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Cablegate: Jamaica: Rumblings of Key Personnel Changes In

VZCZCXYZ0021
PP RUEHWEB

DE RUEHKG #0601/01 2251322
ZNY CCCCC ZZH
P 131322Z AUG 09
FM AMEMBASSY KINGSTON
TO RUEHC/SECSTATE WASHDC PRIORITY 7925
INFO RUCNCOM/EC CARICOM COLLECTIVE PRIORITY

C O N F I D E N T I A L KINGSTON 000601

SIPDIS

STATE FOR WHA/CAR (JMACK-WILSON) (VDEPIRRO) (WSMITH)
WHA/EPSC (MROONEY)(FCORNEILLE) (AWONG)
WHA/IFD/OMA
WHA/PPC (JGONZALEZ)
INR/RES (RWARNER)
INR/I (SMCCORMICK)
SANTO DOMINGO FOR FCS AND FAS
TREASURY FOR ERIN NEPHEW AND LUYEN TRAN

E.O. 12958: DECL: 06/12/2039
TAGS: ECON ETRAD EFIN ENRG PINR PREL PGOV SOCI IADB
IBRD, IMF, TRYS, KRCM, JM, XL
SUBJECT: JAMAICA: RUMBLINGS OF KEY PERSONNEL CHANGES IN
JLP-LED GOVERNMENT

REF: A. 08 KINGSTON 402
B. KINGSTON 294
C. KINGSTON 427
D. KINGSTON 245
E. KINGSTON 223

Classified By: CDA Lloyd Moss for reasons 1.4 (b and d)

SUMMARY AND ANALYSIS
--------------------

1. (C) The Jamaican Labour Party (JLP)-led government is
undergoing a second major reshuffle of portfolios for the
year. Key Minister of Finance advisors Don Wehby and Dennis
Chung have returned to the private sector. Chris Zacca,
President of the Private Sector Organization of Jamaica
(PSOJ), is a likely Senate candidate to replace Wehby, and
there are indications he will be appointed to the Office of
the Prime Minister. Keith Collister, a respected economist
and journalist, is being touted as a possible addition to the
Ministry of Finance and Public Service (MFPS). Both
Collister and Zacca currently work for Jamaican business
mogul Gordon Butch Stewart; thus the transfers would enhance
Stewart,s already robust leverage within the GOJ. Financial
Secretary Sharon Crooks, who once had the full backing of
MFPS Minister Audley Shaw, was asked to resign last week
after serving 16 months. She will be replaced by Wesley
Hughes, Director General of the Planning Institute of Jamaica
(PIOJ). Bank of Jamaica (BOJ) Governor Derick Latibeaudiere
will likely survive in his position despite continued
friction with the MFPS, even as the MFPS seeks resumes for a
potential replacement.

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2. (C) Prime Minister (PM) Bruce Golding is 23 months into
his administration, and the second staff shake up for the
year indicates he is still searching for the right leadership
mix to achieve his campaign goals of job creation, economic
growth, and spending reform. Golding appears disappointed
with the performance of key Ministers who have spent far too
much time delivering speeches on grand future plans with
little actual implementation or measurable results. Golding
has also relied too heavily on a few key top performers such
as Wehby and Chung and overburdened them with multiple major
tasks. Wehby and Chung worked on the privatization of
parastatals including Air Jamaica, tax reform, and conducted
negotiations with multilaterals such as the Inter-American
Development Bank (IADB), the World Bank, and the
International Monetary Fund (IMF). Golding neglected to
prepare in advance for their telegraphed departure, and seems
to have failed in trying to aggressively recruit more top
talent to tackle the range of challenges facing the GOJ. END
SUMMARY AND ANALYSIS

Ministry of Finance Shuffles the Deck
-------------------------------------

3. (C) The July 31 departure of Minister without Portfolio
Don Wehby and Financial Advisor Dennis Chung leaves behind a
noticeable leadership void in the MFPS that will need to be
filled quickly. Both men were results-oriented and were
responsible for a wide range of issues facing the Ministry.
(NOTE: The GOJ relied heavily on Wehby, who initiated
negotiations for the return to the IMF. He is being groomed
to eventually take over Jamaica,s largest conglomerate,
Grace-Kennedy. END NOTE). Despite Wehby and Chung
telegraphing their departure for nearly a year, the MFPS is
just getting around to short-listing their replacements.

Crooks Packs Her Bags...
---------------------

4. (C) Financial Secretary (FS) Sharon Crooks was asked to
resign from her permanent secretary level position and will
be replaced by PIOJ Director General Wesley Hughes. (NOTE:
The PIOJ serves as the GOJ,s policy and planning agency,
particularly in the areas of economic and social development
programs. END NOTE). Crooks, who previously served as an
Advisor to the Director General in the Tax Authority, was
appointed to the FS position in May 2008. Despite having
strong support from Minister Audley Shaw, Crooks raised red
flags with Post and the Canadian and UK High Commissions, as
well as Ministry colleagues, when she refused repeatedly to
be vetted by Jamaican polygraphers (Reftel A).

5. (C) Darlene Morrison, Deputy FS for the Economic Division,
is acting as FS until Hughes arrives. A PIOJ source said
that Customs Commissioner Danville Walker was Minister
Shaw,s first choice, but PM Golding, after consulting with
private sector leaders, refused to move Walker. (COMMENT:
Walker is viewed as a star performer and has been making
significant headway in reforming a corrupt and disorganized
Customs Department, which many in Jamaica thought would be an
impossible task. END COMMENT. During her short tenure,
Crooks had moved out some MSPS senior staff, who now are
returning to the Ministry. This includes Ann-Marie Rhoden,
who was Deputy FS in charge of Public Enterprises.

...But Where Will She Land?
--------------------------

6. (C) Crooks is protected in her public sector employment
status, so the GOJ either has to buy out her employment
contract or transfer her to another job with the same level
of salary and benefits. She was offered the Permanent
Secretary position in the Ministry of Energy, but apparently
does not want the job. Such a move would create significant
challenges for an already embattled ministry. PM Golding
removed former Energy Minister Clive Mullings and his
Permanent Secretary Jean Dixon in April, (Reftel B).
Mullings was replaced by James Robertson as Minister and
Marcia Forbes was brought in as Permanent Secretary. Forbes
has been aggressively working to transform the Ministry and
address Jamaica,s serious energy and power generation
concerns. (NOTE: Jamaica has an antiquated power generation
system and per hour kilowatt energy rates of near 32 cents,
the highest in the region, (Reftel C) END NOTE).

7. (C) Forbes told Emboffs that she has not been informed of
any pending changes, but has received phone calls from
political contacts congratulating her on her promotion to the
Office of the Prime Minister. Forbes is considered a solid
performer; her possible departure would deliver another major
blow to the Energy Ministry and leave Robertson short-handed.
(COMMENT: The situation would be even worse if Crooks were
appointed Permanent Secretary, as she would seem to lack the
personality and core competency to manage the portfolio. END
COMMENT).

Hughes Answers the FS Call
--------------------------

8. (C) As for the expected new MFPS FS, Hughes has spent his
entire professional life in academia and in the public
sector. He is respected by public and should be well
accepted by technocrats throughout the GOJ. Although the
announcement has not been made public, Hughes appears to have
accepted the position, but it is not clear how soon he will
assume the duties. According to PIOJ sources, before Hughes
took the job he was assured that he would have ample autonomy
to bring in some of his own talent. PM Golding allegedly told
Hughes that he intends to become more active in the affairs
of the MFPS, possibly indicating that PM Golding is losing
confidence in Shaw,s leadership.

Third Round of Shake Ups in the Works?
-------------------------------------

9. (C) PM Golding,s suspected concerns with Shaw,s
leadership could also set the stage for a third round of
political reshuffling. Since taking office, Shaw has been
aggressive in pushing for a tax amnesty and in reaching out
to the multilaterals such as the World Bank and the IADB.
These measures initially won him public support; however, he
appears to have slowed down in more recent months and does
not always follow through on implementation after grand
announcements. Furthermore, he backed Crooks for too long
even after it become clear that she lacked the capacity to
serve in the FS position. Golding already has moved
economist Wayne Henry from the Ministry of Agriculture to the
Ministry of Finance to serve as an advisor to Shaw. There
are rumors that Golding may possibly be looking to replace
Shaw down the line.

Who is Coming to the Ministry Finance?

-------------------------------------

10. (C) In addition to serving as President of PSOJ, Chris
Zacca is also Deputy Chairman of the Sandals Group of
Companies owned by Gordon &Butch8 Stewart. Zacca is set to
take a major position in the JLP-led government, either in
the MFPS or the Office of the Prime Minister. (NOTE: Stewart
is the owner of Sandals resorts, Appliance Traders Limited, a
Honda dealership, the Observer newspaper, and one time
majority shareholder of Air Jamaica. He has several other
investments, and is possibly the most powerful player in
Jamaican society. END NOTE). Zacca could be joined by the
respected economist and Observer journalist Keith Collister.
A silent supporter of the JLP, Collister told Emboffs on
August 12 that he is not aware of his imminent appointment to
a GOJ position, but Delano Seiveright, an important JLP
strategist, confirmed that both Zacca and Collister are being
recruited for GOJ positions. He elaborated to say that
Collister should have been a first choice by the JLP for a
Ministerial-level position in the MFPS when they took power
in September 2007.

The Butch Is Back
-----------------

11. (C) The possible Zacca/Collister two-pronged appointment
could be Stewart,s attempt to gain even greater influence in
the JLP-led government. He held a similar level of influence
in the previous PNP-led administration until he fell out of
favor following his mismanagement of Air Jamaica after taking
it over from the GOJ. It has been alleged that Stewart sold
discount airline tickets on the national carrier to fill his
hotel rooms and was less concerned with the profitability of
the airline. After the GOJ took control of the airline back
from Stewart, his level of influence in the PNP party
dropped. In response he used his influence to campaign
against the PNP, helping to facilitate the JLP,s historic
victory in the 2007 national elections. Stewart continues to
use the pages of the Observer to criticize the opposition PNP
as well as economic rivals such as the Spanish-owned hotels
on the North Coast and John Issa-owned SuperClubs, both of
which have created greater competition for Sandals,
all-inclusive resorts.

Bank of Jamaica
---------------

12. (C) As the GOJ makes its return to a borrowing
relationship with the IMF, the JLP-led government is being
forced to rely on Derick Latibeaudiere, the Governor of the
Bank of Jamaica (Central Bank). To his credit, Latibeaudiere
has sufficient knowledge and experience in this area, but he
appears to be losing the confidence of his boss, MFPS
Minister Shaw. (Reftel D), an issue that was jokingly
referenced by reporters at the Governors, Quarterly Press
Briefing on August 12. Latibeaudiere is a skilled survivor
who, despite being a JLP supporter, was able to be hired on
by a PNP-led administration. He also has survived a
low-intensity public scandal relating to a USD 700,000
mortgage provided by the bank without adequate collateral in
August 2008, as well as public concerns over the years about
his generous salary, one of the highest in the GOJ.

Finance Looking for BOJ CVs
---------------------------

13. (C) Although not the most competent technocrat,
Latibeaudiere is a talented strategist who surrounds himself
with highly skilled advisors--including Deputy Governor for
Research and Economic Programming Myrtle Halsall, who was
rumored to have been offered Hughes previous job at PIOJ, but
turned it down. In the August 12 press briefing
Latibeaudiere was asked by a reporter about Halsall,s
suspected departure, and he responded that she would remain
at the BOJ. Halsall, who was seated next to him at the time,
did not comment. There has been historical antagonism
between the MFPS and the BOJ; the former blames the latter
for tight monetary policy which leads to high interest rates,
while the BOJ in turn blames MFPS for fiscal indiscipline.
This war of words took a new turn when Shaw recently made
thinly veiled attacks against the BOJ for hiking interest
rates to as high as 24 percent per annum. (Reftel E).


Latibeaudiere Likely to Survive
--------------------------------

14. (C) Latibeaudiere,s long term future at the BOJ remains
uncertain; a former personal assistant of Shaw,s has asked
Post about resumes for potential candidates to possibly
replace Latibeaudiere. However, the cost of buying out
Latibeaudiere's remaining employment contract, as well has
hiring a replacement, are really beyond the capacity of GOJ
finances at this time. Also, the JLP is not likely to want
to change the BOJ Governor during negotiations with the IMF,
since this is an area in which Latibeaudiere is skilled. His
long term survival may depend on future leadership changes at
MFPS.

COMMENT AND ANALYSIS
--------------------

15. (C) PM Golding is 23 months into his administration, and
the second major staff shake up since April indicates he is
still searching for the right leadership mix to achieve his
campaign goals of job creation, attracting foreign
investment, rooting out corruption, and addressing spiraling
crime. He appears disappointed with the performance of key
Ministers who have spent far too much time delivering
speeches on grand future plans with little actual
implementation or measurable results. Golding has also
relied too heavily on a few key top performers such as Wehby
and Chung and overburdened them with multiple major tasks.
Golding neglected to prepare in advance for their telegraphed
departure, and seems to have failed in trying to aggressively
recruit more top talent to tackle the range of challenges
facing the GOJ.

16. (C) Furthermore, Golding, having subsumed several
portfolios under the Office of the Prime Minister (e.g.
Environment, Telecommunications, the Business Development
Approval Process), appears to be micromanaging as PM instead
of providing a macro-level JLP vision for the country. He
also speaks frequently of &tough decisions8 and &painful
choices8 that need to be made in the face of the major
economic downturn, but over the past few months there have
been no major policy shifts to indicate implementation of
such choices. END COMMENT AND ANALYSIS.
MOSS

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