Sun | Sep 24, 2017

Editorial | The Oceana after K. D. Knight

Published:Thursday | June 2, 2016 | 6:00 AM

K. D. Knight should have gone one step further. He ought to have insisted that Dirk Harrison, the contractor general, investigate the 2013 sale by the Urban Development Corporation (UDC) - while he was the agency's chairman - of the Oceana building in downtown Kingston in the face of the innuendos by Finance Minister Audley Shaw that the deal might have been corrupt.

This failure, of course, does not hinder Mr Harrison, on his own accord, as is his power under the law, from instituting an investigation into the sale. And neither would such an investigation prevent the auditor general, Pamela Monroe Ellis, from proceeding with a probe - as has been called for by Mr Shaw's predecessor, Peter Phillips - of this deal, as well as the circumstances under which the Government failed to convert to its benefit a US$5-million letter of comfort put up by a bauxite company.

Or if Mr Shaw, in retrospect, believes that he erred in substance and/or tone during his parliamentary statement on all or any of these statements, he may wish to seek to short-circuit these formal investigations, or parts thereof, with a public apology to the individuals or firms concerned. Indeed, Mr Shaw, and the administration more broadly, would appreciate that in the drive for investment, the Government can ill afford to alienate the private sector or have owners of capital wary of doing deals for fear of being smeared either by direct claims or innuendos about the bona fides of their deals.

This issue has its genesis in Minister Shaw's highlighting, during the Budget Debate, the fact that while a consortium of one of Jamaica's leading firms, Pan-Jamaican Investments and the Canadian Downing Street Group paid J$385 million for the Oceana building, the accountant general would lease a single floor for over J$90 million annually, plus spend J$400 million to renovate the space, without accruing any value for the expenditure.

 

BAD OPTICS

 

On the face of it, the arrangement, in its broadest sense, did not seem like good

value for money. At the very least, this newspaper believes, the optics are bad. Or, put another way, in the absence of countervailing economic arguments for the decision by the Accountant General's Department, there are legitimate, credible questions about whether the Government is getting the best value for its money.

There is another factor which supports the calls by Messrs Phillips and Knight for an investigation: Mr Shaw's Trump-style raising of the possibility of a "sweetheart deal" over the Oceana sale and then, we presume he believes adroitly, pulling back from the innuendo. Taken to its logical conclusion, the implication of Mr Shaw's remark is the probability of collusion between public officials and private buyers.

However, Mr Knight, in a presentation in the Senate this week, added another dimension to this saga. He not only robustly defended the market economics of the sale, but without doing so explicitly, appeared to invoke the issue of motive on Mr Shaw's part. First, he insisted that the sale of the Oceana building was to the highest of four bidders, after one withdrew its offer. Moreover, he revealed that one of the bidders was a firm in which one of Mr Shaw's current deputies was a shareholder - a material fact the minister should have, given the context of his remarks, disclosed.

We hope vendetta is not at play in this issue.