Turks and Caicos Islands - Foreign Affairs Committee Contents


2  Issues of concern

Funding of the TCI Special Investigation and Prosecution Team (SIPT)

15. Helen Garlick was appointed as the Special Prosecutor to the Turks and Caicos Islands on 10 August 2009. On 27 August, Ms Garlick visited TCI and gave a press conference with the Attorney General and the Governor, announcing the opening of her investigation. In late September Ms Garlick presented the FCO and Governor with a plan, strategic document and budget; all three documents were accepted.[21]

16. The Special Prosecutor has supplied us with subsequent correspondence between herself and Ministers, which we print with this Report.[22] In a letter dated 24 November to the Minister for the Overseas Territories, Chris Bryant MP, and to the Minister for International Development, Michael Foster MP, she expressed anxiety about the funding of her investigation. She estimated that SIPT's budget for the remainder of financial year 2009-10 would be £1.9 million and that for financial year 2010-11 it would be £4.9 million (not including the costs of any prosecutions).[23] She stated that her main concern in accepting her post was that she should be "confident" that she could carry out a "thorough and independent investigation". She emphasised that the provision of adequate and timely funding was essential in order to enable her to do this.

17. The initial costs of setting up the SIPT have been met by the FCO. This amounted to a total spend of approximately £435,000 to the end of January 2010 (including the fees of the five-strong senior management team, one researcher, the rental costs of offices and associated IT, and telephone and travel costs).[24] The FCO "stretched the limited resources" of the Overseas Territories Programme Fund to cover the cost of the core team until 10 February 2010 and agreed to provide an additional £36,000 to allow Ms Garlick to begin to recruit the core intelligence and research unit and to rent more UK office space.[25] The Foreign Secretary told us that the FCO have also agreed to fund an analyst for four weeks at a cost of £5,000. He added that "appropriate arrangements" had been made by the Turks and Caicos Islands Government (TCIG) to meet any further costs incurred up to the end of financial year 2009-10.[26]

18. With regard to the longer-term funding of the SIPT, the Special Prosecutor noted that she signed her contract on the basis of a "distinct understanding" that while the UK Government "would not fund the investigation indefinitely, the most probable outcome would be that it would advance a loan to TCIG". In her letter to Ministers of 24 November, Ms Garlick commented that:

    In October I learned first, that the UK Government would neither make a loan, nor guarantee a separate line of credit agreed by the TCIG. In the absence of any support from HMG, the only option open to TCIG was to negotiate one or more facilities backed by hypothecation of an identified stream of income. [...] If it is agreed, the facility will be syndicated. I am informed that the facility is close to being agreed and that funds are expected to be in place by early January. In the meantime our initial two-month contracts have been extended to 10 February 2010 and we are being funded by the FCO. As from that date, we will be a charge on the budget of TCIG.[27]

19. The Special Prosecutor expressed concern at the consequences of her investigation becoming a burden on the budget of the Islands Government. She noted that the budgeted costs of SIPT would amount to between 4.5% and 5% of TCIG's budget, and could well increase beyond that, if charges are brought and there are several trials. Given the financial difficulties that TCIG faces, this raised the "real prospect that there will be months when the SIPT's expenses and salaries will be met, whilst [those of ] TCIG government servants [...] will not", and that "other important government expenditure that has a real impact on the well being of the Islanders will be subordinated to the SIPT's needs". Ms Garlick commented that "in my view this is wrong in principle" and that "it is hardly likely to help us to win and maintain essential public support".[28]

20. Ms Garlick further commented that the failure to agree funding mechanisms for her team, the need for which should have been anticipated when Sir Robin Auld had produced his initial report back in February 2009, meant that there would now be a "considerable and highly damaging delay before the investigation can be started". She added that as a result, the team's capacity to react to some "important and urgent developments" had been "severely limited".[29]

21. Ms Garlick concluded that she and her team:

    are not prepared to continue to work indefinitely, or to be responsible for recruiting others, without the assurance of funding that is sourced and managed on a basis that assures our independence and ability to carry out a full, independent investigation and any trials. At present I am firmly of the view that the only way in which we can be assured of this, without impacting on other important TCIG expenditure, is if separate funding is made available by Her Majesty's Government.[30]

22. In his response to Ms Garlick, dated 5 December 2009, Chris Bryant said that:

    I must make it clear that neither the FCO nor HMG can fund, or provide a loan for, the full cost of the investigation. It has always been our view that the former TCI Government is responsible for its present financial crisis. It is therefore correct that the Territory pays to sort out these matters. It is not appropriate to ask the British taxpayer to do so.[31]

23. Mr Bryant added that the TCI Government could not borrow further without hypothecation, but that he had agreed, in November 2009, that TCI could hypothecate some of its revenues. The Governor was working to agree a loan and the aim was to have a package in place in January 2010.

24. In January 2010 we held an informal meeting with the Special Prosecutor to discuss the state of progress with her investigation. Following this meeting, we wrote seeking further information from the Foreign Secretary. In his response, Mr Miliband reaffirmed the Government's position that "the former TCIG is responsible for its present financial crisis" and that "it is for territory Governments to fund commissions of inquiry and criminal investigations within their jurisdiction". He admitted that the negotiation of the $85 million loan facility was "proving more difficult than anticipated", but stated "we expect to have the first tranche in place very shortly".[32] He acknowledged that the Special Prosecutor "has felt frustrated" as a result of this delay, and that the "inability of the TCIG to assume the full funding of the SIPT from the start has delayed the recruitment by Ms Garlick of her full team".[33]

25. In early March 2010 the Special Prosecutor supplied us with further written evidence, and held another informal meeting with us. She wrote that: "I continue to register my extreme concern at the financial position and at the consequences of the fact that, against our wishes, the SIPT is now a major burden upon the budget of the TCIG".[34] As of mid-March, the promised loan facility for TCIG has still not been secured.

THE PRESENT SITUATION AND ITS POTENTIAL CONSEQUENCES

26. The lack of timely provision of adequate financing has restricted the ability of the Special Prosecutor to establish a permanent presence in the TCI and to open an office there. Ms Garlick stated that questions were already being asked on the Islands about the lack of progress in her investigation. While the Foreign Secretary said that "the decision on the timing of establishing an office in TCI was a matter for the Special Prosecutor",[35] we are in no doubt that the financial situation has prevented her from doing so.

27. This has created a very real risk of undermining public support for the SIPT's mission of investigating the serious allegations made in the Commission of Inquiry and, where appropriate, bringing prosecutions. Ms Garlick identified a danger that "public confidence and support for our work will ebb".[36] She emphasised that "public support is vital, both to maintain the independence of the investigation against the very real prospect of political interference, once the Islands return to elected Government, but also to encourage potential witnesses and providers of information".[37] In other correspondence, we were told that there is fear of reprisals by those who were engaged in corruption, if the British authorities do not follow through on their promises of firm action. The possibility has been raised that if the Government sticks to its intention of calling elections in TCI by July 2011, without the process of criminal investigation and prosecution being seen to be vigorously under way, some individuals who were the subject of allegations in Sir Robin Auld's report might be returned to power as a result of bribery and intimidation. One correspondent stated that "the hundreds of residents who aided your Commission of Inquiry have seen no real indications that actions by your Government will assure they will not be persecuted by the return to power of those you removed".[38] (We deal with the question of the timing of TCI's next elections in paragraphs 41-48 below.)

28. Furthermore, concerns have been raised with us that individuals of potential interest to the Special Prosecutor (including some of those named in the Commission of Inquiry) are liquidating assets in order to put funds beyond the scope of the authorities. The Foreign Secretary told us that he was aware of these concerns, but stated that "we cannot quantify the likely extent of liquidated assets at present".[39] He added that any action must be supported by "reasonable and credible information" not "based on conjecture".[40]

29. The Foreign Secretary further acknowledged that "inevitably" some members of the TCI public, especially in the civil service, will probably equate cuts with the additional $10 million expense of the SIPT and civil recovery. While he expected some sections of the TCI public to be "concerned at the cost of the SIPT", he maintained that this "public displeasure at the cost" needs to be weighed against "strong support (and impatience) for criminal prosecutions to begin".[41]

30. We understand that Ms Garlick and the members of her team undergo regular threat assessments in relation to their personal safety and protection requirements. Should these assessments identify the need for close protection, the relevant personnel would have to be flown in from overseas to the TCI, and this would incur significant additional costs. We recommend that, should the need be identified, close protection should be provided to the Special Prosecutor and the members of her team, and that the cost of this protection should be wholly met by the UK Government.

31. We conclude that the failure of the Government to put in place adequate funding arrangements for the work of the Special Investigation and Prosecution Team (SIPT) is of grave concern. This has prevented the Special Prosecutor from beginning in earnest the work of fully investigating the allegations raised during the 2008-09 Commission of Inquiry. Twelve months have passed since Sir Robin Auld produced his interim report, and as yet no decisive action has been taken to proceed against those politicians and others suspected of serious corruption. We further conclude that, the longer this damaging delay continues, the greater the risk that the moves to eradicate corruption from public life in TCI may founder, not least by enabling some of the individuals potentially facing investigation to liquidate their assets and put funds beyond the reach of the authorities. There is also a real risk that the delay may lead to a perception that nothing is being done, thereby resulting in the loss of public confidence, and subsequently the co-operation of the residents of the TCI, both of which are essential in order to pursue successful prosecutions.

32. We conclude that there are, at present, inadequate safeguards to protect the funding of the SIPT post-2011. Given the inability to secure funding thus far, we are not persuaded by the assurances of the Foreign Secretary that adequate safeguards will be put into place to protect the funding in future. We fear that the Government is being naive in relation to the potential financial pressures likely to be faced by future governments in the TCI, and the capacity of wrongdoers on the TCI to impede and frustrate the SIPT's investigations.

33. We note the Government's argument that the UK taxpayer should not fund the SIPT, on the grounds that the former TCI Government was responsible for the present parlous economic state of the Islands, and therefore it is the Islanders who should pay to clean up the mess they have created. We conclude that this argument is flawed, for four reasons. First, on grounds of principle: it ignores the extent to which the UK Government was also culpable in allowing a culture of systemic corruption to develop in TCI unchecked, thereby neglecting its duty of responsible oversight of the Overseas Territories. Second, on grounds of pragmatism: if the funding of the SIPT has to be borne by the TCI Government, diverting resources which would otherwise be spent on healthcare, law and order, or public-sector salaries, it is likely that this will lead to an erosion of popular support for the reform process, which will be eagerly exploited by the opponents of reform. Third, we share the Special Prosecutor's concern that there is an important principle at stake as to who should fund the work of the SIPT. The UK Government, having intervened in the Turks and Caicos Islands, has a responsibility to follow through with the required financial commitment. Not to do so would be to risk the UK Government's credibility in its use of reserved powers. Fourth, it is unreasonable to expect the small population of the TCI to bear the financial burden, through debt or taxation, for funding the investigation and prosecution of corruption for which they were not responsible. We recommend that the UK Government fully fund the work of the SIPT or risk severely undermining its own credibility in its use of reserved powers, both in the TCI and in all the Overseas Territories.

Sir Robin Auld's letter of 23 March 2010

34. At a late stage in our discussions on this Report Sir Robin Auld, who had conducted the 2008-09 Commission of Inquiry into allegations of corruption in TCI, sent us a copy of a letter dated 23 March from him to the Foreign Secretary. We print this letter as an appendix to the Report.[42] Sir Robin is highly critical of the FCO's failure to provide sufficient resources to implement the Commission's recommendations. He comments that:

    All or most of the troubles [Governor Wetherell] faces in trying to restore the Territory to good order, efficient governance and financial health—and the increasing chorus of challenge to his conduct of the Territory's affairs—flow from the British Government's failure to provide urgently needed financial support.

35. Sir Robin Auld refers to a "failure of the British Government to fulfil its constitutional responsibility for the good governance of the Territory". He notes the Government's intention of introducing a new constitution and restoring ministerial and parliamentary government in 2011, and comments that "even if funding could be guaranteed and the Territory's finances restored to a manageable state by then, it could not be 'cleansed' and governmentally and administratively reconstructed so as to meet that timetable." Sir Robin concludes by saying that:

    I have never before considered it my role, after completion of an inquiry, to involve myself in the outcome of my recommendations. But the continued deterioration of affairs in the TCI drives me to do so here. I urge you, as a matter of urgency, to intervene to secure the discharge by the FCO of its moral responsibility and to secure its international respectability by making proper provision for the constitutional good governance and welfare of the Turks & Caicos Islands before ending interim direct rule.

36. We conclude that Sir Robin Auld's comments in his letter to the Foreign Secretary of 23 March reinforce our own conclusions set out in this Report. We urge the Government to commit the resources necessary to ensure that the process of reform in the Turks and Caicos Islands does not unravel, at a great cost to the international reputation of the United Kingdom.

Capacity of the legal system

37. Despite the suspension of parts of the Constitution and the installation of the interim Government, many parts of the Constitution have remained in place and many individuals have retained key positions, including the Attorney General. While it is not claimed that the Attorney General has himself committed illegal acts, it has been argued that he "turned a blind eye" for five years to all that occurred.[43] Furthermore, serious concerns have been raised about the capacity of the Attorney General's Office to deal with the issues raised both in our 2008 Report and in the Commission of Inquiry. One correspondent stated that "the legal system of the Government, specifically the inability of the Attorney General's Chambers to demonstrate responsible behaviour be it for the legal drafting of proper Ordinances or the policing of the legal fraternity, much less the undertaking of prosecutions for white collar crimes, makes the country appear to be still operating under the same procedures that led to your mandating the Commission of Inquiry".[44]

38. In his second quarterly statement, published in late February 2010, the Governor commented that the Attorney General's Chambers have been under-resourced, and that the staff have had to cope with a "staggering work load".[45] The Governor has undertaken a full review of Chambers, which was nearly complete, and which is set to determine the level of resources required by the Attorney General's Office during the upcoming period of "extensive change".[46] However, on 2 March 2010, the Special Prosecutor warned that it was essential that changes were made now "so that the strengthened Attorney General's Office has had several months to bed in and to establish itself before the [proposed July 2011] elections".[47] The Governor also confirmed that the Attorney General would not be seeking a third term of office, and that a vacancy notice for a new Attorney General would be published soon.[48]

Crime and security

39. In his first quarterly statement, published in November 2009, the Governor stated that members of the public had consistently expressed concern in relation to crime on the Islands.[49] We have received a significant amount of correspondence from a range of individuals who have been the victims, not only of violent crime, but of harassment. The Governor noted that he is working with the Overseas Territories Law Enforcement Adviser and is thereby "actively engaged with the police in addressing areas of concern to the public".[50] An inspection and review of the leadership, planning, operational and crime management components of the Royal Turks and Caicos Islands' Police Force, to ensure its effectiveness and efficiency, has been conducted.[51] In his second quarterly statement, the Governor stated that the review's conclusions were "robust", and included a number of recommendations and suggestions for improvements.[52] The Governor also hoped that the recruitment of additional British police officers to increase the capacity for community policing and crime detection would be completed by the end of March 2010.[53] We recommend that the Government respond positively to the Governor's requests and fund the required number of additional British police officers for community policing and crime detection through the Department for International Development (DFID) budget.

Political reform

40. The Foreign Secretary told us that the UK Government would shortly launch (and fund) a full review of the constitutional and electoral arrangements in TCI, and will forward suggestions for the improvement of both. He concluded that "the end result must be a system which gives the people of TCI, the UK Government and the international community confidence that the basic principles of good governance will be upheld. This will mean a greater degree of oversight by the UK Government than existed before August 2009".[54] The Governor noted that these revised electoral and constitutional arrangements must be in place before the 2011 elections, and a team leader, Kate Sullivan, was appointed in January 2010 in order to begin this project. It is expected that the work will be complete before the end of 2010, and that it will result in "a draft constitution Order in Council and draft laws for public consultation in the TCI prior to finalisation".[55]

2011 and beyond

41. Given the scale of the task facing the interim Government in the TCI, and the delays in implementing some of the key recommendations of the Commission of Inquiry, we have received a number of submissions requesting that the UK Government extend the suspension of part of the TCI's Constitution and allow more time for the interim Government to complete its work. In his letter of 24 February 2010, the Foreign Secretary acknowledged that while "some criticise the steps we have taken [...] others argue that we should extend the interim Government well beyond 2011".[56] He stated that while the situation was kept "under regular review", it remains the intention that "elections should be held by July 2011, if not sooner".[57]

42. In his second quarterly statement, published in February 2010, the Governor confirmed that it is still intended to hold elections in 2011 "as scheduled".[58] He stated that, on the basis of "remedial work undertaken during the past six months", and giving "careful consideration" to the views expressed, "the UK Government has concluded that a return to elected Government is still feasible for next year".[59]

43. While the Foreign Secretary has assured us that "there will be no simple return to the status quo ante", he acknowledged that "we have not yet defined post 2011 arrangements".[60] However, he assured us that "steps will be taken to ensure that following the elections in 2011, the new TCIG will not be able to repeat past mistakes, that good financial management will be ensured for the future".[61] There will be a "greater degree of oversight of the Territory by the UK Government and a greater presence of British officials on the ground than existed before 2009".[62] The Governor stated that both the "2011 constitution which emerges" and the "extent of UK oversight" will be kept under review, with the "possibility that it will change again in the future once there is confidence that governance and financial management reforms have been fully embedded".[63]

44. The Special Prosecutor has told us that if the Government is indeed intent on returning the Islands to full parliamentary rule in summer 2011, then it is "imperative" that a number of key recommendations of the Auld Commission should be implemented without delay.[64] The Special Prosecutor wrote that she was "becoming alarmed" at the failure to implement these recommendations. They are:

  • Strengthening the capacity of the Attorney General's Chambers: we discuss this in paragraphs 37-38 above;
  • The setting up of an Integrity Commission, with sufficient funds to employ investigators to obtain and analyse financial information relating to past and present public servants (this would be "a valuable partner to the SIPT's work");
  • Securing and refurbishing safe and suitable court buildings for the trial expected to result from the SIPT's investigations. The Special Prosecutor comments, "I have insisted that the trials must take place on Providenciales. The safe transportation of witnesses, their housing and the secure handling of evidence will all be impossible to secure on Grand Turk".[65]

45. We welcome the Governor's efforts to bring about political reform in TCI, and to increase the capacity of the Attorney General's Office and the capabilities of the Police Service, in order to make them fit for purpose. We recommend that urgent action be taken by the Governor, with the support of the UK Government, to set up a properly funded Integrity Commission, and to secure and refurbish safe and suitable court buildings for the trials expected to arise from the work of SIPT, as requested by the Special Prosecutor. We further recommend that the UK Government provide the capital and running costs of the Integrity Commission for an initial period of three years.

46. We conclude that the overriding aim of the current British administration of TCI must be to restore democratic self-government in the Territory as soon as the necessary work of purging its corrupt and dysfunctional political system has been completed and entrenched. However, we note the slow pace of the reform process to date, as well as the delay we have discussed earlier in launching the work of the Special Investigation and Prosecution Team. We therefore further conclude that there are solid reasons for regarding the Government's preferred July 2011 date for the end of direct rule as unrealistic. If elections proceed on this timetable, there is a real danger of a return to the status quo ante, and the possibility that politicians against whom serious allegations of corruption are pending could seek to return to power. In such circumstances, it is possible they might seek to use bribery and intimidation to engineer a return to office, and then use the many means at their disposal in office to roll back the reform process and undermine the work of the Special Investigation and Prosecution Team. While we welcome the steps being taken by the Governor to create new constitutional arrangements aimed at fostering probity and good practice, we are not convinced that these can be put unassailably in place within such a tight timescale.

47. We recommend that the Government take all reasonable and necessary steps to reassure the people of the TCI that a new constitution will not be put in place, nor elections held, until there is absolute confidence that the necessary reforms have been fully embedded. We further recommend that, in its response to this Report, the Government set out clear criteria as to what must be achieved by way of these reforms before elections take place.

48. It is essential that the issues identified in our 2008 Report and by the Commission of Inquiry are addressed and resolved to secure the future well-being of the Turks and Caicos Islands. Despite the progress that has been made, the concerns we have raised in this Report suggest that TCI's future is still far from secure. We recommend that our successor Committee in the next Parliament continue to monitor developments in TCI and the Overseas Territories closely.


21   Ev 4-5 Back

22   Ev 6-7 Back

23   Ev 4 Back

24   Ev 8 Back

25   Ev 5 Back

26   Ev 8 Back

27   Ev 4 Back

28   Ev 4 Back

29   Ev 4 Back

30   Ev 5 Back

31   Ev 6 Back

32   Ev 8 Back

33   Ev 9 Back

34   Ev 7 Back

35   Ev 10 Back

36   Ev 4-5 Back

37   Ev 4-5 Back

38   Published on the Committee's website http://www.publications.parliament.uk/pa/cm200910/cmselect/cmfaff/memo/overseas/contents.htm as OT 413 Back

39   Ev 10 Back

40   Ev 10 Back

41   Ev 8 Back

42   Ev 10 Back

43   Published on the Committee's website http://www.publications.parliament.uk/pa/cm200910/cmselect/cmfaff/memo/overseas/contents.htm as OT 418 Back

44   Published on the Committee's website http://www.publications.parliament.uk/pa/cm200910/cmselect/cmfaff/memo/overseas/contents.htm as OT 413 Back

45   Second Quarterly Statement from His Excellency Gordon Wetherell, Governor, Turks and Caicos Islands, 28 February 2010, p 2, via http://turksandcaicosislands.fco.gov.uk Back

46   IbidBack

47   Ev 7 Back

48   Second Quarterly Statement from His Excellency Gordon Wetherell, Governor, Turks and Caicos Islands, 28 February 2010, p 2, via http://turksandcaicosislands.fco.gov.uk Back

49   First Quarterly Statement from His Excellency Gordon Wetherell, Governor, Turks and Caicos Islands, 30 November 2009, p 4, via http://turksandcaicosislands.fco.gov.uk Back

50   IbidBack

51   Second Quarterly Statement from His Excellency Gordon Wetherell, Governor, Turks and Caicos Islands, 28 February 2010, p 3, via http://turksandcaicosislands.fco.gov.uk Back

52   As of the time of his statement, the Governor was awaiting a final text of the review. Back

53   Second Quarterly Statement from His Excellency Gordon Wetherell, Governor, Turks and Caicos Islands, 28 February 2010, p 3, via http://turksandcaicosislands.fco.gov.uk Back

54   Ev 9 Back

55   Second Quarterly Statement from His Excellency Gordon Wetherell, Governor, Turks and Caicos Islands, 28 February 2010, p 1, via http://turksandcaicosislands.fco.gov.uk Back

56   Ev 9 Back

57   Ev 9 Back

58   Second Quarterly Statement from His Excellency Gordon Wetherell, Governor, Turks and Caicos Islands, 28 February 2010, p 1, via http://turksandcaicosislands.fco.gov.uk Back

59   IbidBack

60   Ev 9 Back

61   IbidBack

62   IbidBack

63   Second Quarterly Statement from His Excellency Gordon Wetherell, Governor, Turks and Caicos Islands, 28 February 2010, p 2, via http://turksandcaicosislands.fco.gov.uk Back

64   Ev 7 Back

65   Ev 7 Back


 
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