Former Prime Minister Joseph Muscat gave his blessing for then MFSA CEO Joe Cuschieri to continue drawing an additional pay packet from the regulatory authority, a parliamentary committee heard on Tuesday.
Apart from his pay as CEO, which was over €100,000, Cuschieri also requested to be paid for his role as an ex-officio member of the MFSA’s board.
In a parliamentary hearing before the public appointments committee on Tuesday, MFSA chairman John Mamo said he had sought advice from Muscat after an internal audit committee at the financial regulator flagged how Cuschieri was drawing this extra pay over and above his remuneration as CEO.
Replying to questions by PN MP Karol Aquilina, Mamo said he had turned to the former Prime Minister because at the time, he was responsible for the MFSA.
Mamo recounted how Muscat informed him that he was “under the impression” that the MFSA CEO was entitled to this extra pay.
The MFSA chairman said he too agreed Cuschieri should draw a pay as an MFSA governor, as the role came with its own set of responsibilities that were separate to his job as CEO.
Mamo said this stance was confirmed by former Finance Minister Edward Scicluna when responsibility for the MFSA was transferred to him.
However, the MFSA chairman said the decision to grant Cuschieri this extra pay was later reversed after the Finance Ministry sought further advice about the matter.
Cuschieri resigned last November after Times of Malta revealed he took an all expenses paid trip to Las Vegas with murder suspect Yorgen Fenech shortly after being appointed to the financial regulator in 2018.
Mamo said Cuschieri and Fenech were “friends from the MGA”.
Cuschieri headed the MGA between 2013 and 2018, and was responsible for regulating the gaming sector, in which Fenech’s Tumas Group is heavily invested.
The MGA is being sued by Tumas rivals Dragonara Gaming for an alleged illegal extension of the Portomaso casino concession run by Tumas Gaming. The extension was granted when Cuschieri still headed the MGA.
Las Vegas trip a 'misdemeanour'
Questioned about the Las Vegas trip during the committee meeting, Mamo said it was a “misdemeanour”, not an enormous offence.
Mamo said that the internal inquiry into Cuschieri had been concluded but had for “some reason” not been published.
Asked if he thought the inquiry report should be published, Mamo said he had no strong feelings either way.
“It did not have much substance,” Mamo said of the inquiry headed by former chief of justice Joseph Azzopardi.
On regulatory failures by the MFSA, Mamo acknowledged that the regulator had not kept pace with the sector's growth.
“There were certain deficiencies that were pointed out to us by the IMF and Moneyval, particularly on authorisation and supervision. We filled these holes," Mamo said.
Mamo said the now shuttered Pilatus Bank and Satabank were two “accidents” that were unfortunate for Malta, pointing out that money-laundering had taken place at these two banks.
He argued that such failings also occurred in much larger jurisdictions.
The committee meeting was characterised by frequent interruptions from government MPs, who objected to Mamo being pressed on certain issues by Aquilina.
“You can ask questions, not interrogate, you can ask for explanation about things. We are here to see if he should be appointed or not. This is not a court, this is parliament,” PL MP Joe Mizzi interjected at one point.
At the end of the meeting, the committee voted in favour of Mamo’s re-appointment, with all four government MPs voting in favour and the three PN MPs voting against.
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