The Auditor General will appear this morning before the watchdog Public Accounts Committee, hearing from Premier McKeeva Bush, United Democratic Party Treasurer Peter Young and Chairman of the Central Tenders Committee Ronnie Dunn.

The five-member committee, meeting in public session at the Legislative Assembly, will hear testimony about government’s abortive 2010 effort to borrow $155 million from New York financier Cohen & Company, potentially violating regulations regarding tendering processes.

The hearings will convene at 10am before Sister Islands MLA Moses Kirkconnell, Chairman of the committee.

“We are finalising the list of witnesses now,” Mr Kirkconnell told iNews yesterday, “and are waiting for confirmation.

“The Auditor General, Alastair Swarbrick will be there, of course, and we are waiting to hear from Mr Bush in his dual capacity as both Premier and Minister of Finance.

The session is not time limited, representing, in fact, a continuation of previous sessions examining the Auditor General’s July report on loopholes in government procurement processes, pointing to lack of controls, political interference and the potential for corruption.”

A second August Auditor General report cited three examples of procurement problems: an effort to bypass recommendations by the Central Tenders Committee on sources of government borrowing; the financing of the 2009 Cayman Islands Jazz Festival; and bidding on a crime-fighting closed circuit television system.

“The committee wanted more information on the report, so we will call witnesses and then write a report to be submitted to the next session of the LA,” Mr Kirconnell said.

The session promises to be contentious, as Mr Bush has long insisted on his innocence, saying he sought the best terms for the Cayman Islands under enormous pressure from budget deficits and London’s Foreign and Commonwealth Office.

While the Auditor General has said Mr Bush did not break the Public Management and Finance law, he violated the regulations that give it effect,

The Cohen alternative, Mr Bush previously said, would have saved government coffers $24 million during the 15-year life of the loan, although the cost of a 4.5% cap on the interest rate for the loan would have negated any savings. The term of the financing was later cut by more than half, to seven years

Ministry of Finance officials and the Central Tenders Committee recommended against the Cohen contract, which was ultimately cancelled in late January this year, but cost government nearly $450,000.

“The decision to contract with Cohen & Company was made by the Minister of Finance against the advice of Ministry of Finance officials,” the Auditor General wrote, saying Mr Bush asked ‘his political party colleagues for advice’, overriding Central Tenders Committee selection for borrowing from FirstCaribbean International Bank and the Royal Bank of Canada, long-established sources for government financing.”

Chief amongst those “colleagues” was Mr Young, who did not return repeated telephone calls yesterday. Similarly, Mr Bush was not available for comment.

“Hopefully we will finalise the reports tomorrow and will have them all on the table for the next session of the Legislative Assembly, which will decide if further action is warranted,” Mr Kirkconnell said.