A bill to protect the JS list

The bill presented by the PN government to GRECO is not meant to make party financing transparent. It is meant to keep the JS list funding mechanism intact.

The Group of States against Corruption characterised the bill on party financing is very weak, as it allows party members to donate as much money as they like without having to declare it.
The Group of States against Corruption characterised the bill on party financing is very weak, as it allows party members to donate as much money as they like without having to declare it.

European anti-corruption watchdog - The Group of States against Corruption - has described the government's bill on party financing as 'very inadequate'. GRECO was established in 1999 by the Council of Europe to monitor States' compliance with the organisation's anti-corruption standards. It says that the bill is so full of loopholes that it is rendered meaningless as a tool that would bring about transparency in political funding - its aim finally being to ensure that donors do not influence the decision-making and dictate the policies of political parties.

GRECO also characterised the bill on party financing is very weak, as it allows party members to donate as much money as they like without having to declare it. Only the names of non-party members donating more than €10,000 will be made public. It is quite clear that the PN is finding it very hard to break away from the tradition it has built over the years through the JS list consisting of companies and individuals who win public contracts and are then asked to go over to the PN headquarters to donate money.

The names on the JS list are not made public, and the amount collected this way is never announced except partially and anonymously in the fund raising marathon organised by the PN and transmitted live on NET TV.

PN has never denied media reports that nearly a month ago, on the eve of the EU summit to deal with the eurozone crisis, Prime Minister Lawrence Gonzi was at the PN Headquarters at Tal-Pieta' meeting PN donors on the JS list.

As in previous years - and even during the days of Eddie Fenech Adami as PN leader - these donors are contacted days before and told to come to the PN HQ with money that they then hand over to a person accompanying the PN leader.

Gonzi's appointment with these PN donors had been prepared from the beginning of December. Donors were told that the minimum donation should be around €5,000. According to the bill presented by the PN government, the JS list would be able to go on. As separate donations would be kept below €10,000, none of them would have to be mentioned by name.

Also, PN donors who are fat cats and get many public contracts, would be able to give as much money as they like without having to be mentioned by name.

The bill presented by the PN government to GRECO is not meant to make party financing transparent. It is meant to keep the JS list funding mechanism intact.

Toothless MFSA

A port worker is still waiting to have his complaint to the Malta Financial Services Authority dealt with seriously after he felt tricked by Global Capital for 'persuading' him to invest most of his hard-earned pension in the Protected Asset TEP Fund plc. He did not really understand what he was signing up for and what he was investing in, and feels that Global Capital took advantage of his lack of knowledge of financial affairs. The last time this retired port worker heard from MFSA was more than 18 months ago, and all that he learnt during this communication was that his case was very complicated and that they needed more time to investigate it and sort it out.    

The port worker is now being represented by Finco Treasury Management, which has written to MFSA saying that the delay to deal with hundreds of such cases "is hardly respectful of members of the investing public, which investing public was placed in the Authority's protection by the Act setting up the Authority."

Finco Treasury Management insists that: "There is nothing complicated in client's complaint in order to assess whether the Investment Services Rules applicable at the time of sale (9 November 2007, and hence post-MIFiD) were complied with or not by the financial intermediary on a substantive basis, and who sold this complex product to a Port Worker Scheme worker who had received a commuted sum for part of his pension and for which he had worked the best of 30 years, an individual with zilch financial knowledge and experience, only to lose a very substantial part of his capital, especially if he should decide to encash the investment."

Finco Treasury Management believes it does not need lengthy investigations to establish that advantage has been taken of  investors' ignorance in financial matters to give the impression that the TEP Fund is a "capital guaranteed" product with the crafty use of semantics in the language used, when the Fund is in fact an open-ended investment company. The client is confused when the intermediary makes available product literature that plays with words and advises the lay man consumer that: "TEPs can offer investors large in-built capital guarantees together with capital growth comparable to and exceeding similar low risk investments." 

There is no doubt that to promote this product as "a low risk investment" also constitutes misselling, namely a wrong risk categorisation; in the UK, for a much less barefaced erroneous risk categorisation, the FSA took prompt and severely punitive and regulatory action (e.g. Barclays mis-selling case of January 2011).

Finco Treasury Management believes that this case is "yet another instance where formalities cannot be allowed to override substance: it is most obvious from the documentation, copies of which are held by MFSA that the intermediary procured client's signatures to all sort of omnibus declarations, including execute-only instructions and declarations that he has not obtained any advice, in order to defeat the spirit of the Investment Services Rules and intended for the intermediary to avoid any legal responsibility for misselling. This practice borders on investment fraud since such declarations are taken from clients unknowingly."

Evarist Bartolo is shadow minister for education.