George A. McCarthy - A QuietStrength for a Tough Job
Mr. and Mrs. George A. McCarthy
For the man who has one of the most high-pressured,high profiled and responsible jobs in the Cayman Islands government,George McCarthy, OBE, JP, Financial Secretary, Executive CouncilMember and Third Official Member of the Legislative Assembly,is surprising relaxed.
Or on closer examination, not surprising at all. It's Sunday afternoonand, at home in Cayman Retreat, off Walkers Road, his family surroundshim. It's a place they call a "sanctuary" - where "Godis centre of everything."
The strong support of and admiration from his family are evidentin the eyes of wife Deborah and teenage daughters, Schwannah andSchmarrah.
Therein lies the explanation for Mr. McCarthy's easy manner, hisobvious humility and quiet confidence. Yet when speaking of hisresponsibilities as Financial Secretary, he seems something ofa zealot - not only convinced that he has been called to servein his position as his contribution to the Cayman Islands, butknowledgeable, passionate and fiercely in love with what he does.
As Financial Secretary, Mr. McCarthy is the financial advisorto the government and the man in charge of the annual budget ofapproximately $350 million on which all government departmentsand elected members portfolios have a call.
He is also responsible for the regulation of Cayman's burgeoningfinancial industry, a role where the pressure has increased inrecent times, given the doctrine of global financial standardsbeing preached by organizations such as the Organization for EconomicCooperation and Development (OECD) and Group of Seven (G-7) countries.
Born on Cayman Brac to Jamaican parents who settled on the islandin the 1940s, he received his early schooling here and in Jamaica.A career public servant, George McCarthy's journey to the hotseat has been a long one which began just after leaving schoolwhen he started out in Internal Audit and later the Post OfficeDepartment and the Treasury. He then had a stint in the privatesector that included Bank of Nova Scotia Trust Company and InterBank,which folded in 1974.
He then returned to the public sector and a steady rise in hiscareer fortunes. It is these experiences, exposure and qualificationas a Certified Public Accountant (CPA), and direction from God,which have shaped his career, Mr. McCarthy says.
"I can't take credit for where I am and from where I came.It is the presence of God in my life," he says, althoughacknowledging that along the way, various persons have helpedhim to formulate the direction for his life.
It is why he speaks with confidence about the topical concernsof the financial sector and working through the challenges ofmaintaining Cayman's phenomenal successes as the world's fifthlargest financial center.
"I'm proud to say that we have a strong regulatory regime,"he says of the financial sector.
He noted that Cayman has learnt from the failure of InterBank,from BCCI and other financial institutions and has come to theposition where it has played a very strong role in the CaribbeanFinancial Action Task Force and, as a consequence, the FinancialAction Task Force.
George McCarthy's intense gaze and constant gesticulations withhis hands serve to underline his statement that Cayman is "fullycommitted to having in place a very strong regulatory regime andwe always try to discourage dubious financial dealings."
Noting that there is still a far way to go, he was neverthelessproud of what had been accomplished so far and that Cayman can"stand with the best in the Caribbean, and with the bestin some of the G-7 countries."
This is because in the early days when banking business shiftedfrom Bahamas to Cayman, the islands had the infrastructure toreceive the business and government cooperated with the privatesector as a whole, which led to the growth of businesses and thedevelopment of the financial industry, he says.
Protection of this industry is the major thrust of governmentaction and recent regulations, he indicated. He pointed to recentlegislation to amend the Monetary Authority law to allow for theAuthority to review, for example details of banking records, butonly for regulatory purposes to ensure that money laundering standardsor due diligence procedures are being observed.
"This is a radical shift," Mr. McCarthy says. "Thisis how we have become more intrusive, but it is more intrusivein order to ensure that we have got an economy that is sustainableand that good standards are observed to achieve the longevityof the business."
Questioned whether the enhanced regulations would increase thecost of doing business in Cayman, Mr. McCarthy noted that it couldcost a bit more, but "we have to look at the end result -the infrastructure and the environment that business is beingconducted in. The presence of major financial institutions inCayman is evidence that they must be satisfied that the returnsare justified."
Cayman's recent cooperation with the OECD to stamp out harmfultax practices should not be seen, he says, as if the governmentwere coerced into any agreements. Rather it must be seen in thecontext of the drive for global financial standards, globalizationand transparency - to ensure that one country doesn't appear tohave the competitive advantage over another.
He noted that G-7 governments recognized that the Internet wouldcreate a borderless society and raised with it the questions ofat what point should economic activity be taxed and how to securetheir tax revenue.
"These are the factors driving the need for exchange of information,"the financial secretary says, in explaining that the Cayman Islandshas worked very closely with the OECD in matters relating to harmfultax competition.
In early June, the Cayman Islands signed a letter of commitmentwith the OECD, which, among other things would provide for theexchange of information for criminal matters at the first taxyear after December 2003 and for civil and administrative mattersat the first tax year after December 2005. He stressed that informationwould only be provided in response to specific requests.
"Cayman has always taken its international obligations seriously,"he said, citing its action from as far back as 1984 with the MutualLegal Assistance Treaty with the United States and prior to thata gentleman's agreement.
"We will not see a demise of the financial industry,"he stressed, noting that the cooperation with the OECD will notbe an "open door policy, but upon request, where we willhave a judicial administrative system in place, so requests thatare coming into the country for cooperation will have to be streamedthrough persons with the desired level of competence."
He cautioned that critics should remember that it is not justCayman, but the world community negotiating with each other interms of what standards and bilateral agreements to put in place.
"What can and will do the type of damage that people mayenvision that the OECD initiative and others will accomplish,is if we do not manage the information flow correctly within thecountry in order to ensure that what is reported and assessedand analyzed is being done correctly."
Government, he says, needs to become more active in the sharingof information and the public has a right to expect that informationand should be made aware of the initiatives, as the financialeconomy rests on confidence.
Referring to the events and negotiations of the past 18 months,he noted however, that while the public might have expected informationat certain points, it was not always prudent provide it, untilthere had been a full understanding of where events were headed.
George McCarthy looks to Cayman's future with the assurance thatit will continue to be a leader in financial services in the regionand the world, and that the islands have the expertise and commitmentof its people, a dynamic economy to build on and a wholesome environmentin which to do business.
He noted that government recognizes the need for a diverse economyand that this would be examined as a process of consultation betweengovernment, the private sector and the community.
Of his own future, he is equally confident. Answering speculationsthat eventually Cayman could see constitutional change involvingthe appointment of a Chief Minister and other ministerial portfoliosincluding finance, he said, "I am not thinking that I wouldbe disadvantaged because, I have always maintained that whateveris best for the Cayman Islands is what should be pursued."
He is grounded in a belief that he has been called to do a joband will only be there for a period. Yet, he says with "theexpertise developed over time, if it becomes necessary for a financeminister to be appointed, I'm sure that there are other areasin which my services can be used. What is important to know isthat I have given my best to the cause of the Cayman Islands."
God and Familykeep The McCarthys
To the public, he may be the Cayman Islands'Financial Secretary, a powerful man on a fast track in governmentand political administration.
At home, the only reflection of his position is the strict financialmanagement that his daughters, Schwannah, 16 and Schmarrah, 13,say they have been taught to follow with their allowance.
"At home, he's just Dad," both say. And he is a Dadthat they love and admire.Schwannah, whose name is Arabic for'beautiful swan', is an 11th grade student at John Gray High School.
She credits her parents for their encouragement to "do rightbecause right is right" and for the "influence of God"in her life. It is a lesson, she says, she takes to the startingline in her career as an athlete of the 100m sprint, 100m hurdlesand relays, along with her father's reminder: Phil 4: 13: 'I cando all things through Christ who strengthens me.'
George McCarthy and family are active in the First Baptist Church,where he is a member of the Church's council.
He met his American-born wife, Deborah, while both were studentsat PACE University in New York City in 1982. He pursued PublicAccounting, eventually gaining his CPA. Deborah suspended herstudies, and now, in between pursuing a career and raising a family,has enrolled for a law degree at the Cayman Islands Law School."George handles work and home separate," she says. "That'show we are able to maintain balance in our family life."
Like her husband, she acknowledges the presence of God in theirlives and supports him in his job, seeing it as something he wascalled to do.
Schmarrah, attends St. Ignatius Catholic High School and dreamsof becoming and architect. She is also active in sports - basketballand track and field.
Both girls say that they are able to handle peer pressure fromhaving a high profile father, in a positive way, precisely becauseof the training they have received at home - even including rulesfor their arguments.
"Our parents have worked very hard at making sure that homeis a sanctuary," says Schwannah.
It is also a place where George McCarthy, Financial Secretary,finds the private support, from his wife Deborah and his adoringdaughters - and inspiration to excel in his public role.