialforriggingofelectoralconstituencyrolls,orasERISput it,[v]oter
registrationproceduresthatunderminethecredibility,finalityandaccuracyof
voter registers,148 including: i) the short deadlines providedby theOrdinance
forthepreparationofelectors’listsandproceduresforclaimsandobjectionto
andpublicationoftheRegisterofElectors;149andii)uncertaintyastotheexact
criteria for residency in an electoral district qualifying for inclusion on the
districtvoterregisterandastoprovisionofavoter’squalifyingaddress;150
4) theneed toprohibitpoliticalparties fromplacing tents at theentrance to
pollingstationsfortheissuetosupportersofrefreshment(presentlylefttoan
instructionbytheGovernor);
1462004ImmigrationReview,Seebelowparas3.70–3.75147ExecutiveSummary,pi148ibid,pi,providedforins49(1)oftheElectionsOrdinance149ibid,piii150ibid,piii
80
5) the need to dispense with [s]erially numbered ballots rendering them
potentiallytraceable,compromisingsecrecyandconfidenceofthevote;and
6) [t]he legal exclusion of domestic and international observers from polling
stations.151
3.7 ThemainconcernofERISwas lackof legislativeprovisionforcampaignfinancingand
thepotentialforbriberyandotherelectoralmalpracticesinthepresentsystem.
The biggest concern during the process of campaigning was the insufficientlegislationdealingwithcampaignfinancing.Currentlythereisnorequirementtopublishcampaignaccounts,noristhereanylimitonspendingimposed.Thiscanbeconsideredaseriousbreachofgoodpractice,andisnotinlinewithUKor internationalstandards,whichimposestrictrulingsoncampaignfinancetoguard against bribery and corruption. Furthermore, no safe‐guards exist toprevent use ofGovernment resources as part of an election campaign,whichgivestheincumbentpartyanunfairadvantageoverOppositionparties.
Whilst it is accepted that political parties and candidates cannot conductcampaignswithoutfunds,anditisinternationallyacceptedthatdonationsarealegitimatesourceofcampaignfunding,thereisariskthatsuchfinancemaycomewithstringsattachedtothecandidateorthedonor.Inordertopreventlegitimate campaign funding transgressing the line and becoming a non‐legitimatemethodof influence, legalsafeguardsmustexist. AlthoughtheTCIElections Ordinance has specific rulings and definitions on what constitutescorruptionandbribery,thereseemstobenowaytoenforceorauditcampaignexpenditure,specificallytoprotectagainstbriberyortreating.Thehighlevelsofcampaign spending, and the advantage that a more wealthy party has overtheir opposition are apparent and of concern. It is questionable whether thecurrent legislation in the TCI meets the requirements as set out in the UNHumanRightsConvention,generalcommentnumber25whichstates:
‘Reasonablelimitationsofcampaignexpendituremaybejustifiedwhenthisisnecessarytoensurefreechoiceofvotersisnotunderminedorthedemocraticprocess distorted by the disproportionate expenditure on behalf of anycandidateorparty.’152
3.8ERISaccordinglyrecommendedlegislationtoregulatepartycampaignfinance,eitherby
prohibitingtheuseofpublicfundsandresourcesforelectioncampaigningortomakethem
equallyavailabletoallcandidates.153Theyalsorecommendedlegislationtorequirepolitical
151ibid,pi;providedforins49(1)oftheElectionsOrdinance152ibid,pp10‐11153ibid,pv
81
partiestopublishtheir incomeandexpenditureonelectioncampaigns.154 Itseemstome,
particularlyinthelightofallthatIheardaboutPNPfundingduringtheoralproceedings,155
as to its substantial amounts, its diverse and secret sources, and how it was spent, that
reformofthelawisnownecessary.AsERISreported:156
There is great scope for change in the Ordinance governing elections. Both toreducetheunnecessaryamountofadministrationandbureaucracy,andalsotointroducedemocraticsafeguards,includingpersonalandfinancialaccountability,which will bring the election legislation in line with UK and internationalstandards.
Thisis,asinotherareasofTCIpubliclife,notthefirsttimethatsuchrecommendationshave
beenmade.On7thAugust2003,ateamofUKElectionObserverswereinvitedtoassessthat
year’s two by‐elections. Their report, submitted in October 2003, contained 26
recommendations for electoral law reform, only two of which were acted upon. In this
instance,Iunderstandthatthedelaywasattributabletoashortageofdraftsmen.However,
bythetimeoftheERISreport,thedraftingwasreportedtobecomplete.SofarasIknow,
the changes first recommended in 2003, and re‐affirmed in 2007 by ERIS, still await
implementation.
CrownLand
3.9ToanewcomertolandtenureintheTCI,itisstartlingtolearnthat,whileCrownLandis
themostvaluableresourceofitspeople,thereisnoconstitutionalor,sofarasisrelevantto
issuesthrownupbythisInquiry,otherstatutoryprovisiondefiningtheincidentsofitsstatus
or providing any requirements or safeguards as to itsmanagement or disposal. The only
constitutionalprovision is in section94of the2006Constitution,which states thatCrown
Landmay be disposed of by the Governoror any person authorisedby him inwriting.157
Thatprovisionhasproved tobe readily susceptible toministerial abuse, andhas failed to
provideaneffectivemeansofensuringeffectivestewardshipoftheTerritory’smostvaluable
resource.CrownLand,asIanFuller,theTCIChiefAuditorandauthorofaSpecialReportfor
154ibid,pv155Seepara2.37above156ibid,p17157See,intermsofsimilargenerality,clauses16to19oftheBillpresentlyindraftfortheproposedCrownLandsOrdinance,discussedinparas3.51‐3.52below.
82
theTCIGovernment,entitledTheAdministrationofCrownLand,in2004(theFullerReport),
putit,is:158
... an extremely valuablebut finitepublic asset. It is also, a crown resource, aresourcethatproperlybelongstothepublic,andoverwhichgovernmentshouldbe exercising a stewardship role. Stewardship implies an appropriate level oftransparencyofactionandaccountabilitytothepublic....
3.10SuchprovisionasthereisfordisposalofCrownLandistobefoundintheCrownLand
Policy.ThisPolicywasoriginallydevisedinthe1980swiththeaimofempoweringBelongers
to play an active role in the economic and social development of the Islands. More
particularly,itsaimwastoensurethatallBelongerswouldhaveaffordableaccesstoCrown
Land for their needs, by permitting them topurchase it at a substantial discount from its
marketvaluation. Thereappear tohavebeenanumberofchanges in thePolicyover the
years,somewritten,somenot,somepublishedsomenot.159Ithasneverhadanystatutory
basis,anditslegalstatusisnotclear.
3.11 Disposals of Crown Land for residential use were initially in the grant only of the
ExecutiveCouncilbymeansofaconditionalpurchase leaseforthreeyears. Thecondition
requiredcompletionoftheproposedhomewithinthatperiodor,ifextendedbytheCouncil,
afurthertwoyears,whentheleasecouldbeconvertedintoafreehold.Theinitialrentwas
tobe10%ofthediscountedfreeholdpurchaseprice,andthefreeholdpurchasepricewas
setatonly25%ofthemarketvaluationatthetimeofsigningofthelease–thus,anover‐all
discountofpotentiallywellover75%.However,afurtherconditionoftheleasewasthatthe
Belongercouldnotdisposeofthelandtoanon‐Belongerwithin10yearswithoutrepayment
totheGovernmentofthediscountedsum.
3.12 Following thePNP’selectionvictory in2003, thenewAdministration,with theHon
MichaelMisick,asChiefMinister,andtheHonMcAllisterHanchell,asMinister forNatural
Resources, reaffirmed the Policy. But, as to allocation of Crown Land for residential use,
theymade changes to givemorepower to individualMinisters in theprocess.Allocations
and extensions of conditional purchase leases henceforth required approval only by an
individual Minister, not the Executive Council, or the Cabinet as it was to become. The
158Fuller,Ian(2004),TCICrownLand–ReviewofAdministration–InterimReport,ExecutiveSummary,p1159Foradiscussionofthepoliciesandtheirvariousmanifestations,Seeibid,pp11–16.
83
enormousscopeforcorruptionentailedintheassumptionbyMinistersofsuchpowerwas
immediatelyrecognisedandrobustlyaddressedintheFullerReport.160
3.13AstodisposalofCrownLandforcommercialuse,thePolicyhadbeenlessconsistent,
savethatittoohadbeenintendedtoempowerBelongerswhomightotherwisebedeterred
or disabled by the costs of development. The Policy took different and sometimes
overlapping forms according to whether the land for disposal was small or large‐scale
commercialdevelopment.ThenewPNPAdministrationintroducedchangestothePolicyin
March2004, shortlyafterassumingpower. In future:1)grantswere tobe subject to the
approval of the Executive Council; 2) no grant could be made unless a Belonger had a
minimumof51%inthegranteeentity;and3)aBelongerwastopaynomorethan50%of
theopenmarketvalueofthelandinProvidencialesandnomorethan25%ofthevaluein
theotherIslands.Conditions2)and3)weretogiverisetoanewspeciesofempowerment
of,orofthepossibilityofabuseby,Belongersintheformofsubstantialunearnedrewards
fromflippingand/orfrontingandotherwisebyvirtueonlyoftheirstatus.
3.14 ThePolicydidnot limitthenumberof leaseholdgrantsofCrownLandper individual
Belonger, whether for residential or commercial use. Nor did it identify any social or
economic criteria for the grant, for example, equality of opportunity, or any over‐all
objectivesas towhatproportionof thepopulationshouldbeaffordedsuchopportunities.
Whatevertheoriginalwell‐intendedpurposesofthePolicy,ithadnotby2004,andmaynot
yethave–asagenerality‐resultedingrantsoflandtoTCIBelongerfamiliestomeettheir
ownneeds. On the contrary, asFullernoted,161 thePolicymadeno specific provision for
equitabledistributionofCrownLand.ManyBelongersacquiredseveralplots,someofwhich
they quickly disposed of for profit to others, including foreign developers. And, as he
added,162 whatever the wording of and intentions for the Policy, it was, in any event,
overreachedbyleavingtoasingleMinistertheallocationofresidentialplotsforthegrantof
conditionalpurchaseleasesandtotheExecutiveCounciltheallocationofcommercialleases.
3.15TheevidencebeforetheCommissionindicatesthatsuchoverreachingofthePolicyhas
continueduptoandsinceitsappointment.Thereismuchanecdotalinformationaboutitin
160ibid,pp17‐20161ibid,p4162ibid
84
the written submissions I have received of personal interference by the Hon McAllister
Hanchell, theMinisterofNaturalResourcesandotherMinisters intheallocationofCrown
Landandastorelatedmatters,includingvaluationandplanningpermission.Itwasalsoput
beyonddoubtbyrecordsproducedbythePermanentSecretaryof theMinistryofNatural
Resources in response to awritten enquiry from the Commission following oral evidence
fromtheMinister.Inhisevidence,163hegaveanaccountofthesystem,which,accordingto
him, was operated by his Department for allocation. He said that there was a review
process, operated by a group of staff workers, who considered on a daily basis
representations of applicants for the grant of Crown Land. He said that that the group
consisted of the Permanent Secretary, the Commissioner of Lands, the Deputy
CommissionerofLands,theAssistantCommissionerofLandsand,sometimes,alsohimself.
He emphasised that normally he only came into the process very late in the day when
decisions as to allocation had been made and letters to successful applicants had been
preparedforhimtosign.Hesignedthem,hesaid,mechanically.Hisevidencewasthatno
minutes weremade of suchmeetings and that the only record of them consisted of the
actualrecommendations.
3.16TheCommission’swrittenenquirytothePermanentSecretaryaboutmembershipof
thereviewgroupanditsmeetingsasdescribedbytheMinisterelicitedthefollowingwritten
replyfromheron31stJanuary2009,makingplainthattherewasnosuchreviewgroupand
nosuchprocess,andattachingdocumentaryexamples fromtheMinistry’s recordsofhow
allocationswereinfactmade:
... In regard toSirRobin’s inquiry re the ‘reviewgroup’,no sucharrangementexistsintheMinistryofNaturalResources.
Since 2006, once Cabinet approves a subdivision, the procedure forallocatinglandhasbeenhandledinoneofthreeways:
i. On instructions from theMinister of Natural Resources, HonMcAllisterHanchell, primarily to me, but also to the Commissioner and DeputyCommissionerofLands,[t]hiswouldeitherbeverballyorintheformofane‐mail–...
ii. Instructions and requests from other Ministers of Government andElectedmembers.Thiswouldbeeitherverballyorinwriting.Thisexercise
163Transcript,Day9,pp28‐32
85
is more prevalent when a subdivision is created in their respectiveconstituencies‐...
iii. Finally, the LandCommissionersor Iwould compilenamesofpersonswho have continuously called and lodged applications with theMinistry.ThesenameswouldbegiventotheMinisterforhisapproval...
Pursuanttoeitheroneoftheabovemethods,LandCommissionerswoulddraftaprovisional letter of offer of a Conditional Purchase Lease for the Minister’ssignature. It isat this stage that thepersonpreparing the letterwouldensurethat the applicant is in compliance with the Crown Land Policy or a ‘reviewprocess’occurs(i.e.age,Belongership,numberofparcelscurrentlyinpossession).This letterprimarily commitsaparticular survey lot to theapplicant, butomitsspecificdetailsoftheparcel.
Followingthesurvey,registrationandvaluationofthesubdivision,afinal letterofoffer...isissuedtotherecipient.
Regrettablymuch of the instructions are informal and not systematically filed.Therefore[sic], requirestimetosearchemailsandforstaff tosearchtheir files.In this regard, theattached instructionsbynomeans representall subdivisionsover the past two years. However, I believe it demonstrates the methodsoutlinedabove.
...
3.17AttachedtothePermanentSecretary’sletterwere,first,severale‐mailsfromtheHon
McAllisterHanchell, inhis capacityasMinister forNaturalResources, including,bywayof
example:1)instructionstohertoallocatealargenumberoflotsinWestCaicos,ineachcase
identifying the lot number and the person towhom itwas to be allotted, including, as it
happens,abrotheroftheHonMichaelMisick,MarvinMisick;2)advicetoherofthegrant
by Cabinet of 16 lots in another part ofWest Caicos in an effort early revenue (sic), and
askingforthelettersforhissignaturetobereadythefollowingmorning.Thelistincluded
Chal Misick, another brother of the Hon Michael Misick, and Olincia Missick, the Hon
MichaelMisick’spersonalassistant.
3.18AlsoattachedtothePermanentSecretary’sletterwere:1)ane‐mailin2007fromthe
Hon Floyd Hall, instructing her to issue 22 plots of land on West Caicos to five named
companies and one individual. The instruction readsBelow is the list of Companieswith
attachedshareholdersthatIwouldliketohavethefollowingparcelsonWestCaicosissued
to; 2) letters in late 2007 and early 2008 from the Hon Lillian Boyce putting forward a
numberofnamesofpersons forgrantof land inFiveCays;3) letters fromtheHonLillian
86
Boyce listing persons who need relocation from the low land in Five Cays, including her
brother, Earlson Robinson; and 4) an e‐mail from the Hon Royal Robinson, Member for
NorthCaicosWestandnowDeputyPremier,listinganumberofpeoplewhoshouldbenefit
from...12threeacrecommerciallotsinKew,NorthCaicos.
3.19 The final attachment to the Permanent Secretary’s letter contained, by way of
example,alonglistofnamessubmittedbyhertotheHonMcAllisterHanchellofpeoplewho
hadcontinuallycalledand lodgedapplications,accompaniedbye‐mails fromhimselecting
thosetowhomlandshouldbegranted.
3.20 In short, the information provided by the Hon McAllister Hanchell’s Department
showednosignof thedepartmental reviewprocess followedbyhismechanisticsigningof
lettersthathehaddescribedinhisevidencetotheCommission.
3.21 Hands‐on ministerial involvement with Crown Land extended to its valuation for
disposal,ofwhichthereareexamples inChapter4ofthisReport. Thesameistrue inthe
contextofplanningpermission,examplesofwhicharealsotobefoundinChapter4.
3.22Perhapsthenatureanddangersofministerialinvolvement,asithasbeenpractisedin
theTCIforthelastfewyears, isbestsummedupinthefollowingthoughtfulandobjective
observationsofMrArielMisickQCinhisclosingsubmissionsonbehalfoftheHonMcAllister
Hanchell:164
...theallocationofCrownland.ThisofcourseisanareainwhichMrHanchellhas to accept responsibility becausehewas theminister of land. Muchof themovement inCrown landtookplaceunderhiswatch. I thinkhe ...doesacceptthat ... thewholesystemforCrownlandallocationanddisposition is inneedofreform. He has also conceded that himself and otherministers have played adirectroleintheprocessofdistribution.Itisclearlynotappropriateforministerstobeinvolvedatthatlevelandtheyreallyoughttoconfinethemselvestomakingpolicy. ... The lastwordsaremysubmission,but certainlyhis stance is thatheaccepts that the ... system is inneedof reformandheaccepts that inan idealworld,ministersoughtnottobeinvolvedintheallocationanddistribution.
...
Heseekstoexplainitbythefactthatthereisatremendousdemandonhimself,hisCabinetcolleaguesandotherelectedmemberstogetinvolvedintheprocessinthatMembersareeffectivelyusedasmessengersbetweenapplicantsandthe
164Transcript,Day21,pp179‐181
87
PermanentSecretaryandotherswhoareinvolvedintheadministrationofCrownland....[Hesays]...thathehasneverreceivedoraskedforanykindoffinancialrewardforhisinvolvementinthisprocess,andhisinvolvementhasnotbeenoutof anydesire tobe corrupt or dishonest. ... he ... said ... that the systemas itoperatesleadsormayleadtofavouritism..intheallocation.
3.23Thus,therewereandarestillanumberofwell‐evidencedandacknowledgedflawsin
thisill‐definedPolicyanditsapplication.Alsoforconsiderationarethecomplexitygivento
theprocessbytheinvolvementofamultiplicityofGovernmentdepartments,andthescope
forabuseandprofiteeringat theexpenseof thepublic indissipationof itsmostpriceless
assetforinadequatereturn.Therewasandstillislittleeffectiveco‐ordinationbetweenthe
variousdepartmentsresponsibleforadministrationofthesystemandensuringcompliance
withthetermsof individualgrantsofCrownLand. This includes, inparticular,compliance
witheligibilitycriteria,withconditionsofdevelopmentandofrepaymenttoGovernmentof
undeserveddiscountswherelandwasnotretainedand/ornotdevelopedbytheBelonger.
3.24 It was plain by the time of the Fuller Report in 2004, if not well before, that the
administrationandallocationofCrownLandshouldbegovernedbystatute,notpolicy,and
that it shouldbe administeredby an independentCrown LandCommission, notMinisters
inside or outside of Cabinet.165 Mr Fuller, in his Report, made many and detailed
recommendations to that end, including the removal of Ministers from the process of
granting of land for residential use and marginalising their role in the case of grants for
commercialpurposes.Hisconcernaboutpossibleministerialcorruption,bothinrelationto
pastpossibleabusesbyMinistersintheTaylorAdministration166andthefuturepotentialfor
it,wasexplicit.Amonghismanyrecommendationswerethefollowing:167
3.2Crownlandisanimmenselyvaluablepublicasset;itsstrategicimportancetotheeconomyandstabilityofthecountry,andtheopportunitiesforimproperadvancement that poor or corrupt management offer, mean that itsmanagementshouldbegovernedbyspecificlegislation(andnotofteninformalpolicyandregulatorystatements).
...
3.12 ... *Specific legislation (as opposed to various statements of uncertainlegal standing) is needed concerning land allocation and usage; *Specificregulationsshouldbeinplacetopreventthosewithdecision‐makingauthority
165Forapowerfulcritiqueofthesystem,Seeopcit158,ExecutiveSummary,pp1‐10166ibid,Seepp9,17and18167ibid,pp17‐19
88
beingabletobenefitdirectlyfromtheirdecisions; ....*Clearaccountability isneeded through the publication of details of all beneficiaries, and moreimportantly,ofalldiscountsgiven,tothoseallocatedsuchland;*Detailsmustbe made available of all transactions involvingMinisters, or companies withwhich Ministers have an involvement, in a publicly available document, andreviewofsuchtransactionsshouldbeundertakenbyanindependentbodysuchasasub‐committeeoftheLegislativeCouncil;...
3.25Unfortunately,theFullerReportgaverisetolittleofpracticalbenefittothepeopleof
the TCI over the next four years. I say that, in the main, because of the continuing
vulnerabilityofthesystemtoMinisterialcorruptionandotherabuses.Hisrecommendation
fora formal inquiry into transactionsofCrownLand involvingMinistersand/or their close
family members was ignored by the Hon Michael Misick, then Chief Minister, and his
Ministerial colleagues. Indeed, a letter emanating from his Office expressed strong
disagreementwithmanyof theChiefAuditor’s recommendations, themainburdenofhis
argumentbeingthatmattersofpolicyanddecision‐makingshouldremainwiththeelected
Governmentratherthanbedevolvedtoindependentbodies.
3.26TherewerealsobroadconcernsexpressedintheFullerReportaboutthefailureofthe
Crown Land Policy to enable, as originally intended,all Belongers to advance themselves,
and of the Government to introduce a properly conceived land use and planning policy,
manyofwhichgaverisetosimilargovernmentalresponse.
3.27 However,theFullerReportwasfollowedbyanumberofotherauthoritativeStudies
andReports,allinmuchthesameconcernedandcriticalvein,andallmeetingwithasimilar
lack of response or disregard from the Misick Administration. The first was an interim
comprehensivestudyonCrownLandManagementbyKevinBarthelinassociationwithTerra
InstituteLtd,astudysponsoredbytheTCIGovernmentin2004‐2005,andfundedbytheUK
Department for International Development (DFID). This led in the first instance to an
Interim Report published in May 2005 (the 2005 Barthel Report), making a number of
recommendations,manyofapiecewiththosecontainedintheFullerReport.168
3.28ThefirstandprincipalrecommendationoftheBarthelReportwasforthepreparation
of a new and modernised Crown Land Policy. Other recommendations of particular
relevance to the Commission’s Report were for: preventing Belongers illicitly transferring
168TerraInstitute(2005),CrownLandPolicyandManagementfortheTurks&CaicosIslands,pp6–15,parasA1.7–1.32
89
their conditional purchase lease discounts to non‐Belongers;169 limiting empowerment of
BelongersbytheacquisitionofCrownLandtoonetransactiononly;170requiringpublication
of information on Crown Land allocations to make the Policy and process open and
accountable;171replacingthesystemofregulationbynon‐statutorypolicybyenactingCrown
LandLegislationandRegulations;172preparationofaCrownLandApplication,Allocationand
Management ProceduresManual;173 establishment of an effective and responsible Crown
Land Department as a statutory body for land administration;174 rationalisation of Crown
LandLeaseapplicationandapprovalprocesses;175establishmentofaCrownLandAdvisory
PaneltoreviewandadviseonallocationapprovalsandaCrownLandsAppealsTribunal;176
and creation of readily accessible land information systems.177 The first of those
recommendations,preventionofillicittransferofdiscountstonon‐Belongers,isparticularly
relevant to the Commission’s work. It lies at the heart of most of the possibly corrupt
transactionsmentionedinChapter4ofthisReport.Barthelstated:
1.11 ... One of the major concerns of the current Crown Land policy is thatdiscounts given to Belongers on Conditional Purchase Leases for large‐scalecommercialdevelopmentareeventuallytransferredtoNon‐Belongers.Itisclearthatunderthecurrentpolicy,nodiscountsshouldbegiventoforeignersasthey... are not eligible to receiveCrown Land. The issue is thepassingonof thesediscounts to foreignowners,apracticewhich is simplyprohibited in the formerCrownLandPolicyandnowrequires that theBelongerpay thediscountback iftransfer is made to a non‐Belonger. This process can only be prevented withspecificlegislation,enforcementofthelegislationandestablishmentofasystemtomonitorthecompliancewiththelegislation.
1.12CrownLandpolicyshouldberevisedsothatnodiscountsaregivenforlargescale development on commercial land. All allocations for large‐scalecommercial development on Crown Land should be done through long‐termleases. Previousallocations ...anddiscountsgiven ... shouldbemonitoredandauditedovertheyearsbytheCrownLandUnitsoastoavoidthetransferofthediscounttonon‐Belongers(“fronting”)...
3.29Inpartasaresultofthe2005BarthelReport’srecommendations,andpossiblyalsothe
earlierFullerReport,theTCIGovernment,on2ndNovember2005, approvedanewCrown
169ibid,pp7–8,paraA1.11170ibid,p8,paraA1.13171ibid,p9,paraA1.16172ibid,p10,paras1.21–1.22173ibid,p11.para1.23174ibid,p11,paras1.24and1.25175ibid,p13,para1.28–1.29176ibid,pp12–13,paras1.26–1.27177ibid,pp14–15,para1.32
90
Land Policy, setting out 21 key principles and proposals.178 The avowed purpose of the
Policyinthefirstofthosestatementswasthat:
TCIGwillnotactivelyseektosellofflargeareasofCrownLand,butitreservestherighttodoso,ifdeemednecessary.TheproceedsofsuchsaleswillbepaidintotheGovernmentReservesFundoruseddirectlyforamajorspecificdevelopmentproject.
Infact,ashasbeenwelldocumentedandpubliclyacknowledged,theTCIGovernmenthas
sincebecome increasinglydependentontheproceedsof largedisposalsofCrownLandto
fundrecurrentexpenditure, including,mostrecently,tomeet itsmonthlypayrollbillwhen
shortoffunds.
3.30Inthebriefestandsomewhatselectiveoutline,thenewPolicyStatementprovidedfor
transferofCrownLandtoBelongersforresidentialorcommercialpurposesatmarketprice,
subject to non‐transferable discounts. Thiswas to apply, initially, to Conditional Purchase
Leases for specified periods appropriate to the size and nature of each proposed
development.Themaximumdiscountforpurchaseofresidentiallandwastobe50%ofthe
fullopenmarketprice,andavailableonly in respectofonepropertyper islandandnot in
respectofanyotherpropertyonanotherislandatthesametime.Themaximumdiscounton
CrownLandrequiredforcommercialuse,whichwastobelimitedtoafirstpurchaseonlyof
upto10acres,wasagain50%,exceptonProvidencialeswhereitwaslimitedto25%.And,
forlargedevelopments,forexample,amajortourismproject,twoormoreBelongerswere
tobepermitted tocombine their10acreentitlements toenableBelongerparticipation in
theproject. In theeventof the landbeing soldwithin fiveyears, thediscountwouldbe
repayableinfull;asalemorethanfiveyearsafteracquisition,butbeforeten,wouldrequire
repaymentofhalfthediscount.InformationonCrownLandallocationwastobepublished
in theGazette. CrownLand LegislationandRegulationswere tobe introduced. ACrown
LandDepartmentwas tobeestablishedwithin theMinistryofNaturalResources,and the
systemofapplicationforandapprovalofgrantsofCrownLandwastoberationalisedand
basedonuniform,rationalandobjectivecriteria.
3.31 Inmid2007,theTCIGovernmentrequestedTerra Institute,comprisingateamagain
led by Kevin Barthel, to assist the Ministry of Natural Resources to implement the new
178TerraInstitute(2008),FinalReport‐ConsultancyfortheImplementationoftheTurksandCaicosCrownLandPolicy,pp90–98,para1.5
91
Policy. The ensuing work involved the establishment of a Crown LandManagement Unit
withintheMinistry,thepreparationofaCrownLandProceduresManualandofmaterialfor
adraftCrownLandOrdinance.TheTCIGovernmentalsoembarkedonworkonthedesign,
development and installation of an integratedmanagement information system, butwith
anotherbody.
3.32ByFebruary2008TerraInstituteLtdproducedaFinalReportinwhichithadfashioned
itsproposalstogiveeffecttotheNovember2005CrownLandPolicy,TheReport,whichwas
describedasthatoftheConsultancyfortheImplementationoftheTurksandCaicosCrown
LandPolicy(the2008TerraInstituteReport),comprised:1)proposalsforestablishmentofa
CrownLandsDepartment;1792)aManualofCrownLandAdministrationandManagement
Procedure;1803) adiscussionof Legal IssuesArising from theCrownLandPolicy;181 and4)
DraftingInstructionsfortheProposedCrownLandOrdinance.182
3.33 The proposedManual andDrafting Instructions for theOrdinance are of particular
importancetotheCommission’sReport.TheManualsetsoutthelaw,policyandprocedures
foradministrationandmanagementofCrownLandintheTCI,and isdesignedtoguide, in
accordancewiththelawandtheNovember2005Policy,theday‐to‐dayworkofthestaffof
theCrownLandsDepartment(alreadyestablishedin2006asaseparatedepartmentofthe
Ministry ofNatural Resources). It should be noted that the proposedOrdinancewas not
intended to replace the Policy, but to give effect to it, proposal 14 providing what the
ConsultancydescribedinitsReportas:183
acentralguidingprinciplefortheproposedlegislation,namely‘[t]oensurethatthe current policy of equitable allocation and sustainable use of Crown Land iseffectiveinthelong‐term,andnoteasilymodifiedbyfutureCabinetdecisionsorfuturepoliticalmandates.
3.34Thatproposal,inmyview,isquestionable,merelyframingtheOrdinance’sprovisions
aroundtheCrownLandPolicyoftheday,ratherthanincorporatingintotheproposednew
Ordinance the essential criteria for administration, management and allocation of Crown
Landfordisposal,variableonlybylegislativeamendment.Anotherproposaldescribedas
179ibid,Cap2180ibid,Cap3181ibid,Cap4182ibid183ibid,Cap5,pp94and206
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key,isfineasfarasitgoes,namelythattheCrownLandDepartment,wouldberesponsible
fortheadministrationandmanagementofCrownLand,inparticularitsallocationforlease
or sale, with the Governor retaining responsibility for legal grant at the request of the
Government. As will appear later in this discussion, it is important that the Bill, in the
drafting,excludesanyMinisterialinterferenceintheworkoftheCrownLandDepartmentin
allocating land to persons for lease or sale. The Bill, as presently drawn does not, inmy
view,dothat.184AfurtherandentirelyproperassumptionwasthatdevelopmentofCrown
Land, like that of any other land, requires development permission from the Physical
PlanningBoardpursuanttothePhysicalPlanningOrdinance,185arequirementthatMinisters
sometimes simply ignore or, on occasion, exert pressure to influence, under the present
statutoryregime.186
3.35 The meat of the proposed Manual concerning prevention of corruption and other
abuse in the allocation of Crown Land is in sections 3 and 4.187 As to disposition and
eligibilityfordisposition,section3.3preservesbroadlytheexistingscheme,restrictinggrants
of Crown Land, whether for residential or commercial purposes, to Belongers, usually by
leases for three years. The lease conditions relate mainly to completion of approved
developmentwithinthatperiod,whichwouldqualifythe lesseetoapplyforfreeholdtitle.
PrioritywouldbegivenonanyoneislandtoBelongerswhoownnolandonthatislandand
havenotpreviouslybenefitedfromanyCrownLanddispositionthere.
3.36 As to allocation, section 4 of the Manual introduces an entirely new and closely
controlledschemetobeoperatedbytheCrownLandsDepartmentandinwhichMinisters
would have no involvement. It provides, in order of preference, for four methods of
allocation, in themain to Belongers only, namely: 1) public invitation for applications for
developedland,withselectiontobemade,wheretherearemoreapplicantsthanavailable
parcelsofland,byballotweightedinfavourofthosewhohaveneverbeforereceivedCrown
Land;2)publicoffer for saleby tender,available forboth residentialandcommercialuse,
principally applicable to large residential or commercial developments; 3) public auction,
thoughnotexpected tobemuchused;and4)private treaty, followingpublicnotification,
184Seeparas3.51–3.52below185Seeparas4.183–45.189below186SeesubmissionsofMrArielMisickQConbehalfoftheHonMcAllisterHanchell,TranscriptDay22.187pp46‐77
93
whereCrownLandhasnotbeensoldbyuseofanyoftheotherthreemethods,orinother
exceptionalcases.
3.37 Section5of theproposedManualdealswithdiscountsas setout in theNovember
2005Policy.Itbeginsbyidentifyingtheirpurpose:188
... toassistBelongerstopurchasefreehold land,recognisingthatthe lawofTCIdoes not prevent foreign ownership of landand thatmanynon‐Belongersmayhave an advantage over Belongers with respect to access to capital for landpurchases. In theabsenceof statute, thepolicy levels theplaying field, ... andmakesaccesstolandmorerealisticallyachievableforBelongers.Moreover,thepolicy seeks to empower Belongers through their ownership of land and thecapitalthatisinherentintheownershipofatangibleasset.
Section5alsoclarifieshowthediscountistobecalculatedwherethegranteeisaBelonger‐
owned TCI company, namely it must be 100% owned by Belongers or Belonger‐owned
companiesororganisationsandat least51%of its incomemustbeearned fromactivities
undertaken in theTCI. Thesectionalsoprovidesthatwhereacompanyororganisation is
less than 100%Belonger owned, the discount shall apply to the portion that is Belonger‐
owned,and,ifacompany,islessthan51%Belongerowned,nodiscountwillbegiven.
3.38 Importantly, the proposed Manual also provides in Section 7 for monitoring and
enforcement of Crown Land leases and grants,189 and in Section 9 for appeals to the
CommissionerofCrownLands,andthencetoanAppealsTribunaltobeconstitutedbythe
proposedCrownLandsOrdinance.190
3.39InMarch2008,shortlyafterpresentationofthe2008TerraInstituteReport,MrMartin
Robinson, who had, as the Acting Chief Auditor, temporarily succeeded Cynthia Travis,
presentedaSpecialReporttotheHouseofAssembly(the2008RobinsonSpecialReport),191
whichGovernorTauwharehadspecificallyrequested. MrRobinsonconcludedthattheTCI
Government’s implementationof its 2005Crown LandPolicy over theprevious two years
hadbeenunsatisfactoryand,oncurrentarrangements,couldnotproperlybeimplemented.
Whilst he acknowledged the value of the recommendations of the Terra Institute, he
consideredthatimprovementsinanyaspectofCrownLandmanagementintheintervening
188p161189pp170‐171190p173191Robinson,Martin(2008),SpecialReportontheManagementandDisposalofCrownLand,ReportNoS/08/052/07R
94
periodwerebarelydiscernibleandthatarrangementsmightworsen,particularlyintheshort
term. His criticisms and concerns aremuch the same as, and as forcefully expressed as,
thoseofhispredecessoroverthreeyearsbefore. Heset themoutundertenheadings,192
makingasanearlypointthefailureoftheTCIGovernmenttokeeptoitsfirststatedaimof
the Policy, namely to confine the proceeds of Crown Lands sales to bolstering the
Government Reserves Fund or for major specific development projects. Instead, as Mr
Robinsonrecorded:
Government finances are now heavily dependent on income from Crown Landsales,whichamountedtoover$55million in2006/07and2007/08. There isadanger that this will become the key determinant of future policy on landdisposal.193
3.40Isummarisehistenheadingsofconcern:1)weaktonon‐existentcompliancewiththe
Policy;2)blatantspeculationinCrownLand,particularlyonSaltCaywarrantingindependent
review;194 3) misuse of Belongers’ entitlements to discounts on dispositions of land for
commercialpurposesandan inequality inallocationofcommercial land,with40%ofsuch
salesintheprevioustwoyearsbeingtocompaniesinwhichpresentorpastMembersofthe
House of Assembly and/or their immediate families had a direct interest; 4) failure of
compliance in the system of allocation, which was determined in large part by personal
contacts, pressure and influence; 5) inadequate and deteriorating systems of Crown Land
dataanddatamanagement;6)generallackofopennessandaccountabilityinallocationsof
CrownLand;7)reliancebydecision‐makersonout‐of‐datevaluationsandthepotentialfor
improperpressuresontheTCIValuationOffice;8) lackofanup‐to‐datedevelopmentplan
for the Islands and of any adequate inventory of Crown Land; 9) insufficient provision of
affordable housing on Crown Land; and 10) mounting arrears of rentals because of
inadequatecollectionarrangements.
3.41TheRobinson2008SpecialReport,whichGovernorTauwharesawindraft,causedhim
greatconcern,particularlyastorecentdisposalsoflandinSaltCay.Heexpressedthoseand
widerconcernsinthefollowingpassageinalettertotheForeign&CommonwealthOfficeof
22ndFebruary2008:
192ibid,ExecutiveSummary,pp3‐6193ibid,ExecutiveSummary,p3194See, inparticularastotheSaltCaytransactions,pp3–4and19–20,SectionB2(a)and(b),expressingparticularconcern aboutanumberofrecenttransactions.
95
Thereappeartohavebeenupto12grantsinashortspaceoftime,shortlybeforea significanthoteldevelopment therewasannounced. Mostof those receivinglandarerelatedtooneanother;oneisaformerPS/NaturalResources,anotheristheDirectorofMedicalServicesandbrotherinlawofHonGalmoWilliams.Mostsubsequently sold the land to thedeveloperatanaverageprofitof750%,withindividualsmakingbetween$300–950kprofiteach.Thetotalprofittothem(andthereforelosstoTCIGwasover$4m).Thevaluationusedwhenthelandwassoldtothemdatedfrom2001andhadnotbeensubsequentlyupdated.Fewifanyofthemappeartohavefulfilledthenormaltermsforbeinggrantedfreehold. Thelandsoldtothedeveloperhimselfwasalsovaluedonthebasisof2001valuation.The draft report strongly recommends that there should be a thorough andindependentreviewofthebackgroundandhistoryofthesegrants.ForthefirsttimeIhavebeenhere,weatlasthaveaproperly‐researchedaccountofexactlythe sortofabusewhich is traditionally complainedof, inwhatappears tobeaparticularly blatant example. Whether anyone has actually broken the law isunclear. ... But questions should certainly be asked of why the Minister forNaturalResourcesproposedtheselandgrantstothesepeopleatthistimeandifsowhy.QuestionsshouldalsobeaskedabouthowthesedecisionsgotthroughCabinetwithanoldvaluation.... ItmustbehighlylikelythatanyseriousreviewwillconfirmwhattheActingChiefAuditorhasfound,recommendrapidreformstotheprocedures(albeitthesearemostlyin‐handintheCrownLandBill,buttotheextentthattheyarenot,theyshouldbeadded)andrecommendthatawiderreviewisrequiredtocheckwhethertheproblemsfoundinSaltCayarereplicatedelsewhere(astheyalmostcertainlyare).Thiscouldprovidethebasisforawide‐rangingCommissionofEnquiryintoCrownLanddeals....
3.42 It is clear from those remarks that, at Governor level at least, there had been
mountingconcernforsometimeaboutabusesinrelationtoCrownLandmanagementand
disposals,andthattheUKForeignAffairsCommittee,whichhadyettopublishitsReportin
June2008,wasnotthefirstinthefieldtoconsidertheneedforaCommissionofInquiry.
3.43 The 2008 Robinson Special Report, which had also been submitted as a matter of
routine in draft to the Hon McAllister Hanchell, did not seemingly cause him the same
concern.FollowingdiscussionofthedraftwithMrRobinson,hecommentedonitbyletter
tohim9thMarch.195Intheletter,theMinisteracceptedthatcertainpartsoftheNovember
2005 Crown Land Policy had not been implemented and that certain parts of it needed
revision,which,hestated,theMinistrywouldputinhandfollowingCabinet’sacceptanceof
the 2008 Terra Institute Report. He also acknowledged the need to ensure that the
beneficiariesofCrownLandtransactionswouldbemajorityBelongerownedandcontrolled
entities, especially where discounts were given. However, he challenged that there had
195setoutbyMrRobinsonwithhisresponsesinalettertotheMinisterof14thMarch2008.
96
beenabuseofthePolicyinrespectofsalesoflandonSaltCayforcommercialpurposes,and
urgedMrRobinsontoreconsiderhisrecommendationforafurtherindependentreview.He
also urgedhim to reconsider his initial implication that present andpastMembers of the
House of Assembly had improperly benefited from Crown Land sales. And he strongly
refutedMrRobinson’scriticismsontheissueofvaluation. TheMinistermademanyother
detailed comments, which I do not attempt to summarise, or the response from Mr
Robinsoninwhich,forthemostpart,herobustlystucktomostofhiscriticisms.However,
the following extended comment from the Minister is interesting in the light of the TCI
Government’s delay in implementing the recommendations of the 2008 Terra Institute
ReportandoftheinformationthathasemergedinthisInquiry:
...Iagreethatthepresentsystemforallocationofresidentiallandisnotperfect,anysystemwillhavethesameexperience(personalcontacts,influenceanddirectpre‐applicationand‘applicationchasingpressure’)Thisisattributedinlargepartto the culture of people of the TCI, ‘peoplewant to see the person/persons incharge’ and the access that persons have to elected officials. In this regard Ireiteratethat it is importanttotake intoaccountthecultureandhistoryof thepeopleofTCIwhenassessingissuessurroundingCrownLand.
Foremost, theMinistry takes the position that this reportmight be prematuresince the majority of criteria on which the assessment and the overalleffectivenessandconformationtotheCrownLandPolicywasbasedispremisedon its full implementation and by the full establishment of a Crown Landunit/department.
3.44ThereisonefurtherReporttowhichIshouldrefer,ifonlybriefly.Itisacuriousand
opaquedocument,seeminglypromptedbyMrRobinson’sexpressionofparticularconcern
inhisSpecial2008ReportaboutanumberofrecentdisposalsofCrownLandinSaltCayfor
commercial purposes. It is a report by Deloitte of June 2008 entitled Agreed Upon
Procedures Report on Salt Cay Development, prepared on the instruction of Governor
TauwhareinconsultationwiththePremier,onbehalfofTCIGovernment.
3.45ThetitleandopacityofthisReportreflecttherestrictednatureofDeloitte’stermsof
engagement.InsubmittingtheReporttotheGovernor,itexpresslydisclaimedthatitbore
the status of either an audit or a review in accordance with internationally recognised
standardsoranyassuranceontheTCICrownLandPolicyorthetransactionssurroundingthe
Salt Cay Development. Its declared sole purposewas to carry out certain procedures to
assist the Governor in evaluating the Crown Land transactions surrounding the Salt Cay
97
Development,namelytodocumentanddetailcertaintransactionsinCrownLandonSaltCay
andotherrelatedmattersas listedinSchedule1totheReport. That,theauthorsdid ina
documentconsistingmainlyofafewbriefstatementsoffact,combinedwithseverallengthy
schedulesoftransactionsrespectivelydescribedasBackgroundandAnalysis.
3.46 Analysis is certainlywhatwas – and still is ‐ required, though not provided in any
meaningful or readily understood form fromDeloitte. But, on their understanding,what
theyhadprovidedwastoformthebasisforanevaluationbytheGovernorwith,presumably
the assistance of the TCI Government. As far as I have been able to discover, no such
evaluationhasbeenundertaken,muchlesscompleted,andtheCommissionhashadneither
thetimenortheresourcesofaforensicaccountantorauditortoattemptit. Insubmitting
itsReporttotheGovernor,Deloittetantalisinglyobservedthat,haditperformedadditional
procedures or had it performed an audit or review of the Crown Land Policy or the
transactions in question in accordance with recognised international standards, matters
mighthavecometotheirattentionthatwouldhavebeenreportedto...[theGovernor].
3.47 Iwas and remain puzzledwhyDeloittewas instructed to report onMr Robinson’s
concerns insorestrictedaway. IhaveaskedGovernorTauwhareandhavecorresponded
with and spoken to those responsible at the Foreign and CommonwealthOffice about it.
TheformerGovernortoldmethathehadcompiledthetermsofreferenceinajointexercise
with the HonMichael Misick, having taken advice from the Foreign and Commonwealth
OfficeinLondonand,notwithstandinghisunease,deferredtotheirjudgment.Icanonlysay
thatIsharetheuneaseofMrRobinsonandGovernorTauwhareaboutthesetransactions‐
an unease accentuated by an absence of information beforeme as to any or any expert
evaluationofthefactualinformationgatheredandtabulatedbyDeloitteinitsReport,save
that the current Chief Auditor has considered it. Such an evaluation, coupled with the
resultsofother investigations in relation to theSaltCayproject, is clearlyamatter thata
specialprosecutor,ifappointedasaresultofthisReport,maywishtoconsider.
3.48 In the meantime, there has been very slow progress on the part of the TCI
Governmentinimplementingtheproposalsinthe2008TerraInstituteReport,inparticular,
fortheManualandthedraftOrdinance.Inthemeantimetoo,theabusesoftheCrownLand
PolicychronicledbyFuller in2004,Barthel in2005,theTerra Institute in2008andlatterly
98
Robinson have continued apace. If anything, Ministers have increased the number of
proposalsbroughttoCabinetforgrantsofCrownLandforsubstantialcommercialuseand
othermajorcommercialprojects,stillinmanycasesatshortnoticeandwithnoornotabled
supporting Cabinet papers. What is more, many recent transactions have involved the
disposal of Crown Land, not by way of Conditional Purchase Lease, but by absolute
dispositionofthefreehold.
3.49 On 3rd April 2008 the TCI Cabinet approved a number of the Terra Institute’s
recommendations, includingdrafting instructions for theproposedCrownLandOrdinance.
As the Hon McAllister Hanchell had surmised in his objections to Mr Robinson’s Special
Report, it did not, however, approve the Manual of Crown Land Administration and
Management, and deferred it for further consideration towards the end of April. The
Cabinetdidnot consider it again inApril, and it surfacednext inoneormorediscussions
between the Governor, the Hon Michael Misick, the Hon McAllister Hanchell and the
AttorneyGeneral. Those discussions gave rise to an undated paper proposing, inter alia,
thattheAttorneyGeneralshould:1)formallyadviseastowhomightmakeallocationsand
disposals of Crown Land; and 2) check what, if any, powers the Chief Auditor had to
investigate Crown Land transactions and review valuations, with a view, if necessary, to
makingprovisionforthosepowersintheproposedOrdinance.TheAttorneyGeneraldidnot
formallyadviseonthepowertoallocateanddisposeofCrownLand,takingtheviewthatit
wasadequatelydealtwithinsection94oftheConstitution,whichaccordsthepowertothe
Governororanypersonauthorisedbyhimtodoso.However,withrespecttotheAttorney
General, thatprovisiondoesnot resolve thevexedquestionwhether theGovernorshould
leavethepowerwiththeCabinetand/orMinistersortransferittoanindependentbodyas
hasbeenfirmlyrecommendedbyFuller,Barthel,theTerraInstituteandRobinson.Hedid,
however,advisethattheOrdinanceshouldprovideforreviewandinvestigationbytheAudit
Department. In my respectful view, that would be an inadequate remedy, coming as it
would, longaftertheoccurrenceofpossibleharmfulconductthat interveningactivitymay
haverenderedirremediable.
3.50TowardstheendofAugust2008thePermanentSecretaryattheMinistryofNatural
ResourceswrotetotheAttorneyGeneralaboutsomeunresolvedmattersintheCrownLand
PolicyandurgingprogressontheproposedOrdinance.InearlyOctobertherewasafurther
99
letterfromthePermanentSecretarytotheAttorneyGeneralreferringtoherAugustletter,
attaching a copy of the Drafting Instructions for the Ordinance taken from the Terra
Institute’s2008Report,andagainurgingexpeditioninitspreparation.TheAttorneyGeneral
didnot reply to thatmemorandum. HisChamberswereabout to commencedrafting the
legislation.Butno‐onetoldthePermanentSecretarythat.AttheendofOctobershesenta
memorandum to the Hon McAllister Hanchell making various further proposals to hurry
matters along, including implementation of the Manual or of some comparable system,
statingthattheCabinet’sfailuretoapproveitinAprilhadleft...thesameflawedsystemfor
allocationofland.TheMinisterdoesnotappeartohaverespondedtohermemorandum.
3.51However,inearlyFebruary2009whentheCommissionwasapproachingtheendofits
oral proceedings in Providenciales, the Attorney General informed me that drafting
instructions for theOrdinancewere nearly complete and that they included provision for
issuing the Manual, thus giving it legislative authority. I trust this includes provision for
placing allocation of Crown Land under the independent control of a Crown Land Unit.
However,clauses16,18and19ofthe incompletefirstdraft,establishingsuchaUnit,and
setting out the duties of a proposed Commissioner of Lands responsible for its
administration,stillleavethatmatteropen‐itseemstome‐tothewhimoftheGovernoror
theMinisterofNaturalResourcesoftheday:
16.ForthepurposeofthisOrdinancethereshallbeestablishedaCrownLandUnitwithintheMinistryofNaturalResources.
...
18.ThereshallbeinthepublicserviceaCommissionerofLands,whoshallberesponsible for administering theCrown LandUnit andwho shall performhisfunctionsinaccordancewiththisOrdinance.
19.TheCommissionershallhavethemanagementofallCrownlandandshall....superintendtheallotmentofCrownlandsand layingoutresidential lotsastheGovernor/Ministerfromtimetotimedirects.
3.52 On 14th April 2009, shortly before submitting this Report to the Governor, a new
Cabinet under the Premiership of the Hon GalmoWilliams, tabled a number of Bills for
considerationbytherecentlyrecalledHouseofAssembly.TheCrownLandsOrdinanceBill
wasnotincludedinthelist.Itmaybethatconsiderationisbeinggiventomorefundamental
100
reformofthelawastoCrownLandsoastogiveitdirectstatutoryimprintratherthanone,
asseeminglyproposedtodate,merelysupportiveofgovernmentalpolicyoftheday.
Publiccontracts
3.53Inthefieldofpublicworkscontracts,asinotherfieldsofcommercialactivity,thereisa
gradationfrompublicinefficiency,enablingabusebyoneorotherpartyofthepotentialor
established contractual relationship, to mutually accepted behaviour that lubricates the
wheels of business and is not generally stigmatised as dishonest, and on to mutual
dishonestyamountingtocorruption.Contractinginthepublicorprivatesectorsisproneto
abuseofonesortoranotherunlessstrongcontrolmeasuresareestablishedandenforced.
The potential for abuse is undoubtedly greater where an urgent and obvious need for
infrastructureiscoupledwithcontractualaccesstosubstantialpublicfinancesthatare,and
areknowntobe,largelyuncontrolled.
3.54IntheTCIoverrecentyearsthebudgetforspendingonpublicworkshasrisensteadily,
but,therehasbeenasignificantoverspendofatleast10%ineachofthefinancialyearsfor
which the TCI Government has produced audited accounts, 2003 – 2006. In the year
2005/2006,itwassome$400,000overthebudgetfigureof$3,380,000.196
3.55AllgovernmenttenderproceduresshouldconformtoFinancialInstructionsissuedby
the Ministry of Finance197 and to generally accepted tendering procedures. Those
Instructions, since2006, have required all contracts forwork valued at between$15,000
and $75,000 to be the subject of public tendering unless the Permanent Secretary, the
AttorneyGeneral, the Financial Secretary or the Commissioner of Police approved limited
tendering,thatis,fromanofficiallistofpreviouslyapprovedcontractors.198Allcontractsfor
workworthmore than$75,000 shouldbe the subjectofpublic tenderunless theCabinet
approved limited tendering.199 Responsibility for issuing invitations to tender lay with
PermanentSecretariesorHeadsofDepartments.TheCabinetcouldwaivepublictendering
requirementswherethenationalinterestrequiredthecontracttobeissuedearlierthanthe
196TCIAuditOffice(2006),AuditReportonContractTendering&ExpenditureSystems,Engineering&MaintenanceServices,p4197 WSP International Management Consulting (2005),Ministry of Communications, Works & Utilities, Department of Engineering &MaintenanceServices:ProjectManagementDivision–RoadDesignManual,Chapters17‐18198ibid,PartIV–AnnexI:FinancialInstructionsChapters17&18,FinancialInstructions1707applies199ibid,towhichFinancialInstruction1702applies
101
normaltenderprocesswouldallow,orwheretheworksand/orservicesorthematerialsto
beprocuredwereofaspecialistnatureforwhichonlyalimitednumberofsourcesofsupply
couldreasonablybeidentified.CapitalprojectswerenormallygovernedbytheGovernment
Development Budget, but the Cabinet could additionally approve expenditure on new
projectsnotcontainedintheBudgetforemergenciesortomeetemergingandunforeseen
developmentsduringtheyear.
3.56 The twomain purposes of public tendering requirements formajor capital projects
were and are: 1) to promote open and competitive tenders to enable those considering
them on behalf of the TCI Government to determine, in the public interest, in terms of
qualityofworkandvalueformoney,thebiddertowhomthecontractshouldbeawarded;
and 2) to ensure honest dealings between those responsible for the award of public
contractsandthosebiddingforthem–inshorttominimisethescopeforcorruptionand/or
unnecessarycosttothepublic.However,theincreasingpatternintheTCIoverthelastfew
yearshasbeentodisregardtheserequirementsinanumberoflargeandsmallscalepublic
works and other contracts –many potentially questionable as to value formoney and/or
becauseofpossiblecorruptionofMinistersandpublicofficersinvolvedintheiraward.
3.57TheCommissionhasnotseentheAuditReportonContractTenderingSystemsinthe
TCIofNovember2004,butitraisedissuesthatwerestillpresentin2006,asshowninalike
Audit Report for that year.200 They included a number of recommendations designed to
improve the accountability, openness and independence of tender procedures, and drew
attentiontospecificcontracts,someinvolvingsignificantsums,wheresuchprocedureshad
notbeenfollowed,oratleastwerenotevidenced.
3.58 In late 2004 the TCI Government had engaged a consulting engineer, Simon
Bradfield,201 to undertake a Department for International Development (DFID) funded
projecttocreateaninventoryandconditionsurveyofallpublicinfrastructureontheIslands
and to reorganise the Public Works Department. He had made detailed and urgent
proposals for reorganisation,newmethodsofworkingandgreateraccountability. Hehad
presented these proposals to the Executive Council and to various Government
200(2006)ContractTenderingandExpenditureSystems,EngineeringandMaintenanceServicesDepartment,AppendixD201ofWSPInternationalManagementConsultants
102
Departments,buttonoavail.In2008,inasubmissiontotheUKForeignAffairsCommittee,
hedescribedthelackofresponsetohiswork:
Throughout my work I received minimal cooperation from the variousDepartment Heads, and PWD [Public Works Department] staff were, largely,unwillingtodivulgeordiscussdetailed informationontheircurrentpracticesofimplementing Public Works projects. Project information and records werehaphazard,incompleteand/orlackingandIfounditimpossible[to]conductanyadequateauditofprojecthistoriesorexpenditure.Myoverallimpressionduringmy time there was that the reorganisation project had been imposed on theDepartmentandthattheyhadnointerestinourobjectives–consideringustobemerelyaninterferencewiththeirexistingmethodsofworking.
He added that, on a subsequent visit at the beginning of 2006 to check on progress of
implementationofhisproposals,hefoundthatnothingwhatsoeverhadbeenachieved.
3.59 The UK 2007 National Audit Report202 indicated widespread departures from
competitive tendering in the TCI, a report echoed inmany allegations to the UK Foreign
AffairsCommitteeandto theCommission. Theseallegations includedtheawardofmajor
contractsatanover‐priceand/orwithouttenderand/ororasaresultoffailureproperlyto
observe the tenderprocess. Commonfeaturesof suchallegationshavebeendisregardof
lowest or lower bidders, Ministers’ advancement of personal or family or associates’
interests,involvementinthesuccessfulbiddersand/orpotentialreceiptfromthemofbribes
as rewards for award of contracts, also awards of small contracts toMinisters’ relatives,
associatesorsupporters,ortheirengagementinprojectsforrewardinreturnforlittleorno
work.
3.60AsIhaveindicated,noneofthesecriticismswasnew.Theyhavebeenidentifiedtime
andagaininofficialandindependentreportsindifferentcontexts,oftencommissionedand
fundedbyDFIDorotheroutsidebodies,buttolittleresult.AsSimonBradfieldsaid,when
hecontactedtheUKForeignAffairsCommitteeinrelationtotheprojecttoreorganisethe
PublicWorksDepartment:203
ItseemsagreatpitythatthelargeexpendituremadebyDFIDontheprojecthasproducedpracticallynoresultsorimprovements.
202Seepara1.39above203Opcit
103
3.61 The material before the UK Foreign Affairs Committee, supplemented by similar
information in evidence to theCommission, has suggested a numberof areas of business
and transactions for concern. For want of time and resources, I have not been able to
investigate all, or even most of them, so as to equip myself to form a view of possible
criminalityandneedforfurtherinvestigation. WhereIhavebeenabletoexaminespecific
allegations,andtoformviewsastopotentialcriminality,IhavedonesoinChapter4ofthis
ReportinrelationtoindividualMinistersandothers.
3.62 Mymainareaofconcern in thiscontext is thegrantofuntenderedand/orpossibly
over‐pricedcontractstopersonsorcorporateentitieswithconnectionswithPNPMinisters
and/or financialsupportersof thePNP. I setout in thenextparagraphsomeexamplesof
typesof transaction thatgive rise to that concern. However, I shouldemphasise that the
Commissionhasnothadthetimeortheresourcestoinvestigateindividualinstancesinany
depth or other similar contracts or matters, for example, by questioning public officials
and/or representatives of persons or corporate entities concerned. It may well be that
further investigations would yield information that would point to the possibility of
corruptionand/orotherseriousdishonesty,orwouldallaywidespreadconcerns thathave
beenexpressedintheTCIaboutsuchmattersoverthelastyearormore.Mylackofspecific
mention of them among the following examples should not be taken as an indication or
recommendation not to investigate them. It is, of course, open to any investigators
instructedbytheTCIGovernmentfollowingmysubmissionofthisReporttoexaminesuch
transactionsandrelationshipsastheyseefit.
3.63Theexamplesare:
1) major contracts for services, such as that made in November 2006 with
Southern Healthcare Network (SHN) for referral of TCI Islanders for overseas
medicaltreatmentandairevacuationsatdiscountedrates,whichquicklyproved
tobeafinancialdisasterinitscost,service,financialmanagementandcontrol;204
2) major construction contracts, for example: a) PFI contracts awarded to
JohnstonInternationalfortwonewTCIhospitals,saidtohavebeenover‐priced
204opcit24,pp57–58,paras154–155
104
and awarded without any or any appropriate tender process, with an initial
budgetof$40millionandcoststodateof$125million;
3) major road‐building and other public works contracts, for example: a) the
Lower Bight Road, Providenciales – said to have contracted to Johnston
Internationalatasignificantlyhigherpricethansomeotherbiddershadoffered,
andbuilt, it is said, toa low standard; andb) roadworks inNorthandMiddle
Caicos,contractedtoHerzog;
4) rental of property byMinisters, their relatives or supporters, including the
HonMichaelMisickandhiswifeandtheHonFloydHall,forGovernmentuseat
above‐marketrents;
5)salebyMinistersofpropertytoGovernmentatabovemarketvalue;
6)makingorapprovalof agreements forhotel/condominiumandother tourist
developmentsinwhichMinistershadorweregrantedinterests;
7)thegrantoffranchisesorlicences,someintheformofeffectivemonopolies;
and
8) purported employment and actual payment of ghost workers, that is, of
personsinvariouspublicpostsorofficesforwhomtherewaslittleornowork.
Immigrationandpermissiontowork
3.64 The Immigration Ordinance205 and subsidiary legislation provide a comprehensive
systemforregulationofimmigrationintheTCI.TheOrdinancehasestablishedthreelevels
of immigration status in a descending order of entitlement and security to remain in the
Territory.
1) The legislation provides206 a status of full citizenship, called Belongership,
acquired by descent from a Belonger or a spouse of a Belonger of five years
standing, or exceptionally where the Governor in Cabinet, considers that a
205RevisedEd1998,Cap51,asamended206ss3and4
105
person has made an outstanding contribution to the economic and social
developmentoftheIslands. AsIhavealreadyindicated,onlythisstatuscarries
withittherighttovote.
2)ThelegislationprovidesforthegrantbytheGovernorinCabinetofPermanent
Residence Certificates,207 which as the name indicates are valid for life and
grantabletopersonsofgoodcharacterandhealth,whohaveestablishedalong‐
term living andworking connection in the Territory, andwith a demonstrated
ability to support themselves and their dependents there. Such long‐term
connection may take any one of several prescribed forms, including having a
home or principal home in the Islands coupled with a work permit as a self‐
employedoremployedperson,orinvestmentinandactiverunningofabusiness
there,orinvestmentofasubstantialsuminabusinessorahomethere.208The
status is also revocable by the Governor, but only for specified reprehensible
conductand/orfailuretocomplywiththestatutoryrequirementsofgrant.Any
decisionofhistorevokeitisappealabletotheSupremeCourt.209
3)Thelegislationprovidesforalesssecureformofpermissiontoremaininthe
form of a temporary and conditional Residence or Work Permit,210 made or
revocableforcausebytheImmigrationBoardestablishedbytheOrdinance,and
subjecttoanappealtotheMinisterresponsibleforImmigration.TheMinister’s
decision on appeal is not required by the Ordinance to be reasoned, and is
expressly declared by it to be final and unreviewable or enquired into by any
court.
3.65 It is apparent from Executive Council and Cabinet minutes that the initiative for
putting and supporting applications to the Governor for Belongership on exceptional
groundsor forPermanentResidenceCertificates is thatofaMinister,usually theMinister
responsible for Immigration. Although applications for Residence or Work Permits are
determinable by the Immigration Board, amajority of itsMembers are appointed by the
207ss14‐22208ImmigrationRegulations,ReviseEd1998,reg15andSchedule2,para3209ss20‐22210ImmigrationOrdinance,s23–35
106
Governor,actingontheadviceoftheMinister,211and,asIhavesaid,anyappealsfromthe
Board’s decision are made to and determined by the same Minister, whose decision is
final.212
3.66Evenfromthatshortsummaryofthestatutoryscheme,itisclearthatMinisterswield
very considerable discretionary powerover non‐Belongers, including thosenot entitled to
permanent residence,butwhohaveestablishedahomeandplaceofwork in the Islands.
There are two aspects to their vulnerability, one at the stage when grant of a higher
immigrationstatusissoughtandtheotherwhere,ifgranted,revocationisthreatened.
3.67TheapplicationforgrantstagewascanvassedinevidenceputbeforetheUKForeign
AffairsCommittee,213andhasbeenafrequentsubjectofinformationgiven–almostalways
in confidence – to the Commission. The complaints are of grant of Belongership or
PermanentResidentCertificates inbreachofthe legalrequirements inreturnforbribesto
Ministers or officials, and also of Belongerships to questionable individuals,with financial
clout orministerial connections, via the exceptional grounds route. TheCommission also
receivedmany complaints, including accounts of long delays in the regularisation of their
immigrationstatusandofseeminglyarbitraryandunexplaineddecisionsonapplicationsfor
grantorinrevocationofexistingstatus.
3.68ManyresidentswhohavenotattainedBelongershiporPermanentResidence,orwho
donotqualify for it, live ina stateof constant insecurity lest theyare compelledat short
noticeandatthewhimofaMinisteroroneofhispublicofficialstoleavetheirhomeand/or
employment.TheCommissionhasreceivedsubmissionsfromnumerouspersonsintheTCI,
given in confidence for fear of losing their homes and livelihoods as a result of arbitrary
revocation of their fragile permissions, and allegations of corruption on the part of
immigrationstaffatvariouslevelsabletoexercisesuchdominance.
3.69 Suchasystemand/orabuseofit isnotacceptableinwhatpurportstobeamodern
democracy.
211ibid,s48212ibid,s35213opcit24,paras161–165;andopcit54,Ev335,para5.3
107
3.70 However, in2003–2004,theimmigrationsystemhadthebenefitofawide‐ranging
and comprehensive review, by an Immigration ReviewCommissionappointed by theHon
JeffreyHall,whoseministerialportfolioincludedresponsibilityforimmigrationmatters.The
Commissionwas chaired by the HonDon‐HueGardiner, its Secretarywas Leo Selver, the
Under‐Secretary in theMinistryof Immigration,andtheothermembersweredrawnfrom
thepublicsector, theprofessionsandtheworldofbusiness.214 Its taskwastoreviewthe
statutory framework, policy and procedures, and to make recommendations for more
efficient and effectivemethods ofmanaging and controlling immigration. As part of that
task, itundertookareviewof thestatutorygrounds for thegrantofBelongershipandthe
grant,refusalandrevocationofPermanentResidenceCertificatesandResidenceandWork
Permits. It also considered possiblemechanisms for greater efficiency in the handling of
applicationsforeachofthosestatusesandforcomputerizationofimmigrationrecords.
3.71 The Commission consulted widely throughout the TCI and beyond, and reported
within fivemonths, in February 2004.215 In doing so it identified abuses of the statutory
system of the sort to which I have referred, including instances of Belonger status given
blatantly in return for political favours216 and of applications for Permanent Residence
Certificatesignoredordelayedformonthsandevenyears.217
3.72 In an early section of the Report inwhich the Commission set out its approach, it
spokeoftheneedtoattractandretainpeoplewithspecialisedskillsandexpertisetosecure
the success of the Islands as a tourist destination and financial centre. In the following
passageitdiagnosed,intermsthatareasapttodayasthen,whatwasrequired:218
Overtime,thepeoplewhohavecometoliveherefeelmoreandmoreattachedtothecountryandbegintolookformoresecurityofresidence.Firmswhohaveemployees who have become valuable to their business naturally want thoseemployeestoremain.ItisinevitablethenthattheproportionofindigenousTurks& Caicos Islanders in the country’s permanent population will continue todecrease.Inordertobeabletosetandadjustimmigrationpolicy,itisvitalthatwehavea system that facilitates the identificationanddifferentiationof thoseresidents who need or deserve to be integrated as long‐termmembers of the
214IncludingalsotheChairmanofthePublicServiceCommission,WendalSwann,andthethenPresidentoftheBarAssociation,RichardSavory215ImmigrationReviewCommission(2004)ReportoftheImmigrationReviewCommission216ibid,p8,para1.4217ibid,p17,para2.1218ibid,p2
108
community,thosewhoshouldnotqualifyaslong‐termresidents,andthosewhoforwhateverreasonhavenointentiontobecomelong‐termresidents.
Such a system, the Commission emphasised, required open, clear, fair and consistently
appliedmechanisms.219
3.73 To those ends, the Review Commission recommended the establishment of a new
statutory body to be known as the Citizenship Commission.220 It was to be appointed
annually and so constituted that, to the extent practically possible, it would not be
susceptible to thepressuresand influenceof interested individuals,andnot subject toany
overridingpowerof theGovernmentof thedayas tograntofBelongership. TheReview
Commissionalsomadeanumberofdetailedrecommendationsastocriteria forgrantand
revocation of immigration status at different levels, and for clear public expression and
consistentapplicationofthemandforotherreformsofthesystem.
3.74 Unfortunately, littleornothingcameoftheImmigrationReviewCommission’swork.
Theevidencebefore theUKForeignAffairsCommitteeand thisCommission suggests that
theabusesitidentifiedcontinue,andthattheremediesitrecommendedlieunattended.
3.75 As foreshadowed in my Interim Report, I consider that there is urgent need for
removal of ministerial involvement in the exercise of discretionary or other powers
concerningthegrantorrevocationofimmigrationstatus.AsrecommendedinChapter5of
thisReport,suchdecisions,whetherbyabodysuchastheCitizenshipCommissionsuggested
inthe2004Review,orbypublicservants intheImmigrationDepartment,shouldbemade
withregardtoclearlydefinedandwell‐publicisedstatutorycriteria. Suchdecisionsshould
beexplainedandexplicable,andbesusceptibletoameritsappealtotheSupremeCourtor
anindependenttribunalestablishedforthepurpose.
RevenuesandExemptions
3.76ThepowertolevytaxesintheIslandsisreservedspecificallytoMinisters,foritisthey
whocontroltheintroductionbeforetheHouseofAssemblyofBillsdesignedtoimposeorto
219ibid,p3220ibid,p10,para1.5
109
increase taxes.221 Likewise, it is only Ministers who can recommend to the House of
Assembly,thoseBillsthatprovideforimposingorincreasinganychargeontherevenuesor
otherfundsoftheIslands,orforcompoundingorremittinganydebtduetotheIslands.
3.77TheTCIisregardedbymanyasataxhaven.222Thisishardlysurprising.TCIimposesno
income, capital gains, corporation, or inheritance taxes. During the oral proceedings, the
Premier,hadrecoursetothisfactinresponsetorequestsforwrittendetailsofhisfinancial
means, saying that there was no need for anyone to keep records of their income or
expenditure. InresponsetoaquestionfromSeniorCounsel totheCommissionaboutthe
dramatic increase in his net worth between his appointment as Chief Minister and the
presentday,hestated:223
IhavebeenworkingfromthetimeIwas18,sellingrealestateonProvidencialessince1984,andbythetimeIbecameChiefMinister,hadalreadybeeninvolvedina lot of businesses andhad establishedmyself in our community not only as abusiness person but also as a politician. In this jurisdiction there is norequirementforaccountingpurposes.Wehavenotaxesorincometax.Sothereisabsolutelynowaythat–and...inrelationtothedeclaration,thedeclarationofintereststhereisnorequirementtoputadollaramountonanyone’snetworth.Whatyouarerequiredtodeclareisassetsandinsomecaseliabilitiesintermsofthe (inaudible) figure.Sothere’sabsolutelynowaythat Iwouldhaveknownorotherswouldhaveknownwhatmynetworthwouldhavebeenin2003.224
3.78 Buttaxhavenstatusbringswith it,especially inthecurrentglobal financialclimate,
certain responsibilities, even for a British Overseas Territory. The TCI is but one player,
amongstmany,havingtolooktoitslaurelsinthisregard.Pressuresarebeingapplied,not
leastfromtheUSA,nowarmedwiththeStopTaxHavenAbuseAct,passedbytheUSSenate
on2ndMarch2009.
3.79 The CompaniesOrdinanceprovides for the establishment of exempt companies, of
which there aremore than 10,000 registered in the TCI. An exempt company is one the
objects of which are to be carried out mainly outside TCI,225 but for 20 years from
221s67ofthe2006Constitution222TheOrganisationforEconomicDevelopment(OECD)identifiesfourkeyfactorstobeusedtodeterminewhetherajurisdictionisataxhaven:1)nooronlynominal taxes;2)whether there is a lackofopenness;3)whether thereare lawsoradministrativepractices thatpreventtheeffectiveexchangeofinformationfortaxpurposes;and4)whetherthereisanabsenceofarequirementthattheactivitybesubstantial.223Transcript,Day1,p27224ibid225s180oftheCompaniesOrdinance,Chapter122
110
incorporation, it is exempted from tax on profits, income, capital gains, estate duty or
inheritancetaxpayableonitsshares.226Inaddition,itisnotsubjecttomanyofthenormal
procedural formalities of TCI company registration.227 All that must be filed with the
Registrar of Companies is a Memorandum of Association with details of the company’s
registeredoffice,detailsof itssharecapital(orguarantee),228adeclarationthatoperations
willbeconductedmainlyoutsideTCI,229andthenameof itsrepresentativewithinTCI. In
particular, the subscribers are not required to inform the Registrar of the identity of the
company’s beneficial owners. The attraction of exempt companies thus lies in a
combination of their tax‐exempt status and the minimal disclosure and administrative
requirements.
3.80Instead,theTCImustlooktorevenuefrommanyothersources,including:1)tourists
andothervisitors,intheformofaccommodationtax,airandseaportsdeparturetaxes,and
landingfees;2)fromlandsalesintheform,notonlyofstampduties,registrationfeesand
surveyfees,butalsoinrecentyearsfromCrownLandrentalsandfreeholdpurchasesales;3)
businessmen in the form of export and import duties and cargo dues, business Licences,
vehicle licences and gamingmachine tax; and4) from immigration‐related sources, in the
formofvisas,permanentresidenceandotherresidenceandworkpermits.
3.81 In the Audited Financial Statements for the year 2005/2006,230 the most recent
available,stampdutyonlandtransactionsaccountedforalmost20%ofrecurrentrevenue,
workpermitsandotherimmigrationfees,andaccommodationtaxforalmost10%each,and
ImportandotherCustomsdutiesforalmost40%.TheTCIGovernmentcan,anddoes,also
raise revenue fromborrowing, although its scope forborrowing is constrained,231 and the
Foreign & Commonwealth Office monitors the level of its indebtedness. The Annual
EconomicUpdateReport2008232showsthattheTCIGovernmenthasusedup itsreserves,
andcannotthereforepresentlyextenditsborrowing.
226s197227ibidSection185228ibidSection182229ibidSection183230TCIAuditOffice(2006),GovernmentoftheTCI,FinancialStatementsfortheyearended31stMarch2006,GrandTurk,Graph1,p30.(TheFinancialStatementsfortheyearendedMarch2007remain,asyet,unaudited.)231TheborrowingratioscurrentlyarethatTotalNetDebtshouldnotexceed80%ofGovernmentrevenue;principalandinterestpaymentsforGovernmentdebtshouldnotexceed8%ofGovernmentrevenue;andReservesshouldbenolessthan20%ofgrossdebtstock.232CompiledinMay2008byOxfordPolicyManagementonbehalfoftheFCO.
111
3.82Thereis,ofcourse,greatdifficultyforthoseattemptingtomonitorthefinancialstate
oftheTerritorywhen itsFinancialStatementsareunauditedandareotherwiseunreliable.
Forexample,astheUKNationalAuditOfficereportedinits2007Report,in2006‐2007the
Foreign&CommonwealthOfficeconsentedto$10millionof furtherborrowingbytheTCI
onthebasisthatitsliquidreservesamountedto$14.6million.However,whenthe2004‐05
AccountswereauditedinJuly2006,itwasrevealedthatcashreserveshadbeenoverstated
by$6.6million.233
3.83Giventhedirestateoftheeconomy,itisallthemoreimportantthatallrevenuesare
collected.ButifsomeoralloftheserevenuesaresubjecttoconcessionsmadebyMinisters,
for example when grants of Crown land at less than market value are made or when
development agreements are being negotiated, the impact on TCI revenues may be
considerable.CynthiaTravis,theChiefAuditorfrom2005to2007reportedsimilarconcerns
aboutthelostopportunityfortheTCIGovernmentresultingfromsignificant,andpotentially
unwarranted,concessions.234AccordingtoherReport,someUS$32millionwasgivenaway
by the Customs Department in the year 2005/2006 through concessions made to
developers.
3.84 The information from many sources before the Commission suggests that such
forgonerevenuehas in largepartbeen theproductofover investor‐friendlydevelopment
policies, often presented by Ministers to the Governor in Cabinet to be absolutely and
imminentlynecessarytosecuretheparticularinwardinvestmentunderdiscussion.Thereal
possibility is that individualMinistershaveoften sold thepass inpre‐Cabinetnegotiations
withdevelopers,byundertakingtosecureforthemfavourableprices,exemptions,discounts
andconcessionsofone sortoranother. Suchnegotiations,oftenconductedprivately, in
haste and without recourse to advice from TCInvest or other professionals, are a ready
sourceof fixingon financialadvantagesbetweendeveloperandMinisternotpresentedto
theGovernorinCabinetorintendedevertobecomepublic.However,signsofitmaylater
surfacewhendeveloperrecipientsofsuchministeriallargessearediscoveredtohavemade
large,andusually secret,donations toor for thebenefitofaparticularMinisteror to the
PNP. ThereisaclearneedfortimelypublicationoffulldetailsofallgrantsofCrownLand
233TCIAuditOffice(2006),Turks&Caicos IslandsNationalAuditReport,AuditReportandFinancialStatements,Fortheyearended31stMarch2005,p14234ibid,page55
112
anddevelopmentagreements,includingthenameoftheproposingMinister,thebeneficial
recipientofthegrantandthetypeandvalueofanyexemptionsgranted.
3.85Quiteapartfromsuchdirectlossorrevenuetheremaybeassociatedlossofcapitalor
revenueontheproceedsofsaleoftheTCI’sprincipal,valuablebutfastdiminishing,asset–
Crown Land. In the year‐ended 31 March 2006, receipts for land sales exceeded $11
million235(areductionofapproximately$4millionfromthepreviousyear’stotal),although
theGovernmenthadbudgetedforreceiptsof$17million.236AsIhavealreadymentionedin
thisReport,theGovernmenthasnotmaximiseditsincomefromlandsales.Verygenerous
discounts have been given to Belongers, and indeed to others,when Crown Land is sold.
There have been cases involving Ministers, their families or associates and some high
ranking civil servants where Belongers and developers have secured separate and
substantialbenefitsontherapidturnoverofCrownLandbytheformertothe latter. The
nobleprincipleofEmpowerment,underwhichBelongersareofferedlandatahugediscount
togivethemastakeinthecountry,hasthusbeenhi‐jackedforotherignoblepurposes.The
Commission has itself discovered allocations that can only be categorised as the result of
greed, favouritism and/or cronyism.237 The corollary of such Belongers’ and developers’
benefitis,ofcourse,significantlossofrevenuefortheTCI.
3.86 Aside from the obvious difficulties of collection of government revenue, where
revenues arederived from indirect taxes, such as stampor import duties and visa/permit
fees,thereismassivescopeforcorruptionamongthosechargedwiththetaskofcollection.
The Commission received a substantial number of reports, almost invariably from
anonymoussources,ofunwarranteddemandsformoneybeingmadetoapplicantsorextra
fees and charges being levied, to ensure their application or matter received favourable
treatment.
________________________
235TCIAuditOffice(2007),FinancialStatementsoftheGovernmentoftheTCIfortheyearended31stMarch2006,GrandTurk,StatementNo2,p2236ibidStatementNo3‐1,p3237Seeparas3.17and3.18aboveandparas4.134–4.135and4.166–4.168below.
113
4–INFORMATIONOFPOSSIBLECORRUPTIONAND/OROTHERSERIOUSDISHONESTY
andRECOMMENDATIONS
Introduction
4.1Inowturntotheissueswhichhaveariseninrelationtoindividualelectedmembers,in
thecourseofevidencepresented to theCommission. TheCommissionhasnot,anddoes
notmakedefinitivefindingsoffact;itisvitaltobearinmindthattheTermsofReferenceof
theCommissionwereonlyevertoestablishwhethertherewasinformationthatcorruption
orotherseriousdishonestymayhavetakenplace.Themoreexactingtestsofproofasmight
beapplied inatrialcouldnotbeemployedbytheCommission,norweretheyrequiredto
be.
4.2 This Chapter necessarily considers other persons beyond simply the elected officials
involved. ItwouldbewhollyartificialtoproduceaReportthatdidotherwise. Insofaras
thereisinformationindicatingcorruption,thatcorruptiondoesnotexistinavacuum(e.g.if
anofficialreceivesapossiblycorruptpayment, itmusthavecomefromsomeoneelseand
theymustbeidentifiedinordertoshowwhyandhowitmaybeiscorrupt.
4.3SeveralpartieshavesoughttoarguebeforetheCommissionthattoconsiderorevento
name parties, apart from elected officials, takes the Commission outside its Terms of
Reference. Related arguments were also raised that no comment should bemade upon
thosewhoprovidednoevidenceorwhoonlygavewrittenevidencebeforetheCommission.
Idonotacceptthosearguments.Ihaveendeavouredtoensurethat,ineverycasewhereI
was minded to make an adverse finding leading to a recommendation of criminal
investigationinrespectofanypersonwhoseconductisthesubjectof,orwhoisimplicated
orconcernedinthesubjectmatteroftheInquiry,thatpersonshouldhaveanopportunityto
comment ahead of the Report, by means of responses to Salmon letters.238 All have
responded.
238Seepara1.86above.
114
4.4 In reporting uponwhat I have found, I have simply relatedwhat emerged from the
evidence,andidentifiedareasofconflict,contradictionandinformationpointingtopossible
corruption.Furtherinvestigationwillberequiredineverycase,buttodolessthanthis,at
this stage,would have been a dereliction ofmy duty under the Terms of Reference, and
wouldhaveriskedpresentingalessthanfullpicture.
4.5 Any final assessmentmade,may ormay not, bear outmy initial assessment on the
materialavailable.Thatassessmentwillbeataskforthosewhocomeafterme,andmayor
may not involve criminal proceedings. What should also be clear is that the process of
inquiry,whichthisCommissionhasbegun,isfarfromcomplete.Thefactthatanindividual
is not named or criticised should not be taken as any form of endorsement of their
behaviour;thefactthatparticularmisdeedsarenotexploredindetailhere,doesnotmean
theywillnotbegivenattentionatalaterstage.
TheHonMichaelMisick
Background
4.6 BecauseoftheHonMichaelMisick’scentralroleinGovernmentinrecentyears,and
therefore in the Inquiry, I turn first in this first section of the Chapter to my findings
concerninghim,findingswhich,inthecontextofcorruption,mayhaveimplicationsforsome
ofthosewithwhomhedealt.Hemadewrittensubmissionsbeforetheoralproceedings,he
gaveevidenceover fourdaysduringthoseproceedings,atwhichhewasrepresentedbya
strong legal team ledMr Edward Fitzgerald QC, and he has since provided a number of
writtendocumentsandsubmissions.
4.7AccordingtohisbiographicalnotesontheTCIGovernmentwebsite,239theHonMichael
Misickwasbornin1966andwaseducatedlocallyandintheUSAbeforetakingadegreeat
theUniversityofBuckinghamintheUK,andbeingcalledtotheBarofEnglandandWales.
His use of the title “Doctor” derives from an honorary doctorate awarded to him by a
University in the Bahamas. He worked in real estate sales in the TCI with Prestigious
239 TCI Government (2008), Honourable Dr Michael Eugene Misick, Premier [online], Available at: http://tcgov.tc/info--ID--181.html[Accessed4thMay2009]
115
Properties Ltd, a company established by his family, between 1984 and 1988, and then
becameChairmanandChiefExecutiveOfficerofParamountGroupofCompanies,aproperty
andfinancialservicescompany.
4.8 Hewas firstelected to theLegislativeCouncil in1991,whenhebecameMinisterof
Tourism,TransportationandCommunications,andwasre‐elected in1995. InMarch2002
hewaselectedLeaderofthethenOppositionProgressiveNationalParty (PNP). Following
theApril2003GeneralElectionsandthesuccessfulpetitioningandwinningofby‐electionsin
two constituencies, hewas sworn in as ChiefMinister of the Turks and Caicos Islands on
August 16th 2003. The information before me indicates that at that time he was a
reasonably successfulbusinessman. HewasalsoanassociateatSaunders&Co,a firmof
attorneys in the TCI, and still had connections with real estate sales through his family
company Prestigious Properties Ltd. He also owned some properties in his own right.
Severalsourceshavequotedhimashavingsaidthathewasworthonly$50,000priortohis
electiontotheLegislativeCouncilin2003.Hedenieshavingsaidthat,andthereisnofirm
informationbeforemetosupporttheassertion.Itmayhavebeenacommenttakenoutof
context.
4.9Hewas,atallrelevanttimesafterAugust2003,firstChiefMinisterandthenPremier.
Hehasalsoheldtheportfolios forTourism,Trade, InvestmentandDistrictAdministration,
andwasthe leaderofhisparty,thePNP. Duringthe latterpartofhisperiodofofficehe
marriedtheAmericanactress,LisaRayeMcCoyinahighprofileweddinginApril2006.The
couple subsequently separated and, during the Inquiry, were engaged in divorce
proceedings.
4.10 I should state straightaway that the Inquiry has produced much information of
possiblecorruptionand/orotherseriousdishonestyinrelationto–thatis,involving–him.
InthefollowingparagraphsIsummarisetheinformationthathasledmetothatconclusion
in relation to a number of matters, and I express findings and, where appropriate,
recommendcriminal investigationswithaviewtopossibleprosecution. In reaching those
findingsandmakingthoserecommendations,Ihavetakenintoaccountallrelevantwritten
and oral information, including evidence in the oral proceedings in Providenciales, all the
variouswrittenandoralsubmissionsmadeonbehalfofwitnesses,includingresponsesand
116
other correspondence in the Salmon exercise. As I have indicated, theremay be other
mattersworthyofsuchinvestigation,which,forwantoftimeandresources,Ihavenotbeen
abletoundertakeinsufficientdetail.
4.11 There ismuch information to show thatheadopteda lifestyleand spendinghabits
once inoffice that farexceededhis salaryandallowancesasaMinisterandpoliticianand
that which he had previously enjoyed. He spent lavishly and extravagantly, indulging in
internationaltravelbyprivatelyleasedjet,andadoptingwhatwasreferredtointheIslands
asaHollywood lifestyle. Itwas this,asmuchasanything, thatattractedpublic comment,
opprobriumandeventuallyinvestigation.
4.12 During a periodwhen his duties and responsibilities as aMinister and a politician
shouldhaveengagedmost,ifnotallofhistimeandefforts,hisbusinessinterestsappeared
toprosperandexpandexponentially.Thoseinterestswereintimatelyconnectedtohisrole
as ChiefMinister and later as Premier. The principle that a politician should scrupulously
avoid any danger of an actual or perceived conflict of interest between their Ministerial
positionandtheirprivate financial interestswasnotonethatheobserved,orencouraged
hisCabinettoobserve.240
4.13Heappearstohavebenefitedonseveralfronts,apartfromhissalaryandallowances:
1) The PNP continued to fund him with Candidate’s Stipends amounting to about
US$900,000 following his election in 2003. His assertion that these represented salary is
largelyamatterofsemantics;noneofthepaymentsborethehallmarksofasalary.Ihave
beenshownnodocumentationtosupporthiscontention.
2) He was also at liberty to spend the Party funds at will: examples of hundreds of
thousands of dollars going out to his wife’s US stylist and to pay for his household
decorations have been found. His assertions that he was entitled to treat these as
reimbursementsofpersonaloutlaysbyhimonpoliticalmatterswerenotsupportedbythe
Hon Floyd Hall, in his capacity as Treasurer of the Party, or by any documentation. It is
noteworthy thathe controlled,orhelped to control at leastoneof theParty’smainbank
accounts.
240Cap2,para2.7etseq
117
3) PartyfundingofhimintheformofCandidate’sStipendwassupplementedbypersonal
donationstohim,largelymadeinthefirstinstanceonaconfidentialbasistohisbrother,the
attorney,ChalMisick,whodisbursedthemorforwardedthemonhisbehalf.Thesewerefor
large amounts of money, and, in one instance, included $500,000 from a businessman
involved inamajordevelopmentproject,whowas in theprocessofnegotiatinga further
large development project with the Government, and who received Belonger status the
sameyear.
4) His spending of government fundswas extensive. As ChiefMinister andMinister for
Tourism, he funded worldwide travel on the Government budget. This extended in due
coursetotheprovisionofaGulfstreamIIIjetwhichhetreatedashisown.Healsoensured
thathiswifereceivedcontractsforpromotionoftheTCI,whichresultedinpaymentstoher
ofhundredsofthousandsofdollars.
5) The Cabinet voted to provide himwith, not just one, but two official residences, and
coveredmuchof thehouseholdrunningexpenditureonhismain,Providenciales,property
frompublicfunds.
6)Hewasthebeneficiaryofanumberoflandgrants,includingoneof18acresintheNorth
WestPointareainApril2007,forwhichhedidnotpay.Hispartners,overseasdevelopers,
paid theentirepurchasepriceofover$1.9million,buthe received50%ownership in the
project.
7) He received a number of payments whilst in office representing finder’s fees or
commissionsfromdevelopersseekingland,includinghalfofafeechargedbytheHonFloyd
Hall,tothedeveloperRichardPadgett.Hedoesnotappeartohaveregardedsuchactualor
perceived conflicts of interest as an obstacle to acceptance of such financial benefits.
Similarly he received a sum of $325,000 for having introducedMr Alden Smith of Ashley
PropertiesLtdtoadevelopernamedMrPeterWehrli,leadingtoasaleofland.241TheHon
FloydHallalsobenefitedfromthistransaction.
8) Whilst promoting development in the Islands, he held a financial interest in projects
consideredby theCabinet thatbenefited fromGovernment grantsofpermission,without
241Seeparas4.33‐4.39below
118
disclosing that interest. Anexamplewas theCasablancaCasino,whereheheldashare in
thecompanythatownedandrenteditsbuilding.TheCasinopaidfortherenovationofthe
building,thusindirectlyenrichinghimandtwoCabinetcolleagues.Hedidnotdeclarethose
interestswhentheywerediscussedinCabinet.
9) He received large sums of money, which he and his brother, Chal Misick, were to
characteriseas loans. Manyof thosereceiptswereundocumentedandnot thesubjectof
anyagreed terms for interestor repayment. In several instances theyhave still notbeen
repaid,despitethepassageofyearsorhisapparentabilitytorepaythem.Hereceivedone
ofsuchloansamatterofdaysbeforethelenders(thesameoverseasdeveloperswholater
paid for the North West Point land) received a favourable decision from the Cabinet
approving conversion of land from residential to commercial use and the grant of
developmentpermission.
10) He receivedpaymentsdescribedas loans fromorwith theassistanceof twoCabinet
colleagues, the Hon Floyd Hall and the Hon Lillian Boyce when relatives of those two
Ministers used their Belonger status to purchase freehold Crown Land for immediate
onward sale to anoverseas developer. Eachof theparties received $1million; eachwas
thenpressedto,anddid,makeasubstantial loantohim,noneofwhichhehasyetrepaid.
AfurtherloanwasalsotakenfromhiscolleagueHonJeffreyHall,whoalsoprofitedfromthe
deal.
11) He receivedmillions of dollars in transactions formally documented as loans, one of
whichwas of a sumof $6millionon advantageous terms from theoverseas backers of a
developmentprojectonSaltCay.Thecollateralonthe loanwas the50%share in theSalt
CayGolfClubLtdagreedbyMrMarioHoffmann, thedeveloperofSaltCay, toacompany
controlled by the Hon Michael Misick’s brother, Chal Misick, following the grant of
development permission promoted by the HonMichaelMisick himself. The pattern of a
relativeorclosefriendreceivingalargeunearnedstakeinadevelopmentcompanywasalso
demonstrated in the case of Joe Grant Cay. This convenient fiction of loans appears in
anothercontext:thatofnever‐to‐berepaidloanstoconstituents,describedbelow.
119
DeclarationsofIntereststotheRegistrarofInterests
4.14 Ihavealreadysetout ingeneral terms242 theevidenceof theHonMichaelMisick’s
disregard for his obligations under the Constitution and the Registration of Interests
OrdinancetomakefullandaccuratedeclarationsofhisfinancialintereststotheRegistrarof
Interests.InadditiontheevidenceofnoorinadequatedeclarationsrevealedbytheRegister
of Interests and his own acknowledgment in evidence of these breaches, there aremany
matterstowhichIreferinthefollowingpagesofthisChapterthatillustratethatdisregardin
abundance.
1–Ifindthathefailedrepeatedlythroughouthisperiodofmembershipofthe
LegislatureoftheTCItomakefullandaccuratedeclarationsofhisinterestsas
requiredbytheRegistrationofInterestsOrdinance1993.
SuchbreachesarepunishableundertheOrdinanceonlybytheLegislature,243andnotbythe
Courts,savepossiblybyrecoursetosomeothermoregeneralprovisionofthecriminallaw
such as the common law offence of misfeasance in public office. For that reason and
because there is much else of importance to investigate in relation to him, I make no
recommendationarisingoutofthisfinding.
DisclosureofIntereststotheCommission
4.15AsiswellillustratedthroughoutthissectiondealingwiththeHonMichaelMisick,he
failed repeatedly for some months to respond adequately, or sufficiently to instruct his
attorneys toenable themto respondadequately, to theCommission’s requestsunder the
CommissionsofInquiryOrdinancerequestforinformationandsupportingdocumentationof
hisfinancialinterests.ItwasonlyastheInquiryreachedthepointoftheoralproceedingsin
January of this year that he became more forthcoming. However, as appears in the
following paragraphs, he had still failed to disclosemuch that was highly relevant to the
Commission’sInquiryandcontinuedtodosoinhisoralevidenceuntilconfrontedbyother
informationandmaterialavailabletotheCommissionandbyevidencefromothersfollowing
242Seeparas2.27–2.28above243RegistrationofInterestsOrdinance,ss7‐10
120
his. To this day, he has still not disclosedmuch of the information that the Commission
soughtfromhim.
2‐IfindthattheHonMichaelMisickhasfailedinseveralimportantrespects
to make adequate disclosures in response to the Commission’s requests,
pursuanttoitspowersundertheCommissionsofInquiryOrdinance,forfulland
accuratedisclosureofhisfinancialinterests.
4.16WhilsttheCommissionsofInquiryOrdinancegivespowertotheCommission,whileit
isinbeing,totakeproceduralstepstoenforcesuchdisclosurebycontemptorbyreference
totheSupremeCourtforsanction,Ihavenotconsidereditnecessaryorappropriateinthe
circumstances. He and his attorneys, Misick & Stanbrook, whom I commend for their
assiduityand speed in responding to theCommission’smany requestsasbest they could,
eventually produced, onhis instructions,muchdisclosure. Thatdisclosure, in conjunction
withmuchother evidence and informationbefore theCommission, is sufficient to enable
metomakefindingsandrecommendationsrelevanttomyTermsofReference,whichismy
mainconcern.
Politicaldonationsor‘loans’
4.17Substantialpoliticaldonationsandotherpaymentscharacterisedasloans,oftenwith
notermsastointerestorrepayment,appeartobereadilyandwidelyusedmeansofmaking
covertpaymentstopoliticiansinpowerintheTCI.
4.18 Ihavediscussed inChapter2ofthisReport,undertheheadingPoliticsandPolitical
Donations,244 the relaxed attitude of the HonMichaelMisick and other PNPMinisters to
what constituted political donations to them and what use they could make of them,
coupledwith the lax or non‐existing accounting controls of thePNP. Such a combination
wasaclearrecipeandcamouflageforcorruption.Theevidence,oralandwritten,givento
theCommissionhasdemonstratedbeyonddoubt theabsenceatallmaterial timesofany
effectivecontroloraccountingwithinthePNPtoactasarestraintormeansofdisclosureof
donors and their possible non‐political reasons for making such large donations or the
244Seeparas2.34–2.40above
121
personal use to which the recipients put them. Massive sums of money from wealthy
individuals and companies passed through its bank accounts with minimal over‐all Party
control or even record keeping. The Hon Michael Misick and the Hon Floyd Hall –
respectively theLeaderandTreasurerof theParty–acknowledged inevidence that there
waslittlepracticaldistinctionbetweenmoniesgivenforpoliticalpurposesandmoniesgiven
forpersonaluse.
4.19 Thispicturewasreinforcedbymanyexamples indocumentseventuallydisclosedto
theInquiryoftheuseofPartyaccountsforpaymentofpersonaldebts.HeusedPartyfunds
forthedecorationofhishouseandforhiswife’sstylist. TheHonFloydHallusedthemto
payhiscreditcardbills.Bothsoughttoattributethisapplicationofthefundsasameansof
reimbursementofpersonaloutlaysbythemonbehalfoftheParty.Butneitherwasableto
identifyordocumentwithanythingapproachingprecisionwhattheyhadpaidoutcallingfor
suchreimbursement.
4.20 Whetherthisbehaviourmayhaveamountedtotheft fromtheParty is lessmaterial
thanitsillustrationofcasualnesstothetreatmentofandaccountingforsupposedlypolitical
fundsandpossiblecarry‐overintotheirministerialroles.Eithermancouldhaveestablished
apropersystemofcontrolsandcheckshadhewishedtodoso.Theconduitofmoneyfrom
richindividualsorcompaniesviathePartytothemforpersonaluseinevitablyinvitesserious
questionsoveranylargedonationstothePartyfromthosedoingbusinesswith,orhopingto
dobusinesswiththeGovernment.Theneedforsuchquestionsisnotlessenedbytheopen
conflict between theMinisters in evidencebeforeme as towhichof them controlled the
Party’sbankaccountwiththeBelizeBank,oneofitstwobankaccounts,andastowhether
theHonMichaelMisickwaspaidasalary.
4.21QuiteapartfromtheprovisionoffundstotheHonMichaelMisickandtheHonFloyd
Hall via the Party, the information before me shows a pattern of anonymous donations
directtotheHonMichaelMisickasanindividualpolitician,orviahisattorneyandbrother,
ChalMisick. Heandothersexplainedinthecourseoftheoralproceedingsthatdonorson
122
occasion might wish to advance the political career of an individual, but without any
publicity.Inhisevidence,hesaid:245
Thisisprimarilybecause,particularlythesmallnatureofourTerritory,personsgivingpoliticalcontributionwouldhavepreferredtobenotnamed
Headded:246
I received contribution from political supporters to further – in relation topolitical support andalso in relation to somepersonal political support. Thecultureof–againofthepolitical,andIthinkyouhavetoputitinthecontextofislandswherepoliticiansarenotonlyhelptheirpartytowinanelectionbutalsoweareexpectedtohelpourconstituentswhentheyhaveproblems.
This isessentiallythesameargumentasthatadvancedbytheHonFloydHall247thatparty
politicians must dispense money to constituents as well as pay for the usual political
expenses.
4.22 What constituted individual political contributions proved to be somewhat elusive.
TheHonMichaelMisickhadmadenomentionofpoliticalcontributionsinhisdeclarationsof
interestsundertheRegistrationofInterestsOrdinanceovertheyearsorinhissubmissions
to theCommissionprior to thestartof theoralproceedings. Hementionedthemfor the
firsttimeinthefollowingpassagefromawrittenstatementpresentedtotheCommissionat
thestartofthoseproceedings:
SomedonationswerepaiddirectlytomewhilstonatleastoneoccasionthePNPpassedontomedonationsofapoliticalnature.Donationssometimestooktheform of personal contributions to me to use as I see fit, rather than politicalcontributionsinthenormalsenseunderstoodbyaUKobserver.Themoneygivento me in this way could be used to help out the people in the Islands, or toreimburse me for money that I spent to help Islanders. And there is anotheraspecttothis.IoftenspentmyownmoneyonPNPactivitiesandIoftendidnotclaimthesumsback.
He provided no details of monies spent on helping Islanders any more than he did of
personalmoniesthathehadspentonPNPactivitiesorofanycorrelationofsumsreceived
by himwith such expenditure. Onhis ownbelated account, set out in a schedule to the
statement,andthelightofPNPaccountsalsoproducedatthelastmomentbytheHonFloyd
Hall,hehadmuchpoliticallargessetoexplain.Hedisclosedtwopaymentsintohisaccounts,
245Transcript,Day1p49246ibid,p56247Transcript,Day5,pp5‐26
123
described as Funds from PNP, one of $18,000 in May 2004 and another of $100,000 in
February2005.ThePNPaccountsshowedpaymentstotheHonMichaelMisickfrom2004
to2008totallingabout$900,000.
4.23Evenwhenheleftthewitnessbox,therewasnoevidencebeforetheCommissionof
undisclosedpoliticaldonationsreceivedonhisbehalfbyhisbrotherChalMisick.Whenthe
lattergaveevidencethefollowingweek,hedisclosed,afterhavingbeenorderedtodoso,
theidentitiesoffivecontributorswhohadchosentomakedonationstothePremierviahis
office. These totalled a further $1,030,000. The largest was for half a million dollars in
January2007,purportedlyforelectioncampaigningexpenses,fromTurksLtd,thecompany
ofDrCemKinay,thedeveloperofDellisCayandtheproposeddeveloperofJoeGrantCay.
InafurtherwrittenstatementtotheCommission,hestatedthathehadomittedtomention
thosesumsbecausehehadbeenconcentratingonhisownaccounts.248
4.24 Other previously undisclosed donations to the Hon Michael Misick continued to
emerge. Chal Misick, in his oral evidence to the Commission, spoke of $50,000 from
SarawakLtd(PaolaSepe);$30,000fromWindsorEnterprisesLtd(RussellGarland);$300,000
fromValentineGrimes,and$150,000 in twopayments fromCherokeeLtd.249 ChalMisick
alsospokeofanumberof loans fromothersources,somefromlargefinancial institutions
anddocumented,otherssmallandundocumentedfromindividualsandsomefromhimself.
Hismethodoflending,onatleasttwooccasions,wastoplacefundsintohisclientaccount
onbehalfofhisbrother,whowouldthendrawupontheaccount.InJuly2006hecredited
$325,000tohisclientaccountandmadeequivalentpaymentsouttotwoaccountsoperated
by or on behalf of his brother; in November 2006 he placed a further $130,000 into the
client account, and dealtwith it in the samewaywithin a fewdays. In all he loanedhis
brothersome$455,000inthatway,noneofwhichhadbeenrepaidwhenhegaveevidence
to the Commission in January this year. The Commission had no time to investigate the
legitimacyorotherwiseofthepaymentsfromthiscompanyorindividuals.
4.25ThereisnoobviousreasonwhypersonalloanstotheHonMichaelMisickwouldneed
to be put through Chal Misick’s client account, the latter’s ledger record of which is
seeminglytheonlybasisforhisassertionthattheywereinfactloans.Itisatleastopento
248Seealsoinparas4.172–4.182inrelationtotheHonMcAllisterHanchell249ChalMisickbundlep380
124
question whether the reason was to obscure the connection between the source of the
funds and theHonMichaelMisick, especiallywhenhehasnever repaid themevenwhen
apparentlyinfundstodoso,andhehasseeminglynotbeenpressedbyhisbrothertodoso.
Without examining the full banking records of Chal Misick, the Commission could not
identifythesourceorestablishanyaudittrailforthesefunds.
4.26AfurthersourceoflargescalefundstotheHonMichaelMisick,whollyundisclosedby
him in the course of correspondence with the Commission or in his oral evidence, was
$500,000allegedlyborrowedfromhisbrotherPhilip.Thesesumsonlycameto light inthe
ledgerofChalMisick,andweresaidtobeloansmadeinNovember2005andFebruary2006.
Aswith theChalMisick loans, theyweredevoidofsupportingdocumentationand,on the
faceoftheclientaccount,havenotbeenrepaid.Attheveryleast,theseraisequestionsas
totheirpurpose.
3‐IfindfromtheaboveandothermaterialbeforetheCommissionthatthere
is information that theHonMichaelMisickmay have abused his position as
Premier and as Leader of the PNP Party by using PNP funds for his own
purposes in that: 1) if and insofar as he may have been entitled to
reimbursementfromthePartyformoniesexpendedonitsbehalf,hefailedto
accountforsuchexpenditure;and2)thatthelevelofhispersonalexpenditure
wasdisproportionatetoanyexpenditureonthePartyhemayhaveincurred.
I,therefore,recommendcriminalinvestigationbypoliceorothersinrelationto
himintopossiblecorruptionand/orotherseriousdishonestyinrelationtosuch
andothersimilarmattersinrecentyears.
4 – I find that theHonMichaelMisick accepted and failed to declare to the
RegistrarofInterestsmanygiftsofmoneyviatheclientaccountofhisbrother
and attorney, Chal Misick, which were not, and could not reasonably be
interpretedasbeing,politicalinnature,andwhichheappearstohaveapplied
tohispersonalexpenditurewithoutdisclosuretotheRegistrarofInterestsor
totheCommission.
125
I,therefore,recommendcriminalinvestigationbypoliceorothersinrelationto
himofpossiblecorruptionand/orotherseriousdishonestyinrelationtosuch
andothersimilarmattersinrecentyears.
5‐Ifindthatthepaymentof$500,000byDrCemKinay,throughhiscompany,
TurksLtd,totheHonMichaelMisickwasapossiblycorruptpaymentbecause:
1) the Hon Michael Misick did not declare it in Cabinet when Dr Kinay’s
proposals for development were under discussion, or to the Registrar of
Interests or to the Commission; 2) it was paid to him through a third party
account,namelytheclientaccountofhisbrotherandattorney,ChalMisick;3)
it was wholly disproportionate to its stated purpose, namely for political
campaigning,andwasnot,forthemostpart,spentonsuchcampaigning;and
4)itwasreceivedfromadeveloperwhohadacontinuingrelationshipwiththe
Government, with whom further development agreements were under
considerationorbeingnegotiated,andwhobenefited fromCabinetdecisions
generoustohim250
I,therefore,recommendcriminalinvestigationbypoliceorothersinrelationto
the Hon Michael Misick into possible corruption and/or other serious
dishonestyinrelationtosuchandothersimilarmattersinrecentyears.
OtherPayments
4.27 Thereweremanyotherundeclared,undisclosedandstillnotsatisfactorilyexplained
substantialpaymentstotheHonMichaelMisick.
4.28OnewastheCaltagirone‘Loan’of$250,000,informationofwhichfirstemergedinthe
course of Chal Misick’s oral evidence. The sum had been had been paid into his client
accounton29thJuly2005forthebenefitoftheHonMichaelMisick.251Theloanwassaidby
ChalMisicktobefromInazio&GataenCaltagirone.252TheHonMichaelMisickhadmadeno
mentionofthisindocumentationprovidedbeforethehearingsorduringhisoralevidence;
250SeealsoFindingandRecommendation32,atpara4.182below251ChalMisickSchedule252Transcript,Day10,p69
126
theCommissionwasunawareofitatthatstage,andsodidnotquestionhimaboutit.There
wasno indicationofanyformaldocumentationorofanyrepaymenthavingbeenmade in
theinterveningfouryears.253
4.29TheattorneysfortheHonMichaelMisickhavesinceprovidedtheCommissionwitha
copy of a written agreement of a loan granted in the name of a company calledMarlie
JordanInc,dated29thJuly2005.Theloanagreementdoesnotnametheindividualsbehind
thecompany,butthefunds,passedtoChalMisick,wererecordedbyhimwiththenamesof
theCaltagirones,andnotthecompany.TheagreementwasforrepaymentinJuly2010,and
‐documentedorno–thetimingoftheloanisinteresting.Threeweeksafteritwasmade,
theHonMichaelMisick (thenChiefMinister)placedapaperbefore theExecutiveCouncil
proposingre‐zoningofcertainparcelsofland254fromLowDensityResidentialDevelopment
toTourismRelatedDevelopment,andaskedtheCounciltoapproveanoutlinedevelopment
planforthesite.255Approvalwouldhavesignificantlyincreasedthecommercialvalueofthe
property. The Hon Michael Misick did not inform his colleagues in the Council of the
Caltagirone Brothers’ ownership of the land and interest in the proposal or of any link
between them and him. The Director of Planning, who was present at the meeting,
appeared to be unhappy with the proposal, which was for 76 units as opposed to the
maximumof 36permissibleunder theexisting zoning. TheCouncil approved theplan, in
outline,withoutapparentalteration.Veryshortlyafterwards,on31stAugust2005,theHon
MichaelMisickwrote, as ChiefMinister, to Ignazio Caltagirone at Ericson Investment Ltd,
whichwasevidentlythebeneficiaryofthisdecision,confirmingthechangeofuseandgrant
ofoutlineapproval.256
4.30 The story of thismatter does not end there, because the Physical Planning Board
rejected certain aspects of the application, only to have their decision overturned in
December 2005 by theHonMichaelMisick. The circumstances surrounding this loan, like
some of those others that I have mentioned, clearly raise serious questions calling for
further investigation, but in particular here: the amount and timing of the loan, the Hon
MichaelMisick’spilotingandendorsementofthere‐zoninganddevelopmentproposals,the
253Transcript,Day10,p119254Parcels60904/509,510and511255Minute05/812ofCabinetMeeting24thAugust2005256CoreVolume6,section3letter&appeal
127
covertnatureofthepayment,throughacompanyandnotnamedindividuals,andhisnon‐
disclosure of the loan to the Executive Council, to the Registrar of Interests or to the
Commission.
6– I findthatthereceiptbytheHonMichaelMisickof$250,000on29th July
2005, purportedly byway of loan from Inazio & Gataen Caltagirone, via the
clientaccountofChalMisick,waspossiblyacorruptpaymentinthelightof:1)
theHonMichaelMisick’snon‐declaration to theCabinetofhis receiptof the
moneythreeweeksearlierorofhislinkstotheCaltagironeBrothersandtheir
interest in the proposed development under consideration; 2) the Cabinet’s
decision in favour of the proposal, followed by the Hon Michael Misick’s
subsequentdecisiononappealinfavourofitonplanningmatters;3)hisfailure
todisclosethepaymenttotheRegistrarofInterestsandnon‐disclosureofitto
the Commission; 4) the absence of any documentation identifying the
CaltagironeBrothersasthesourceofthemoneyoranytermsforrepaymentor
interest;and5)theabsenceofanyevidenceofrepayment.
I,therefore,recommendcriminalinvestigationbypoliceorothersinrelationto
theHonMichaelMisickofpossiblecorruptionand/orotherseriousdishonesty
inrelationtosuchandothersimilarmattersinrecentyears.257
4.31TheSaunders&Coloanof$275,000‐AnotherloantotheHonMichaelMisickthat
deservescommentwastheprovisionin2008of$275,000fromthelawfirmofSaunders&
Co,ofwhichhehadbeenanassociate. Hehaddeclarednoearningsfromthefirminhis
returnstotheRegistrar.HeinitiallystatedtotheCommissionthroughhisattorneysthathe
had been paid forwork done in 2003, but not since. He then produced a list showing a
commission payment in2002, salary payments in2004,2005and2006and loans in2004
and2008,thelatterbeingthe$275,000 loan. InoralevidencetotheCommission,hesaid
that hehadbeenpaid as a consultant by the firm throughout his period as Premier. His
attorneys, clearly on instructions, had informed the Commission on 18th November 2008
that he had not been employed by Saunders& Co since 2003. The precise nature of his
consultancywork forSaunders&Cowas,however,obscure,ashecouldnotnameanyof
theirclientsinrespectofwhomhehadprovidedconsultancyservices. 257TheCommissiondidnotserveaSalmonletterontheCaltagironebrothersbecauseitnotfindthem.
128
4.32 The loan from Saunders & Co was not supported in the Hon Michael Misick’s
submissions to the Commission with any documents. During the course of the oral
proceedingstheCommissionwasinformedthatthefundshadbeenusedtomakeapayment
toajewellerscompanytowhichthehehadowedmoney,andareceiptfromthejewellers
wasproduced.Sincethen,Saunders&Cohaveproducedfurtherdocumentation,insisting,
mistakenly, that the Hon Michael Misick must have previously produced them to the
Commission. According to this further documentation, Saunders& Co did notmake the
loanbutarrangedit.Thesourceofthefundsremainsunclear.TheoralevidenceoftheHon
MichaelMisickwasthathehadstillnotrepaidit,incommonwithalmostallhisotherloans.
Saunders&Cohadnottakensecuritythemselves,butapparentlyacautionhadbeenplaced
onpropertyownedbytheHonMichaelMisickonbehalfofanomineecompanyrunbythe
firm.Intheresult,thisloan,liketheothersraisesseriousquestionsthatremainunanswered
andmeritfurtherinvestigation.
4.33TheNorthWestPointLoansof$450,000–TheHonMichaelMisicksaidthat,inJune
andJuly2006,hehadreceiveda totalof$350,000 in three loans,$150,000 fromtheHon
Floyd Hall and $100,000 each from the Hon Jeffrey Hall and the Hon Lillian Boyce. The
moneyfortheseloanswasgeneratedbythesaleoflandatNorthWestPointbyacompany
called Urban Development Ltd to a company controlled by an overseas developer called
DavidWex,andtheloansweremadetotheHonMichaelMisickfollowingthetransaction.I
examinethismatterinmoredetaillaterinthisChapterinrelationtotheHonJeffreyHall.258
Thebeneficiariesofthetransaction,whichinvolvedflipping,259ofCrownLand,weretheHon
JeffreyHallandthreeotherBelongers. Thethreeotherswererespectivelythebrothersof
theHonFloydHall,andtheHonLillianBoyce,andtheformerhusbandofHonLillianBoyce.
TheHonFloydHallandtheHonLillianBoyceeachinsistedinevidencethattheirsiblings,not
they, had loaned themonies, but theHonMichaelMisick disagreed, saying theMinisters
hadbeenthelenders.
4.34Thetransaction,asawholebearsthehallmarksofaflagrantexploitationoftheCrown
LandPolicy,inwhichthreeCabinetMinistersmayhavebeencomplicit.BoththeHonFloyd
258seeparas4.196–4.209below259seeparas3.9–3.15above‐purchasebyBelongersoflandatadiscountandimmediateonwardsaletooverseasdevelopersatlargeprofits.
129
Hall260 and theHon LillianBoyce261 admitted that they hadbenefited personally from the
profitsmadebytheirbrothers.TheHonMichaelMisickseemstohaveknownenoughofthe
transactionandtheprofitsmade, toregard itasanopportunetimetoapproachthemfor
money.Thereisnosignofanyattempttorepay,orevenpretenceatattemptstorepaythe
funds, despite his later acquisition of much greater funds from a Slovakian Bank, J&T
Banka.262 The fact that themoney was being taken from those who hadmade windfall
profitswithouttheneedforinvestmentorriskontheirpartssuggeststhattheHonMichael
Misick took a cut from the profits from each. If that proves to be the case, it would be
shamelessexploitationoftheCrownLandPolicy,andrepresenthispersonalenrichmentat
theexpenseoftheTCIIslanders.
4.35 Aswithallormostof theother loansthat Ihavementioned, thereceiptofmultiple
sums never repaid suggests that – like the loans to constituents – the idea of eventual
repayment is a convenient fiction. This is at itsmostobviouswhen it is remembered that
theyweremadetoanostentatiouslywealthyPremierbycolleagues intheCabinet (orthe
relativesofthetwoofthem),noneofwhomenjoyedatthetimehistrappingsofwealthor
influenceandwhomhehasmadenoattempttorepay.
7 ‐ I find that theundocumentedandun‐repaid,NorthWestPoint ‘loans’ to
theHonMichaelMisick, collectively amounting to about $350,000 fromHon
JeffreyHall,theHonFloydHallorhisbrotherandtheHonLillianBoyceorher
brother,werepossiblycorruptpaymentstohimforfavoursgiveninrelationto
theNorthWest Point transaction,which engendered themoney to facilitate
suchpayments.
I,therefore,recommendcriminalinvestigationbypoliceorothersinrelationto
theHonMichaelMisickofpossiblecorruptionand/orotherseriousdishonesty,
includingmisfeasance in public office, in relation to these payments and the
NorthWestPointtransactionsgivingrisetothem.
4.36TheThirdTurtleClub–Finders’sFeeof$161,000‐AnothermajorpaymenttotheHon
MichaelMisickwastoemergeforthefirsttimeafterhehadcompletedhisoraltestimony.
260Transcript,Day15,p50261Transcript,Day13,p125262Seepara4.99below
130
TheHonFloydHall,inhisoralevidence,informedtheCommissionthathehadreceivedwhat
hetermedafinder’sfeeinrespectofhisdealingswithadevelopernamedRichardPadgett,
whoranacompanycalledOceanpointDevelopmentLtd. This sumwas$375,000 in total,
andthepropertywaslatertobedevelopedastheThirdTurtleClub.263TheHonFloydHall
acknowledgedthathehadnotdeclaredthepaymenttotheRegistrarof Interests. Hehad
notonlyprovidedafindingservicebuthadalsodonesomeconsultancyworkforMrPadgett,
andhadbilledhimforthesumhalfofwhich,between$161,000and$165,000,hehadgiven
bywayofbanktransfertotheHonMichaelMisick.Hecharacteriseditasaweddingpresent
since, he said, themoney had been awindfall for him. As I have said, theHonMichael
Misickhadnotmentionedthistransfer.Infactasumof$161,618.92waslaterdisclosedby
Chal Misick as having gone into his client account for the benefit of his brother from
Paradigm CorporateManagement Ltd (Paradigm), the Hon Floyd Hall’s company, on 20th
February2006,sometwomonthsbeforetheHonMichaelMisick’swedding.
4.37 The characterisationby theHon FloydHall of thismoney as awindfall, andhaving
passedhalfofitonasagiftisunconvincing.Thepreciseamountofthetransferandmedium
of payment through Chal Misick’s client account, rather than direct to the Hon Michael
Misickdonotreadilysuggestapersonalweddinggift.Moreover,thecircumstancesofthe
HonFloydHall’sreceiptofthe$375,000,includinghisfailuretodeclareittotheRegistrarof
Interestsandhis latedisclosureof it to theCommission, raiseseriousquestionsabout the
probityof thepayment.Themoresuspect thedealon thepartof theHonFloydHall, the
more questionable is the division of it between him and the Hon Michael Misick. The
circumstancesgivingrisetothepayment,andtheHonMichaelMisick’sfailuretodeclareit
clearlyrequirefurtherinvestigation.
4.38TheAldenSmithpaymentof$325,000–TheHonMichaelMisickreceivedapayment
of$325,000 inFebruary2006 fromamannamedAldenSmith,whichhehadpaid intohis
BelizeBankaccount.HedidnotdeclareittotheRegistrarofInterests,andhediscloseditto
theCommissiononlyatthestartoftheoralproceedingsafterhavingbeenaskedtoaccount
for previously unexplained credits to his bank accounts. He said that he had been
approachedbyMrSmith,whohadacompanycalledAshleyPropertiesLtd,toassistwitha
saleofland.ThelandwasonWaterCay,andthepurchaserwasMrPeterWehrli,whowasa 263Transcript,Day6,p113
131
friendof theHonMichaelMisick, andhad loanedhimmoney.264 Heclaimed thathehad
been asked by theHon FloydHall to intervene, but did not knowwhether the latter had
receivedanymoneyfromthetransaction.Healsodeniedthatthelandinquestionhadbeen
CrownLandatthetime.
4.39 In due course theHon FloydHallwas to tell the Commission thatMr Smithwas a
friendofhisandhehadloanedMrSmith$75,000.HesaidthatMrSmithhadhadanoption
topurchase10acresofCrownLandonWaterCayfor$750,000andhadevidentlysoldthe
landonfor$2million,makingasubstantialprofit.Thisallowedhimtorepayhisdebttothe
HonFloydHallandtopayhimafurther$125,000.Onthataccount,thetotalcommissionof
$450,000allegedlypaidbyMrSmithonthe$2millionsalewouldhaveamountedto22.5%
incomparisontomostrealtors’commissionratesinsinglefigurepercentages.Theevidence
of the Hon Floyd Hall is clearly at odds with that of the Hon Michael Misick, as the
transactiondescribedbythe formerwasapurchaseandsaleon (‘flipping’)ofCrownLand
andnotsimplyaprivatesaleofprivateland. Ifthatwereso,theHonMichaelMisick,who
profitedfromthedeal,musthaveknownofit.
4.40TheJanetteVarellaDepositof$95,000–AfurtherpaymenttotheHonMichaelMisick
without proper explanation, was made into his account with the First Caribbean
InternationalBankof$95,000inJanuary2007. HetoldtheCommissionthatithadbeena
deposit by a friend, named Janette Varella, for a private land purchase. He said that
althoughtheyhadlaterjointlyboughtproperty,thismoneyhadbeenintendedasadeposit
onlandshehadbeengoingtobuyonherownaccount.Hesaidshehadsentittohimtopay
thedeposit.Hewasnotable,however,topointtothemoneybeingpaidoutofhisaccount
for that purpose. Thediscrepancy remainedunexplainedduringhis oral evidence, and in
latersubmissions.
8– I find that theHonMichaelMisick in recentyearsacceptedand failed to
declaretotheRegistrarofInterestsmanygiftsorpurportedloansofmoneyvia
theclientaccountofhisbrotherandattorney,ChalMisick,whichwerepossibly
corruptonaccountofpossiblefavoursgivenbyhiminhiscapacityasPremier.
264Seepara4.13above
132
I,therefore,recommendcriminalinvestigationbypoliceorothersinrelationto
theHonMichaelMisickofpossiblecorruptionand/orotherseriousdishonesty,
including misfeasance in public office, in relation to such and other similar
mattersinrecentyears.
9 ‐ I find that there is information that the Hon Michael Misick may have
promotedtheabuseoftheCrownLandPolicyonanumberofoccasions,and
benefitedpersonallyfromthatabuse:1)inhisreceiptof$161,618.92fromthe
HonFloydHall via the clientaccountofChalMisickon20th February2006,a
possiblycorruptpaymentderivedfromapurportedfinder’sfeeof$373,000in
respectoftheThirdTurtleClubpaidbyMrRichardPadgett,adeveloper,tothe
HonFloydHallinthecircumstancessummarisedabove;2652)inhisfacilitation
of the sale of former Crown Land by Ashley Properties Ltd for which he
receivedacommission,asdescribedabove;3)inhisparticipationintheprofits
of Urban Developments from the sale of land at North West Point to a
companycontrolledbyDavidWex,anoverseasdeveloper,asdescribed;and4)
in fronting the sale of Crown Land to overseas developers, specifically in his
involvement in the company, MIG Investments Ltd, by which he enabled
overseasdeveloperstopurchase18acresoflandentirelyattheirexpense,but
inwhichheacquireda50%interestbyvirtueonlyofhisstatusasaBelonger.266
I, therefore, recommendcriminal investigationbypoliceorothers in relation to
the HonMichaelMisick in respect of the abovematters of possible corruption
and/orotherseriousdishonesty,includingmisfeasanceinpublicoffice.
Tourism
4.41 Over the last decade themain source of income and development for the TCI has
been, and remains, thepromotionof the Islands as a tourist destination. Theyhavebeen
deliberatelymarketedtoattractwhataretermedhigh‐endtourists,thosepreparedtospend
extensivelyonluxuryaccommodation.FromtheformationofthisGovernmentin2003,the
265Seeparas4.36–4.37above;Seealsoparas4.121–4.124andRecommendation19below266Transcript,Day2,pp127‐133
133
HonMichaelMisickalsoheldthepostofMinisterofTourism.Inrecentyears,hehasshared
responsibilityfortourismwithTouristBoardwithsomefulltimepaidofficials,includingthe
Director, Lindsey Musgrove, and Deputy Director, Ralph Higgs. Both of these men gave
evidencetotheCommission,asdidtheChairmantheHonWayneGarland,aPNPMemberof
theHouseofAssembly.AlthoughaBoardmember,theHonGarland’spostisanexecutive
one,makinghimalsoapaidmemberoftheBoard.
4.42 AsMinister forTourism, theHonMichaelMisickhaspresentedhimselfas themain
ambassador for the Islands abroad. The Hon Floyd Hall has commented that this was a
successfulstrategy,andtheHonMichaelMisickdisplayednofalsemodestyinvauntinghis
ownsuccess.Theevidenceof theHonWayneGarlandtotheCommissionwasthat tourist
numbershadbeen rising since2003,buthaddippedduring the financial year2007‐2008.
TheCommissionhasnotseenfiguresfortouristnumbers,andnoevidencewaspresentedto
itastotheeffectivenessofdifferentapproaches.Infact,theChiefAuditor,CynthiaTravis,
in her Audit Report on the Tourist Board for 2005‐2006, stated that the Board had been
unabletocompileaccuratestatisticaldataontouristarrivalsbyair,andhadbeenrelyingon
estimates. TheReportmadedepressing reading. TheChiefAuditordescribed theTourist
Boardasbeing inapoorfinancialstate,withapatternadhocspendingandalargedeficit
becauseofmuchunbudgetedexpenditure in theprevious financial year. Shepointedout
that, of 13 issues raised with the Board, six had also been raised the previous year,
suggesting an unwillingness or inability on the part of the Board to address identified
problems. She did not attribute the deficits to fraud, but seemingly to incompetence and
poorleadership.
4.43TheHonMichaelMisick,whenaskedintheoralproceedingsabouttheChiefAuditor’s
criticisms,respondedwithapersonalattackonherasbeinganti‐government,allegingthat
she was in cahoots with the Opposition. As the Commission learned, he had previously
beratedherpubliclyonatleastoneoccasion.TheCommissionhasseenmuchofherworkin
herauditreports.Nothinginthemsuggestshertohavebeenanythingotherthanobjective
andprofessionalinherwork,rightlyseekingtoaddresstheGovernment’sincompetentand
chaoticmanagementofpublicfinances.
134
4.44ThedivisionorsharingofresponsibilitiesbetweentheMinistryofTourismledbythe
HonMichaelMisickandtheTouristBoardledtoconfusion.TheBoard’sjobwastopromote
tourism, and it had been voted a generous budget for that purpose. However, the Hon
MichaelMisickincreasinglyactedonhisowninitiative,undertakingprojectsandcommitting
theBoardtocontractualobligationswithoutconsultingtheminadvanceor indisregardof
itsadvice.TherewasconfusingevidencebeforetheCommissionastowhowasresponsible
forwhatandwhohaddonewhatinundertakingsomeofthesecommitments.FromApril
2007 themarketing budget of the Board was apparently hived off to allow for a special
budgetformarketing.Boardofficialsunderstoodthatthiswastobemanagedorchannelled
through theOfficeof thePremier. In awritten submission to theCommissionhedenied
that.267TheHonWayneGarlandsaidthat,onoccasion,hehadsigneddocumentsonbehalf
oftheHonMichaelMisickratherthanBoard,thelegalquestionabilityofwhichmayyethave
tobetested.
4.45Theonlyreasonforthisnewbudgetaryarrangementseemstohavebeentogivethe
HonMichaelMisick an opportunity to intervenepersonally inmarketing decisions for the
Islands’ tourism industry, more particularly as to advertising. I do not doubt the Hon
MichaelMisick’senthusiasmforpromotionoftheTCI,butcannotavoidtheconclusionthat
he wished to circumvent governmental bureaucracy andmake his own decisions, usually
involvinghigh‐profileanddeterminedlyup‐marketadvertising.Although,hisspecialbudget
forthepurposewasgenerous,hespentalmostallthesumbudgetedforthefirsttwoyears
in the first year. Meanwhile theBoard hadoverrun its ownbudget in the previous year,
leadingtoanaccumulateddeficitinMarch2006ofover$2million.Thisresulted–according
to the evidence of its Director and Deputy Director – from the Hon Michael Misick’s
directionsthatitshouldundertakeprojectsforwhichtherewerenobudgetedfunds.
4.46KerwinCommunications–OfparticularconcernwasanagreementbetweentheBoard
and Kerwin Media LLC, a New Jersey agency working under the name of Kerwin
Communications.Untilabout2006advertisingoftheTCIintheUSAhadbeenhandledbya
companynamedBlurAdvertising,workingona relativelymodestbudget. In2006Kerwin
Communicationsemergedasabidder for thework. TheCommissionwasshowna formal
267HonMichaelMisick,fourthstatement,dated19thJanuary2009
135
contractbetweentheagencyandtheBoarddated10thMarch2007. Itwasdauntingin its
scope,seeminglyauthorisingtheagencytoactonbehalfoftheBoard intheplacementof
contracts for Print‐Media and Broadcast‐Media advertising without prior agreement. The
billsweregototheBoard;KerwinCommunicationswouldbeheldfreeofanyliability,and
wouldreceivecommissiononalladvertisingplaced;andthecontractplacednorestrictionat
allupontheamountofadvertisingornumberofcontractsplacedbytheagency.Itwas,it
appears, inKerwinCommunications’ interesttoplaceasmuchadvertisingaspossible,asit
receivedastraightpercentageofeverydollarcommitted.
4.47 The contract, on the face of it, had been signed by the Hon Wayne Garland, as
ChairmanoftheBoardandonitsbehalf.Onbeingshownthecontractinthecourseofhis
evidencetotheCommission,hesaidthathehadtakennopartinitsnegotiation,allofwhich
had takenplacebeforehis appointment. He agreed that the contract borehis signature,
but, paradoxically and without explanation, denied that he had ever seen the document
before.HeagreedthatitamountedtoablankchequeinfavourofKerwinCommunications,
and informedtheCommission that theGovernmentwasbeingsued foraseriesofunpaid
debts incurred on its behalf by the agency. He said that the contract would have been
referredtoSaunders&CoasattorneysfortheBoardbeforesignature.
4.48 In fact, Kerwin Communications had already begun to place advertising for the
GovernmentbeforethepurportedsigningofthecontractwiththeBoardinMarch2007.At
around this time they had engaged the services of the Hon Michael Misick’s wife for
advertising purposes from late 2006. Photo‐shoots had been arranged, for which she
appearstohavebeenpaidnearly$300,000throughhercompanyMyWayProductions2Ltd.
TheevidencebeforetheCommissiononthismatterwas,however,unstructuredandpoorly
documented.
4.49 TheTouristBoard’sminutesof itsmonthlymeetings intheAutumnof2006confirm
thatKerwinCommunicationshadalreadybegun toactde factoasagent for theBoardon
instructions of the Hon Michael Misick before the March 2007 contract, and had been
invoicing it for advertising placed. In his evidence to the Commission, the Director, Mr
Musgrove, spokeofameetingheattended inNewYork late in2006withMrKerwin, the
136
HonMichaelMisickandthethenChairmanoftheBoard,DonGardiner,atwhichtheagency
madeapresentationoftheservicesitcouldprovideandtheirprice.Hestatedthatthathe
hadleftthemeetingwiththeimpressionthatKerwinCommunicationswastobetheBoard’s
new advertising agency, although no firm agreement had been reached. In cross‐
examinationonbehalfoftheHonMichaelMisick,hedisagreedwiththesuggestionthat it
hadbeen theBoard’sdecision toengageKerwinCommunicationsand that theBoardhad
decidedhowthe fundsprovidedby thespecialbudgetweretobespent. Evidenceto the
CommissionbytheBoard’sDeputyDirector,MrHiggs,wastolikeeffect,thoughhediffered
astodetail. Accordingtohim,268theHonMichaelMisick’swife’s involvementhadalready
beendecided.
4.50Thus,thethrustoftheevidencefromallthreeTouristBoardofficialswasthattheHon
Michael Misick, not the Board, had chosen Kerwin Communications as the advertising
agency for theTCI, and that theBoardhadeffectivelybeen instructedor asked toaccept
thatchoice.TheirevidenceinthatrespectisofapiecewiththatofMsMcCoy‐Misick,who
saidthatherhusbandhadplayedaroleinnegotiatingtheKerwinCommunicationscontract.
ShesaidthatherhusbandhadtoldtheagencythatshewasgoingtobethefaceoftheTCI,
andhadmadetheappointmentoftheagencydependentuponit.
4.51TheHonMichaelMisick,ontheotherhand,toldtheCommissionthattheBoardhad
selected and appointed Kerwin Communications269 and that he had played no part in the
selectionorintheirchoiceofhiswifetobetheadvertisingfaceoftheTCI.270Hemaintained
thatitwasacoincidencethattheagencychosehiswife.MrKerwinsoughttosupporthis
stance,inalettertotheCommissionassertingthatthecontracthadbeennegotiatedsolely
by the HonWayne Garland on behalf of the Board, and that his agency had negotiated
separately with Ms McCoy‐Misick as to the terms of her engagement. However, he
acknowledged thatKerwinCommunicationshadbeen instructed inmid2006, about the
timeithadengagedhertoadvertisetheTCI,longbeforetheHonWayneGarlandbecame
theBoard’sChairman,and,onhisownevidence,firstmetMrKerwin,namelyinMayorJune
2007.
268Transcript,Day20,p220269Transcript,Day3,p73270Transcript,Day3,p76
137
4.52EveniftheHonWayneGarlanddidsigntheMarch2007contractdocument,itlooks
asifitwaswellaftertheagreementhadbeenstruckbytheHonMichaelMisickandKerwin
Communications, and that the latter’sworkhadbegunwith thepromotionofMsMcCoy‐
Misick’slucrativeworkasthefaceoftheTCI. TheHonMichaelMisickandMrKerwinhad
beenonfriendlytermssinceatleastearly2006,longandcloseenoughforKerwintohave
been invited to theMisicks’wedding inApril 2006. In addition, theHonMichaelMisick’s
involvementintheoperationoftheagreement,oncemade,isalsotelling.Inresponsetoan
expressionofconcernbytheDeputyDirector,MrHiggs,aboutthe levelofexpenditureto
whichKerwinCommunicationswasexposingtheBoardunderthecontract,hewrotetoMr
HiggsinstructingtheBoardtoabidebytheagreementheandtheagencyhadmadeabout
expenditure.
4.53Inmyview,if,asappearslikely,theproperviewofthisconflictingevidenceisthatthe
Hon Michael Misick engineered the Government’s advertising contract with Kerwin
Communications and the agency’s engagement of his wife for high financial reward, it
suggestsattheveryleastabusebyhimofhisofficialposition.Inexpressingthatview,Ido
notcriticiseMsMcCoy‐Misick,whoperformedthedutiesaskedofher,orthequalityofthe
advertisingpurchasedviaKerwinCommunications.
10–IfindthattheHonMichaelMisickbehavedinapossiblycorruptmanner
and/or inmisfeasance of his public duty, by securing highly paid advertising
contracts for his wife with the TCI Tourist Board and with Kerwin
Communications purportedly acting on behalf of the Tourist Board, thereby
potentiallyabusinghisministerialresponsibilityforthetourismintheTerritory
withaviewtoenrichinghiswifeandhimself.
I,therefore,recommendcriminalinvestigationbypoliceorothersinrelationto
the HonMichael Misick of possible corruption and/or misfeasance in public
office, in relation to him to his exercise of his responsibility as Minister
responsiblefortourisminthismatter.
138
UseofGovernmentandleasedaircraft
4.54OneofthemostcontentiousandhotlydebatedissuesbeforetheCommissionwasthe
use by the Hon Michael Misick of privately leased aircraft and of Government funded
aircraft.HeandhiswifegaveevidencetotheCommissionabouttheiruseofprivateaircraft.
After they met in mid‐2005 they conducted a courtship from afar, flying between Los
Angeles and the TCI, initially on scheduled aircraft. They quickly decided that a privately
leasedaircraftwouldgivethemmoretimetogether. Heprovidedthefunds;shesaidthat
she did not, at first, know the cost, but later learned that each one‐way trip cost about
$50,000.TheyadoptedthismodeoftravelfromaboutJulyorAugust2005,andcontinued,
with twoor three round trips permonth, up to andbeyond theirmarriage inApril 2006.
AssumingprivateleaseswerealwaysatthelevelandratementionedbyMsMcCoy‐Misick,
thePremierwouldhavespentbetween$200,000and$300,000permonthbetweenAugust
2005 and March 2007, when they began to consider a different arrangement. This
represents expenditure of between $4 million and $6 million. Conspicuous and lavish
expenditure of this nature is precisely the reasonwhy therewas suchwidespread public
concern at the behaviour of the Premier, and a legitimate concern as to how he could
possiblyaffordit.
4.55In2007theGovernmentacquireda1976KingAir200aircraft271forlocalandregional
transport.Itboughttheplaneforjustover$1millionfromacompanycalledTCIExportLLC
basedinBoise,IdahowithamailingaddressinChicago.272Theonlynamedmanageronthe
corporate documents is a man named Paul Brassington, whose likely relative, Michael
Brassington, became its regular pilot, once the Government had purchased it. The Hon
MichaelMisickproposed thepurchaseatCabinetMeetingon30thMay2007.273 Cabinet
approved thepurchase, and the followingweek,6th June, theyapprovedpayment for the
employmentoftwopilots.
4.56 Theaircraftofgreaterinterest,however,wasaGulfstreamIII jetaircraft,capableof
internationaland trans‐Atlantic travel. Fromabout themiddleof2007 theybegan touse
271RegistrationnumberN884PG.272TheHonMichaelMisickBundle3,pp1077‐1081273CoreVolume6,tab1,p114‐116
139
anotherGulfstreamIIIJet.274Theirevidencediffersastohowthatcameabout.Hesaidthat
hehadbeeninterestedinleasingaplanetosavethegovernmentmoney.Sherecalledthat
she had jokingly said to him that they needed a plane and he started looking into it and
eventuallytheyacquiredone,andsheusedit. Sherecalledthatononeoccasiontheyhad
borrowed Mario Hoffmann’s private aircraft for a trip to the USA. Michael Brassington
suggestedhe look at a jet beingoffered for salebyWealthAviationof LasVegas. Itwas
flowntoLosAngeleswhilsthewas thereonavisit, forhim lookat. AlthoughanOffer to
Purchasewasdrawnupinhisnamewithaviewtooutrightsaleofthejetfor$6.25million,
his interest, he said, was only in leasing, so he did not continue with the transaction.
However,JeffreyWatson,aUScitizen,afriendofhisandWashingtonDClawyer,knewofhis
interest, andbought theplane in thenameof Indigo TransportationPartners, a company
basedinMiami.ThatcompanythenofferedtoleaseittotheTCIGovernmentfor$165,000
permonthbasedonatotalof400hoursflyingtime.InJuly2007theCabinet,beforewhom
thematterwas raised by theHon FloydHall, approved the purchase on those terms. In
evidence to the Commission, the Hon Floyd Hall maintained that he had at the time
disagreedwiththepurchase,buthadnotspokenoutagainstit.HetoldtheCommissionthat
thedealhadbeendonebytheHonMichaelMisickwithoutreferencetohimasMinisterfor
Finance.TheHonMichaelMisickwasunabletoexplaintotheCommissionhowitwasthat
MrWatsonhadbought theaircrafthehadbeen lookingat in LosAngeles. Soonafter, in
October2007,MrWatsonwasgivenBelongerstatus.
4.57 MsMcCoy‐Misick remembered thedetailsof theacquisitionsomewhatdifferently.
She had been shown theOffer to Purchase document whilst on board the aircraft from
MiamitoProvidenciales.Theyhad,shesaid,boughttheplane;sheknewthatbecauseher
husbandhadtoldherso. Sheandhehadmadearrangementstopersonaliseorcustomise
theinsideoftheaircraft,totheextentofherdesigningapersonalcresttobewovenintothe
carpet. Theyhadalso chosen coloursand fabrics for the interiordesign; sheprovided the
Commissionwith documentation from a designer, quoting forwork on the aircraftwhich
hadbeenfaxedtoCaptainMike.SheknewJeffreyWatsonasafriendofherhusband,who
would stay at the house with them in TCI, but was unaware of his connection with the
aircraft.Atnostageduringhermarriagedidshesuspectthattheydidnotowntheaircraft.
274RegistrationnumberN165G
140
ShehadaccompaniedherhusbandinitonaworkingtriptoDubaiforatouristconference,
but most of her use of it was personal, including many trips to the USA, including Los
Angeles,Europe,includingSwitzerlandtovisitherdaughterinschoolthere,Milan,Prague,
andaholiday inAfrica. HerhusbandwouldsendtheplanetocollectherfromtheUSA, if
shecouldnotmakescheduledflightconnections.275
4.58TheHonMichaelMisick,inhiswrittenstatementattheoutsetoftheoralproceedings,
maintainedthatJeffreyWatsonhadleasedittotheGovernmentandothersforgovernment
useforsetperiodsoftime,andtohimselfforpersonaluse.However,thereisnodoubtthat
theHonMichaelMisickhadalmostexclusiveuseoftheaircraft.TheHonFloydHalltoldthe
Commissionthathehadnottravelledon itandhadneverevensteppedonboard. Ihave
seennoevidenceofotherministerialorothergovernmentaluseofit.NorhaveIseenany
evidenceofpaymentsmadebytheHonMichaelMisicktoIndigoTransportationPartnersfor
hispersonaluseoftheplane,noranyevidenceofreimbursementbyhimtotheGovernment
forthatuse.
4.59 These circumstances of the acquisition and the Hon Michael Misick’s use of the
Gulfstream raise a number of matters, worthy of criminal investigation as to possible
corruption and/or other serious dishonesty in the form of misfeasance in public office
and/ordishonestmisappropriationofpublicfunds,namely:
1)thefactthatMrWatson,afriendoftheHonMichaelMisick,purchasedthe
jet and then leased it to the Government after the Hon Michael Misick had
viewed the same jet, which suggests a much closer involvement of the Hon
Michael Misick in its acquisition and/or beneficial ownership than he has
admittedtotheCommission;
2) the fact thathemadenomentionofMrWatson inCabinetor toapossible
conflict of interest,when the government leased the jet at a very high rental,
whichsuggestsadesiretokeephisconnectionsecret;
3) If the Hon Floyd Hall is correct, the transaction was completed without
advancereferencetotheCabinet,anditsapprovalwasamereformality,and
275Transcript,Day14,p87
141
4)theexclusiveuseoftheaircraftbytheHonMichaelMisickandhiswife,forthe
mostpart,fortheirpersonaluse.
4.60Bywayofpostscript,thereisconflictastowhethertheleasingchargesfortheaircraft
werestillbeingpaidand,ifso,bywhomatthetimeoftheoralproceedingsinJanuaryand
Februaryofthisyear.TheHonFloydHall,whowasstillMinisterofFinanceatthetime,was
under the impression that the Government was paying for it. The HonMichaelMisick’s
evidencewasthatthecontracthadbeenterminatedandthatpaymentshadceased.Istill
donotknowthetruthofthematter.
11 – I find that the Hon Michael Misick behaved in a possibly seriously
dishonest manner, including misfeasance in public office and dishonest
misappropriationofpublicfunds,byhispossiblemisuseofgovernmentfunds
andfacilitiesforhispersonalpurposesinhisuseofaircraftcharteredorleased
bytheGovernmentforofficialpurposes.
I,thereforerecommendcriminalinvestigationbythepoliceorothersinrelation
to him of possible serious dishonesty, including misfeasance in public office
and/ordishonestmisappropriationofpublicfundsinrelationtohispersonaluse
ofsuchaircraft.
CasablancaCasinoandtheWindsorInvestmentGroupLtd
4.61TheCommissionreceivedundocumentedinformationsuggestingthattheHonMichael
Misick andMario Hoffmann, the Chief Executive Officer of Salt Cay Development Co Ltd,
bothhadaninterestintheCasablancaCasino.TheHonMichaelMisickhaddeclarednosuch
interest in his declarations to the Register of Interests. But evidence given to the
Commissionwastosuggestthathe,theHonFloydHallandtheHonMcAllisterHanchelleach
owned10%ofWindsorInvestmentGroupLtd,theholdingcompanyofthelandonwhichit
stood,andthatChalMisickownedtheother70%.
142
4.62 Bya letterof27thOctober2008,276theHonMichaelMisick’sattorneys informedthe
Commission, for the sake of completeness, that he owned 10% of a company properly
describedasWindsorInvestmentGroupLtd,277ofwhichChalMisickwasthesoleregistered
director,companysecretaryandshareholder.WindsorInvestmentGroupLtdowned50%of
HydronoxLtd,aholdingcompanywhichownedthe landuponwhichtheCasinowasbuilt.
The other 50% of Hydronox Ltd was owned by Terrapin Investments Ltd. The beneficial
ownership of Terrapin Investments Ltd or the other shareholders inWindsor Investment
GroupLtdwerenotspecified.
4.63TerrapinInvestmentsLtd,itemerged,washeldbyoronbehalfofMarioHoffmann,as
anassetholdingcompany.TheHonMichaelMisick’sattorneysstatedintheletterthatthe
corporate documents for Windsor Investment Group Ltd would be forwarded to the
Commission; they have not been. In the letter they also stated that Hydronox Ltd had
generatednoprofitsand therehadbeennodrawingson it, and thatWindsor Investment
Group Ltd had no income.278 Searches of the Companies Register show that, since April
2008, Windsor Investment Group Ltd and Terrapin Investments Ltd became joint equal
shareholdersandtheonlytwodirectorsofHydronoxLtd,andthustheeffectiveownersof
theCasinoland.
4.64 ChalMisickacknowledged inhisevidence to theCommission that theHonMichael
Misick owned 10% of Windsor Investment Group Ltd, but refused to identify the other
shareholders.WhenIruledagainsthisrefusal,hesaidthattheHonFloydHallandtheHon
McAllisterHanchelleachheld10%andthatheheldtheother70%. Ishouldmentionthat
neithertheHonFloydHallnortheHonMcAllisterHanchellhaddisclosedtheseintereststo
theRegistrarofInterestsortotheCommissioninwrittenortheiroralevidence.279Hesaid
thatwhenWindsorInvestmentGroupLtdhadacquiredthelanduponwhichtheCasinonow
stood,therewasapropertyonitwhichtheCasinooperatorsconvertedintotheCasino.280
The initial arrangement between the company and the Casino operators was that, as a
reflectionoftheirborrowingofsome$1.8millionforconstructionofthenewbuilding,they
were to pay a nominal rent of $2,500 permonth. But soon the company took over the
276HonMichaelMisickBundle1,page320277registeredon21stApril2004,withChalMisickasthesoleregistereddirector,companysecretaryandshareholder.278HonMichaelMisickBundle1,page323(T/SreftoCorrespondenceBundlep65)279Transcript,Day10,p17280ibid,p20
143
servicingof the loan in return foramonthly rentalof$40,000permonth,whichwaspaid
directtothelenderandmortgageetocoverthecostoftheloan.ChalMisickwasunableto
identifythelender.
4.65 ChalMisick had set up the Casino company, Casablanca Casinos Ltd, in April 2006,
allocating shares in equal amounts to Washington Misick, a brother of the Hon Michael
Misick,andtoamannamedAndyStephens,bothofwhombecamedirectors. ChalMisick
later produced to the Commission what purported to be board minutes at which they
authorisedthecompanytoborrow$1.3millionfromM&STrustCompanyLtd.
4.66 When asked about the possible involvement of Mario Hoffmann in the Casino
operation, Chal Misick said he did not know. He maintained that he had no idea if Mr
Hoffmannwasbehindtheother50%shareinHydronoxLtd,orwhetherhehadbeenbehind
theloanofmoneyfortheredevelopmentoftheCasino.Infact,asMrHoffmannwaslater
tomakeclear inwritten submissions to theCommissionon20thFebruary2009,281hewas
behindboth.Includedinthosesubmissions,MrHoffmannstatedthatonavisitbytheHon
MichaelMisick to Bratislava in October 2005, he,Mr Hoffmann, introduced him to Andy
Stephenswhoranacasinothere.AtthesuggestionoftheHonMichaelMisick,MrStephens
visitedtheTCIwithMrHoffmannandviewedtheCasinositeanditsformerbuilding,which
hedecidedtoconvertintothepresentCasino,withthehelpoffundingfromorfacilitatedby
MrHoffmann.
4.67MrHoffmannstatedinthosesubmissionsthathehadalwaysthoughtthatChalMisick
ownedHydronoxLtd,theownersoftheland.Heistechnicallycorrectaboutthat.Terrapin
Investments Ltd isdescribedbyMrHoffmannasmyTCIassetholdingcompany,whichhe
used to purchase 50% stake in Hydronox Ltd in 2007. He added that he had sold his
investment in the company to Schomer Ltd owned by another, unnamed, Slovakian. The
CompanyRegistry recordsTerrapin Investments Ltd takingup sharesandadirectorship in
April2008,althoughtheir informationwouldonlybeasaccurateasthatwhichChalMisick
gaveto it. AsMarioHoffmannbelievedHydronoxLtdwasownedbyChalMisick,hemust
presumably have dealt with him. ChalMisick’s assertion, that he did not knowwho lay
behindtheother50%shareholdingofHydronoxLtd,isunconvincing.
281MarioHoffmannstatementparas14.1‐14.6
144
4.68 MrHoffmannalsoconfirmed, inwrittensubmissionstotheCommission inFebruary
2009,thathehadloanedthemoneytoCasablancaCasinosLtdandtoBKPartnersLtd(the
latter,apparentlyapartner inmanagingtheCasino, initiallyownedbyWashingtonMisick,
and later jointlybyhimandMrStephens). Accordingly itappears that,whilstChalMisick
managesHydronoxLtd,50%ownedbyhimselfontrustforothers,heclaimsnottoknowthe
identityofthepersonbehindtheother50%share,eventhoughthiswasMarioHoffmann,a
manwithwhomhehasbeen involved later inanumberof transactions.Healsodoesnot
knowthat themoney loanedto thecompany formedbyhimfor renovationof theCasino
(encouraged by his brother, the Hon Michael Misick, and 50% owned by his brother
Washington)wasalsofromMrHoffmann.
4.69Whetherthereisanywrong‐doingintheestablishmentoftheCasinodoesnotemerge
fromthematerialwehaveseen.MrHoffmann,inhiswrittenevidencetotheCommission,
insistedthatitwasastandardbusinessdeal,butevenheexpressedsurprisethatChalMisick
claimednottorecallthedetailsofit,completed,asitwas,onlyafewmonthsearlier.Inmy
view, Chal Misick is almost certainly lying about his recollection. It defies belief that he
wouldnotknowwithwhomhewasdealing.
4.70 The two CabinetMinisters, in addition to the HonMichaelMisick, who had been
investors inWindsor InvestmentGroup Ltd, theHon FloydHall282 and theHonMcAllister
Hanchell,283 both returned to give further evidence in the oral proceedings. Both then
rememberedtheirinvestment,$40,000each,intheCasinoprojectinabout2004.
4.71TheHonFloydHallsaidthathehadnotknownthattheWindsorInvestmentGroupLtd
hadbeenthecompanyinvolvedorthathisshareholdinghadamountedto10%.Hesaidhe
had paid $40,000 from his own account, but had received no paperwork evidencing his
investment. He said that he had not thought it necessary to declare his interest in this
investment to theRegistrar of Interests or todisclose it to theCommission. He also said
that,whilsthebelievedMinisterialcolleagueshadalsoinvested,hehadnotknownwhoorin
whatsums.HeaddedthattheHonMichaelMisick,theHonMcAllisterHanchellandhehad
never discussed their joint investment, despite all being in a similar position, and he had
282Transcript,Day15,p4283Transcript,Day19,p94
145
never asked Chal Misick how the investment was doing, despite the high profile and
apparentsuccessoftheCasino.
4.72TheHonMcAllisterHanchell,unliketheHonFloydHall,knewthecompanynameand
itsborrowings, that theHonMichaelMisickand theHonFloydHallwerehis co‐investors,
and that Chal Misick had co‐ordinated their respective investments. Indeed, he recalled
whenthefourmenhadmettogethertodiscusstheprojectandhadagreedthatitwouldbe
goodinvestment.
4.73 All this information and evidence about the Casablanca Casino suggests a joint
venturebythefourmen,throughWindsorInvestmentGroupLtd,todeveloptheCasablanca
building. That in itself is unremarkable. However, no formal shareswere ever issued in
WindsorInvestmentGroupLtd,andtheCommissionhasnotbeenabletoestablishwhat,if
any,investmenttheyrespectivelymade,orwhenorwherethemoneyfromtheinvestment
came from. The company said toown the land,Hydronox Ltd, although it existedbefore
CasablancaCasinosLtd,wasnotacquiredbyWindsorInvestmentGroupLtduntillate2007,
which isover18monthsafterCasablancaCasinosLtdhadbeenestablished,andafter the
Casino, with the financial involvement and support of Mario Hoffmann, had begun to
operate. It is hard to see how the claimed investment in 2004 could have been used to
redevelopthebuilding.
4.74Icannotsaythatthecircumstancesgivingrisetothisestablishmentandinvestmentin
theCasinobythreeformerGovernmentMinistersandMarioHoffmannwere,ontheirface,
possibly corrupt or otherwise seriously dishonest. However, the contradictions and
evasivenessexhibitedbythethreeMinisterssuggestapossibilityofsomevenalitythatcalls
for further investigation. Ihave inmind, inparticular, the followingcircumstances:1) the
non‐declarationbytheMinistersoftheirrespectiveinterestsintheCasinototheRegistrarof
Interests,andtheirtardyandpatchydisclosureofthemtotheCommission;2)contradictory
accounts of the Hon Floyd Hall and the Hon McAllister Hanchell; and 3) their common
accounts of investing without any form of documentation and apparent lack of curiosity
aboutthevalueofandreturnsfromtheirinvestment,despiteitsapparentobvioussuccess.I
am strengthened in the suspicion of such possibility of venality by the contradictions
inherentintheevidenceofChalMisick.
146
4.75 An interestingside issueandfootnotearisesfromthe involvementofChalMisick in
theWindsorInvestmentGroupLtd.Itconcernsapaymentintooneofthecompaniesthat
ChalMisickhadestablished forMsMcCoy‐Misick,MyWayProductions2 Ltd. Oneof the
itemslistedbytheHonMichaelMisickontheschedule,Schedule5,thatheprovidedtothe
Commission at the start of the oral proceedings in January 2009 purporting to show the
sourcesofvariousfunds,284wasthereceiptofapaymentfromWindsor InvestmentGroup
LtdbyMyWayProductions2Ltd,ofasumof$300,000madeinMarch2007.Whenasked
about it, the Hon Michael Misick referred to his interest as a shareholder in Windsor
Investment Group Ltd,285 and initially suggested that it was a dividend payment to him.
However,hewasunabletoexplainwhyorhowhecouldhaveacquired$300,000asdividend
fromacompanythathadearnednothing.
4.76 Chal Misick was to suggest in a later statement that he thought his brother was
mistaken and that the $300,000 came from a share sale option on a North Caicos
property.286InfacttheclientaccountledgerprovidedbyChalMisickdidnotsupporteither
explanation.Theclientaccounthadreceivedalmostexactlythesamesumaboutsixweeks
before the transfer toMyWay Productions 2 Ltd, byway of apolitical contribution from
ValentineGrimes,believedtobeaBahamas‐basedlawyerandpolitician.
JoeGrantCay
4.77 TheissueofthedevelopmentofJoeGrantCayhasarisenbeforetheCommissionin
different contexts, and has given rise to various concerns. Joe Grant Cay (sometimes
referredtoasJoeGrant’sCay) isasmall islandofabout740acres(1.16sqmiles)situated
between Middle Caicos and East Caicos. The earliest documentation seen by the
Commission relating toaproposeddevelopmentof this island is a letterof1st September
2006totheHonMichaelMisickfromalocalfirmofattorneys,MillerSimonsO’Sullivan,on
behalf of Arturo Malave, a Venezuelan national known to him. The letter contained a
proposal for developmentof theCay through a company in formationnamedEast Caicos
Ltd,andsoughtGovernmentapproval.287Theletteralsomentionedyourrecentdiscussions
284HonMichaelMisick,BundleA,Appendix5285Transcript,Day2,p51286ChalMisickstatement,p6287CoreVolume7,tab2,p3
147
withourclient. TheHonMichaelMisick,whenaskedaboutthis,agreedthathemayhave
hadearlierdiscussionswithMrMalaveonthesubject.288
4.78 Theproposalwasraised inCabineton18thOctober2006.289TheCabinetdecidedto
approve in principle what was termed a high end resort project on Joe Grant Cay to be
developed by Arturo Malave or a designated company. Various elements of the likely
agreementfortheprojectwereincludedintheCabinetminute,includingacceptanceofan
offer from Mr Malave to pay $5 million to the Government on completion of the
Development Agreement. TCInvest, which is the Government agency responsible for
encouragementofinwardinvestmentintotheIslands,wrotetoMrMalave’sattorneyson6th
Novembertothateffect.290However,aduediligencereportonMrMalavepreparedinlate
2006 painted him in less than glowing colours. The HonMichael Misick, who agreed in
evidencethathewasafriendofMrMalave,correctlypointedoutthatthereportconfirmed
thathehadnocriminalconvictions. TheHonMichaelMisicktoldtheCommissionthathe
hadbeenintroducedtoMrMalavebyanexecutivefromtheCarnivalCorporation,andhad
hadnocausetobesuspiciousabouthispastbusinessdealings.291Headdedthateventually,
however,theGovernmentdidnotenterintoagreementbecauseoftheduediligencereport
anditsperceptionofhisinabilitytoperform.
4.79 An internet search against thenameofArturoMalavequickly reveals a numberof
adversereferencesalleginghisinvolvementinfraudulentactivity.Theremaybenothingin
these allegations; the Commission has not received any information to suggest that his
involvement in Joe Grant Cay was not above board. It is clear, however, that he was
attractingcriticisminhisownnameoversomeperiodoftime,andhiscontinuingassociation
withtheprojectmighthavebeenembarrassingfortheTCIGovernment.
4.80ChalMisickalsoknewMrMalave.InhisoralevidencetotheCommission,hesaidthat
hehadacted forhim in theestablishmentof a company calledCaicosPlatinumCompany
Ltd292forthepurposesofthisproject.Thecompanywasincorporatedon30thOctober2006
288Transcript,Day3,p115289CoreVolume6tab1p88290CoreVolume7,tab2p20291Transcript,Day3,p119292Transcript,Day10,p152
148
intheTCI,andhadonlyeverhadoneissuedshare,whichwasheldbyChalMisick’snominee
company,WindsorEastLtd.ChalMisick’sothernomineecompany,ChalmersManagement
Ltd, was the sole director.293 Chal Misick told the Commission that since Miller Simons
O’SullivanrepresentedMrMalaveinhisdevelopmentambitions,hisonlyrolehadbeento
incorporatethecompany.
4.81ChalMisickwentontosaythat,becauseArturoMalavecouldnotpaysomemoneyby
lateNovember2006totheGovernment,theofferofadevelopmentagreementlapsed.This
is not reflected in the Cabinetminutes or in the TCInvest letter, but ChalMisickmay not
havehadfullaccesstothat informationatthetime. What isclear is that inthefollowing
year,2007,theCabinetsetadeadlineof30thNovember2007foraction,adeadlinethatthe
then proposed developers did not meet. This failure may have been confused with the
eventsoflate2006.Bythen,accordingtoChalMisick,MrMalavehaddroppedoutofthe
picture, and he, ChalMisick, had retained Caicos PlatinumCompany Ltd for use by other
clients.294
4.82 What ChalMisick said aboutArturoMalave is demonstrablywrongon thebasis of
other evidence. In mid‐March of 2007MrMalave had not dropped out of the proposed
project. InthatmonthMillerSimonsO’SullivanwrotetothePremier295andtoTCInvestby
emailedletterundertheheadingCaicosPlatinumCompanyLtd,copiedtoMrMalaveandhis
associates,statingthatfundswerenowinplacetostartdevelopment.
4.83However,asChalMisickacknowledgedinevidencetotheCommission,therehadalso
beenanotherpotentialandshort‐livedcompetingdeveloperforJoeGrantCay,PaolaSepe
and three associates, each of whom was a nephew of the HonMichael Misick and Chal
Misick,forwhomhehadformedacompanycalledOceanicDevelopmentLtd.296Hedidnot
seem to think there had been any conflict of interest in his assistance to two separate
contendersfortheprizeoftheJoeGrantCaydevelopment. However,PaolaSepeandthe
threenephewsdroppedoutoftheracebytheendof2006.297
293ChalMisickbundlep143‐153294Transcript,Day10,p154295CoreVolume7,tab2,pp37‐38296 Paolo Sepe featured in a different context in that hewas said to have provided a donation froma company called Sarawak Ltd of$50,000tothePremierviatheaccountsofChalMisickon8thDecember2006.297Transcript,Day10,p174
149
4.84ChalMisicktoldtheCommissionthatatthatstageathirdpotentialdeveloperforJoe
Grant Cay appeared and for whom he acted: Don Gardiner, a real estate agent with
PrestigiousPropertiesandformerChairman,nowDeputyChairman,oftheTCITouristBoard.
Hewasjoinedbyafourthpotentialdeveloperofsubstance,DrCemKinay,thedeveloperof
DellisCay,usingforthispurposeacompanyknownTheStarLionsLtd.298
4.85Asaresultoftheinstructionsreceived,ChalMisickwrotetotheGovernmentabout
theproposeddevelopmentagreementforJoeGrantCay.Hisproposalwasthattheoriginal
development agreement in the name of Arturo Malave / Caicos Platinum Company Ltd
shouldbeamendedtodescribethedevelopersasOceanicDevelopmentLtdandStarLions
Ltd.299TheCabinetconsideredandapprovedthisproposalon16thMay2007.
4.86However,fivedayslater,on21stMay2007,DrKinaywrotetothePremierinforming
him that his hotel group, The O Property Collection, was working with Caicos Platinum
Company, the company originally destined as the vehicle for Mr Malave’s proposed
developmentofJoeGrantCay.Intheletter,hereferredtoalettersentbytheGovernment
toCaicosPlatinumCompanyon1stDecember2006asastartingpoint,aletternotproduced
to the Commission. One possible inference that could be drawn from the letter and the
changeofnameofthedeveloperisthatMrMalavewasstillinvolved,eventhoughhisname
had been taken off the development agreement. The public controversy surrounding his
otheractivitiesmightwellbethereasonwhytheGovernmentwouldnotwishtobeseento
bedoingbusinesswithhim.Ifanotherdeveloperwasthepublicfaceofthedeal,thatwould
havemadetheprocesslesscontroversial.
4.87 Foranycriminal investigatorwhomighthereafterhaveto lookat thestoryofwhat
happenedtotheJoeGrantCayproposalthereismuchperplexingdetail.Whowasactingfor
which potential developers at different stages? Why the differences in account between
ChalMisickandDrKinayandastowhoownedexactlywhatinthevariouscorporatevehicles
circlingtheproposeddevelopment?Thatdetailhasbeencloselyexaminedandanalysedby
theCommission,anditsanalysiswillbeavailableifrequired.Iamnotgoingtoburdenthe
298Transcript,Day11,p3299CoreVolume7,tab2,p42
150
readersofthisReportwithit. It isenoughformetosaythat,giventhesharplyconflicting
and/orinexplicableaccountsprofferedbythevariousplayersatdifferentstagesofthestory
and to theCommission, someonemustbe lying,and there isapossibilityofotherserious
dishonesty. Theproposeddevelopmentmovedforwardslowly,withextensivenegotiation
betweentheGovernmentandtheconsortiumheadedbyDrKinay.Thesaleofthelandon
JoeGrantCaytothemwasnotfinaliseduntil2008.WhentheCommissionbeganitsworkin
mid2008theproposalsfordevelopmentwerestillintheirearlystages.300
4.88 Political interferenceintheallocationoftheJoeGrantCaydevelopmentpermission,
particularlybytheHonMichaelMisick,thesuddenchangesindevelopersandintheidentity
of theBelonger partners associatedwith them, the close links between the HonMichael
Misick and those individuals, and the coincidence of a large political contribution to him
aroundthetimeoftheinitialdevelopmentgrant,allpointtothepossibilityofacorruptdeal
involvingtheHonMichaelMisick.Thisisatopicwhichclearlyrequirescloseinvestigation.
4.89Theheartofthematteranditshistoryillustratestothefullthesystemicweaknesses
of the way in which the Crown Land Policy in recent years may be open to abuse by
developers, Ministers and Belonger partners, or fronters, and those skilled in pairing the
fronters with the Ministers and developers, and documenting the latter’s corporate
relationship. All such players in the chain can and do make undeserved profits at the
expense of the TCI public. The various possibilities for abuse here are to be found in the
chainofevents leadingtotheGovernment’sapproval intheearlySummerof2007forthe
saleofthelandatJoeGrantCayatwellbelowmarketpricetoaconsortiumledbyDrCem
Kinay for development, to which I shall return in this Report when looking at the Hon
McAllisterHanchell’sinvolvementinthattransaction.
12 – I find, for the reasons set out above, that there is a possibility of
corruption and/or other serious dishonesty, including misfeasance in public
office, inrelationtotheHonMichaelMisick inthechainofevents leadingto
theeventualdisposaloflandatJoeGrantCayatwellbelowmarketpricetoa
consortiumledbyDrCemKinay,followingthesecretpaymentbyDrKinayof
300Seealsoparas4.172–4.181below
151
$500,000tohiminJanuary2007,followedbytheapprovalbyCabineton16th
May2007,towhichtheHonMichaelMisickwasaparty.
Accordingly, I recommend criminal investigation by the police or others of the
possibility in relation to the HonMichaelMisick of corruption or other serious
dishonesty,includingmisfeasanceinpublicoffice,inrelationtothismatter.
SaltCay
4.90 The issue of Salt Cay is a recurring theme in the submissions received by the
Commission.ItisclearlyanareaofgreatconcerntotheinhabitantsoftheTCI,inparticular
those of Salt Cay, its renowned natural beauty, the fragility of its environment and the
historicalsignificanceoftheIslandmakeanyattempttodeveloptheislandatopicofserious
debate. I do not seek to intrude on that debate, but Imust consider the handling of the
proposed development, in so far as itmay cast light upon the issues at the heart of the
Inquiry.
4.91ThedevelopmentofSaltCayhasbeencontemplatedforalongtime,butonlybecame
a real possibility in recent years with the proposals advanced by Salt Cay Development
Company Ltd (DEVCO), which is ultimately owned and controlled by the Slovakian
businessman,MrMarioHoffmann. MrHoffmann, inextensivewrittensubmissions to the
Commission,describedhisinvolvementwiththeproject,beginningwithhispurchaseofland
ontheIslandheldbytheCaribbeanIslandsInvestmentCompanyLtdin2001,intotalabout
11 acres of mixed freehold and leasehold property. Over the following years he bought
furtherlandaddingaboutsixacresmoretohisholding.
4.92 From 2005 onwards proposals for the development gathered pace and grew in land
take.MrHoffmann reached an agreement in principlewith theGovernment to obtain 41
furtheracresoflandtobuildahotelandresidences.AtaroundthistimetheHonMichael
Misick and the Hon Galmo Williams made a trip to Bratislava at the invitation of Mr
Hoffmann.
152
4.93Inearly2006afeasibilitystudywaspreparedbyKPMGonbehalfofDEVCOenvisaging
afarwiderreachingdevelopmentoftheisland.Thisdocumentfloated,forthefirsttime,the
ideaofagolfcourse.InMay/June2006MrHoffmannalsoreachedagreementwithhisthen
Belongerpartnerstobuyouttheirsharesinthebusiness.
4.94OneparticularaspectofthedevelopmentthathascausedconcerntotheCommission
wasthehandlingoftheproposalfortheSaltCayGolfClub.Followinginformalconsideration
anddiscussionsabout thepossibilityof a golf course,MarioHoffmannwrote formally,on
behalfofDEVCO,on1stAugust2006totheHonMichaelMisickseekingaparceloflandfora
golfcourse. Hesought, in formal terms,a longterm leaseof222acres for99years. The
letter of 1st August stated that Salt Cay Golf Club Ltd would be established to run the
course.301Itmadenomentionofwhowouldbeinvolvedbeyondthat.
4.95 TheHonMichaelMisickshowedthelettertotheCabinetmeetingscheduledforthe
following day, 2nd August. There had clearly been no possible chance for any formal
governmentalassessmentof it in the intervening24hours,andthere isno indicationthat
therehadbeenbeforehand. Nonetheless,Cabinet immediatelyapproved it inprinciple,302
and the Hon Michael Misick wrote to Mr Hoffmann telling him the good news on 8th
August.303TCInvestinstructedtheChiefValuationOfficer,MrShaabanHoza,toundertakea
valuationofthesite.Heplacedafreeholdvalueonitof$7.76million.304By29thNovember
2006theCabinethaddecided–followingarequestforarelativelysmallincreaseinacreage
–thattheywouldgrant238.72acresfortheproposedgolfcourse,atapeppercornrentof
$1peracreperyear. AtthesametimetheyapprovedthegrantofBelongerstatusforMr
Hoffmann.Theeffectof thisgrantwas toavoid theneed forMrHoffmanntoengageany
otherBelongerpartnerintheproject,sincehewasnow,himself,theBelonger.
4.96 FromtheviewpointofMrHoffmann thiswasaverygooddeal.Hehadhis full golf
course for a tiny initial outlay, and his Resort development would be a valuable extra
resourcethatwouldmakethemarketingofthedevelopmentfarmoreattractive.Evenso,
theCommissionhasreceivedseveralrepresentationsthatthedealwasvulnerabletofailure
301CoreVolume7,tab3,p1302ibid,pp2‐3303ibid,p4304ibid,p5
153
without adequate and timely ancillary facilities such as thoseproposed. And, it hasbeen
pointedout,giventhevastdevelopmentcosts, landforgolfcoursesisfrequentlyprovided
bywayoflongtermleaseandatlowornominalrates.
4.97Iflong‐termleasingatanominalsumhadbeenanticipatedbytheGovernmentwhen
first considering the proposal in August 2006, it is surprising that TC Invest, inNovember
2006, sought a market valuation of the land from the Chief Valuation Officer. Having
received the freehold valuation of $7,760,000, TC Invest had, on 14th November 2006,
prepared a memorandum for the lease suggesting a commercial rent of $194,000 per
annum,calculatedat2.5%ofthefreeholdvalue.305However,theCabinetdidnotevenseek
tonegotiateon the strengthof that valuation. They chose to forego the$194,000 rental
(worthover$19millionover the termof the lease)and let the leasego forapeppercorn
rent.
4.98SaltCayGolfClubLtdhadbeenincorporatedbyChalMisickon4thAugust2006,two
daysaftertheAugust2006Cabinetapprovingtheinitialproposalinprincipleandbeforethe
receipt of the letter from the HonMichaelMisick informingMr Hoffmann of it. On 15th
December 2007 Windsor East Ltd, a nominee company of Chal Misick, was appointed
company secretaryandadirector, andStefanKralofDEVCObecame the seconddirector.
Moreimportantly,atthattimethesharesofthenewcompanyweresplit50‐50.Halfwent
toMrHoffmann’sCyprusbasedholdingcompany.Theotherhalfwentintoacompanywith
the innocuoustitleofBusinessVenturesLtd. Thiswasanotherholdingcompany,based in
theBritishVirgin Islands,but itheldshares forChalMisick. Inessence,hehadbeengiven
halfofSaltCayGolfClubLtd,andtherebyownedhalfofitsassets.
4.99Thefollowingyear,2007,theHonMichaelMisickapproachedJ&TBankainPrague,to
which he had initially been introduced byMarioHoffmann, for a loan of $6million. The
Bankagreedtogranttheloantohimandhiswife. MsMcCoy‐MisicktoldtheCommission
that she had signed a form presented to her by her husband, but had not queried its
contents.ShetoldtheCommissionshehadnotunderstoodwhatshewassigning,hadnot
appreciatedthatheneededtoborrowmoney,andwouldnothaveconsentedtoithadshe
305ibid,p8
154
beenknown.TheloanwassecuredonthesharesheldbyBusinessVenturesLtdintheGolf
Club,suggestingthatintheeyesoftheBank–ifitwastreatingthe$6millionasagenuine
loan–a50%shareinSaltCayGolfClubLtdwasgoodsecurityforit.ChalMisicksignedthe
documentsforthissecurity.WhenaskedbytheCommissionaboutthefiguresinvolved,he
expressednosurprise,andseemedunperturbedbythevalueofhisnewasset.
4.100TheHonMichaelMisickwasaskedwhetherheknewabouthisbrother’sinvolvement
inthisprojectwhenheandtheCabinetapprovedthe leasetothenewcompany. Hesaid
thathehadnot.306Hesaidthathecouldnotrecallwhenhehadbecomeawareofit.307He
suggested, and has argued since, that his brother must have become involved at a later
stage.ChalMisick’sevidencetotheCommissionwasIwasinvitedbytheproponentstoget
involved,308referring,asheexplained,toStefanKral.Hesaidthathehadbeeninvolvedas
anattorney,andhadnegotiatedwiththearchitectonbehalfofSaltCayGolfClubLtd;and
that those activities had led them to invite him to become further involved in about
NovemberorDecemberof2006,shortlybeforeallotmenttohimof50%ofitsshareson15th
December2006.
4.101 ChalMisicksaidthathehadhadnodealingswithMrHoffmann,onlywithMrKral.
ThisiscontradictedbyaletterfromMrHoffmanntotheCommissionof12thJanuary2009,
addressedoriginallytotheattorneysfortheHonMichaelMisick,stating:
...I’veappliedforleaseofadditional239acresofCrownlandforgolfcourseand
infrastructurewithmypartnerChalMisickin2006aswell.
In a statement to the Commission, provided after the oral proceedings, on 20th February
2009, Mr Hoffmann gave more detail. He stated that, having started out on the
developmentofSaltCaywithtwolocalpartners,inMaytoJune2006hehadboughtoutthe
interestofone,BenWalkin, andhad reachedagreementwithanother, SimonWoodwho
wastocontinuesimplyasthearchitectoftheproject.Hecontinued:309
In July/August 2006 having not having or applied (sic) for Belonger status andknowing therewasapolicyestablishedbyMichaelMisick’s cabinet thatCrownlandwould be transfer (sic) only to Belongers or companieswith at least 50%Belongerownership,IaskedStefantoinvolveanotherBelongertomeettherules.
306Transcript,Day3,p137307TranscriptDay3,p139308Transcript,Day11,pp43‐45309MarioHoffmannstatementpara2.17
155
Wewere looking for someonewhocouldbehelpful, not justbecause theyhadBelongerstatus.
4.102TheevidenceofChalMisick,andtosomeextenttheHonMichaelMisick,thathehad
not been invited to become a partner until November or December 2006, is therefore
contradictedbyMrHoffmann.IfMrHoffmanniscorrectaboutJuly/August2006,thenthe
HonMichaelMisickshouldhaveknownatamuchearlierstagethanhehasadmitted,that
hisbrotherwasinvolved. Clearly,MrHoffmannregardedChalMisickashispartneratthe
timeoftheapproachinearlyAugust.IfMrHoffmannisright,italsomeantthatChalMisick
liedonoathtotheCommission.
4.103 MrHoffmann’sassertionthat, inselectingChalMisickashispartner,hehadbeen
concernedtohaveaBelongerpartnerisalsounconvincing.DEVCOwasthemaincompany
workingontheprojectasawhole,anditdidnothaveanyBelongerelementonitsbooks.
The involvementofMrWalkinandMrWoodintheGolfClubprojecthadbeenadvertised
prominentlytotheGovernmentinthesubmissionsmadeatearlierstages(seeforexample
theAgreedUponProceduresReport of February2006attached toMrHoffmann’swritten
evidence). However,by the summerof2006hehad removed themasBelongerpartners
withoutreplacingthem.
4.104 Inanyevent,MarioHoffmann,onhisaccount,hadbeenapproachedtobecomea
Belonger as early as May 2006. He had made written application for the status. The
Commissionhasseenafaxedcopyofthatapplication,whichbearsthetransmissiondateof
29th September 2006,310 twodays after theCabinet had already granted it to himon the
suggestion of the Premier.311 It is plain from this and much other evidence before the
CommissionthatPremierhadbeenonfriendlytermswithMrHoffmannforsometime,and
itisreasonabletoassumethathewouldhavetoldhimofhisnewstatussoonafterthevote.
4.105 Accordingly, well before the division of the Salt Cay Golf Club Ltd shares on 15th
December2006,MrHoffmannalreadyknewhedidnotneedanyBelongerpartnerforthe
new company, and he had dispensedwith his partners on themain company. And Chal
Misickwasremarkablyvagueastothespecialskillshehadbroughttotheearlynegotiations,
310HonMichaelMisickbundle3,p1099311ibid,p1098
156
beyondmentioning that he had a qualification in engineering. As to his claimed value in
negotiationswiththearchitectfortheprojectatthattime,hewasunable,whenasked,to
identify either the architect or the firm involved.312 Subsequently, by letter, Chal Misick
identified the architect as being Arthur Hills of Steve Forrest & Associates, Golf Course
Architects.313 TheCommissionhasnot seenanyother reference to this firm in anyof the
documents presented to it, and has not seen any correspondence with this firm. Such
correspondence as has been presented byMr Hoffmann suggests that Troon Golf LLC of
ScottsdaleArizona(whocorrespondedwithMrKral)wouldhavebeenthecontactwiththe
golfcoursearchitect,SimonWood.
4.106MrHoffmann,bycontrast,makesnoreferencetoChalMisickhavingnegotiatedwith
thearchitect.Hisonlyrecollectionisofhavingsetaconditionthatheshouldnotnegotiate
withtheGovernment.Eventhelegalworkwastakenawayfromhim,andplacedwiththe
regular lawyers for Mr Hoffmann, Miller Simons O’Sullivan.314 The only demonstrable
contributionhemadewastoformthecompany,whichisalowleveltaskusuallydelegated
toparalegalstaff.
4.107 ChalMisick’s explanation is therefore that he performed a role that nobody else
describeshimperforming,withsuchskillthat,althoughhehadhadnodirectdealingswith
theoverall developer, thedeveloper chose to givehima50% share in theenterprise.Mr
HoffmannsayshemadeChalMisickapartnerprincipallybecausehewasaBelonger,when
hedidnotneedaBelonger,andbecausehewantedacontributor,buthedoesnotsaywhat
ChalMisickevercontributed. Finally,whenthelatterwasaskedifhewasconcernedthat,
havingprovideditascollateral,hemightnowstandtoloseitifhisbrothercouldrepaythe
loansecured,hesaidthathewasnotconcerned.
4.108 ThesubmissionsfromtheHonMichaelMisickandMrHoffmannastotherelative
lackofworthof thegolfcoursearemeaningless. Thewillingnessof J&TBankato lend$6
millionplusinterestagainstthesecurityofthesharestellsonealloneneedstoknowabout
howvaluableanassetwasgivenawaybytheCabinetatthebehestofthePremier.
312Transcript,Day11,p68313ChalMisickbundlep381314MarioHoffmannstatement,para2.20
157
4.109Thereis,inmyview,informationandevidencebeforetheCommissionsuggestiveof
the involvement of the Hon Michael Misick in corrupt dealings in relation to the
Government’s transactionswithMarioHoffmannonbehalfofDEVCOandofChalMisick’s
knowing assistance and complicity in it. Whatever the value and worth of the Salt Cay
developmentasawhole,theCommissionisunabletoaccepttheaccountofMrHoffmannin
relationtotheappointmentofMrChalMisickasapartnerintheproject.
13 – I find that there is information of possibly corrupt and/or otherwise
seriouslydishonestinvolvement,includingmisfeasanceinpublicoffice,ofthe
HonMichaelMisickinrelationtotheGovernment’stransactionswithMario
Hoffmann of DEVCO for the development of Salt Cay: 1) in respect of his
participationinthatdevelopmentwithChalMisick’sknowingassistanceand
complicity in it, as described above; 2) in the potential abuse of his public
office by accepting lavish and disproportionate hospitality from Mario
Hoffmann,includingtheuseofprivateaircraft,theprovisionofinternational
flightsandotherhospitalityinthecourseofdevelopingbusinessrelations
betweenDEVCOandtheGovernment;and3)inpotentialabuseofhispublic
officebyseekingandacceptingaloanof$6millionfromJ&TBankawhenthat
Bank, on its own account,315was in negotiationwith the Government over
fundingandparticipationinthedevelopmentofSaltCay.
I,therefore,recommendcriminalinvestigationbythepoliceorothersofthe
possibility of corruption and/or other serious dishonesty, including
misfeasanceinpublicoffice,inrelationtotheHonMichaelMisickinrespect
ofthosematters.
_________________
315SeeJ&TBankaweb‐site
158
TheHonFloydHall
Background
4.110 TheHon FloydHallwas at all relevant timeseitherDeputyChiefMinisteror later
DeputyPremieroftheTCI.HewasalsotheMinisterofFinance,havingalsoresponsibilityfor
NationalInsuranceandEconomicPlanning,andwastheTreasurerofhispoliticalparty,the
PNP.HeisaCertifiedPublicAccountant.BeforebecomingaGovernmentMinisterhehad
workedinBarclaysBankandtheninCharterTrustasChiefAccountant.
4.111 OwingtohiscentralroleinGovernmentformanyyears, Ihavehadtoexaminehis
conduct insomedetail,havingregardtoanumberofallegationsmadeagainsthimwithin
my Terms of Reference. He made written submissions prior to the Commission’s oral
proceedingsinJanuaryandFebruaryofthisyear,andgaveevidenceovertwodaysinthose
proceedings,whenhewas representedbyMrOliver Smith. He has provided a series of
writtendocumentsandsubmissionssubsequenttothehearings.
DeclarationsofInterests
4.112TheHonFloydHall,incommonwithhisCabinetcolleagues,failedtocomplywiththe
statutory requirements requiring declarations to the Registrar of Interests.316 The most
strikingandconsistentomission in this respectwasofhis receiptofgiftsorcontributions,
including so‐called political contributions. In particular, he did not mention Party
contributionstohiminanyofhisreturnstotheRegistrarof Interests. Inoralevidenceto
theCommission,heproducedaledgershowingpaymentsinhisfavourfromanaccountof
the Party heldwith the First Caribbean Bank totalling $355,500 over three years. He also
admitted receipts, largely undocumented, of further Party funds from a second account,
heldwiththeBelizeBank.
4.113HealsofailedtodeclaretotheRegistraranyofhisoverseasvisitsduringtheperiod
coveredby the Inquiry, ofwhich therewere several. Hehas admitted inevidence to the
Commission that he was flown from London to Slovakia in the private jet of Mario
316Seepara2.29above
159
Hoffmann,317 and from Slovakia on to Dubai to see motor‐racing. He sought to draw a
distinction between the requirement under the Registration of Interests Ordinance to
declareevery visit relating to yourmembership of the Legislative Council undertaken...the
costofwhichhasnotbeenwhollyborneby yourself...orbypublic funds, andhis role as a
memberoftheexecutivebranchofgovernmentbyvirtueofbeingMinisterofFinance.Ido
not regard this as a meaningful distinction so as to constitute an exemption from the
Ordinance. Theoffice ofMinister of Financederives fromhis electedmembershipof the
Legislature,ofwhichheremainsamemberwhenactingasMinister.Attheveryleastthetrip
shouldhavebeendeclared,sothattheRegistrarcoulddetermineitsrelevance.Itwassaid
by Mario Hoffmann that its purpose was to enable him to see his, Mr Hoffmann’s,
operations in Slovakia, none of which, according to him, was tourism‐related. Their
relevance to Salt Cay was not explained. The trip to Dubai, similarly, had no overt
connectiontoMinistryofFinancework,andcouldbedescribedasajunket.
14–Ifindthat,throughouthisperiodofmembershipoftheLegislatureofthe
TCI,theHonFloydHallrepeatedlyfailedtomakefullandaccuratedeclarations
ofhisintereststotheRegistrarofInterestsasrequiredbytheRegistrationsof
InterestsOrdinance.
15– I find, as an important exampleof his failure tomake full and accurate
declaration of interests to the Registrar as required by the Registration of
InterestsOrdinance,hisfailuretodeclarehisinterestintheCasablancaCasino
inProvidenciales,throughhisinvestmentinWindsorInvestmentLtd.318
As in the case of the Hon Michael Misick, the breaches of the Registration of Interests
Ordinance arepunishableonlyby the Legislature, andnotby theCourts (savepossiblyby
recoursesomemoregeneralprovisionofthecriminallawsuchasthecommonlawoffence
ofmisfeasanceinpublicoffice). Inhiscasetoo,thereismuchelseofsubstanceworthyof
criminalinvestigation.I,therefore,makenorecommendationarisingoutofeitherofthose
findings.
317Transcript,Day6,pp161‐163318Seeparas4.61–4.74.above
160
4.114 FurthermattersthattheHonFloydHallshouldhavedeclaredtotheRegistrar,and
whichhedidnot,includeloansorpurportedloanstohim,withwhichIdealwithbelow.
DisclosuretotheCommission
4.115 In addition to the Deputy Premier’s failure tomake adequate declarations of his
intereststotheRegistrar,hedidnotmakefullandaccuratedisclosureofhisfinancialaffairs
to the Commission prior to his attendance on summons to give evidence in the oral
proceedings. For example, he did not disclose until hewas in thewitness box apolitical
contributionof$150,000paidbyJakCivre,amajordeveloperontheIslands,intothebank
accountofhiscompany,Paradigmon8thFebruary2007, thedaybefore theelection. Mr
CivrehasconfirmedinwritingtotheCommissionthatthiswasapoliticalcontributionand
thathehadpaiditintotheaccountofParadigmontheinstructionoftheHonFloydHall.He
alsostatedthathehadmadesuchpaymentstopoliticalpartiesandindividualsinthepast.
Heinsisted,however,thathedidnotseekorreceiveanyfavoursinreturnforthepayment.
4.116AnotherinstanceoftheHonFloydHall’snon‐disclosuretotheCommission,towhich
Ihavealreadyreferred,emergedonlyafterhehadcompletedhisinitialoralevidence.Chal
Misick, who gave evidence after him, spoke of his 10% interest, through the Windsor
Investment Group Ltd, in the Casablanca Casino in Providenciales, along with the Hon
MichaelMisick,319theHonMcAllisterHanchellandMarioHoffmann.WhentheHonFloyd
Hallwasrecalledtothewitnessbox,saidthathehadforgottenthis investment,whichhe
saidwasof$40,000,butclaimedignoranceofthepercentageofhisshareintheproject.In
additiontohisnon‐declarationtotheRegistrarandnon‐disclosuretotheCommissionofthis
interest,heneverdiscloseditatCabinetmeetingswhentheCasinoprojectwasthesubject
ofapplicationsforvariousapprovals.AsIhavementioned,320hisevidencewasthatheonly
hadavague ideathatsomeofhisministerialcolleaguesmightbe involved intheventure,
and that they had not discussed their involvement.321 The Hon McAllister Hanchell’s
319Seeparagraph4.71above320ibid321Transcript,Day15,p11
161
evidence,ontheotherhand,wasthathehadknownwhotheothertwowere,andthatthey
haddiscusseditasaninvestmentbetweenthem.322
16– I findthat theHonFloydHallhas failed inseveral importantrespects to
makeadequatedisclosuresinresponsetotheCommission’srequests,pursuant
toitspowersundertheCommissionsofInquiryOrdinance,forfullandaccurate
disclosureofhisfinancialinterests.
WhilsttheCommissionsof InquiryOrdinancegivespowertotheCommission,while it is in
being, to takeprocedural steps toenforcesuchdisclosurebycontemptproceedingsorby
referencetotheSupremeCourtforsanction,Idonotconsideritnecessaryorappropriatein
the circumstances, especially as hewas apparently acting on themisjudged advice of his
attorney,MrOliverSmith,ofStanfieldGreene. Moreover,theHonFloydHallmadeupin
somepart forhispreviousnon‐disclosureto theCommissionbyhis frankdisclosurewhen
givingevidenceofmanymattersinexaminationbyCounseltotheInquiry.
PoliticalPartyFinances
4.117TheHonFloydHall, inresponsetoclosequestioningbyCounseltotheCommission
abouthisroleofTreasurerofthePNP,spokeofthreebankaccountsoftheParty.Again,I
havereferredtothesemattersunderthegeneralheadingofPoliticsandPoliticalDonations
inChapter2ofthisReport. Forconvenienceofreferenceinthiscontext, Ireturntothem
here. The first, andmain, accountwaswith the First Caribbean International Bank, from
which,hesaid,bankstatementscouldbeobtained,andinrespectofwhichhekeptaledger
account at his home. In the course of his evidence the ledger account and partially
supporting bank statements from the First Caribbean International Bank were, with his
consent,323providedtotheCommission.Itappearedtocomeasasurprisetoothersenior
membersofthePartythathehadmaintainedsuchaledger.Theaccountsrevealedthat,as
TreasurerofthePNP,hehadpresidedoverachaoticsystem.Evenallowingfortheabsence
of any legal requirement in the TCI for political parties to keep and publish accounts, his
322Transcript,Day19,p96323TheCommissionrejectedasubsequentchallengebyMrNormanSaundersonbehalfofthePNPtotheCommissionretainingortakinganyaccountofthoserecords,whichhethenmodifiedtoanapplicationthatthenamesofanypoliticaldonorsidentifiedintheaccountsshouldnotbepubliclyrevealed,achallengethattheCommissionalsorejected;Seealsopara2.35above.
162
wereatravestyofwhatcouldhavebeenexpectedfromacertifiedpublicaccountantinhis
role as Party Treasurer. Theywere inaccurate, incomplete andpotentiallymisleading. In
addition,hehadpreparedonlyoneformalandmisleadingTreasurer’sreportforthepartyin
2006 covering the previous five and half years –misleading because it reflected only the
Party’saccountwiththeFirstCaribbeanInternationalBank.Seemingly,hehasnotprepared
anyfurtherreportsontheParty’sfinances.
4.118 The second and third accounts of the Partywerewith the Belize Bank, a current
account and a supporting loan account with an overdraft of $1.5 million. From these
accounts, the Hon Michael Misick and the Hon Floyd Hall spent Party funds at will and
without accounting for their use of the funds to anyone, even to other senior Party
members.TheHonFloydHalldescribedthecurrentaccountattheBelizeBankasaclearing
account for itsmain account there, by which he presumablymeant the supporting Party
Loan Account. He maintained that the Party Executive had known of the Belize Bank
accounts,butthattheirexistencehadbeenkeptfrompartymembersbecausefulldisclosure
of theParty’s financial affairswasa sensitive issueandnot all of itsmembershiphad the
Party’sbest interestsatheart. HeaddedthattheParty’sSecretary‐General,theHonDon‐
HueGardiner, knew of the accounts. However,MrGardiner gave two differing accounts
aboutthis.Thefirst,inhisoralevidencetotheCommission,wasthathehadnotknownof
themuntil theHonRoyalRobinsontoldhimabout them inNovemberorDecember2008,
that is, very shortlybefore theCommission’soralproceedings.324Thesecond, inawritten
statement sent to the Commission on 18th February 2009, he maintained that he had
subsequently remembered having signed a resolution authorising the opening of a Belize
Bank account for the Party, and produced an unsigned document purporting to be a
resolutionofthePartyof5thJune2002mandatingtheopeningofthecurrentaccount.
4.119 The Hon Floyd Hall acknowledged to the Commission his failure tomaintain and
presenttotherulingPartyproperaccountsofitsfinancialaffairs.Suchfailure,ofwhichhe,
the HonMichaelMisick and possibly a few others in the Party leadershipwere potential
beneficiaries, smacksofdishonesty in keeping to themselves theexistenceanduseof the
secondandthirdPartybankaccountswiththeBelizeBank.
324Transcript,Day17,p102
163
4.120 Ofmajorconcernalso,mustbethescopethatsuchsecrecymayhavegiventothe
passageoffundsfromwealthyindividualswithbusinessrelationshipswiththeGovernment,
andwhostoodtogainfromitsdecisions,tofundonalavishscaleextravagantlifestylesof
theParty’s representatives in theCabinet. InformationreceivedbytheCommission from
varioussourcesindicatesthatPNPPartyfund‐raisingconsistedinlargepartofdemandsby
theHonMichaelMisickandtheHonFloydHallonoverseasdeveloperstoprovidelargecash
donationstotheParty.Themessageimplicitinthosedemands‐truetothefearsvoicedby
MrfJnrwhentrying,bywayofsubmissiononbehalfofthePNP,tokeepitsbankaccounts
fromtheCommissionandtheTCIpublic325wasthatfailuretopayupwouldorcouldhave
hadanadverseeffectontheGovernment’sviewoftheacceptabilityoftheirprojects.
17‐IfindthattheHonFloydHall,inhiscapacityasTreasurerofthePNPParty:
1)failedtoadministerandkeepproperaccountsofthefundsofthePNPsoas
toallowpartymoniestobedisbursedforhispersonaluseandthatoftheHon
MichaelMisickandotherseniorPartyMembers,withouthavingdevisedany,
oranyeffective,systemforaccountingtothePartyforsuchuse;and2)misled
thePartyasawholeastothetruestateofitsfinancialaffairsandthepurposes
towhich itsmonieswerebeingput, by keeping secret frommembersof the
Party, including senior Party officials, the existence of certain Party bank
accountsmaintainedandoperatedbyhim,andbyproducingin2006apartial
andmisleadingTreasurer’sReportconcealingthetruestateofitsfinancesand
thepurposestowhichitsfundswerebeingapplied.
I recommend criminal investigationby thepoliceor others in relation to the
Hon Floyd Hall of possible corruption in respect of his administration of the
Party Accounts and/or other serious dishonesty, including theft and false
accounting.
18 – I find that the payment by Jak Civre, the developer of the Seven Stars
Resort,totheHonFloydHallof$150,000on8thFebruary2007,thedaybefore
theelection,purportedlyasacampaigndonation,butwhichtheHonFloydHall
325Seepara2.35above
164
paid into the business account of his company, Paradigm, and also other
unexplainedpayments,werepossiblycorruptpayments.326
I recommendcriminal investigationbypoliceorothers in relationto theHon
FloydHallofpossiblecorruptionand/orotherseriousdishonestyinrespectof
thatpaymentbyJakCivreand/orotherunexplainedpayments
LinkswithRichardPadgett
4.121 TheCommissionbecameconcerned inthecourseofthe Inquirywiththeapparent
close links between the Hon Floyd Hall and Mr Richard Padgett. Mr Padgett is a well‐
established developer in the TCI, responsible, through his TCI company, Oceanpoint
Developments Ltd, for a project known as the Third Turtle Club, begun in 2004. Hewas
shownonPNPrecordsashavingmadeaseriesoflargecontributionstothePartyin2005to
2007,amountingto$500,000.
4.122TheprojecttodeveloptheThirdTurtleClubisrelevanttotheconductunderinquiry
oftheHonFloydHall.Inthecourseofitsplanninganddevelopment,MrPadgettappliedto
the Physical Planning Board for an exemption from the five storeys height restriction on
beachfront properties. He sought permission to build a hotel to a level of seven storeys,
with a view to increasing its profitability. The Board refused his application, and, in
December 2005, he appealed, as was his entitlement, to the Hon Michael Misick in his
additionalroleasMinisterforDevelopment.IntheabsenceoftheHonMichaelMisickwhen
theappeal fell tobe consideredandbecause itwas said tobeurgent, theHonFloydHall
dealt with it. By a letter of 14th December 2005, he allowed the appeal.327 In his oral
evidencetotheCommission,hemaintainedthathehadnotmadetheactualdecision,but
hadsimplysignedtheletterinsteadoftheHonMichaelMisick,asifitwerehisowndecision.
Only a week later, on 21st December 2005 the Government announced the grant of
BelongershiptoMrPadgett.However,MrPadgett’sfairwindfaltered,becausethedecision
oftheHonFloydHall inhisfavourontheappealwasstruckdowninthefollowingyearby
the Supreme Court on a judicial review challenge. The Court’s decision was not on the
326Seepara4.115above327CoreVolume6,tab3
165
planningmerits ofMrPadgett’s application tobuild to seven storeys, but because, in the
absenceofthePremierastheresponsibleMinister,theHonFloydHallhadactedultravires.
4.123InFebruary2006,twomonthsaftertheHonFloydHall’spurportedappealdecision
inMr Padgett’s favour andbefore itwas struck downby the SupremeCourt,Oceanpoint
DevelopmentsLtd,madetwo largepayments, totalling justunder$375,000, into thebank
account of the Hon Floyd Hall’s company, Paradigm. The Hon Floyd Hall revealed those
paymentsinoralevidenceaftertheCommissionhadaskedhimtoaccountforunexplained
income on a schedule it had prepared from his disclosed bank accounts. He said the
paymentswereforinvoiced328serviceshehadprovidedtoMrPadgett,asfarbackas2002,
foradvisoryassistanceandinhelpinghimin2004findthesitefortheThirdTurtleClub.He
saidthathehadpaidhalfofthe$375,000totheHonMichaelMisick,viaChalMisick’sclient
account.ItwillberememberedthattheHonMichaelMisickhadnotdeclaredthisreceiptto
theRegistrar,ordisclosedittotheCommission,eveninhisoralevidence.329TheHonFloyd
HallsoughttoexplainhispaymenttotheHonMichaelMisickasagift,claimingthathehad
regardedMrPadgett’spaymenttohimasawindfall.
4.124 However, the timingofMrPadgett’s payment of $375,000 to theHon FloydHall,
shortlyafterhis seemingly successfulplanningappeal to theHonMichaelMisick, theHon
FloydHall’s favourable fieldingof it, theyearsofdelaybetweenhispurportedservices to,
andhisinvoicingMrPadgett,forthem,andtheformerMinisters’commonnon‐disclosureof
thepaymentsuntiltheinformationwasdraggedoutofthembytheCommission,suggestat
leastthepossibilityofcorruption.
4.125 The links between Mr Padgett and the Hon Floyd Hall are also to be seen in Mr
Padgett’s real estate company, Elite TCI Ltd, which operates under the trading name of
RemaxElite.Atsomepointin2007thiscompany,evidentlyincorporatedinFebruary2007,
was divided between Mr Padgett and the Hon Floyd Hall’s wife, Mrs Lisa Hall.330 In his
declarations to the Registrar for 2006 and 2007, the Hon Floyd Hall declared a 49%
shareholding in her name in this company. He indicated in his evidence in the oral
proceedingsthatshehadinfactownedonlyonethirdofthebusinessandthathehaderred
328MrPadgettprovidedtheCommissionwiththeinvoiceonthedaytheHonFloydHallwasaskedabouttheissueintheoralproceedings,stipulatingthatpaymentshouldbemadetoParadigm.329Seealsopara4.36‐4.37,above330TheHonFloydHallhasprovidedapurportedcopyofthatagreement(undated)totheCommission.
166
in his declarations. Mr Padgett owns the other two thirds. This is the Hon Floyd Hall’s
accountofthisarrangementandofhowitcameintobeing:331
ItcameaboutbecauseMrPadgetthadinvitedmetostartarealestateoperationwithhimandItoldhimthatIcouldnotbeinvolvedwithanyrealestatebusinesswithhimbecauseIamingovernment, Idon’thavethetimetodedicatetothatand Ialsohada realestatecompanyat the time,PlatinumRealty, thatwasn’tgettingmyattentionandneededmyattention. I toldhim that I know thatmywifeis interestedintherealestateactivityandhecouldverywellapproachherconcerningitandhedid.
4.126 It appears thatMrsHall didnothave the funds topurchase the shares (valuedat
$228,000), but was allowed an arrangement by which she could pay for them from her
dividendswhenearned.AsofOctober2008shestillowed$234,911.20toRemaxElite.The
value to Mr Padgett or Remax Elite of this arrangement is unexplained. However, Mr
Padgetthasmadenocomplaintabout it,and I suppose there isapossibility in the longer
termofMrsHall bringing something to the company. Nonetheless, it looks like a further
instance in which the Hon Floyd Hall potentially exploited his position of governmental
influencetoobtainapotentiallylucrativefinancialbenefitatnorealcosttohimorhisfamily
–apossiblycorruptarrangement.
4.127FinallyinthecontextofMrPadgett,on1stAugust2007hemadeapaymenttothe
Hon FloydHall of $200,000. Bothmenhavemaintained, respectively by attorneys’ letter
andinevidence,thatthiswasaloan.TheCommissionhasseenapromissorynotesignedby
the Hon Floyd Hall, undertaking to repay the loanwith interest at 8% per annum, by 1st
February2009or, ifrepaymentwasnotmade,at10%interestperannum.TheHonFloyd
Halldidnotdeclare the loan to theRegistrarof Interestsordisclose it to theCommission
untilhegaveevidence.
19 – I find that the Hon Floyd Hall, in accepting payment fromMr Richard
Padgettof$375,000inFebruary2006,purportedlyasafinder’sfeeforservices
renderedsomeyearsbefore,butshortlyafterhisplanningappealdecision in
MrPadgett’sfavourinrelationtohisproposedconstructionoftheThirdTurtle
331Transcript,Day5,p50
167
Club, possibly acted dishonestly, including by way of misfeasance in public
office,andpossiblycorruptlyinacceptingsuchsum,given:1)thelengthoftime
andapparentdisproportioninvaluebetweenthepaymentof$375,000andthe
servicesforwhich itwassaidtohavebeenpaid;2)theHonFloydHall’snon‐
declaration of the payment to Registrar of Interests and his late and
incompletedisclosureof it to theCommission;and3)hisdivisionof thesum
withtheHonMichaelMisick,whohadhadnoostensibleconnectionwiththe
provisionofanyservicesinrespectofwhichitwaspurportedlymade.
I recommend criminal investigationby thepoliceor others in relation to the
HonFloydHallinrespectofpotentialseriousdishonesty,includingmisfeasance
inpublicofficeandcorruptioninrelationtoMrRichardPadgett’spaymentto
himof$375,000inFebruary2006
20 – I find that there is information of possible corruption in the Hon Floyd
Hall’sarrangementwithMrRichardPadgettinoraboutJune2007forhiswife,
LisaHall, tobeappointedadirectorof, andmadeaone‐third shareholder in
Elite TCI Ltd, a real estate brokerage company controlled by Mr Richard
Padgett, the agreed value of her shareholding being about $280,000, but for
whichshewastoprovidelittleornoconsideration.
I recommend criminal investigationby thepoliceor others in relation to the
HonFloydHallinrespectofthispossiblycorrupttransaction.
21 – I find that there is information that the Hon Floyd Hall possibly acted
corruptlyand/orinmisfeasanceofhispublicofficeinfailingtowithdraworto
declarehislinkswithMrRichardPadgett,atCabinetdiscussionsconcerningthe
Government’sdealingswithMrRichardPadgett’sbusinessaffairs,inparticular
at CabinetMeetings on 21stMarch 2007 and 8thMay 2008 atwhichmatters
relatingtoOceanpointDevelopmentsLtdwerediscussed.
Irecommendcriminalinvestigationofpossiblecorruptionand/ormisfeasance
inpublicofficeinrelationtotheHonFloydHallinrespectofthosematters.
168
22–Ifindthattheloanof$200,000fromMrRichardPadgetttotheHonFloyd
HallinAugust2007,whichtheHonFloydHalldidnotdeclaretotheRegistrarof
Interests, or to the Commission, until hewas examined in the Commission’s
oralproceedings,wasapossiblycorruptpayment.332
I recommend criminal investigation by the police or others of possible
corruptionand/orotherseriousdishonestyinrelationtotheHonFloydHallin
respectofthisloantohimof$200,000.
‘Flipping’ofCrownLand
4.128 A further issuearoseduring theHonFloydHall’sevidence in theoralproceedings
concerning his undeclared and hitherto otherwise undisclosed financial links. The Hon
MichaelMisick, in his oral evidence had disclosed for the first time payment to him of a
finder’s fee $325,000 for introducingapurchaser to a sellerof landonWaterCay,Ashley
Properties Ltd, controlled byMr Alden Smith. According to the HonMichael Misick, his
understandinghadbeenthatthelandforsalewasprivatelyowned. Hesaidhehadbeen
approached by the Hon Floyd Hall on behalf of that company to propose a purchaser,333
whichhedid,resultinginasaletoMrPeterWehrli.334
4.129TheHonFloydHallgaveaslightlydifferentaccount.HesaidthatMrAldenSmithwas
amutualfriendoftheHonMichaelMisickandhimself,andthatMrSmithhadapproached
him toask theHonMichaelMisick forhelp.Hemaintained that the land fordisposalhad
been Crown Land, not privately owned. He said that Mr Smith had made an offer to
purchaseCrownLandforthesumof$750,000,andwishedtodosoandsellitonforaquick
andsubstantialprofit–toflipit.TheHonFloydHallalreadyhadafinanciallinktoMrSmith,
towhom,hesaid,hehadloanedmoneyatvarioustimesleadingtoanoutstandingdebtof
$75,000. WhenMrSmithacquiredtheCrownLandandsoldittoMrWerhli,whichhedid
for$2million,hepaidthe$750,000totheGovernment,$325,000totheHonMichaelMisick
332Seepara4.127333Transcript,Day2,p41334Seeparas4.38–4.39above
169
and$200,000totheHonFloydHall,whichwastoincludetheloanrepayment,leavinghim
withaprofitonthetransactionofover$500,000.
4.130TheHonFloydHallemphasisedtotheCommissionthatMrSmithhadbeengivena
provisional offer oroption tobuy theCrown Landby theearlier PDMadministration, and
haddelayed taking itup. However,even if the transactionwasa legitimatesale, itwasa
clearexampleofseniorministersfacilitatingtheabuseoftheCrownLandregime,whereby
quick profits aremade by islanders exploiting their option to buy Crown land and sell to
overseas developers. The fact that both the HonMichael Misick and the Hon Floyd Hall
madelargesumsfromitshowsthattheywereawareof,andwillingtofacilitateandbenefit
fromthatexploitationinthisinstance.
23–IfindthattheHonFloydHall,inacceptingthepaymentof$200,000from
Mr Alden Smith, purportedly for services rendered, did so possibly corruptly
and/orbyconductpotentiallyamountingtomisfeasanceinpublicoffice,since
the payment followed the advantageous sale of Crown Land to Mr Smith’s
company,AshleyPropertiesLtd,whichhadimmediatelysoldthelandonfora
largeprofittoanoverseasdeveloper,andhadmadepaymentsfromthatprofit
totheHonFloydHallandtheHonMichaelMisick.
I recommend criminal investigation by the police or others of possible
corruptionand/ormisfeasanceinpublicofficeinrelationtotheHonFloydHall
inrespectofthismatter
4.131 Oneof the clearestandmostbrazenexamplesof “flipping” is thatwhicharose in
relationtofourparcelsof landatNorthWestPointinwhichfourBelongers–oneofthem
beingaMinister theHon JeffreyHall–used thecompanyUrbanDevelopmentLtd (Urban
Development)topurchasepropertyandthensolditonimmediatelytoaCanadiandeveloper
namedDavidWex. Idealwithhis transaction inmoredetailbelow inrelationtotheHon
JeffreyHall.335 The funds fromMrWexwere channelled via the TCI attorneyMelbourne
WilsontothefourBelongers.OneofthemwasQuintonHall,brotheroftheHonFloydHall,
who, likehis three fellowBelongers in thetransaction,benefitedtothetuneof$1million
withouthavingtolayoutanyfundsortakeanyriskinthepurchaseandonwardsaleofthe 335Seeparas4.196–4.209below
170
property.TheCabinetdiscussedtheprojectonanumberofoccasions.TheHonFloydHall
attended all or most of the meetings at which it was discussed, but, on his account,
withdrewfromthediscussiononatleastoneoccasion,presumablybecauseheappreciated
hispotentialconflictofinterests.
4.132ShortlyafterthetransactiontherewasatransferoffundstotheHonMichaelMisick
of$150,000,whichhedescribedtotheCommissionasaloanfromtheHonFloydHall.The
latteracceptedthatthatsumwaspaidtotheHonMichaelMisick,butsaidthatitcamefrom
hisbrotherQuinton.336HesaidthattheHonMichaelMisickknewofhisbrother’s$1million
windfall,andthereforesoughtaloanfromhim.NeithertheHonMichaelMisicknortheHon
FloydHall,whenquestionedintheoralproceedings,waspreparedtoconcedeonthispoint.
Itispossible,butunlikelythatoneorotherofthemmayhavemisunderstoodwhomadethe
loan. It is also possible that oneor theother has deliberately sought tomisrepresent the
agreement.
4.133 Although both the Hon Michael Misick and the Hon Floyd Hall characterised the
payment to the former as a loan, there was no evidence before the Commission of any
documentary record of it as a loan ‐ no terms agreed for repayment or as to interest; no
evidenceofrepaymentorevenrequestfororattemptatrepaymentdespitethepassageof
three years. The Hon Floyd Hall acknowledged that he too had receivedmoney from his
brother,Quinton,ataboutthesametime,some$25,000or$50,000.337Whetherornotthe
moneypaidtotheHonMichaelMisickwasaloan,thefundsfromwhichitwasderivedwere
theproceedsof flippingCrownLand. TheHonMichaelMisickandotherCabinetmembers,
including theHon FloydHall, are likely to have been aware of that, despite theHon Floyd
Hall’sdenialofsuchknowledge.
24–IfindthattheHonFloydHalltookpartinpossiblycorrupttransactionsby
acceptingproceedsoftheprofitsmadebyhisbrother,QuintonHall,forsaleof
partof theequityofUrbanDevelopmentLtd involving thedisposalofCrown
LandatNorthWestPointtoanoverseasdeveloperatalargeprofitinthathe:
1) purportedly loaned part of those profits to the Hon Michael Misick, or
assisted his brother, Quinton Hall, to do so; and 2) failed to declare those
336Transcript,Day5,p89337Transcript,Day15,p95
171
profitsorthepurportedloantotheRegistrarofInterestsortodisclosethemto
theCommission.
I recommend criminal investigation by the police or others of possible
corruptionand/orotherseriousdishonesty,includingmisfeasanceinpublic
office,inrelationtotheHonFloydHallinrespectofthesematters.
MinisterialInterventionintheAllocationofCrownLand
4.134 During theoralproceedings itemerged that theHonFloydHallhadapproached
theHonMcAllisterHanchell onbehalfof certain companies asking for grantsofCrown
Landtothosecompanies.Heacknowledgedinevidencethathehadputtheproposalsto
hisCabinet colleague, theHonMcAllisterHanchell,Minister forNaturalResources,and
sought to justify them to the Commission, saying that they did not need to follow the
normal route for application.338 He also acknowledged that, having secured grants of
land for the companies, they were able to obtain loans totalling $19 million secured
againsttheland,partofwhichborrowing,$1.1million,heobtainedforhimself.
4.135TheHonFloydHalldidnotappeartoregardallthisasabuseofhisCabinetposition.It
is, however, arguable that this is precisely what it was, and that by advancing certain
companies with his personal endorsement to the Ministry of Natural Resources, he was
ensuringthat theyobtainedanunfairadvantage in landselection.He in turnbenefitedby
virtueofthefinancedeal,towhichhewouldnototherwisehavehadaccess.Thefactthat
hewasobligedtorepaythe loan,whichhesuggestedwasrelevant,doesnot, inmyview,
diminishthepossiblecorruptionsuggestedbyhisactions.Closingsubmissionsmadeonhis
behalf by Mr Oliver Smith sought to argue that his and others’ actions in promoting
individualpersonsorcompaniesforgrantsoflandsimplyreflectedasmallsocietyinwhich
everyoneknewthepoliticianspersonally,andwouldinevitablyseektousethatcontactfor
favours. Healsoarguedtheparties receiving landwereentitledto itanyway,sonoharm
wasdone.Theseargumentsdonotmeet theadverse implicationscapableofbeingdrawn
fromthe fact that thecompaniesbeingpromotedwere, in somecases,ones inwhich the
338Transcript,Day15,p105
172
HonFloydHallhadadirectfinancialinterest.Therewas,inanyevent,asysteminplacefor
distributionofland,nomatterhowflawed,anditwasbeingsubvertedbytheactionsofan
influentialminorityinCabinet.
25 – I find that the Hon Floyd Hall, in making private requests to the Hon
McAllister Hanchell,Minister for Natural Resources, for allocations of Crown
Landforcertaincompaniestoenablethemtousethelandassecurityforloans,
from which he personally derived a substantial borrowing of $1.1 million,
perverted and/or undermined the Crown Land Policy for and process of
allocationofCrownLand,anddidsopossiblycorruptlyand/orinmisfeasance
ofhispublicoffice.
I recommend criminal investigation by the police or others of possible
corruptionand/ormisfeasanceinpublicofficeinrelationtotheHonFloydHall
inrespectofthismatter
Scholarships
4.136 InasimilarfashiontohisinterventioninCrownLandallocation,theHonFloydHall
intervened onmany occasions to ensure that candidates were advanced for government
scholarshipsoutsidetheprocedureestablishedbygovernmentfortheiraward.Thispractice
wasdocumentedbytheChiefAuditor,CynthiaTravis,inanAuditReportontheScholarships
ProgrammeinOctober2006,inwhichshestated:339
ThepolicyandproceduresestablishedbytheMinistryhavebeencircumvented,andthereisalackofsupportfromthegovernmenttoensurethatthepolicyisfullyimplemented.
4.137 Allocation of scholarships was the responsibility of the Education Advisory
Committee, but the Chief Auditor found that several hundred scholarships had been
awardedwithoutithavingproperlyscrutinisedthem.Ministers,specificallytheHonMichael
Misick and the Hon Floyd Hall, repeatedly intervened to solicit scholarships for particular
pupils,thustakingthematteroutofthehandsoftheCommittee.WhilstIhavenoevidence
339TCIAuditOffice(2006),AuditReport‐ScholarshipsProgramme,S/22.035/06R,p8
173
tosuggestthatsuchinterventionwasforthepersonalbenefitofanyindividualMinister, it
was an improper disregard of the proper procedures of government, and yet another
exampleofabuseofministerialinfluence.ThesuggestionbyMrOliverSmith,inhisclosing
submission on behalf of the Hon Floyd Hall, that this practice was simply one of
recommendationsforscholarshipisunreal;itwasineachcaseeffectivelyaninstruction.
HealthCare
4.138AtopicofmajorconcernintheTCIforseveralyearshasbeentheprovisionofhealth
care. The PNP government has, throughout its administration, laid great emphasis on the
provisionof goodqualityhealthcare forTCI Islanders, and therehasbeenunderstandable
support for the concept. The longer term project to provide hospitals on the Islands is
another manifestation of the Government’s concern in this area. The medium term
approachbytheGovernmentwas,however,toarrangefortransporttotheUnitedStatesfor
persons requiring health treatment beyond the currentmedical resources on the Islands.
ThiswasknownastheTreatmentAbroadProgramme.
4.139 TheHonFloydHalltoldtheCommissionthat,uptoAprilof2006,arrangementof
such overseas medical care had undertaken by a company named Canadian Medical
Network(CMN),inconjunctionwithanairambulanceprovider,TrinityAirAmbulance.340In
early 2006 theGovernment invited both of them to submit tenders for further contracts,
whichtheydid.Thetenorofbothsubmissionswasthattheywouldorganisetransporttothe
mainlandUSA,andprovidecasemanagementforthecasesreferred.
4.140 An internal memorandum from the Ministry of Finance, Health and National
InsurancesentbythePermanentSecretary(Health)totheChairmanoftheTenderBoardon
11thAugust2006 soughtpermission toproceedwitha limited tender341between the two
bidders.Thiswas soughtbecause,as thememorandumpointedout, theGovernmenthad
workedsatisfactorilywithbothcompaniesinthepast.Thememorandumstatedclearthat
thenewtendershadbeenobtainedwithaviewtoslowingthegrowth incostsofmedical
careforwhichtheTreatmentAbroadProgrammeprovided. TheTenderBoardconsidered
340Transcript,Day15,p117341Seepara3.53above
174
andgrantedtherequest. AmemorandumfromtheBoardof15thAugust2006setoutthe
historyofCMNandTrinityAirAmbulance,andconcludedthatCMN’smanagementcharges
weretoohigh,andthattwoquotesshouldbesoughttoobtainabetterprice.Italsostated
that theMinistry had drawn up terms of Reference for the service required and that the
quotes should take account of that service requirement. That was followed by a draft
undated and unsigned Cabinet paper for presentation to the Cabinet on behalf of the
Minister,theHonFloydHall, thePermanentSecretaryandtheDirectorofHealthServices,
Dr Rufus Ewing. The paper made a careful comparison of the two tenders and invited
Cabinettochoosebetweenthem.
4.141 However,when thequestionof continuedprovisionofoverseasmedical carewas
raisedbeforetheCabinetatitsMeetingon23rdAugust2006,matterstookawhollydifferent
turn,asthefollowingextractfromtheMinutesoftheMeetingrecord:
TheDeputyPremierraisedthismatterinformingCabinetthatthecontractwithC[M]Nrecentlyexpired,aproposalwasreceivedfromSouthernHealthNetworkwhichwasofferingthesameservicesatmuchbetterprices.HeadvisedthathewasmoreinclinedtoenterintoanagreementwithSouthernHealthNetworkastheyareaUSbasedCompanywhichwouldbeabletooverseethemedicalcarethatpatientswhichwerereferredtoMiamiwerereceiving.Theywouldreceive50%ofthesavingstheyachieved.
TheCabinetthereandthenacceptedtheHonFloydHall’sproposal,subjecttothedrawing
upasuitablecontractbytheAttorneyGeneral’sChambers.
4.142 Not only were the limited tendering procedures not followed in reaching that
decision,buttheHonFloydHalldidnot,inthecourseoftheMeetingorthereafter,mention
ordeclarethatthepersonbehindSHNwasDelroyHowell,apersonalfriendofhisandwith
whomhehaddonebusiness.Althoughhelatermaintained,342thathehadhadnobusiness
involvementwithDelroyHowell,andthattheyweremerelyfriends,inhisoralevidenceto
theCommissionhedescribedhimasaclientforwhomhetransferredfunds.343And,asthe
Commissionhasascertained,hehad indeedmadeanumberofpaymentsonhisbehalf in
respectofHarbourHouse,acommercialrentalcompanyinGrandTurk.Thesignificanceof
thelackofreferencetoMrDelroyHowell intheCabinetMinutes isunderlinedbytheoral
342Transcript,Day5,p61343Transcript,Day15,p14
175
evidence to the Commission of the Hon Lillian Boyce, then Minister of Education, who
attendedtheMeeting. Shesaidthat,althoughshehadknownthetwomenwerefriends,
shehadnotknownthatHowellwasbehindSHN,andthatsheshouldhavebeentold.344
4.143 TheHonFloydHall, inthecourseofhisoralevidencetotheCommission,saidthat
the Cabinet had at itsmeeting on 23rd August 2006, considered the tenders of CMN and
TrinityAirAmbulance.Hisevidencewasasfollows:345
Cabinetwasgiventhreeoptionstochooseoneofthethree.Q. Didtheyhavethreepresentationsplacedbeforethem?A. Tothebestofmyknowledge, I thinktheywouldhavehad informationonallthreepresented.TheCabinetpaperwouldhavebeenstructuredinsuchawaythatwoulddiscussthethreeoptionsthatwerebeforeus.
Thatrepresentation isnotsupportedbytheCabinetMinutes,whichdonotrefertoeither
theCMNortheTrinityAirAmbulancetenderpaper, letalonetoanycomparisonofthem.
The Hon Lillian Boyce recalled being told of the other tenders only after Cabinet had
approvedtheselectionofSHN;herevidencewasthatshehadneverseentheothertender
documents.346Itlooks,therefore,asifthedraftCabinetpaperandassociatedtenderswere
not put before or discussed by the Cabinet, and that the Cabinet was only given one
candidateforselection,SHN.
4.144 The qualifications of SHN for the task were to cause concern. It had been
incorporatedonlya fewdaysprior to thepresentationof itsproposal to theCabinet.The
HonFloydHall said inevidence thathewouldhaveaskedhow long ithadbeenproviding
such services, but couldnot recall theanswer. TheHon LillianBoyce’s recollectionwasof
having been left with the impression that SHN was a long established company. An
executionofduediligence,ifundertaken,wouldquicklyhaverevealedthetruth.
4.145WhenaskedabouttherationaleforCabinetinselectingsuchacorporatenewcomer
inthefield,theHonFloydHallclaimedthatthosebehindSHNhadexperienceof,andcould
provide access to, reinsurance in respect of exceptionally large claims, that is, claims in
excess of $1 million,347 a resource that CMN or Trinity Air Ambulance could not have
344Transcript,Day17,p19345Transcript,Day15,pp116‐117346Transcript,Day17,p27347Transcript,Day15,pp126‐128
176
matched.Thisdoesnotappeartohavebeenafactortowhichweightwasgiveninthedraft
CabinetPaperormentionedintheCabinetdecision.Whenaskedthenameoftherelevant
re‐insurancecompanytowhichSHNimportantlyhadsuchaccess,theHonFloydHallcould
notrecallit.
4.146 Insubsequentwrittensubmissions,theHonFloydHallcontendedthatSHNwasan
extensionofMrHowell’sinsurancebrokerage,FirstFinancialInsuranceBrokersLtd.Hesaid
that it could provide a number of facilities not provided for in either of the other two
tenders, in particular, preparation of a claims history for the TCI to secure adequate
reinsurancecoveragefortheTreatmentAbroadProgramme.Healsosoughttomakewider
points about the comparative offers, and suggested that the SHN offer wasmuch better
than the others. He also suggested that he had simply added the SHN tender for
considerationatthe23rdAugust2006CabinetMeetingontheassumptionthattheTender
Board would have included it if they had seen it. He maintained that it was more
comprehensive the other two proposals, and that they were simply one page letters of
expressionofinterestintheproject,andthatneitherhadbeenvettedasSHNhadbeen–an
apparentsuggestionthattheCabinetpaperandaccompanyingtenderdocumentsfromCMN
andTrinityAirAmbulancewerenotevenputbeforetheCabinet.
4.147ThetenderfromCMNwas10pageslong,baseduponitsexistingexperienceasinthe
fieldoftransferringpatientsabroad,andtheTrinityAirAmbulanceproposalwasninepages
long, and similarly detailed.348 The SHNproposal, bearing a date after the TenderBoard’s
decision,wasalsoninepages long,plusacoveringletter.ThesuggestionbytheHonFloyd
Hallthattherehadonlybeenoneserioustenderisthereforeatravestyofthefacts.Whatis
more serious is the strong implication from his evidence that the Cabinet paper and the
accompanyingtenderdocumentsofCMNandTrinityAirAmbulancewerenotputbeforethe
CabinetandthepossibilitythatnoteventhetenderdocumentofSHN,which includedthe
nameofDelroyHowell,wasshowntothem.
4.148TheHonFloydHall’sconductofthismatterwas,inmyview,possiblycorruptinthat
it suggests subversion of the proper workings of government, in particular its tender
348HonFloydHallBundle2,tab2,pp88‐106
177
processes,toensurethattheonlyproposalputbeforetheCabinetforseriousconsideration
wasthatofafriendandbusinesscolleague,DelroyHowell.
4.149Asapost‐script,IshouldmentionthattheHonFloydHallconcededinevidencethat
the reinsurance aspect never took effect. He blamed that on lack of support from the
MinistryofHealth,andsuggestedthatthatwasthereasonforthesubsequentcatastrophic
cost of the SHN contract. An independent analysis of the Treatment Abroad System
operatedbySHN,carriedoutinJuly2008bySterlingHSAonbehalfoftheTCIGovernment,
reporteda varietyof failingsonbehalf of SHNand theGovernmentas the causes for the
very poor and expensive performance by SHN. The analysis did notmentionwant of re‐
insuranceasamajorfactor.Poormanagementand lackofcoordinationbetweenSHNand
theGovernmentaccountedformostofthewasteandloss. TheHonFloydHalleventually
concededthatitwasunfortunateandperhapsregrettablethattheSHNtenderhadnotbeen
consideredbytheTender’s(sic)Board.Theendofthestorycameon1stApril2009withthe
Government informing SHN that it was terminating the contract, and with SHN
contemplating litigation in respect of claims against theGovernment in respect of unpaid
invoicesforservicesrenderedunderthecontract.
26 – I find that there is information that the Hon Floyd Hall’s conduct in
promoting in Cabinet the award of the contract for administering the
Treatment Abroad system to SHN was possibly corrupt and/or otherwise
seriously dishonest and/or amounted to misfeasance in public office, in
subverting the proper workings of government, in particular its tender
processes,toensurethattheonlyproposalputbeforetheCabinetforserious
considerationwasthatofafriendandbusinesscolleague,DelroyHowell.
I recommend criminal investigationby thepoliceor others in relation to the
HonFloydHallofpossiblecorruptionand/orotherseriousdishonestyand/or
misfeasanceinpublicofficeinhispromotioninCabinetofSHNfortheawardof
theGovernmentcontracttoadministertheTreatmentAbroadSystem.
178
Cabinetresponsibility
4.150 TheevidencethatunfoldedbeforetheCommissionduringtheoralhearingsdidso
against a back‐drop of constant press speculation and reports as to infighting within the
Cabinet.Aspoliticalalliesovermanyyears,itislikelythattheHonMichaelMisickandthe
Hon FloydHall hadbeen, at least at some stage, friendlywith one another. Thepopular
view inearly2009was that any friendshiphad turned intoa rivalry, vergingonantipathy
between the two men. There were certainly a number of matters on which they gave
contradictoryevidence,andinwhich,byimplication,eachaccusedtheotheroflying.
4.151However,theyhadservedtogetherinCabinetsince2003,andhadbeenleadinglights
of thePNPbeforethen. Theyhadclearlyworkedclosely together,andcanreasonablybe
assumedtohaveknownagreatdealabouteachother’sattitudesandworkingpractices.If
andinsofaraseithermanmightbesaidtohaveactedimproperlyinoffice,itisreasonable
toconsiderwhethertheotherwouldnothaveknownofit.
________________
TheHonMcAllisterHanchell
Background
4.152TheHonMcAllisterHanchellwasaMinisterfrom2003untilhisresignationafterthe
Commission’s oral hearings in early 2009. He was, at all relevant times the Minister for
NaturalResources,andtherefore,carried,withotherresponsibilities,ultimateresponsibility
fortheallocationanddistributionofCrownLand.HewastheelectedMemberoftheHouse
of Assembly for South Caicos North. In his private life he was, and remains, a wealthy
businessman,withavarietyofcommercialinterests.Hismainprivatebusinessappearstobe
AL Services Ltd, a shipping company based in the TCI. He also owns a half share in a
company called Caicos Oil Ltd, the other half being owned by his brother, currently
proposingtodevelopoilstoragefacilities,deliveryservicesandservicestationsthroughout
theIslands.
179
4.153 As in thecaseof theother formerMinisters,hehashadan important role in the
Governmentforsomeyears,inrecentyears,inparticular,asMinisterforNaturalResources.
Ihavehadtoexaminehisconductinsomedetail,especiallythemannerinwhich,inrecent
years,hehasexercisedhisresponsibilitiesforthedirectionandoversightoftheworkingof
the Crown Land Policy in its various manifestations. Through his attorneys, Misick &
Stanbrook,hemadewrittensubmissionstotheCommissionpriortoitsoralproceedingsin
January and February of this year, and gave evidence over a number of days in those
proceedings.Hehasalsosinceprovided,throughhisattorneys,anumberofdocumentsand
furtherwrittensubmissions.
DeclarationsandDisclosureofInterests
4.154 In commonwith all other Cabinetmembers theHonMcAllisterHanchell failed to
makeadequatedeclarations to theRegistrarof Interestsofhis financial interests. Also in
commonwithmostofthem,hefailedtomakefullandadequatedisclosureofhisfinancial
affairs to the Commission. In his written and oral evidence to the Commission, he
acknowledgedthathehadreceivedpoliticaldonationsovertheyears,andhadnotdeclared
them. He said that his impression had been that political contributions were not being
declared. Inaddition,hehadnotdeclaredto theRegistrarseveralparcelsof landthathe
disclosed to theCommissionashavingbeen inhisownership foranumberofyears. As I
have already mentioned,349 he attributed these failures to errors on his own part in
understandingandcompletingtheforms,andinrespondingtotheCommission’s lettersof
requestforinformation.
27 ‐ I find that, throughout his period ofmembership of the Legislature, the
Hon McAllister Hanchell repeatedly failed to make full and accurate
declarations of his interests to the Registrar of Interests, as required by the
Registrations of Interests Ordinance, including his shared interest through
Windsor Investment Group Ltd in the Casablanca Casino on Providenciales;
andhewasalsoslowandpatchyinhisdisclosuretotheCommission.
349para2.30above
180
ForthereasonsthatIhavegivenforsimilarfailuresbytheHonMichaelMisickandtheHon
Floyd Hall, Imake no recommendations in respect of thesematters for any investigation
withaviewtopossiblecriminalorothersanction.
4.155Astonon‐declarationstotheRegistrarandnon‐disclosurestotheCommissionprior
to giving oral evidence, the first formention is a total of $90,000 in PNP stipends over a
numberof years. The second is amuch largerpolitical fundingpurportedly for campaign
expenses in the February 2007 election. He effectively controlled and operated the
campaignforthePNPinSouthCaicos.Althoughonebankingformdocumentinhisearlier
disclosure to the Commission made passing reference to campaign finances, it was only
when theBelize Bank statements of the Partywere disclosed during theHon FloydHall’s
evidence,350 that the size of the purported funding for the election became clear, namely
$389,000 donated between lateNovember 2006 andApril 2007. The bulk of that figure,
over 81%, had been donated by ArlingtonMusgrove, a friend of theMichaelMisick and
otherMembersoftheCabinet. MrMusgrove isandwasthenanestablishedGovernment
contractorthroughhiscompany,JACALtd.HewasalsomentionedinevidencebytheHon
JeffreyHallassomeonewhohadoncepaidacreditcardbillof$7,000forhim.351
4.156ThefundsforFebruary2007electioncampaigninSouthCaicoswerelavish,giventhat
thetotalnumberofthoseontheIslandregisteredtovoteatthattimewasonly547(318in
South Caicos North, the HonMcAllister Hanchell’s constituency, and 229 in South Caicos
South).Thecampaignchestwas,therefore,over$1,223foreveryvoterinhisconstituency
or$711.15foreveryregisteredvoteronthewholeislandofSouthCaicos.Andthatdidnot
takeintoaccountgeneralfundsavailablefromthePNPforspendinginbothconstituencies.
Although,asIhavementioned,352thereisnostatutorylimitintheTCIonelectioncampaign
funding, the provision by oneman of suchmassive funds for a small single constituency
campaigncouldbeconsideredastrongattempttobuytheelection.However‐andthismay
be an alternative and equally serious concern ‐ the lack of accountability by politician
recipients of such funds as to their use of them renders them readily available for their
personaluse.
350cfUKParliamentaryelectionsrulesthatlimitpoliticalparties’spendingto£30,000(about$44,000)perconstituency.UKconstituencieshaveanaverageelectorateof68,492persons,namelyover125timeslargerthanthetotalvotingpopulationofSouthCaicos351Transcript,Day12,p128352aslongastheyareincurredingoodfaithatorconcerninganelectionanddonotamounttobribingortreatingvoters,Seepara3.1,above
181
4.157 The PNP ledger for the South Caicos PNP Campaign Fund, produced by the Hon
McAllisterHanchell,disclosedsomedetailsoftheexpenditureontheaccount.Someofthe
entries appeared to relate to political expenditure, sometimes identified only as sums for
reimbursement, but without any reconciliation with items for actual expenditure. There
were regular debit entries in large round figures andwithminimal detail, for example, a
payment of $60,000 to the Hon McAllister Hanchell on 10th January 2007 for Services.
Duringthefivemonthperiod,28thNovember2006to30thApril2007,betweenthefirstand
lastreceiptsfromMrMusgrove,theaccountshowedabalancingtotalofabout$390,000in
receiptsanddrawings.
4.158TheHonMcAllisterHanchellmaintainedinevidencetotheCommissionthatmuchof
the money had been applied to meet the cost of travel to and accommodation for his
constituency workers at a Convention on Grand Turk. Quite apart from an instinctive
scepticism that all ormostof the$390,000 fromMrMusgrove couldhavebeen spenton
such hospitality, the PNP ledger entries simply do not reflect the type or pattern of
expenditurethatwouldbeexpectedinmeetingthecostsofsuchagathering.Inaddition,
thebulkofthemonieswerereceivedintotheaccountinDecember2006,aftertheholding
of the Convention in the previous month, as is shown on the Treasurer’s report to that
meeting producedby theHon FloydHall. I, therefore, find theHonMcAllisterHanchell’s
explanation of the purpose and use of the large donations by Mr Musgrove to be
unconvincing,andunsupportedby theavailableevidence. All that isa rather roundabout
wayofsayingthattherearequestionmarksoverArlingtonMusgrove’slargessetotheHon
McAllisterHanchelloverelectiontimeinearly2007.
28 ‐ I find that the HonMcAllister Hanchell, in accepting fromMr Arlington
Musgravepaymentstotallingover$300,000intothePNPSouthCaicosaccount
purportedly as campaign funding for the February 2007 election, possibly
entered into a corrupt transaction in that: 1) the payments were
disproportionately large for the purported purpose of financing an election
campaign in such a small constituency; 2) the payments were made by an
established and substantial public works contractor; 3) the Hon McAllister
Hanchell held a public office in which he could influence the award of such
182
contracts;and4)he failed todeclare thispersonaland financial linkwithMr
MusgraveinrelevantCabinetdiscussions.
I recommend criminal investigation by the police or others of possible
corruptionand/orotherseriousdishonesty,includingmisfeasanceinpublic
office,inrelationtotheHonMcAllisterHanchellinrespectofthismatter.
Loans
4.159 In written and oral evidence to the Commission, the Hon McAllister Hanchell
disclosed that he had borrowed extensively byway of private loans, and on credit cards.
These were all loans or receipts of money that he had not declared to the Registrar of
Interests, and only at the last moment to the Commission. Despite being requested in
advanceoftheproceedingstoprovidedetailsofanycreditcardsused,hefailedtomention
until the day before giving oral evidence that he had obtained an American Express
Centurion card, following an introduction in 2007 to J&T Banka in Prague by Mr Mario
Hoffmann, the principal developer of Salt Cay. He has since used the card extensively.
However, he did not always clear the debit on a monthly basis, allowing monthly
outstandingbalances to accumulate. This, from time to time, engendered chasing letters
fromtheBankseekingpaymentofoutstandingsums,onoccasion,inexcessof$300,000.
4.160 The Minister made late disclosure, in the course of his oral evidence to the
Commission,ofother loans thathehadneverdeclared to theRegistrarof Interests. One
wasaloantotalling$1.168million,whichhesaidthathehadobtained,withtheagreement
ofNormanSaundersJnr,fromhisfirmofattorneys,Saunders&Co.Heagreedthattheonly
documentationoftheloanwasachargeinfavourofSaunders&Coimposedonaparcelof
land.Infact,theloanwasfromanun‐namedprincipalofthefirm.
4.161Anotherloan,whichtheHonMcAllisterHanchelldisclosedjustbeforehebeganto
giveoralevidence,wasof$1millionfromtheHonMichaelMisick,whohadnotatthatstage
discloseditinhiswrittenororalevidence.353TheMinisterexplainedthathehadaskedthe
HonMichaelMisickfortheloantohelppayoutstandingsumsonhisAmericanExpresscard
353whichtheHonMichaelMisickthenpromptlydisclosedbyane‐mailedmessagetotheCommission.
183
bills. TheHonMichaelMisickmadea seriesofpayments tohelpout, in at leastone case
fromalineofcredithehadfromLichtenstein‐basedArlingAnstaltinstitution.Accordingto
the Minister, this borrowing was informal, interest‐free and undocumented, on the
understanding thathewould repay itas soonaspossible. TheCommission isunawareof
any repayment by him of the loan or when or how he anticipates doing so. His limited
accounts,disclosinganexcessof spendingoverhisdisclosedadhoc incomestreams inAL
ServicesLtdandCaicosOilLtd,donotindicateearlyrepayment.
4.162WhilsttheMinisterbrokenolawinborrowingmassivelybeyondhismeanstorepay,
his behaviour raises someworrying questions. His Cabinet salary of $203,000 per annum
couldnotprovidehimwithfundsthatwouldgoveryfartowardsrepaymentofcapital,never
mind servicing interest obligationswhen charged. Andhe seemsnot to have felt able to
makedrawing fromhis company interests toput him in credit. Yet he embarkedon and
persisted in a lavish spending spree, as the debits incurred on his American Express card
show,andwhichhecouldonlymeet in the first instanceby furtherborrowing. Itmaybe
thathehadexpectationsofotherandsubstantialsourcesofrevenue.
CaicosOilLtd
4.163 One possible source revenue may have been a willingness to use his ministerial
positiontofurtherhisownfinancialinterests,forexampleinrelationtohiscompany,Caicos
Oil Ltd. On 8th October 2008 the Hon Michael Misick put a proposal to the Cabinet in
supportofhisinterestinobtainingCabinetapprovalforthecompanytobuildanumberof
storagefacilitiesaroundthe Islands.Theproposalenvisagedthegrantofoutright freehold
ownershipof landforservicestations, longleasesforestablishmentofstoragefacilitieson
anuninhabitedisland,taxexemptionfor15yearsand5%customsdutyonmaterialsneeded
forestablishmentofthefacilities.
4.164Whenquestionedintheoralproceedingsabouttheneedforsuchaprovision,hetold
theCommissionthattherehadbeenalongstandingproblemontheIslandsofshortagesof
fuel.Hewasunabletopointtoanysupportingdocumentationforthiscontention,sayinthe
formofGovernmentFuelStrategyPapers,andthereappearstohavebeennoreferenceto
184
suchaproblematthe8thOctober2008CabinetMeeting.Hisproposal, ifapprovedbythe
Cabinet,would,however,createavaluablecommercialopportunityforCaicosOil.
4.165ThefactthatHonMcAllisterHanchellwasknowntobetheownerofCaicosOilLtdand
thathewithdrewfromCabinetdiscussionontheproposaldoesnotexcludetheproblemofa
potentialconflictofinterestsonhispart.Itwashighlylikely,giventheHonMichaelMisick’s
espousal of theproposal thathis other closeCabinet colleagues and friendswould follow
suitwhilehewaitedoutsidethedooroftheCabinetRoom.
MinisterialallocationofCrownLand
4.166 There was considerable potential for more direct abuse by the Hon McAllister
HanchellofhisCabinetpositioninhisroleasMinisterforNaturalResources.Ithasbeena
commonthemeofofficialandotherconcernsputbefore theCommissionthat thesystem
for allocation of Crown Land has been routinely abused in a number of complementary
ways, including, critically,ministerialmisuse of power. I have detailed these concerns in
Chapter 3 of this Report.354 Broadly they fall under two main headings. The first is that
allocation is not fair or equitable in that not all Belongers can obtain Crown Land,whilst
someareabletoprofiteerbyobtainingitatthediscountedrateandimmediatelysellingitto
overseasdevelopers.Thesecondistherecentgovernmentalapproachofcoveringrecurrent
publicexpenditurefromthedisposalofvaluablecapitalassetsintheformofCrownLand.
4.167Inresponsetoquestionsposedbyhiscounsel,MrArielMisickQC,theMinistergave
anaccountoftheadministrationofallocationofCrownLandthatIhavealreadysetoutin
Chapter3,355partofwhich,forconvenience,Irepeathere:
Theofficerstrytodotheirverybesttoserviceonafirstcome,firstservedbasis.After that process is over, then there is a review process with a number ofapplicationswhererecommendationsaremadebystaffmembersintheindustrybased on the representations received to get Crown land...The review processinvolves the Permanent Secretary, the Commissioner of Lands, the AssistantCommissionerofLands,theDeputyCommissionerofLands,and italso involvedme.Icomeinsometimesduringtheoveralldiscussionoftheallocations,orImay
354Paras3.10–3.50above355Transcript,Day9,p29
185
comeinverylatewhentheletterisalreadypreparedasarecommendation,andIsimplysignthem,andthepersonsaresuccessfulintheCrownlandapplication.
As I have indicated, the Permanent Secretary of theMinistry for Natural Resources,Mrs
Garland‐Campbell, in response to a written enquiry from the Commission about this
account, wrote on 29th January 2009 contradicting it.356 She stated that there were no
formal procedures for allocating land and that no such arrangement as a review group
existed. She stated that applicationswere handled in one of three possibleways: 1) the
Ministergave instructions,orallyor inwritingastowhomthelandwastobeallocated;2)
anotherMinisterintervenedtodothesame;or3)sheortheLandCommissionersprovided
theMinisterwith lists of long‐standingunsuccessful applicants for his approval. Theonly
review that took place was after allocation had been made simply to ensure that each
successful applicant qualified for it as a Belonger, and had not exceeded the maximum
numberofparcelsoflandallowable.
4.168 The Permanent Secretary provided the Commissionwith a number of letters and
emailsbywayofexamplesoftheHonMcAllisterHanchell’spracticeofunilaterallyallocating
land,andofotherMinistersinterveningtodothesamefortheirownpreferredapplicants.
Therewereevendocumentedexamplesofhimgrantinglandtohimself. Oneofthemwas
theallocationofanumberofconditionalpurchaseleasestoacompany,AkitaHoldingsLtd,
of which he owned 60% of the equity, which he communicated by letters bearing his
signature – effectively writing to himself, as he acknowledged in evidence. He also
acknowledgedthat itdidnot lookgood,butdefendedtheuseofthediscretiongrantedto
himbytheCabinet,tomakeallocationstohimself.Evenmorestrikingwasaletterhewrote
onbehalfoftheMinistrytoPalmBreezeLtd,acompanywhollyownedandoperatedbyhim,
granting it freehold title to a parcel of land at 75% of openmarket value ‐ said to be in
accordancewithCabinet’sdecision. Whenaskedaboutit,heclaimedthathehaddeclared
his interest in Cabinet when the decision was made and that he had not in the event
accepted his offer. The Commission has not been able to identify the claimed Cabinet
decision,andhedidnotdeclarehisinterestinPalmBreezeLtdtotheRegistrarofInterests.
Inshort,theMinisterdidnotappeartoregardtheuseofhisministerialpowertograntland
356Seepara3.18above
186
tohimselfaspresentinghimwithaconflictofinterests,since,asheemphasised,hetoowas
aBelonger.
29‐IfindthattheHonMcAllisterHanchell,inhisofficeofMinisterforNatural
Resources,enteredintopossiblycorruptand/orotherwiseseriouslydishonest
transactionsand/orinmisfeasanceofpublicoffice,byofferingonbehalfofthe
Government grants of Crown Land to himself and/or to companies that he
substantially ownedor controlled, thereby creating and ignoring the obvious
conflictsofinteresttowhichhisoffersgaverise.
Irecommendcriminalinvestigationbythepoliceorothersinrelationtohim
of possible corruption and/or serious dishonesty and/or misfeasance in
publicofficeinrespectofthesematters.
30– I findthattheHonMcAllisterHanchellpossiblyabusedhisministerial
positionbyinstructingthePermanentSecretary intheMinistryforNatural
ResourcestoallocateCrownLandtoindividualsofhischoice,ortoallocate,
orinstructthePermanentSecretaryorotherofhisdepartmentalofficersto
allocate,CrownLandtoindividualsidentifiedandnotifiedtohimbyfellow
Ministers, in all or most cases without proper regard to the Crown Land
Policy.
Irecommendcriminalinvestigationbythepoliceorothersinrelationtohim
ofpossiblecorruptionand/orotherseriousdishonestyand/ormisfeasance
inpublicoffice,inrespectofsuchactions.
4.169OneassociatedaspectoftheallocationofCrownLandarosefromtheevidenceofMr
GaryLightbourne,whohadbeenaformerbodyguardofthePremier.Hesaidthathadbeen
offeredaparcelofCrownLandpersonallybytheHonMcAllisterHanchellforwhichhehad
not even applied, following a series of unsuccessful applications over the years for other
parcels.ItwasinDecember2006,hesaidthattheHonLillianBoyceMinisterhandedhima
letter at ProvidencialesAirport bearing theHonMcAllisterHanchell’s signature, informing
himof the grant ofhis application for a commercial lease of a parcel inWest Caicos.Mr
187
Lightbourne said that he had never made any such application and had never had any
interestinstartingabusinessonWestCaicos.He,rightlyorwrongly,interpretedtheletter
asanattempttoplacatehimaheadoftheFebruary2007election,ashehadlefttheservice
oftheHonMichaelMisick,forwhomhehadbeenadriverandbodyguard.
4.170Onthefollowingdayithappenedagain.ThistimetheHonMichaelMisickpersonally
handed him a letter, again at theAirport and again signed by him, now for a conditional
purchase lease of a residential property at Proggins Bay, but again for which he had not
applied.Heregardeditasafurtherattemptatanelectoralbribe.
4.171 When these matters were put to the Hon McAllister Hanchell, he said that Mr
Lightbournehadmademanyapplicationsforleasesovertheyears,anddidnotacceptthat
offershadbeenmadetoMrLightbournethatdidnotreflecthisapplications.Hesuggested
thataresidentialoffermighthavebeenmadeifanexistingleaseelsewherewascomingto
anend, althoughMr Lightbourne sawno such circumstance inhis case. TheMinisterwas
unabletoexplainwhyanofferwouldhavebeenmadetoMrLightbourneforacommercial
parcel of land on another island, when Mr Lightbourne’s home was established in
Providenciales.
31–IfindthattheHonMcAllisterHanchellmayhaveparticipatedinpossibly
corruptarrangementsinwhichoffersofCrownLandweremadetoindividuals,
includingMrGaryLightbourne,whohadnotappliedfortheland,withaview
to the recipients of the offers selling the land on quickly to developers at a
substantialprofitforallthepartiesinvolved.
I recommend criminal investigationby thepoliceor others in relation to the
Hon Michael Misick of possible corruption and/or other serious dishonesty
and/ormisfeasanceinpublicofficeinrelationtosuchoffers.
JoeGrantCay
188
4.172 I have summarised earlier in this Chapter,357 the complex issues relating to the
proposeddevelopmentofJoeGrantCayinrelationtotheHonMichaelMisick.FollowingMr
Malave’s application in 2006 for permission to develop Joe Grant Cay, the Government
soughtavaluationof the landon theCay. TheChiefValuationofficer,MrShaabanHoza,
prepared, on 7th November 2006, a valuation of the whole of the Cay,358 based on
instructionsfromTCInvestthataninvestorgroupwasinterestedinundertakinganultrahigh
end development. Mr Hoza would evidently have preferred more detail, but made an
assessmentnonetheless,andindicatedthatforthepurposeofthevaluationhehadvisited
theCay.Hisputhisvaluationasbetween$230,000to$330,000peracre,stating:
Itismyopinionthat,withtheaboveassumptionsinmind,themarketvalueofthefreeholdinterestinthelandcomprisedintheJoeGrant’sCayisrepresentedin$230,000peracre(or$145,000,000forthewholeCay).Thisfigurecomparesfavourablywithtotalprojectcostswhichareestimatedat$500,000,000.
There is no evidence to suggest that the Government acted upon or communicated the
valuationtotheproposeddevelopers.Thevaluation,aswithallsuchdocuments,borethe
cautionaryriderthatitwasvalidfornomorethansixmonthsfromthedateofproduction.
4.173 Some18months later, inJune2008,MrHozawasagainaskedtovalueJoeGrant
Cay,butonlyasto300acres, forahotel,villasandcondominiumsasdescribed ina letter
fromChalMisickonbehalfofanewdeveloper,DrCemKinay.MrHoza,inareportof10th
June3008,359valuedthe300acresat$75million. TheHonMcAllisterHanchell,onbeing
notifiedofthatvaluation,communicatedatleasttwicebye‐mailwithMrHozarequiringhim
to produce a further valuation. The Commission has been shown some of the email
correspondence between the twomen. The first was a request by theMinistermade at
5:18pmonThursday12th June for sightof the10th Junevaluation report.MrHoza sent it
back by email at 8:35am the nextmorning.360 TheMinister wrote back at 8:59am in the
followingterms:
357para4.73etseq358CoreVolume6,tab9359CoreVolume7,tab2,p63360HonMcAllisterHanchellbundleprovidedon9thFebruary2009,p15
189
I am in receipt of your valuation report and make reference of the NON‐PUBLICATIONCLAUSE. Werespectfullyrequesttheactualmarketvalueoftherawlandinitspresentstate.
Why theMinister thought it necessary to stress the non‐publication clause is unclear.Mr
Hoza had inserted, and always inserted, that phrase in valuation reports, and would be
awareoftheneedforconfidentialityinhiswork.
4.174MrHozarepliedat9:13amindicatinghisconfusionattherequest,andstating:
Thevaluefor landisdeterminedbyforcesofdemandandsupplyforgoodsandservices.Intryingtosatisfythisdemand,suitablelandfordevelopmentis sought after. This means that the demand for suitable land is deriveddemand.
Heindicatedthatheawaitedfurtherinstructions.TheCommissionhasnotbeenshownany
correspondence to suggest he received any. The requestmade by theMinisterwas a tall
order,asitsoughtafreshvaluationthesameday.MrHozaapparentlycomplied,producing
tworeportsonthe13thJune.Onesetouttovaluethelandasifforagriculturaluse361and
the secondon thebasis of commercial use.362 In each case, at the specific requestof the
Minister, he addressed four specific parcels of land. For agricultural use he valued them
collectivelyat$26.76million.Forcommercialusehevaluedthemcollectivelyjustover$89
million.
4.175 The remarkable difference in the two valuations clearly demonstrates the
professionaltruismofavaluationofficer,thattheperceivedusetowhichlandmaybeputis
criticaltoitsvalue.
4.176 The Hon McAllister Hanchell was later to say that he had not seen the report
referringtoagriculturaluse,althoughMrHozahadclearlyprepareditatthesametimeas
theotherreportofthesameday,andonewouldhaveexpectedthemtobesenttogether.
TheMinister’scomplaintinevidencetotheCommissionwasthathehadnotrequestedany
assessmentbasedonagriculturaluse,whichwastrue.Heseemedtoassume,however,that
361CoreVolume7,p67 362ibid,p71
190
anassessment foravalueofraw landwasonethatMrHoza,asavaluationofficerwould
understandandrespondaccordingly.
4.177CorrespondencedisclosedtotheCommissiontowardstheendofitsoralproceedings
on 9th February 2009363 showed that at 8:27am on 13th June 2008, before he had even
receivedMrHoza’svaluationof10thJune,theHonMcAllisterHanchellhadsoughtafurther
valuationonabasisofrawlandfromafirmofsurveyorsinProvidenciales,calledBCQS.His
email asked for a response by close of business the same day. Unsurprisingly BCQSwere
unabletoprovideareportinthespaceofafewhours.Theyprovidedonefourdayslateron
17thJune,indicatingavaluationof$7.7million.364BCQSacknowledgedintheirreportthat
they had not even had time to visit the site, given the rushed nature of the instructions.
Their valuation approach was to make comparisons with other islands, and the rates
achievedonthoseotherislandsperacre.ThisechoedtheapproachofMrHoza.However,
BCQSchoseascomparatorspricesachievedin2007,2006andasfarbackas2004.MrHoza’s
comparatorswereforpricesachievedinAprilandMay2008,amatterofweeksbeforethe
currentvaluation.
4.178 TheHonMcAllisterHanchell,as Ihavesaid,maintains thathehadonlyMrHoza’s
commercial valuations of just over $89 million and that of BCQS at $7.7 million. The
remarkabledivergencebetweenthetwofiguresmighthavecausedhimenquirewhythere
wassuchadifference,butthereisnoevidencethathedid.Onemightalsohaveexpected
that he would have wished at least useMr Hoza’s valuation as a negotiating tool in the
proposedsaletoDrKinay;buthedidnot.Onthefollowingday,18thJune2007,theCabinet
approvedthesaletohimatBCQS’valuationof$7.7million,under9%ofthevalueadvisedto
Cabinetbytheirownvaluationofficer.Avaluationmoreover,arrivedatbyasurveyorwho
hadnotvisitedthesite,whohadbeengivennosignificantdetailsoftheproposeduse,and
who used demonstrably out‐of‐date comparators for the valuation exercise. For good
measure,theHonMichaelMisickchosetocriticisetheMrHozainCabinetforinconsistency.
4.179 The Hon McAllister Hanchell was later to say that he had just wanted a simple
valuation for the land. His attitude appeared to be that landmust have a single intrinsic
363ibid360,p28364CoreVolume7,tab2,p78
191
marketvalue.Theadviceandpracticeofprofessionalvaluers,inthiscasetheGovernment’s
own experienced valuation officer, and common knowledge as to the variability of land
valuationsaccordingtotheperceivedpotentialuseoflandforvaluationwoulddemonstrate
tomostinformedpeoplethatthereisnosuchthingasintrinsiclandvalue.Onemighthave
expectedtheHonMcAllisterHanchell,asMinisterforNaturalResourcestoknowthat,orat
least to trust the Government’s own professional advice, and, as it was in its strong
commercialinterest,todosowithgusto.Butwhenaskedinthecourseofhisoralevidence
abouthispublicdutytonegotiatethebestpriceforCrownLand,hesaid:365
Ourpositionisthatwedon'twanttobeinapositionnegotiatethegovernmentland.Wewanttobeinapositionofthevalueofthemarket‐‐thevalueofthelandinitspresentstate.
TheHonMcAllisterHanchellalsoclaimedthattherehadbeencomplaintbylawyersforthe
purchaser,DrKinay,aboutthevaluation.366Hesaid:
Inthisparticularcase,whenthevaluationwouldhavebeencommunicatedtothedevelopers,atsomepoint in timedeveloperswillhavechallengedtheevaluation,saying that they thought itwas toohigh.My instructionswouldhave come fromCabinettoaskMrHozatokindlyreviewhisevaluations.
4.180Thiswaswhollymisleading.ThereisnoevidencethattheNovember2006valuehad
beendisclosedtoDrKinay; itwas inanyeventconfidential. The10th June2008valuation
wasonlycommunicatedtotheMinisterintheearlyhoursof13thJune,and,beforeiteven
reachedhim,hewasseekingasecondopinion.TheCommissionhasseennoCabinetminute
requiringtheMinister toseekasecondopinion. When itmetontheday followingBCQS’
valuation, it simply accepted it. There is,moreover, no evidence of any complaint by Dr
Kinayabout thevalidityofMrHoza’s10th June2008valuation; if therehadbeen itwould
havefeaturedinthecorrespondence.AndwhytheGovernmentshouldhavebeensofearful
ofsuchacomplaint,ifithadbeenmade,soastodeteritfromnegotiatingthebestavailable
price for thedisposalofCrownLand is inexplicableonanynormal considerationsof good
governanceandcommercialdealing.
4.181WhenthemattercamebeforeCabinetitwastheHonMichaelMisickwhoraisedthe
transactionasanoralmention,367inwhichheappearedtohaveapersonalinterest.Thefact
365Transcript,Day19,p155366ibid,p153
192
thatthelandwasbeingsoldtoaconsortiumledDrKinay,amanwho,throughhiscompany,
TurksLtd,hadgivenhimanundeclaredandunpublicisedpoliticaldonationofhalfamillion
dollarson9thJanuary2007,368mayormaynothaveinfluencedhisviewofthismatter–it
didnotinfluencehimenoughtodeclarethatlinkortowithdrawfromthediscussion.Inthe
result,theGovernmentsoldthelandtoDrKinay’sconsortiumforarelativepittance.
4.182Inmyview,inthecircumstances,theCabinet’sdecisiontosellthelandtoDrKinayat
wellbelowmarketprice raisesapossibilityof corruptionand/orother seriousdishonesty,
includingmisfeasance in public office, on the part of itsMembers, in particular, the Hon
MichaelMisickandtheHonMcAlisterHanchell.Inshort,thereisinformationofapossibly
corrupttransactioncallingforfurtherandcloserinvestigation.
32 – I find for the reasons set out above, that there is possible corruption
and/orotherseriousdishonestyand/ormisfeasanceinpublicoffice,inrelation
the HonMcAllister Hanchell in respect of the chain of events leading to the
secret payment by Dr Cem Kinay of $500,000 to the HonMichael Misick in
January2007,followedbytheapprovalinprinciplebytheCabineton16thMay
2007, to which the Hon McAllister Hanchell was a party, of the sale for
developmenttoaconsortiumledbyDrKinayoflandatJoeGrantCay,followed
by the agreement in 2008 to sell it to the consortium atwell belowmarket
price.369
Accordingly,Irecommendcriminalinvestigationbythepoliceorothersofthe
possibilityinrelationtotheHonMcAllisterHanchellofcorruptionand/orother
serious dishonesty and/or misfeasance in public office, in relation to this
matter.
33 – In addition, I find that the HonMcAllister Hanchell possibly abused his
ministerialpositionand/oracted corruptlyorotherwise seriouslydishonestly
and/or acted inmisfeasanceofhis public office, bydeliberatelyundermining
theauthorityoftheChiefValuationOfficer,inrelationtothevaluationofland
367CoreVolume6,tab1,p166368Seepara4.23above369SeeinrelationtotheHonMichaelMisick,para4.23above,andFindingandRecommendation5;andparas2.34–2.35astosecrecyofsuchpayments.
193
at JoeGrantCay,by rejecting thevaluationsundertakenbyhim,withaview
possibly, toensuringaswiftcompletionofsaleofthe landtotheconsortium
ledbyDrKinayataverylargeundervaluation.
I recommend criminal investigationby thepoliceor others in relation to the
HonMcAllisterHanchellofpossiblecorruptionand/orotherseriousdishonesty
and/ormisfeasanceinpublicoffice,inrelationtothismatter.
SaltCayDock
4.183 TheHonMcAllisterHanchellalsoplayedarole inthepolitical interventionintothe
affairsofthePhysicalPlanningBoard(PPB)inlate2008andearly2009.ThePPBhadbeen
askedtoconsideranapplicationfortheestablishmentofadockonSaltCay,an important
precursorfortheproposeddevelopmentoftheIsland.Therewasgeneralagreementthata
dockwasnecessary,butnotastoitslocation.
4.184Thetwoalternativesforthedockwereconsideredtobethetowncentre,neartothe
historicWhiteHouseonthenorthoftheIslandoronitssouthside.ThePPBatameetingon
15th December 2008 received a comprehensive and thorough advice from theDirector of
Planning, Mr Clyde Robinson. He was trenchant in his assessment of an earlier
EnvironmentalImpactStatementrelatingtothesiteforadock.Hefeltthattheassessment
was incomplete and needed further consideration before the PPB could recommend
approvalofasite. ThePPB,afterdiscussingMrRobinson’sadvice,decidedtorecommend
theHonMcAllisterHanchellnottoapprovetheapplication.Thatmeetingwasthelastone
for2008.TherewouldinduecoursehavebeenafurthermeetinginJanuary2009.
4.185 Before the next scheduled meeting could take place there was an impromptu
gatheringcalledattheHonMichaelMisick’sofficeonthemorningof9thJanuary2009.He
andtheHonMcAllisterHanchellhadapparentlyissuedrequeststomembersofthePPBand
Mr Robinson to attend themeeting. Mr Robinson was later to describe how, when he
attended,hefoundtheHonMichaelMisickwiththeHonMcAllisterHanchell,StefanKralof
DEVCOandacolleague.MrKraltookseveralminutesexplainingtheimportanceofthedock
194
totheoveralldevelopmentofSaltCay,andheandhiscolleaguethenleft.Therewasthena
heated discussion, the general content ofwhich,Mr Robinson indicated, consisted of the
HonMichaelMisickberatinghimfordaringtorejectagovernmentproposal.
4.186TheHonMcAllisterHanchell,inhisevidencetotheCommission,saidthatthathe
hadcalledthevariousmembersofthePPBtothemeeting,andthatitwashismeeting.He
explainedhisconcernfortheearlyconstructionofadockforthepeopleofSaltCay,and
saidthattheissuehadbeendraggingonsince1991.MrRobinsonevidentlydefendedhis
positionvigorously,andtherewasnomeetingofminds.
4.187LaterthatdayafurthermeetingofthePPBwashastilyconvenedtoreconsiderthe
matter. This was called by the Deputy Chairman of the Board. The Chairman Mr Earl
Handfield, had been notified of the further meeting, and decided not to attend. Mr
Robinsonalsodecidednottoattend,thoughhemadeclearthatheheldtohisposition.Mr
Handfield, in his evidence to the Commission, argued that this meeting was unlawful
because the Deputy Chairman was not entitled to convene a meeting of the Board. In
addition,hemaintained, theBoardhadnopowertoreopendiscussionaboutaprojecton
whichithadtakenadecisionforarecommendationtotheMinister.
4.188 Those present at themeeting reconsidered the issue discussed in December and
concluded this time in favourof locating thedockonnear theWhiteHouse, ashadbeen
sought by the Hon Michael Misick and the Hon McAllister Hanchell. Mr Handfield, on
learning of their decision, resigned his post in disgust. He was later to say in a press
conferenceandbefore theCommission that thiswas the latest in a seriesof attemptsby
Ministers to pressurise him into hurrying decisions along, and by implication to reach
conclusionsthattheywishedtosee.
4.189TherelevanceofallthistotheCommission’sInquiryisthatitcastssomelightonthe
attitude of the Cabinet to development projects. The machinery of government is not
designedtomoveslowly for thesakeofdoingso; it isdesignedtodebate, testandcheck
ideasbeforethereisarushtojudgementandtherebytoavoidill‐thoughtoutprojectsbeing
undertakenatpublicexpense. TheCabinet’sresponsetobeingquestionedon itsdecision
195
ondevelopment–evenwhenthosedecisionsaremadeonthehoofandwithoutthebenefit
ofproperconsultation–appearstohavebeentoapplypressuretothoseindividualstobend
toitswill.Thissmallsagaappearstobeanexampleofjustsuchanexerciseinpressureby
HonMichaelMisick and the HonMcAllister Hanchell. Ironically, the latter could, had he
wished, simply have rejected the PPB’s first recommendation. Insteadhewas party to an
attempttoextractadubiousendorsementfortheGovernment’spositionfromthePPB.
___________________
TheHonJeffreyHall
Background
4.190TheHonJeffreyHallbecameanelectedmemberoftheformerLegislativeCouncil in
1999, representingMiddleCaicos, and served as a PNPMemberof the Legislature and in
Government, when the PNP was in power, from that time onwards. In the Misick
Administration, hewasMinister forHousing,Agriculture,Works andTelecommunications.
Priortohisentryintopoliticsandelectedpublicoffice,hehadbeenaCustomsOfficer,and
rosetotherankofDeputyCollector.
Declarationanddisclosureofinterests
4.191InhisevidencetotheCommission,theHonJeffreyHallsaidthathehadknownofthe
existenceoftheRegistrationofInterestsOrdinance,butnotitstermsbecausehehadnever
read it. In common with all his fellow Cabinet members, his compliance with the
requirements of thatOrdinancewas poor in the extreme. Such annual declarations of his
interests as he made were patchy, inconsistent and strewn with errors, failures that he
attributed,inhisevidence,tocarelessness.Hefailedtodeclareintereststhathehadheldin
companies.Hehaddeclaredinterests,inparticularinrelationtoacompanycalledAlliance
Realty Ltd, thathe told theCommissionhehadnothadat the time. He failed todeclare
Interests concerning land that he and his wife owned and from which they had derived
196
substantial rental income, suggesting that he had thought it only applied to government
land,anabsurdsuggestiongiventheplaintermsoftherequireddeclaration.370And,hehad
failed to declare receipt of a total of $153,000 from the PNP in respect of Candidates’
Stipend,an interest thatheonlydisclosed to theCommission following itsexaminationof
the PNP accounts obtained from the Hon Floyd Hall. However, he did disclose to the
CommissionasingleCampaignContributionof$10,000,which,itlateremerged,camefrom
aCanadianpropertydeveloper,MrDavidWex,ofwhommorebelow.
4.192 ExaminationoftheaccountoftheHonJeffreyHall,withtheScotiaBank–theonly
disclosed bank account in his own name371 ‐ revealed that between 2004 and 2008 (the
statementsfrom2005weremissing)unexplainedcreditswerepaidintohisaccount.These
paymentstotalledover$560,000.Only$36,000ofthePNPmoneycanbeidentifiedasthe
likelysourceof thosesums.Thesourcesofoverhalfamilliondollars remainunexplained,
saveforhissuggestionthatsomeofthecreditsmighthavebeenlumpcashpaymentsofrent
andsomepaymentsofPNPStipend.372
4.193TherewereotherverylargeomissionsfromtheHonJeffreyHall’sdeclarationstothe
RegistrarandinhisdisclosuretotheCommission.
4.194ThefirstrelatedtohisaccountwithScotiaBank,thepartiallydisclosedstatementsof
whichshowunexplainedcreditsofover$550,000,unexplainedthatis,savefor$36,000,part
ofthedeclaredtotalofPNPStipendof$153,000referredtoabove.Astothebalanceofthat
Stipend,$117,000, it doesnot appear in the ScotiaBank account, andhehasdisclosedno
otheraccountintowhichitmighthavebeenpaid.
4.195Therewerealsosubstantialdeficienciesofdisclosureaboutthesourceoffundsused
byhimtosettlehiscreditcardbills, identifiableinstatementsthathehaddisclosedtothe
Commission. A number of those credits came from his ScotiaBank account where the
Commission found corresponding debits, and similarly a number fromAlliance Realty Ltd,
thecompanyreferredtoabove.Butthereremainedover$334,000unexplainedcreditcard
account credits, money to which he had had access, but did not declare to Registrar or
370Seepara2.21above371saveforajointaccountwithhiswife372Asthosepaymentshavebeentakenintoaccountintheprecedingparagraph,anyfurtherpoliticalcontributionsmustbeinadditiontotheonlypaymentactuallydeclaredtotheCommissionof$10,000
197
disclose to the Commission. His only attempt at an explanation was that a number of
repayments, which he could not identify, had been made on his behalf by a man called
Rhynie Campbellwho had owed himmoney. He told us thatMr Campbell had borrowed
$200,000fromhim,drawnontheaccountofAllianceRealtyLtd,373inSeptember2006.The
Commissionhasseenacopyofachequedrawnonthatcompany’saccountandcopyofa
promissory note from Mr Campbell to Alliance Realty Ltd, but has seen no evidence to
supporttheassertionthatalloftheuntracedcreditscamefromhim.TheHonJeffreyHall
maintainedthathehadkeptnorecordrentalpaymentsorrepaymentsbyMrCampbell.
34‐IfindthattheHonJeffreyHallfailedrepeatedlytomakeanyoranyfullor
adequatedeclarationsofintereststotheRegistrarofInterests,inbreachofthe
Registrationof InterestsOrdinance,andalso failedadequately todisclosehis
financial intereststotheCommission,pursuanttotheCommissionsof Inquiry
Ordinance
For reasons that I havegiven in relation to theHonMichaelMisick andotherMinisters, I
makenorecommendationforcriminalinvestigationwithaviewtoanysanctioninrespectof
thosefailures.
35‐IfindthattheHonJefferyHallhasfailedtoaccount:1)forhisreceiptand
expenditureoffundsinexcessof$800,000creditedtohisaccounts,assetout
above; 2)forhisreceiptof$200,000fromMrEvanHarvey,assetoutabove;
and3)foragifttohimof$10,000fromDavidWex.374
I recommend criminal investigation by the police or others of possible
corruptionand/orotherseriousdishonestyand/ormisfeasanceinpublicoffice
inrelationtotheHonJeffreyHallinrespectoftheabovematters.
MelbourneWilsonandtheFirstNorthWestPointtransaction
4.196 Any analysis of Hon Jeffrey Hall’s positionmust necessarily include business links
betweenhimandhisattorney,MrMelbourneWilson.MrWilsoninitiallyrepresentedhimin
373Seepara4.214below374Seepara4.191aboveandparas4.196–4208below
198
the Commission’s Inquiry, but eventuallywithdrew on the grounds of possible conflict of
interest.MrWilsonwasthencalledbeforetheCommissionasawitnesstospeakabouthis
own involvement in transactions that he had helped to broker for his former client and
others.
4.197OnesuchtransactionwasthesaleofanumberofparcelsofCrownLandintheNorth
WestPointareaofProvidenciales, towhich Ihavealready referred in relation to theHon
MichaelMisickandtheHonFloydHall,andwillreferinrelationtotheHonLillianBoyce.The
HonJeffreyHallhadappliedforacommercialconditionalpurchaseLeaseforaparcelinthat
areainMay2004.Hedidnotindicatethepreciseplotforwhichhewasapplying,and,inthe
event, he did not take up any plot that may have been unofficially allocated to him.
However,in2005aCanadianbusinessman,DavidWex,expressedinterest,eventually,toMr
Wilson,thenapartnerinMcLeans,afirmofattorneyspractisingintheTCI,inpurchasing20
acres of land in the TCI. On Mr Wilson’s account in evidence to the Commission, he
discoveredfromtheLandRegistrythattheHonJeffreyHallhadaninterestinlandatNorth
WestPoint. MrWilson, stillonhisaccount, identified threeotherpersonseachofwhom
hadalsoappliedforaparceloflandinthatareaand,therefore,hadaninterestinit.They
were Quinton Hall, brother of the Hon Floyd Hall, Earlson Robinson, brother of the Hon
LillianBoyce,andSamuelBeen,formerhusbandoftheHonLillianBoyce,andaMemberof
theHouseofAssembly.Quitewhatthenatureoftheinterestwasthateachofthemhadin
thelandisunclear,sinceIhaveseennodocumentsindicatinganyofthemhadformoftitle
orentitlementtoacquireatitletolandinthatarea.
4.198 AsMrWilson acknowledged in his evidence and submissions to the Commission,
followingMrWex’sapproach,heorchestratedanapplicationbytheHonJeffreyHallandthe
otherthreetoapplyforfourcontiguousparcelsatNorthWestPointtomakeupthe20acre
plotsought.Why?Because,they,asBelongers,couldapplyforaconditionalpurchaselease
oftheplotandatgreatlydiscountedprices,MrWex,asanon‐Belonger,couldnot,andthey
andhe,MrWilson,couldprofitfromthedeal.Heclearlytooktheroleofcoordinatorand
didallormostofthearrangingoftheacquisitionbythefourBelongersofthelandandtheir
onwardsaleof it toMrWex. Hisevidence intheoralproceedingswasthathehadbeen
involvedinallaspectsofthetransaction,actingforbothsidesandtakingapercentageofthe
dealasacommission.
199
4.199 ThearrangementsandnegotiationforthedealwithMrWexprogressedapace. In
June2005MrWilsondrewup‘OffertoPurchase’documentsinthefourBelongers’names,
intrustforayet‐to‐beincorporatedcompany.Thatcompanywas,inturntotransferall20
acrestoMrWexforatotalof$7million,theamounthehadapparentlyagreedtopay.In
July2005theExecutiveCouncilapprovedthegrantoffreeholdsofthefourparcelsoflandto
the four men for a total of about $2.7 million less their Belongers’ substantial, 50%,
discounts,forthepurposeofpursuingtheirtouristrelateddevelopmentinaccordancewith
thetermsoftheCrownLandPolicy.375OnthefaceoftheExecutiveCouncilMinute,thiswas
to be their development to be conducted through the vehicle of a company, already
identified in the name of Urban Development Ltd, but not yet formed. There was no
suggestionthattheultimatedeveloperwouldbeanoverseasentity,andthereisnorecord
of theHon JeffreyHallwithdrawing fromtheCabinetdiscussionsat that stageconcerning
theroleofUrbanDevelopmentLtd.376Onthestrengthofthatapproval,MrWilsoninAugust
2005, formed the Company, the sole shareholder of which was a nominee company of
Mcleans, Windsor Nominees Ltd. At about the same time he arranged for Urban
Development Ltd to resolve to issue share certificates to the four Belongers, but never
registered them. TheHon JeffreyHall told theCommission inevidence that thecompany
wassetuponhisbehalf,soheclearlyknewofthelinkwiththeotherthreeBelongersfrom
thestart.
4.200HavingestablishedUrbanDevelopmentLtd,MrWilsonnegotiatedonitsbehalfwith
theGovernment a development agreement in the name of the company. That document
was signed by the Governor on 7th February 2006. The nominee directors of Urban
DevelopmentLtdsignedforthecompany.Whetherthedevelopmentagreementwasplaced
beforeMrWexforhisapprovalisnotclear.MrWilsonmaintainedthattheBelongers,apart
fromtheHonJeffreyHall,hadeachintendedtoremaininvolvedintheprojectinsomeway.
Intheevent,inApril2006allfoursoldtheirsharesinUrbanDevelopmentLtdfor$7million
toacompanyestablishedbyMrWexshortlybeforetheGovernorsignedthetransferofland
tothemon2ndMay2006for$1.367million.Thus,thegrossprofitonthedealforthefour
Belongerswasabout$5.5million.Whetherornotthatamountedtoempowerment,itwas
certainlyenrichment. 375Minute05/426ofCabinetMeeting376Thoughhedidinlaterdiscussions.
200
4.201MrWexpaidthe$7milliontoMrWilsonatMcLeans.MrWilsonplaceditondeposit
with Temple Securities, an associated finance company, which, in due course made the
following payments by way of cheques: about $1.5 million to the Government for the
freeholdandassociatedfeesandduties;$1.8milliontoAllianceRealtyLtd,whichhadalso
been established by Mr Wilson, $1 million of which was for the Hon Jeffrey Hall, and
$800,000forMrWilson;$1milliontoeachoftheotherthreeBelongers;and$500,000toa
MrTimSmith,anestateagent,whoatanearlystagehadhadahandinintroducingMrWex
toMrWilson.Therewassomeuncertaintyabouttheinvolvement,ifany,oftheHonJeffrey
Hall inAllianceRealtyLtd.Thishasrelevanceto:1)MrWilson’spaymentoftheMinister’s
$1millionintothatcompany’saccountinsteadofintohisclientaccount,asonemighthave
expected;2)theHonJeffreyHall’suseofthataccountasamediumfor lendingMrRhynie
Campbell 200,000;377 and 3) Mr Wilson’s claimed and incomplete list of payments
approaching$800,000madeon theMinister’sbehalf, including that loanand somecredit
cardbills.
4.202 Theshares inUrbanDevelopmentLtdhavingbeensoldon toMrWex’scompany,
BlueResortDevelopments(TC)Ltd,thefourBelongersdroppedoutofthepicture.MrWex’s
lawyerbythisstagewasMrHughO’Neill,apartnerinthefirmofHughGO’Neill&Co.He
soughtandobtainedanindemnityfromthefourBelongersinfavourofUrbanDevelopment
Ltd and Blue Resort Developments (TC) Ltd in the event of the Government seeking to
reclaim the Belonger’s discount on the sale of the land. The Commission has seen no
evidence that it has done so, or that it has been offered by any of the four Belonger
participants.
4.203 Interestingly, and it is hard to know if this was a deliberate attempt to avoid any
liability to repay the discount, Cabinet persuaded itself that there was no necessity to
impose a charge on the land in respect of the discount. The Commission has seen that
normally, theGovernmentprotected itsposition inrelationtodiscountsbycreatinga first
chargeoverCrownLanddisposedof. Thiswouldensurethatonanysubsequentsale, if it
waswithintenyearsandtoanon‐Belonger,theGovernmentwouldbeinapositiontoforce
repayment.Inrespectofthistransaction‐andsaidtobesoasnottoinhibitcondominium
sales in due course – the Cabinet agreed to no charge inmeetings at which all the four 377Seepara4.195above
201
Belongerswererepresented inthepersonsoftheHonJeffreyHall, theHonFloydHalland
theHonLillianBoyce.378
4.204 The Commission invited comment from each of the Belongers involved in the
transaction.OnlySamuelBeenacknowledgedthathehadknownthetransactionwastobe
acoordinatedoneoffourseparateapplicationsforcontiguousplotsoflandtobeacquired
andsoldasone.QuintonHallandEarlsonRobinsoneachsuggestedthathewasactingalone
andthatMrWilsonapproachedhimtojoinanexistingproject.However,theiraccountsare
consistentinanumberofimportantrespects:1)thatMrWilsonarrangedeverything;2)that
theyhad known littleornothingof themechanicsof the transaction; 3) theyhadhadno
involvement in the negotiations; 4) they had expected a substantial reward in money or
money’sworthfortheirparticipation;and5)thattheyhadsignedandindemnityinfavourin
favourofUrbanDevelopmentLtdandMrWex’scompany,BlueResortDevelopments (TC)
LtdinrespectofanyliabilitytheymightincuriftheGovernmentweretoseekrepaymentof
thediscountsBelongerdiscountsgranted.
4.205TheoutcomeofthiscomplicatedtaleisthatthesefourBelongerseachreceivedlarge
sumsofmoneyforthesaleoffreeholdpropertythattheyhadneveractuallyowned.Their
title to shares in Urban Development Ltd had been transferred before the land was
transferred by the Crown. At no stage did they have tomake any outlay with their own
funds.Theytookeffectivelynorisk,andprofiteeredattheexpenseoftheIslands.Ofcourse,
theGovernmentcouldhavevaluedthe landcloser to the truemarketvalue (MrWexwas
clearlyableandwillingtopay$7millionforaplot,whichCabinetwascontenttovalueat
$2.7 million), and this failure contributed to the big margin that was available to be
exploited.
4.206 A sequel to these transactions, one towhich I have already referred,379were the
loansfromthreeofthefourBelongerstotheHonMichaelMisick.HetoldtheCommission
thathehadbeen lent themoneyby theHonJeffreyHall, theHonFloydHallandtheHon
Lillian Boyce. The Hon Jeffrey Hall agreed that he had loaned $100,000 to the Premier,
drawingonthemoneyintheAllianceRealtyLtdbankaccount.TheHonFloydHallandthe
HonLillianBoycedenymakinghimanyloan,eachsayingthatthemoneycamefromhis/her
378HonJeffreyHallBundle1,pp546‐561379Seeabove,paras4.28–4.30
202
brother.AsIhavesaid,ontheinformationbeforetheCommissiontheHonMichaelMisick
hasnotrepaidanyofthese loans,seeminglywithout interestortermsforrepayment,and
hasnotbeenpressedbythelenderstodoso.
4.207ItmaybeacoincidencethatthefourBelongersinvolvedinthistransactionwereall
intimately connected to the Cabinet; one of them a Member of it, two the brothers of
serving Ministers, one the ex‐husband of a Minister. It may be a coincidence that the
Premierseemedtoknowagreatdealaboutexactlywhoprofited,andwhen,totheextent
that he felt able to ask for a loan from the three Cabinet colleagues – a loan apparently
unreturnedineachcase.TheHonFloydHallandtheHonLillianBoycemaintainedthathad
nopartorinterestinthetransactions.However,theHonFloydHallacknowledgedthathe
might have had something from them, but only because he had been generous to his
brotherinthepast.TheHonLillianBoycecertainlybenefited.ShetoldtheCommissionthat
shehadused someof themoney fromher brother as collateral for a loan, and some for
building work on hermother’s house. These benefits toomay simply be attributable to
coincidence.
4.208 There is a possible alternative interpretation. It could be suggested that the Hon
MichaelMisick and his three Cabinet colleagues involved took the opportunity to get an
insidetrackonalandtransaction,whichtheyallowedMelbourneWilsontoorchestrateso
astoenableallinvolvedtoprofiteerfromabuseoftheCrownLandPolicy.
36‐ I findthat theHonJeffreyHallpromoted,andpersonallybenefited from
abuse of the Crown Land Policy in relation to the sale to a non‐Belonger of
CrownLandbyparticipatinginapossiblycorrupttransactioninrespectofthe
sale (‘flipping’) of land at North West Point, Providenciales, to an overseas
developer,DavidWexby:1)knowinglyparticipatinginthetransactionasone
oftheflippersandsharinginthelargeprofitsmadefromthesale;2)loaningor
givingpartoftheproceedsofthoseprofitstotheHonMichaelMisick;and3)
failingtodeclaretotheRegistrarofInterestsortotheCommissionhisshareof
theprofitsor themakingof the loanorgiftofpartof theprofits to theHon
MichaelMisick,ortodeclarehis involvement inthesaleofthe landtoDavid
WexwhenitwasbeforeheCabinetfordiscussion.
203
I recommend criminal investigationby thepoliceor others in relation to the
HonJeffreyHallofpossiblecorruptionand/orotherseriousdishonestyand/or
misfeasanceinpublicoffice,inrespectoftheabovematters.
4.209IhavedealtwiththeNorthWestPointlandtransactioninsomedetail,becauseitisa
goodexampleofapparentabuseofCrownLandPolicy
MelbourneWilsonandtheSecondNorthWestPointtransaction
4.210 The Hon Jeffrey Hall, in a written statement to the Commission after he had
completedhisoralevidence,disclosedforthefirsttimethathehadreceivedasubstantial
payment for political purposes from a Mr Evan Harvey arising out of a further land
transactionatNorthWestPointinlate2006.Itisnotclearwhattriggeredhisrecollection.
This contribution,oneof $200,000,was far greater, and receivedmore recently, than the
politicalcontributionhehadreceivedfromDavidWex.HesaidthathehadputMrHarveyin
touch with Melbourne Wilson at the latter’s request about a potential property deal at
NorthWestPoint,andthatMrHarveyhadofferedtomakeacontributiontohisimpending
re‐election campaign if the dealwent through. Seemingly it did go through, becauseMr
Harvey,havingmadeaprofiton itof$800,000,paidhim$200,000. Hemaintains thathe
hadagreedtogiveMrWilsonhalfofthatsum.ButMrWilsonhasdeniedthat,sayingthat
MrHarveyhadmerelyaskedhimtoholdthemoneyonhisbehalf,whichhedidbylodgingit
in thebankaccountofhiscompany,AllianceRealtyLtd. Itwasa transaction inwhichMr
Wilsonhadapparently again acted for both the sellers and thepurchaser,with the result
thatAllianceRealtyLtdreceivedahandsomecommissionof$320,000.
4.211 TheconflictbetweentheHonJeffreyHallandMrWilsonastowhethertheformer
hadgiven$100,000tothe latterorhadmerelyaskedtohold it forhim isnotresolvedby
examination of their respective bank accounts and that of Alliance Realty Ltd. The
movementsofmoniesinthoseaccountsareabitconvoluted,likethetransactiongivingrise
tothem.Undoubtedlybothmeritfurtherinvestigation.Forwhatitisworth,itlooksmeas
iftheHonJeffreyHallhadthebenefitofthewhole$200,000commissionpaidbyMrHarvey.
Butwhetheritwas$200,000or$100,000,hedidnotdiscloseittotheRegistrarofInterests.
204
___________________
TheHonLillianBoyce
Background
4.212TheHonLillianBoycebecameanelectedmemberoftheformerLegislativeCouncilin
1999, and has continued as aMember of theHouse of Assembly to this day. She is the
Member for Five Cays, a constituency on Providenciales. She became aMember of the
Cabinetin2006,servingfirstasMinisterofEducationand,fromFebruary2007,asMinister
ofHealth.ShelivesinChalkSoundandisabusinesswomanaswellasaMemberofCabinet,
beingtheManagingDirectorofKSK–amanagingcompanythatoperatestheAirportInnin
Providencialesanda linkedcar rentalcompany. She is theex‐wifeofanotherMemberof
theHouseofAssembly,theHonSamuelBeen,whoisnowaMinisterintherecentlyformed
AdministrationoftheHonGalmoWilliams.SheisnowmarriedtotheEditoroftheTCISun
Newspaper,HaydenBoyce.
DeclarationstotheRegistrarofInterests
4.213 The annual declarations provided by the Hon Lillian Boyce to the Registrar of
Interests, like thatofher colleagues,were incompleteandotherwise inadequate, ignoring
thestatutoryobligationssetout insimpletermsintheRegistrationof InterestsOrdinance.
In2004shedidnotfileadeclarationatall,anomissionthatshewasunabletoexplaintothe
Commission. Sheneverdeclared receiptsof any financial sponsorship, although thePNP
recordsshowthatshereceived$72,500fromthePartybetween2005and2007inpayments
ofCandidate’sStipend.Shedidnotdeclareanyoverseastrips,althoughitisclearfromthe
material she disclosed to the Commission, that she has travelledwidely in her successive
rolesasMinisterforEducationandMinisterforHealthandHumanServices.
205
DisclosuretotheCommission
4.214 TheHonLillianBoycealsofailedtodisclosetotheCommissionthesubstantialsum
she had received by way of Candidate’s Stipend over a disclosure exercise that spanned
manymonths.TheCommission’srequeststoherattorneysforfullandaccuratedisclosure
of her financial interests, pursuant to theCommissions of InquiryOrdinancewere specific
and clear as to the information required. It was not until the Commission came into
possessionofvariousPNPrecordsinthecourseoftheHonFloydHall’sevidenceintheoral
proceedings that the existence of payments byway ofCandidate’s Stipend came to light.
Whenquestioned,shesaidthatsheregrettednothavingtoldtheCommissionaboutit.She
receivedthevastbulkofthemoney,twopaymentstotallingalmost$70,000,verycloseto
thedateoftheFebruary2007Election.
4.215Havingsaidthat,theHonLillianBoycemadeupforherpoorrecordofdeclarationsof
interest to the Registrar in the course of the long disclosure exercise undertaken by the
Commission. Apart from her silence about the Candidates Stipend payments, she co‐
operatedwithitsrequestsforinformation.Shedisclosedlargevolumesofbankaccountand
credit card statements for the relevant period, along with correspondence and title
documentsinrelationtoherinterestsinland.SheprovidedtheCommissionwithdetailsof
her involvementwith companies, including a full set of company accounts dating back to
2003.
37 ‐ The Hon Lillian Boyce failed to declare to the Registrar of Interests, or
initially to the Commission, her receipt of payments of Candidates’ Stipend,
totalling$72,000.
NoRecommendation
Allocationand‘Flipping’ofCrownLand
4.216AsdetailedinearliersectionsofthisChapterrelatingrespectivelytotheHonMichael
Misick,theHonFloydHallandtheHonJeffreyHall,theHonLillianBoyce’sbrother,Earlson
Robinson,wasoneofthefourBelongerswhowereeffectivelygrantedanoptiontopurchase
adjoining parcels of Crown Land inNorthWest Point, Providenciales,which they sold on,
206
through the company formed for the purpose byMelbourneWilson,UrbanDevelopment
Ltd,totheCanadiandeveloper,DavidWex.Sheacknowledgedinheroralevidencetothe
Commission that she had not withdrawn from Cabinet discussions when the matter was
considered,includingthementionofherbrother’sinvolvementinit.AsIhavementioned,
herbrotherreceivedforhisinvolvementachequefor$1million.$600,000ofthatsumwas
paidintoabankaccountoperatedbyher,linkedtohercompanysothatshecoulduseitas
security for a loan to her car rental company, as she explained in evidence. She
acknowledged,whenthematterwasputtoher,thatthesecuritydepositdidnotappearin
thecompany’saccounts.
4.217 The Hon Lillian Boyce also acknowledged in evidence that, by way of a personal
cheque, she had paid $100,000 of the $1 million to the HonMichael Misick, which, she
maintainedwasaloanfromherbrother,EarlsonRobinson.AsIhavealreadymentionedin
thisReport,thispurportedloanof$100,000wasoneofthreeidenticalloans,theothertwo
madebytheHonJeffreyHallandtheHonFloydHall,whosebrotherQuinton,andhadalso
received $1 million in the transaction. She confirmed in evidence that the HonMichael
Misickhasnotrepaidthemoney,and,whenaskedwhetherithadbeenakickbacktohim,
shesaidthatshehadnotatthetimeconsidereditassuch.
38 ‐ The Hon Lillian Boyce participated in a possibly corrupt transaction in
relationtothesale(flipping)ofCrownLandby:1)acceptingtheproceedsof
profitsmadebyherbrother,EarlsonRobinson,fromthesaleofashareinthe
interest of a company, Urban Development Ltd, which had involved the
disposalofCrownLandatNorthWestPoint,Providenciales,forlargeprofitsto
anoverseasdeveloper,DavidWex;2)loaningorgivingpartofthoseprofitsto
theHonMichaelMisick,orassistingherbrother indoingso;and3) failing to
declare those profits to the Registrar of Interests or to disclose them to the
Commission,andfailingtodeclareherbrother’sconnectiontothetransaction
inrelatedCabinetdiscussions.
I recommend criminal investigationby thepoliceor others in relation to the
Hon Lillian Boyce of possible corruption and/or other serious dishonesty
and/ormisfeasanceinpublicoffice,inrespectoftheabovematters.
207
Awardofscholarships
4.218 During her time as Minister of Education, her Ministry of Education was the
subjectofheavycriticismfromanumberofpeople.Therewasparticularcriticismofthe
awardofoverseasscholarshipsoutsidethestrictmeritcriteriaoftheScholarshipsPolicy,
asaresultofMinistersrequestingthegrantofscholarshipstoparticularstudents. This
was highlighted by the Chief Auditor in her 2006 Audit Report on the Scholarships
Programme,380 in the preparation of which she found little cooperation from the two
most senior officials of the Ministry, namely the Permanent Secretary and Under
Secretary:
Our audit highlighted that the policy and procedures established by theMinistry have been circumvented, and there is a lack of support from thegovernmenttoensurethatthepolicyisfullyimplemented....Inparticular,wenotedalargenumberofscholarshipswereawardedoutsideofthescrutinyofthe Committee. Several problems arose out of this. The majority of suchrecipients did not apply through the prescribed application process; not allawardsmet the predetermined criteria set by the policy; inmost cases, theawardsdidnotfocusonpriorityareas;andwerenotbasedonmerit....
...Withregardtotheadministrationofthescholarships,unlessthereareclearbreachesofgovernmentpolicy,ministerialinvolvementinindividualcasescanonly hinder the efficient operation of Ministry and the Committee, inimplementingpolicyinacosteffective,transparentandequitablemanner....
4.219TheHonLillianBoyce,asMinisterofEducation,clearlysetthetonefordisregard
at thehighest level of the Scholarships Policy, for the administrationofwhich shewas
responsible. Oneof thestudentswhoawardedascholarshipoutsidethePolicy for the
year2005/2006washerowndaughter,notedasMinisterAwardedinAppendixDtothe
2006AuditReport,381undertheheadingAwardsissuedoutsideofCommitteescrutinyfor
2005/2006.
4.220 In the course of its information gathering, the Commission received reports of
chequesmadepayablepersonallytotheHonLillianBoycefromoverseasuniversitieswhen
TCI studentswhowere holders of such scholarships had failed to complete their courses.
380TCIAuditOffice(2006),AuditReport‐ScholarshipsProgramme,S/22.035/06R,p3381ibid,p29
208
TheCommissionfoundnohardevidenceofthishavingoccurred,butowingtothelaxwayin
whichtheScholarshipsProgrammewasoperated,therewasscopeforit.
39 ‐ TheHonLillianBoyceabusedherministerialpositionby:1) assistingor
permitting her fellow Cabinet Ministers, specifically the HonMichael Misick
andtheHonFloydHall,tointerfereinandoverridetheScholarshipsPolicyfor
nominating according to set criteria, in particular merit, candidates for
overseas scholarships, thereby by‐passing the control of the Scholarships
Committee; and 2) granting a scholarship to her own daughter without
referringhercandidaturetotheScholarshipsCommitteeforscrutiny.
NoRecommendation.
Profitmakingfromgovernmentcontracts
4.221TheHonLillianBoyce’scompany,KSKLtd,rentsspaceintheAirportInntotwoquasi‐
governmentaldepartments,theTouristBoardandtheKidneyFoundation.Whenitwasput
to her in the course of her evidence to the Commission that it could be considered
inappropriateforamemberofCabinettoprofitfromgovernmentbusinessshesaidthather
brother, Phillip Robinson, had arranged the contracts with those two entities, that
accommodationislimitedinTCIandthetenantschosetheirpremisesandwerehappywith
them.
SouthernHealthNetwork
4.222TheHonLillianBoycebecameMinisterforHealthinFebruary2007,shortlyafterthe
contractwithSHNhadbeensigned.HerevidencetotheCommissionwasthatshehadnot
knownofanyothercompany thathad tendered for thecontractas shehadnotbeen the
responsibleMinisteratthetime.
_____________________
209
TheHonGalmoWilliams
Background
4.223 TheHonGalmoWilliamswas an electedMemberof theHouseofAssembly from
2003, andwas appointed to the Cabinet in 2004.HewasMinister for Social Services and
NaturalResources,andlaterMinisterforImmigrationandLabour,beforebecomingMinister
forHomeAffairs, includingImmigrationandLabour, in2006.FollowingtheinterimReport
of this Commission at the end of February 2009, and the resignation of theHonMichael
MisickasPremier,hewaselectedleaderofthePNPandsworninasPremieroftheTCIat
theendofFebruary2009.
4.224DuringtheCommission’sinvestigations,theHonGalmoWilliamssubmittedextensive
documentationinresponsetoitsrequestsfordisclosureofhisfinancialinterests.Itisplain
fromthatdisclosureandfromwhattheCommissionhasotherwiselearnedofhim,thatheis
a successful andwealthy businessman,who has had a prominent business profile on the
Islands for a number of years. He has a substantial private income from his extensive
interests in therestauranttradeandfromthesaleofbeers,winesandspirits. Heandhis
companiesownseveralplotsof land. Healsoowns somecompanies jointlywithhiswife
Althea, most notably Provo Travel Ltd, which appears to have a near‐monopoly on the
provisionoftravelservicestotheGovernment.ThecouplealsoholdinequalsharesCreeker
Investments Ltd, a property holding company that controls a five acre commercial lot in
NorthCaicos. In all, he is involved, both as aDirector andbeneficial owner, in some18
companies.
DeclarationstotheRegistrarofInterests
4.225 Regrettably, the Hon Galmo Williams’ annual declarations to the Registrar of
InterestsdidnotmatchthequalityofhisdisclosuretotheCommission.Likethemajorityof
hisparliamentaryandCabinetcolleagues,hemadewhollyinadequatedeclarations.Indoing
so, he ignored his constitutional obligations so simply expressed in the Registration of
InterestsOrdinance.Givenhiswillingnesstoseekanduseprofessionalaccountingadvicefor
210
thepreparationofhismanycompanyaccounts,itisunfortunatethathedidnotseeksimilar
adviceinrespectofhisobligationsofdisclosureofhisfinancialintereststothepublic.
4.227 In2003,he signedhis returnanddelivered it theRegistrar, leaving itblankunder
everyheadingofdisclosurerequired,causingtheRegistrartorecordintheRegisternothing
todeclarethroughout.In2004hemadenoreturnatalltotheRegistrar,noteveninblank.
In2005hedeclareddirectorships inonly fourcompaniesandemployment inoneof them
(Gilley’sEnterprisesLtd),butdidnotdeclareanyshareholdingsoroverseasvisits.Inrelation
to land and property, he declared only a dwelling house and Commercial Properties on
Providenciales.His2006declarationwasinalmostexactlysimilarterms.Inhis2007return,
submitted inMarch 2008, he failed to declare any directorships, although he did declare
paid employment in three of his businesses. He also declared his ownership of shares in
DiscountLiquorsLtd,butmentionednoproperty.Inthislatterregard,theCommissionhas
seenasubsequent letterofapologyonhisbehalftotheRegistraron28thJuly2008forhis
failure to declare details of his properties, and setting themout. The letter followedmy
publicopeningoftheInquiryjustoveraweekearlier,on15thJuly2008inProvidenciales,in
which I indicated that I would seek, and if necessary resort to my powers under the
Commissions of InquiryOrdinance to enforceproduction, specific information and records
fromthosepossiblyimplicatedinthesubjectmatteroftheInquiry.
4.228 In none of the Hon Galmo Williams’ declarations did he disclose any financial
sponsorship or gifts, although the PNP records the Commission has seen show that he
received$63,500fromthePNPbetween2005and2007inpaymentsofCandidate’sStipend.
Nordidhedeclareanyoverseas trips,althoughwenowknowthathe travelled toEurope
with the HonMichaelMisick in 2005, returning early from the trip without the Premier,
owingtofloodingintheTCI.382
4.229MrCarlosSimonsQC,inhisclosingsubmissionsonbehalfoftheHonGalmoWilliams,
characterisedhisfailuresovertheyearsadequatelytodeclarehisintereststotheRegistrar
astechnicalbreachescommittedinadvertently.FromthehistoryofthosefailuresthatIhave
attempted to summarise above, I could not possibly regard them as merely technical or
inadvertentfailures,howeverengaginglyMrSimonsputthematteronhisbehalf.NordoI
382Transcript,Day19,pp65‐66
211
accept that any of the failures, as was subsequently suggested in correspondence to the
SalmonlettertotheHonGalmoWilliams,areattributabletolooseproceduresonthepartof
theRegistrar.
DisclosuretotheCommission
4.230 As I have said, the Hon Galmo Williams provided the Commission with much
documentationabouthis financial interests,mainly in the formofauditedaccountsofhis
principalcompanies.However,foravarietyofreasons,theCommissiononlyreceivedallthe
accounts in late November, by which time it did not have the time or the resources to
examinethemas itwouldhavewished.383However, Inotethat internationalaccountants,
PriceWaterhouseCoopers,hadauditedsomeofthem.
ConflictsofInterest
4.231 Theownershipby theHonGalmoWilliamsandhiswifeofProvoTravelLtd iswell
knownontheislands,and,ofcoursetothoseintheGovernment.Theeffectivemonopolyof
theircompanyinmakingalmostallgovernmenttravelarrangementscreatesapotentialfor
conflictsof interest, in that,asmemberofCabinet,andnowthePremier,heandhiswife
benefitpersonallyfromincomederivedfromthosetravelarrangements.
4.232Similarly,thegrantofCrownLandtofamilymemberswhilstHonGalmoWilliamswas
aMinister createsa furtherpossibilityof conflictof interests.Hisandhiswife’s company,
CreekerInvestmentsLtd,wasgrantedaparcelatBottleCreek,NorthCaicosbyadecisionof
theCabinetatameetingon20thJuly2006.Althoughhewasnotpresentatthemeeting,and
hisinterestinCreekerInvestmentsLtdwasdisclosedatit,theCommissionhasbeenunable
to traceanyreference in theCabinetpapers ithasseentoanearliergrantof land inEast
CaysmadetohiswifeinMarch2006.
383Seeparas1.68–1.171above
212
FirstFinancialCaribbeanTrustCompany
4.233 Records disclosed to the Commission show that the Hon Galmo Williams was a
shareholderofFirstFinancialCaribbeanTrustCompany(FirstFinancial),fromwhichashort‐
term loan is recorded in the accounts of Discount Liquors Ltd for 2004. His ownership of
theseshareswasneverdeclaredtotheRegistrar,andnevermentionedtotheCommission.
HisownershipofthememergesfromtheFirstReportoftheLiquidatorofLeadenhallBank&
Trust Company Ltd, (Leadenhall) to First Financial of 9th December 2005,384 to which
Leadenhallhadtransferred$14millionintrustassetsin2002,andwasclaiming$19million.
4.234TheLiquidator’sreport,whichwaspreparedforthecentralBankoftheBahamas,the
Supreme Court of the Bahamas and others, reveals that First Financial had been jointly
ownedbyDelroyHowell, theHonGalmoWilliamsandChristopherDonnachie. Dr Jospeh
Marzouca,whowas to become theDeputy Chairman of SouthernHealthNetwork (SHN),
acquired Mr Donnachie’s shares. In the time available to the Commission, it has been
unable to establishwhether the HonGalmoWilliams’ financial links toMr Delroy Howell
werestillinplacein2006whentheHonFloydHallfirstproposedSHNastheAdministrator
for the TCI Treatment Abroad Programme. Certainly, the Hon Galmo Williams has not
declared any current connection with First Financial, and he was not present when the
Cabinet, on 23rd August 2006, approved the grant of the contract to SHN.385 But if he
appreciated that Mr Howell was behind SHN, he did not make any reference to his
connectionwithhiminsubsequentCabinetdiscussions.
Immigration
4.235TheCommissionhasnotbeenabletoundertakeadetailedstudyoftheoperationand
managementof the ImmigrationDepartment. However, ithas information in the formof
numerous complaints about its inefficiencies, and possible departmental corruption. The
onlyrecentauditofpracticewasanInternalAuditReportbythethenChiefAuditor,Cynthia
Travis, inMay2006,386 inwhich she found that controlofexpenditure systemswithin the
384CoreVolume5,tab2p83385Seeparas4.155–4.165above386TCIAuditOffice(2006),ExpenditureSystems:ImmigrationDepartment,S/12/061/06R
213
Departmentwasveryunsatisfactory,andthatseveralchangeswererequiredasamatterof
high priority. Much more recent information provided to the Commission suggests a
continuingpatternofgross inefficiency inadministrationandpettycorruptionamongst its
officials.
4.236TheCommissionhasalsobeenalertedtotheprovision,orthewholesalewaiver,of
workpermitsformajordeveloperswhobringinlargenumbersofoverseaslabourerstothe
TCI forworkontheirbuildingprojects. Thereare linkedallegationsthatsuchworkersare
accommodatedinpoorconditions,andpaidlowwages.Thisraisesseveralissues:1)thelack
of protection for the rights of immigrantworkers, as demonstrated by recent high‐profile
protests; 2) the undermining of the local labour market by the use of foreign low‐wage
employees;and3) thewillingnessof theGovernment towaivestatutory requirements for
work‐permits for favoured developers, anyorallofwhich is likely to createunfairness, to
underminecompetitionandalsotoengendercorruptiononalargescale.Theseareinlarge
partattributabletothepreviousCabinet’sattitudeofdevelopmentatanycost,areadiness
tocutcornersandtomakeorchangepoliciesonthehoof.
4.237 These are all areas inwhich theHonGalmoWilliamswouldhavebeen intimately
involvedasMinisterwith responsibility for Immigration. TheCommissionhasnobasis, on
the information before it, for suggesting corruption on his part, but it does suggest a
willingnesstogoalongwiththegeneralattitudeofthethenCabinetwithoutdemur.Italso
reflects a lack of control over, or sufficient awareness of, the running of his own
Department,whichhasallowedinefficienciesandthepossibilityforcorruptiontothrive.
____________________
214
5–SYSTEMICLEGISLATIVEANDGOVERNMENTALWEAKNESSES
Somegeneralfault‐lines
5.1Undermysecondandthirdtermsofreference,Iamtoconsider,inthelightofallthe
information before me, whether to make findings as to any systemic weaknesses in
legislation,regulationoradministrationand/oronanyrelatedmatter.AsIindicatedinthe
InterimReport, I have interpretedany relatedmatter as one that bears in a fundamental
way on any statutory, regulatory and/or administrative reform or changes that I
recommend. That includes the Franchise, the Constitution, the Criminal and Civil Justice
Systems and other areas of law and procedures, the over‐all system of governance and
financial control, any relevant codes of professional conduct, and, electoral and party
politicalfinances.
5.2AsshowninearlierChaptersofthisReport,theinformationIhavegatheredintheten
months of this Inquiry points at least to a possibility – but more realistically a high
probability ‐ of systemic corruption and/or other serious dishonesty involving past and
present electedMembers of the Legislature in recent years. The information leading to
those conclusions and, where I have expressed them, preliminary findings in relation to
individuals,hashighlightedmanyweaknessesinthelawanditsadministration,allormostof
whichIhavetouchedonindifferentcontextsintheReport.InthisChapterIshallreferto,
but not rehearse in detail, systemicweaknesses or failures that I have already identified,
and,whereIthinkitmaybehelpful,venturerecommendationsforremedyingthem.
5.3Beforedoingso,Ishouldliketomentionsomegeneralfault‐lines,asInowseethem,in
thegovernanceanddifferentculturalattitudesgivingrisetothetroublesthatbroughtmeto
thesebeautiful,hurricaneprone,friendlyandpotentiallyprosperousIslandsinthesun.Ido
notclaimanyoriginalityinthisexercisebecause,aftertenmonthsofthisabsorbingInquiry,I
amlittlemorethanasoundingboardforallthatIhaveread,heardandseen.
5.4 First, there is the phenomenon sowell described by Sir Louis Blom‐Cooper QC ‐ a
largelysingleeconomicbaseatdifferentstagesoftheIslands’history, fromwhichasmall,
comparativelydiverseandwidelyspreadpopulationhashadtomakealiving.Initially,and
215
for some time, there was production of salt on some of the Islands combined with
subsistence farming and fishing on others. Therewere fleeting periods of settlement by
American loyalist settler/planters at the end of the 18th century, the establishment of
Americanmilitarybases intheSecondWorldWarandthenslowopeningofthe Islandsto
tourism,acceleratinginthe80’sand90’stotheoverridingeconomicdominancethatithas
now.TheTerritory’spopulationisstillcomparativelysmall,diverseandwidelyspread.But
with an economic power and potential derived from its geographical attractions, it is
capable, if properly led and governed, of punchingwell above its weight in world terms.
Such economic power in a small population, wheremoney‐making combines so naturally
with politicking, demands a special sophistication and discipline if an efficient and fair
system of governance is to be achieved. For whatever reasons, such sophistication and
discipline have not been evident in the TCI for some time. In the result its democratic
traditionsandstructureshavebeentestedalmosttobeyondbreakingpoint.
5.5Suchproblemsarebadenoughforanysmallstatewithstrongeconomicpotential.But
they are compounded by the tripartite system of governance that is a feature of many
British Overseas Territories. First, there is the Foreign & Commonwealth Office with a
generaloversightandresponsibilityforthepeopleoftheIslandsandultimatecontrolover
theGovernor of the day. Yet it has only partial financial input to the governance of the
country. Secondly, there is theGovernor,usuallyofbroadanddeepexperienceofmany
overseasjurisdictions,butastrangerforawhiletotheIslands,andhereonlyforafewyears.
HehasgeneraloversightoveranExecutiveofwhichheispartandinaccordancewithwhose
adviceheisboundtoactsaveincertainreservedmattersorwheninstructedfromLondon.
Forhim,therearepoliticalandfinancialpressuresinCabinetfromthefront,distant,albeit
experienced,guidanceorinstructionfromLondonfrombehind,andallaround,expectations
frommanyofthosewho liveherethathewillstandupforthem. Andthirdly, there isan
Executive in the form of the Cabinet consisting of a third or more of the members of a
politically polarised Legislature of locals closely involved with the commercial and social
sinewsoftheirsocietyandtheirconstituents,representativeatbestoflessthanhalfofthe
long‐termresidentsoftheIslands.
5.6Thepressures,goodorbad,upwardsonMinistersandonwardtotheGovernor,andthe
limitedfinancialcloutandimmediateauthorityhecanbringtobearonmatters,possiblyor
216
possiblynot,callingforreferencetohissuperiorsontheothersideoftheAtlantic,arethe
stuffoftheweeklyCabinetMeetingsoverwhichhepresides.Itisatthosemeetings–calling
Ishouldthinkfortheskillsofaseasonedpokerplayer‐thatheisoftenpressedbyCabinet
Ministers to approvemattersof greatpublic andprivate consequenceproposedby them.
They are inevitably matters in respect of which they know more than he does – the
approacheshavebeenmade to them;mostof the talkingand thedeal‐makinghavebeen
donebeforetheyputittohimintheCabinetRoom.AsCabinetAgendasandMinutesshow
–hisapprovalforproposalsisfrequentlysoughtasamatterofurgencyandoninadequate
information,withtheclearimplicationthat,ifhedoesnotapprove,thefleetingopportunity
ofsecuringavaluableinvestmentfortheTerritorywillbelost.
5.7 TheConstitutiondoesnot, it seems tome,assistaswellas itmight inbalancing the
countervailinginterestsandinputsinthistripartitesystemdecision‐making. Perhapssuch
tensions are unavoidable. The 2006 Constitution, to a far greater extent that its 1988
predecessor, leaves individual Cabinet Ministers with a wealth of discretions, by way of
grants,exemptions,concessions,discountsetctooverrideorside‐stepmattersofprinciple
ororderlyandfairadministration.Norhastherebeenforsometimeacultureofprobityin
governance at the highest level, or openness in the management and control of public
finances, to engender what democracy should be there to deliver, an efficient system of
governanceandfinancialorderthatishonestandfairtoall.Putatitsnarrowest,thereisa
dearthofeffectivechecksandbalancestopreventministerialandotherofficialabuseofthe
systemofgovernanceanditsfinancialmanagement.
5.8Behindalloftheseproblemsliesthepowerandpoisonofpolitics,sinceitisthroughthe
largely secret and publicly unaccountable donations to politicians direct or through the
medium of their political parties – notably in recent years the PNP ‐ that corruption of
individualministers bydevelopers andother investorsmayhavebeenenabled to flourish
unseen.Thispossiblecorruptionmayprovetobe,notonlyafeatureofpersonalenrichment
of Ministers, and in some instances, their officials or families or associates, but also of
correspondinglossestothepeopleoftheIslandsinthebadgovernancetowhichitreduces
thecountryandthediminutionofitsnaturalassetsandrevenuereturns.
217
5.9InthefindingsandrecommendationsthatfollowIhaveattemptedtokeepthefocuson
possible/potentialcorruptionandotheralliedseriousdishonesty‐whatencouragesoraidsit
andhowbesttopreventordeter it. Ihavetried,notalwayssuccessfully,tokeepinmind
the imperativeexpressed inmy InterimRecommendation9,Keep it simple,which I think
worthyofrepeating,notsomuchasarecommendation,butasareminder:
Those conducting reviews of governance and governmental financial
managementandcontrol,andanysubsequentreviewfor,sayaConstitutional
Commission,shouldkeep inmindthesmallnessoftheTerritory’spopulation.
While allowing for the size of an economy disproportionately large for the
population, the Territory should not be burdened with unnecessary
governmentaloradministrativetrappingsmoreappropriatetoalargernation.
Inevitably,however,Ihavehadtolookatthebroaderconstitutionalandotherstatutory
frameworkofgovernancethatprovidetheinstitutionalsettingandclimateforvenality–
systemicas itprobably is– inthese Islands. ThenatureandTermsofReferenceofthe
InquiryaresuchthatIcanonlyaimtoexpressmyviewsinthebroadest,andsometimes,
mosttentativeterms.And,evenifitwerewithinmycompetence–whichitisnot–such
recommendations that Imakecannotberegardedasapanacea forallorevenmostof
theillsofthecountry’sgovernancethatnowurgentlyneedattention.
5.10 In turning first to my individual findings of systemic weaknesses and related
matters and tomy associated recommendations, I should start, as I did inmy Interim
Report of 28th February 2009, with the most urgent, namely suspension or partial
suspensionofthe2006Constitution.
PartialSuspensionoftheConstitutionandInterimDirectRulefromWestminster,acting
throughtheGovernor
5.11 Mypubliclyexpressedviewattheendoftheoralhearings inProvidencialeson11th
February 2009 was that the TCI were in such dire constitutional, political and economic
218
straits that I should submit an InterimReport by 28th February 2009,387which I did – see
Appendix 3 to this Report. In the Interim Report I adhered to that view, and made 24
Interim Recommendations for later development and elaboration, some of which, I
indicated,Iregardedas:388
ofgreaturgencytomeetwhatIconsiderchronicillscollectivelyamountingtoanational emergency. The others are for the middle and longer terms, butrequire early consideration with a view to making ready for their timelyintroductioninduecourse.
Icontinued:389
... I am ... satisfied on the information before me ... of a high probability ofsystemic corruption and/or other serious dishonesty involving past and presentelectedMembersoftheHouseofAssemblyandothersinrecentyears.However,I am not ready to formulate provisional findings for institution of criminalinvestigation in relation to any individual or any such interests he or shemayhave.When I am ready to do so, I shall ... give each individual concerned anopportunitytomakerepresentations....
5.12 Nothing that has happened since then has prompted me to take a different view.
Certainly not the newAdministration established under the leadership of theHonGalmo
Williams after much delay and bumpy internal PNP political manoeuvring, and now
functioningsomewhatfitfullyunderthewatchfuleyesoftheHonMichaelMisickandother
formerCabinetcolleagues.Therehasbeenlittleapparentlegislativeactivityontheseveral
broadfrontsurgentlyneededforsometime, thoughthat isnodoubt inpartowingtothe
unsettled conditions towhich the Inquiry has contributed, coupledwith thewait for this
Report. But,perhapsmost importantofall,mycloseexaminationof the informationand
evidencebeforetheInquirydrivingmetothePreliminaryFindingsandRecommendationsin
Chapter4inrelationtoindividualMinistersintheMisickAdministrationhasreinforced,not
weakened my conviction of the need of a need for urgent and wide‐ranging systemic
change.
5.13 Accordingly, I confirm my Interim Recommendation 5 for Suspension of the 2006
Constitution,butvariedsoastotakeaccountofthealternativeofpartialsuspensionthatI
considered,which isnowenacted in the2009ConstitutionOrder,namely for cessationof
387Seeparas1.79above388InterimReport,para9389ibid,para10
219
ministerial government, dissolution of the House of Assembly and suspension of certain
relatedprovisions,initiallyfortwoyears,subjecttopossibleextensionorabbreviation.390I
expressthatconvictionasrecommendation40soastocontinuethesequenceofnumbering
of findings and recommendations in Chapter 4, rather than establish two separately
numbered series of recommendations, even though a few Chapter 4 findings are not
accompaniedbyrecommendations.
40‐Recommendation:cessationofMinisterialGovernment,dissolutionofthe
House of Assembly and suspension of certain related provisions, initially for
two years, subject to possible extension or abbreviation, as provided in
Schedule1tothe2009ConstitutionOrder,yettocomeintoforce.
5.14 Similarly, I confirm my Interim Recommendation 6 for Direct Rule through the
GovernorandCouncil,butvariedsoastoaccordwiththeformulaadoptedinSchedule2to
the 2009ConstitutionOrderofgovernmentby theGovernor,withdiscretionarypower to
make laws for the peace, order and good government of the TCI,391 assisted by: 1) an
Advisory Council consisting of four ex officio members392 and up to seven nominated
membersappointedbytheGovernor,ofwhomatleastfivemustbeBelongers,toaidhimin
theformulationofpolicyandtheexerciseofhisfunctions;and2)byaConsultativeForum,
consistingofbetween11and15membersappointedbytheGovernorfromamongpersons
representative of the TCI community and three ex officio members,393 to make
recommendationsinrelationtolegislationandotherpolicyissues.394
41 ‐ Recommendation:direct ruleby theGovernorwith theassistanceofan
AdvisoryCounciltoadvisehimontheformulationofpolicyandexerciseofhis
functionsandofaConsultativeForumtomakerecommendationsinrelationto
legislation and other policy issues, as provided in Schedule 2 to the 2009
ConstitutionOrder,yettocomeintoforce.
390TheTurks&CaicosIslandsConstitutionOrder2009ConstitutionOrder,Schedule2,para3;SeeAppendix4(ii)tothisReport391ibid,para8;SeeAppendix4(ii)tothisReport,392TheDeputyGovernor,theChiefExecutive,theAttorneyGeneralandthePermanentSecretary,Finance393opcit390,para9,theexofficiomembersbeingtheChiefExecutive,theAttorneyGeneralandthePermanentSecretary,Finance;394cftheviamediafavoured,albeitsoftly,bySirLouisBlom‐CooperQCinhis1986Reportopcit26,whenrecommending,atCapXX,pp99–100,inresponsetolesserallegationsofcorruption,amendmentofPartIIofthe1976ConstitutiontoallowtheGovernortoadministertheTerritorywiththenon‐bindingadviceofanAdvisoryExecutiveCouncilconsistingofuptofourmembersnominatedbyhimfromtheLegislature,whichwouldremainintact,and/oreminentBelongers.
220
5.15Iconfirm,withslightvariation,myInterimRecommendation10,forAnnualReviewof
need for continuance of rule through Governor and Council, namely that the Governor
should annually, or otherwise as he considers necessary, take the advice of his Advisory
Council as to the earliest practicable date on which to seek the revocation by Order in
Council395 of the 2009 Constitution Order and return to ministerial government and an
electedHouseofAssembly.
42 ‐ Recommendation: the Governor should annually, or otherwise as he
considersnecessary, taketheadviceofhisAdvisoryCouncilas to theearliest
practicabledateonwhichtoseektherevocationbyOrderinCouncil396ofthe
2009ConstitutionOrderandreturntoMinisterialGovernmentandanelected
HouseofAssembly.
5.16IconfirmmyInterimRecommendation3,ReplacementofPublicOfficersetc.,butin
the form setout in Schedule2397 to2009ConstitutionOrder,namely giving theGovernor
powertomakeappointmentstoanypublicofficeinhisdiscretion.
43‐Recommendation:theGovernortohavepower,actinginhisdiscretion,to
makeappointmentstoanypublicoffice,asprovidedinSchedule2tothe2009
ConstitutionOrder,yettocomeintoforce.
5.17IconfirmmyInterimRecommendation1.i),forstrengtheningtheGovernor’sPrivate
Office.WhilsttheadvisoryandconsultativesupportfortheGovernorprojectedbythe2009
ConstitutionOrdermaybeadequateonaninstitutionalbasisfortheheavyburdensitputs
onhimduringtheperiodofinterimgovernment,hemaywellbenefitfromastrengthening
ofhisPrivateOfficebothinstaffandadministrativeaccommodationandfacilities.Hewillbe
abletojudgefarbetterthanIwhathewillneedtomeettheadditionaldemandsofhispost
intheinterimperiodandalsointhelongerperiodonreturntoMinisterialGovernment.My
only contribution, which I venture as a recommendation, is that he will need some
strengtheningofresourcesand,inanyevent,heshouldhavethesupportofanexperienced
Foreign&CommonwealthOfficeadministratorof the level, inFCOclassification,ofaFirst
Secretary.
395opcit390,Schedule2,para3396ibid,para3397ibid,paras6and7
221
44 ‐Recommendation:strengtheningof theGovernor’sPrivateOfficeboth in
the numbers and seniority of staff and administrative accommodation and
facilities, including the addition of an experienced Foreign& Commonwealth
administratorofthelevelofaFirstSecretary.
5.18IalsoconfirmmyInterimRecommendations1.i)andii)forstrengtheningtheAttorney
General’s Chambers. One of the first concerns for the Governor, in the exercise of his
interimpowers,islikelytobetheneedtosecureadequateandtimelyadviceonthelawasit
affectsanymattertouchingthegovernanceoftheIslandsandtheeffectiveenforcementof
thecriminalandcivillaw.Tothaturgentend‐andinthemedium‐to‐longertermfollowing
restorationofministerialgovernment–itisvitalthattheAttorneyGeneral’sChambersare
strengthened with adequate numbers of high quality staff of a disposition to withstand
politicalandotherinappropriatepressures.Theyshouldalsobeprovidedwithsuitableand
securepremises toenable them to copewith the surgeof legalwork likely to flow in the
shorttermandthereafterberequiredbysuchacceptanceasthereisofthisReport.
45 ‐ Recommendation: the Attorney General’s Chambers should be
strengthenedwithadequatenumbersofhighquality staffof adisposition to
withstandpoliticalandotherpressuresinappropriatetotheirrole,andsuitable
andsecurepremisestoenablethemtocopewiththesurgeoflegalworklikely
tobeengenderedintheshorttermandthereafterrequiredinthemedium‐to‐
longertermbysuchacceptanceasthereisofrecommendationsinthisReport.
5.19Inaddition,bothintheshortandthemedium‐to‐longterm,Ibelievethatthereshould
beconsiderationofappointmentofaDirectorofPublicProsecutionstohaveresponsibility
under the general oversight of the Attorney General for the initiation and conduct of
criminalinvestigationsandprosecutionsintheIslands.Suchanappointmentwouldrelieve
theholderoftheofficeofAttorneyGeneralfromtheofteninvidiouscombinationofrolesof
member of the executive and/or legislature and governmental adviser with that of
prosecutor. That is so, notwithstanding the provision in section 39(5) of the Constitution
that, in the exercise of his powers in criminal proceedings,he shall not be subject to the
direction or control of any other person or authority. Any holder of the office, given his
membership of the executive and the legislature as well as his main job, advising the
Government on the law and applying and enforcing it in the public interest, is inevitably
222
vulnerableinacloselyknitandhighlypoliticisedcommunity,suchasthatintheseIslands,to
speculativeandunfoundedperceptionsandcriticisms.whateverhedoesordoesnotdoin
theexerciseofhislegalresponsibilities.Inmakingthefollowingtworecommendations,my
intention, therefore is to enhance the authority and reachofwhoever holds theoffice of
AttorneyGeneralbydistancinghimabitfromboththepoliticalandforensicarenas.
46‐Recommendation:Considerationshouldbegivenbywayofconstitutional
amendmentre‐definingtheAttorneyGeneral’sprincipalfunctions398and‐for
as long as the Attorney General remains a member of the executive and
legislative arms of government ‐ the appointment of a Director of Public
Prosecutionswith responsibility under the general oversight of the Attorney
General,forinitiationandconductofcriminalinvestigationsandprosecutions.
5.20 While on the subject of the Attorney General, and looking ahead to the eventual
returnoftheIslandstoministerialgovernment,Ibelieve,forsimilarreasons,that,whatever
the traditional role of the Attorney General in most British Overseas Territories,
considerationshouldbegiventohimnolongerbeingexofficoamemberoftheexecutiveor
legislative arms of government. Hismembership of both bodies is in practice somewhat
restricted in function. Hispresenceat thedeliberationsofbothbodieswhennecessaryas
independentlegaladviseris,howevervitaltotheirproperfunctioning.Itisforhimtoadvise
the Governor in Cabinet on matters of law and practice when necessary, rather than
participate in Cabinet discussions and decisions on the extra‐legal merits or demerits of
manymattersofCabinetbusinessunderdiscussion. Similarly,andafortiori, Ibelievethat
the Attorney General should no longer be aMember of the House of Assembly on its
resumption. Both positions are, in my view, inimical to the quality, in addition to legal
expertiseandjudgmentthat,inthepubliceye,bringsstaturetotheoffice–independence
ofthegovernmentofthedayandassociatedpoliticalpressures.IftheGovernorinCabinet
and the House of Assembly need his legal advice he can be present at their respective
deliberationsinhislegalcapacity,butnotasaMemberprivyto,butconventionallysilenton,
theirdeliberationsastopolicy.
47 ‐ Recommendation: In the interests of preserving and enhancing the
independence and stature of the office of Attorney General, consideration
398Sees39ofthe2006Constitution,whichdetailshispowers,allinthecontextofcriminalproceedings.
223
should be given before return to ministerial government to amending the
Constitutiontoprovidethat:1) theAttorneyGeneralshouldbeavailableand
entitled to advise the Cabinet and the House of Assembly on the law and
practicalitiesofitsformandadministrationasitaffectstheirdeliberations;and
2) for thosepurposesheor she shouldbeentitled toattend their respective
meetings, but to do so in the capacity of independent legal adviser not as a
memberofeither.
5.21Thefinalmatterhighlyrelevanttotheproposedperiodofinterimdirectrulethrough
theGovernor has beenwell canvassed inmany audit andother reports over the last few
years, discussed in various parts of this Report. It is the urgent need for a thorough
examination–stock‐taking‐oftheTerritory’sfinancialstateandtheintroductionofrigour
tothemanagementandcontrolinthefutureofitsfinancialaffairs. Thisisbothtoobroad
andtoospecialisedanareaofexpertiseformetoaddanythingofsignificancetowhathas
beensaidbysomanyobjectiveandexpertobserversovertheyears.Itiswellunderstood
by the Governor and others recently seconded to assist him in his task of financial
regeneration.
5.22 My Interim Recommendation 8, Governance and Fiscal Review, and 19, More
effectiveauditing,werebothblindingglimpsesoftheobvious.TheGovernor,with,Ibelieve,
theassistanceoftheDepartmentforInternationalDevelopment,hasalreadybeguntowork
with experts seconded to the Territory to assist in certain aspects of the immediate task,
including recovery from hurricane damage. And there are various initiatives under way
within the public service which he, with the assistance of the proposed Advisory Council
shouldbewellequippedtolead.Butifandtotheextentthattheyarenotalreadyplanned
orinhand,thepriorities,itseemstome,are:
1) anurgent assessmentof capital and revenue foregone in recent years from
possibleundervaluationandundeserveddiscountsonthedisposalofCrownland
and of revenue in respect of waivers and/or concessions in respect of stamp,
224
import, and other duties, fees and taxes, to which I have referred in various
passagesinthisReport,mostparticularlyinChapter3;399
2) a review of public funding, particularly the financing of recurrent public
expenditurefromdisposalsofCrownLand;and
3)More generally, an urgent reviewor otherwise from an International Flying
Squad of experts from other Commonwealth Countries and/or appropriate
Internationalagencies,withaviewtosecuring,onatemporarybasisand/oras
appropriate and necessary in the longer term, an efficient and rigorously
accountable system of governance and control at all levels, including
departmental and island administrations and public boards, commissions etc.
In this connection, thewordsof Sir LouisBlom‐CooperQC in the1986Blom‐
CooperReport400areasapttoday,withafewnotableexceptions,astheywere
then:
TheurgentneedforfinancialcontrolwithingovernmentDepartmentsdemands a vast improvement in the quality of senior and middlemanagement. The vital need is to establish an active trainingprogramme.
CriminalSanctionsandCivilRecovery
5.23 Whatever theoutcomeofmyrecommendation,401asproposed inRecommendation
16inmyInterimReport,forsuspendingadefendant’srightunderthe2006Constitution402
totrialbyjudgeandjury,criminalinvestigationsundertakenpursuanttoallorsomeofmy
recommendationsinChapter4,wouldbelikelytoleadtoanincreaseinprosecutions.There
would thus be a greater workload on TCI judges, courts and court staffs. Accordingly, I
confirm my Interim Recommendation 2, Additional Judges and Courts, for early and
contingent preparation for such increase in workload by the appointment of additional
judges and court officers of high calibre, probably on temporary secondment, and the
provisionofadditionalcourtpremisesandsupportingresources.
399Seepara3.76etseq400opcit26,recommendation45,atp106401s8andSchedule1,para1402s6(1)(g)
225
48‐Recommendation:Makeearlyandcontingentpreparationfor increase in
judicial workload that may result from criminal and/or civil recovery
investigations undertaken pursuant to this Report, by appointment of
additional judges and court officers of high calibre and the provision of
additionalcourtpremisesandsupportingresources.
5.24Iftherearetobecriminaland/orcivilorcriminalrecoveryinvestigationswithaview
to proceedings, I anticipate that they will need to be conducted by separate but closely
liaisingspecialistteamssecondedforthepurpose,probablyunderthegeneraloversightof
theAttorneyGeneral.403Asamatteroftiming,giventhegenerallymorespeedyprocesses
available in civil and criminal recovery than in criminal prosecutions, and the urgency of
taking steps to preserve and/or secure the return of potentially misappropriated public
assets, priority should probably be given to establishing machinery for recovery. I
accordingly confirm the substance ofmy InterimRecommendations 3 and 4,Recovery of
Public Assets – Special Civil and Criminal Recovery Units, for the establishment of such
Units and of secure accommodation and other resources for them to secure civil redress
whereappropriate.Ihaveinmindproceduresforsecuringearlyfreezingorrecoveryofland
and/or assets pending recovery and other interim or final relief in support of civil
proceedings,pursuanttotheProceedsofCrimeOrdinance2007404and/orforrestraintand
confiscationorders405intheTCIorworldwide.
49‐Recommendation:TheestablishmentofaCivilandCriminalRecoveryUnit
orUnitsandofsecureaccommodationandotherresourcesforthem,pursuant
to the Proceeds of Crime Ordinance 2007, for securing early freezing or
recovery of land and/or assets pending recovery and other interim or final
relief in support of civil proceedings406 or for restraint and confiscation
orders407intheTCIandworldwide.
5.25IconfirmmyInterimRecommendation17fortheappointmentofaSpecialProsecutor,
operating under the general oversight of the Attorney General to instigate and direct
403Inanyevent,arequirementoftheProceedsofCrimeOrdinance2007.404ProceedsofCrimeOrdinance,s2,ss59‐60andss127‐130405ibid,ss42(a)and/or(b)–53and58406opcit404407opcit405
226
criminal investigations and for any consequent prosecutions resulting from
recommendationsinChapter4ofthisReport.Sheorheshouldbesupportedbyaspecialist
team of prosecutors in the field of corruption and fraud and of experienced fraud and
forensic accounting investigators, all drawnwholly fromoutside the TCI, and be provided
withadequateandsecureaccommodationandotherresourcesforthejob.
50‐Recommendation:TheappointmentofaSpecialProsecutorandsupporting
specialist team, to operate under the general oversight of the Attorney
General, for the criminal investigation and prosecution of matters that may
resultfromrecommendationsinChapter4ofthisReport.
5.26 I confirmmy InterimRecommendation16 forCriminalTrialby Judgealone,andas
providedbythe2009ConstitutionOrder,yettobebrought intoforce.408 Ihave inminda
provisionfortheintroductionofaspecialcourtorcourtsand/orspecialprocedureoftrialby
judgealoneforcaseswheretrialwithajurywouldriskimpairmentoftheadministrationof
justice. Thiswouldcover,butnotnecessarilybeconfined to, casesofpossiblecorruption
and/orotherseriousdishonestygivingrisetothisInquiry.See,forexample,theprovisions
inEngland&Walesundersections43and44ofCriminalJusticeAct2003fortrialbyjudge
aloneincasesrespectivelyofseriousandcomplexfraudandwherethereisadangerofjury
tampering; also, inNorthern Ireland under the Justice and Security (Northern Ireland) Act
2007,sections1–9. Seealsothewide‐spreaduseofbenchtrials(i.e.trialwithoutjuryat
theoptionofthedefendant)incommonlawjurisdictions,forexample,inmanyoftheStates
oftheUnitedStates,theCommonwealth,includingCanada,AustraliaandNewZealand,the
FalklandIslandsandStHelena.
5.27Suchacoursewouldinvolvetheremovalofthepresentrighttotrialbyjurycontained
insection6(g)ofthepresentTCIConstitution,forsuspensionofwhichthe2009Constitution
Orderprovides,409butideallyleavingitfordecisionbythetrialjudgeonacasebycasebasis.
Buttrialbyjuryisnotapre‐conditionofthefairtrialrequirementofArticle6oftheECHR,
whichsection6(g)reproducesinsubstance.Trialwithoutjuryisalsoafeatureofanumber
ofjurisdictionsthroughouttheWorld,includingIndiaandHolland.If,asisclearlythecase,it
is Article 6 compliant in themany jurisdictions that permit trial of even themost serious
408s7andSchedule1,para1409ibid
227
offencewithoutjury,itisnotsuchabigsteptotakewherenationalandculturalconditions
aresuch,ashere,thatnofairoreffectivetrialcouldtakeplacewithajury.Thereare,inmy
view,atleastsevenreasonswhysuchastepshouldbetaken:
1)thestancetakenbyallattorneysactingforMinistersand/orotherMembers
of the House of Assembly and others in the Inquiry was that their respective
clientscouldnotpossiblybegivenafairhearingbyajury,giventhewideadverse
publicitytoallegationsagainstthembefore,duringandasaresultoftheworkof
theCommission;allormostof theattorneys,expressedwithsomecogency, in
myview,thehighlikelihoodthatanytrialjudge,facedwithanapplicationfora
stayoftheprosecutiononaccountofsuchprejudice,wouldstayit.410
2) the contrary consideration, if any prosecution were to survive such a stay
application, is that, in this small community of close family political and
commercialaffiliations,itwould,intheevent,bewellnighimpossibletosecure
convictions of politicians by jury trial, where the panel is of only seven jurors
entitledtobringinmajorityverdictsbyasfewasfive,411andwhere,forsomany
potential jurors inthis jurisdiction,muchturnsoncommitmenttopartypolitics
andlocalandfamilyallegiances;412
3)theclearrisk,insuchcircumstances,ofjury–tampering;
4) the potential complexity of allegations of corruption or other serious
dishonesty of the sort canvassed in the Inquiry – taxing for any jury panel,
whetherintheTCIoranyjurisdiction‐astrongcontributortothereasoningof
Lord Roskill’s Committee on Fraud Trials recommending trial of serious and
complexfraudwithoutjuries;413
5)thelengthandpublicandprivatecostofanylikelyprosecutionsiftriedwitha
jury – insomecasesofsomemonths–andtheconcomitant intrusion,burden
onthelivesanddistress,toalltrialparticipants;
4102006Constitution,s1411SeeTCIJuryOrdinance,ss23and36412cfSirLouisBlom‐CooperQC’s1986Report,pp58and103,para20;andtheReportoftheConstitutionalCommission1986(theMarshallCommission),paras3.28–3.31413FraudTrialsCommittee(1986),TheRoskillReport,London:HMSO
228
6)thefragilityoflongandcomplexjurytrials–seee.g.thecollapseoftheJubilee
LinetrialattheCentralCriminalCourtaftermanymonthsatareportedcostto
thepublicpurseofsome£60million;414and
7)thestrongpublic interest inwhathasbecomeastateofnationalemergency
forthoseresponsibletobebroughtswiftlytojusticeand,iffoundguilty,madeto
expiatetheircrimes–anoutcome,which, inmyview,willbe impossible if it is
attemptedintheTerritorybywayoftrialbyjury.
5.28Thesameconsiderationsshould,inmyview,applytocivilissues,whicharepresently
alsotriableintheTCIwithajury.
5.29Inbothcriminalandcivilcaseswheretheissueofjurytrialisraised,itshould,inmy
view,beamatter fordeterminationby the judgeassignedtohear thematterwhether, in
hisjudgment,therecouldbeafairandeffectivetrialwithajury,orsomesuchtest,andhis
decisionontheissueshouldbefinal.
51‐Recommendation:Provisionshouldbemadeforcriminalandciviltrialby
judgealone,atthetrialjudge’sdirectioninanycaseinwhichheconsidersno
fair or effective trial could take place with a jury, and the judge’s direction
shouldbefinal.
5.30ForreasonsthatIhavegiveninChapter2ofthisReport,415considerationshouldbe
given to introducing, by way of statutory amendment and/or if necessary by way of
amendmentofSchedule1tothe2009ConstitutionOrder,apartialreversaloftheburden
of proof, or so called evidential burden, in cases of corruption and other appropriate
casessoastoenableacourttoconvictapublicofficialwherethereisevidencethathe
has been living above his present or past officialmeans, forwhich he has not given a
satisfactoryexplanation.Suchaprovisionistobefoundinvariousformsinanumberof
jurisdictions, where national and social conditions have been such that it has been
necessarytointroducesuchaprovisiontoprovideaproperbalanceofthepublicinterest
against the individual rights of defendants in cases of alleged corruption. I emphasise
414RvRayment&Ors(2005)–therearemanyothersimilarexamplesinEngland&Walesoflengthytrialsabortedforreasonsarisingfromthevulnerabilityjuriestoprejudiceorotherfactorsrequiringtheirdischargebeforeverdict.415paras2.18etseqabove
229
thatIhaveinmindaproceduralandevidentialchangefortheexistingcriminaloffences,
notthecreationofanewsubstantivecriminaloffenceintheform,say,asinHongKong.416
52 ‐ Recommendation: Considerationof introductionof a statutoryprovision
partiallytoreversetheburdenofprooforevidentialburdenincasesofcharges
of corruption against a public official, so as enable convictionwhere there is
evidencethathehasbeenlivingabovehisorpresentorpastofficialmeansand
forwhichhehasnotgivenasatisfactoryexplanation.
5.31 Disqualification fromPublicOffice ‐ There is statutoryprovision insection47of the
2006 Constitution for disqualifying persons from standing for election asMembers of the
House of Assembly if, within the preceding five years, they have served part or all of a
sentenceofimprisonmentofatleast12months.Criminalconvictionfollowingelectiondoes
notappeartoresultinautomaticdisqualificationofanelectedMemberorrequirehisorher
resignation.Inmyview,considerationshouldbegiventodisqualificationfromMembership
oftheHouseforlongerperiodsofuptolifewhereacourtconsidersitnecessary,and/orfor
anenforceabledeclarationtobemadethatasuchaperson,whetheraMemberornot, is
unfittoholdanypublicofficeorspecifiedpublicoffices.
5.32 In an Inquiry such as this, even where prosecution for a criminal offence is not
recommendedorcontemplated,asinthefirstBlom‐CooperInquiry,417itisnotunknownfor
the report to include a finding that the conduct of a public office holder a subject of the
Inquiry is so seriously reprehensible that he should be declared to beunfit to hold public
office.Itisnotcleartomewhat,ifany,legalforcesucharecommendationoractiontaken
in consequence of it in the context of a commission of inquiry; the TCI Commissions of
InquiryOrdinancemakesnoprovisionfor it. Suchadeclarationwhereappropriate,clearly
basedandsufficientlypreciseastotimeandextent,couldbeanimportantprotectionand
reassurancetothepublic.Inmyview,considerationshouldbegiventotheintroductionofa
statutorybasis, saybyamendmentof theOrdinance, for suchadeclarationand forgiving
effecttoit.
416See,forexample,section10oftheHongKongPreventionofBriberyOrdinance(Cap201)andotherexamplesreferredtoinpara2.6above.417Seepara1.28above
230
53 ‐ Recommendation: Consideration should be given to providing for:
1)disqualificationfrommembershipoftheLegislatureofthosewhohavebeen
convicted of serious criminal offences, for longer periods than presently
prescribed; 2) for an enforceable declaration that such aMember is unfit to
hold to hold any public office or specified public offices; and 3) for the
provision to a Commission of Inquiry appointed under the Commissions of
Inquiry Ordinance of a power to make such a declaration, enforceable if
necessarybythecourt.
Integrityinpubliclife
5.33 Codes of Conduct ‐The2009 ConstitutionOrder, so long as it lasts,will remove or
neutralisemanyoftheinstitutionalcontextsconducivetocorruptionthatIhavementioned
inthisReport,inparticularthosegoingtoministerialdiscretion.However,stepsshouldbe
taken in the meantime by legislation and otherwise, including, eventually, constitutional
change to minimise the opportunities for recurrence. The first requirement is the
establishmentofasystemofgovernancethatremovesorminimisesthescopeforconflictof
interests for those holding public office, and,where such scope remains, ensures full and
publicdisclosureofit.AsindicatedinChapter2,someofthesafeguardsarealreadythere;
buttheyneedconsiderablestrengtheningifintegrityinpubliclifeistodevelopandendure.
5.34 The starting point should be a clear andwidely publicised statement from the top
emphasisingtheneedforprobityinpubliclife,notjustforitsownsake,butforthegeneral
well‐being and economic health of the Islands. The key‐stone of that stance should be
formal and public adoption of the Code of Conduct forMinisters of the Turks and Caicos
Islands,whichhasbeenheld,asifinescrow,bythePNPAdministrationforsometwoyears,
and itsexistence,evenasan instrument for theguidanceofMinisters,deniedbysomeof
them.418 There is another document, which appears to have been given equally little
priority by the PNP Administration, the precise status of which is seemingly unknown by
those in thepublic servicewhomightbeexpected toknow, theTCIPublicServicecodeof
418Seeparas2.7–2.14and2.27–2.28above.
231
Ethics.419 Whilst there are professions by the present PNP Administration under the
leadership of the Hon GalmoWilliams shortly before submission of this Report of doing
somethingaboutit,nothinghasyetbeendonetoconveytotheTCIIslandersachangefrom
the culture to the contrary about which the HonMichael Misick spoke so confidently in
evidencetotheCommission. I, thereforerecommend,asamatterofurgency, formaland
widepromulgationofbothCodesandanynecessaryassociatedrevisionofGeneralOrders
as a clarion call to all in public service ofwhat is expected of them. Promulgation should
includeanexpandedGovernmentweb‐site.
54‐Recommendation:TheCodeofConductforMinistersoftheTurks&Caicos
Islandsandanyothersimilarcodeorprovisiongoverningthoseinpublicoffice
should be formally and widely promulgated, and used as a permanent
reminderbyprovisiontoallpublicofficersonappointmentandpublishedasa
permanent feature on the Government’s web‐site. It should also be
strengthenedbyregularreinforcementandreminderbytrainingandinpublic
educationalmediaprogrammes.
5.35 Secondly, consideration should be given to the introduction of a Freedom of
InformationAct
5.36Thirdly,thereshouldbeearlyimplementationoftheIntegrityCommissionOrdinance
enactedon15thMay2008,presumablyintendedinpartasareplacementoftheRegistration
of InterestsOrdinance1993. The latter, though relatively basic as to its requirements for
disclosure,couldpossiblyhavecontinuedtoserveifithadbeentakenseriouslybyMinisters
and other elected representatives of the Territories. Full and accurate public disclosure
under its provisions would have gone a long way to deterring or bringing to light much
earlier the rampant conflicts of interest to which Minister appear to have exposed
themselvesandofwhichtheypossiblytookadvantage.
5.37 The new Ordinance is more demanding and provides investigative powers and
sanctions outside the parliamentary context that should encourage a more rigorous and
cooperativeapproachbypersonsinpubliclifetotheneedtoavoidconflictsofinterestand
419IunderstandthattheTCIOfficeofPublicServiceManagementandtheChangeManager,ratherthantheMisickAdministration,wereresponsiblefortheintroductionofthisdocument,andhavenowcirculatedittocivilservantsinadvanceofitsformallaunch.
232
to be open about andminimise them if they are unavoidable. However, theOrdinance
could do with some tightening up by way of the following steps, but not so as to delay
bringingitintoforce:
1)conductinganearlyandwidely‐spreadexaminationundersection13(1)(f)of
theOrdinanceofthepracticesandproceduresofthoseinpublic lifeandpublic
bodies in order to facilitate the discovery of corrupt practices, if and to the
extent that no other person or body has a statutory duty to perform that
function;
2)instructing,advisingandassistingthemanagementofpublicbodies,pursuant
to section13(1)(g)of theOrdinance, as to changes inpracticesorprocedures
thatmay be necessary to reduce the occurrence of corrupt acts, if and to the
extent that no other person or body has a statutory duty to perform that
function;
3) the Commission itself and/or any other appropriate public body providing
early publicity to, and education in respect of, theOrdinance’s definition and
manifoldcategoriesofcorruptionsetoutinsection44;
4)reviewingthesufficiencyofparticularityrequiredfromperson[s]inpubliclife
inannualDeclarationsoftheirFinancialAffairsrequiredofthembysection25of
andSchedule2totheOrdinance,and
reviewing the procedures for enforcement by the Attorney General or other
appropriate public bodies, pursuant to section 35 of the Ordinance, of the
section 25 duty to declare their financial affairs, so as to ensure speedy and
otherwiseeffectiveproceedingsandtimelyimpositionofsignificantpenaltiesfor
non‐compliancewhererequired.
55‐Recommendation:Earlyimplementationandamendmentalongthelines
indicatedaboveoftheIntegrityCommissionOrdinanceenactedinMay2008,
inreplacementoftheRegistrationofInterestsOrdinance.
233
5.38 In the lightof thedeclared ignoranceof someMinistersandotherMembersof the
HouseofAssemblyofwhatwasrequiredofthemaspublicservants,andpossiblyothersin
publicoffice,andwithaviewtogreateropennessaboutthewayinwhichtheGovernment
conducts its business, its web‐site should be expanded and kept up to datewith, among
otherinformation:
1)theCodeofConductforMinistersoftheTurks&CaicosIslandsandanyother
similarcodespromulgatedforthoseinpublicoffice;
2)theIntegrityCommissionOrdinance;
3)annualdeclarationsoffinancialaffairsmadebyMembersoftheLegislature
pursuanttothatOrdinance,withinashortperiod–tobeprescribed–oftheir
final dates for submission or a notation that no declaration has been
submitted;
4)detailsofanysanctionimposedfornon‐compliance;
5) all audit reports preparedby the TCIAuditOffice and required tobe laid
beforetheLegislature‐withinaperiodtobeprescribedaftertheduedatefor
suchaction–orastatementofexplanationfornon‐compliance;
6) all minutes and reports of the Public Accounts, Expenditure and
AdministrationCommitteesoftheHouseofAssembly(orcognatebodiesinthe
interim)within a short period ‐ to be prescribed – after their due dates for
reporting;
7)acompleteandup‐to‐datesetofTCIOrdinances(lastrevisedin1998),giving
prominence to a new Constitution if and when there is one, the Integrity
Commission Ordinance and the Crown Land Ordinance when enacted and in
force;
8) an up‐to‐date copy of the electoral roll, by constituency, but omitting
addressesandanypointsofcontact;and
234
9) posting, as they occur, all entries in the Gazette, including allocation of
CrownLand,grantsofBelongerstatus,PermanentResidenceetc.
56‐Recommendation:TheGovernmentshouldexpanditsweb‐sitewithaview
toinformingandremindingallinpubliclifeofwhatisrequiredoftheminthe
matterofconflictsofinterestanddeclarationsofinterests,andwithaviewto
greater openness about the way in which the Government conducts its
business,soastoprovidetheabove,amongotherinformation.
5.39.AsdiscussedinChapter3andasERISdetailedinitsexcellentReportontheFebruary
2007 election,420 there has long been much potential for abuse by politicians and their
associates of purported campaign funding. First, there is no specific legislative control of
election campaign funding. Secondly, such legislative control as there is in the Elections
Ordinance,namelyprohibitionsonbribingandtreatingvotersatoraroundelectiontimehas
long beenwidely disregarded. The ERIS Report deserves attention in their expression of
general concern about lack of legislative provision for campaign financing and electoral
malpractices, which it has detailed in the present system. I strongly endorse their
recommendationfor legislationtoregulatepartycampaignfinanceandtorequirepolitical
partiestopublishtheirincomeandexpenditureonelectioncampaigns.Iwouldgofurtherin
the light of the information rehearsed in Chapter 4 as to the use of PNP accounts as a
medium for channelling possibly corrupt payments to the Premier and a number of his
Cabinetcolleagues.Iwouldrecommendlegislationrequiringpublicationoftheamountsof
all purported political donations, the identities of the true donors and donees and the
mediumofpayment.Therecanbenohonestreasonorlegalbasisforsecrecyaboutpolitical
donations and their sources if the motive for giving and receiving them is in the public
interest,asitshouldbe
57‐Recommendation:legislationto:
1)regulatepartycampaignfinance;
2) require public disclosure by contributors to and recipients of election
campaignexpenses;
420paras3.1–3.8
235
3) of details of the true source, recipient, amount of all other purported
politicaldonationsandtheusetowhichtheyareput;
4) external and published audit of political parties’ accounts, with criminal
sanctionsfornon‐compliance;and
5)ingeneral,toremedythemanyotherelectoralabusesidentifiedbyERISin
theirReport.421
5.40Abuseofoffice‐ChecksandBalances‐AsIhavementionedinanumberofcontextsin
thisReport, therehavebeen serious shortcomings ingovernmental financialmanagement
andaccounting systemsover theyears, including serious inadequacies in internal auditing
systems. These have been routinely drawn attention to and criticised in successive audit
reportsbyTCIChiefAuditorsandothers,andmostly ignoredbythoseMinisters inCabinet
responsiblefordoingsomethingaboutit.Thereislittlepointinmydetailinghereeventhe
moreimportantdeficienciesandthemanyoverlappingcriticismsofthem,manyofwhichI
havesummarisedinChapters1and2.422
58 ‐ Recommendation: introduction or facilitation of rigorous internal and
external audit systems for all governmental departments and public and
statutorybodies,whereauditreportsarepromptlypublishedandtreatedwith
respect by Ministers and used by them, board chairmen and directors, and
other senior public officials to inform budgetary decisions and give effect to
necessaryfinancialcontrol.
5.41 As isalsoapparent fromChapter2of theReport, there isendemic lackofeffective
checksandbalances in thesystemofgovernanceof theTCI,eitherbecauseof insufficient
constitutionalorother legislativeunder‐pinningand/orbecauseofsystematicdisregardor
neglectofwhatlegislativeorotherimperativesthereare.Thisismostevidentinthetotal
breakdownofthesystemofparliamentarystandingcommittees–oversightcommitteesor
constitutional watch dogs as they are variously called – for which the 2006 Constitution
421Seeparas3.5–3.8above422Seeparas1.38and2.50‐2.51above
236
provides,asdid the1998Constitution.423 Theyhavebeenso inactiveover theyears that
neitherthepublicofficersresponsibleforservicingthemnortheMembersoftheHouseof
Assemblytowhichtheyshouldreport,orothers inthepublicservice, letalonethepublic,
are barely aware of what, if anything, they do. The Commission has had extraordinary
difficulties intryingtoextractbasic information, intheformofrecordsorotherwise,asto
whatthesebodieshavedoneinprotectionofthepublic’sentitlementtogoodstewardship
by the government and its servants of the day. There have been very fewmeetings and
even fewerreports fromthemover the last fewyears,all inbreachof theirconstitutional
intentionandtheHouseofAssembly’sStandingOrders.
5.42 On return to ministerial government, firm steps should be taken, by increasing
constitutional underpinning, amendment or replacement as necessary of the Legislative
Council (Powers and Privileges) Ordinance 1988 and Standing Orders of the House of
Assembly, andby rigorousoversight and insistenceby theHouseon compliancewith its
StandingOrdersandforprovisiontotheCommitteesofthenecessarysupportfacilitiesto
enablethemtodotheirjobs.Inadditiontosuchparliamentaryscrutiny,provisionshould
be made for other public scrutiny as to the action or inaction of their watchdogs, by
broadcastingandreporting,ontheGovernmentweb‐siteandotherwise,theirproceedings,
includingexaminationofwitnessesandtheirreportstotheHouse. AstheChiefAuditor,
CynthiaTravis,commentedinher2005and2006AuditReportswithregardtothePublic
AccountsCommittee,424maintenanceofanaccountabilityprocesscanonlybeachievedifit
regularly submits a report of its recommendations to the legislature, followed by a
governmental reply in the legislature, and, unless reports are tabled, the exercise is an
entirely empty one. Consideration should be given to holding PAC sessions in public,
broadcastsontelevisionorontheradioasinothercountries,suchasintheUK.
59‐Recommendations:
1)Onreturntoministerialgovernment,constitutionalandotherlegislativeor
parliamentaryinstrumentsshouldprovideforrigorousscrutinyofthefinancial
and other governance of the Territory through parliamentary oversight
committees and for a regimeof strict andwell publicised adherence to their 423Seeparas2.52–2.53424Seeparas3.38and2.58above;2006TCIAuditReport,pp15‐16
237
duties,includingregularpresentationoftheirreportstotheHouseofAssembly
anddebatebytheHouseofthem;and
2) consideration should also be given to amending the 2006 Constitution to
enable, on return to ministerial government, appointment to the Public
Accounts Committee, if not all three Committees, of one or more ex officio
members qualified and experienced to introduce financial management
experienceintotheprocess.
5.43 Abuseofoffice–wideandunfetteredMinisterialdiscretion ‐ Theabsenceofchecks
andbalancesarecomplementedandaggravatedbythemanymattersengagingpublicand
privateintereststhataresusceptibletodiscretionarydeterminationbyMinistersratherthan
regulatedbylegalandclearlyspecifiedcriteria.
60 ‐Recommendation:There is anurgentneed for removal,or reduction,by
reference to clearly expressed criteria, of ministerial lawful or unlawful
exerciseofdiscretionarypowers inmanyandvariousaspectsofgovernment.
These include inappropriate interference in and by‐passing of statutory,
administrativeorpolicyproceduresinanumberofareas‐forexample:
1)administration,managementanddisposalofCrownLand;
2) award of public works contracts and other public contracts, and their
fragmentationtoevadeopentenderingrequirements;
3) development approval, planning permission and control, the grant or
revocation of licences or franchises or effective government‐protected
monopolies, the grant of exemptions, waivers and discounts of any type, in
particularastostampdutyonthetransferofland,andastoimportduties;and
4) in immigrationmatters, including thegrantofBelongershipsandthegrant
and terms of Permanent Residence Certificates; Residence Certificates and
WorkPermits
238
CrownLandAllocation,SaleandManagement:
5.44 I have setoutat length inChapter3,425by reference toanumberofobjectiveand
highlyexperiencedexperts,theills,injusticesandpossibilityforcorruptionofMinisterstheir
families andassociatesandpublicofficials in the system in theTCI for administrationand
disposalofCrownLand.Ihavealsosetoutthemany,oftenoverlappingrecommendations
forreformmadeintheFuller,426Barthel/TerraInstitute427andRobinson428Reports,whichit
would be otiose to repeat byway of summary here, all ofwhich should be given careful
consideration for inclusion in theCrown LandBill, now in preliminary draft, or other new
legislation, regulatory or administrative forms as appropriate. TheCrown LandBill,when
enacted, should go a longway to removingmanyof thedefects in thepresent systemof
CrownLandadministration,managementanddisposal,bothastoprincipleandpracticality.
Importantly,itshouldalsoremoveorseverelyreducethepossiblescopeforcorruptionand
diminutionatgreatlosstothepublicofitsmostvaluableasset.Butmorethoughtneedsto
begiventothemattersthatIhavelistedinthefollowingrecommendation:
61‐Recommendation:
1)deviseaspartoftheproposedCrownLandOrdinancetheessentialstatutory
criteria for the administration, management and disposal of Crown Land, in
replacementoftheCrownLandPolicyoftheday–amoreprincipledapproach
toCrownLandReform;
2)ensurecompleteindependenceofthedepartmentalbodytobeentrustedby
theproposednew legislation fromministerial involvement or interference in
itsindividualallocationsofCrownLandbywayofleaseorsale;
3)maketheManualofCrownLandAdministrationandProcedure,partofthe
Bill,aswasintendedbyitsauthors,theTerraInstitute;429
425Cap3,para3.9etseq426ibid,paras3.9,3.24‐3.26427ibid,paras3.27‐3.28,3.31‐3.37428ibid,paras3.38‐3.39429inPartIIIoftheBill,forwhichdraftinginstructionswerecontainedinChaptersIIIandVoftheTerraInstitute’sFinalReportofFebruary2008,
239
4)inthelightofMarch2008SpecialAuditReportoftheActingChiefAuditor,
theHonMcAllister Hanchell’s evidence to the Inquiry and other information
recently received pending enactment and the bringing into force of the new
legislation,giveimmediateeffecttotheManualbyseekinganinstructionfrom
theSecretaryofStateundersection25(1)(a)and/or(3)oftheConstitutionnot
toapproveanyCrownLand transactiongovernedby theManualunlesshe is
satisfiedthattherehasbeenfullcompliancewithitsprocessesandterms;
5) arrange for secondment to the Governor and/or to the Interim Successor
DepartmentoftheMinistryofNaturalResourcesofanindependentexpertor
expertsonthemanagementandallocationofCrownLandsoastoensurerapid
implementationoftheCrownLandManualandforvettingcompliancewithit
ofproposedlandgrants;
6)atanearlystage,enactandimplementtheCrownLandBill,amendedalong
thelinesIhavesuggested,includingtheManual;
7) strengthen the Crown LandValuationOffice and introduce clearly defined
criteriaforvaluation,andpublishallvaluationsintheGazette;
8) require all corporate bodies and those acting for others in a trustee or
nominee capacity to disclose the true beneficial ownership of or interest
involved to any public body required or seeking to exercise due diligence in
contemplation of the grant of Crown Land or of development approval ‐
coupled with substantial potential civil (including rescission) and/or criminal
sanctionsfornon‐compliance;and
9)publishintheGazettefulldetailsofoffersforleasesorsaleofCrownLand,
includingtheidentityoftheproposedbeneficialowner,andtheextentofany
discount,fulldetailsofallDevelopmentAgreements,includingthenameofthe
recipientandthetypeandextentofallconcessionsgranted.
240
ANewConstitution
5.45 It will be necessary to considerwhat, if any changes should bemade to the 2006
ConstitutioningoodtimebeforetheTerritory’sreturntoministerialgovernment.Thisisan
area into which I trespass with some diffidence, since I have neither experience nor
competence for such a task. Clearly a Constitutional Commission shouldbe appointed to
consider and draft such amendments, or a new Constitution, as soon as the Secretary of
Stateand/ortheGovernor,actingontheinstructionsoftheSecretaryofState,considersit
practicabletodoso. However, I inviteconsideration inanysuchexerciseof the following
few, but important matters. Broadly they are designed to correct what I regard as
weaknesses in thepresentConstitution,other legislationandadministrativepractices,and
toensuregoodgovernanceandproperfinancialmanagementandcontroloftheTerritory.
5.46EnlargementoftheFranchise‐Iappreciatethatthisisaverysensitiveareainwhich,
asastrangertotheTCI,Ishouldtreadwithextremecaution.Idosoonlyfortworeasons:
1) The electoral base ‐ Belongers only – is so narrow,well below half of the
permanent residentpopulationof the Islands, that it calls inquestionwhether
thepresentHouseofAssembly is trulyademocraticallybased legislativebody.
ThisappearstohavebeenaconcernoftheImmigrationReviewTribunal,chaired
by theDon‐HueGardiner, in 2004,430 albeit softly said, andof ERIS in its2007
Election Observation Report,431 in its expression of the need to consider an
enlargement or possible replacement of Belongership, with a more inclusive
formofcitizenship.
2) As recognised by the 2004 Immigration Review Commission and by ERIS in
2007,thescopeforabusethroughintimidationofthemajorityoftheTerritory’s
effective permanent residents by those voted into political power by the
minority, isanaffronttoanysocietywithaspirationstocallingitselfcivilisedas
wellasdemocratic.TheevidencebeforetheUKForeignAffairsCommitteeofa
climateoffearwasandisstillbeingreplicatedinfulltothisCommission432–fear
thatis,oflosingtheirhomeandplaceofworkintheIslands.Thoseexpressingit
430ibid,para3.62etseq431ibid,para4etseq432ibid,para56etseq
241
are not just long‐standing TCI Residents who were only prepared to give
information to the Committee and/or the Commission in confidence, but also
thosewhoareevennowunwillingforthesamereasontohaveitpassedtoany
prosecutor whomight follow the Commission. It was the acceptance of such
vulnerabilityandinsecuritythatledthe2004ImmigrationReviewCommissionto
recommendtheestablishmentofaCitizenshipCommissionsoconstitutedthatit
wouldnotbesusceptibletothepressuresandinfluenceofinterestedindividuals,
and not subject to any overriding power of the Government of the day as to
grantofBelongership‐arecommendationthatIendorse.
62‐Recommendation:ConsiderationofreformoftheFranchisesoasto:
1) place its determination in an independent statutory body appointed
annuallybythePublicServiceCommission,suchasaCitizenshipCommission
recommendedbythe2004ImmigrationReviewCommission;
2)removetheGovernor,theCabinetandMinistersandtheirpublicofficials
from any involvement in the grant, withholding or revocation of grant of
citizenship;
3)introduceclearlydefinedstatutorycriteriatowidentheFranchisetolong‐
termresidentsoftheTerritorytobeappliedbysuchindependentpublicbody
on an individual basis to grant, withholding and revocation of citizenship,
subjecttoappealonlytotheSupremeCourtbywayofjudicialreviewortoa
tribunalchairedbyaservingorretiredSupremeCourtJudge;and
4) thereby to enhance democracy and reduce the scope for political
patronage,bribery,electoralabuseandintimidation.
5.47 District Commissioners/Island Administrators and Electoral Districts ‐ A number of
contributorstotheCommission’sproceedingshavewrittenoftheneedforakeypersonfor
eachmajorIslandorgroupofsmallerIslandstoactasanofficialpointoflocalreferenceand
liaison for government matters and local concerns, District Commissioner or Island
Representatives. Suchaproposalcouldperhapsbeconsideredalongwithareviewof the
distribution and number of electoral districts so as to produce a more equable and
242
consistentratioofparliamentaryrepresentationacrosstheIslands. Itwillberemembered
that ERIS, in their 2007 Election Review Report spoke of an imbalance in the number of
registeredvotersbetweendifferentelectoraldistrictsthatmayaffectthequalityofthevotes
cast.433
63‐Recommendations:Considerationof:
1) strengthening the role ofDistrict Commissioners or Island Administrators,
subjecting them to appointment by the Public Service Commission in
accordance with a public and regulated procedure,434 giving them clearly
defineddutiesandpowers;and
2)areviewofthedistributionandnumberofelectoraldistrictswithaviewto
producing a more equitable and consistent ratio of parliamentary
representationacrosstheIslands.
5.48 Considerationshouldbegiventopossibleconstitutional imbalancesandweaknesses
inthe2006Constitution. Onepossibleexample istherelationshipbetweentheForeign&
Commonwealth Office and the Governor, and of the Governor and the Cabinet. The UK
ForeignAffairsCommittee’sviewwasthat theGovernor is tooweakandwithout financial
muscle and the Cabinet too strong and not democratically or otherwise accountable.435
Anotheristoprovidegreaterconstitutionalunder‐pinningoftheroleandresponsibilitiesof
theparliamentaryoversightcommitteesthanisnowprovidedbysections60and61ofthe
2006Constitution,asrecommendedbytheTCIChiefAuditor,CynthiaTravis,inher2005and
2006AuditReports.
64 ‐ Recommendation: Consider possible constitutional imbalances and
weaknessesinthe2006ConstitutionasbetweentheForeign&Commonwealth
OfficeandtheGovernor,theGovernorandtheCabinet,andtoprovidegreater
constitutional underpinning of the role of the parliamentary oversight
committees than is now provided by sections 60 and 61 of the 2006
Constitution.
433ibid,para3.5(2)434Ifthatisnotalreadythecase.435Opcit24,paras17,30,88‐98,112‐118,183‐197
243
5.49 The Legal Profession Ordinance should be reviewed, in consultation with the Bar
Association, inparticular sections21 to23as to themaintenanceandauditofattorneys’
accounts, with specific reference to their handling of clients’ funds, and keeping them
separatefromtheirownmonies.
65 ‐ Recommendation: The Government should review, in consultation with
the TCI Bar Association, the provisions of the Legal Profession Ordinance, in
particular,: 1) Section 21 of the Ordinance, as tomaintenance of separate
clients’accounts;2)Section22,astothemakingandeffectiveenforcementby
theBarCouncilofRulestherefor;and3)pursuanttosection23,widerpowers
to be given to the Supreme Court to secure effective audit of attorneys’
accounts,byspotcheckswhereconsiderednecessaryinindividualcases.
________________
244
6–SummaryofFindingsandRecommendations
FromChapter4–InformationOfPossibleCorruption
And/OrOtherSeriousDishonesty
TheHonMichaelMisick
1–Finding:TheHonMichaelMisickfailedrepeatedlythroughouthisperiodofmembership
of the Legislature of the TCI to make full and accurate declarations of his interests as
requiredbytheRegistrationofInterestsOrdinance1993.436
NoRecommendation
2 – Finding: The Hon Michael Misick has failed in several important respects to make
adequate disclosures in response to the Commission’s requests, pursuant to its powers
undertheCommissionsofInquiryOrdinance,forfullandaccuratedisclosureofhisfinancial
interests.437
NoRecommendation
3‐Finding:ThereisinformationthattheHonMichaelMisickmayhaveabusedhisposition
asPremierandasLeaderofthePNPbyusingPNPfundsforhisownpurposesinthat:1)if
and insofar as he may have been entitled to reimbursement from the Party for monies
expendedonitsbehalf,hefailedtoaccountforsuchexpenditure;and2)thatthelevelofhis
personal expenditurewas disproportionate to any expenditure on the Party hemay have
incurred.438
Recommendation: Criminal investigationbypoliceorothers in relation tohimofpossible
corruptionand/orotherseriousdishonesty inrelationtosuchandothersimilarmatters in
recentyears.
4–Finding:TheHonMichaelMisickacceptedandfailedtodeclaremanygiftsofmoneyvia
theclientaccountofhisbrotherandattorney,ChalMisick,whichwerenot,andcouldnot
436Seeparas2.27–2.28and4.14above437Seeparas2.18–2.20and4.15above438Seeparas4.17–4.23above
245
reasonablybeinterpretedasbeing,politicalinnature,andwhichheappearstohaveapplied
to his personal expenditure without disclosure to the Registrar of Interests or to the
Commission.439
Recommendation: Criminal investigationbypoliceorothers in relation tohimofpossible
corruptionand/orotherseriousdishonesty inrelationtosuchandothersimilarmatters in
recentyears.
5–Finding:Thepaymentof$500,000byDrCemKinay,throughhiscompany,TurksLtd,to
theHonMichaelMisickwasapossiblycorruptpaymentbecause:1)theHonMichaelMisick
did not declare it in Cabinet when Dr Kinay’s proposals for development were under
discussion,ortotheRegistrarofInterestsortheCommission;2)itwaspaidtohimthrougha
thirdpartyaccount,namelytheclientaccountofhisbrotherandattorney,ChalMisick;3)it
waswhollydisproportionatetoitsstatedpurpose,namelyforpoliticalcampaigning,andwas
not,forthemostpart,spentonsuchcampaigning;and4)itwasreceivedfromadeveloper
whohadacontinuing relationshipwith theGovernment,withwhomfurtherdevelopment
agreementswereunderconsiderationorbeingnegotiated,andwhobenefitedfromCabinet
decisionsgeneroustohim.440
Recommendation:CriminalinvestigationbypoliceorothersinrelationtotheHonMichael
Misickofpossiblecorruptionand/orotherseriousdishonestyinrelationtosuchandother
similarmattersinrecentyears.
6 – Finding: The receipt by the Hon Michael Misick of $250,000 on 29th July 2005,
purportedlybywayofloanfromInazio&GataenCaltagirone,viatheclientaccountofChal
Misick, was possibly a corrupt payment in the light of: 1) the HonMichaelMisick’s non‐
declarationtotheCabinetofhisreceiptofthemoneythreeweeksearlierorofhislinksto
the Caltagirone Brothers and their interest in the proposed development under
consideration;; 2) the Cabinet’s decision in favour of the proposal, followed by the Hon
MichaelMisick’s subsequentdecisiononappeal in favourof itonplanningmatters;3)his
failuretodisclosethepaymenttotheRegistrarof Interestsandnon‐disclosureof it tothe
Commission;4) theabsenceof anydocumentation identifying theCaltagironeBrothers as
439Seeparas4.24–4.26above440Seeparas4.23aboveandFindingandRecommendation32,below
246
thesourceofthemoneyoranytermsforrepaymentorinterest;and5)theabsenceofany
evidence of repayment. Recommendation: Criminal investigation by police or others in
relationtohimofpossiblecorruptionand/orotherseriousdishonestyinrelationtosuchand
othersimilarmattersinrecentyears.441
7‐Finding: Theundocumentedandunrepaid,NorthWestPointloanstotheHonMichael
Misick,collectivelyamountingtoabout$350,000fromHonJeffreyHall,theHonFloydHall
orhisbrotherandtheHonLillianBoyceorherbrotherwerepossiblycorruptpaymentsto
himforfavoursgiveninrelationtotheNorthWestPointtransactionengenderingthemoney
tofacilitatesuchpayments.442
Recommendation:Criminal investigationbypoliceorothers in relationtohimofpossible
corruptionand/orotherseriousdishonesty,includingmisfeasanceinpublicoffice,inrelation
tothesepaymentsandthetransactionsgivingrisetothem.
8– Finding:TheHonMichaelMisick in recentyearsacceptedand failed todeclare to the
Registrarof Interests manygiftsorpurportedloansofmoneyviatheclientaccountofhis
brother and attorney, Chal Misick, which were possibly corrupt on account of possible
favoursgivenbyhiminhiscapacityasPremier.
Recommendation: Criminal investigationbypoliceorothers in relation tohimofpossible
corruptionand/orotherseriousdishonesty,includingmisfeasanceinpublicoffice,inrelation
totheNorthWestPointtransactionandothersimilarmattersinrecentyears.443
9‐Finding:ThereisinformationsuggestingthattheHonMichaelMisickhaspromotedthe
abuseof theCrownLandPolicyonanumberofoccasions, andbenefitedpersonally from
thatabuse:1)inhisreceiptof$161,618.92fromtheHonFloydHallviatheclientaccountof
ChalMisickon20thFebruary2006ofapossiblycorruptpaymentderivedfromapurported
finder’s fee of $373,000 in respect of the Third Turtle Club from Mr Richard Padgett, a
developer, in the circumstances summarised above; 4442) in his facilitation of the sale of
former Crown Land by Ashley Properties Ltd for which he received a commission, as
441Seeparas4.28–4.30above442Seeparas4.33–4.35and4.196–4.209443Seeparas4.36above444Seeparas4.36–4.307
247
describedabove;4453)inhisparticipationintheprofitsofUrbanDevelopmentsfromthesale
oflandatNorthWestPointtoacompanycontrolledbyDavidWex,anoverseasdeveloper,
asdescribed;446and4) in fronting thesaleofLandtoCrownLandtooverseasdevelopers,
specifically in his involvement in the company,MIG Investment Ltd, bywhich he enabled
overseasdeveloperstopurchase18acresoflandentirelyattheirexpense,butinwhichhe
acquireda50%interestbyvirtueonlyofhisstatusasaBelonger.447
Recommendation: Criminal investigation by police or others in relation to him and the
abovemattersofpossiblecorruptionand/orotherseriousdishonesty,includingmisfeasance
inpublicoffice.
10 – Finding: The Hon Michael Misick behaved in a possibly corrupt manner and/or in
misfeasanceofhispublicduty,bysecuringhighlypaidadvertisingcontractsforhiswifewith
theTCITouristBoardandwithKerwinCommunicationspurportedlyactingonbehalfofthe
TouristBoard, therebypotentiallyabusinghispowerwithaviewtoenrichinghiswifeand
himself.448
Recommendation:CriminalinvestigationbypoliceorothersinrelationtotheHonMichael
Misickofpossiblecorruptionand/orotherseriousdishonesty,intheformofmisfeasancein
publicoffice,inrelationtohimtohisexerciseofhisresponsibilityasMinisterresponsiblefor
tourisminthismatter.
11–Finding:TheHonMichaelMisickbehavedinapotentiallyseriouslydishonestmanner,
includingmisfeasanceinpublicofficeanddishonestmisappropriationofpublicfunds,byhis
possiblemisuseof government funds and facilities for his personal purposes in his useof
aircraftcharteredorleasedbytheGovernmentforofficialpurposes.449
Recommendation: Criminal investigation by the police or others in relation to the Hon
MichaelMisickofpossibleseriousdishonesty,includingmisfeasanceinpublicofficeand/or
dishonestmisappropriationofpublicfundsinrelationtohispersonaluseofsuchaircraft.
445Seepara4.38above446Seepara4.33–4.35447SeeTranscript,Day2,pp127‐133448Seeparas4.41–4.53449Seeparas4.54–4.60above
248
12–Finding:Thereisapossibilityofcorruptionand/orotherseriousdishonesty, including
misfeasanceinpublicoffice,inrelationtheHonMichaelMisickinthechainofeventsleading
totheeventualdisposaloflandatJoeGrantCayatwellbelowmarketpricetoaconsortium
ledbyDrCemKinay,followingthesecretpaymentbyDrKinayof$500,000tohiminJanuary
2007, followed by the approval by Cabinet on 16thMay 2007, towhich the HonMichael
Misickwasaparty.450
Recommendation:Criminalinvestigationbythepoliceorothersofthepossibilityinrelation
totheHonMichaelMisickofcorruptionorotherseriousdishonesty,includingmisfeasance
inpublicoffice,inrespectofthismatter.
13–Finding:Thereisinformationofpossiblecorruptand/orotherwiseseriouslydishonest
involvement,includingmisfeasanceinpublicoffice,oftheHonMichaelMisickinrelationto
theGovernment’stransactionswithMarioHoffmannofDEVCOforthedevelopmentofSalt
Cay: 1) in respect of his participation in that development with Chal Misick’s knowing
assistanceandcomplicityinit;2)inhisthepotentialabuseofhispublicofficebyaccepting
lavish anddisproportionate hospitality fromMarioHoffmann, including theuseof private
aircraft, the provision of international flights and other hospitality in the course of
developingbusinessrelationsbetweenDEVCOandtheGovernment;and3)inhispotential
abuseofhispublicofficebyseekingandacceptingaloanof$6millionfromJ&TBankawhen
thatBank,onitsownaccount,451wasinnegotiationwiththeGovernmentoverfundingand
participationinthedevelopmentofSaltCay.452
Recommendation: criminal investigation by the police or others of the possibility of
corruptionand/orotherseriousdishonesty,includingmisfeasanceinpublicoffice,inrelation
totheHonMichaelMisickinrespectofthosematters.
450Seeparas4.77–4.89and4.172–4.181above451SeeJ&TBankaweb‐site452Seeparas4.90–4.109above
249
TheHonFloydHall
14–Finding: Throughouthisperiodofmembershipof theLegislatureof theTCI, theHon
Floyd Hall repeatedly failed tomake full and accurate declarations of his interests to the
RegistrarofInterestsasrequiredbytheRegistrationsofInterestsOrdinance.453
NoRecommendation
15–Finding:AnimportantexampleoftheHonFloydHall’sfailuretomakefullandaccurate
declaration of interests to the Registrar as required by the Registration of Interests
Ordinance,washisfailuretodeclarehisinterestintheCasablancaCasinoinProvidenciales,
throughhisinvestmentinWindsorInvestmentLtd.454
NoRecommendation16–Finding:TheHonFloydHallhasfailedinseveralimportantrespectstomakeadequate
disclosures in response to the Commission’s requests, pursuant to its powers under the
Commissions of Inquiry Ordinance, for full and accurate disclosure of his financial
interests.455
NoRecommendation
17 ‐ Finding: The Hon Floyd Hall, in his capacity as Treasurer of the PNP: 1) failed to
administerandkeepproperaccountsofthefundsofthePNPsoastoallowpartymoniesto
bedisbursedforhispersonaluseandthatoftheHonMichaelMisickandotherseniorParty
MemberswithouthavingdevisedanyoranyeffectivesystemforaccountingtothePartyfor
suchuse;and2)misledthePartyasawholeastothetruestateofitsfinancialaffairsand
thepurposestowhich itsmonieswerebeingput,bykeepingsecret frommembersof the
Party, including senior Party officials, the existence of certain Party bank accounts
maintained and operated by him, and by producing in 2006 a partial and misleading
Treasurer’s Report concealing the true state of its finances and the purposes towhich its
fundswerebeingapplied.456
453Seeparas4.1124.113above454Seeparas4.61‐4.74above455Seeparas4.115‐4.116456Seeparas4.117–4.120
250
Recommendation:CriminalinvestigationbythepoliceorothersinrelationtotheHonFloyd
HallofpossiblecorruptioninrespectofhisadministrationofthePNPPartyAccountsand/or
otherseriousdishonesty,includingtheftandfalseaccounting
18–Finding:ThepaymentbyJakCivre,thedeveloperoftheSevenStarsResort,totheHon
FloydHallof$150,000on8thFebruary2007,thedaybeforetheelection,purportedlyasa
campaign donation, but which the Hon Floyd Hall paid into the business account of his
company, Paradigm, and also other unexplained payments were possibly corrupt
payments.457
Recommendation:criminalinvestigationbypoliceorothersinrelationtotheHonFloydHall
ofpossiblecorruptionand/orotherseriousdishonestyinrespectofthatpaymentbyJak
Civreand/orotherunexplainedpayments
19–Finding:TheHonFloydHall,inacceptingpaymentfromMrRichardPadgettof$375,000
inFebruary2006purportedlyasafinder’sfeeforservicesrenderedsomeyearsbefore,but
shortlyafterhisplanningappealdecisioninMrPadgett’sfavourinrelationtohisproposed
constructionoftheThirdTurtleClub,hadpotentiallyacteddishonestly,includingbywayof
misfeasance in public office, and possibly corruptly in accepting such sum, given: 1) the
lengthoftimeandapparentdisproportioninvaluebetweenthepaymentof$375,000and
theservicesforwhichitwassaidtohavebeenpaid;2)theHonFloydHall’snon‐declaration
ofthepaymenttoRegistrarof Interestsandhis lateand incompletedisclosureof ittothe
Commission;and3)hisdivisionof thesumwith theHonMichaelMisick,whohadhadno
ostensible connection with the provision of any services in respect of which it was
purportedlymade.458
Recommendation:CriminalinvestigationbythepoliceorothersinrelationtotheHonFloyd
Hall in relation to potential serious dishonesty, includingmisfeasance in public office and
corruptioninrelationtoMrRichardPadgett’spaymenttohimof$375,000inFebruary2006.
20–Finding:TheHonFloydHall,inarrangingwithMrRichardPadgettinoraboutJune2007
forhiswife, LisaHall, tobeappointedadirectorof, andmadeaone‐third shareholder in
EliteTCILtd,arealestatebrokeragecompany,theagreedvalueofhershareholdingbeing 457Seepara4.115above458Seeparas4.121–4.124
251
about$280,000,butforwhichshewastoprovidelittleornoconsideration,wasapossibly
corrupttransaction.459
Recommendation:CriminalinvestigationbythepoliceorothersinrelationtotheHonFloyd
Hallofthispossiblycorrupttransaction.
21–Finding:TheHonFloydHallpossiblyactedcorruptlyand/orinmisfeasanceofhispublic
office in failing to withdraw or to declare his links with Mr Richard Padgett, at Cabinet
discussions concerning the Government’s dealings with Mr Richard Padgett’s business
affairs, in particular at CabinetMeetings on 21stMarch 2007 and 8thMay 2008 at which
mattersrelatingtoOceanpointDevelopmentsLtdwerediscussed.460
Recommendation:CriminalinvestigationbythepoliceorothersinrelationtoHonFloydHall
ofpossiblecorruptionand/ormisfeasanceinpublicofficeinrelationtothosematters.
22–Finding:Theloanof$200,000fromMrRichardPadgetttotheHonFloydHallinAugust
2007, which the Hon Floyd Hall did not declare to the Registrar of Interests, or to the
Commission, until hewas examined in the Commission’s oral proceedings,was a possibly
corruptpayment.461
Recommendation: Criminal investigation by the police or others of possible corruption
and/orotherseriousdishonesty inrelationtotheHonFloydHall inrespectof this loanto
himof$200,000.
23 – Finding: the Hon Floyd Hall, in accepting the payment of $200,000 fromMr Alden
Smith, purportedly for services rendered, did so possibly corruptly and/or by conduct
amounting tomisfeasance in public office, since the payment followed the advantageous
saleofCrownLandtoMrSmith’scompany,AshleyPropertiesLtd,whichhad immediately
sold the land on for a large profit to an overseas developer,making payments from that
profittotheHonFloydHallandtheHonMichaelMisick.462
459Seeparas4.125–4.126above460Seeparas4.116and4.121–427above461Seepara4.127above462Seeparas4.128–4.130above
252
Recommendation: Criminal investigation by the police or others of the possibility of
corruptionand/ormisfeasanceinpublicofficeinrelationtotheHonFloydHallinrespectof
thismatter
24 – Finding: The Hon Floyd Hall took part in possibly corrupt transactions by accepting
proceedsoftheprofitsmadebyhisbrother,QuintonHall, forsaleofpartoftheequityof
Urban Development Ltd involving the disposal of Crown Land at NorthWest Point to an
overseasdeveloperatalargeprofitinthathe:1)purportedlyloanedpartofthoseprofitsto
the HonMichaelMisick, or assisted his brother, Quinton Hall, to do so; and 2) failed to
declarethoseprofitsorthepurportedloantotheRegistrarofInterestsortodisclosethem
totheCommission.463
Recommendation: Criminal investigation by the police or others of possible corruption
and/orotherseriousdishonesty,includingmisfeasanceinpublicoffice,inrelationtotheHon
FloydHallinrespectofthesematters.
25 – Finding: The Hon Floyd Hall, inmaking private requests to theMinister for Natural
Resources for allocationsofCrownLand for certain companies toenable them touse the
landassecurityforloans,fromwhichhepersonallyderivedasubstantialborrowingof$1.1
million,pervertedand/orunderminedtheCrownLandPolicyforandprocessofdistribution
ofCrownLand,anddidsopossiblycorruptlyandinmisfeasanceofhispublicoffice.464
Recommendation: Criminal investigation by the police or others of possible corruption
and/ormisfeasanceinpublicofficeinrelationtotheHonFloydHallinrespectofthismatter
26–Finding:TheHonFloydHall’sconductinpromotinginCabinettheawardofthecontract
for administering the Treatment Abroad system to SHN was possibly corrupt and/or
otherwise seriouslydishonest, includingmisfeasance inpublic office, because it subverted
the properworkings of government, in particular its tender processes, to ensure that the
only proposal put before the Cabinet for serious consideration was that of a friend and
businesscolleague,DelroyHowell.465
463Seeparas4.131–4.133above464Seeparas4.134–4.135above465Seeparas4.138–4.149above
253
Recommendation:Criminalinvestigationbythepoliceorothersofpossibilityinrelationto
theHonFloydHallofcorruptionand/orotherseriousdishonesty, includingmisfeasance in
publicofficeinhispromotioninCabinetofSHNfortheawardoftheGovernmentcontractto
administertheTreatmentAbroadSystem.
TheHonMcAllisterHanchell
27–Finding: Throughouthisperiodofmembershipof theLegislature, theHonMcAllister
Hanchell repeatedly failed to make full and accurate declarations of his interests to the
Registrarof Interests,asrequiredbytheRegistrationsof InterestsOrdinance, includinghis
shared interest through Windsor Investment Group Ltd in the Casablanca Casino on
Providenciales; and he was also distinctly slow and patchy in his disclosure to the
Commission.466
NoRecommendation
28 – Finding: The Hon McAllister Hanchell, in accepting from Mr Arlington Musgrove
payments totalling over $300,000 into the PNP South Caicos account purportedly as
campaignfundingfortheFebruary2007election,possiblyenteredintoacorrupttransaction
in that: 1) the payments were disproportionately large for the purported purpose of
financinganelectioncampaigninsuchasmallconstituency;2)thepaymentsweremadeby
anestablishedandsubstantialpublicworkscontractor;3)theHonMcAllisterHanchellhelda
public office inwhich he could influence the awardof such contracts; and 4) he failed to
declarethispersonalandfinanciallinkwithMrMusgroveinrelevantCabinetdiscussions.467
Recommendation: Criminal investigation by the police or others of possible corruption
and/orotherseriousdishonesty, includingmisfeasanceinpublicoffice, inrelationtothe
HonMcAllisterHanchellinrespectofthismatter.
29–Finding: TheHonMcAllisterHanchell, inhisofficeofMinister forNaturalResources,
enteredintopossiblycorruptand/orotherwiseseriouslydishonesttransactionsbyoffering
onbehalfoftheGovernmentgrantsofCrownLandtohimselfand/ortocompaniesthathe
466Seepara154above467Seeparas4.155–4.158above
254
substantially owned or controlled, thereby creating and ignoring the obvious conflicts of
interesttowhichhisoffersgaverise.468
Recommendation: Criminal investigation by the police or others in relation to the Hon
McAllisterHanchellofpossibleseriousdishonesty, includingmisfeasance inpublicoffice in
respectofthesematters.
30 – Finding: The Hon McAllister Hanchell potentially abused his ministerial position by
instructingthePermanentSecretaryintheMinistryforNaturalResourcestoallocateCrown
Landtoindividualsofhischoice,ortoallocate,orinstructthePermanentSecretaryorother
ofhisdepartmentalofficerstoallocateCrownLandtoindividualsidentifiedandnotifiedto
him by fellow Ministers, in all or most cases without proper regard to the Crown Land
Policy.469
Recommendation: Criminal investigation by the police or others in relation to the Hon
McAllister Hanchell of possible corruption and/or other serious dishonesty, including
misfeasanceinpublicoffice,inrespectofsuchactions.
31 – Finding: The Hon McAllister Hanchell may have participated in possibly corruption
arrangements inwhichoffersofCrownLandweremade to individuals, includingMrGary
Lightbourne,whohadnotapplied for the land,withaview to the recipientsof theoffers
sellingthelandonquicklytodevelopersatasubstantialprofitforallthepartiesinvolved.470
Recommendation: Criminal investigation by the police or others in relation to him of
possiblecorruptionand/orotherseriousdishonesty, includingmisfeasanceinpublicoffice,
inrelationtosuchoffers.
32–Finding:Thereisapossibilityofcorruptionand/orotherseriousdishonesty, including
misfeasance inpublicoffice, in relationtheHonMcAllisterHanchell in thechainofevents
leadingtosecretpaymentbyDrCemKinayof$500,000totheHonMichaelMisickinJanuary
2007,followedbytheapproval inprinciplebytheCabineton16thMay2007,towhichthe
HonMcAllisterHanchellwasaparty,ofthesalefordevelopmenttoaconsortiumledbyDr
468Seepara4.168above469Seepara4.166–4.168above.470Seepaaras4.169–171above
255
Kinay of land at Joe Grant Cay, followed by the agreement in 2008 to sell it to the
consortiumatwellbelowmarketprice.471
Recommendation:Criminalinvestigationbythepoliceorothersofthepossibilityinrelation
to the Hon McAllister Hanchell of corruption and/or other serious dishonesty, including
misfeasanceinpublicoffice,inrespectofthismatter.472
33 – Finding: TheHonMcAllister Hanchell possibly abused hisministerial position and/or
actedcorruptlyorotherwiseseriouslydishonestlyand/orinmisfeasanceofhispublicoffice,
bydeliberatelyundermining theauthorityof theChiefValuationOfficer, in relation to the
valuation of land at JoeGrant Cay, by rejecting the valuations undertakenby him,with a
view,possibly,toensuringaswiftcompletionofsaleofthelandtotheconsortiumledbyDr
Kinayataverylargeundervaluation.473
Recommendation: Criminal investigation by the police or others in relation to him of
possiblecorruptionand/orotherseriousdishonesty, includingmisfeasanceinpublicoffice,
inrespectofthismatter.
TheHonJeffreyHall
34 ‐ Finding: The Hon Jeffrey Hall failed repeatedly tomake any or any full or adequate
declarations of interests to the Registrar of Interests, in breach of the Registration of
Interests Ordinance, and also failed adequately to disclose his financial interests to the
Commission, pursuant to the Commissions of Inquiry Ordinance.474
NoRecommendation
35‐Finding:TheHonJefferyHallhasfailedtoaccount:1)forhisreceiptandexpenditureof
fundsinexcessof$800,000creditedtohisaccounts;4752)forhisreceiptof$200,000from
Mr Evan Harvey; and 3) for a gift to him of $10,000 from David Wex.476
Recommendation: Criminal investigation by the police or others in relation to the Hon
471Seeparas4.172–4.182above472SeealsoinrelationtotheHonMichaelMisick,para4.23above,andFindingandRecommendation5.473Seeparas4.173–4.182474Seeparas4.191–4.195above475Seeparas4.192–4.195above476Seeparas4.191and4.196‐4.208above
256
JeffreyHallofpossiblecorruptionand/orotherseriousdishonesty,includingmisfeasancein
publicoffice,inrespectoftheabovematters.
36–Finding: TheHon JeffreyHall promoted, andpersonally benefited fromabuseof the
CrownLandPolicyinrelationtothesaletoanon‐BelongerofCrownLandbyparticipatingin
apossiblycorrupttransactioninrelationtothesale(‘flipping’)oflandatNorthWestPoint,
Providenciales, to an overseas developer,DavidWex by: 1) knowingly participating in the
transaction as one of the flippers and sharing in the large profitsmade from the sale; 2)
loaningor giving part of the proceeds of those profits to theHonMichaelMisick;and 3)
failingtodeclaretotheRegistrarofInterestsortotheCommissionhisshareoftheprofitsor
themakingoftheloanorgiftofpartoftheprofitstotheHonMichaelMisick,ortodeclare
his involvement in the sale of the land to DavidWexwhen it was before he Cabinet for
discussion.477
Recommendation: Criminal investigation by the police or others in relation to the Hon
JeffreyHallofpossiblecorruptionand/orotherseriousdishonesty,includingmisfeasancein
publicoffice,inrespectoftheabovematters.
TheHonLillianBoyce
37–Finding:TheHonLillianBoycefailedtodeclaretotheRegistrarofInterests,orinitially
to the Commission, her receipt of payments of Candidates’ Stipend, totalling $72,000.478
NoRecommendation
38–Finding:TheHonLillianBoyceparticipatedinapossiblycorrupttransactioninrelation
to the sale (flipping) of Crown Landby: 1) accepting theproceeds of profitsmadeby her
brother, Earlson Robinson, from the sale of a share in the interest of a company, Urban
Development Ltd, which had involved the disposal of Crown Land at North West Point,
Providenciales, for largeprofits to anoverseasdeveloper,DavidWex; 2) loaningor giving
partofthoseprofitstotheHonMichaelMisick,orassistingherbrotherindoingso;and3)
failingtodeclarethoseprofitstotheRegistrarofInterestsortodisclosethemCommission,
477Seeparas4.196–4.208above478Seepara4.213above
257
and failing to declare her brother’s connection to the transaction in Cabinet discussions
concerningthetransaction.479
Recommendation:CriminalinvestigationbythepoliceorothersinrelationtotheHonLillian
Boyce of possible corruption and/or other serious dishonesty, including misfeasance in
publicoffice,inrespectoftheabovematters.
39 ‐ Finding: The Hon Lillian Boyce abused her ministerial position by: 1) assisting or
permitting her fellow CabinetMinisters, specifically the HonMichaelMisick and the Hon
FloydHall, to interfere inandoverridetheScholarshipsPolicy fornominatingaccordingto
setcriteria,inparticularmerit,candidatesforoverseasscholarships,therebyby‐passingthe
controlof theScholarshipsCommittee;and2)grantingascholarship toherowndaughter
without referring her candidature to the Scholarships Committee for scrutiny.480
NoRecommendation
FromChapter5–SystemicWeaknesses
PartialSuspensionoftheConstitutionandInterimDirectRule
40 ‐ Recommendation: cessation of Ministerial Government, dissolution of the House of
Assembly and suspension of certain related provisions, initially for two years, subject to
possibleextensionorabbreviation,asprovidedinSchedule1tothe2009ConstitutionOrder,
yettocomeintoforce.481
41 ‐ Recommendation: direct rule by the Governor with the assistance of an Advisory
Council to advise him on the formulation of policy and exercise of his functions and of a
Consultative Forum to make recommendations in relation to legislation and other policy
issues,asprovidedinSchedule2tothe2009ConstitutionOrder,yettocomeintoforce.482
479Seeparas4.216–4.217above480Seeparas4.218–4.220above481Seeparas5.11–5.13above482Seepara5.14above
258
42 ‐ Recommendation: the Governor should annually, or otherwise as he considers
necessary,taketheadviceofhisAdvisoryCouncilastotheearliestpracticabledateonwhich
toseektherevocationbyOrder inCouncil483of the2009ConstitutionOrderandreturnto
MinisterialGovernmentandanelectedHouseofAssembly.484
43 ‐ Recommendation: the Governor to have power, acting in his discretion, to make
appointmentstoanypublicoffice,asprovidedinSchedule2tothe2009ConstitutionOrder,
yettocomeintoforce.485
44‐Recommendation:strengtheningoftheGovernor’sPrivateOfficebothinthenumbers
andseniorityofstaffandadministrativeaccommodationandfacilities,includingtheaddition
of an experienced Foreign & Commonwealth Office administrator of the level of a First
Secretary.486
45 ‐ Recommendation: the Attorney General’s Chambers should be strengthened with
adequate numbers of high quality staff of a disposition to withstand political and other
pressures inappropriate to their role,andsuitableandsecurepremises toenable themto
copewiththesurgeoflegalworklikelytobeengenderedintheshorttermandthereafter
requiredinthemedium‐to‐longertermbysuchacceptanceasthereisofrecommendations
inthisReport.487
46‐Recommendation:Considerationshouldbegivenbywayofconstitutionalamendment
re‐defining the AttorneyGeneral’s principal functions488 and ‐ for as long as the Attorney
General remains a member of the executive and legislative arms of government ‐ the
appointmentofanindependentDirectorofPublicProsecutionswithresponsibilityunderthe
general oversight of the Attorney General, for initiation and conduct of criminal
investigationsandprosecutions.489
483opcit390,s3;SeeAppendix4(ii)484Seepara5.15above485Seepara5.16above486Seepara5.17above487Seepara5.14above488Sees39ofthe2006Constitution,whichdetailshispowers,allinthecontextofcriminalproceedings489Seepara5.19above
259
47‐Recommendation: Intheinterestsofpreservingandenhancingtheindependenceand
stature of the office of Attorney General, consideration should be given before return to
ministerial government to amending the Constitution to provide that: 1) the Attorney
GeneralshouldbeavailableandentitledtoadvisetheCabinetandtheHouseofAssemblyon
thelawandpracticalitiesofitsformandadministrationasitaffectstheirdeliberations;and
2)forthosepurposesheorsheshouldbeentitledtoattendtheirrespectivemeetings,butto
dosointhecapacityofindependentlegaladviser,notasamemberofeither.490
CriminalSanctionsandCivilRecovery
48 ‐ Recommendation: Make early and contingent preparation for increase in judicial
workload that may result from criminal and/or civil recovery investigations undertaken
pursuant to this Report, by appointment of additional judges and court officers of high
calibreandtheprovisionofadditionalcourtpremisesandsupportingresources.491
49‐Recommendation:TheestablishmentofaCivilandCriminalRecoveryUnitorUnitsand
ofsecureaccommodationandotherresourcesforthem,pursuanttotheProceedsofCrime
Ordinance 2007 for securing early freezing or recovery of land and/or assets pending
recoveryandotherinterimorfinalreliefinsupportofcivilproceedings492orforrestraintand
confiscationorders493intheTCIorworldwide.494
50 ‐Recommendation: Theappointmentofa SpecialProsecutorand supporting specialist
team, operating under the general oversight of the Attorney General, for the criminal
investigationandprosecutionofmattersthatmayresultfromrecommendationsinChapter
4ofthisReport.495
51‐Recommendation:Provisionshouldbemadeforcriminalandciviltrialbyjudgealone,
atthetrialjudge’sdirectioninanycaseinwhichheconsidersnofairoreffectivetrialcould
takeplacewithajury,andthejudge’sdirectionshouldbefinal.496
490Seepara5.20above491Seepara5.23above492ProceedsofCrimeOrdinance,s2,ss59‐60andss127‐130493ibid,ss42(a)and/or(b)–53ands58494Seepara5.24above495Seepara5.25above496Seeparas5.26–5.29above
260
52 ‐Recommendation: Consideration of introduction of a statutory provision partially to
reversetheburdenofprooforevidentialburdenincasesofchargesofcorruptionagainsta
publicofficial,soasenableconvictionwherethereisevidencethathehasbeenlivingabove
his present or past official means and for which he has not given a satisfactory
explanation.497
IntegrityinPublicLife
53‐Recommendations:Considerationshouldbegiventoprovidingfor: 1)disqualification
from membership of the Legislature those who have been convicted of serious criminal
offences,forlongerperiodsthanpresentlyprescribed;2)foranenforceabledeclarationthat
suchaMemberisunfittoholdtoholdanypublicofficeorspecifiedpublicoffices;and3)for
the provision to a Commission of Inquiry appointed under the Commissions of Inquiry
Ordinanceofapowertomakesuchadeclaration,enforceableifnecessarybythecourt.498
54‐Recommendation:TheCodeofConductforMinistersoftheTurks&CaicosIslandsand
anyothersimilarcodeorprovisiongoverningthoseinpublicofficeshouldbeformallyand
widelypromulgated,and formapermanent reminderbyprovision toallpublicofficerson
appointmentandpublishedasapermanentfeatureontheGovernment’sweb‐site.Itshould
also be strengthened by regular reinforcement and reminder by training and in public
educationalmediaprogrammes.499
55 ‐ Recommendation: Early implementation and amendment along the lines indicated
above500oftheIntegrityCommissionOrdinanceenactedinMay2008,inreplacementofthe
RegistrationofInterestsOrdinance.
56‐Recommendation:TheGovernmentshouldexpanditsweb‐sitewithaviewtoinforming
and reminding all in public life of what is required of them in thematter of conflicts of
interestanddeclarationsofinterests,andwithaviewtogreateropennessaboutthewayin
whichtheGovernmentconductsitsbusiness.501
497Seepara5.30above498Seeparas5.31and5.32above499Seeparas5.33–5.34above500Seeparas5.35–5.37above501Seepara5.38above
261
57‐Recommendation: legislationto:1)regulatepartycampaignfinance;2)requirepublic
disclosurebycontributorstoandrecipientsofelectioncampaignexpenses;3)requirepublic
disclosure of details of the true source, recipient, amount of all other purported political
donations and the use to which they are put; 4) require external and published audit of
politicalparties’accounts,withcriminalsanctionsfornon‐compliance;and5)ingeneral,to
remedythemanyotherelectoralabusesidentifiedbyERISintheirReport.502
58 ‐Recommendation: introduction or facilitation of rigorous internal and external audit
systems for all governmental departments and public and statutory bodies, where audit
reports are promptly published and treatedwith respect byMinisters and used by them,
boardchairmenanddirectors,andotherseniorpublicofficialstoinformbudgetarydecisions
andgiveeffecttonecessaryfinancialcontrol.503
59‐Recommendations:
1) On return toministerial government, constitutional and other legislative or
parliamentary instruments should provide for rigorous scrutiny of the financial
and other governance of the Territory through parliamentary oversight
committees and for a regime of strict and well publicised adherence to their
duties,includingregularpresentationoftheirreportstotheHouseofAssembly
anddebatebytheHouseofthem;
2) consideration should also be given to amending the 2006 Constitution to
enable,onreturntoministerialgovernment,appointmenttothePublicAccounts
Committee, if not all three Committees, of one or more ex officio members
qualified and experienced to introduce financialmanagement experience into
theprocess.504
60‐Recommendation:Thereisanurgentneedforremoval,orreduction,byreferenceto
clearly expressed criteria, of ministerial lawful or unlawful exercise of discretionary
powers in many and various aspects of government. These include inappropriate
502Seepara5.39above503Seepara5.40above504Seeparas5.41–5.37above
262
interference in and by‐passing of statutory, administrative or policy procedures in a
numberofareas‐forexample:
1)administration,managementanddisposalofCrownLand;
2) award of public works contracts and other public contracts, and their
fragmentationtoevadeopentenderingrequirements;
3) development approval, planning permission and control, the grant or
revocation of licences or franchises or effective government‐protected
monopolies, the grant of exemptions, waivers and discounts of any type, in
particularastostampdutyonthetransferofland,andastoimportduties;and
4)inimmigrationmatters,includingthegrantofBelongershipsandthegrantand
terms of Permanent Residence Certificates; Residence Certificates and Work
Permits.505
CrownLand
61‐Recommendations
1)deviseaspartoftheproposedCrownLandOrdinancetheessentialstatutory
criteria for the administration, management and disposal of Crown Land, in
replacementoftheCrownLandPolicyoftheday–amoreprincipledapproachto
CrownLandReform;
2)ensurecompleteindependenceofthedepartmentalbodytobeentrustedby
theproposednewlegislationfromministerial involvementorinterferenceinits
individualallocationsofCrownLandbywayofleaseorsale;
3)make theManual of Crown LandAdministration andProcedure, part of the
Bill,aswasintendedbyitsauthors,theTerraInstitute;506
4)inthelightofMarch2008SpecialAuditReportoftheActingChiefAuditor,the
HonMcAllisterHanchell’sevidencetotheInquiryandotherinformationrecently
505Seepar5.43above506inPartIIIoftheBill,forwhichdraftinginstructionswerecontainedinChaptersIIIandVoftheTerraInstitute’sFinalReportofFebruary2008.
263
receivedpendingenactmentandthebringing into forceof thenew legislation,
giveimmediateeffecttotheManualbyseekinganinstructionfromtheSecretary
ofStateundersection25(1)(a)and/or(3)oftheConstitutionnottoapproveany
CrownLandtransactiongovernedbytheManualunlessheissatisfiedthatthere
hasbeenfullcompliancewithitsprocessesandterms;
5) arrange for secondment to the Governor and/or to the Interim Successor
Department of theMinistry ofNatural Resources of an independent expert or
expertsonthemanagementandallocationofCrownLandsoastoensurerapid
implementationoftheCrownLandManualandforvettingcompliancewithitof
proposedlandgrants;
6)atanearlystage,enactand implement theCrownLandBill,amendedalong
thelinesIhavesuggested,includingtheManual;
7) strengthen the Crown Land Valuation Office and introduce clearly defined
criteriaforvaluation,andpublishallvaluationsintheGazette;
8) require all corporate bodies and those acting for others in a trustee or
nominee capacity to disclose the true beneficial ownership of or interest
involved to any public body required or seeking to exercise due diligence in
contemplationofthegrantofCrownLandorofdevelopmentapproval‐coupled
withsubstantialpotentialcivil(includingrescission)and/orcriminalsanctionsfor
non‐compliance;
9)obtainanexpertevaluationoftheJune2008DeloitteReportintoanumberof
disposalsofCrownLandinSaltCayforcommercialpurposes inrecentyears;507
and
10)publishintheGazettefulldetailsofoffersforleasesorsaleofCrownLand,
including the identity of theproposedbeneficial owner, and the extent of any
507Seeparas3.39–3.47above
264
discount,fulldetailsofallDevelopmentAgreements, includingthenameofthe
recipientandthetypeandextentofallconcessionsgranted.508
ANewConstitution
62‐Recommendation:ConsiderationofreformoftheFranchisesoasto:
1)placeitsdeterminationinanindependentstatutorybodyappointedannually
by the Public Service Commission, such as a Citizenship Commission
recommendedbythe2004ImmigrationReviewCommission;
2)removetheGovernor,theCabinetandMinistersandtheirpublicofficialsfrom
anyinvolvementinthegrant,withholdingorrevocationofgrantofcitizenship;
3) introduce clearly defined statutory criteria to widen the Franchise to long‐
termresidentsoftheTerritorytobeappliedbysuchindependentpublicbodyon
anindividualbasistogrant,withholdingandrevocationofcitizenship,subjectto
appeal only to the Supreme Court by way of judicial review or to a tribunal
chairedbyaservingorretiredSupremeCourtJudge;and
4)therebytoenhancedemocracyandreducethescopeforpoliticalpatronage,
bribery,electoralabuseandintimidation.509
63‐Recommendations:Considerationof:
1) strengthening the role of District Commissioners or Island Administrators,
subjectingthemtoappointmentbythePublicServiceCommissioninaccordance
withapublicandregulatedprocedure,510givingthemclearlydefineddutiesand
powers;and
2)a reviewof thedistributionandnumberofelectoraldistrictswithaview to
producingamoreequitableandconsistentratioofparliamentaryrepresentation
acrosstheIslands.511
508Seepara5.44above509Seeparas5.45and46above510Ifthatisnotalreadythecase.511Seepara5.47above
265
64‐Recommendation:Considerpossibleconstitutional imbalancesandweaknesses in the
2006Constitution asbetween theForeign&CommonwealthOfficeand theGovernor, the
GovernorandtheCabinet,andtoprovidegreaterconstitutionalunderpinningoftheroleof
theparliamentaryoversightcommitteesthanisnowprovidedbysections60and61ofthe
2006Constitution.512
65 ‐ Recommendation: The Government should review, in consultation with the TCI Bar
Association,theprovisionsoftheLegalProfessionOrdinance, inparticular:1)Section21of
theOrdinance, as tomaintenance of separate clients’ accounts; 2) Section 22, as to the
makingandeffectiveenforcementbytheBarCouncilofRulestherefor;and3)pursuantto
section 23, wider powers to be given to the Supreme Court to secure effective audit of
attorneys’accounts,byspotcheckswhenconsiderednecessaryinindividualcases.513
______________
512Seepara5.48above513Seepara5.49above