There seems to be no end to revelations about the systemic political corruption that characterised the governance of the country in the last seven years.
On various occasions, private interests managed to infiltrate the decision-making processes of supposedly independent regulators and banks through inappropriate relationships with public officials.
The chief executive officer of the Malta Financial Services Authority, Joseph Cuschieri, has admitted that in 2018 he travelled to Las Vegas with murder suspect Yorgen Fenech who paid for the luxury trip.
Cuschieri strangely argues that he saw no conflict of interest or breach of ethics because the trip happened one month after he moved on from the Malta Gaming Authority.
On the same trip was Edwina Licari, at the time general counsel of the gaming authority before also moving on to the MFSA in the same post.
Cuschieri says he was advising Fenech on regulatory issues. The abusive revolving doors practice, the obligations of public officials not to accept gifts, and the paramount importance of regulators not to be seen as compromised by the perverse alliances they build with business people seem to have little meaning for the CEO of MFSA.
It is worth highlighting that the MFSA is entrusted with ensuring that the fight against money laundering is effective. The gaming industry is often perceived as being one of the vehicles that facilitate money laundering.
In the meantime, the MGA’s CEO Heathcliff Farrugia has been interrogated by police over alleged communications “at some length” with Fenech. He denies any wrongdoing even if he has now resigned together with the MGA chief officer in charge of authorisation.
These were not isolated incidents. In 2016, a bank official issued a letter of recommendation to disgraced minister Konrad Mizzi which was then used to attempt to open an undeclared bank account. Banks had stopped issuing such letters of recommendation, often addressed ‘to whom it may concern’, a long time ago.
Another official of the same bank accepted a free holiday from one of the clients to whom he lent money.
This state capture by corrupt businesspeople is worrying because of the financial costs to taxpayers and because it confirms the collapse of the checks and balances meant to protect democracy.
At a time when Malta is trying to re-establish its credentials as a respectable jurisdiction, to have the financial services and gaming regulators compromised by suspicious liaisons with businesspeople is unacceptable.
Cuschieri and Licari have suspended themselves from their positions. Outright resignations are in order.
Instead of insisting that Cuschieri be sacked, Prime Minister Robert Abela has defended him, throwing in multiple red herrings. Abela questioned if Cuschieri knew at the time that Fenech was a suspect in the murder of Daphne Caruana Galizia and wondered if this was an attack against him and people “close to him” or an attempt to undermine the country.
The fact that seems to escape Abela is that regulators, like Caesar’s wife, must be beyond suspicion. Thousands of jobs depend on Malta’s ability to project itself as a trustworthy jurisdiction where regulators are indeed autonomous and free from political influence.
State capture is a dangerous phenomenon that corrupts a nation’s soul. Former prime minister Joseph Muscat’s strategy to control every nook and cranny of public governance has already caused enormous harm to Malta and contributed to the climate which led to the murder of a journalist who challenged that strategy.
It is the right time for Abela to fight back against state capture for the good of the nation.