Having the Constitution give absolute and dictatorial powers to one man is the opposite of providing for good governance. A read of the draft Constitution reveals an intention to give the Governor almost total power over the administration. He is controlled only by secret and unaccountable instructions from the FCO. This secrecy and lack of accountability are then multiplied by giving him associated discretionary powers.
The result is an anti-democratic Constitution. The system it sets up is not conducive to good governance. It is the polar opposite of integrity, accountability and transparency. In particular,
(a) The section 21 use of his discretionary and reserve powers is not subject to democratic accountability. The draft Constitution should be amended to provide that, except where otherwise instructed by the Secretary of State, he ought first to consult the Cabinet and be subject to review by the High Court in the exercise of his discretionary and reserve powers;
(b) Integrity, accountability and transparency require that the section 26 power to dispose of Crown Land should be subject to a resolution of the Legislature;
(c) The section 28 power of pardon should be exercised on the advice of a Mercy Committee;
(d) The section 87 power to grant or withhold pensions, gratuities and allowances ought to be exercised on the advice of the Public Service Commission;
(e) The section 100 power to appoint the Auditor General is exercised after consultation with the Public Accounts Committee. Greater accountability and transparency would be achieved if this were to be done after consultation with the Public Service Commission and the Integrity Commission;
(f) Extraordinarily for the twenty-first century, the Governor will retain the power to amend or to disallow a law passed by the Legislature without any reference back to the Legislature.
In this post we conclude my preliminary thoughts on Kate Sullivan's Initial Recommendationsfor Changes to the Constitutional and Electoral Arrangements in the Turks and Caicos Islands? If you have not read her paper I urge you to do so by clicking on the link above. I have dealt with the earlier portions of her Recommendations over the past seven posts. I end with these final but preliminary thoughts:
[16] Recommendations 36 and 37 retain the power of the Governor to deal in Crown Lands. We know what that has meant in the past when there have been weak Governors and Attorneys-General. The Governor has allowed ministers of government secretly to misuse Crown Lands for their own and their families' profit.
The proper reform is to have the Constitution require any dealing in CrownLand to be approved by the House of Assembly. Let the government answer to the public for any proposed dealing in Crown Land. This is not a proper province for either the mandarins in Whitehall or for the Governor in Government House.
We need the disinfecting influences of openness, transparency and fresh air. We do not need to maintain a system that has shown itself to be a failure in the past.
[17] There are many other Recommendations in this Report that we can all appreciate and approve of, particularly the provisions for Watchdog Institutions. One complaint would be that they are not complete and others are missing.
For example, the Constitution makes no provision for a Tenders Board, with security of tenure and guarantees for its independence.
Similarly, the Constitution makes no provision for a Public Accounts Committee.
For democratic principles to begin to flourish in what has clearly become a failed kleptomanic state, institutions such as these are essential. No dictatorship by a foreign Governor can be an acceptable substitute for the nurturing and encouragement of local democratic institutions.
[18] There are several other recommendations that one might legitimately have strong views on. There are other obvious and timely recommendations that could and should have been made but that are missing. We in the OverseasTerritories need to act swiftly to discuss them on a variety of forums.
Our concern should be transparent and obvious. It is that if these recommendations are permitted to find their way into the TCI Constitution, it will not be long before there is pressure for them to be introduced into ours, for consistency and administrative convenience. However, this paper is long enough for all but the very patient to be able to read, and I propose to stop writing here.
Crown Lands: Following on from the last couple of posts, the third point in our check list that we would search for in determining whether there is likely to be integrity in the public service, is a transparent procedure for dealing in public lands.
In Anguilla, as in many of the British Overseas Territories in the West Indies, Crown Lands are dealt with in the Governor's sole discretion. In practice, this means that the Governor relies on the advice of Cabinet or the Executive Council, and there is no accountability to the Legislative Assembly. The integrity of dealings in public lands ought to be enforced by having any resolution to deal in any significant area of public land, which in a small territory may be as little as a half acre, brought to the House of Assembly for public debate.
It is with great sadness that I report the following.One of the many public complaints against the outgoing Anguilla Administration has been its gross over-emphasis on economic development at the cost of the under-development of our social services. It seems that whenever there has been a choice between any of culture, social development, the environment, transparency, accountability or integrity on the one hand and the financial interest of the land developer on the other, the land developer won each time. It appears to be the commonest complaint one hears both on the calypsos and on the opposition platforms. Now, I hear a very sad story that I want to tell you about. First, a little history.
Portrait of Dr SB Jones MD
Dr Samuel B Jones, famous as the first black medical doctor in the Leeward Islands, served as Warden, doctor, and Magistrate of Anguilla from August 1918 to May 1923. He wrote the first published history of Anguilla, The Annals of Anguilla (1931).
Dr SB Jones OBE of Anguilla
During the time Dr Jones was in charge of Anguilla, the island experienced four consecutive years of drought, food shortages, a hurricane and a quarantine period. The last of these endured for several months due to the presence of 400 contacts and 19 cases of mild smallpox imported from the Dominican Republic. In response to the threat, Dr Jones built a quarantine station on the tip of the point of the Shannon Hill which lies to the north of SandyGroundBay.
View of the point at Shannon Hill where Dr Jones built the Anguilla Quarantine station
All schooners returning to Anguilla bringing the annual temporary cane cutters from the Dominican Republic back to Anguilla were made to tie up to the great iron ring that still to this day remains cemented on the small cliff. There, the crew and passengers were detained in quarantine until they were cleared of all infection and were permitted to join their families. They were the 400 “contacts”. Dr Jones ensured that no serious case of smallpox escaped from the quarantine station. It is said that he built a fence across the Shannon Hill point, from shore to shore, and put guards at the gate to keep the men in and the girlfriends out. No Anguillians died during the epidemic that raged in the islands around. For his achievement in preserving the islanders from serious infection he was awarded the OBE. The ruins of the foundations of the cottages that made up the quarantine hospital could, at least until about five years ago, still be seen there. Now they have been bulldozed by some demented Philistine developer, and the site has gone back to its previous state of abandonment, but without the historic foundations. There remained one link with Dr Jones’ historic achievement.
Bulldozed foundations of the quarantine station at the point of the Shannon Hill
The cottages that he built on the foundations at the point on the Shannon Hill were subsequently, when he finally lifted the quarantine, transported by truck and by cart to the top of Crocus Hill. There they were installed on new foundations. They formed the first wards of The Old Cottage Hospital. Over the years, the original chattel house buildings were gradually replaced by the concrete and galvanized-roof buildings that are there now.
The back view of the Old Cottage Hospital
Anguilla’s hospital has moved on to its present location in Pope Hill where it is now known as the Princess Alexandra Hospital. The Old Cottage Hospital buildings are presently occupied only by WISE and by the Anguilla branch of the Red Cross.
The front view of the Old Cottage Hospital
WISE stands for Workshop Initiative for Support in Education. The name rather conceals the purpose of the institution. This is where Anguilla’s children who have behavioural issues, or who have chronic learning problems, come to complete their education. Members of the public have equipped it with wood working equipment and metal working tools. There is a modern, well equipped teaching kitchen. Language and mathematics skills are developed. Above all, there is shelter, care and concern showered on the students while they are there. WISE is a division of the Ministry of Education, and is one of the most important social developments that have taken place in Anguilla over the past decade. The management and staff of WISE are widely recognized throughout the island for their selfless devotion to, and love for, their wards. Many of them have graduated and gone on to be productive and useful members of Anguilla society.
The WISE classrooms at the Old Cottage Hospital
Now, the school children tell me that members of a certain political party have promised the Crocus Bay Development people that, if they should win the upcoming general election, they will sell them the Old Cottage Hospital buildings. The developers have, apparently, applied to some of these politicians for the property to be sold to them. Once they open their villas for sale, they do not want the school to continue on their doorstep, so to say. I am told that the original Old Folks Home on the grounds of the Cottage Hospital was turned over to the Fisheries Department when the old folks were removed to their new home at Pope Hill. This building has already been occupied by the developers. If this is true, there will be precedent for this proposed transfer.
The Old Folks Home at the Cottage Hospital, now occupied by the developer
Given what, in my opinion, appears to be the cattle-truck style of construction pursued by Crocus Bay Development, I doubt that there can be any question of a surplus bundle of money being available to the company for it to build a suitable replacement college building for WISE.
The Crocus Bay Development
It is not clear whether any, and if so, how much of a campaign contribution was solicited or donated in exchange for this promise. Given the presently apparently semi-abandoned state of the project, it is highly unlikely that there would be any substance to such a base thought. As is apparent from the photographs, construction appears to be almost at a standstill. On the Saturday I visited, there was one workman hammering away at the back of the site. The fronts of the half-constructed buildings were covered with weeds. It did not seem to be under active construction. A July 2009 article in The Anguillian Newspaper quotes the owners as saying that the first of the buildings would have been available for sale last year. The next seven were to be ready by December of 2010. It would appear that things are not progressing as planned. Even the website appears to be only partially constructed.
Weeds growing out of the front of the Crocus Bay Development, suggesting a degree of abandonment
Will WISE have to close down, or will they be able to remove their equipment, students and staff, to a new and adequate location provided to them?
Whatever the fate or fortune of Crocus Bay Development, if there is any substance to the story of the imminent demise of our Old Cottage Hospital building at the request of a real estate developer and speculator, all those who are concerned ought to be ashamed of themselves.
The extension to be constructed at the east of the WallblakeAirport is called a “Runway End Safety Area”. The safety regulators have banned small jet aircraft from landing in Anguilla until the required RESA has been put in place. Many of Anguilla’s richest visitors arrive for their vacations in such small jets. The upcoming Christmas tourism season will be adversely impacted if we do not complete this construction in time.
Wikipediahas a good explanation what a RESA is all about.
Government is quite desperate to have the RESA built in time for the upcoming tourism season. They are not even waiting until it is announced that the British Government has agreed to the necessary borrowing of funds to finance the project. Word came to me that Government has already begun awarding the contracts for the construction to heavy-equipment operators.
Someone sent me some photographs of the work that has begun. The photos were taken today, Sunday. They give some idea of the extent of the work that will have to be done, and what has been started so far.
Photo of the eastern end of the runway, indicating the steep drop-off that will have to be filled and graded
Another photo of the eastern end of the runway showing the steep drop-off
Someone has started to move a lot of heavy equipment on site.
More heavy equipment
Yet more heavy equipment
The bush east of the runway is being cleared
Land is being cleared and holes are being dug to extract marl and boulders
Huge amounts of fill will have to be moved from higher up the hillside to create the safety area lower down
Holes are being dug in several places, and the marl piled up
Rumour has it that Government expects to fill in the steep drop-off to the east of the airport for the sum of EC$10 million.
It looks to me like it will cost much more than that.
Victor was on the radio today. I suspect he meant to make this speech in the cancelled House of Assembly meeting that should have taken place this afternoon. It is sufficiently important that we should not have to wait until next week's The Anguillian Newspaper to read what he has to say about the abandoned Flag golf course. [I suppose we all know that the watering of the grass started up about one week ago, but has now been discontinued again.]
Anyway, this is what he had to say. What do you make of it?
Over the past twelve months the Government of Anguilla has been faced with a number of consequential impacts from the global financial situation. Foremost among these have been a shortfall in tourism arrivals; challenges to obtain and maintain financing for a number of tourism projects in the early stages of implementation; slowdown of the construction schedule for one major project at an advanced stage of completion; and the stoppage of all construction activity on one of our main tourism development projects, namely, the Flag Luxury Properties project known as the Tenemos Resort & Golf Course.
The latter has become the topic of discussion and debate in daily conversation; the print media; the radio talk shows; political platforms, and; other fora. I will hereafter refer to it as the Golf Course Project.
The Government of Anguilla has been extremely cautious in its approach to public discussion on certain aspects of the Golf Course Project negotiations in the context of the legal and fiduciary issues which are involved in the process. We have however on a number of occasions sought to involve members of the opposition both in the House of Assembly and meetings at the Secretariat with the intention of bringing some bipartisanship to the process. And to demonstrate our readiness to adopt that approach --- we actually supported at least two motions by the Opposition in the House of Assembly on the topic.
While this period may be characterized as a political year we feel that the issue is important enough to merit the participation of all sides of the political spectrum. We are also aware that the wider public has great concern for this issue and are anxious to find a solution. Our experience, however, has been that the issue is being used as a political football without due regard to the critical realities surrounding the ongoing delay in the resumption of the project.
It is in this context and at this strategic juncture in the negotiations that the Chief Minister has asked me in my capacity as Minister for Economic Development and Tourism to clarify a number of the statements that have been tossed about; explain the reasons for Government’s strong resolve to finding a way forward and outline the progress that we have made to date.
Since the third quarter of 2008, the Government of Anguilla has been in negotiations with the principals of the Golf Course Project to assist them in finding a way to overcome the challenges facing them since they were forced to shut down construction in early June last year. We thought that it was important enough to take a motion to the House of Assembly seeking support for developing an appropriate strategy for assisting the project in its efforts to obtain critical funding. We understood that this might require some unusual measures by the Government of Anguilla but we felt that the impact that the closure of this project would have on the island would be devastating. Where we stand today is testimony to that foresight.
There were many persons who perhaps, understandably, were not supportive because the impression was maliciously circulated that Government assistance meant a direct cash injection into the project. Preoccupation with quieting those negative concerns could have been in fact a lost opportunity to bring an earlier response to the challenges of the project. And unfortunately it ended up with the closing of the Golf Course itself including maintenance and watering. But of course that is water under the bridge.
Still pressing forward in February of this year the principals of the Golf Course Project as a result of the persuasion of the Hon. Chief Minister and other Ministers decided that they would devise a way to restart the project and solicited the support of a team of four local Anguillian consultants to work with them to develop a viable proposal. The outcome of this joint effort was a proposal presented to GOA on March 23, 2009. The proposal indicated that a suitable buyer/operator was identified but certain preconditions were required to get the process going --- the main one being the acquisition of the Golf Course improvements by the Government of Anguilla.
Let me clarify that when I say the golf course improvements I mean all the costs involved in converting the over 100 acres of lands into an operating facility.
To put the issue even more clearly, let me state that the buyer could not in the present financial market conditions get funding for completing the project because the inclusion of the golf course component would make the overall business plan unattractive to lenders. It is an accepted fact that, a golf course, in and of itself does not make a profit --- it usually requires a strong real estate component to ensure viability. In fact in the last twelve months of operations the facility lost approximately 3.9 million US dollars.
It is in this context that the team’s proposal included three possible options for the GOA to acquire the Golf Course. The justification for the acquisition of the Golf Course is based on the premise that only two entities can feasibly purchase the facility, namely, the buyer of the other components of the property because of the value-added or the Government of Anguilla because it would enhance the quality of our tourism product and increase its the overall revenue potential. Since the potential buyer/operator was unable to put together a feasible business plan to its lenders to include the purchase of the Golf Course facility --- the team presented the GOA with a structure whereby it could acquire the golf course improvements.
The three options presented to GOA were as follows:
·Purchase the Golf Course facility via a fifteen year loan with total payments of 83 million US dollars.
·GOA put together a public/private partnership to acquire the Golf Course facility via a fifteen year loan with total payments of 93 million US dollars
·The owner immediately transfers the Golf Course facility to the GOA for a nominal payment of $1.00. GOA then grants an incentive to the project by the allocation of tax revenues (the suggestion being accommodation tax) for a period of thirty years.
The presentation of these three options required GOA to indicate in a letter of intent its readiness to accept any one of them as a way forward. However, the presenters indicated a willingness to discuss any alternatives and modifications which GOA may wish to propose. You may ask the question: why would the GOA even consider any of these options?Let me explain!
I find it at this juncture useful to quote a part of an open letter to the Chief Minister from Mr. Sheridan Smith, CEO/Owner, Sheritons Development Inc. Mr. Smith writes and I quote: “If this is the only logical way to get this property restarted, and to alleviate the financial burden off the shoulders of the Anguilla people, some careful thought and action should be applied. We do not have the luxury of time on our side. The state of the economy is speeding down a slippery slope and the Government should --- in my humble opinion --- find the moral and political will power to implement a prompt settlement of this ongoing disaster.”Those are of course the views of an assertive and enterprising Anguillian who has built one of the most elegant and top class tourism resorts on the island. He concludes by writing and again I quote: “This is a matter of economics and should not be politicized.” I can assure you that Mr. Smith is not an individual who would allow anyone to put words in his mouth.
I have used that abstract from Mr. Smith to provide a backdrop for the concerns which led GOA to consider the options presented to us. Let me list some of these concerns briefly:
·The Golf Course was a major initiative by GOA to enhance our tourism product and remains a critical element of our business plan and promotion strategy
·We need to protect future jobs and business opportunities
·We must defend the interests of local creditors, vendors and contractors who are now owed several million dollars collectively and in some cases separately. Including the GOA.
·Anguilla cannot afford a “white elephant” after committing so many resources to its implementation.
·If we lose this golf course the next one is probably about two years from completion --- even so more than one golf course facility has a multiplier value for golfers in terms of choice of destination.
·If we do not find a solution in a timely manner we can conceivably end up in a long period of litigation which in terms of its complexity would exceed/dwarf the Cap Juluca matter.
·The local rental sector which was encouraged to respond to the needs for all kinds of accommodation is beginning to feel the pinch and if we do not protect their source of business they face a real threat of mortgage failures and foreclosures.
·Anguilla does not have a formal social safety net system that is institutionalized and funded to support persons who have lost jobs and business opportunities --- as a consequence there is a real chance of social and political instability as a result of the failure of large ventures such as this.
·The central government budgetary situation requires some form of immediate to short term stimulation --- because our key revenue streams are dependent on consumption which requires purchasing power.
·The project involves a number of stakeholders not the least among which are a number of international buyers who have chosen to invest in this project and Anguilla --- these homeowners/buyers need our support and assistance --- and they too are making sacrifices. They have not chosen the route of going to the World Press --- so to maintain Anguilla’s good name and reputation as an excellent place to invest we should not let them down.
While the foregoing list of concerns is not exhaustive there are a number of reasons why the GOA decided that of the three options it would prefer to negotiate on modifications to option three, that is, the immediate transfer of the facility to the GOA for $ 1.00 and the granting of an incentive to the project via the allocation of future revenue streams in particular accommodation tax for up to 30 years. Let me explain:
·In this option the GOA owns the land and improvements immediately without any direct liability. That means that we have no commitment to pay any loan.
·In this option the GOA pays only if and when future revenues are payable. In other words if the project is not completed the GOA owes no one anything. In the other two options GOA has a liability to pay whether or not the project is completed.
·This option represents an economic risk free transaction for the GOA because the owner on the basis of a negotiated long term management agreement with GOA will assume all costs associated with the maintenance and operations of the facility.
·GOA can also create a further revenue stream by charging a per-round “recreation tax”.
·The allocation of revenue from accommodation tax of the hotel operations is not the only revenue associated with the project.
·We are cognizant of the fact that everything carries a price and any quoted price can be negotiated. It depends on the commitment of all parties concerned to come to a successful and mutually beneficial arrangement.
On March 27th a letter of intent was sent to Flag by the Chief Minister indicating our willingness to negotiate the third option and a process of due diligence slated to take over a period of thirty days began.When this option of purchasing the Golf Course was floated one of the Members of the Opposition who was encouraged to use his self-proclaimed influence with Mr. Lee Rizzuto, the owner of Cuisinart Resort & Spa came back with the report that Mr. Rizzuto was prepared to buy the Golf Course. Discussions with Mr Rizzuto and his agents by the Chief Minister and myself clearly confirmed that this is not the case. In fact despite strict instructions from Mr. Rizzuto and his agents that this was not so that member of the opposition continues to say on various media that Mr. Rizzuto intends to purchase the Golf Course.
I believe that to dispel this misinformation once and for all I should read a copy of a letter from the Senior Vice President & General Counsel of the Company to the Chief Minister on the matter. The letter was dated May 29th and reads as follows:
“It was a pleasure meeting with you this morning regarding the golf course issues. You asked me to confirm with Mr. Rizzuto if he has any intention of actually paying monies to purchase the golf course. This will confirm that the offer Mr. Rizzuto made to Mr. Sillerman never involved the payment of any monies by Mr. Rizzuto to purchase the golf course. The considerations which Mr. Rizzuto will undertake are limited to the assumption of the operating costs and maintenance of the golf course. In the event agreements can be worked out by all parties, I hope this sufficiently clarifies this point. Please let me know if you require anything further. Sincerely etc.”
Obviously, that member of the opposition either mistakenly or deliberately is spreading the wrong information. But even from a basic business standpoint for Mr. Rizzuto to decide to purchase such a high price facility and then operate it at a loss for several years would defy the very principles which made him the successful entrepreneur that he is. Mr. Rizzuto himself has said this.
I therefore want to disabuse all listeners of the idea that that there is any one out there who has a feasible plan to purchase the Golf Course as a separate entity. I repeat that only the GOA or the buyers of the other components of the project can realize any practical benefit in doing so.
But even in the face of overwhelming evidence that GOA could benefit from this transaction. Technical officers in the relevant ministries were charged with doing the necessary due diligence in researching the matter. GOA employed two qualified international firms at great expense to review the purchase and management agreements and do an evaluation of the asset. This exercise took some time and the period for due diligence having come to a close the principals of Flag opined that GOA was reneging on its agreement and decided to suspend the maintenance of the Golf Course which they decided that at a cost of US$200,000.00 a month without any resolution in sight would represent a waste of valuable resources.
Nevertheless, Government continued its due diligence and negotiations and on Thursday May 28, 2009Executive Council instructed me to make a final offer based on a modification of option three. Rather than an incentive based on allocation of accommodation tax revenues for thirty years --- GOA offered ninety percent of the allocation for fifteen years and seventy-five percent for ten years. Added up this offer would amount to 21 years of one hundred percent allocation. We feel that this is a reasonable compromise for a valuable asset which GOA would acquire. In other words it is not a free concession but a transaction which includes the transfer of an asset in exchange for future revenues. As I said earlier nothing comes without a price and we believe that this is a reasonable cost to pay for a fully operational resort with a top class golf course facility.
The point must be made that this is not an unusual government transaction. Governments use revenue in the form direct payments and loans to buy goods and services for its people including the purchase of roads; airports; seaports; schools; hospitals; playgrounds golf courses and so on, to develop its economy. This is the same thing. But in addition GOA is acquiring a facility without any contingent liability if it is not successful. In other words if it does not work out we owe no one anything. But let me explain what this agreement triggers in terms of the project. Bear in mind that immediately upon signing, this document goes into escrow until the other cogs of the arrangements fall in place.
As soon as GOA successfully negotiates the terms of the purchase and management agreements, the other components of the larger strategy to restart, complete and operate the project are triggered as follows:
·Flag Properties settles its liens with its lenders
·A new developer/owner is brought in
·The homebuyers arrangements are affirmed or mutually modified if required
·A new construction loan is arranged
·Agreement is reached with the Contractor for past due amounts and scope of new work
·Flag Properties must come to a mutually agreed settlement of outstanding monies owed to local creditors, vendors and contractors, including GOA.
This last component as it relates to local creditors, vendors and contractors will be of major importance in the approval of the new owner/operators of the project. GOA remains committed to ensuring that Anguillians who are owed monies have been dealt with satisfactorily.
On the basis of the foregoing agreements which will shortly be approved in the Anguilla House of Assembly the principals of Flag have in good faith restarted the maintenance program for the Golf Course facility and have begun negotiating the other components of the deal. We feel that this represents significant progress and hope for a final resolution of the challenges of restarting this very vital project.
While I am on my feet I would also like to take this opportunity to report that the Viceroy Project is well on the way to a soft opening in July which will result in the employment of a number of Anguillian workers --- and the long awaited Medical School is scheduled to open in August/September and will create opportunities for the apartment rental sector and other businesses. The fiscal situation is challenging but we are encouraged that with continued progress on all these fronts we will experience some relief from the pressures that now attend us.
Let me take this opportunity to thank you all for your kind attention and wish you all the best as you strive to manage the many challenges which are affecting all of us in this unique period of global financial and economic crisis.
