Labour MP Josè Herrera yesterday alleged rampant nepotism in the financial services sector, to the point of people in authority being involved in issuing licences to their own private investments.

Speaking on the Bill to implement the Budget 2011 measures, he singled out the betting sector.

He claimed former Malta Gaming Authority CEO Mario Galea had been involved directly in the industry while still serving in his official post. He had been authorised to issue licences to people involved in the company he himself was involved in, even liaising between the gaming authority and the company.

Dr Herrera said there was no problem with getting betting licences so long as one went through the company Belmed, but huge problems if anyone went anywhere else. Now Belmed was in a position to charge four or five times the going rate for its services but it was still successful because of its connections.

There had been a time when the Casino di Venezia had been allowed to operate without a licence for online betting. Dr Herrera said such blatant nepotism in an industry worth billions of euros was wrong.

Online shopping was another aspect of flagrant nepotism in financial services. Trolleymania.com had been formed under the pretext of doing work which no other company could do in Malta, when it had already received €300,000 in subsidies from the Communications Ministry. The truth was that there already was another company, Ħanut.com, doing the work.

Dr Herrera said another company, Alert, had been invited to launch Malta Expo to provide services not being offered in Malta. Again this had been untrue but it had seemed to justify the government subsidy.

The government had instructed Bank of Valletta to promote Malta Expo’s services when it had not yet been Payment Card Industry (PCI)-compliant. This held true for another company being helped, Icon. Yet the agencies set up to regulate the industry had not stopped either wrongdoing, even while other companies were unjustly being sidestepped.

When Malta Expo had wound up, most of its work had been given to Trolleymania. This had now formed Malta Supermarket, a new private company, which had been selected by the government for a financial package in precedence over others.

Dr Herrera said that while the government was intent on using such nice words as transparent, free market economy, fair competition and dominance, even when a meaty market had been discovered by someone else the precedence was given to friends who wanted to barge in and gain all the advantages with direct financial assistance and undue pressure for clients to use their services.

A full report of Dr Herrera’s speech will be carried tomorrow.