fp Turks and Caicos

We have gotten many lettres asking whether Ministers who rendered testimony for the last 7 days, who seem to have stupendous borrowing powers, will have to repay those loans. The web of credit extends across the Cabinet of the Turks and Caicos government; so that even Ministers who are yet to testify have been mentioned as having borrowed or loaned money to Ministers who have.

Of the loans, which have been made public so far, a general calculation reveals nearly thirty-four ($34,000,000.00) million dollars of debt; and more likely to come. The more compelling question therefore is: given the extent of borrowing, is bankruptcy lurking in the wings?

This would have profound consequences, since if enough Ministers were caught by this, a Cabinet could not be formed.

Consider Article 47 of the Turks and Caicos Constitution. It reads at section  (1) as follows: No person shall be qualified to be an elected member or an appointed member of the House of Assembly who  (according to subsection (c)): has been adjudged or otherwise declared bankrupt under any law in force in any part of the Commonwealth and has not been discharged.

What this means is that Members of the House of Assembly may be disqualified if found to be bankrupt. That is the general case.

Specifically, under any law (Banking, Trust, Company, etc.) or as the conclusion to a legal action, or by means of professional audit anywhere in The Commonwealth (often called the “British Commonwealth”, erroneously), where a Member of the House is declared a bankrupt, he or she is disqualified.

How would this apply in the current situation?

This question was put to The Premier, The Hon. Dr. Michael E. Misick MP during the first three days of the Inquiry. He replied that his assets were at a value greater than his debts. If that is so, the question is moot. If not, then the door is open on the issue of bankruptcy insofar as the constitution is concerned.  This would be true for all members of the House, whether they appeared before the Inquiry or not.
The issue is not, however, so simple as it may seem. The final clause of the subsection above says: “has not been discharged”. This means literally, those who have loaned the monies testified to, may at anytime discharge the debtor, thereby nullifying the legal question.

If on the other hand, the debts are not nullified by means of discharge as the constitution provides, and the assets of the borrowers are not sufficient to offset the debts, then primarily, the borrowers would face “balance sheet” bankruptcy and this could lead to disqualification from the House.

Whatever is the case, there is deep public resentment in Turks and Caicos about the borrowings. It will not do to say it is a private matter. What Ministers must do is explain the objectives of these borrowings to the public in order to assuage sentiment. The reason is that politically, the way such things marinate in the minds of the public is that they compare it to their own inability to borrow for quite legitimate projects or objectives. To them it may appear that whilst they borrow at 60% loan-to-value (meaning that they can only borrow 60% of the value of any collateral), Ministers, ostensibly by being ministers, seem able to obtain much more advantageous terms.

In politics, defending public presumption concerning the behaviour of political leaders, by political leaders has not worked since the age of the Greeks. One hopes for the sake of our young democracy, and in light of the difficulty faced by so many – particularly in Grand Turk and South Caicos – some political and social sensitivity is in the offing.