There is plenty more to investigate, PWC-consultants say:  Report recommends integrity assessment of St. Maarten Parliament

POSTED: 10/1/14 5:24 PM

St. Maarten – The PricewaterhouseCoopers integrity report touches on many issues, but it also left many others alone because they fell outside of the scope of its assignment. Nevertheless, the researchers recommend in a separate chapter twenty areas that warrant future analysis. The most pressing issue, labeled as “a major priority” is to conduct a “targeted integrity assessment of Sint Maarten’s Parliament.”

“Interviewees expressed grave concerns about the Parliament and its capacity, effectiveness, and commitment to integrity,” the report states. “Parliament controls the appointment of the Council of Ministers and as such should be reviewed against the inquiry team’s integrity architecture to ensure that its members are working in the country’s general interest and not for personal gain.”

Furthermore, the report recommends forensic investigations and operational audits of government-owned companies. “The government should order several factual and forensic books and records investigations into the circumstances surrounding fraud or other impropriety, including the misappropriation of corporate assets or resources within government-owned companies and adherence to statutory objectives.”

The report suggests paying especially attention to the Buro Telecommunication and Post (BTP) and the Harbor group of Companies because these entities did not comply with the request to provide financial documents to the PWC-team. “It also appeared during the inquiry that some government-owned companies operate without accountability to their sole shareholder. The government should assert itself as the sole owner and demand that these companies comply with any and all investigations, inquiries and requests for information.”

The report recommends bringing in fiscal specialists for a comprehensive assessment of the country’s tax system, and to look at tax compliance and make recommendations for increased compliance. For the matter of vote buying, the report suggests to prosecute those who are involved in such practices to the fullest extent.

Because several interviewees questioned the integrity of senior officials at the Central Bank, the report recommends subjecting this institution to a targeted integrity assessment as well.

Money laundering also caught the attention. “The lack of oversight into casinos and other cash-heavy businesses creates an environment susceptible to money laundering and other financial crimes.” The report recommends “a specific review of money-laundering identifying gaps with leading practices with respect to compliance with money laundering regulatory requirements, reporting and investigations.”

The same suggestion applies to the trafficking in drugs and weapons. “Sint Maarten is currently susceptible to drug/arms trafficking due to its lack of oversight of imports, geographic location and reliance on tourism,” the report observes, adding that there are concerns about escalated violence due to a surplus of arms, and in particular the import of assault rifles.

The researchers received several reports “that individuals identified to be involved in organized crime are currently involved in private sector businesses, especially in the gambling industry.

The report notes that no one was able to tell the researchers who is in charge of the Crime Fund, or how much money it holds. This warrants an investigation that also looks at compliance with the law that regulates this fund.

The government also ought to look at background checks for civil servants, ministers and politicians, the report suggests. This ought to include an assessment of the procedures for identifying adverse and other information relevant to a subject’s criminal history, litigation and qualification, including educational degree verification.

The report recommends, “conducting an assessment of long-lease land sales to identify instances of illegal profiting by recipients, including government officials.”

Other areas that warrant future analysis are the quality of property appraisers, the social health insurance system, water quality, the foreign investment climate, environmental issues, the waste-to-energy plant, six-month contracts, employment agencies and the pension fund.

 

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