Editorial | Carinosa reprised

Given The Gleaner’s reprise of the question of whether senior public officials should be required to place their private businesses or earning assets in blind trusts, the authorities should grasp the opportunity to conclude an issue raised nearly four decades when then Prime Minister Edward Seaga faced allegations of conflict of interest with his Carinosa tourism attraction.

At the time, in 1987, a high-powered committee, appointed by Mr Seaga to review the matter, recommended that they should.

But although the findings were tabled in Parliament and presumably discussed by the Cabinet, the recommendation was never implemented. Neither then nor subsequently.

The issue is back of the agenda in the face of the Integrity Commission’s (IC) continued decision not to certify the assets and liabilities filings of the current prime minister, Andrew Holness, and to refer his wealth status to the Financial Investigation Division (FID) – a quasi law-enforcement agency of the finance ministry – for deeper investigation.

Although it was only for a single year, 2022, that commission was conclusive that Mr Holness’ assets overshot his known income by under J$2 million. The IC, in a report tabled in Parliament a fortnight ago, said it had unresolved questions of whether the prime was involved in illicit enrichment.

Among the issues highlighted in the report was that Mr Holness’ private and associated companies engaged in large and frequent inter-company transfer of cash via myriad bank accounts, including, in one case, a small subsidiary, which, ostensibly, was funded by the larger one, making substantial net transfers to the parent.

Mr Holness’ companies, the IC said, too, reported no taxable income, which it believed ought not to have been the case. The commission therefore recommended that the tax authorities determine whether the companies in fact had tax liabilities.

The securities industry regulator was also asked to investigate the basis on which a brokerage/investment house, Barita, loaned $50 million to one of Mr Holness’ firm, apparently without the agreed collateral being appropriately registered.

There was also a question of whether Mr Holness used money from a charitable trust with which he was associated to buy a bond in his own or a company’s name.

AWAIT FURTHER FINDINGS

This newspaper, as it has said previously, has come to no conclusion about the issues raised in the report. We await further findings.

Nonetheless, the matters highlight the potential for conflict of interest, and more, or the appearance thereof, when senior public officials continue to be personally in control of their private businesses while in office.

In the mid-1980s, Mr Seaga was not only the prime minister, but also the finance minister, as well as being in charge of many regulatory agencies. He developed Carinosa, a 20-acre garden, aviary and high-end craft outlet on a hillside overlooking the north shore tourist town of Ocho Rios.

The project elicited questions from a broad spectrum of the society – including the People’s National Party (PNP), which was out of Parliament having boycotted the 1983 general election – over planning approval, financing, and whether it received governmental promotion support. The PNP, through P.J. Patterson, then its chairman, pressed the conflict of interest question.

In an August 1987 statement, Mr Seaga responded: “ I have endeavoured to do this project on a model basis – a model of how a business involvement can be carried out without depending on the Government for assistance, incentives, or, indeed, financial support.

“It is not that Carinosa does not require these areas of assistance to which it is normally entitled, but as a matter of principle, on the same basis as raised by Mr Patterson. I scrupulously avoided any financial assistance by Government, a decision which has cost more than J$l.5 million in payment of Customs duties which would normally have been waived. In addition to the continuing cost of using more expensive funds than the cheaper funds for which the project would normally have been eligible through the National Development Bank.”

Nonetheless, Mr Seaga appointed a committee chaired by Glen Owen, an educator, and including major corporate and public affairs personalities – Aaron Matalon, Elon Beckford, William Thwaites, Errol Dunkley, R Danny Williams and Hector Wynter – to consider the issue and make recommendations.

REPORT ASSETS

The Owen Committee concluded that on taking office, a prime minister should, within 30 days, report his assets to the Integrity Commission (as it existed then).

“Where a conflict of interest exists or is likely to arise, the Prime Minister or Minister should:

(a). either divest himself those assets; or

(b) place them in a blind trust, and in either case, inform the Integrity Commission within thirty days of what action he has taken.”

The prime minister and other ministers would also be obligated to “resign any directorship or any remunerative position of management ... other than directorship in companies owned by the Government to which he has been appointed by the Government, or a directorship in a private family company dealing with the maintenance of family property and not primarily engaged in trading”.

With respect to senior public officials such as permanent secretaries, chief technical officers and the top officers of government companies and agencies, the committee said: “ We consider that similar provisions should be adopted here. Accordingly, we recommend that all the officers whom we have indicated in this paragraph should fall within the ambit of the guidelines which we have recommended for ministers and fair under the jurisdiction of the Integrity Commission.”

The Owen Committee report provides a sound platform from which to proceed with the conversation on the incomplete business of 37 years ago. The issue is beyond Andrew Holness.