OAG finds pre-election abuse of public cash

(CNS): The Office of the Auditor General noted an “unusual spike” in spending by the National Roads Authority during the two months before the 2021 General Election. More than $11 million was spent between the announcement of the early election and the day of the vote, Auditor General Sue Winspear and her team found during an audit of the NRA, and she said this could indicate political abuse of public funds during the election campaign. Expenditure in those eight weeks amounted to 88% of the road budget for the first four months of 2021.

“The NRA is susceptible to political interference whereby, to gain political benefit, politicians with influence over its operations may determine when and where road infrastructure projects can be undertaken,” Winspear wrote in her latest report on the current state of government’s reporting on public finances. “I noted that there is no framework governing road construction services for the executive asset construction; this makes the NRA susceptible to political abuse.”

This was not the first time that a PPM-led administration had upped its spending on roads prior to elections. Winspear said that during the course of the NRA audit her team looked at the previous pre-election period in 2017 and noted a surge in road construction spending then as well.

During 2021 her office also carried out a review of the Dart dump deal, which is expected to be published shortly, Winspear said. That was one of two pieces of work by auditors this year raising concerns about government spending and commitments to spending during the election campaign period in 2021.

Winspear pointed out that after four years of negotiations, the contract for the Integrated Solid Waste Management System, now known as ReGen, was signed by the PPM-led administration less than three weeks before the election.

“This contract committed the Government to spending a significant amount of money over the following 25 years,” she said. “The contract was to reach financial close by 30 September 2021, but, as a result of the election, a new Government had been formed by then. The new Government has since revisited the signed contract, and the conclusion of the contract was extended to October 2022.”

A second report, which has still not been published but was reported on widely after CNS obtained a copy, covered the controversial move by the previous administration to begin the work on opening overseas offices and committed Cayman to attend the Dubai Expo, all after the election had been announced.

While Winspear has come into conflict with the civil service management over this report, which made for uncomfortable reading for senior civil servants, she has stood by her findings. She said the Expo contractual commitment and the various related new employee contracts entered into appeared to be binding on the new government.

Between 10 February and 20 April 2021, what was then the Ministry of International Trade, Investment, Aviation and Marine Affairs held by then premier Alden McLaughlin and headed up by Chief Officer Eric Bush, signed employment contracts with the commissioner of the Expo and five staff members of overseas offices. As a result, the new government was committed to over $6 million in potential costs even though it had different policy objectives.

Winspear has raised concerns that there is no formal guidance on this issue. However, “one would expect that the responsible minister should be briefed as soon as possible after taking office”, she said, as some employment contracts for overseas offices’ staff were not signed until after the election.

“Signing these contracts commits the Government to ongoing new expenditure and so it is reasonable to expect that the minister should have been briefed before this happened to afford the new Government an opportunity to amend the policy direction if required,” Winspear wrote in the report.

“The purpose of the civil service is to remain politically neutral but serve the Government of the day. International best practice would be to avoid introducing new policies, signing major new procurement contracts and undertaking any novel and contentious spending, including staff appointments to newly created posts during the period between the day an election is called and the day of the election itself.”

Winspear has called on the government to adopt a comprehensive pre-election policy and set of protocols to guide the conduct of the civil service before, during and immediately after an election.

“This policy could set out restrictions on the use of public resources and the activities of civil servants and ministers in the period between an election being called and the election itself, and it could also guide operations immediately after the election,” Winspear has recommended. “The policy should also clarify to existing ministers that they may not initiate new policies, new projects or spending once an election has been called to ensure that the electoral process remains fair and avoid the risk of biasing the voting population,” she added.

Since the report was leaked, Deputy Governor Franz Manderson has confirmed that a formal policy entitled ‘Period of Election Sensitivity’ has been developed. In his response to the report on this specific issue, he said that policy had recently been supported in Cabinet. 

“This policy is intended to provide clear information about how civil servants and ministers should conduct government business once an election has been called,” he said.