Bank of Valletta is downplaying the news that Michelle Muscat was given extensive powers at the Marigold Foundation, including the ability to appoint board members, saying that a recent legal change was made to ‘reverse an administrative oversight’.
The bank is claiming that Muscat was actually a co-founder of the Foundation from the start, and the amendment to the deed granting her more power over the bank’s foundation was because they just realised – five years after the foundation was created – that they had actually given her the wrong title.
The Shift revealed last month that the wife of disgraced former Prime Minister Joseph Muscat, who resigned from parliament on Monday, had taken control of the Marigold Foundation, which was originally set up by the bank, for the token sum of €100. No public announcement had been made.
The Foundation’s most recent audited accounts (2018) show net assets close to €1 million.
Recent changes to the Foundation’s statute granted Muscat the power to appoint half its board members and to veto her own replacement as chairperson.
In 2019, she appointed Mark Farrugia as one of her representatives to the Foundation’s board. Farrugia was her husband’s personal assistant and the right hand man of former chief of staff Keith Schembri who is on police bail following a court order to freeze his assets on accusations of money laundering.
Asked to justify handing over the reins of a foundation heavily supported by public funds to the wife of the prime minister at the time, BOV said:
“Michelle Muscat was, in effect, a co-founder of the Foundation since its inception in 2014. The legal change affected in 2019 was to rectify what was essentially an administrative oversight at the time of drafting the original deed, which put Mrs Muscat as chairperson instead of co-founder.”
In a lengthy reply, the bank failed to provide answers to further issues raised and instead listed the ‘good deeds’ carried out by the foundation.
A question that remains is how a bank tasked with rigorous oversight could set up a foundation by forgetting to mention one of its co-founders, if the explanation given by BOV is to be believed. The alternative is that the bank is refusing to explain why it decided to hand over power to the former prime minister’s wife or whether it had a choice in the matter.
Even if this was a simple oversight, then it should have been rectified earlier, not five years after the Foundation was set up. The Marigold Foundation was originally established in February 2014 as ‘The Marigold Foundation – BOV in the Community’.
The stated purpose for BOV setting up Marigold was to formalise BOV’s charitable and corporate social responsibility activities and efforts under one banner.
The Shift also asked the bank whether this change in the board of the Foundation was communicated to the Foundation’s donors. BOV said that apart from the yearly direct donation it provides, it does not enter into administering donors and contributors to the Foundation.
As this was BOV’s charity, the bank endowed Marigold Foundation with €200,000 as initial capital, and consistently donated €100,000 per year between 2016 and 2019, according to its accounts.
A review of the finances of the Foundation, as well as direct orders and donations by government departments, shows that over the years the government has become the single largest donor to the Foundation.
Events held by the Marigold Foundation over the years show an increasing focus on Muscat, now perpetually surrounded by her aides and friends. Between 2014 and 2016, over half the fundraising events organised by the Marigold Foundation consisted of events, primarily fashion-show oriented, held at the Prime Minister’s residences in Villa Francia and Girgenti as well as Castille itself.
In 2015, around the time Michelle announced that she had taken up swimming, the Marigold Foundation also started organising a “personal swimming challenge for the chairperson”, featuring ever more fictitious long distance swims.
She used her influence to seek funding through her husband’s connections. Yorgen Fenech, the suspected mastermind of journalist Daphne Caruana Galizia’s assassination, was among those called upon to support a foundation “by the prime minister’s wife”.