A government in denial

The Prime Minister must come to terms with the seriousness of the situation for another reason: ‘Panamagate’ has also exposed glaring administrative lacunae in the country’s ability to guarantee good governance.

It is becoming increasingly evident that Prime Minister Joseph Muscat has not yet taken on board the seriousness of the revelations concerning Energy Minister Konrad Mizzi and his own chief of staff, Keith Schembri.

Even the fact that Muscat would make a sudden announcement, out of the blue, calling for a national debate on gay marriage, is a clear sign that he is scrambling to regain control of the news agenda.

At any other time or in any other context, the Prime Minister’s declaration would have been interpreted as a logical (and welcome) extension of his government’s progressive agenda.

Under the circumstances, however, this scenario does not seem plausible. Given the scandal unfolding all around him, it is difficult – if not impossible – to avoid the impression that Muscat has raised this issue only as a red herring, to deflect attention from his own failure to take decisive action over ‘Panamagate’.

Not only is the ploy in itself somewhat cynical; it also demeans the issue by reducing it to the level of a political smokescreen. 

This in turn betrays a certain insensitivity on Muscat’s part, on the one area – civil rights – where his government was previously unimpeachable. 

There are many people of all sexual orientations who take the issue of full marriage equality very seriously indeed. The last thing they would want, at this stage, would be for such a critically important issue to be used as the equivalent of a ‘Get Out Of Jail Free’ card for the beleaguered government.

But the Prime Minister must come to terms with the seriousness of the situation for another reason: ‘Panamagate’ has also exposed glaring administrative lacunae in the country’s ability to guarantee good governance.

In a normal democracy, the Prime Minister would have asked a senior Cabinet minister to resign over revelations that he had established an overseas trust with links to ‘shell companies’ in a notorious tax haven.

The simple reason is this: such structures open up government ministers to suspicions of tax avoidance, aided by opaque offshore jurisdictions that allow them to minimise their tax exposure. Much worse, they also hide the sources of any income they may receive from overseas.

For a politically exposed person like Konrad Mizzi – who handles a sensitive portfolio – the problem is clear: his is a position that is hypothetically easy to abuse, and an offshore structure such as this only raises suspicions. It goes without saying that, as a Cabinet minister, he should be above suspicion at all times.

Even Schembri’s offshore interests pose a problem for the PM, because he is Muscat’s right-hand man. Even if he is an unelected official, and not directly answerable to parliament, his closeness to the Prime Minister raises questions about how much of this financial arrangement was known to Muscat from beforehand. 

In spite of all this, however, the reality is that Muscat will not be asking any of them to resign. He needs Mizzi to steer his energy policy towards success, apart from running his next electoral campaign; and Schembri remains his enforcer, ally, and confidant.


But this blow is one that affects the Prime Minister personally. Too many scandals have erupted over the past three years, in what should have been a new political season heralded by Muscat. Having already lost two ministers, he is now faced with the greatest crisis he has ever had to face.

The biggest problem with the government’s current state of denial is that it risks impinging on the government’s performance in other areas. A reformist and secularist agenda that the island has long needed now risks being jeopardised; much-needed social reforms – such as free childcare and a programme of civil liberty reform – are now imperilled.

The danger here is that this agenda is not shared by an Opposition which often strikes out in very different directions. The Nationalist Party did not support civil unions and gay adoption; historically, it opposed divorce, and retains a quintessentially conservative outlook on such issues as embryo freezing and the decriminalisation of religious vilification.

Muscat’s failure to take corrective action on ‘Panamagate’ also provides Busuttil the opportunity to present a viable alternative on governance issues. Busuttil has already mapped out a blueprint for political reform where it comes to standards for the political class that shows the government the gaping holes in governance that it seems intent in ignoring.

For too long, Muscat has basked in the success of his economic performance. ‘Panamagate’ is an indelible stain on his record, one that can be expected to debit his comfortable ‘trust ratings’ with the electorate.

Unless Muscat makes good governance a priority over the next two years, he will allow this scandal to become a tragic part of his administration. He must enact urgent reforms on the appointment of persons-of-trust and their ethical obligations; reform the parliamentary declaration of assets; have chairpersons or CEOs who are directly appointed by the state, submit to an annual grilling by a parliamentary committee.

Above all, discipline must be instilled across the board, among public appointees who seem to enjoy carte blanche when it comes to actions that offend people’s decency.

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