Government is not a business

Had the government allowed matters to proceed in court it would have rightfully taken back a property valued at €500 per square metre.

Cartoon by Mark Scicluna
Cartoon by Mark Scicluna

It is with heartfelt disappointment that one has to admit that the sometimes unwarranted contempt of the Maltese political class for bureaucracy and good governance shows no sign of abating.

Political parties want to reinvent themselves into sanitised, centrist, and non-ideological organisations for their ‘catchall’ politics. The end-result is no longer about putting government at the service of the citizenry and serving the public good; but to treat voters as clients, serving interest groups to their satisfaction, irrespective of the public good.

In 2008, MaltaToday broke the story of a spending spree of €4.6 million in direct orders issued by the Office of the Prime Minister for security, car park, and the outsourcing of clerical duties at Mater Dei hospital. Like the Café Premier story we broke in February last year, that story was vindicated by the National Audit Office, which revealed serious shortcomings in public procurement, among others. And like this newspaper had stated at the time, it is now up to the Prime Minister to answer to the shortcomings that the NAO identified in the Café Premier ‘bailout’.

In 2008, Lawrence Gonzi proved himself impervious to the NAO’s chastisement, saying with bravado he would do the same thing again if he felt it was the right decision. Joseph Muscat is advised not to display the same kind of grit. It has been embarrassing to see one of his first acts in government being torn to shreds by the Auditor General. The decision to reacquire a 65-year emphyteusis on the Café Premier, ostensibly for reasons to protect the Grade 1 importance of the National Library from its uglification by a catering establishment, was marred by a total disregard of good governance, accountability and transparency: values that were part and parcel of Muscat’s election battlecry.

Muscat’s only face-saver is that the €4.2 million the government spent was a fair market price, but as the NAO pointed out, this was not necessarily value for money: in part because court action had already been started by the Government Property Division (GPD), which would have eventually regained the property for the State; and on the other hand, because the property could have been sub-leased to a third party, AX Holdings – whose offer was not put on the table at the time of the negotiations with the government.

Had the government allowed matters to proceed in court it would have rightfully taken back a property valued at €500 per square metre. It would have probably been left to contend with some €1.5 million in unpaid taxes, VAT, and rental arrears. But Cities Entertainment would be left on their own to pay back a €2.5 million loan taken out with Banif Bank.

It is clear that in April 2013, the new Labour administration was raring to go and eager to get to grips with a cumbersome bureaucracy. But in its troubleshooting zeal to reclaim the Café Premier, it threw out the good governance rulebook, did not consult the GPD, and it used a civil servant – a Labour candidate, now director of the Joint Office – to carry out the valuation, and conduct negotiations using an advisor of the OPM.

In their enthusiasm to run government like a business, the Labour administration used considerable taxpayer money to nullify the debts run up by an unsuccessful private enterprise. And it’s there that they subverted the basic rules of the free marketplace. Politically, it will cost Muscat more unless he shows himself ready to take mitigating measures not to allow the Café Premier story to repeat itself.

In praise of… the Auditor General

Like the Ombudsman, the Auditor General is an independent officer of parliament endowed by the Maltese Constitution with independent advisory and investigative powers. Not influenced by partisan interest, it is to our benefit that the Auditor General can go about the analytical business of determining whether the political class is giving us value for money with the tax money entrusted to them.

The Auditor’s office has suffered the brunt of politicos and their slurs, who in the past doubted the expertise of the office in a bid to undermine its credibility. So were offices like the Ombudsman’s and the MEPA auditor’s forced to fend off accusations that their objective, knowledgeable interpretation of the law emasculated government policy.

But it is these career civil servants who fully appreciate that the structure of government is built so as to protect the interests of taxpaying citizens, with checks and balances in place to prevent abuse, political largesse, and misappropriation. They are guardians of the purse and it is to them that a doff of the hat is in order.

More in Editorial