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On Joseph Muscat’s watch, Malta has earned a reputation for corruption and bad governance throughout Europe, and it remains to be seen whether he has the will or even the ability to turn this unfortunate tide

3 January 2017, 7:30am
It was the Panama Papers scandal that gave Muscat a real opportunity to show his governance mettle
It was the Panama Papers scandal that gave Muscat a real opportunity to show his governance mettle
There seems to be global consensus that 2016 was something of an ‘Annus Horribilis’ in terms of international news and events. 

High-profile celebrity deaths may have dominated the headlines, but in a sense these news items obscure other, much more serious catastrophes which also occurred in 2016. The migration crisis, the worsening civil war in Syria, the resurgence of terrorism in Europe, the election of Donald Trump in the US (and all it represents)... all these and more – including the rise of an aggressive Far Right – cause many to question whether the entire Western paradigm might even be on the brink of collapse.

As is often the case, Malta seems cocooned from most of these realities. Unlike previous years, we were not on the forefront of migration waves into Europe; we were spared the nightmare scenarios witnessed in Greece, Italy, France and across Europe’s eastern frontier. And judging by the style of political discourse used locally – almost unchanged since the 1980s – it is clear that the anti-establishment wave currently afflicting Europe has not been felt here as yet.

All the same, there are indications that Malta is not immune to the malaise gripping the rest of the world. Disenchantment continues to gnaw at the heels of the traditional political parties, give rise to splinter groups and new political formations. And there was, of course, one major international event which had a massive impact on local politics: the Panama Papers scandal, which revealed a key Cabinet minister and the OPM chief of staff to be embroiled in secretive financial instruments set up in a notorious tax haven.

This posed a significant problem for Prime Minister Joseph Muscat, who had been elected on the promise of transparency, accountability and meritocracy. 2015 had already eclipsed many of those promises: this time last year, MaltaToday took Muscat to task for appointing ‘persons of trust’ across the board in the country’s administration: including the appointment of Labour MPs on government boards in a way which made them dependent on the Prime Minister’s generosity, thus undermining their autonomy. 

There was a slackening of the planning regime which saw the approval of a number of dubious permits: including one for parliamentary secretary Ian Borg in Rabat, chastised by the planning ombudsman.

In February 2015 the Auditor General found insufficient justification for the government’s decision not to pursue legal action in a bid to rescind the lease on Café Premier in Valletta, through a €4.2 million payment to buy back the 65-year lease on the cafeteria revealed by MaltaToday a year before.

In March the Auditor General also questioned a “ministerial direction” in a hedging agreement with Azerbaijani energy giant SOCAR. The government’s good governance credentials received another blow in view of the €1.65 million expropriation of half a property in Old Mint Street, Valletta, from Mark Gaffarena, in two separate contracts earlier in 2015.

The year ended with parliament being rushed to approve the land transfer to the Sadeen group before the Christmas recess, in the absence of any tendering procedure.

Matters did not improve in 2016 either. Though the Gaffarena scandal resulted in the resignation of lands secretary Michael Falzon, the Labour MP was quickly reabsorbed as a private consultant for the Grand Harbour Regeneration Corporation (whose CEO, Stefan Zrinzo Azzopardi, is himself a former PL president). In brief, political nepotism proved just as rampant in 2016 as the preceding three years under Labour.

But it was the Panama Papers scandal that gave Muscat a real opportunity to show his governance mettle. Energy Minister Konrad Mizzi was the only serving European minister actively named in an international scandal that toppled Prime Ministers in other countries (eg, Iceland). Mizzi was nonetheless retained in Muscat’s Cabinet, and given a vague portfolio which allowed him to continue representing Malta’s interests in the energy sector.

This was (and still is) unacceptable by any standard, and the fall-out is already plainly visible. The European Parliament rejected Leo Brincat for the Court of Auditors merely by association with the scandal... the fact that Brincat got the job anyway does not lessen the damage caused to Malta’s international reputation for governance.

The cold truth of the matter is that, on Muscat’s watch, Malta has earned a reputation for corruption and bad governance throughout Europe. Labour sympathisers may feel this is unfair, given the lack of similar attention to the PN’s past scandals. But that is irrelevant: the harm is done, and efforts must now be made to undo it. 

It remains to be seen whether Muscat has the will or even the ability to turn this unfortunate tide. 2017 in the last year of his first term: there may not even be enough time to act before the country is once again engulfed by election fever. Polls so far continue to favour the Labour leader: this in turn may discourage him from taking actions which – while necessary to salvage Malta’s reputation – may weaken his position with the electorate.

Muscat now faces a choice: whether to put the country’s interest before his own. Experience suggests he will choose his own interests. But there is still time to prove this prediction wrong.

DealToday
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