Like everyone with a head on his shoulders, I hope I’ll have woken up this morning to the news that Malta escaped being put on the grey list of the FATF, the global watchdog against money laundering and terrorism financing. It would mean we’ve escaped a severe economic blow, almost dealt thanks to corruption and political inaction.

I’m writing this on Tuesday, however, having read the op-ed by Clyde Caruana, the finance minister, who said that he and the government have done all they could to avoid the dread fate. No, they didn’t.

It’s worth understanding what they didn’t do. Whether the FATF gave us the thumbs up or down, it was a close call. We should never have been put into this position.

Caruana wrote, on the eve of the FATF’s decision, as though he was levelling with us. He was actually spinning for all he’s worth. He divided the history of our financial services and their regulation into the years B.C. (Before Clyde) and the last 18 months, when he was, first, the prime minister’s head of secretariat and, soon after, finance minister.

He blurs the differences between the pre-2013 and post-2013 years, suggesting there were similar institutional shortcomings across the entire quarter-century at issue. But 2013 was, demonstrably, a watershed year.

The pillars of our financial services sector are three: legislation, institutional watchdogs and political leadership. The latter determined right at the start (1994) that Malta would target clients from among EU member states (then the EU-15), rather than eastern Europe, Russia or the post-Soviet states. This very choice necessitated the highest standards for law and institutions, which were bolstered as the sector evolved.

We know they were fit for purpose. Our financial services passed two crucial external tests. Our system was audited, and approved, as part of our pre-accession negotiations to become an EU member in 2004. When the financial crisis struck in 2008, our financial services came through with flying colours and, by circa 2011, they were growing again.

As for political leadership, from the start the development of the financial services sector was seen as a national project on which consultation and consensus were important. Until 2013, every government kept the senior opposition finance spokesman informed of developments.

After 2013, that stopped. Why? Was it no longer a national project? Had it become privatised for personal profit? We deserve an answer. But while we’re holding our breath, let’s look at what happened. Remember, these are facts the FATF knows as well.

Within a few days of the 2013 general election, the favourite accountants of the government began the process of opening three secret Panama companies, two of which ended up belonging to the then prime minister’s chief of staff and his cabinet favourite.

When they were caught out, they were not fired. The fire was turned on the journalist who revealed all.

Political leadership – the third pillar the financial sector needs – failed. Is this not betrayal of the financial sector?

Worse, corrupt leadership greatly damaged the other two pillars. The watchdogs failed to take action. One by one – the police, the FIAU, the MFSA – were disgraced by new revelations of laxity and inaction, as more damaging details emerged.

We have Muscat to thank. Having persistently defended the corrupt, he let the country down, greatly damaged Malta’s good name and tarnished its word of honour- Ranier Fsadni

As reasonable suspicions of systemic money laundering mounted – in scandals affecting major national projects and implicating the same men around the prime minister – no action was taken. Anyone who was publicly critical was called a traitor. The real betrayers of the public interest in general, and financial services in particular, were lauded as heroes and “doers” (and no, not because they did us in).

In the end, the disgraced Joseph Muscat did resign, and Robert Abela took over. Some expulsions and arrests have since taken place. But put yourself in the shoes of an FATF member and ask yourself what you see.

Abela has not taken all the steps necessary to persuade sceptics. Muscat is still embraced. The gaming authority’s reputation is in tatters; yet its then senior legal counsel kept her present MFSA job even after she was found to be over-chummy with a businessman she was supposed to be overseeing. The MFSA’s chair regards serious misbehaviour by his staff as a peccadillo.

Our FATF member sees all this. Our finance minister flies up to assure him (or her) that this time it’s different: Malta has entered the age of After Clyde.

Alas, our finance minister might be able to give assurances on the first two pillars but the third, political leadership, is barely distinguishable from the previous administration.

Investigations remain blatantly selective. National interest still takes a back seat to the immediate interest of the ruling political party.

Moreover, Daphne Caruana Galizia continues to be attacked by government MPs and Labour operatives, as are her sons. An FATF member, who links Caruana Galizia’s assassination to her revelations about money laundering, can reasonably conclude that revealing corruption is still resented right at the top.

The government, instead of directing critical anger at those responsible for bringing us to this point, deflects the anger towards others. They blame the leader of the opposition, who made a clumsy but well-intentioned attempt to persuade FATF members to vote in favour of Malta. Labour operatives have even blamed Richard Cachia Caruana for Bernard Grech’s initiative, when they obviously know that no experienced strategist would recommend an initiative so ham-handed. 

Where does that leave the finance minister’s assurances of Malta’s good faith and commitment? Alas, they all depend on Malta being taken at its word.

If we have not been greylisted, then, thankfully, we’ve given one last reprieve. But our assurances still remain greatly devalued by leadership that defended what everyone else sees as manifest corruption.

We have Muscat to thank. Having persistently defended the corrupt, he let the country down, greatly damaged Malta’s good name and tarnished its word of honour.

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