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ITS deal | How PN ran with hares and hunted with hounds as government made the kill

By soliciting donations from Silvio Debono’s company, the PN has undermined its good governance pledge. But there is more than a pinch of irony in Labour attacking PN when the advantageous land deal was concocted and sealed under this administration's watch

james
James Debono
6 March 2017, 10:47am
On ITS deal Simon Busuttil was always one step behind public opinion and has only stepped his ante when his deputy leader came under fire for being party to negotiations on the deal.
On ITS deal Simon Busuttil was always one step behind public opinion and has only stepped his ante when his deputy leader came under fire for being party to negotiations on the deal.
Let us put things in context. Opposition leader Simon Busuttil was right in calling on the Auditor General to investigate the deal on the ITS site.  He should have done so weeks ago when it emerged that the government had been deceiving the public when it announced a €60 million price tag.

In fact the DB San Gorg Property company, which is owned by hotelier Silvio Debono, will pay a €5 million premium and €10 million in seven annual instalments. The rest will be paid for the redemption of ground rent on individual residences included in the project. 

Effectively, this creates a major conflict of interest for the state; for while as regulator it has a duty to control the over development of it site, the state stands financially to gain from the sale of apartments. This is because the more apartments are sold, the greater the income for both the developer and the state.

Surely the PN had criticized the deal but it only upped its ante after it emerged that its deputy leader Mario De Marco was actually involved in negotiations related to what is clearly a questionable deal. 

The impression one gets after learning of the donations made to the PN by DB San Gorg, is that the opposition was – as has been the case with so many other issues in the past months (Townsquare comes to mind) – running with the hares and hunting with the hounds. 

But reacting to popular stupor at De Marco’s involvement in the deal, the party was forced to react in a way which broke one of the unwritten laws of party financing: you don’t turn against the hand that feeds you. 

On their part, DB also felt comfortable enough to break the other unwritten law: that of not revealing the extent of such funding made to political parties. The ultimate consequence is that DB, with the complicity of Labour, has managed to turn the spotlight from the deal itself to the PN. 

And the PN has only itself to blame for this.

In this context to understand what is happening, it is crucial to analyse and dissect the four aspects of the case: namely De Marco’s role, the PN soliciting donations from DB, DB’s decision to ask the PN to return its donations and how all this fits in the plan to develop the site. 

In so doing I have arrived at these conclusions:

1. Mario De Marco made a gross political misjudgement in accepting legal work related to what was bound to be a controversial deal.   His position in the party has been weakened, not just because like many others before him he was making a buck through professional work for a major developer, but because the writing was already on the wall: this particular deal was bound to be the subject of political controversy

Ultimately the only solution to such conflicts of interests is a parliament where MPs are paid decently as full timers on condition that they make a choice between professional and political work.  But that is only part of the story.  In the current conjuncture where the opposition is constantly harping on good governance, De Marco should have known better.  In life one has to make a choice between politics and private business.

2. Party leader Simon Busuttil should never have allowed his party to solicit money from Silvio Debono. The fact that this was apparently done to finance stipends of party officials is even more damning (This is a claim made by Silvio Debono's DB Group which was subsequently denied by the Nationalist Party).  The party is now duty bound to clarify how such donations where made in view of party financing legislation and if this is not the case pay the consequences. 

Moreover past donations to party do cast a dark shadow on permit granted to the Seabank hotel in Ghadira in 2009 and on pressures to relocate the Ghadira coast road even - if the latter proposal was ultimately refused by the Gonzi administration. 

The stark reality is that donations from questionable sources are bound to return to haunt you.  Good governance and money from big business do not mix well.  That is why the country urgently needs a law which introduces state financing of political parties and makes all private donations illegal. 

Truly, until such a law is introduced, the PN stands at a disadvantage especially in view of Labour’s private land deals involving its own properties like Australia Hall.  The scale of Labour's 2013 campaign suggested that Labour is far from virginal when it comes to donations from powerful interests but the moment Busuttil made good governance his main platform, he should have been more careful in his dealings with big developers.  In this case Busuttil was running with the hares and chasing with the hounds.  

3. The announcement by DB group that it wanted its donations back from the PN after Simon Busuttil’s decision to report the deal to the Auditor General is a confirmation that donations are meant to condition political debate in the country. 

It is an illusion to believe that businessmen finance political parties out of love for our democracy.  But that in itself should be a wake up call for political action in the shape of a law which removes the dependence of political parties on donations from such sources.  The fact that these donations were meant to finance salaries of party officials simply increased the leverage of the company on the party.  

The PN may argue that the donations did not condition its criticism of Seabank.  This is only partly correct. In reality the party was constantly one step behind public opinion and only upped its ante in response to the De Marco debacle.  Neither is DB group a victim of the PN’s solicitations for money.  In reality their actions suggest that while seeking an advantageous deal from Labour in government they were also keen on conditioning the Nationalist opposition, which was all to willing to fall in their trap.

The Labour Party may understandably feel comfortable seeing the PN implode in its contradictions, but that does not in any way alter the fact that prime land under is being transferred to DB at an advantageous rate under its watch. 

4. It is Labour which stands to benefit from having the spotlight diverted from its own dealings with Silvio Debono to his dealings with the PN. Neither can one exclude that Silvio Debono is trying to curry favour with Labour through his group's statements.  But in this case the PN has nobody to blame but itself.  Simon Busuttil has no choice now but either to sever links with big developers – and lead a poorer but more honest party – or to continue trying to please God and Mammon at the same time at the risk of losing any credibility he may have left. 

This is also a moment where civil society and third parties can stand up to be counted to channel popular anger against the influence of big business on the political class in to meaningful democratic reforms like full time parliaments, full scrutiny of land deals and state financing for all political parties based on the number of votes gained in the last general election.

If we do not want our democracy to be held at ransom by big business, taxpayers must pay for it.

james
James Debono is MaltaToday's chief reporter on environment, planning and land use issues, ...
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