Editorial | Don’t make an ass of integrity law
The law may be an ass, but not as big a one as Colonel Daniel Pryce would have us believe. In any event, there are questions about how apprised Colonel Pryce is of the Integrity Act.
Colonel Pryce is the executive director of the Integrity Commission, the body to which legislators and specified public officials have to make annual declarations of their income, assets and liabilities, thus providing a framework for tracking their wealth and creating a deterrent to the use of public office for private gain. As part of Jamaica’s anti-corruption matrix, the Integrity Commission, so far, hasn’t distinguished itself.
Just how badly the commission is faltering is highlighted in the current hubbub over what it captured, and publicly reported, as the value of real estate owned by Opposition Leader Peter Phillips and his attorney wife Sandra Minott-Phillips, QC. The commission caused Jamaicans to believe that the properties owned by the Phillipses were valued at J$3.6 million.
If that value related only to the Phillipses’ home in one of the capital’s best residential districts, it would have been eye-poppingly ridiculous. But it also includes a bit of land owned by Mrs Minott-Phillips, to which a value of J$2.1 million was assigned. The rest of the J$3.6 million sum is the $1.5 million the couple paid for their home 28 years ago.
The Phillipses apparently agreed that the optics of those numbers, published without explanation, would be bad for political credibility. Indeed, according to Mrs Minott-Phillips, ahead of its publication, her husband pointed out that the value on their house reflected its purchase price. Dr Phillips also, in later communication, indicated that the estimated market value of the home was $48 million and the land J$10 million.
Jamaicans deprived of important information
Further, he suggested that in instances where the purchase price of an asset was used, it should be made “clear, perhaps by use of an asterisk and a footnote, that that value represents purchase price at the date of acquisition”. Neither the estimated market value nor the Phillipses’ suggested explanation appeared in the commission’s report that gave the couple a net worth of J$185 million, or J$54 million below what, by the couple’s account, would be their real wealth.
Looked at differently, the Integrity Commission deprived Jamaicans of important information for creating a benchmark of the financial worth of a political leader, which might be a useful tool in any future assessment of his integrity. This, of course, applies not only to Peter Phillips, but also Prime Minister Andrew Holness, and whoever else may fall within the rubric of the law.
Strangely, rather than acknowledging the misstep and pledging to do better in the future, Colonel Pryce vainly attempted to find cover behind non sequiturs and the integrity legislation. To use the current market value, he said, “could be inflationary, and because of that, we use that which is consistent, which is the cost of the item”.
To be consistent, and on the basis of Colonel Pryce’s logic, rather than mixing base/purchase price and current values, the Integrity Commission should perhaps have reported all of the Phillipses’ assets in, say, constant 1991 dollars, thus depriving the average Joe of an understandable basis for arriving at conclusions about a leader’s wealth. Moreover, with the commission’s method, an action by a policymaker, deliberately or otherwise, that enhances the value of his property wouldn’t be captured in the declaration and would be lost to a public privy only to the purchase of the real estate and, maybe, any direct expenditure on its improvement.
In the case where the asset is held in a company controlled by a declarant, the net value of the business, based on its audited accounts, “would be reflected in his summary”. But if the asset held therein is reflected at current valuation, “the net asset value would be adjusted to eliminate the difference between the cost and valuation”. Companies are, indeed, allowed to carry the value on their accounts at cost. But in those situations modern accounting standards insist that they reflect the “fair market price” of those assets in the notes to their accounts. That’s because there is a commitment to transparency.
With regard to the Phillipses’ suggestion that the footnotes be used to clarify the purchase price for an asset, Colonel Pryce claimed that the commission is constrained by the law, which sets out information relating to how real estate values are captured. Maybe, however, he hasn’t had a look at the Third Schedule of the Integrity Commission Act, which sets out the forms to be used for integrity filings. With regard to the form for reporting immovable property, such as house and land, its last column, the one to the right to the one headed ‘Purchase Price’, is headed ‘Current Market Price’.
But even if the prescribed form had this limitation, Section 64(1) (b) of the Integrity Commission Act gives the commission the power to “amend the form specified in the Third Schedule”. That, therefore, wouldn’t, as Colonel Pryce implied, have to await Parliament’s action.