Prime Minister Joseph Muscat has expressed his full confidence in the chairman, CEO and entire board of the Malta Financial Service Authority, which he insisted was an independent entity. 

His comments come after governor Joe Brincat, also a former Labour minister, accused chief executive Joe Cuschieri of abuse of power and of using money which was not his to settle a golden handshake.   

The issue is connected with the unceremonious dismissal of Reuben Fenech, the financial services authority's Chief Operating Officer following a public quarrel with Mr Cuschieri, informed sources said. Mr Cuschieri is offering Mr Fenech an undisclosed sum as compensation for leaving.

In his hard-hitting judicial protest filed earlier this week, Dr Brincat, a former justice minister, told Mr Cuschieri to “desist from offering a golden handshake,” insisted that there was no approval for the use of such funds to terminate the contract of an employee.

Addressing Mr Cuschieri directly, Dr Brincat charged that “this is a crime, as the public funds which you are administering should have been used for specific purposes and not as a blank cheque for you”. 

Mr Fenech, a former head of the National Statistics Office, was recruited by the MFSA a few months before Mr Cuschieri.

The Sunday Times of Malta had revealed that a former HR director at the MFSA, George Spiteri, was encouraged to retire from his job by Mr Cuschieri in exchange for an early retirement package worth €150,000.

However, only a few weeks after receiving his golden handshake, Mr Spiteri was re-employed as senior HR manager with the Registry of Companies, an offshoot of the MFSA. This case has now been referred to the National Audit Office for investigation.

Meanwhile, in a statement, the Nationalist Party said it was calling for an urgent debate on these cases within the Public Accounts Committee. It condemned the way the MFSA was "squandering public funds", against the principles of good governance. Political responsibility should be shouldered for the sake of accountability, it said.

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