Politics is a full-time job

The troubles engulfing former Energy Minister Konrad Mizzi stem from his handling of private financial interests while wearing a political hat

18 October 2016, 9:56am
Cartoon by Mikiel Galea
Cartoon by Mikiel Galea
If there is a common thread running through the various political scandals over the years – under both Labour and Nationalist administrations – it would be the danger of politically-exposed persons (PEPs) retaining lucrative private financial interests.

The troubles engulfing former Energy Minister Konrad Mizzi stem from his handling of private financial interests while wearing a political hat. Other, non-political individuals were named as having set up financial instruments in dubious tax jurisdictions; and while concerns do exist in such cases, they are broadly not in the same league as decisions taken by those wielding political power. 

And while Mizzi’s case was particularly suspect because of the nature and timing of the revelations, while being egregious for what looks like an attempt at gross tax avoidance by a government minister, he is by no means the only Maltese politician to blur the line between private interests and public responsibilities.

The recent case of former home affairs parliamentary assistant Beppe Fenech Adami retaining financial ties with Baltimore Fiduciary, the nominee owner of CapitalOne – at one point the subject of a Dutch/Europol investigation – were rooted in the same malaise. Likewise, Tonio Fenech’s troubles with the Swedish Pensions Authority create political trouble for the former minister’s private business dealings and his role as an MP today.

Elsewhere, there are examples such as Joe Sammut, a Labour MP who retains a close collaboration with businessman Marco Gaffarena; or Charles Buhagiar, who still provides architectural service for local councils even if he is chairman of the Building Industry Consultative Committee; or take Franco Mercieca, the former parliamentary secretary for elderly who still wanted to retain his private consultant’s income.

Such cases are not all comparable on a level of seriousness; nor is it necessarily the case that a private financial interest automatically equates to corruption. But it remains a fact that Cabinet ministers and persons holding high public office are not subject to the same ethical expectations as private individuals. And rightly so, because a politician has to be above suspicion when legislating on behalf of an entire country.

This much is well understood, both locally and throughout the democratic world. Yet while we all agree on the basic ethics of political engagement, in practice we seem to have been unable to ever address the root cause of the issue itself. This creates a glaring contradiction in the way politics unfolds in Malta. On one hand, the electorate is becoming increasingly discerning, and sensitive to the issue of conflicts of interest involving politicians. This explains why such issues now provoke outrage, when up to only a few years ago they would have been considered ‘business as usual’.

This is naturally a positive development; but on the other hand, Malta has also retained a political system that makes such conflicts all but unavoidable in practice. Our Members of Parliaments are part-timers: and this means they are allowed to retain their more lucrative interests while still occupying the House. And unlike practically any other democratic model, the procedures and rules governing such interests remain vague and largely unenforceable. On paper, MPs are required to annually declare their assets – which include all financial interests, invested anywhere in the world – to Parliament. Yet there is no actual legal obligation to comply with this requirement; nor any significant penalties for when an MP is caught lying in his or her declaration.

This lack of clear regulation on such a politically sensitive issue is creating uncomfortable precedents in Maltese politics. In virtually all the above-mentioned cases, the politician at the centre of the controversy would resort to the traditional defence that there was ‘nothing illegal’ in the activity concerned.

This is at best a weak argument. There should be something illegal in all such cases. And it is members of Parliament, in Malta’s political set-up, who get to decide what is legal or not.

One way to address the issue would simply be to implement the recommendations of Europe’s anti-corruption GRECO, which flagged the anomaly in a report last year. In its annual report, GRECO expressed concern on the conflict of interests of Maltese Parliamentarians who are “generally part-time legislators who maintain their private practices”. 

According to GRECO the private interests of parliamentarians create the “potential for a conflict of interests due to the personal and professional networks and business links built across Malta”. To address this serious democratic deficit, it proposed reinforcing legislation concerning ethical conduct and accountability in public life.

Such legislation should apply not only to members of parliament in general, but also to ministers, parliamentary secretaries, parliamentary assistants, as well as employees in a position of trust and persons engaged as advisors or consultants to the government and any statutory body. 

Moreover, the time has come to revisit Malta’s model of a part-time Parliamentary system. Clumsily as it was handled at the time, former Prime Minister Lawrence Gonzi’s ill-fated decision to give ministers an increase salary by adding on their MP’s honorarium, backfired so badly that no government in its right mind would try to increase the remuneration of ministers.

But this newspaper reiterates its position at the time. We cannot continue ignoring the elephant in the room forever. Unless MPs are made full-timers who have to relinquish their financial interests, in such a way that they do not burden their decisions, Maltese politics will remain married to business interests.