Tue | Jan 22, 2019

Big house still a big problem

Published:Sunday | February 21, 2016 | 12:00 AM

What do you think would be the impact if it were revealed today that Portia Simpson Miller, as a Cabinet minister in the early 1990s, talked to some accountants and lawyers, then established an offshore company for 'efficient' tax structuring?

What if Peter Phillips answered the questions posed by Andrew about his family home by explaining that a company in Cayman actually owned it? Wouldn't we think about them a little differently?

It's not illegal. And many private individuals and companies do it. But wouldn't it tell you something about the judgement of a public servant? Wouldn't it tell you something about where their head is? I think so. And I also think that if such a thing were discovered about Mrs Simpson Miller or Dr Phillips, they would be unceremoniously slaughtered forthwith.

Remember when Mitt Romney was running for president of the United States? His offshore holdings became an issue in the campaign, and the question was asked: With what moral authority does a man who has accepted advice from lawyers and accountants to structure his business outside of a jurisdiction turn around and levy taxes within that jurisdiction? Is he not seriously compromised?




That's why the revelation that Andrew Holness' (Jamaica's current leader of the Opposition) decision to take advice, while he was minister of education, from accountants and lawyers to carry his affairs overseas to St Lucia is a matter of serious significance.

Again, if a private citizen arranges his affairs like this, I fully accept, and may even argue myself, that it's just good planning. It may also be a signal that tax laws need enforcement or change.

However, if, as many claim to believe, public servants, particularly senior ones, are to be held to a higher standard, surely you can't be at the source of making and enforcing rules that you then take great pains and care to escape. Or, at the very least, the public over whom you seek to exercise authority should know.

Whatever the outcome of next week's general election, this isn't an issue that will evaporate. I would like to know, for instance, which lawyers and accountants would advise a sitting Cabinet minister to establish himself in a tax haven and not in the country he is governing. And, for the record, a Cabinet minister so advised, particularly about his personal matters, should use good judgement and say, "No!"

Furthermore, the obvious question of whether this offshore company is associated with any bank accounts, in Jamaica, St Lucia, or elsewhere, hasn't even been asked, far less answered. Yet National Integrity Action (NIA), after waiting until forever to even express a concern, dashed with unseemly haste to say it was satisfied as long as there was a filing in Parliament. What? Trevor ketch him fraid. Joke ting!

Does the parliamentary filing record that the offshore company holds more than $26 million (cost of the land) in assets? By the way, what other assets, if any, does the offshore company hold?

There are other issues, of course. The statement issued by Mr Holness was artfully worded to avoid the other 300,000-pound gorilla in the mansion: source of funds.




A mention is made of savings, but US$300,000 is a lot of Cheddar for someone on a US$30,000 salary all his life. No disrespect meant, but Andrew just hasn't, at least in an obvious way, earned that kind of money ever.

Therefore, it's significant that Juliet Holness' earnings don't turn up in Andrew's statement, though if he were truly interested in making a proper disclosure, it would have been included. Mrs Holness now seeks public office herself, so it oughtn't be a problem.

Then there's the rather large point that the figures presented by Holness make little sense. If there weren't so many lawsuits flying all over the place, someone might even suggest that they are untrue. Well, actually The Gleaner had this interesting take on the matter:

"Senior players in the construction and housing sectors have suggested that the cost of construction for Holness' substantially completed house is nowhere close to costs in the market. One player has remarked that Holness was able to build an upscale house cheaper than professionals can build an affordable house in terms of cost per square foot."

So Andrew is so much more efficient that he can build luxury for less than Gore or Matalon can build low-income.

When confronted with this glaring anomaly, Mr Holness seems to have pointed to his wife's construction background and his wicked hidden Jedi woodworking skills. Thanks for the laugh! But come now: What's the story?

I want to acknowledge that since it is election time, I can understand why Labourites cannot allow or afford themselves to see what is there to be seen. But it was during the run-off between Andrew and Audley that this issue first came forward and we were asked to inspect it. So now that further details have come out, don't blame anyone for looking.

So as I have said, the whole offshore company business with a senior public servant is a problem, at least of judgement. That aside, the source of funds needs more details. And the incredible construction costs haven't been properly addressed.

But with all that, assuming, as I do at this point, that Holness is innocent of everything but proven poor judgement, it is fair to say that the issue has been handled horribly. A full and frank disclosure, not the lawyered and doctored mish-mash that has been offered, would have been much better, and is, in fact, still outstanding.

- Daniel Thwaites is an attorney-at-law. Email feedback to columns@gleanerjm.com.