Limiting our exposure to economic crime | Edward Zammit Lewis

Malta is under severe pressure to reform its justice and law enforcement sectors, especially when it comes to economic crime. Justice Minister EDWARD ZAMMIT LEWIS is however confident that his reform programme will meet the required standards

Justice Minister Edward Zammit Lewis
Justice Minister Edward Zammit Lewis

The Ombudsman’s report this week was an indictment of Malta’s state of governance: especially the fragility of national institutions “whose inability and failure to promptly bring to justice those responsible for serious violations of the law gravely undermined the democratic credentials of the country.” Do you take this as confirmation that accusations of criminality and mafia, inside the highest echelons of power in Malta, are in effect true?

First of all, I cannot comment either way when it comes to matters of criminality, because that is something for the courts to decide…

But that’s the whole point of the Ombudsman’s criticism: that national institutions were not functioning properly…

I don’t agree that the law courts ‘were not functioning’… you have to make a distinction between ‘not functioning’, and needing renewal, or needing greater administrative capacity.

Let me give you a concrete example: the executive police.  I believe that there is need to increase the capacity as regards the fight against economic crime: and this is something we are working hard upon, with the help of Minister Byron Camilleri and Minister Edward Scicluna. The Police Force has to embark on a total root-and-branch  overhaul, even with regard to the conditions of employment of the people they recruit: to get people who are equipped, vis-à-vis human resources, to analyse data; to analyse bank statements; to be better able to fight white-collar crime.

But this is what we are already doing. That is why, within four months, I conducted and proposed a number of key reforms. Because I agree with the Ombudsman, that certain institutions need renewal and strengthening; and past experience shows us that particular sectors are exposed to white collar crime…

Yet the Moneyval adjudication, coming up in October, is widely expect to ‘grey-list’ Malta as a financial centre: based on the fact that there have been no criminal prosecutions, despite evidence of economic crimes having taken place during the time when Labour was in power…

I don’t agree with you there. I believe that the reform in the Police Force has been overdue, not just for the last seven years. More like the last 17 years…

But Labour has nonetheless been in power for the last seven years, and nothing was done about it during all that time…

That is why we are conducting the necessary reforms, and taking them highly seriously – with inter-ministerial co-ordination, under the Office of the Prime Minister - to adhere to the Moneyval recommendations: not just to tick all the right boxes, but to have adequate structures to reduce our exposure to economic crime.

We are country where two important pillars are financial services, and remote gaming; and as you can appreciate, those sectors are indispensable to high-quality jobs. But they also give us high exposure to trans-border crime; to money-laundering; to financing of terrorist activities… I’m not saying any of this is happening, but we do have that exposure. And we need to limit that exposure.

Do you think you’ll manage in time to avoid what has been described as the ‘inevitable’ grey-listing of Malta?

I am optimist; and we are working very hard towards it. We will soon have the opportunity to do another interview, on the very important laws and structures we are introducing, especially to fight money-laundering…

Meanwhile, the decision to sack Konrad Mizzi this week was heralded as ‘raising the ethical bar’ inside Labour; but without clear investigations on the Panama Papers and other major investments such as VGH and the Electrogas power station… isn’t this a hollow gesture? Do you agree that many of the major decisions and investments under the aegis of Joseph Muscat and Keith Schembri have to be investigated by police and magistrates?

I disagree with your question, because it is not factually correct. The prime minister did take a decision: he took a very important decision, within the structures of the party…

I’m not saying he didn’t. I’m asking whether it was enough, given that Konrad Mizzi and Keith Schembri were involved in so many other questionable government transactions…

But there are investigations ongoing. On Vitals, for instance, there is a magisterial inquiry… under Magistrate Doreen Clarke. There are other investigations in progress. Are they taking long? Yes, I agree that they are.  And I believe that they should be concluded as quickly as possible; I have said so publicly as well.

But I cannot intervene; as if I do, it would undermine the impartiality and independence of our judicial system…

The decision itself was taken last Tuesday. But the Montenegro connection has been known to the Prime Minister since at least last January: when it was brought up at a Cabinet meeting for which you were present. So why did it take so long to take action?

That is a gratuitous assertion. I cannot comment on Cabinet meetings; but I beg to fully and strongly disagree with that assertion.

So it wasn’t mentioned at that Cabinet meeting?

I can’t comment on that; but I strongly disagree with that assertion.

Turning to the Venice Commission recommendations: earlier this month, it was announced that the President of the Republic – who has already been given the final say on appointments to the judiciary, and other public positions – will be henceforth be appointed by a two-thirds Parliamentary majority. Your government had previously disagreed with that proposal. Why the change of heart?

We changed our position, because we appreciated the argument that, if the President is going to choose a judge or a magistrate from a list of three candidates… and we have now removed from the process the Cabinet of Ministers, the  Prime Minister, and anything do with the Executive – we would have to give the Office of the President more security of tenure.

So we gave that executive power to the President instead, for the first time since 1964: and this has to be appreciated as well. From now on, the President will be appointed by a two-thirds majority in the House of representatives; and also removed by a two-thirds majority… both for the same reasons found in the Constitution, applicable to members of the judiciary.

This is a total breakthrough for our country: I don’t want to sound bombastic; but this reform is bigger than the 1974 reform of our Republic; and the 1987 reform which introduced proportional representation, and the neutrality clause in our Constitution. These reforms are more far-reaching than those two…

Given, however, that past efforts to remove sitting judges through a two-thirds majority have so far always proven unsuccessful…

We changed that as well…

… but the same measure has now been extended to the President. So what would happen if it proves impossible to reach that level of consensus in Parliament (as has happened in the past)? Wouldn’t that precipitate a governability crisis? Also: what would happen if one party succeeds in occupying two-thirds of the House on its own (as could happen in the case of Labour, according to recent polls)?

Let me answer the second question first. I understand the concern; though I can’t comment much about it, because if that happens, it would be the democratic will of the people. And I can’t say it’s not my wish to reach that situation, either; because I am a member of the Labour Party. I have to declare my own interest.

But regarding the system itself: it works. It works with the Ombudsman; it works with the Commissioner for Standards in Public Life; it works with the Auditor General; it is a system that works.

As for the first part of the question: I am very confident that the Opposition will be responsible. We have a good track record on that score, even with the Opposition. I’m going to be fair: I found very valuable help from one of my counterparts, the Hon. Chris Said – because I have practically five counterparts in the Opposition, who cover my ministry – who has been very constructive in contributing to these reforms.

And we already have the experience of the appointment of the new Chief Justice: who was appointed by a unanimous vote in the House of Representatives. Again, this is something that never happened since 1964.

Under the new proposals, ‘the Principal Permanent Secretary will be appointed by the president on the advice of the cabinet, after consulting with the Public Service Commission’. This is very similar to the previous mechanism for appointing the President: in which case, government was free to ignore the results of any ‘consultation’. Is this a case of a superficial change that will still leave the final say in the hands of Cabinet (and therefore at the prime minister’s discretion)?

No, and I will explain why. First of all, permanent secretaries have to enjoy a certain degree of confidence by the administration.

Secondly, I believe in the distinction between politicians, and the Civil Service.

We have inherited this Anglo-Saxon system, which - irrespective of what people on the Continent say about it - works well, and has worked for decades. It is a good system. My experience – and I am not ‘young’ in politics anymore – is that we have very good people in the Civil Service. Even if they come from, or are affiliated with, the opposition party, my impression is that they do a good job, both for the country and the administration.

So what we are saying – and this has been noted as a welcome development by the Venice Commission – is that the Principle Permanent Secretary, who in our system is also the Cabinet secretary, will be appointed by the Cabinet… because Cabinet decisions have to be implemented by the administration. So there has to be that link.

But – and here is the difference in the new system – permanent secretaries will be selected from a list of candidates given by the Principle Permanent Secretary to the Public Service Commission: in which I have total trust, even in the members nominated by the Opposition leader. The Public Service Commission will choose all the permanent secretaries; who will then be appointed by the President of Malta.

So the Prime Minister will not have a free hand in appointing the Principle Permanent Secretary. Ok, you may say that the position will be still chosen by the Cabinet of Ministers… but there is a dilution of powers: and the Venice Commission has recognised this.

Regarding ‘persons of trust’: government is proposing “a maximum number of people who can be engaged as persons of trust in secretariats of ministers and parliamentary secretaries”. But was the problem really that there were too many ‘persons of trust’… or the lack of transparency in how they were appointed, or conducted their functions?

To be frank about it, I think the problem was that people who were appointed as persons of trust, weren’t people who were fundamentally attached to ministries as consultants. That was our main challenge.

I believe that every minister has to have a free hand, to a certain extent, to appoint a consultant: because the minister needs to have confidence in the appointee… and up to a point, he has to also trust his loyalty as well. But we needed to regulate the situation, both quantitatively – hence the maximum number – and also qualitatively.

There is now a manual, published by the Principle Permanent Secretary, with a number of specific principles to regulate this issue. But we didn’t stop there: we are going to amend the Public Service Act… and also the law regulating standards in public life, to give the Standards Commissioner more powers to supervise the situation in the respective ministries.