The Council of Europe’s Committee on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism – Moneyval – chose to have a picture of the iconic gardjola on the front page of its latest report on Malta.
Promotional material about Malta would tell you that this stone lookout post that forms part of the majestic bastions has various symbols sculpted on it such as an eye, an ear and the crane bird, representing guardianship and observance protecting the Maltese shores.
Was the choice of image purely linked to the fact that the eye on the gardjola is a popular feature in many brochures about the Maltese islands? Or was there a message that Moneyval wanted to convey?
What we know for sure is that, in its ‘fifth round mutual evaluation report’ published this summer, Moneyval commented that “Malta should ensure that the supervisory authorities have sufficient resources and expertise in place to ensure effective supervision for the size, complexity and the (money laundering/financing of terrorism) risks of their respective sectors”.
It also urged the island to take action to improve the national understanding of risks, threats and vulnerabilities.
It takes hard work to build a good reputation but that can be lost in no time, especially if the government appears to be turning a blind eye when cracks appear in the regime.
When the FBI acted upon information it had been compiling in relation to the Ta’ Xbiex-based Pilatus Bank, which has since closed down, the government had no alternative but to push the supervisory authorities – notably, the Malta Financial Services Authority (MFSA) – to do something about it.
The action taken included changes at the top at the MFSA.
Unfortunately, it did not take long for the new MFSA chief executive, Joe Cuschieri, to face public criticism – and by a member of the Authority’s Board of Governors, to boot. Former Labour justice minister Joseph Brincat filed a judicial letter accusing Mr Cuschieri of spending the regulator’s money as if he had a “bank cheque” rather than using public funds for the purposes decided upon by Parliament.
The MFSA said it did not consider it appropriate to comment publicly on the ongoing matters referred to by Dr Brincat but noted that funds administered by it “are and will continue to be used exclusively in the exercise of its functions and operations”.
That may, of course, be the case but at least one member of the board of governors disagrees and felt he had no other alternative but to take legal action to stop what he considered to be an offence that, as a director, could expose him to criminal action.
Prime Minister Joseph Muscat merely expressed full confidence in the chairman, the CEO and the entire MFSA board. Which, of course, implies he also trusts Dr Brincat who decided to publicly point a finger at the CEO, presumably after his internal efforts proved futile.
This is not the first time the government had to deal with such serious accusations made by one of its own against the headship of the country’s financial services regulator.
Education Minister Evarist Bartolo had on various occasions accused former MFSA chairman Joe Bannister of a conflict of interest.
In Mr Cuschieri’s case, the accusation made by Dr Brincat implies that the man running a supervisory authority that must ensure all laws and regulations are rigorously observed is unable or unwilling to abide by the house rules.
Such behaviour simply cannot be allowed from the sentinel manning the gardjola.