A director of the MFSA and former justice minister has filed court action against the authority's Chief Executive, protesting a “golden handshake” offered to a company official out of public funds.

Lawyer and former Labour minister Joseph Brincat called on Joseph Cuschieri, both personally and as CEO at the Malta Financial Services Authority, to desist from paying out money which was not his to hand out as he pleased.  

Dr Brincat's judicial letter comes just weeks after Times of Malta brought to light a controversial golden handshake deal given to George Spiteri, who served for years as the financial regulator's Human Resources director.

Mr Spiteri was "encouraged" to take a €150,000 early retirement scheme and then engaged in the same position with an offshoot of the same authority.

When contacted on Monday, Dr Brincat said his judicial letter concerned a different case and not that of Mr Spiteri.  

Judicial letter

In his judicial letter, Dr Brincat said that as a member of the MFSA board, he was duty-bound to take all possible measures to block any action that amounted to a criminal offence. Not doing so would render him “criminally responsible.”  

The Authority depended partly on funds allocated to it by Parliament out of the Consolidated Fund, voted for specific purposes, and no one had the right to use such monies save for the purposes authorised by the House of Representatives and vetted by the Auditor General.

Yet, recently media reports revealed that an official had received a “golden handshake”- apart from the early retirement scheme - in an attempt to reach an agreement which would end his employment. 

However, such a payment was not covered by any vote in Parliament and there was effectively no relative provision on the matter.

This meant that any monies paid would be taken out of funds intended for other purposes, Dr Brincat argued, stressing that this amounted to a crime since funds thus entrusted “were no blank cheque” to be cashed according to the CEO’s personal whims and fancies.

Dr Brincat called upon Mr Cuschieri to stop from forking out this “golden handshake” since this was certainly “not the private sector or his own personal business.”

The handling of public funds was basic to the rule of law and a public administrator was to abide by the rules so as not to bring shame upon the government, Dr Brincat added.

He observed that in this case, the CEO had failed to shoulder responsibility “letting newspapers and politicians direct attacks against the current administration, knowing that no member of government was to blame.”

The letter was notified to both the Auditor and Attorney General.