Cayman Islands leader arrested in corruption probe

Reuters News

12/11/2012 3:11:49 PM - Reuters News

By Shurna Robbins

GEORGE TOWN, Cayman Islands (Reuters) - The leader of the Cayman Islands was arrested on suspicion of corruption on Tuesday in connection with a series of police investigations in the Caribbean offshore financial center, authorities said.

Premier McKeeva Bush was detained at his home by members of the Financial Crime Unit of the Royal Cayman Islands Police Service, a police statement said.

The 57-year-old premier is suspected of theft, alleged misuse of a government credit card and abuse of office over the alleged importation of explosive substances without valid permits, the statement said.

"It would be inappropriate ... to make any further comment in relation to these matters at this time," it said. "Further updates will be made available in due course."

A police spokesperson declined to elaborate on the arrest. A spokesman for the premier could not be immediately reached for comment.

Bush was elected in 2009 as premier of the Cayman Islands, a British Overseas Territory with a population of 55,000 people and a leading global tax haven.

The islands are home to most of the world's hedge funds, offering both tax advantages and financial secrecy for companies and investors.

Bush also holds the position of minister of finance and tourism. He is the longest-serving member of the Caymans' Legislative Assembly and was first elected in 1984.

Police searched Bush's home after his arrest and set up roadblocks restricting access to his residence, said a government official who requested anonymity because the investigation is still ongoing.

Earlier this year, Cayman Islands Police Commissioner David Baines said Bush was the subject of three police investigations, two of them involving what he described at the time as financial irregularities.

Bush publicly denied any wrongdoing.

Officials from Bush's United Democratic Party were meeting to determine how the government will proceed, according to a party statement.

Alden McLaughlin, an opposition leader from the People's Progressive Movement party, said Bush's arrest had opened "a period of uncertainty."

"The arrest of the premier is a hugely damaging body blow to the reputation of these islands and to confidence in our government," he said in a statement.

(Writing by Kevin Gray; Editing by Tom Brown, Nick Zieminski and Cynthia Osterman)