Ministers

What is the function of a Minister in the Government of Anguilla?  The proper answer, I suppose, is that it is exactly the same as the function of a Minister in any other West Indian country.

And, what is that? you ask.  The answer is that the main function of a Minister is to oversee the operations of his Ministry, and to ensure that his public service officers carry out the policy decisions of the Executive Council/Cabinet.  The persons charged with making the government work are the public servants.  They carry out the day to day activities of the Ministry under the direction of the Permanent Secretary.  Subsidiary to this role is the important function of giving advice to the Minister on technical aspects of the work of the Ministry.  This permits the Minister to take the advice to Cabinet and get a sensible policy decision made.

What should clearly not be within the remit of a Minister is for him to go out on the road and personally direct operations related to his Ministry.  He should not hire people to carry out work.  He should not order materials and services to be paid for by his Ministry.  He is the policy maker, not the technician.  He is the director of the play, not the actor on the stage. 

And, how does a Minister learn his role? you ask.  The answer is that in bigger countries, such as the United Kingdom, there is a National School of Government.  They hold workshops and conferences for new Ministers.  They go through the Ministers’ Code of Ethics, pointing out each of the duties and responsibilities of Ministers of Government.   They train a politician how to be a responsible Minister.  They teach how corruption comes in many forms.  

It can take the shape of cronyism, when friends are appointed to Boards and given contracts.  That is a form of corruption.

Ministers need to be taught how to look out for conflicts of interest, and how to deal with them.  This is not something that comes naturally to many of us.

The British have long had an independent Appointments’ Board answerable only to Parliament.  When a Minister wants to appoint a new person to a Board, the proposed appointee must be vetted to ensure that person is properly qualified  and able to contribute to the work of the Board.  No one is given an appointment solely as a juicy plumb for political support.

They do not let a Minister go about ordering replacement parts for fire engines. 

They do not tolerate a Minister going down onto a project and participating in an industrial dispute.

They would not contemplate a Cabinet meeting discussing the overturning of a Public Service Board’s decision in carrying out its duties.

But, those things happen every day in Anguilla.  They always have.  We consider it normal.

Isn't it about time the Governor directed the Public Administration Department to come up with a course specifically for new Ministers designed to explain and teach best practices for Ministers?

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22 July 2008

Integrity Law

Just passing a law does not achieve much. We need integrity legislation in Anguilla. No thinking person in Anguilla doubts that proposition. An Integrity in Public Life Act is the law that would, among other things, require members of the House of Assembly, members of Executive Council, and other senior public officers, to state on oath their assets and liabilities. They would have to make regular filings and declare gifts given to them while in office. There would be severe penalties if they lie or fail to make the declaration. The Anguilla Constitution 1982 has set up a Register of Interests. By itself, the Constitution does not achieve anything to ensure integrity in public office. There needs to be a law to give effect to the constitutional provision, to set out the details of the mechanism.

The official explanation of the advantage of such a law is that it forces public officers to declare their interests when they meet to discuss policy, make decisions, and pass laws. That is, it makes people think of conflicts of interest. That is polite mumbo jumbo. The real reason for the law is that the assets of the public officer in question becomes public knowledge. If he acquires sudden wealth while approving licences and permits, questions are likely to be asked. The risk of public exposure and even prosecution will give the conscience a boost. Such a law is an aid to the personal integrity impulse, so to say. It is like the Vitamin B12 injection doctors give to the elderly. It boosts our resistance and inoculates us against infection.

So, it should be no surprise that Anguillians were nearly unanimous in 2006 when the Constitutional and Electoral Reform Commission sought their views on the subject of the need for integrity legislation. Paragraph 135 of the final Report contained the recommendation of the Commission. There must be strengthened anti-corruption provisions in our proposed new Constitution. An appropriate law, including severe penalties for any evasiveness or falsehood, must be put in place without delay.

With any luck, we will get the new law in due course. When we do so, that will not be the end of the matter. There is the little matter of how the Act is drafted, and how it is amended in the House of Assembly. It can be watered down to meaninglessness. Turks and Caicos Islands has such an Act. It has been a complete waste of time. The politicians have ensured that it is no use at all. I was reading all about it in a recent article in Caribbean Net News. This is the gist of the TCI integrity legislation story:

2006 September – The Leader of the Opposition presents in the House of Assembly an anti-corruption Bill. It is based on legislation that had been effective in Trinidad. This Bill is never debated. It is killed in the House by the incumbent party.

2008 January – The FCO provides a draft Integrity in Office Bill to the A-G’s Chambers. He is told to prepare it for passage through the House of Assembly. The draft duly goes to Cabinet and then to the House. It will provide that officials must periodically declare their assets. They must declare gifts of $5,000.00 and up. The Commission will consist of five members. It is empowered to investigate and adjudicate complaints leveled against government office holders. The Commission will have the power to enforce sanctions against an offending official. He can be fined, assessed jail time, and even be forced to step down from office. There will be a judge from a Commonwealth country on the Commission to ensure independence and impartiality.

2008 May – In Committee Stage, members of the governing party make amendments. These are designed to water down the Bill. The fines and jail terms are reduced. The value of the gifts that have to be declared are raised to $10,000.00. The requirement for a Commonwealth judge is replaced by a one for a TCI judge. The TCI House of Assembly passes the Bill. The Governor assents to it. The Commission is never put in place. Apparently, no TCI judge willing to serve has ever been found.

2009 April – The Auld Commission comes out with its scathing interim report on corruption in TCI. An amendment to the law is proposed at a sitting of the House of Assembly. It would revert to a Commonwealth judge. It would return to the $5,000.00 standard. The former Ministers who have now resigned oppose the amendments. But, with the support of the Opposition, the amending Bill is passed.

The same thing could happen in Anguilla. Without vigilance, an ineffective piece of integrity legislation could be drawn like wool over our eyes. It is only if there is a genuine and heart-felt demand by the public for integrity legislation that the politicians will be reluctant to sabotage it.

Are we up to the challenge?

Register of Interests

The BVI Missed the Boat with their Register of Interests Legislation. The Register of Interests Act 2006 came into effect in the BVI on 18 February 2008. It requires all members of the House of Assembly to declare their financial interests. This includes directorships, employment, clients, sponsorships, gifts received, overseas visits, land and shareholdings. They will have to file a declaration of their interests each year. There is a Registrar of Interests, Victoreen Romney-Varlack.

As an article in the BVI Beacon of 9 July 2008 makes clear, this register is not open to public inspection. That is a disgrace. It is in the public interest to know what enterprises our representatives hold interests in. We need to measure those interests against the public interest, when we see them voting and behaving in a certain way. It is hard to imagine that there is another reason for having such a register. What use is it if it is secret?

In the United Kingdom, a similar register of members’ interests is updated annually and is open to public inspection.

In the United States, you can inspect the tax returns of members of the House and Senate, and their declarations of interests.

Chalk up another victory for secret and corrupt government in the British Overseas Territories.

Will we in Anguilla do any better when we come to introduce our long-overdue Bill?

Parliamentarians

Register of Interests Act. Our Attorney-General’s Chambers has finally produced a draft Register of Interests Act. Regular readers will know how long we have been asking for this to be done. The most recent was on 19 February. It all goes back to the Constitution. In particular, section 60A. This provides:

60A. (1) The Speaker shall maintain a Register of Interests in accordance with this section.

What is a register of interests, and why is it so important? When we are looking at parliamentarians and, especially, those who are appointed to public office, and speaking of a register of interests we are referring to a report made by the members of their financial interests. These include interests held in the name of a spouse or child or company. Requiring such a report is a completely useless exercise if the report is not made under penalty of perjury and required to be published for all who are interested to see. The official reason why this publication is important is said to be so we can see if a member has an interest which causes a conflict of interest with his public office. The unofficial reason is for us the members of the public to see if our representative is getting suspiciously rich as a result of his holding public office. This is usually a sign of corruption. We can take steps to have him prosecuted at best, or at the least ensure he is not re-elected to the House.

It is no use at all if the register of interests is not published. In England, members of the House of Commons are under an obligation to declare their financial interests, and these are published for all the public to check on. The House of Lords publishes its own Register of its members' interests.

When we get our Register of Interests legislation, will we take the same precautions as the UK did?

Will we demand strong and muscular legislation?

Or, will we be happy with keeping a guard dog with all its teeth pulled?

Financial Services

Appendix 3: Territory Issues. We are looking at the recently published National Audit Office Report titled “Managing Risk in the Overseas Territories”. Appendix 3 contains what John Bourn, the Comptroller and Auditor General, considers the most significant issues relating to Anguilla. It is always revealing to learn what others think about your performance. The revelations can either make you very angry, or they can encourage you to improve your performance. This is what he writes:

Anguilla’s financial services industry contributes some 15 per cent of GDP, making it the second, albeit minor sector in Anguilla’s economy, after tourism. Regulation of the industry remains the direct responsibility of the Governor under the Constitution, and so any failure could have direct implications as well as wider reputational impact on the UK. The financial services sector is small compared to that in Bermuda, Cayman Islands and the British Virgin Islands; it employs some 200 people and its licence fees are insufficient to finance substantial regulatory capacity. Currently, Anguilla has only four professional regulatory staff, which limits its ability to keep up to date with fast moving international standards and implementing recommendations from previous Reviews of the Sector. For example:

- Recommendations made by UK-appointed consultants in 2000 in respect of companies and credit union legislation have not been implemented.

- Anguilla has not created a separate agency to market its financial services overseas, freeing the regulator from involvement in this potentially conflicting activity.

- An International Monetary Fund Report in 2003 referred to the need to broaden the professional and managerial capacity of the Anguilla Commission, and to the absence of sufficient skilled persons to analyse and investigate suspicious transaction reports.

- There are doubts over the extent of compliance with “know your customer” requirements. The International Monetary Fund’s 2003 review of Anguilla identified difficulties obtaining customer information from overseas sub agents and recommended a tightening of procedures. When the Anguillan Regulator conducted on-site checks in 2004 most agents did not have copies of the code of practice issued by the professional association, and there were numerous instances of deficient or incomplete documentation.

- The Anguillan regulator’s policy towards non-compliance in anti-money-laundering practice has been to encourage raised standards through education, rather than to apply sanctions on the most deficient agents. It is not evident that this has been a successful strategy. Police and Industry sources in Anguilla expressed the view to us that there are still a minority of financial service providers in the Territory which they believed would accept “any business”.

NAO Conclusion: The Department, supported by other UK Departments, needs an integrated approach to addressing regulatory under-capacity in Anguilla, the Turks and Caicos Islands, and Montserrat. Options that can be considered include developing a shared regulatory resource across the three Territories, use of Governors’ powers to raise regulators’ licence income, and more placements of staff from the UK, focusing on industry compliance with anti-money laundering measures.

I thought it quite extraordinary that recommendations made by consultants since the year 2000 had not yet been implemented. The only conclusion can be that there was something quite objectionable in the recommendations. But, as we do not know what they were, we cannot be sure. I was astonished to learn that Anguilla still depends on the regulator to market our financial services overseas. When I was in practice over ten years ago, we urged the Ministry of Finance to bring this arrangement to an end. There is an intrinsic conflict between the functions of a policeman and those of a salesman. Can you picture this imaginary scenario? The regulator attends an offshore marketing conference in Miami and meets a lot of people. He encourages some of the attendees to visit Anguilla and to make it their home base for their offshore services. When he gets back to his office, he finds some of them have applied. He now has to put on his policeman’s hat and tell them that they do not come up to standard, and he has to refuse them! Either that, or he is so embarrassed by the quandary he is in that he approves their licence while doubting that they will perform creditably. What a joke!

Exploitation

Foreign Exploitation of British Overseas Territories. One of my readers has drawn my attention to a recent article in the Royal Gazette of Bermuda [link here]. It concerns an initiative by Bermuda Premier Dr Ewart Brown and his wife to set up a stem-cell research centre in Bermuda. They have linked up with a US-based Russian medical research company to develop a private research facility. They hope to treat patients using as yet unproven, controversial and highly expensive scientific techniques. What conceivable reason could these Russian-American foreigners have for wanting to be in the West Indian territory of Bermuda? The answer should be obvious to most of us. Bermuda lacks the laws under which such treatment can be monitored. Bermuda has no infrastructure to ensure compliance with internationally agreed standards. The obvious intent is to avoid and circumvent regulatory oversight by regulators such as the FDA or the European Medicines Evaluation Agency. Dr Brown is no stranger to questionable activities in Bermuda while serving in government. His recent investigation by police for his alleged involvement in a fraud concerning public monies has been widely reported [link here].

What disturbs me even more is the risk to the integrity and good name of Bermuda’s public service. The Chief Medical Officer of Bermuda reports to Cabinet. How can he be expected to properly carry out his function when the proposed facility will be partly owned by the Premier and his wife? The potential for conflict of interest is staggering in its extent. The moral of this story is that we are at far more risk of exploitation by our local leaders than by crooks from overseas. The Foreign Office will continue to follow the official policy of not intervening on the basis that the colonies have to learn by making their own mistakes. All I can say is, thank Heavens, such a thing could never happen in Anguilla!