[ANALYSIS] Muscat has to step back for his party to avert meltdown

For the past three years the prime minister has deliberately chosen to keep Keith Schembri, his chief of staff and person of trust, in office. His resignation was announced to the public by Muscat while Schembri was facing a police interrogation related to ongoing investigations on the Daphne Caruana Galizia assassination probe.

The PM is to be blamed for putting the country in a Catch-22 situation, torn between respecting a strong electoral mandate which the government enjoys, and holding those responsible in power – not just for unethical and potentially criminal behaviour – but in the PM’s case, for fatal political misjudgements.

From strong mandate to moral bankruptcy

Labour has a clear mandate to govern and complete this legislature. This mandate was reinforced by a strong performance in mid- term elections and a strong economy. Just six months ago, Muscat was at the peak of electoral popularity, a living testimony to the tattoo ‘Invictus’ believed to be inscribed on his right bicep.

Moreover over the past years Malta had drifted further to a semi-presidential system where the prime minister incarnates the mandate and generates loyalty beyond the party’s more restricted constituency. Any demand for his resignation can easily be interpreted as an attempt to subvert electoral results.

But Malta now finds itself facing its greatest political earthquake in contemporary history, led by a Prime Minister who for three years refused to sack a minister and a chief of staff who not had not only set up secret companies in Panama after the 2013 election, but had listed 17 Black – a company owned by Tumas magnate Yorgen Fenech – as a ‘target client’ from whom they planned to receive €5,000 a day.

The moment Fenech was investigated in relation to the police probe on the ‘commissioned assassination’ of Daphne Caruana Galizia. The position of Mizzi and Schembri became even more untenable. Yet even at this stage Muscat remained reticent on firing them. It was only when Schembri himself was taken for interrogation, that heads started rolling.

Normally in such circumstances the country needs strong leadership. Muscat immediately reacted to Caruana Galizia’s assassination by promising to leave no stone unturned in solving this case, and his words were matched by the arrest of the three executioners weeks after the murder. At that stage Muscat emerged stronger than ever. He was rewarded by greater public support. Muscat may be tempted to think he can repeat the act, by at least hanging on till the culprits for Daphne Caruana Galizia’s murder are brought to justice.

But in so doing he risks presiding over the implosion of his government. While the arrests of the middleman now offered a pardon and Fenech suggest that the institutions are functioning well, Muscat himself is too compromised to take on this role.

The situation is messier than it was in the aftermath of Caruana Galizia’s assassination, for a number of reasons. The optics are surely not in the PM’s favour. Even in the absence of any direct involvement by close political aides, Yorgen Fenech’s name is too associated with Labour’s boldest electoral promise in 2013: that of privatising the energy supply to deliver cheaper bills and cleaner fuel, vital in having secured Labour’s ‘super majority’.

Secondly, through 17 Black, Fenech’s name is associated with that of high government officials both of whom were inexplicably kept in office by Muscat for the past three years. Schembri was not even fired, but resigned out of his own will after a meeting with the PM on Monday night before he was himself taken into custody for an interrogation. His resignation also sealed the fate of Konrad Mizzi, who till Monday was resisting calls from his own party to resign, insisting that he had no idea who the owner of 17 Black was, despite the listing of this company as a target client of his now dissolved Panama company.

Cardona, who was himself interrogated on Saturday, has also suspended himself until the conclusion of investigations.

Thirdly, Muscat now finds himself taking important decisions related to the case, including that on a pardon requested by Yorgen Fenech who is reportedly spilling beans on people including Schembri, who are higher up in the food chain. While this may be a desperate attempt by a man who is drowning to take others with him to the abyss, the implications of any further links between him and political officials could be explosive.

Konrad Mizzi and Keith Schembri

How Muscat has damaged himself

Overall the PM’s position is weakened in view of his past reticence to act on Schembri and Mizzi.

This cannot but be interpreted as self-inflicted harm by a PM who for reasons he only knows, refused to act in the appropriate time-frame to nip this problem in the bud.

Irrespective of whether his trust had been betrayed by those closest to him or whether he was actively protecting them despite being in the know, his political judgement was clearly wrong and a dark shadow has been cast on the whole government. He is now obliged to shoulder political responsibility for his misjudgement. This raises the inevitable question: Can he now be trusted with taking any further decisions with a direct bearing on the investigations?

Take Fenech’s request for a presidential pardon. Granting a pardon to Fenech would be interpreted as the ultimate get-out-of-jail card. But not granting it may be fodder for conspiracy theories of all sorts.

Moreover, the arrest of Yorgen Fenech has raised the popular credulity stakes: for who would have suspected that such a powerful and connected person to be possibly involved in such a crime? And who would have imagined the PM’s own chief of staff to face a police interrogation (the matter of which still has to be established)? The fact that what was deemed unthinkable a few months ago is now real, means that nothing can be excluded. In such a scenario it becomes vital that the person at the helm is vested by moral authority. For as a result of recent events people will start doubting everything and everyone. It stands to reason that the Prime Minister overseeing this delicate phase of Maltese history has to be as disconnected as possible from the persons being investigated.

Thousands protested on tuesday outside Malta’s House of Representatives

The political aftermath

In his terse declaration Muscat has hinted that for the moment he wants to remain in charge to give the country ‘stability’. On Monday he even summoned the parliamentary group which unanimously approved a confidence vote in him in what was described as an internal party process leading to other “decisions” to be taken in coming days.

But rather than reinforcing Muscat’s authority the confidence vote may well have diminished him. For now he is facing his own party not from the position of ‘invictus’, but as the man who wronged the party by taking a very bad decision. It may well be that Muscat is now paving the way for a transitional phase which may see him depart in the next months.

But by staying on with a dark personal cloud standing above his head, he may well end up paralyzing the country’s government. The realisation that he has become a liability may well be the hardest and most painful realisation for the man who thought of himself as being invincible.

But even if his exit is managed to ensure a dignified exit, Muscat’s procrastination with regards to sacking Mizzi and Schembri has come at a big political cost. It has eroded Labour’s greatest political advantage; that of being united in contrast with a divided opposition. Instead the current crisis has given a semblance of unity and sense of purpose to the opposition while triggering dissent in Labour’s ranks, which has found a strong voice in Evarist Bartolo, a respectable and shrewd politician hailing from the party’s socialist wing, who commands sufficient moral authority while no longer harbouring leadership ambitions.

Still, the hubris generated by these events may well represent an opportunity for the country, albeit one full of pitfalls and lurking dangers. The Nationalist Party may build on its newfound unity and start presenting itself as a government-in-waiting. Yet this may not be easy especially if the anti-Delia faction feels vindicated enough to attempt another bid to remove him. Moreover the party still lacks a strong frontbench to be regarded as an alternative government.

Third parties also smell another opportunity. While there is a void on the left, which movements like Graffitti may aspire to fill, the aftermath of a breakdown in public trust in politicians was always fertile ground for the far-right to exploit.

Neither can one write off the Labour Party. It is very unlikely that it suffers the same fate as the Italian Socialist Party after Tangentopoli, simply because political loyalties in Malta run so deep. But it would be dangerous if the party simply relies on tribal loyalties to survive. It can still build on its positive legacy of social reforms while throwing away the toxic bathwater in which it has found itself.

But that may require a clear departure from the subservience to the big business interests, which ultimately brought about the meltdown of the Muscat government. It is hard to see this transformation with Muscat still at the helm. Even for the sake of his party, he may have to take a step back, now before it is too late.