Cayman Islands judge may today direct witnesses to testify in tribunal

JUDGE of the Grand Court of the Cayman Islands will decide today if key individuals in the McCracken payments to politicians Tribunal should give evidence to the tribunal.

Among the individuals concerned are Mr John Furze and Mr John Collins, Cayman Island bankers who have been mentioned before the Dublin Castle tribunal. The name John Furze was on some of the bank drafts which Mr Ben Dunne has told the tribunal were meant for Mr Charles Haughey.

Mr Furze and Mr Collins were directors of Ansbacher Ltd, a Cayman Islands bank. This bank had accounts in two Dublin banks where monies paid by Mr Dunne at one stage ended up. If the order is given today it will direct Ansbacher and a number of individuals, as well as audit partners from KPMG, Cayman Islands, to disclose information and documents to Mr Justice McCracken in the offices of a legal firm in the Cayman Islands, at a date to be set by the court.

As well as Mr Furze and Mr Collins, other individuals named in the application are Mr Hugh Harte, Mr Michael Day, Mr Kevin Glidden, Ms Maxine Everson and Mr Brian Bothwell.

The McCracken Tribunal, in seeking to have the witnesses compelled to give evidence, is having to deal with complex laws established to protect the confidentiality of the Cayman banking system.

According to legal sources on the Caribbean island, in order for the Cayman Grand Court to compel witnesses to give evidence about the £1.3 million allegedly given by Mr Ben Dunne to Mr Charles Haughey, conditions laid out in the Confidential Relationships (Preservation) Law may have to be fulfilled.

It was the passing of this law in 1976 which led to the transformation of the Cayman Islands into a major financial centre, with companies and individuals transferring vast sums of money to Cayman accounts in order to benefit from its secrecy laws.

The McCracken Tribunal has heard that four payments totalling £1.1 million were transferred into an account held at Guiness & Mahon (Ireland). The account was in the name of Ansbacher Ltd, a Cayman Islands bank. Three bank drafts worth £210,000 allegedly handed by Mr Dunne to Mr Haughey, ended up in an Ansbacher account held at the Irish Intercontinental Bank.

The tribunal has not heard what happened subsequently to these monies.

In his interim report Mr Justice McCracken said that if the application were granted by the Cayman Grand Court, it was hoped evidence could be taken in the first week of June.

The application was heard in chambers by the Chief Justice of the Cayman Court, Mr Justice Harre, last week. He then appointed another judge to enquire into whether the conditions of the case satisfied the criteria needed to allow the strict Cayman confidentiality law to be waived.

Under the law confidential information includes information concerning any property which the recipient thereof is not, otherwise than in the normal course of business, authorised by the principal to divulge".

The principal is defined as a person who has imparted confidential information in the course of a business transaction.

The four payments totalling £1.1 million were organised by the late Des Traynor, the tribunal was told. Mr Traynor was a director of the Cayman's bank, Guinness & Mahon, which subsequently became Ansbacher after a change of ownership. Some of the payments were made in the name of Mr Furze, a former director of Ansbacher.

Another former director of the bank Mr Collins, was a then signatory of the Ansbacher account in Irish Intercontinental Bank. So too was Mr Furze. Both men still live and work on the Cayman Islands.

A spokesman for Ansbacher said: "We will only disclose information if told by the Grand Court to do so. That is the general concept under which the island works."

He said the banks, accounting firms and legal firms on the island operated in an environment of confidentiality "and we are personally liable if we disregard it".

Under the confidentiality law, seven days notice of an application must be given to the Caymanian Attorney General and, if the judge so orders, to other persons on the island who are parties to the proceedings. The attorney general is entitled to be heard by the judge.

The judge, who sits in chambers, may direct that evidence be given; that evidence may not be given; that evidence be given subject to conditions designed to safeguard confidentiality.

In coming to his decision the judge must have regard to whether such an order would deny the rights of any person in the enforcement of a just claim; any offer of compensation or indemnity made; in any criminal case, the requirements of the interest of justice.

Legal sources said these points mean essentially that the law should not be used to prevent justice from being done. It is understood that it is a decision on this which will be made today by the Cayman court.

DISCLOSURE of confidential information without permission is an offence. The penalty upon conviction is a fine of $5,000 or imprisonment for two years.

As a result of pressure from the United States the Cayman Islands has in recent years become more open to disclosing information to recognised authorities. However, as one source pointed out, the large number of financial institutions still based on the Cayman Islands are there because people wishing to hide their monies still have faith in the Cayman secrecy laws.