JAMAICA: APRIL POLITICAL ROUND-UP

UNCLAS SECTION 01 OF 04 KINGSTON 000364

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SENSITIVE
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WHA/CAR FOR JTILGHMAN
TREASURY FOR SARA GRAY

E.O. 12958: N/A
TAGS: PGOV PREL PINR SOCI ECON EFIN JM XL
SUBJECT: JAMAICA: APRIL POLITICAL ROUND-UP

REF: A. KINGSTON 310


B. KINGSTON 328

C. KINGSTON 354

D. KINGSTON 245

Summary
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1. (SBU) It's budget time in Jamaica, and presentations on
the budget from both parties in Parliament dominated the
media this month. The only story bigger than the first new
JLP budget in over 18 years is the ongoing saga of dual
nationals serving in Parliament. The first test case was
completed in the Supreme Court; however the petitioner has
expressed a desire to appeal part of the ruling and the
Supreme Court Justice granted a 42 day stay. Other news in
April included the failure of the biggest alternative
investment scheme "Cash Plus", and the return to Parliament
of an embattled Member.

By-Election or General Election ?
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2. (SBU) Since the initial decision in the first case against
dual-nationals serving in Parliament has come out, it appears
almost certain that another election will be held; but it
remains unclear whether this will be a by-election (as
ordered by the court) or, possibly, a snap general election
called by the Prime Minister. While the case is being
appealed by the petitioner, Abe Dabdoub of the People's
National Party (PNP),based on the legal decision delivered
by Supreme Court Justice Zaila McCalla, it seems unlikely
that the Court of Appeals will overturn the judgment (Ref A).
In the meantime, the appealing of the case has led to a stay
of the court's decision and thus Daryl Vaz of the Jamaica
Labour Party (JLP) is to retain his seat in Parliament for
the next 42 days. The PNP maintains that since the
nomination of Vaz has been nullified, the votes cast for him
should not count and the runner-up should be declared the
winner.


3. (SBU) In a recent conversation with a PNP caretaker,
Poloff has learned that many young people concur with the
PNP's point of view on the matter of giving the seat to the
runner up. Many young men compare the race for Parliament
like a race in track and field, in which, if the winner is
disqualified, the second place finisher is automatically
elevated for the gold. While this may not be sound legal
reasoning, it does illustrate the thinking of many people.
However, since the case has come to light, Vaz has received
increased media attention and it appears that the citizens of
West Portland are much enamored with their current Member of
Parliament (MP). Since he has now begun the process to
renounce U.S. Citizenship, he plans to run in any by-election
or general election for the same seat.


4. (SBU) Once the issues of the Vaz case work their way
through the judicial system, the other cases filed against
sitting MPs will come before the court. While at least one
of the cases appears likely to be thrown out on a procedural
ground pertaining to how and when the subpoena was served,
there are still at least two more cases filed against sitting
JLP MPs that could also end up in by-elections. Also, one
member of the Opposition PNP, Ian Hayles, has admitted that
he did not complete the renunciation process until after the
election; although no election petition has been filed
against him. Some members of the current government estimate
that as many as ten MPs may possess dual citizenship and have
violated the Jamaican Constitution's prohibition against
swearing an allegiance to a foreign power. Therefore given
the current weakness of the PNP, the scandals that have
wracked its public image, and the narrow majority of the
ruling-JLP in Parliament (32-28),a snap general election
must seem inviting to Prime Minister Bruce Golding (PM
Golding).


5. (SBU) Recent media reports are suggesting the possibility
of a compromise on the disputed seats held by dual nationals.
The suggestion is that the PNP could agree not to contest
the by-elections in the seats that were won by JLP
candidates, such as Daryl Vaz; and in return the JLP would
agree to not hold a snap election in the immediate future.
Currently, both sides are considering the issue, but it is
likely that some members on both sides welcome the prospect
of a new election. Some recent accounts in the media
speculate that former Minister of National Security Peter
Phillips and his supporters welcome the prospect of a fresh
election prior to the September hosting of the annual PNP

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convention. The idea is that if the JLP solidify their
majority in a fresh election, it will be seen as a third
strike against current Opposition Leader Portia
Simpson-Miller, and allow Phillips to supplant her as party
leader.

University Professor Sees Apathy Among Young Voters
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6. (SBU) Poloff met with Dr. Ian Boxill, professor of Social
Science at the University of the West Indies (UWI) in
Kingston. Dr. Boxill stated that the students and youth of
today are much more apathetic about politics than 10 or 20
years ago. Most university students show little preference
for either party and take a very pragmatic approach to
politics. Whereas previous generations tended to vote in
line with their parents, and were very likely to participate
in active politics or the political youth organizations,
today's youth are not very inclined to vote, and the
political parties' youth organizations are only visible
around election time. He also said that many of today's
students distrust politicians and do not see any reason to
support politics. Professor Boxill predicted that if snap
elections are called, voter turn-out will be very low, and
only the party faithful will turn out in high numbers. He
also stated that with a low turn-out, the government is not
assured of significantly improved results at the ballot box.

Minister of National Security Out of Sight
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7. (SBU) Minister of National Security, Derrick Smith, was
not seen or heard from for over two weeks. He was having
surgery on his foot, and there has been speculation that this
is related to diabetes. However, some PNP insiders are
questioning the severity of the injury and whether the
government is being completely open with the public. They
find it unusual that for such a minor procedure the
government went so far as to appoint another Minister of
Cabinet as Acting Minister of National Security. However,
Smith was back in Parliament for the final round of budget
debates, so whatever his illness it does not appear life
threatening.

Failed Cash Plus Scheme and Political Fund Raising
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8. (SBU) The failure of the alternative investment scheme
known as &Cash Plus8 has dominated the media during April
(Ref B). From the arrest of founder Carlos Hill, and his
American Citizen Brother Bertram Hill and CFO Peter Wilson on
the morning of April 10, it was clear the scheme had hit rock
bottom. General Secretary of the PNP, Peter Bunting, during
his Opposition Budget presentation requested the JLP
Government to investigate alternative investment schemes.
Bunting was quoted in the Dailey Observer saying, &I believe
it would be appropriate to enquire into the operations of
alternative investment schemes. Let us see how much of the
public's money these schemes gave to political parties.8
The initial reaction of the JLP came from Industry and
Commerce Minister, Karl Samuda, who indicated the government
was not planning to release the names of financial supporters
of the party to the public, but already had complied with all
campaign finance laws. (Comment: While it is likely at
least some members of the JLP benefited from schemes such as
Cash Plus, it is just as likely a good number of the PNP
members benefited as well. Since Cash Plus came into
existence in 2002, the previous government turned a blind eye
to it and other such schemes for years. However, it is
possible Bunting knows who among the PNP are most likely to
be named and is hoping to gain advantage within the party.
End Comment)

Budget Debate Dominates Political Scene
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9. (U) The month of April has been dominated by the annual
budget debate in Parliament. From its initial release on
March 29, the entire political arena has been focused on the
first budget proposal of the new JLP government (Ref C).
Former Minister of Finance Omar Davies opened the
Opposition's response, but aside from suggesting some targets
for tax collection may be unrealistic, he was not seen
scoring many points. Opposition Leader, Portia
Simpson-Miller (PSM),was also a bit restrained in her
responses, although she tried to take credit for starting
some of the current initiatives of the JLP government,
including free health care. General Secretary Bunting on the

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other hand, took the government to task on the issue of free
health care and education, saying: &I subscribe to a
philosophy of personal responsibility.8 He further stated,
&When a good or service is totally free, it tends not to be
appreciated and is used most inefficiently.8 (Comment: The
difference of opinion between these two top leaders of the
PNP is reflective of the widening factionalism within the
party. Bunting represents the new movement of youth within
the party, whereas Simpson-Miller represents the old guard
that is becoming synonymous with corruption and being out of
touch with reality. End Comment.)


10. (U) The Prime Minister addressed Parliament on April 22
for his inaugural budget presentation. He announced that the
government had granted casino gaming licenses to two new
resorts being constructed on the North coast. He also spent
a large part of his speech addressing the two big concerns of
food security and energy prices. He announced a new drive to
conserve energy and outlined relief measures for the poor to
aid in the cost of food (Ref C).

Debate on Past Government Bail Out of Financial Sector Heats
Up
--------------
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11. (SBU) Minister of Finance Audley Shaw recently announced
an official government review of the financial sector bailout
of the 1990s, when the Financial Sector Adjustment Company
(FINSAC) was created to bail out failing financial
institutions. This led to a heated debate in Parliament
between Shaw and former Minister of Finance Omar Davies, with
the later suggesting that the former should recuse himself
from any involvement in the matter. Davies went on to claim
that at least four current cabinet members of the present
administration, including Shaw, had had their bad loans
acquired by FINSAC because of failure to service bad debts.
Davies was striking back against earlier accusations by Shaw
that inappropriate financial decisions during the former PNP
administration had led to the melt down of the sector and
created the need for the FINSAC relief which nearly destroyed
the economy of Jamaica.


12. (SBU) During his presentation in Parliament when
announcing the details of the investigation into FINSAC, Shaw
created a large commotion when he accused current PNP General
Secretary Peter Bunting of receiving a "sweetheart deal" from

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the government when he was CEO of Dehring, Bunting and
Golding (DBG),a major investment firm. He alleged that the
previous government had sold receivables from the sale of
National Commercial Bank (NCB) to AIC and other debts at a
huge discount and the DBG served as an intermediary in many
FINSAC transactions, allowing a the company to book record
earnings at the expense of failed companies. Bunting lashed
out at Shaw, and told Shaw to "Say it again!" and meet him
outside to settle the issue, where he would not enjoy
parliamentary immunity. Bunting called the accusations
"cowardly and underhanded" and declared there was nothing
secret or unethical in any of the deals mentioned by Shaw.

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(Comment: While there is a likelihood that many shady deals
were struck during the FINSAC crises and that the government
did not handle the bail out well, Shaw is wasting efforts on
an issue that should be left to lie. By seeking to re-open
old wounds, he is embarking on a possible witch hunt which
could sully the reputations of members of both parties and
further damage the economic confidence of investors. End
Comment.)

Embattled MP Returns to Parliament
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13. (U) Kern Spencer, embattled PNP MP for St Elizabeth North
East, returned to Parliament on April 16. Spencer had
previously requested a leave of absence from the Speaker of
the House after his high profile arrest for fraud in
connection with his direction of the distribution of free,
light bulbs donated by Cuba (Ref D). The former Junior
Energy Minister spent three nights in jail and faces multiple
charges, including conspiracy to defraud, money laundering,
and breaches of the Corruption Prevention Act. Kern
maintains he has no plans to resign from his seat in
Parliament and continues to represent the people of his
district.

Conclusions
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14. (SBU) The formal budget debate was wrapped up with the

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Prime Minister's presentation on April 22. Talk of budget,
taxes, and rising food prices are dominating the media and
local conversations. The appeal of the Vaz case will likely
give an indication of how the other pending cases will play
out. If Dabdoub is handed the West Portland seat by the
Court of Appeals, then there is a good chance for unrest in
that district, and such a decision would give the JLP a good
justification for calling a snap election. In his strongest
indication of his stance on elections yet, Golding has stated
to the media that he will not allow anyone to serve in
Parliament by legal technicality who was not elected by the
people. The Cash Plus case will likely take a long time to
settle, but the police provide updates almost daily in the
press. Whether the names of all Cash Plus beneficiaries,
including politicians and political parties, will ever come
to light is unclear. However, with so many ordinary
investors losing money through the alternative investment
scheme, it is unlikely that accusations of politicians being
involved would draw any great public outcry.
HEG